<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to
240.14a-11(c) or 240.14a-12
Synthetech, Inc.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11
CALCULATION OF FILING FEE
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or other Proposed
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class of number of value of aggregate
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Check box if any part of the fee is offset as provided by
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<PAGE> 2
SYNTHETECH, INC.
1290 Industrial Way
Albany, Oregon 97321
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 17, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
Shareholders of Synthetech, Inc., an Oregon corporation (the
"Company"), will be held at the Portland Marriott, 1401 SW Front
Avenue, Portland, Oregon on July 17, 1997, at 2:00 p.m., Pacific
Time, for the following purposes:
1. To elect a Board of seven (7) directors consisting of
two directors for terms of one year, two directors for terms of
two years and three directors for terms of three years.
2. To transact such other business as may properly come
before the meeting or any adjournments thereof.
The foregoing items of business are more fully described in
the Proxy Statement accompanying this Notice.
Only holders of record of the Company's Common Stock at the
close of business on June 11, 1997 will be entitled to notice of
and to vote at the Annual Meeting and any adjournments or
postponements thereof. A list of such shareholders will be
available for the inspection of any shareholder, for any purpose
germane to the meeting, at least 10 days prior to the Annual
Meeting at the offices of the Company at 1290 Industrial Way,
Albany, Oregon.
To assure their representation at the meeting, shareholders
are urged to mark, sign, date and return the enclosed proxy as
promptly as possible, even if they plan to attend the meeting.
Any shareholder attending the meeting may vote in person, even if
he or she has returned a proxy, if the proxy is revoked in the
manner described in the accompanying Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS,
Charles B. Williams
Secretary
June 6, 1997
Albany, Oregon
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND
THIS MEETING IN PERSON, PLEASE EXECUTE THE ENCLOSED PROXY AND
RETURN IT SO THAT YOUR SHARES WILL BE VOTED. IN THE EVENT YOU
ARE PRESENT AT THE MEETING AND WISH TO DO SO, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON.
<PAGE> 3
SYNTHETECH, INC.
1290 Industrial Way
Albany, Oregon 97321
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
Synthetech, Inc., an Oregon corporation (the "Company"), for use
at the Annual Meeting of Shareholders which will be held on
July 17, 1997 at 2:00 p.m., Pacific Time at the Portland
Marriott, 1401 SW Front Avenue, Portland, Oregon. This Proxy
Statement and the accompanying Notice of Annual Meeting of
Shareholders (the "Notice") and form of proxy card were first
mailed to shareholders on or about June 27, 1997.
PROXIES
The cost of soliciting proxies will be borne by the Company.
In addition, the Company may reimburse brokerage firms and other
persons representing beneficial owners of shares for their
expenses in forwarding solicitation materials to such beneficial
owners. Proxies may also be solicited by certain of the
Company's directors, officers and regular employees, without
additional compensation, personally or by telephone or telegram.
Please MARK, SIGN and DATE the enclosed proxy card and
RETURN it promptly in the enclosed envelope provided for this
purpose.
REVOCATION OF PROXIES
Any shareholder returning the accompanying proxy may revoke
such proxy at any time prior to its exercise: (i) by giving
written notice to the Company of such revocation; (ii) by voting
in person at the meeting; or (iii) by executing and delivering to
the Secretary of the Company a proxy dated a later date.
ACTION TO BE TAKEN UNDER PROXIES
The shares represented by proxies in the form solicited by
the Board of Directors of the Company will be voted at the Annual
Meeting if the proxy is properly executed and is returned to the
Secretary of the Company prior to the Annual Meeting. Where a
choice is specified with respect to the matter being voted upon,
the shares represented by the proxy will be voted in accordance
with such specification. The proxy may specify approval of all nominees
<PAGE> 4
for directors of the Company, or may withhold approval to vote for
any or all of the nominees presented. If no specification is indicated,
such shares will be voted in favor of the nominees for directors.
Although the Company is not aware of any matters to be voted
upon at the meeting other than as stated herein and in the
accompanying Notice of Annual Meeting of Shareholders, if any
other matters are properly brought before the Annual Meeting, the
enclosed proxy gives discretionary authority to the persons named
in such proxy to vote the shares with respect to any of such
matters.
OUTSTANDING COMMON STOCK
On June 11, 1997, the record date for shareholders entitled
to vote at the Annual Meeting, the Company had outstanding
13,882,021 shares of common stock, par value $.001 per share (the
"Common Stock"), each share of which entitles the holder to one
vote at the Annual Meeting. Only shareholders of record at the
close of business on June 11, 1997, are entitled to notice of,
and to vote at, the Annual Meeting.
QUORUM, VOTING
The presence of a majority of the total number of
outstanding shares of Common Stock entitled to vote at the Annual
Meeting, either in person or by proxy, is required to constitute
a quorum at the Annual Meeting.
On all matters submitted to a vote of the shareholders at
the Annual Meeting, each shareholder shall be entitled to one
vote for each share of Common Stock owned of record by such
shareholder at the close of business on June 11, 1997.
If you find it inconvenient to attend the meeting in person,
your stock will be represented and voted if you will execute and
mail the enclosed proxy card. Management urges each shareholder
to attend the meeting or to sign and promptly return the enclosed
proxy card.
PRINCIPAL OWNERS OF COMMON STOCK
The following table sets forth the number of shares of
Common Stock and percentage of outstanding shares of Common Stock
of the Company owned as of April 1, 1997, by persons who hold of
record or are known to beneficially own 5% or more of the
outstanding common stock of the Company, each nominee and
director of the Company, the named executive officers, one other
employee and all officers and directors as a group.
<TABLE>
<CAPTION>
<S><C> <C> <C>
Name and Address of Amount and Nature Percent
Beneficial Owner of of
Beneficial Class
Ownership
- ------------------- ----------------- -------
Paul C. Ahrens 1,500,491(1) 10.8%
1290 Industrial Way
Albany, OR
<PAGE> 5
Name and Address of Amount and Nature Percent
Beneficial Owner of of
Beneficial Class
Ownership
- ------------------- ----------------- ---------
Michael A. Mitton 701,087 5.1%
Suite 22
6300 Estate Frydenhoj
416-1
St. Thomas, U.S.V.I.
M. ("Sreeni") 624,210(2) 4.4%(3)
Sreenivasan
1290 Industrial Way
Albany, OR
Howard L. Farkas 69,292(4) *
5460 South Quebec
Street
Suite 300
Englewood, CO
Page E. Golsan, III 38,000(5) *
3205 Canterbury Drive,
South
Salem, OR
Edward M. Giles 271,000(6) 2.0%
919 Third Avenue
New York, NY
Donald E. Kuhla, Ph.D. -0- *
1787 Sentry Parkway
West
Building 18, Suite 301
Blue Bell, PA
JB Partners 1,000,000(7) 7.2%
919 Third Avenue
New York, NY
Philip L. Knutson, 397,240(8) 2.8%(3)
Ph.D.
1290 Industrial Way
Albany, OR
Charles B. Williams 257,120(9) 1.8%(3)
1290 Industrial Way
Albany, OR
Jay A. Bouwens 29,000(10) *
1290 Industrial Way
Albany, OR
Mitchell A. McVay 4,000(11) *
1290 Industrial Way
Albany, OR
All Officers and 2,915,353(1)(2)(4)(5) 20.2%
Directors as (8)(9)(10)
a Group (7 persons)
______________________
</TABLE>
*less than 1%.
(1) Includes 29,000 shares of common stock which are owned of
record by a private foundation of which Mr. Ahrens is the
President. Mr. Ahrens disclaims beneficial ownership of these
shares.
<PAGE> 6
(2) Includes 216,000 shares of common stock which Mr.
Sreenivasan has the right to acquire immediately or within
sixty (60) days pursuant to employee stock options. Excludes
25,000 shares of common stock issuable pursuant to stock
options held by Mr. Sreenivasan which are not exercisable now
or within sixty (60) days.
(3) The denominator used in calculating the percentage is
equal to the number of shares outstanding plus the number of
shares the beneficial owner (or group of beneficial owners)
has a right to acquire immediately or within sixty days
pursuant to warrants or options.
(4) Includes 19,292 shares of common stock which Mr. Farkas
has the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Mr. Farkas disclaims
ownership over 50,000 shares of common stock held in his name
which have been pledged as security for a loan and over which
Mr. Farkas has no voting control. Excludes 45,708 shares of
common stock issuable pursuant to stock options held by Mr.
Farkas which are not exercisable now or within sixty (60)
days.
(5) Excludes 15,000 shares of common stock issuable pursuant
to stock options held by Mr. Golsan which are not exercisable
now or within sixty (60) days.
(6) All of the 270,000 shares of common stock are held by JB
Partners, a limited partnership, in which Mr. Giles is a
limited partner. Mr. Giles has a beneficial interest in
201,000 of the shares by virtue of his limited partnership
interest. The other 70,000 shares of common stock represent
the beneficial interest of two other limited partners in JB
Partners who have granted to Mr. Giles the investment power
associated with these shares. Mr. Giles disclaims beneficial
ownership over these 70,000 shares.
(7) See Note 6.
(8) Includes 166,240 shares of common stock which Dr. Knutson
has the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 20,000 shares of
common stock issuable pursuant to stock options held by Dr.
Knutson which are not exercisable now or within sixty (60)
days.
(9) Includes 109,720 shares of common stock which Mr.
Williams has the right to acquire immediately or within sixty
(60) days pursuant to employee stock options. Excludes 16,000
shares of common stock issuable pursuant to stock options held
by Mr. Williams which are not exercisable now or within sixty
(60) days.
(10) Includes 29,000 shares of common stock which Mr. Bouwens
has the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 14,000 shares of
common stock issuable pursuant to stock options held by Mr.
Bouwens which are not exercisable now or within sixty (60)
days.
(11) Includes 4,000 shares of common stock which Mr. McVay has
the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 4,000 shares of
common stock issuable pursuant to stock options held by Mr.
McVay which are not exercisable now or within sixty (60) days.
ELECTION OF DIRECTORS
Pursuant to a recent amendment to the Company's Bylaws, the
Board of Directors has been divided into three classes, serving
staggered three year terms. To accomplish this staggering,
initially two directors will serve one year terms, two directors
will serve two year terms and three directors will serve three
year terms. Mr. Ahrens and Mr. Golsan are nominees for election
to a one year term. Mr. Giles and Mr. Williams are nominees for
election to a two year term. Mr. Farkas, Dr. Kuhla and Mr.
Sreenivasan are nominees for election to a three year term. If
any of the seven nominees becomes unavailable for any reason
(which is not now anticipated), the proxies will vote the shares
represented by each proxy for such substitute nominee as approved
by the Board of Directors. Under Oregon law, if a quorum of
shareholders is present at the annual meeting of shareholders,
the two nominees for election as Class I and Class II directors
who receive the greatest number of votes cast for their
respective classes at the meeting shall be elected directors.
Similarly, the three nominees for election as Class III directors
who receive the greatest number of votes cast for Class III
directors at the meeting shall be elected directors. Abstentions
and broker non-votes will have no effect on the results of the
vote.
<PAGE> 7
The name and age of each nominee for director, their
principal positions and offices held in the Company, and the
period of time each director has served as a director of the
Company are set forth below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name, Age & Position Held Director of
Class with the Company the
Company
Since
----- ------------------------- ----------
I Paul C. Ahrens (45) 1981
Chairman of the Board
I Page E. Golsan, III (59) 1991
Director
II Edward M. Giles (61) --
Nominee
II Charles B. Williams (50) --
Vice President of Finance
and Administration, Chief
Financial Officer,
Secretary and Treasurer
III Howard L. Farkas (73) 1985
Director
III Donald E. Kuhla, Ph.D. (54) --
Nominee
III M. ("Sreeni") Sreenivasan 1995
(48)
President and Chief
Executive Officer
</TABLE>
The following is a brief account of the business experience
of each nominee.
Nominees for Directors (term expiring in 1998)
- ----------------------------------------------
Paul C. Ahrens. Mr. Ahrens has been a director of the
Company since its inception in 1981 and became Chairman of the
Board effective March 31, 1995. Since 1996, he has been the
founder and President of Groovie Moovies, Ltd., a film production
company. Mr. Ahrens, a founder of the Company, served as
President and Chief Executive Officer of Synthetech from 1989
through March 1995. From 1981 through 1989 he was the Vice
President of Technology. He also served as Secretary of the
Company from 1981 through March 1995. From September 1979 to
September 1980, Mr. Ahrens served as Vice President of
Engineering of Colorado Organic Chemical Company, an organic
chemical manufacturing company located in Commerce City,
Colorado. Prior thereto, Mr. Ahrens spent five years with Allied
Chemical and CIBA-Geigy in various engineering and research
capacities. Mr. Ahrens holds B.S. and M.S. degrees in Chemical
Engineering from M.I.T.
<PAGE> 8
Page E. Golsan, III. Mr. Golsan has served as a director of
the Company since 1991. Since 1986, he has been a principal of
P.E. Golsan & Co. (formerly Golsan Management Company), a private
capital management firm. From 1990 to 1992, Mr. Golsan was a
senior advisor with Bane Barham & Holloway, registered investment
advisors under the Investment Advisor Act of 1940. Since 1990
Mr. Golsan has been President and Chief Executive Officer of
Bridgetown Capital, Inc., an investment company. From 1987 to
1989 he was the Executive Vice President of Calumet Industries,
Inc., Chicago, Illinois (manufacturer and marketer of petro-
chemicals and other fine chemicals). Prior to 1987, he was the
President and Chief Operating Officer of the K&W Products
Division (specialty chemical manufacturing) of Berkshire
Hathaway, Inc. Mr. Golsan holds an M.A. in Finance from Claremont
Graduate School of Business and a Doctorate in Pharmacy and a
B.A. in Chemistry and Zoology, both from the University of
Southern California.
Nominees for Directors (term expiring in 1999)
- ----------------------------------------------
Edward M. Giles. Mr. Giles has not previously served as a
director of the Company. Mr. Giles has served as Chairman and
President of The Vertical Group, Inc., a venture capital
investment firm, since January 1989. Mr. Giles was previously
President of F. Eberstadt & Co., Inc., a securities firm, and
Vice Chairman of Peter B. Cannell & Co., Inc., an investment
management firm. He is currently a director McWhorter
Technologies, Inc. and Ventana Medical Systems, Inc. Mr. Giles
received a B.S.Ch.E. in Chemical Engineering from Princeton
University and an M.S. in Industrial Management from the
Massachusetts Institute of Technology.
Charles B. Williams. Mr. Williams has not previously served
as a director of the Company. Mr. Williams has served as Vice
President of Finance and Administration and Treasurer since 1990.
In 1995, he became the Secretary of the Company and in July 1995,
he also became Chief Financial Officer. Mr. Williams is
responsible for accounting, administration, finance, personnel
and information systems. From 1988 to 1990, Mr. Williams served
as the Controller. Prior thereto, he was Controller for White's
Electronics, Inc. of Sweet Home, Oregon for 5 years. His
responsibilities at White's Electronics included accounting, data
processing, personnel and finance. From 1976 to 1983, he held
several accounting and financial positions with Teledyne Wah
Chang, a metals producer in Albany, Oregon. Mr. Williams earned
his B.S. in Economics and M.B.A. from Oregon State University.
Nominees for Directors (term expiring in 2000)
- ----------------------------------------------
Howard L. Farkas. Mr. Farkas has served as a director of
the Company since 1985. Since 1981, he has been the President of
Farkas Group, Inc., and since 1992 he has been President of
Windsor Gardens Realty, Inc., both of which are engaged in
general real estate brokerage and management activities. From
1984 to 1996, he was also the managing director in Manistee Gas
Limited Liability Company, which is in the gas production and
processing business. Since 1986, Mr. Farkas has also served as
Secretary and a director of Acquisition Industries, Inc., a
publicly owned acquisition and merger company. Mr. Farkas serves
as the Chairman of the Board of Logic Devices, Inc., a Sunnyvale,
California company specializing in
<PAGE> 9
CMOS digital signal process semiconductor and SRAM chips, and as a
director in various natural resource and other commercial
companies. Since May 1988, Mr. Farkas has also been a vice
president of G.A.S. Corp., which is a general partner of an
Oklahoma limited partnership, Gas Acquisition Services, which
filed for bankruptcy under Chapter 11. Though not presently in
public or private practice, he has been a certified public
accountant since 1951. Mr. Farkas received a B.S. (B.A.) from
the University of Denver.
Donald E. Kuhla, Ph.D. Dr. Kuhla has not previously served
as a director of the Company. Since 1994, he has been Vice
President and Chief Technical Officer of Plexus Ventures, Inc., a
biotech consulting and investment firm. From 1990 to 1994, Dr.
Kuhla held senior management positions with two venture capital
backed, biotechnology start-up companies. Previously, he was in
research and development and operations management positions with
Pfizer Inc. and Rorer Group, Inc., his last position at Rorer
being Senior Vice President of Operations. Dr. Kuhla is a
director of NPS Pharmaceuticals, Inc. (a biotechnology drug
discovery and development company). Dr. Kuhla received a B.A. in
Chemistry from New York University and a Ph.D. in Organic
Chemistry from Ohio State University.
M. "Sreeni" Sreenivasan. Mr. Sreenivasan has served as a
director of the Company since July 1995. He has served as
President and Chief Executive Officer since March 31, 1995 and as
Chief Operating Officer from 1990 through March 31, 1995. From
1988 to 1990 he was Executive Vice President and General Manager
and from 1987 to 1988 he was director of Manufacturing.
Previously, he worked for Ruetgers-Nease Chemical Co. (bulk
pharmaceuticals and other fine chemicals) for 13 years in various
technical and manufacturing management capacities, including 7
years as Plant Manager of their Augusta, Georgia plant.
Mr. Sreenivasan received his M.S. in Chemical Engineering from
Bucknell University and his M.B.A. from Penn State University.
In connection with the issuance of common stock and a
warrant to JB Partners, an investment partnership affiliated with
Peter B. Cannell & Co. Inc., a New York investment management
firm, the directors and officers of Synthetech (other than
Mr. Golsan who was not a director at the time) have entered into
an agreement to vote shares of Synthetech owned by them for the
election of a nominee to the Board of Directors selected by JB
Partners. Unless terminated earlier under certain circumstances,
this agreement will continue until 1998. JB Partners has advised
Synthetech that it will not select a nominee for election at the
upcoming Annual Meeting of Shareholders.
During the last fiscal year, there were four meetings of the
Board of Directors and the Board took action by written consent
on three other occasions. During the last fiscal year, each
director was present for more than 75 percent of the aggregate of
(i) the total number of meetings of the Board of Directors and
(ii) the total number of meetings held by all committees of the
Board on which he served.
The Board of Directors has established an Audit Committee,
the current members of which are Howard Farkas and Page Golsan.
The Audit Committee is authorized to meet with management and the
Company's independent public accountants to consider fiscal accounting
<PAGE> 10
matters. The principal functions of the Audit Committee are to
recommend selection of independent accountants to the Board of
Directors and to review the scope and result of audits. The
Audit Committee met once during the last fiscal year. The
Company has also established a Compensation Committee, the
current members of which are Paul Ahrens, Howard Farkas and Page
Golsan. The Compensation Committee is authorized to review and
set officer compensation and to serve as the Plan Administrator
in connection with all awards other than nonemployee director
option grants for the 1995 Incentive Compensation Plan. The
Compensation Committee met once during the last fiscal year.
In fiscal 1997, the Company established a policy to grant
all current directors who are not employees (other than Mr.
Ahrens, who is a founder of the Company) a nonqualified stock
option for 15,000 shares vesting at the rate of 3,000 shares at
the next and each of the subsequent four annual shareholder
meetings. This option is intended to provide the outside
director with the equivalent of an annual grant of 3,000 shares
and the Company does not anticipate granting any additional
options until the end of the fifth year. The exercise price of
these options will be set at the fair market value of the Common
Stock on the date of the grant. Under this policy, in fiscal
1997, Messrs. Golsan and Farkas each received 15,000 share
options.
In recognition for over 11 years of service as a director
to the Company without compensation, the Company granted a cash
payment of $20,000 and an additional nonqualified stock option
for 50,000 shares to Mr. Farkas. This option vests over three
years and the exercise price was set at $1.81 per share, a
discount from the $7.50 fair market value of the Common Stock on
the date of grant.
Commencing in fiscal 1998, the Company will provide
directors who are not employees of the Company an annual fee of
$4,000. The Company has also established a policy to grant all
new directors who are not employees a one-time nonqualified
stock option for 10,000 shares which vests immediately. Thus,
new directors who are not employees of the Company will receive
this 10,000 share option in addition to the ongoing 15,000 share
option described above. Like the 15,000 share option, the
exercise price of the options will be set at the fair market
value of the Common Stock on the date of grant.
Consulting and Technology Agreement
- -----------------------------------
In March 1995, Mr. Ahrens resigned his positions as
President and Chief Executive Officer of the Company and became
Chairman of the Board. At that time, Mr. Ahrens established an
independent research and development effort to investigate new
applications of novel amino acids and peptides. In connection
with this transition, the Company and Mr. Ahrens entered into an
agreement (the "Agreement") pursuant to which Mr. Ahrens agreed
to provide consulting services to the Company and to provide the
Company with licensing rights for any invention he might develop
during the year which involved amino acids and/or peptide-based
materials (the "Amino Acid Technology"). In March 1996, at the
conclusion of the consulting services and research period,
Mr. Ahrens advised the Company that he did not intend to continue
further laboratory research. At that time, the Company
requested, and Mr. Ahrens agreed to, an Addendum to the Agreement
to expand the Company's licensing rights to any Amino Acid
<PAGE> 11
Technology that he may discover at any time in the future. The
Company also agreed to reimburse Mr. Ahrens for his expenses
associated with his attendance on behalf of the Company at
technical symposiums.
Warrant Exercises and Securities Registrations
- ----------------------------------------------
In March 1996 the Company issued 1,000,000 shares of common
stock to JB Partners pursuant to the exercise of a warrant for an
aggregate cash consideration of $1,000,000. This warrant had
been previously issued in 1991. Mr. Giles, a nominee for a Class
II directorship, is a limited partner in JB Partners and, as
such, has a beneficial interest in twenty percent (20%) of those
shares.
In December 1996, the Company issued 25,000 shares of common
stock to Mr. Golsan pursuant to the exercise of a warrant for an
aggregate consideration of $45,250. This warrant had been
previously issued in 1992. Mr. Golsan is a director of the
Company.
During the fall of 1996 the Company registered for resale
750,000 shares of common stock owned by JB Partners with the
Securities and Exchange Commission and several state securities
authorities. These shares had been originally been purchased by
JB Partners from the Company in 1991. Mr. Giles, a nominee for a
Class II directorship, is a limited partner in JB Partners and,
as such, had a beneficial interest in twenty percent (20%) of the
registered shares.
Executive Officers
- ------------------
Officers are elected annually by the Board of Directors and
serve at the discretion of the Board of Directors. The name and
age of each executive officer (other than Mr. Sreenivasan and Mr.
Williams who are listed above), their principal positions and
offices held with the Company, and a brief account of their
business experience is set forth below:
Philip L. Knutson, Ph.D. Dr. Knutson (age 47) has served as
Vice President of Research and Development since June 1988. Dr.
Knutson is responsible for process development, "kilo lab"
production and production support. From July 1986 to June 1988,
he was a Senior Research Chemist with the Company. Prior
thereto, Dr. Knutson was a Senior Research Chemist at Ash
Stevens, Inc. in Detroit, Michigan for 7 years. He received his
B.A. degree from Luther College, Decorah, Iowa and his M.A. and
Ph.D. in Organic Chemistry from the University of Missouri -
Columbia.
Jay A. Bouwens. Mr. Bouwens (age 51) has served as Vice
President of Manufacturing since 1996. From 1994 to 1996, he was
director of Manufacturing with the Company. From 1992 to 1994,
Mr. Bouwens was the Pilot Plant Manager at Ash Stevens, Inc. in
Detroit, Michigan. From 1990 to 1992 he was Production Manager
for Poly Organix in Newburyport, Massachusetts. From 1967 to
1990 he held various chemical manufacturing positions, including
Process Manager for Wyeth-Ayerst laboratories in Rouses Point,
New York. Mr. Bouwens received his B.S. in Chemistry from the
University of Michigan.
<PAGE> 12
Schedule 16(a) Beneficial Ownership Reporting Compliance
- --------------------------------------------------------
Messrs. Farkas and Golsan, each a director of the Company,
failed to report one and two transactions, respectively, on a
timely basis in compliance with Section 16(a) of the Securities
Exchange Act of 1934 ("Section 16(a)"). In addition, JB
Partners, a 10% shareholder during Fiscal 1997, failed to report
one transaction on a timely basis in compliance with
Section 16(a). The Company has now adopted procedures to assist
its directors and officers in complying with Section 16(a), which
includes assisting them in preparing the forms for filing.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
- ----------------------------------------------
The following table provides certain summary information
concerning compensation paid by the Company to those persons who
were at March 31, 1997, the Company's Chief Executive Officer,
the three other executive officers of the Company and one other
Company employee whose salary and bonus exceeded $100,000 during
the last fiscal year (the "Named Persons") for the fiscal years
ended March 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
<S><C> <C> <C> <C> <C> <C>
Summary Compensation Table
Long-Term All Other
Compensation Compensation
Annual Compensation ($)(2)
Name and --------------------
Principal Year Salary Bonus Stock
Position (1) ($) ($) Options (#)
- ------------- ---- ------ ------ ----------- --------------
M. ("Sreeni") 1997 150,000 95,000 50,000 7,125
Sreenivasan 1996 132,000 60,000 66,000 3,203
President & 1995 113,400 28,000 52,000 4,688
Chief Executive
Officer
Philip L. 1997 108,000 63,000 40,000 9,500
Knutson 1996 95,000 43,000 50,000 3,531
Vice President 1995 87,150 24,000 40,000 4,672
of Research and
Development
Charles B. 1997 88,000 57,000 32,000 6,544
Williams 1996 75,000 35,000 34,000 3,122
Vice President 1995 67,200 20,000 25,000 3,130
of Finance and
Administration
Jay A. Bouwens 1997 87,000 55,000 28,000 4,356
Vice President 1996 74,000 35,000 15,000 1,863
of 1995 34,149 8,750(3) --- ---
Manufacturing
Mitchell A. 1997 74,250 30,000 --- ---
McVay 1996 10,000 1,200(4) 8,000 ---
Plant Engineer
</TABLE>
_______________________
(1)Fiscal year ended March 31.
(2)Represents Company contributions to the account of the Named
Persons under the Company's 401(k) plan.
(3)Mr. Bouwens was hired in September 1994.
(4)Mr. McVay was hired in February 1996.
<PAGE> 13
Stock Option Grants in Last Fiscal Year
- ---------------------------------------
The following table provides information, with respect to
the Named Persons, concerning the grant of stock options during
fiscal year 1997.
<TABLE>
<CAPTION>
<S><C> <C> <C> <C> <C> <C>
Stock Options Grants in the Last Fiscal Year(1)
-----------------------------------------------
% of
Total Fair
Options Options Exercise Market
Granted Granted or Value Expiration
(#) to Base at Date Date
Employees Price of
in ($/Sh) Grant(3)
Fiscal
Name Year(2) ($)
- ---- ------ --------- ----- ----- --------
M. ("Sreeni") 50,000 20% $8.50 $8.50 May 2006
Sreenivasan
Philip L. 40,000 16% $8.50 $8.50 May 2006
Knutson
Charles B. 32,000 13% $8.50 $8.50 May 2006
Williams
Jay A. Bouwens 28,000 11% $8.50 $8.50 May 2006
Mitchell A. --- --- --- --- ---
McVay
</TABLE>
(1) The Company has not granted any stock appreciation rights
(SARs).
(2) Based on an aggregate of 250,000 options being granted to
all employees during the fiscal year ended March 31, 1997.
(3) The average of closing bid and asked prices on the date of
grant.
Stock Option Exercises in Last Fiscal Year and Fiscal Year-End
- --------------------------------------------------------------
Stock Option Values
-------------------
The following table provides information, with respect to
the Named Persons, concerning the options granted to them during
the last fiscal year and the options held by them at March 31,
1997.
<TABLE>
<CAPTION>
<S><C> <C> <C> <C> <C> <C> <C>
Fiscal Year End Stock Option Value
----------------------------------
Shares
Acquired
on Value
Exercise Realized Value of Unexercised
Number of Unexercised In-the-Money
(#) ($) Options at Options at
Fiscal Year End Fiscal Year End($)(1)
-------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------- ------ -------- ----------- ------------- ---------- -------------
M. ("Sreeni") 61,000 $350,750 158,000 83,000 $1,205,540 $251,790
Sreenivasan
Philip L. 47,000 $340,750 121,240 65,000 $925,061 $190,750
Knutson
Charles B. 29,000 $166,750 76,720 49,000 $585,374 $129,710
Williams
Jay A. Bouwens --- --- 10,000 33,000 $76,300 $38,150
Mitchell A. --- --- 4,000 4,000 $20,520 $30,520
McVay
</TABLE>
(1) The closing price of the Common Stock on March 31, 1997 was $7.63.
<PAGE> 14
SELECTION OF AUDITORS
The Board of Directors has selected Arthur Andersen LLP as
the Company's independent public accountants for the current
fiscal year. Arthur Andersen LLP has audited the financial
statements of the Company since the fiscal year ended March 31,
1989. It is expected that representatives of Arthur Andersen LLP
will be present at the Annual Meeting, will have the opportunity
to make a statement if they so desire, and will be available to
respond to appropriate questions.
ANNUAL REPORT
The Annual Report to Shareholders covering the Company's
fiscal year ended March 31, 1997 including audited consolidated
financial statements, is transmitted herewith. Such Annual
Report to Shareholders is not a part of the material for the
solicitation of proxies.
SHAREHOLDER PROPOSALS
Shareholders of the Company may submit proposals for
inclusion in the proxy materials for the 1998 Annual Meeting of
Shareholders. The proposals must meet the shareholder
eligibility and other requirements of the Securities and Exchange
Commission. In order for a proper shareholder proposal to be
included in the proxy materials for the 1998 Annual Meeting of
Shareholders, it must be received by the Secretary of the
Company, at its corporate headquarters, 1290 Industrial Way,
Albany, Oregon 97321, not later than February 16, 1998.
OTHER MATTERS
The Board of Directors does not intend to bring any matters
before the Annual Meeting other than those specifically set forth
in the notice of the meeting and knows of no matters to be
brought before the Annual Meeting by others. If any matters
properly come before the Annual Meeting, it is the intention of
the persons named in the accompanying proxy to vote such proxy in
accordance with the judgment of the Board of Directors.
Dated: June 6, 1997 Charles B. Williams
Secretary
<PAGE> 15
- -----------------------------------------------------------------------------
PROXY SYNTHETECH, INC. PROXY
1290 Industrial Way, Albany, OR 97321
Annual Meeting of Shareholders of Synthetech, Inc. to be held on July
17, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder(s) hereby appoint(s) M. ("Sreeni")
Sreenivasan and Charles B. Williams, and either of them, Proxies with
full power of substitution and hereby authorize(s) them to represent
and vote, as designated below, all the shares of Common Stock held of
record by the undersigned on June 11, 1997, at the Annual Meeting of
Shareholders of Synthetech, Inc., to be held on July 17, 1997, or any
adjournments or postponements thereof.
The undersigned hereby authorize(s) the Proxies to vote on the matters
set forth in the Proxy Statement of the Company dated June 6, 1997, as
follows:
ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary
below) or, if any named nominee is unable to serve, for a substitute nominee.
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
CLASS I CLASS II CLASS III
Paul C. Ahrens Edward M. Giles Howard L. Farkas
Page E. Golsan, III Charles B. Williams Donald E. Kuhla, Ph.D.
M. ("Sreeni") Sreenivasan
IN THEIR DISCRETION, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
PLEASE SIGN ON REVERSE HEREOF AND RETURN THIS PROMPTLY. THANK YOU.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
THE BOARD OF DIRECTORS HAS NOMINATED AND RECOMMENDS A VOTE FOR THE
ELECTION OF PAUL C. AHRENS, HOWARD L. FARKAS, EDWARD M. GILES, PAGE
E. GOLSAN, III, DONALD E. KUHLA, PH.D., M. ("SREENI") SREENIVASAN
AND CHARLES B. WILLIAMS AS DIRECTORS.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREON BY THE UNDERSIGNED SHAREHOLDER(S). IF NO CHOICE IS SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE NOMINEES.
DATE:____________________
SIGNATURE:_______________
SIGNATURE IF HELD
JOINTLY:_________________
PLEASE INDICATE ANY
CHANGES IN ADDRESS
Please sign name exactly
as it appears hereon.
When shares are held by
joint tenants, both
should sign. When
signing as attorney,
executor, administrator,
trustee or guardian,
please give full title as
such. If a corporation,
please sign in full
corporate name by
President or other
authorized officer. If a
partnership, please sign
in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY. THANK YOU.
- -----------------------------------------------------------------------------
