<PAGE>
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
Per unit price
or other Proposed
Title of each Aggregate underlying maximum
class of number of value of aggregate
securities to securities to transaction value of Total Fee
which which computed transaction: Paid
transaction transaction pursuant to
applies: applies: Exchange
Act Rule 0-11:
------------- ------------- --------------- ------------ --------
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>
SYNTHETECH, INC.
1290 Industrial Way
Albany, Oregon 97321
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 15, 1999
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 15, 1999, at 1:30 p.m., Pacific
Time, for the following purposes:
1. To elect two Class II 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, 1999 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, 1999
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 15, 1999 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 June 25, 1999.
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 of the Company, or may withhold approval
to vote for any or all of the nominees
<PAGE> 2
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, 1999, the record date for shareholders entitled
to vote at the Annual Meeting, the Company had outstanding
14,251,630 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, 1999, 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, 1999.
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 1999 Annual Meeting, two Class II directors are to be
elected to hold office until the 2002 Annual Meeting, or until
their successors have been duly elected and qualified. The Board
of Directors proposes for election Edward M. Giles and Charles B.
Williams, both of whom are now Class II 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. Last year the Class I directors were reelected to a term
of three years. This year, Mr. Giles and Mr. Williams, whose
initial terms were for only two years, are nominated for
reelection to three year terms. 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
<PAGE> 3
is present at the annual meeting of shareholders, the two
nominees for election as Class II directors who receive the
greatest number of 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 (47) 1981
Chairman of the Board
I Page E. Golsan, III (61) 1991
Director
II Edward M. Giles (63) 1997
Director
II Charles B. Williams (52) 1997
Vice President of Finance
and Administration, Chief
Financial Officer,
Secretary, Treasurer and
Director
III Howard L. Farkas (75) 1985
Director
III Donald E. Kuhla, Ph.D. (56) 1997
Director
III M. ("Sreeni") Sreenivasan (50) 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 2002
Edward M. Giles. Mr. Giles has served as a director of the
Company since 1997. Since 1989, Mr. Giles has served as Chairman
of The Vertical Group, Inc., a venture capital investment firm.
From 1989 to 1998, Mr. Giles also served as President of The
Vertical Group, Inc. 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
<PAGE> 4
McWhorter Technologies, Inc. and Ventana Medical Systems, Inc.
Mr. Giles received a B.S. 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 also became Chief Financial Officer and Secretary.
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. 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.
Continuing Term 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. 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 1998, Dr. Kuhla has been
President and Chief Operating Officer of Albany Molecular
Research, Inc. (contract research organization). From 1994 to
1998, he was 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.
<PAGE> 5
M. "Sreeni" Sreenivasan. Mr. Sreenivasan has served as a
director of the Company since 1995. He has served as President
and Chief Executive Officer since 1995 and as Chief Operating
Officer from 1990 through 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.
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 in 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 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 1979
to 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. LLC (P.E. Golsan & Co.), 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.
Executive Officers and Key Employees
- ------------------------------------
Officers are elected annually by the Board of Directors and
serve at the discretion of the Board of Directors.
Mr. Sreenivasan and Mr. Williams, who are listed above, are the
executive officers of the Company. In addition, the Company has
the following key employees:
Timothy D. Fitzpatrick. Mr. Fitzpatrick has served as
Director of R&D and Pilot Plant Operations since October 1, 1998.
From 1994 to 1998 he was the R&D Laboratory Manager. Previously,
he worked for Cortech, Inc. from 1993 to 1994 and Somatogen, Inc.
from 1992 to 1993 (both start-up biotechnology companies) as a
research scientist in new drug discovery.
<PAGE> 6
Prior to 1992, he was a research chemist in LHRH Drug Discovery
at Abbott Laboratories of North Chicago, Illinois (pharmaceutical
research and manufacturing). Mr. Fitzpatrick received his M.S. in
Organic Chemistry from University of Wisconsin-Madison and his
B.S. in Chemistry from Montana Tech.
Mitchell R. McVay. Mr. McVay has been Director of
Engineering since April 1, 1998. From 1996 to 1998 he served as
the Plant Engineer. Previously Mr. McVay worked for Salsbury
Chemicals Inc., a division of Cambrex Inc. (chemical
manufacturing) from 1983 to 1996 in various technical and
management capacities, his last position being the Manager of
Engineering and Maintenance. Mr. McVay received his B.S. in
Chemical Engineering from Texas A & M University.
Joel D. Melka. Mr. Melka joined the Company as Director of
Manufacturing in February 1999. From 1988 to 1999 he worked at
ChemDesign Inc. (custom chemical manufacturing) in various
capacities, his last position being Director of Manufacturing.
From 1984 to 1988, he worked for Polaroid Corporation in various
manufacturing positions. Prior to 1984, he spent 5 years as an
officer in the U.S. Navy nuclear submarine service. Mr. Melka
received his M.S. in Chemistry from the University of British
Columbia and his B.S. in Chemistry from Michigan Technological
University .
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 and took action by written
consent on two other occasions.
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
<PAGE> 7
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.
Employment Agreements
- ---------------------
In July, 1997, the Company entered into Employment
Agreements with Messrs. Sreenivasan, Knutson and Williams (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. In May 1998, Mr. Knutson resigned his
employment and has received payments under this Agreement for the
immediate twelve month period thereafter.
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.
<PAGE> 8
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.
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 1999.
As a result of the Company's excellent fiscal 1999
performance, including record revenues and profits, the
Compensation Committee granted significant bonuses to Mr.
Sreenivasan, the CEO, and Mr. Williams, the CFO. Recognizing
Mr. Sreenivasan's long term efforts on behalf of the Company, the
Compensation Committee also granted him a $45,000 one-time bonus
payable over the next three years. Mr. Sreenivasan received
$7,500 of this bonus in fiscal 1999. Consistent with its policy
to create longer-term incentives, the Compensation Committee
granted stock options to the executive officers, including a
24,000 share option to Mr. Sreenivasan.
Paul C. Ahrens
Edward M. Giles
Page E. Golsan III
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, 1999, the Company's Chief Executive Officer,
Chief Financial Officer and two other key employees of the
Company whose salary and bonus exceeded $100,000 during the last
fiscal year (the "Named Persons") for the fiscal years ended
March 31, 1999, 1998 and 1997:
<PAGE> 9
<TABLE>
<CAPTION>
<S><C> <C> <C> <C> <C> <C>
Summary Compensation Table
--------------------------
Long-Term All Other
Annual Compensation Compensation Compensation($)(2)
- ------------------ ----------------------- ------------- ------------------
Name and Principal Year(1) Salary Bonus Stock
Position ($) ($) Options(#)
- ------------------ -------- ------- ------ ------------- -----------------
M. ("Sreeni")
Sreenivasan 1999 165,000 71,500(3) 24,000 11,200
President & Chief 1998 150,000 - 25,000 12,500
Exectutive Officer 1997 150,000 95,000 50,000 7,125
Charles B. Williams 1999 99,000 36,000 19,000 9,900
Vice President of 1998 88,000 - 20,000 7,950
Finance and 1997 88,000 57,000 32,000 6,544
Administration
& Chief Financial
Officer
Mitchell R. McVay 1999 85,500 24,000 19,000 -
Director of 1998 78,000 - 15,000 975
Engineering 1997 74,250 30,000 - -
Timothy D. 1999 71,500 30,600 35,000 4,130
Fitzpatrick 1998 60,000 2,500 9,500 4,050
Director of R&D 1997 57,500 21,000 11,000 3,488
and Pilot Plant
Operations
</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. Sreenivasan was granted a special $45,000 bonus payable
over three years. The fiscal 1999 bonus set forth in the
table includes the initial $7,500 payment of this bonus. See
"Report of the Compensation Committee" above.
Stock Option Grants in Last Fiscal Year
- ---------------------------------------
The following table provides information, with respect to
the Named Persons, concerning the grant of stock options during
fiscal year 1999.
<TABLE>
<CAPTION>
<S><C> <C> <C> <C> <C> <C> <C>
Stock Options Grants in the Last Fiscal Year(1)
-----------------------------------------------
--------------------------------- -----------------------------
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants (Through Expiration Date)
- ---- ----------------------------------- -----------------------------
Options % of Exercise
Granted Total Price Expiration 5% per 10% per
Name (# of Shares) Options(2) ($/Sh)(3) Date year(4) year(4)
- ---- ------------- ---------- --------- ---------- ------- --------
M. ("Sreeni")
Sreenivasan 24,000 9.8% $6.25 May 2008 $82,800 $203,760
Charles B.
Williams 19,000 7.8% $6.25 May 2008 $65,550 $161,310
Mitchell R.
McVay 19,000 7.8% $6.25 May 2008 $65,550 $161,310
Timothy D.
Fitzpatrick 10,000 4.1% $6.25 May 2008 $34,500 $84,900
25,000 10.2% $4.38 Oct 2008 $60,370 $148,695
</TABLE>
<PAGE> 10
_______________________
(1)The Company has not granted any stock appreciation rights
(SARs).
(2)Based on an aggregate of 244,000 options being granted to all
employees during the fiscal year ended March 31, 1999.
(3)These options were granted under the Company's 1995 Incentive
Compensation Plan in May 1998 to each individual for the
options expiring in May 2008, and in October 1998 to Mr.
Fitzpatrick for the option expiring in October 2008. Each
option has an exercise price equal to the fair market value of
the Company's Common Stock as of the date of the grant. These
grants vest annually over a two-year period ending April 2000
for each individual for the options expiring in May 2008, and
the two-year period ending October 2000 for Mr. Fitzpatrick
for the option expiring in October 2008.
(4)The 5% and 10% assumed rates of appreciation are mandated by
the rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of future
prices for its Common Stock.
Stock Option Exercises in Last Fiscal Year and Fiscal Year-End
- --------------------------------------------------------------
Stock Option Values
-------------------
The following table provides information, with respect to
the Named Persons, concerning the options granted to them during
the last fiscal year and the options held by them at March 31,
1999.
<TABLE>
<CAPTION>
<S><C> <C> <C> <C> <C> <C> <C>
Option Exercises in Last Fiscal Year and Fiscal Year End Stock Option Values
----------------------------------------------------------------------------
Number of
Unexercised Value of Unexercied In-
Options at the-Money Options at
Shares Fiscal Year End Fiscal Year End($)(1)
Acquired on Value ------------------ ---------------------
Exercise Realized Exercis- Unexercis- Exercis- Unexercis-
Name (#) ($) able able able able
- ----- ------ -------- ------ ---------- --------- ----------
M. ("Sreeni")
Sreenivasan 47,887 $133,605 80,613 36,500 $27,894 $0
Charles B.
Williams 0 $0 42,000 29,000 $0 $0
Mitchell R.
McVay 2,500 $14,350 9,000 26,500 $5,805 $0
Timothy D.
Fitzpatrick 0 $0 15,750 39,750 $0 $0
</TABLE>
_______________________
(1)Represents the difference between the exercise price of the
options with exercise prices below $4.38 and the $4.38 closing
price of the Company's Common Stock on March 31, 1999.
<PAGE> 11
Comparison of Five Year Cumulative Total Return
- -----------------------------------------------
The following graph provides a comparison of the five year
cumulative total stockholder return on (i) the Company's Common
Stock, (ii) the Nasdaq Stock Market Index (U.S.), and (iii) the
S&P Specialty Chemicals Index. The graph assumes that $100 was
invested on March 31, 1994 in the Company Common Stock, the
Nasdaq Stock Market Index (U.S.), and the S&P Specialty Chemicals
Index, and that all dividends were reinvested. 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 S&P
Stock Market Specialty
Synthetech, Inc. Index (U.S.) Chemicals Index
---------------- ------------- ---------------
1994 $ 100.00 $ 100.00 $ 100.00
1995 84.62 111.25 100.65
1996 246.10 151.06 129.94
1997 312.76 167.83 116.80
1998 253.81 254.43 147.98
1999 179.45 342.42 124.69
</TABLE>
All data points are at March 31.
<PAGE> 12
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, 1999, 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, key
employees and directors as a group.
<TABLE>
<CAPTION>
<S><C> <C> <C>
Name and Address of Amount and Nature Percent
Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- ---------
Paul C. Ahrens 1,405,491(1) 9.9%
1290 Industrial Way
Albany, OR
M. ("Sreeni") Sreenivasan 604,154(2) 4.2%(3)
Howard L. Farkas 106,000(4) *
Edward M. Giles 274,000(5) 1.9%(3)
Page E. Golsan, III 44,000(6) *
Donald M. Kuhla, Ph.D. 17,000(7) *
Charles B. Williams 253,620(8) 1.8%(3)
Timothy D. Fitzpatrick 25,500(9) *
Mitchell R. McVay 26,100(10) *
Brown Capital Management 1,035,800(11) 7.3%
809 Cathedral Street
Baltimore, MD 21201
All Officers, Key 2,755,865(1)(2)(4)(5) 18.9%(3)
Employees and Directors (6)(7)(8)(9)(10)(12)
as a Group (10 persons)
</TABLE>
______________________
*less than 1%.
(1)Includes 6,000 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 105,113 shares of common stock which Mr. Sreenivasan
has the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 12,000 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.
<PAGE> 13
(4)Includes 56,000 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 9,000 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 13,000 shares of common stock which Mr. Giles 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. 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.
(6)Includes 6,000 shares of common stock which Mr. Golsan has the
right to acquire immediately or within sixty (60) days
pursuant to stock options. Excludes 9,000 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 13,000 shares of common stock which Dr. Kuhla 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 Dr. Kuhla
which are not exercisable now or within sixty (60) days.
(8)Includes 61,500 shares of common stock which Mr. Williams has
the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 9,500 shares of
common stock issuable pursuant to stock options held by Mr.
Williams which are not exercisable now or within sixty (60)
days.
(9)Includes 25,500 shares of common stock which Mr. Fitzpatrick
has the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 30,000 shares of
common stock issuable pursuant to stock options held by Mr.
Fitzpatrick which are not exercisable now or within sixty (60)
days.
(10)Includes 26,000 shares of common stock which Mr. McVay has
the right to acquire immediately or within sixty (60) days
pursuant to employee stock options. Excludes 9,500 shares of
common stock issuable pursuant to stock options held by Mr.
McVay which are not exercisable now or within sixty (60) days.
(11)Based on Schedule 13(g) filings, pursuant to which Brown
Capital Management disclosed controlling 1,035,800 shares of
common stock with sole dispositive power. Of these shares,
Brown Capital Management further disclosed that it had sole
voting power over 971,500 shares of common stock.
(12)Excludes 10,000 shares of common stock issuable pursuant to
stock options held by Mr. Melka which are not exercisable now
or within sixty (60) days.
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, 1999, all Section 16(a) filing requirements applicable
to its officers, directors and 10% shareholders were complied
with except that Messrs. Fitzpatrick, McVay and Melka each failed
to timely file a Form 3 and Form 5.
<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, 1999 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 2000 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 2000 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 25, 2000.
The Company's bylaws also provide that a shareholder may not
present a matter for action at a meeting (other than matters
included in the notice of the meeting) unless the shareholder has
delivered written notice thereof to the Secretary of the Company
not less than 60 days (May 16, 2000) and not more than 90 days
(April 16, 2000) prior to the first anniversary of the preceding
year's annual meeting. The notice must include the information
listed in the bylaw provision.
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, 1999 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 15, 1999
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, 1999, at the Annual Meeting of
Shareholders of Synthetech, Inc., to be held on July 15, 1999, 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, 1999,
as follows:
ELECTION OF DIRECTORS
[ ] FOR all nominees listed below as Class II 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.
Edward M. Giles Charles B. Williams
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 EDWARD M. GILES AND CHARLES B. WILLIAMS AS CLASS II
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.
