<PAGE> i
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
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Per unit price or
Title of each other underlying
class of value of
securities to transaction
which Aggregate number of computed pursuant Proposed maximum
transaction securities to which to Exchange aggregate value of
applies: transaction applies: Act Rule 0-11: transaction: Total Fee Paid
------------- -------------------- ----------------- ------------------ --------------
</TABLE>
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: Filing Party:
Form, Schedule or
Registration Statement No.: Date Filed:
<PAGE>ii
SYNTHETECH, INC.
1290 Industrial Way
Albany, Oregon 97321
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 23, 1998
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 Hilton, 921 S.W. Sixth
Avenue, Portland, Oregon on July 23, 1998, at 1:30 p.m., Pacific
Time, for the following purposes:
1. To elect two Class I Board members for a term 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 10, 1998 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 23, 1998
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> 1
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 23, 1998 at 1:30 p.m., Pacific Time at the Portland Hilton,
921 S.W. Sixth 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 July 2, 1998.
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 for directors
<PAGE> 2
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 10, 1998, the record date for shareholders entitled
to vote at the Annual Meeting, the Company had outstanding
14,232,683 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 10, 1998, 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 10, 1998.
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.
ELECTION OF DIRECTORS
At the 1998 Annual Meeting, two Class I directors are to be
elected to hold office until the 2001 Annual Meeting, or until
their successors have been duly elected and qualified. The Board
of Directors proposes for election Paul C. Ahrens and Page E.
Golsan, III, both of whom are now directors of the Company.
The Board of Directors currently consists of seven
directors, divided into three classes, serving staggered three
year terms. To accomplish this staggering, the Class I directors
were initially elected to serve one year terms; the Class II
directors were initially elected to serve two year terms and the
Class III directors were initially elected to serve three year
terms. Mr. Ahrens and Mr. Golsan, whose initial terms were only
one year, are nominated for reelection this year. If either of
the 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 directors the greatest number of
<PAGE> 3
votes shall be elected directors. Abstentions and
broker non-votes will have no effect on the results of the vote.
The name and age of each nominee for director and each
continuing term 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 the
Class with the Company Company Since
----- ------------------------- ---------------
I Paul C. Ahrens (46) 1981
Chairman of the Board
I Page E. Golsan, III (60) 1991
Director
II Edward M. Giles (62) 1997
Director
II Charles B. Williams (51) 1997
Vice President of Finance and
Administration, Chief Financial Officer,
Secretary, Treasurer and Director
III Howard L. Farkas (74) 1985
Director
III Donald E. Kuhla, Ph.D. (55) 1997
Director
III M. ("Sreeni") Sreenivasan (49) 1995
President, Chief Executive Officer and
Director
</TABLE>
The following is a brief account of the business experience
of each nominee and continuing term director.
Nominees for Directors
- ----------------------
Term expiring in 2001
---------------------
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
<PAGE> 4
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 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.
Continuing Term Directors
- -------------------------
Term expiring in 1999
---------------------
Edward M. Giles. Mr. Giles has served as a director of the
Company since 1997. Since January 1989, Mr. Giles has served as
Chairman and President of The Vertical Group, Inc., a venture
capital investment firm. 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 of 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 served as a director
of the Company since 1997. Since 1990, Mr. Williams has served
as Vice President of Finance and Administration and Treasurer.
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.
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
<PAGE> 5
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. Mr. Farkas serves 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 CMOS digital signal process
semiconductor and SRAM chips. 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. In
September 1992, Mr. Farkas filed for personal protection under
Chapter 7 of the federal bankruptcy laws and the court
subsequently entered an order discharging his debts. 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 served as a director
of the Company since 1997. 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.
Executive Officers
- ------------------
Officers are elected annually by the Board of Directors and
serve at the discretion of the Board of Directors. In addition
to Mr. Sreenivasan and Mr. Williams, who are listed above, Mr.
Bouwens is an executive officer of the Company. His name and
age, his principal position and office held with the Company, and
a brief account of his business experience is set forth below:
Jay A. Bouwens. Mr. Bouwens (age 52) 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
<PAGE> 6
Process Manager for Wyeth-Ayerst laboratories in Rouses Point,
New York. Mr. Bouwens received his B.S. in Chemistry from the
University of Michigan.
Philip L. Knutson, Ph.D. resigned his position as the
Company's Vice President of Research and Development effective
May 8, 1998.
Board Meetings and Committees
- -----------------------------
During the last fiscal year, there were four meetings of the
Board of Directors and the Board took action by written consent
on one other occasion. 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 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, Edward Giles 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 on three
occasions during the last fiscal year.
Directors' Compensation
- -----------------------
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.
Since fiscal 1998, the Company has provided directors who
are not employees of the Company an annual fee of $4,000. The
Company 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.
<PAGE> 7
Employment Agreements
- ---------------------
In July, 1997, the Company entered into Employment
Agreements with Messrs. Sreenivasan, Williams and Knutson
(collectively, "Executives" and individually, "Executive"). In
addition to providing for an annual base salary, the Agreements
have certain noncompetition and nonsolicitation provisions.
Pursuant to the Agreements, the Company will pay the Executives
certain payments after termination of employment for any reason
other than death. Specifically, the Company will pay an amount
equal to the base salary earned by the Executive during the
twelve month period immediately preceding the date of termination
plus an additional amount for one year of health insurance
coverage. The Company has certain rights to extend the
agreements and payments under the Agreement for a total of 24
months after termination of an Executive's employment. In the
event the Executive should die during the payment period, the
Company's payment obligation immediately terminates.
Report of the Compensation Committee
- ------------------------------------
The Compensation Committee sets, reviews and administers the
executive compensation program of the Company and is comprised of
the individuals noted below, each of whom are non-employee
directors of the Company. The role of the Compensation Committee
is to establish and approve salaries and other compensation paid
to the executive officers of the Company and to administer the
Company's stock option plan, in which capacity the Compensation
Committee reviews and approves stock option grants to all
employees.
Compensation Philosophy. Synthetech's compensation
philosophy is that cash compensation should be directly linked to
the short-term performance of the Company and that longer-term
incentives, such as stock options, should be aligned with the
objective of enhancing shareholder value over the long term. The
use of stock options clearly links the interests of the officers
and employees of the Company to the interests of the
shareholders. In addition, the Compensation Committee believes
that the total compensation package must be competitive with
other companies in the industry to ensure that the Company can
continue to attract, retain and motivate key employees who are
critical to the long-term success of the Company.
Components of Executive Compensation. The principal
components of executive compensation are base salary, bonuses and
stock options.
Base salary is set based on competitive factors and the
historic salary structure for various levels of responsibility
within the Company. In addition, the Company relies on bonuses
in order to emphasize the importance of performance.
The equity component of executive compensation is the stock
option program. Stock options are generally granted when an
executive joins the Company and, typically, on an annual basis
thereafter. The options granted to the executives vest over a
period of two years. The purpose of the annual option grants is
to ensure that the executive always has options that vest in
increments over the following two-year period. This provides a
method of retention and motivation for the senior level
executives of the Company and also aligns senior management's
objectives with long-term stock price appreciation.
<PAGE> 8
Other elements of executive compensation are participation
in a Company-wide life insurance, long-term disability insurance,
medical benefits and ability to defer compensation pursuant to a
401(k) plan. Matching Company contributions to the 401(k) plan
of up to 10% of eligible base pay were made in fiscal 1998.
As a result of the decline in revenues and profits in fiscal
1998, the Compensation Committee did not grant bonuses to Mr.
Sreenivasan, the CEO, or any of the other executive officers.
Consistent with its policy to create longer-term incentives, the
Compensation Committee granted stock options to the executive
officers, including a 25,000 share option to Mr. Sreenivasan.
COMPENSATION COMMITTEE OF THE BOARD
OF DIRECTORS
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
The members of the Compensation Committee are Paul C.
Ahrens, Edward M. Giles and Page E. Golsan III. Mr. Ahrens is
formerly an officer of the Company.
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, 1998, the Company's Chief Executive Officer,
Chief Financial Officer and one other executive officer of the
Company whose salary and bonus exceeded $100,000 during the last
fiscal year (the "Named Persons") for the fiscal years ended
March 31, 1998, 1997 and 1996:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Summary Compensation Table
--------------------------
Long-Term All Other
Annual Compensation Compensation Compensation($)(2)
Name and ------------------------------ ---------------- ------------------
Principal Position Year(1) Salary ($) Bonus ($) Stock Options(#)
- ------------------ ------- ---------- --------- ---------------- ------------------
M. ("Sreeni") Sreenivasan 1998 150,000 - 25,000 12,500
President & Chief 1997 150,000 95,000 50,000 7,125
Executive Officer 1996 132,000 60,000 66,000 3,203
Philip L. Knutson 1998 108,000 - 20,000 12,200
Vice President of Research 1997 108,000 63,000 40,000 9,500
and Development* 1996 95,000 43,000 50,000 3,531
Charles B. Williams 1998 88,000 - 20,000 7,950
Vice President of Finance 1997 88,000 57,000 32,000 6,544
and Administration & Chief 1996 75,000 35,000 34,000 3,122
Financial Officer
</TABLE>
_______________________
*Dr. Knutson resigned his position with the Company on May 8,
1998.
(1)Fiscal year ended March 31.
(2)Represents Company contributions to the account of the Named
Persons under the Company's 401(k) plan.
<PAGE> 9
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 1998.
<TABLE>
<CAPTION>
<S><C> <C> <C> <C> <C> <C> <C> <C>
Stock Options Grants in the Last Fiscal Year(1)
-----------------------------------------------
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants (Through Expiration Date)
--------------------------------------------- --------------------------
Options
Granted % of Exercise
(# of Total Price Expiration 5% per 10% per
Name Shares) Options(2) ($/Sh)(3) Date year(4) year(4)
- ---- ------- ---------- --------- ---------- -------- ---------
M. ("Sreeni")
Sreenivasan 25,000 12.3% $7.13 July 2007 $112,000 $284,000
Philip L. Knutson* 20,000 9.9% $7.13 July 2007 $89,600 $227,200
Charles B. Williams 20,000 9.9% $7.13 July 2007 $89,600 $227,200
</TABLE>
_______________________
*Dr. Knutson resigned his position with the Company on May 8,
1998.
(1)The Company has not granted any stock appreciation rights
(SARs).
(2)Based on an aggregate of 203,000 options being granted to all
employees during the fiscal year ended March 31, 1998.
(3)These options were granted under the Company's 1995 Incentive
Compensation Plan in July 1997, and have an exercise price
equal to the fair market value of the Company's Common Stock
as of the date of the grant. These grants vest annually over a
two-year period ending April 1999.
(4)The 5% and 10% assumed rates of appreciation are mandated by
the rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of future
prices for its Common Stock.
Stock Option Exercises in Last Fiscal Year and Fiscal Year-End
- --------------------------------------------------------------
Stock Option Values
- -------------------
The following table provides information, with respect to
the Named Persons, concerning the options granted to them during
the last fiscal year and the options held by them at March 31,
1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Option Exercises in Last Fiscal Year and Fiscal Year End Stock Option Values
----------------------------------------------------------------------------
Number of Unexercised Value of Unexercised In-the-
Shares Value Options at Fiscal Year End Money Options at Fiscal Year End($)(1)
Acquired on Realized -------------------------- -------------------------------------- End ($)(1
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------- ----------- --------- ----------- ------------- ----------- -------------
M. ("Sreeni")
Sreenivasan 125,000 $415,250 91,000 50,000 $221,100 $0
Philip L. Knutson* 56,240 $233,958 110,000 40,000 $326,300 $0
Charles B. Williams 93,720 $256,822 16,000 36,000 $0 $0
</TABLE>
_______________________
*Dr. Knutson resigned his position with the Company on May 8,
1998.
(1)Represents the difference between the exercise price of the
options with exercise prices below $6.19 and the $6.19 closing
price of the Company's Common Stock on March 31, 1998.
<PAGE> 10
Comparison of Total Cumulative Shareholder Equity
The following graph sets forth the Company's total
cumulative shareholder return as compared to the Nasdaq Stock
Market (U.S.) and S&P Specialty Chemicals Indexes for the period
March 31, 1993 through March 31, 1998. The total shareholder
return assumes $100 invested at the beginning of the period in
Common Stock of the Company, Nasdaq Stock Market Index (U.S.) and
the S&P Specialty Chemicals Index. Historic stock price
performance is not necessarily indicative of future stock price
performance.
Edgar Representation of Data Points Used in Printed Graphic
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Nasdaq Stock Market S&P Specialty
Synthetech Index (U.S.) Chemicals Index
---------- ------------------- ---------------
1993 100 100 100
1994 137 108 106
1995 122 120 107
1996 356 163 138
1997 452 181 124
1998 367 275 157
</TABLE>
All data points are at March 31.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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, 1998, 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 Persons and all officers and
directors as a group.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
- ------------------- -------------------- -----------
Paul C. Ahrens 1,465,491(1) 10.4%
1290 Industrial Way
Albany, OR
M. ("Sreeni") Sreenivasan 603,810(2) 4.2%(3)
1290 Industrial Way
Albany, OR
Howard L. Farkas 89,042(4) *
5460 South Quebec Street
Suite 300
Englewood, CO
<PAGE> 11
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
- ------------------- -------------------- ----------
Edward M. Giles 271,000(5) 1.9%(3)
645 Madison Avenue
8th Floor
New York, NY 10022
Page E. Golsan, III 41,000(6) *
3205 Canterbury Drive, South
Salem, OR
Donald M. Kuhla, Ph.D. 13,000(7) *
1787 Sentry Parkway West
Bldg. 18, Suite 301
Blue Bell, PA 19422
Philip L. Knutson, Ph.D.+ 400,840(8) 2.8%(3)
1290 Industrial Way
Albany, OR
Charles B. Williams 234,120(9) 1.7%(3)
1290 Industrial Way
Albany, OR
Brown Capital Management 752,400(10) 5.3%
809 Cathedral Street
Baltimore, MD 21201
All Officers and Directors as 3,171,303(1)(2)(4)(5) 21.8%(3)
a Group (9 persons) (6)(7)(8)(9)
</TABLE>
______________________
*less than 1%.
+Dr. Knutson resigned his position with the Company on May 8,
1998.
(1)Includes 14,000 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.
(2)Includes 128,500 shares of common stock which Mr. Sreenivasan
has the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 12,500 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 39,042 shares of common stock which Mr. Farkas has
the right to acquire immediately or within sixty (60) days
pursuant to 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 25,958 shares of common stock
issuable pursuant to stock options held by Mr. Farkas which
are not exercisable now or within sixty (60) days.
(5)Includes 10,000 shares of common stock which Mr. Giles has the
right to acquire immediately or within sixty (60) days
pursuant to stock options. Excludes 15,000 shares of common
stock issuable pursuant to stock options held by Mr. Giles
which are not exercisable now or within sixty (60) days. Also
includes 60,000 shares of common stock held by two individuals
who have granted to Mr. Giles the investment powers associated
with these shares. Mr. Giles disclaims beneficial ownership
over these 60,000 shares.
<PAGE> 12
(6)Includes 3,000 shares of common stock which Mr. Golsan has the
right to acquire immediately or within sixty (60) days
pursuant to stock options. Excludes 12,000 shares of common
stock issuable pursuant to stock options held by Mr. Golsan
which are not exercisable now or within sixty (60) days.
(7)Includes 10,000 shares of common stock which Dr. Kuhla has the
right to acquire immediately or within sixty (60) days
pursuant to stock options. Excludes 15,000 shares of common
stock issuable pursuant to stock options held by Dr. Kuhla
which are not exercisable now or within sixty (60) days.
(8)Includes 140,000 shares of common stock which Dr. Knutson has
the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 10,000 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 42,000 shares of common stock which Mr. Williams has
the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 10,000 shares of
common stock issuable pursuant to stock options held by Mr.
Williams which are not exercisable now or within sixty (60)
days.
(10)Based on Schedule 13(g) filings, pursuant to which Brown
Capital Management disclosed controlling 752,400 shares of
common stock with sole dispositive power. Of these shares,
Brown Capital Management further disclosed that it had sole
voting power over 695,800 shares of common stock.
Schedule 16(a) Beneficial Ownership Reporting Compliance
- --------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's officers and directors, and
persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership on
Form 3 and changes in ownership on Form 4 or Form 5 with the
Securities and Exchange Commission ("SEC"). Such officers,
directors and 10% shareholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms
received by it, or written representations from certain reporting
persons, the Company believes that, during the fiscal year ended
March 31, 1998, all Section 16(a) filing requirements applicable
to its officers, directors and 10% shareholders were complied
with, except for the following late filings: one Form 4 filed by
Mr. Ahrens with regard to one transaction, one Form 4 filed by
Mr. Sreenivasan with regard to one transaction and one Form 4
filed by Mr. Williams with regard to one transaction.
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, 1998 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.
<PAGE> 13
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 1999 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 March 12, 1999.
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 23, 1998 Charles B. Williams
Secretary
<PAGE>
PROXY SYNTHETECH, INC. PROXY
1290 Industrial Way, Albany, OR 97321
Annual Meeting of Shareholders of Synthetech, Inc. to be held on July
23, 1998
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 10, 1998, at the Annual Meeting of
Shareholders of Synthetech, Inc., to be held on July 23, 1998, 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 23, 1998,
as follows:
ELECTION OF DIRECTORS
[ ] FOR all nominees listed below as Class I Directors (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.
Paul C. Ahrens Page E. Golsan, III
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 AND PAGE E. GOLSAN, III AS CLASS I
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.
