<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 20, 2000
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 Hotel, 921 S.W. Sixth Avenue, Portland, Oregon on
July 20, 2000, at 1:30 p.m., Pacific Time, for the following purposes:
1. To elect two Class III Board members for a term of three years.
2. To approve the 2000 Employee Stock Purchase Plan.
3. To approve the 2000 Stock Incentive Plan.
4. 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. Shareholders of record at the
close of business on June 12, 2000 are entitled to notice of and to vote
at the meeting.
Our annual report for the fiscal year ended March 31, 2000 is
enclosed.
You may vote your shares by marking, signing, dating and returning
the enclosed proxy card in the enclosed envelope (which is postage
prepaid if mailed in the United States). If your shares are held in the
name of a bank or broker, you may be able to vote by telephone or on the
Internet. Please follow the instructions on the form you receive from
your bank or broker.
You may attend the meeting and vote your shares in person even if
you have submitted a proxy. Please note, however, that if your shares are
held of record by a broker, bank or other nominee and you wish to vote at
the meeting, you must obtain from the record holder a proxy issued in
your name.
BY ORDER OF THE BOARD OF DIRECTORS,
Charles B. Williams
Secretary
June 16, 2000
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> 2
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 20, 2000 at 1:30 p.m., Pacific Time at the Portland Hilton
Hotel, 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 21, 2000.
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 facsimile message.
Please MARK, SIGN and DATE the enclosed proxy card and
RETURN it promptly in the enclosed envelope provided for this
purpose.
REVOCATION OF PROXIES
You may revoke or change your proxy at any time before it
is voted by sending a written revocation to Synthetech's
Secretary, Charles B. Williams, by providing a later dated
proxy, by voting in person at the meeting or, if your shares
are held in the name of a bank or broker, you may be able to
revoke or change your proxy by telephone. Attendance at the
meeting will not, by itself, revoke a proxy.
<PAGE> 2
ACTION TO BE TAKEN UNDER PROXIES
At the close of business on June 12, 2000, the record date
for determining shareholders entitled to notice of and to vote
at the meeting, there were outstanding and entitled to vote
14,276,641 shares of common stock. Each such shareholder will
be entitled to one vote for each such share held on all matters
to be voted upon at the meeting.
All shares represented by proxies will be voted in
accordance with shareholder directions. If the proxy is signed
and returned without any directions given, shares will be voted
in accordance with the Board of Directors' recommendations. We
are not aware of any matters to be voted on at the meeting
other than as stated in this proxy statement. If any other
matters are properly presented at the meeting, the enclosed
proxy gives discretionary authority to the persons named
therein to vote your shares in their best judgment.
All votes will be tabulated by the inspector of election
appointed for the meeting, who will separately tabulate
affirmative votes and negative votes. Abstentions and "broker
non-votes" will be treated as shares that are present and
entitled to vote for purpose of determining the presence of a
quorum, but do not constitute a vote "for" or "against" any
proposal and thus will be disregarded in the calculation of
votes cast. In an uncontested election of directors, any action
other than a vote for a nominee will have no effect, assuming
the presence of a quorum.
Brokers who hold shares for the accounts of their clients
may vote such shares either as directed by their clients or in
their own discretion if permitted by the stock exchange or
other organization of which they are members. Members of the
New York Stock Exchange are permitted to vote their clients'
proxies in their own discretion as to the election of directors
and other matters if their clients have not furnished voting
instructions at least ten days prior to the meeting. Certain
proposals other than the election of directors are "non-
discretionary," and brokers who have received no instructions
from their clients do not have discretion to vote on those
items. Brokers have discretion to vote on all proposals
presented in this proxy statement.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Shareholders of the Company may submit proposals for
inclusion in the proxy materials for the 2001 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 2001
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 2,
2001.
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
<PAGE> 3
60 days (May 21, 2001) and not more than 90 days (April 21,
2001) prior to the first anniversary of the preceding year's
annual meeting. The notice must include the information listed
in the bylaw provision.
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NOMINEE
At the 2000 Annual Meeting, two Class III directors are to
be elected to hold office until the 2003 Annual Meeting, or
until their successors have been duly elected and qualified.
The Board of Directors proposes for election Howard L. Farkas
and M. ("Sreeni") Sreenivasan, both of whom are now Class III
directors of the Company. Dr. Donald E. Kuhla, who has been a
Class III director, has advised the Board that other business
commitments preclude him from continuing on the Company's Board
of Directors. With Dr. Kuhla's departure, Board of Directors
will consist of six directors, divided into three classes,
serving staggered 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.
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 (48) 1981
Chairman of the Board
I Page E. Golsan, III (62) 1991
Director
II Edward M. Giles (64) 1997
Director
II Charles B. Williams (53) 1997
Vice President of Finance
and Administration, Chief
Financial Officer, Secretary,
Treasurer and Director
III Howard L. Farkas (76) 1985
Director
III M. ("Sreeni") Sreenivasan (51) 1995
President, Chief Executive
Officer and Director
</TABLE>
<PAGE> 4
The following is a brief account of the business
experience of each nominee and continuing term director.
Nominees for Directors
----------------------
Term expiring in 2003
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.
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.
Continuing Term 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 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
<PAGE> 5
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 & 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.
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 McWhorter
Technologies, Inc. (chemical company) and Ventana Medical
Systems, Inc. (medical diagnostic company). 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.
<PAGE> 6
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 employee:
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, Page Golsan and
Paul Ahrens. 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 two 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
<PAGE> 7
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
<PAGE> 8
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.
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 2000.
As a result of the decline in revenues and profits in
fiscal 2000, the Compensation Committee did not grant bonuses
to Mr. Sreenivasan, the CEO, or any of the other executive
officer. In fiscal 1999, recognizing Mr. Sreenivasan's long
term efforts on behalf of the Company, the Compensation
Committee granted him a $45,000 one-time bonus payable over
thirty-six months. Mr. Sreenivasan received $15,000 of this
bonus in fiscal 2000 and $7,500 in fiscal 1999. Consistent
with its policy to create longer-term incentives, the
Compensation Committee granted stock options in fiscal 2000 to
the executive officers, including a 14,000 share option to Mr.
Sreenivasan.
Paul C. Ahrens
Edward M. Giles
Page E. Golsan III
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
<PAGE> 9
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 the Company's
Chief Executive Officer and Chief Financial Officer (the "Named
Persons") for the fiscal years ended March 31, 2000, 1999 and
1998 (no other officer or key employee received a salary and
bonus exceeding $100,000 during fiscal 2000):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Summary Compensation Table
--------------------------
Long-Term All Other
Annual Compensation Compensation Compensation($)(2)
Name and ----------------------------- ------------ ------------------
Principal Year(1) Salary($) Bonus($) Stock
Position Options(#)
-------- ------- --------- --------- ---------- ------------------
M. ("Sreeni") Sreenivasan 2000 180,000 15,000(3) 14,000 5,800
President & Chief 1999 165,000 71,500(3) 24,000 11,200
Executive Officer 1998 150,000 - 25,000 12,500
Charles B. Williams 2000 110,000 - 14,000 10,000
Vice President of 1999 99,000 36,000 19,000 9,900
Finance and Administration 1998 88,000 - 20,000 7,950
& Chief Financial Officer
</TABLE>
_______________________
(1) Fiscal year ended March 31.
(2) Unless otherwise footnoted, represents Company contributions
to the account of the Named Persons under the Company's
401(k) plan.
(3) In fiscal 1999, Mr. Sreenivasan was granted a special
$45,000 bonus payable over thirty-six months. The bonus
figures include a $7,500 payment in fiscal 1999 and a
$15,000 payment in fiscal 2000. See "Report of the
Compensation Committee" above.
<PAGE> 11
Stock Option Grants in Last Fiscal Year
---------------------------------------
The following table provides information, with respect to
the Named Persons, concerning the grant of stock options during
fiscal year 2000.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Stock Options Grants in the Last Fiscal Year(1)
-----------------------------------------------
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants (Through Expiration Date)
----------------------------------------------- -------------------------------
Options Exercise
Granted % of Total Price Expiration
Name (# of Shares) Options(2) ($/Sh)(3) Date 5% per year(4) 10% per year(4)
---- ------------- ---------- --------- ---------- -------------- ---------------
M. ("Sreeni") Sreenivasan 14,000 10.2% $4.56 May 2009 $40,040 $101,780
Charles B. Williams 14,000 10.2% $4.56 May 2009 $40,040 $101,780
</TABLE>
_______________________
(1) The Company has not granted any stock appreciation rights
(SARs).
(2) Based on an aggregate of 137,000 options being granted to
all employees during the fiscal year ended March 31, 2000.
(3) These options were granted under the Company's 1995
Incentive Compensation Plan in May 1999. Each option has an
exercise price equal to the fair market value of the
Company's Common Stock as of the date of the grant. These
grants vest annually over a two-year period ending April
2001 for each individual.
(4) The 5% and 10% assumed rates of appreciation are mandated by
the rules of the Securities and Exchange Commission and do
not represent the Company's estimate or projection of future
prices for its Common Stock.
Stock Option Exercises in Last Fiscal Year and Fiscal Year-End
--------------------------------------------------------------
Stock Option Values
-------------------
The following table provides information, with respect to
the Named Persons, concerning the options granted to them
during the last fiscal year and the options held by them at
March 31, 2000.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Option Exercises in Last Fiscal Year and Fiscal Year End Stock Option Values
----------------------------------------------------------------------------
Shares Value Value of Unexercised In-
Acquired on Realized Number of Unexercised the-Money Options at
Name Exercise(#) ($) Options at Fiscal Year End Fiscal Year End($)(1)
-------------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
M. ("Sreeni") Sreenivasan 18,113 $50,535 87,000 26,000 $0 $0
Charles B. Williams 0 $0 61,500 23,500 $0 $0
</TABLE>
_______________________
(1) Represents the difference between the exercise price of the
options with exercise prices below $4.19 and the $4.19
closing price of the Company's Common Stock on March 31,
2000.
<PAGE> 11
Comparison of Total Cumulative Shareholder Equity
-------------------------------------------------
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, 1995 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 Graph
---------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Nasdaq Stock S&P Specialty
Market Index Chemicals
Synthetech, Inc. (U.S.) Index
---------------- ------------- -------------
1995 $ 100.00 $ 100.00 $ 100.00
1996 290.84 135.80 129.10
1997 369.61 150.95 116.05
1998 299.95 228.88 147.03
1999 212.07 309.19 123.89
2000 203.01 574.04 119.88
</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, 2000, 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 of Percent of
Beneficial Owner Beneficial Ownership Class
------------------- -------------------- ----------
Paul C. Ahrens 1,328,491 9.3%
1290 Industrial Way
Albany, OR
M. ("Sreeni") Sreenivasan 619,018(1) 4.3%(2)
Howard L. Farkas 109,000(3) *
Edward M. Giles 277,000(4) 1.9%(2)
Page E. Golsan, III 51,000(5) *
Donald M. Kuhla, Ph.D. 20,000(6) *
Charles B. Williams 271,120(7) 1.9%(2)
Brown Capital Management 1,432,000(8) 10.0%
809 Cathedral Street
Baltimore, MD 21201
All Officers, Key 2,729,379(9) 18.6%(2)
Employees and Directors
as a Group (9 persons)
</TABLE>
______________________
*less than 1%.
(1) Includes 106,000 shares of common stock which Mr.
Sreenivasan has the right to acquire immediately or within
sixty (60) days pursuant to employee stock options.
Excludes 7,000 shares of common stock issuable pursuant to
stock options held by Mr. Sreenivasan which are not
exercisable now or within sixty (60) days.
(2) 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
(3) Includes 59,000 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 6,000 shares of
common stock issuable pursuant to stock options held by Mr.
Farkas which are not exercisable now or within sixty (60)
days.
(4) Includes 16,000 shares of common stock which Mr. Giles 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. 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.
(5) Includes 9,000 shares of common stock which Mr. Golsan has
the right to acquire immediately or within sixty (60) days
pursuant to stock options. Excludes 6,000 shares of common
stock issuable pursuant to stock options held by Mr. Golsan
which are not exercisable now or within sixty (60) days.
(6) Includes 16,000 shares of common stock which Dr. Kuhla 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 Dr. Kuhla
which are not exercisable now or within sixty (60) days.
(7) Includes 78,000 shares of common stock which Mr. Williams
has the right to acquire immediately or within sixty (60)
days pursuant to employee stock options. Excludes 7,000
shares of common stock issuable pursuant to stock options
held by Mr. Williams which are not exercisable now or within
sixty (60) days.
(8) Based on Schedule 13(g) filings, pursuant to which Brown
Capital Management disclosed controlling 1,432,000 shares of
common stock with sole dispositive power. Of these shares,
Brown Capital Management further disclosed that it had sole
voting power over 1,333,700 shares of common stock.
(9) See footnotes 1, 3, 4, 5, 6 and 7.
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, 2000, all Section 16(a) filing
requirements applicable to its officers, directors and 10%
shareholders were complied with.
<PAGE> 14
2000 EMPLOYEE STOCK PURCHASE PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
THE 2000 EMPLOYEE STOCK PURCHASE PLAN.
The Board has unanimously adopted the 2000 Employee Stock
Purchase Plan (the "ESPP") subject to approval by the
shareholders at the Annual Meeting. The Board believes that
the ESPP will help the Company attract and retain the services
of certain employees and provide added incentive to them by
encouraging stock ownership in the Company. The following
description of the ESPP is a summary and does not purport to be
a complete description. The proposed ESPP is attached in its
entirety to this Proxy Statement as Exhibit A.
Description of the ESPP
-----------------------
Under the ESPP, qualified employees may purchase shares of
Common Stock through payroll deductions at a 15% discount from
market price, without incurring broker commissions. A maximum
of 200,000 shares of Common Stock will be available for
purchase under the ESPP. To be eligible to participate in the
ESPP, an employee must be employed by the Company for at least
20 hours per week, not own 5% or more of the combined voting
power or value of the Company's capital stock or that of any
related corporation and not have a base salary of greater than
$100,000 per year. Nonemployee directors of the Company are
not eligible to participate in the ESPP. Approximately 46
employees are eligible to participate in the ESPP.
Offering Periods. The ESPP is divided into six-month
offering periods that begin on February 1 and August 1 of each
year and end, respectively, on the next July 31 and January 31.
However, the first offering period under the ESPP will begin on
September 1, 2000 and will end on January 31, 2001. During
each offering period, participating employees accumulate funds
in an account used to buy Common Stock through payroll
deductions. Payroll deductions accrue at a rate of not less
than 1% and not more than 15% of the employee's base pay during
each payroll period in the purchase period. At the end of each
six-month offering period, the purchase price is determined and
the participating employees' accumulated funds are used to
purchase the appropriate number of whole shares of Common
Stock. Under the ESPP, no employee may purchase more than
$25,000 worth of Common Stock (based on the fair market value
of the Common Stock on the first day of an offering period)
during any single offering period or calendar year. In
addition, no more than an aggregate of 50,000 shares may be
purchased by all participating employees in a single calendar
year under the ESPP.
Purchase Price. The purchase price per share of Common
Stock is 85% of the lesser of (1) the fair market value of the
Common Stock on the first day of an offering period and (2) the
fair market value of the Common Stock on the last day of an
offering period. On June 15, 2000, the closing price for the
Company's Common Stock on the Nasdaq National Market was $3.19
per share.
<PAGE> 15
Effect of Termination. Employees have no right to acquire
shares under the ESPP upon termination of their employment for
any reason prior to the last business day of an offering
period. Upon termination of employment, the Company will pay
the balance in the employee's account to the employee or to his
or her estate. Neither payroll deductions credited to an
employee's account nor any rights with regard to the purchase
of shares under the ESPP may be assigned, transferred, pledged
or otherwise disposed of in any way by the employee, other than
by will or the laws of descent and distribution.
The Common Stock issued under the ESPP will be from
authorized but unissued shares of the Company's Common Stock.
Administration. The Board or the Compensation Committee
will administer the ESPP. If designated by the Board or the
Compensation Committee, an executive officer of the Company may
also administer the ESPP. The Administrator of the ESPP is
authorized to administer and interpret the ESPP and to make
such rules and regulations as it deems necessary to administer
the ESPP, so long as such interpretation, administration or
application regarding purchases corresponds to the requirements
of Section 423 of the Internal Revenue Code of 1986, as amended
(the "Code").
Amendment of the ESPP. The Board has the power to amend,
suspend or terminate the ESPP, except that the Board may not
amend the ESPP without shareholder approval if such approval is
required by Section 423 of the Code. Unless sooner terminated,
the ESPP will terminate on June 12, 2010.
Change in Control. In the event of a merger or
consolidation resulting in a change in control or acquisition
by another corporation of all or substantially all the
Company's assets, each outstanding option to purchase shares
under the ESPP will be assumed or an equivalent option
substituted by the successor corporation. If the successor
corporation refuses to assume or substitute for the option, the
offering period during which an employee may purchase stock
will be shortened to a specified date before such proposed
transaction. In the event of a proposed liquidation or
dissolution of the Company, the offering period during which an
employee may purchase stock will be shortened to a specified
date before the date of the proposed liquidation or
dissolution.
Federal Income Tax Consequences. The Company intends that
the ESPP qualify as an "employee stock purchase plan" under
Section 423 of the Code. The following discussion summarizes
the material federal income tax consequences to the Company and
the participating employees in connection with the ESPP under
existing applicable provisions of the Code and the accompanying
regulations. The discussion is general in nature and does not
address issues relating to the income tax circumstances of any
individual employee. The discussion is based on federal income
tax laws in effect on the date of this Proxy Statement and is,
therefore, subject to possible future changes in the law. The
discussion does not address the consequences of state, local or
foreign tax laws.
<PAGE> 16
Under the Code, the Company is deemed to grant employee
participants in the ESPP an "option" on the first day of each
offering period to purchase as many shares of Common Stock as
the employee will be able to purchase with the payroll
deductions credited to his or her account during the offering
period. On the last day of each six-month offering period, the
purchase price is determined and the employee is deemed to have
exercised the "option" and purchased the number of shares of
Common Stock his or her accumulated payroll deductions will
purchase at the purchase price.
The required holding period for favorable tax treatment
upon disposition of Common Stock acquired under the ESPP is the
later of (1) two years after the deemed "option" is granted
(the first day of an offering period) and (2) one year after
the deemed "option" is exercised and the Common Stock is
purchased (the last day of an offering period). Thus, the
Common Stock generally must be held for at least one and one-
half years after it is purchased to gain favorable tax
treatment. When the Common Stock is disposed of after this
period, the employee realizes ordinary income to the extent of
the lesser of (a) the amount by which the fair market value of
the Common Stock at the time the deemed "option" was granted
exceeded the "option price" and (b) the amount by which the
fair market value of the Common Stock at the time of the
disposition exceeded the "option price." "Option price" is
equal to 85% of the lesser of the fair market value of the
Common Stock on the first day of the offering period and the
fair market value of the Common Stock on the last day of the
offering period. Thus, the maximum amount of gain taxable as
ordinary income is the amount of the 15% discount measured as
of the last day of an offering period. Any further gain is
taxed at capital gain rates. If the sale price is less than
the option price, there is no ordinary income and the employee
recognizes long-term capital loss.
When an employee sells the Common Stock before the
expiration of the required holding period, the employee
generally recognizes ordinary income to the extent of the
difference between the price actually paid for the Common Stock
and the fair market value of the Common Stock at the date the
option was exercised (the last day of an offering period),
regardless of the price at which the Common Stock is sold. If
the sale price is less than the fair market value of the Common
Stock at the date of exercise, then the employee will also have
a capital loss equal to such difference.
Even though an employee who meets the requisite holding
period must treat part of his or her gain on a disposition of
the Common Stock as ordinary income, the Company may not take a
business deduction for such amount. However, if an employee
disposes of Common Stock before the end of the requisite
holding period, the amount of income that the employee must
report as ordinary income qualifies as a business deduction for
the Company for the year of such disposition.
<PAGE> 17
2000 STOCK INCENTIVE PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
THE 2000 STOCK INCENTIVE PLAN.
The Board has unanimously adopted the 2000 Stock Incentive
Plan (the "2000 Plan") subject to approval by the shareholders
at the Annual Meeting. The Board believes the 2000 Plan will
help the Company attract and retain the services of eligible
individuals and provide added incentive to them by encouraging
them to acquire and maintain stock ownership in the Company.
The following description of the 2000 Plan is a summary and
does not purport to be a complete description. The proposed
2000 Plan is attached in its entirety to this Proxy Statement
as Exhibit B.
Description of the 2000 Plan
----------------------------
The 2000 Plan is an employee benefit program that allows
participants to buy or receive shares of Common Stock. The
purpose of the 2000 Plan is to enhance the long-term
shareholder value of the Company by offering opportunities to
selected individuals to participate in the Company's growth and
success.
Administration. The 2000 Plan is administered by the
Compensation Committee of the Board, except to the extent the
Board appoints another committee or committees consisting of
two or more members of the Board. The Board may also authorize
one or more officers to make grants to designated classes of
eligible persons, subject to limits specifically prescribed by
the Board. The plan administrator has the full and exclusive
power to interpret the 2000 Plan and to establish the rules for
its operation, including the power to select the individuals to
be granted awards and to determine the form, amount and other
terms and conditions of such awards.
Types of Awards. The 2000 Plan permits the Company to
grant both stock options and awards of Common Stock, which may
or may not be subject to certain restrictions.
Eligibility to Receive Awards. The 2000 Plan permits the
Company to grant awards to employees, directors, officers,
consultants, agents, advisors and independent contractors of
the Company or a related corporation. Incentive stock options
may be granted to employees only.
Shares Reserved. A total of 500,000 shares of Common
Stock are issuable under the 2000 Plan. In addition, (a) any
authorized shares not issued or subject to outstanding awards
under the 1995 Stock Incentive Compensation Plan or the 1990
Stock Incentive Compensation Plan (the "Prior Plans") plus
(b) any shares subject to outstanding awards under these Prior
Plans that cease to be subject to such awards (other than by
reason of exercise of options or settlement of stock awards),
up to an aggregate maximum of 893,450 shares, will cease, as of
the date of shareholder approval of the 2000 Plan, to be
available for grant and issuance under the Prior Plans, but
will be available for issuance under the 2000 Plan.
<PAGE> 18
No more than 350,000 shares may be subject to awards
granted to any one individual in a single year, to the extent
such limitations are required for compliance with
Section 162(m) of the Code. Any shares of Common Stock that
have been made subject to an award that cease to be subject to
the award (other than by reason of exercise or payment of the
award to the extent it is exercised for or settled in shares)
will be available for issuance in connection with future grants
of awards under the 2000 Plan.
Stock Options. Both nonqualified stock options and
incentive stock options as defined in Section 422 of the Code
may be granted under the 2000 Plan. The exercise price for
incentive stock options must be at least equal to the fair
market value of the Company's Common Stock on the date of grant
and not less than 110% of fair market value for holders of over
10% of the Company's voting stock. The exercise price for
nonqualified options will be determined by the plan
administrator. For purposes of the 2000 Plan, "fair market
value" means the closing sales price for the common stock as
reported by the Nasdaq National Market on a single trading day.
On June 15, 2000, the closing sales price of a share of common
stock was $3.19.
Unless otherwise provided by the plan administrator, and
to the extent required by law for incentive stock options,
options generally will expire on the earliest of:
- ten years from the date of grant (five years for holders
of over 10% of the Company's voting stock);
- one year after the optionee's retirement, death or
disability;
- immediately upon notice to the optionee of termination for
cause; and
- three months after other terminations.
Unless otherwise specified by the plan administrator,
options vest 25% after each year from the date of grant so that
options are fully vested four years from the date of grant.
The option exercise price may be paid in cash or by check,
or, unless the plan administrator determines otherwise, by
tendering shares of common stock that the holder has owned for
at least six months, by a broker-assisted cashless exercise or
by any other consideration permitted by the plan administrator.
Stock Awards. The plan administrator may grant shares of
Common Stock subject to terms, conditions and restrictions
established by the plan administrator. Restrictions may be
based on continuous service with the Company or the achievement
of performance goals and may also include repurchase or
forfeiture rights in favor of the Company. Holders of
restricted stock are shareholders of the Company and have,
subject to established restrictions, all the rights of
shareholders with respect to such shares.
Transferability. Except as otherwise determined by the
plan administrator and to the extent permitted by Section 422
of the Code, no options or stock awards are assignable or
<PAGE> 19
otherwise transferable by the holder other than by will or the
laws of descent and distribution and, during the holder's
lifetime, may be exercised only by the holder.
Adjustments. The plan administrator will make
proportional adjustments to the aggregate number of shares
issuable under the 2000 Plan and to outstanding awards in the
event of stock splits or other capital adjustments.
Corporate Transactions. Unless individual letter
agreements provide otherwise, in the event of certain corporate
transactions, such as a merger or sale of the Company's assets,
each outstanding option will automatically accelerate and
become 100% vested and exercisable immediately before the
corporate transaction, unless (a) the option is assumed,
continued or replaced with a comparable award by the successor
corporation or its parent or (b) acceleration will render
unavailable "pooling of interest" accounting for a transaction
that otherwise qualifies for this accounting treatment.
Repurchase and forfeiture rights applicable to stock awards
will lapse to the same extent options accelerate in vesting and
exercisability. Any option that is assumed, continued or
replaced with a comparable award in the corporate transaction
will accelerate if the holder's employment or services are
terminated by the successor corporation without cause or by the
holder voluntarily with good reason within two years of the
corporate transaction.
Amendment and Termination. The 2000 Plan may be modified,
amended, or terminated by the Board at any time, except that an
amendment or modification will not affect previously granted
awards without a participant's consent. Shareholder approval
is required for any amendment that increases the number of
shares under the 2000 Plan, changes the class of employees
eligible to receive options, or is otherwise subject to
shareholder approval under any applicable law or regulation.
Federal Income Tax Consequences
-------------------------------
The material U.S. federal income tax consequences to the
Company and to any person granted an option under the 2000 Plan
who is subject to taxation in the United States under existing
applicable provisions of the Code and underlying treasury
regulations are substantially as follows. The following
summary does not address state, local or foreign tax
consequences and is based on present law and regulations as in
effect on the date of this Proxy Statement.
Nonqualified Stock Options. No income will be recognized
by an optionee upon the grant of a nonqualified stock option.
Upon the exercise of a nonqualified stock option, the
optionee will recognize taxable ordinary income in an amount
equal to the excess of the fair market value of the shares at
the time of exercise over the exercise price. Upon a later
sale of those shares, the optionee will have capital gain or
loss equal to the difference between the amount realized on
such sale and the tax basis of the shares sold. Furthermore,
this capital gain or loss will be long-term capital gain or
loss if the shares are held for more than one year before they
are sold. If payment of the option price is made entirely in
cash, the tax basis of the shares will be equal to their fair
market value
<PAGE> 20
on the exercise date (but not less than the exercise price),
and the shares' holding period will begin on the day after the
exercise date.
If the optionee uses already-owned shares to pay the
exercise price of a nonqualified stock option in whole or in
part, the transaction will not be considered to be a taxable
disposition of the already-owned shares. The optionee's tax
basis and holding period of the already-owned shares will be
carried over to the equivalent number of shares received upon
exercise. The tax basis of the additional shares received upon
exercise will be the fair market value of the shares on the
exercise date (but not less than the amount of cash, if any,
used in payment), and the holding period for such additional
shares will begin on the day after the exercise date.
Incentive Stock Options. No income will be recognized by
an optionee upon the grant of an incentive stock option.
Upon the exercise of an incentive stock option during
employment or within three months after the optionee's
termination of employment (12 months in the case of disability,
as defined in the 2000 Plan), the optionee will recognize no
ordinary income at the time of exercise (although the optionee
will have income for alternative minimum income tax purposes at
that time equal to the excess of the fair market value of the
shares over the exercise price).
If the acquired shares are sold or exchanged after the
later of (a) one year from the date of exercise of the option
and (b) two years from the date of grant of the option, the
difference between the amount realized by the optionee on that
sale or exchange and the option exercise price will be taxed to
the optionee as long-term capital gain or loss. If the shares
are disposed of in an arms' length sale before such holding
period requirements are satisfied, then the optionee will
recognize taxable ordinary income in the year of disposition in
an amount equal to the excess of the fair market value of the
shares received on the exercise date over the exercise price
(or, if less, the excess of the amount realized on the sale of
the shares over the exercise price), and the optionee will have
short-term or long-term capital gain or loss, as the case may
be, in an amount equal to the difference between (i) the amount
realized by the optionee upon that disposition of the shares
and (ii) the exercise price paid by the optionee increased by
the amount of ordinary income, if any, so recognized by the
optionee.
The rules for the tax treatment of a nonqualified stock
option also apply to an incentive stock option that is
exercised more than three months after the optionee's
termination of employment (or more than 12 months thereafter in
the case of disability, as defined in the 2000 Plan).
Stock Awards. Depending on the terms of the award,
taxable ordinary income may or may not be recognized by the
participant upon the grant of the award.
For stock awards subject to vesting and other similar
restrictions, the participant will recognize ordinary income
when the shares cease to be subject to the restrictions in an
amount equal to the excess of the fair market value of the
shares at that time over the amount paid for the shares. The
participant may elect, under Section 83(b) of the Code, to
recognize ordinary income
<PAGE> 21
at the time of the transfer in an amount equal to the excess of
the fair market value of the shares at that time over the
amount paid for the shares. In that case, no additional income
is recognized upon the lapse of restrictions on the shares, but
if the shares are subsequently forfeited, the participant may
not deduct the income recognized at the time of receipt of the
shares, and the participant will have a capital loss equal to
the amount paid for the shares.
For stock awards that are not subject to restrictions,
other than restrictions on transfer, the participant generally
recognizes ordinary income at the time of receipt. The holding
period for the shares begins at the time income is recognized
under the rules, and the tax basis in the shares is the amount
of ordinary income so recognized plus the amount, if any, paid
for the shares.
Company Deduction. In all the foregoing cases the Company
will be entitled to a deduction at the same time and in the
same amount as the participant recognizes in ordinary income,
subject to certain limitations. Among these limitations is
Section 162(m) of the Code, under which certain compensation
payments in excess of $1 million are not deductible by the
Company. This limitation on deductibility applies with respect
to that portion of a compensation payment for a taxable year in
excess of $1 million paid to either the Company's chief
executive officer or any one of the other four most highly
compensated executive officers. Certain performance-based
compensation is not subject to the limitation on deductibility.
The 2000 Plan has been drafted to allow compliance with those
performance-based criteria.
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.
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 16, 2000 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 20, 2000
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 in each 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 12, 2000, at the Annual Meeting of Shareholders of
Synthetech, Inc. to be held on July 20, 2000, 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 16, 2000, as follows:
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below as Class III 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.
Howard L. Farkas M. ("Sreeni") Sreenivasan
2. APPROVAL OF 2000 EMPLOYEE STOCK PURCHASE PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF 2000 STOCK INCENTIVE PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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.
---- -- -------
<PAGE>
THE BOARD OF DIRECTORS HAS NOMINATED AND RECOMMENDS A VOTE FOR THE
ELECTION OF HOWARD L. FARKAS AND M. ("SREENI") SREENIVASAN AS CLASS
III DIRECTORS, AND RECOMMENDS A VOTE IN FAVOR OF THE 2000 EMPLOYEE
PURCHASE PLAN AND 2000 STOCK INCENTIVE PLAN.
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 AND FOR THE 2000
EMPLOYEE STOCK PURCHASE PLAN AND 2000 STOCK INCENTIVE PLAN.
DATE:_______________________________
------------------------------------
SIGNATURE
____________________________________
SIGNATURE IF HELD JOINTLY
PLEASE INDICATE ANY CHANGES IN ADDRESS
Please sign name exactly as it appears
hereon. When shares are registerd in
more than one name, the signatures of
all such persons are required. 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.
