SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the fiscal year ended December 31, 1995
Commission File Number: 0-3207
Barringer Technologies Inc.
(Exact name of registrant as specified in its charter)
Delaware 84-0720473
(State or Other (I.R.S. Employer
Jurisdiction of Identification No.)
Incorporation or
Organization)
219 South Street, New Providence, NJ 07974
(Address, Including Zip Code, of Principal Executive Offices)
(908) 665-8200
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
Indicate by check mark whether: the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
The aggregate market value of voting stock held by nonaffiliates
of the registrant is $1,346,000 as of March 25, 1996.
Indicate the number of shares of each of the issuer's classes of
common stock, outstanding as of the latest practicable date.
Outstanding as of March 25, 1996
Common Stock, $.01 par value 3,479,131
TABLE OF CONTENTS
Page
PART I
Item 1. Business 3
Item 2. Properties 10
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
PART II
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters 11
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Item 8. Financial Statements and Supplementary Data 23
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 23
PART III
Item 10. Directors, Executive Officers, Promoters and
Control Persons of the Registrant 23
Item 11. Executive Compensation 25
Item 12. Security Ownership of Certain Beneficial
Owners and Management 28
Item 13. Certain Relationships and Related Transactions 30
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K
PART I
Item 1. Business
(a) General
Barringer Technologies Inc. and its subsidiaries (except where
otherwise indicated, collectively, the "Company") are principally
engaged in the following areas of business: (1) the development and
marketing of analytical instruments for the high sensitivity
detection of chemicals, including explosives and drugs (the
"Instruments Business"), conducted by Barringer Instruments, Inc.
("BII") and Barringer Research Ltd., wholly-owned subsidiaries of the
Company, and (2) contract research for industrial companies and
various government agencies (the "Research and Development
Business"). The Company has also recently entered the consumer
products business with its consumer product, which is a home drug
detection and identification kit.
At December 31, 1995, the Company owned 26% of Barringer
Laboratories, Inc. ("Labco"). Labco provides comprehensive
laboratory-based analytical and consulting services in the United
States and Mexico, including environmental monitoring and geochemical
analysis for the hydrocarbon and mineral exploration industries.
In early 1995, the Company commenced negotiations with respect
to a possible sale of its interest in Labco in order to obtain cash
to fund its other operations. On December 13, 1995, the Company sold
back to Labco 647,238 shares of Labco stock in exchange for
cancellation of intercompany obligations and a cash payment. This
transaction reduced the Company's investment in Labco from 47% to
26%. Accordingly, the Company reclassified its financial statements,
where appropriate, to reflect this operation as an investment in an
unconsolidated subsidiary and will account for this investment on the
equity method. See Note 2 of the Notes to Consolidated Financial
Statements.
On August 30, 1995, the Company's stockholders at the Company's
Annual Meeting approved a one-for-four reverse stock split, which
went into effect on September 25, 1995. Where appropriate, all
information has been changed to reflect this action.
The Company was incorporated under the laws of the State of
Delaware on September 7, 1967. The Company's principal executive
office is located at 219 South Street, New Providence, New Jersey
07974 (telephone (908) 665-8200).
Recent Developments
During 1995, the Company was unable to generate sufficient
positive cash flow from operations to meet the Company's cash
requirements. As a result, the Company experienced interruptions and
inefficiencies in production and continues to obtain extended payment
terms from its vendors. If the Company is unable to generate
sufficient cash from its operations or other sources, the Company may
not be able to achieve its growth objectives and may have to curtail
development and marketing activities.
On March 28, 1995, the Company introduced its new consumer
product, which is an in-home drug detection and identification kit
available to consumers that will allow them to determine the presence
of illicit drugs from sampled areas. After limited market testing,
it became apparent that a successful marketing program has to
overcome certain barriers that exist relating to the consumer's
reluctance to purchase the product. Management believes that the product
has good potential and intends to devote appropriate resources to
this product when such resources become available. In the meantime,
it is proceeding with limited distribution to further test its packaging
and other marketing strategies. However, there can be no assurances that
the Company will have the resources to successfully market this product, or
that it will be able to overcome the psychological barriers of its intended
customers or as to the timing thereof.
On May 9, 1995, the Company completed the private placement of
its securities to two institutional investors. The private placement
consisted of 125 units priced at $6,000 each for an aggregate sales
price of $750,000. Each unit ("Unit") consisted of 2,500 shares of
the Company's common stock and a five year warrant to purchase 2,500
shares of the Company's common stock at $2.00 per share. In
addition, in order to induce the institutional investors to enter
into this transaction, an additional three year warrant to acquire
37,500 shares of the Company's common stock at $2.00 per share was
issued.
On June 30, 1995, the Company completed an additional private
placement in which it sold an additional 28 Units, including 22 Units
to 7 members of senior management and the Company's Board of
Directors, for proceeds aggregating $168,000. This private placement
did not include the additional three year warrant.
Effective June 30, 1995, the Company, pursuant to the terms of
its Certificate of Incorporation, as amended, converted all of the
outstanding shares of the Company's convertible preferred stock into
shares of the Company's common stock at a conversion ratio of 0.3217
shares of common stock for each outstanding share of convertible
preferred stock. As a result, effective June 30, 1995, the Company
issued 122,599 shares of common stock in exchange for 381,099 shares
of the convertible preferred stock.
On August 30, 1995, the Company's stockholders at the Company's
Annual Meeting approved a one-for-four reverse stock split of the
Company's common stock, which went into effect on September 25,
1995. See Note 7 of Notes to Consolidated Financial Statements.
On September 14, 1995, the Company's stockholders, at the
reconvened Company's Annual Meeting, approved a proposed amendment
to the Company's Certificate of Incorporation to increase the
authorized shares of capital stock of the Company. See Note 7 of
Notes to Consolidated Financial Statements.
On September 28, 1995, the Company entered into an Agreement
with the Toronto-Dominion Bank pursuant to which the Bank agreed that
the Company's Canadian subsidiary ("BRL") had until September 30,
1995 to come into compliance with certain covenants specified in the
Agreement. In exchange, the Company agreed to dispose of its
interest in Labco and to remit a portion of the proceeds to BRL. In
addition, the Company provided the Bank with additional collateral to
secure its advances to BRL. At September 30, BRL was in compliance
with these requirements. However, at December 31, 1995 BRL was not
in compliance with the minimum working capital requirement and at
January 31, 1996 and February 29, 1996, BRL's borrowings under the
line of credit exceeded the amount available thereunder. The bank
has notified BRL of such default, and without waiving any other
remedies available to it, will charge BRL an interest rate of 21% on
the excess of such allowable borrowings. Based upon the Company's
historical sales patterns and sales through March 22, 1996, BRL
anticipates being in compliance with the borrowing formula as of
March 31, 1996. However, there can be no assurances that the Company
will be in compliance with the terms of the facility or that the
Company will remain in compliance in the future. Management believes
that the Bank will continue to provide funding according to past
practices, however, the Company cannot predict what actions, if any,
the Bank may take or as to the timing thereof. See Note 5 of Notes to
Consolidated Financial Statements.
In March 1996, the Company received notification from NASDAQ
that the Company was not in compliance with the minimum $1.00
bid price requirement necessary for continued listing of the Company's
shares of common stock on The Nasdaq Stock Market SmallCap Market during
the ninety day period ending March 5, 1996. The Company subsequently
filed an appeal with NASDAQ to maintain its listing and has furnished
additional information requested by the qualifications committee.
Management cannot predict the outcome of the appeal. Should the
Company be delisted, it would expect to be traded on the Bulletin Board.
(b) Financial Information About Industry Segments
Reference is made to the information set forth in Note 12 to
the Consolidated Financial Statements of the Company included herein
for financial information regarding the Company's industry segments.
(c) Description of the Company's Business
Instruments Business
The Company designs, develops and manufactures analytical
instruments which are used for security, environmental, earth science
and process control applications. The development and design of
these analytical instruments have been derived from the Company's
contract research and development programs, supplemented by internal
funding when appropriate. This business segment carries out product
engineering, fabrication, assembly and test functions, and oversees
quality control in accordance with strict industrial standards.
Revenues generated by the Instruments Business for the years
ended December 31, 1993, 1994 and 1995 were $6,761,000, $5,216,000
and $5,250,000, respectively. Operating income (loss) for the years
ended December 31, 1993, 1994 and 1995 were $1,709,000, ($1,075,000)
and $268,000, respectively. Identifiable assets attributable to the
Instruments Business at December 31, 1993, 1994 and 1995 were
$6,363,000, $5,486,000 and $7,589,000, respectively.
The Company has developed an Ion Mobility Spectrometer
("IONSCAN") for use in the detection of chemicals, including heroin
and cocaine, and various types of explosives, including plastiques.
The development of the IONSCAN product line has been funded in part
by Transport Canada and Revenue Canada. Pursuant to an agreement with
the Canadian government, in exchange for the funding provided by
Transport Canada and Revenue Canada, Revenue Canada is receiving a
royalty payment equal to 1% of sales of all IONSCAN units.
Management believes that the success of the IONSCAN product
line is essential to the Company's future profitability. The Company
is actively marketing the IONSCAN product line in the United States,
Canada, Central and South America, Europe, Asia, Africa and the
Middle East. The Company has directed its sales and marketing
efforts substantially toward Federal, state, local and foreign law
enforcement, penal and regulatory agencies as well as toward military
agencies. During 1995, the Company has been actively researching new
applications for its technology. No assurances can be given as to
whether the Company's efforts to expand its sales and marketing in
this manner will be effective.
The Company has 20 employees responsible for sales and
marketing efforts, who are aided by technical support employees as
needed. Additionally, the Company has agreements with several
independent sales representatives who are marketing IONSCAN
instruments in selected areas around the world. The Company has
entered into sales representation agreements with Mitsubishi Heavy
Industries for certain Far Eastern countries and has established
offices in Paris, France for certain European, Middle Eastern and
African countries and in the United Kingdom for the United Kingdom,
Germany and the Scandinavian countries.
The Company also manufactures specialized instruments that
cover a wide range of applications in earth sciences, environmental
monitoring and on-line process control. Because of their unique
character, the Company manufactures and sells a limited number of
such instruments, and such instruments constitute an insignificant
part of the Company's business. The hardware components of the
products marketed by the Instruments Business are not proprietary to
the Company, but are generally available products manufactured by
third-party suppliers. Management believes that the Instruments
Business is not significantly impacted by seasonal variation.
The Company expended approximately $182,000, $362,000 and
$151,000 on research and development for the Instruments Business in
1993, 1994 and 1995, respectively, substantially all of which related
specifically to the development of IONSCAN. All of these amounts
were funded by the Company.
Customers. The Company's sales of IONSCAN units to date have
been substantially to Federal, state and foreign governmental
agencies and military agencies. Such sales are dependent upon
budgetary allocations for drug interdiction and security efforts.
Governmental budgetary processes are unpredictable and have resulted
in substantial lead times between the Company's initial marketing and
sales efforts and ultimate budgetary approvals for the purchase of
IONSCAN units. The Company is attempting to expand its markets to
other customers, but to the extent the Company continues to be
dependent on orders from governmental agencies and military forces it
will continue to be subject to and affected by governmental budgetary
processes and constraints.
During 1995, no customer accounted for more than 10% of the
consolidated revenues of the Company. During 1994, one customer
accounted for 10.8% of the consolidated revenues of the Company.
During 1993, no customer accounted for more than 10% of the
consolidated revenues of the Company. During 1995, five customers in
the aggregate accounted for approximately $1,156,000, or 22.2% of
revenues attributable to the Instruments Business. During 1994,
three customers in the aggregate accounted for approximately
$2,095,000 or 40.2% of revenues attributable to the Instruments
Business. During 1993, three customers in the aggregate accounted
for approximately $2,655,000, or 39%, of revenues attributable to the
Instruments Business.
Competition. The Company competes with a number of companies,
most of which have significantly greater financial, technical,
manufacturing and marketing resources than the Company. The
principal competitive factors in the market for security devices
include technological expertise, price, marketing, ease of use and
speed of analysis. The Company believes that it competes effectively
within this market based on the price of its IONSCAN product, the
product's compact size, ease of use and speed of analysis.
Nonetheless, the Instruments Business competes directly with major
manufacturers of instruments for security, environmental, earth
sciences and process control applications. Because of these
considerations, the Company markets its IONSCAN technology and
products in cooperation with other larger entities where necessary.
The Company's major competitor for IONSCAN technology is
Thermedics, Inc. ("Thermedics"). The Company believes that its
product is smaller and more competitively priced than the Thermedics
product and performs its analysis faster than the Thermedics product.
The Company also competes with the present use by various law
enforcement agencies of canines to locate the presence of explosives
or drugs. Although the strengths of canines are their sensitivity of
smell and their ability to follow a trail, the Company believes that
IONSCAN is more effective and cost efficient than canines, because
IONSCAN can operate 24 hours a day whereas canines can work
diligently for only a short period of time. Additionally, IONSCAN
has greater selectivity than canines and will identify the substance
located by it whereas canines react to various substances but cannot
analyze or identify their composition.
The Company has little competition in the manufacture of the
limited number of non-IONSCAN instruments that it sells in
connection with the Instruments Business.
Research and Development Business
The Research and Development Business, chiefly conducted by
Barringer Research Ltd. ("BRL"), the Company's wholly-owned
subsidiary, carries out contract research and development for various
government agencies and for industries in which financial and other
resources are provided primarily by the customer. Presently, a
primary objective of the Research and Development Business is to
develop new IONSCAN applications which will permit the Instruments
Business to penetrate new markets.
Revenues generated by the Research and Development Business
for the years ended December 31, 1993, 1994 and 1995 were $1,009,000,
$298,000 and $1,052,000, respectively. Operating losses for the
years ended December 31, 1993, 1994 and 1995 were $56,000, $208,000
and $311,000, respectively. Identifiable assets attributable to the
Research and Development Business at December 31, 1993, 1994 and 1995
were $325,000, $302,000 and $275,000, respectively. Management
believes that the Research and Development Business is not
significantly impacted by seasonal variation.
Customers. During each of 1993, 1994 and 1995, no customer of
the Research and Development Business accounted for more than 10% of
the consolidated revenues of the Company. During 1995, one customer
accounted for approximately $962,000 or 91.5% of the revenues
attributable to the Research and Development Business; in 1994, three
customers in the aggregate accounted for approximately $230,000, or
77.2%, of the revenues attributable to the Research and Development
Business; and in 1993, three customers in the aggregate accounted for
approximately $517,000, or 51%, of the revenues attributable to the
Research and Development Business.
Competition. The Company's Research and Development Business
competes with a large number of other companies which have
substantially greater financial and other resources. The principal
competitive factors in this market include quality of results,
turnaround time and price. The Company believes that it competes
effectively in this area of its business due to its technological
expertise in its IONSCAN technology and ability to price its
technologies and services competitively.
Consumer Products Business
On March 28, 1995, the Company introduced its new consumer
product, which is an in-home drug detection and identification kit
that allows the Company to determine the presence of illicit drugs
from sampled areas. The kit contains a specially prepared sample
collector that the consumer uses to collect particles from the
target surface or objects most likely to contain drug traces,
such as desk tops, telephones, door knobs, steering wheels, etc.
The consumer then returns the sample to the Company in the sample return
bag provided. The Company analyzes the substances captured by the sample
collector using its IONSCAN analytical instrument. The consumer is
then provided with the results either by mail or by telephone. If the
consumer wishes to remain anonymous, he does not have to provide his
name and address with the returned sample collector, but can utilize
his unique sample number to get the results by calling the Company.
The direct response, test marketing program was not considered
successful and accordingly, the product is currently being prepared
for retail distribution, primarily to pharmacies. The product sells
for approximately $35, which includes the cost of analysis.
The Company is primarily utilizing its existing personnel in
the sales and marketing and administration of this product. It is
expected that additional personnel will be added as required. The
hardware components of the products marketed by the Consumer Products
Business are not proprietary to the Company, but are generally
available products manufactured by third-party suppliers. Management
believes that the Consumer Products Business is not significantly
impacted by seasonal variation.
The Consumer Products Business is not yet a significant line
of business.
Customers. The Company has not yet developed a significant
customer base in this line of business.
Competition. The Company does not know of any companies
currently competing with it in providing non-invasive detection and
identification capability. Nonetheless, there are other
manufacturers and consumer product companies that have the capability
to enter this market, many of which have significantly greater
financial, technical, and marketing resources than the Company.
Although the Company has just begun operating in this market, the
Company believes that the principal competitive factors in this
market include marketing, price, accuracy, reputation and turnaround
time.
Employees
As of December 31, 1995, the Company and its subsidiaries had
61 full-time employees and 4 part-time employees. None of the
Company's employees is represented by any union, and the Company
considers its relationships with its employees to be satisfactory.
Patents and Trademarks
The Company holds, through BRL, an aggregate of 10 patents
throughout the world related to equipment, systems and techniques.
While such patents may be regarded as having substantial value, the
Company's current business is not deemed to be materially dependent
upon either the aggregate of such patents or any one of them. The
Company believes that its IONSCAN registered trademark has gained
recognition in the markets for the Company's instrument products and
is a valuable trademark; however, the Company does not believe that
the Instruments Business is dependent on the trademark. Management
believes that only segment of the Company's business in which patents
play a significant role is the Instrument Business.
Backlog
As of December 31, the backlog of orders by industry segment
believed to be firm was as follows for each of the following years:
1995 1994
Research and Development $ 480,000 $ 1,580,000
Instruments 594,000 -
Consumer Products - -
$1,074,000 $ 1,580,000
The Company expects to ship all of its backlog in the current
year.
(d) Financial Information about Foreign and Domestic Operations and
Export Sales.
For information with respect to financial information about
foreign and domestic operations and export sales, reference is made
to the information set forth in Note 12 to the Consolidated Financial
Statements of the Company included herein, and see Item 7,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations."
Item 2. Properties.
The Company does not own any real property. The Company
leases space as follows:
Square Annual Lease
Footage Lease Expiration Type
219 South Street 4,910 $78,000 March 1998 Sales, service and
New Providence, NJ administrative
1730 Aimco Boulevard 28,480 $76,000* August 2005 Office, research
Toronto, Ontario, Canada laboratory and
manufacturing
Aeroport De Paris 1,060 $21,000 January Sales and service
Roissytech
BP10614-1 Rue Du
Cercle
95724, Roissy C.D.G.,
France
Manor Royal 1,560 $9,000 February 1998 Sales and service
Crawley, West Sussex
England RH10 2QU
________________________
* Increases to $115,000 on September 1, 2000
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's security
holders during the fourth quarter of the year ended December 31, 1995.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The Common Stock is quoted on the NASDAQ interdealer quotation
system (small cap listing). Its symbol is BARR. On March 22 , 1996,
there were approximately 964 holders of record of the Common Stock.
The following table sets forth the high and low bid quotations per
share of Common Stock for each quarter of the two fiscal years ended
December 31, 1994 and 1995 as reported by NASDAQ and adjusted to
reflect the one-for-four reverse stock split effected September 25,
1995 (such quotations reflect inter-dealer prices, without retail
markup, markdown or commission, and may not necessarily represent
actual transactions).
Common Stock
High Low
1994
First Quarter................... $11.24 $9.00
Second Quarter.................. 9.24 6.00
Third Quarter................... 6.76 4.00
Fourth Quarter.................. 4.52 2.00
1995
First Quarter................... $6.88 $1.25
Second Quarter.................. 5.00 2.00
Third Quarter................... 4.25 2.25
Fourth Quarter.................. 3.25 0.50
In March 1996, the Company received notification from NASDAQ
that the Company was not in compliance with the minimum $1.00 bid
price requirement necessary for continued listing of the Company's
shares of common stock on The Nasdaq Stock Market SmallCap Market
during the ninety day period ending March 5, 1996. The Company
subsequently filed an appeal with NASDAQ to maintain its' listing and
has furnished additional information requested by the qualifications
committee. Management cannot predict the outcome of the appeal.
Should the Company be delisted, it would expect to be traded on the
Bulletin Board.
The Company has not paid cash dividends on the Common Stock
and does not anticipate paying cash dividends on the Common Stock in
the foreseeable future. The Company is prohibited from paying cash
dividends on the Common Stock unless full cumulative dividends have
been paid or set aside for payment on the Company's Class A
Convertible Preferred Stock and Class B Convertible Preferred Stock,
which dividends, at the option of the Company, are payable in cash or
shares of the Common Stock. The Company is further restricted from
paying cash dividends under the terms of an Indenture between the
Company and The Colorado National Bank of Denver as Trustee, dated
July 15, 1981, under which the Company's 12-1/2% Subordinated
Convertible Debentures were issued. The Company's ability to pay
dividends may also be limited in the future by any legal or
contractual restrictions placed on the abilities of its subsidiaries
to pay dividends to the Company.
Item 6. Selected Financial Data
The following selected consolidated financial data have been
derived from the Company's consolidated financial statements for each
of the five years ended December 31, 1995. These selected financial
data should be read in conjunction with Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements, related notes
and other financial information included elsewhere herein. The
information presented herein has been reclassified to reflect Labco
as being accounted for under the equity method of accounting.
SELECTED FINANCIAL DATA
Years Ended December 31,
1995 1994 1993 1992 1991
(in thousands, except per share data)
OPERATIONS STATEMENT
Sales of goods and services $6,374 $5,514 $ 7,770 $2,838 $1,963
Costs of goods and services 3,804 4,269 3,930 2,211 1,703
Gross profit 2,570 1,245 3,840 627 260
Operating expenses 3,456 3,714 3,299 2,341 3,365
Income (loss) from operations (886) (2,469) 541 (1,714) (3,105)
Other income (expense) (292) (89) (101) (49) (219)
Income tax benefit
(provision) - (75) 153 - -
Income (loss) from
continuing operations $(1,178 $(2,633) $ 593 $(1,763) $(3,324)
PER SHARE DATA (1991 - 1994
restated to reflect reverse
stock split)
Income (loss) per share from
continuing operations $ (0.39) $(0.97) $ 0.20 $(0.92) $ (1.84)
Weighted average shares 3,283 2,827 2,570 2,135 1,862
outstanding (in thousands)
BALANCE SHEET DATA 1995* 1994 1993 1992 1991
Working capital (deficit) $ 370 $ 652 $2,912 $ 27 (1,027)
Current assets 3,672 5067 7,000 2,835 2,639
Total assets 4,735 6,792 8,939 4,805 3,983
Current liabilities 3,302 4,415 4,088 2,808 3,666
Long-term liabilities 10 451 581 759 344
Shareholders' equity (deficit) 1,325 1,186 3,646 709 (27)
* Barringer Laboratories was held for sale and not consolidated in 1995.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
1995 Compared to 1994
Sales of all instruments increased by $34,000, or 0.07%.
Sales of Ionscan instruments and related product decreased by
approximately $200,000, or 3.9% on increased unit sales of
approximately 60%. This was due to the selling price of the new
Model 400 IONSCAN, which was introduced in the first quarter of
1995, being priced approximately 30% less than the Model 350 which
was the only available product during 1994. This reduction in selling
price, coupled with the unit being smaller, lighter and containing
more features, has resulted in significantly more unit sales. Sales
of instruments other than Ionscan products increased by approximately
$240,000 principally due to the award in 1995 of the heavy water
analyzer contract, which will be completed in mid-1996. The Company has
been successful in selling many of its older Model 350 units, but still
has a significant number of units remaining in its inventory.
Accordingly, the Company has reduced the carrying value of the
remaining finished units. Although management believes that it will
dispose of substantially all of its Model 350 inventory by the end of
1996, there can be no assurance that such sales will occur as planned
or the price at which such sales may occur.
Revenues of the research and development business increased by
approximately $754,000, or 253.0%. The improved sales are
attributable to work performed under the Company's contract with the
Emergencies Science Division, Environment Canada to design and build
an airborne laser-fluorosensor system The contract has a value of
approximately Cdn. $1,967,000, with a substantial portion of that
Contract being billed in 1995.
The Company's Consumer products business, formed in March
1995, did not achieve significant sales during 1995. After limited
market testing, it became apparent that a successful marketing
program has to overcome certain barriers that exist relating
to the consumer's reluctance to purchase the product. Management
believes that the product has good potential and intends to devote
appropriate resources to this product, when such resources become
available. In the meantime, it is proceeding with limited distribution
to further test its packaging and other marketing strategies. The
Company does not anticipate significant sales of this product in
1996 and there can be no assurance that markets for this product
will develop or as to the timing thereof.
Gross profit for all businesses as a percentage of sales for
the year ended December 31, 1995 increased to 40.3% from 22.6% in
1994. The gross profit as a percentage of sales for the Research and
Development business improved to a negative 14.2% from a negative
44.6% in 1994. The improvement was due to higher volume absorbing a
greater portion of the fixed overhead. The gross profit as a
percentage of sales for the Instruments business increased to 53.1%
from 26.4%. The 1995 gross profit was impacted by the write down of
the carrying value of the Model 350 inventory aggregating
approximately $450,000 of which approximately $160,000 relates to
excess spare parts inventory and the balance to finished goods
partially offset by an $800,000 charge against its Model 350
inventory taken in 1994. The Consumer Products Business had
negative gross profit due primarily to the expensing of tooling,
software and other development costs.
Selling, general and administrative expenses in 1995 decreased
by approximately $47,000, or 1.4% over 1994. Selling expenses
increased by $759,000, or 48.3%. The increase is primarily
attributable to the expenses associated with the Company's French and
United Kingdom offices being open for a full year and the marketing
associated with the DrugAlert product. General and administrative
expenses decreased by approximately $806,000, or 45.3% over 1994.
This reduction was attributable primarily to a Canadian pension
recovery of $147,000 relating to the 1993 conversion of the Canadian
pension plan from a defined benefit plan to a money purchase plan; a
reduction in accounts payable of $226,000 relating to a settlement of
professional fees and the effect of staff and expense reductions
implemented in late 1994.
Unfunded research and development in 1995, applied to IONSCAN
technology, decreased by approximately $211,000, or 58.3%. The 1994
level was attributable to the completion of the development of the
Company's new Model 400. The level of unfunded research and
development engaged in by the Company is primarily a function of the
availability of resources, both financial and personnel, that is
available at the time.
Interest expense increased by approximately $38,000, or 18.8%
over 1994 levels. The increase is the result of higher levels of
borrowing, at higher interest rates.
Other expense, net of income in 1995 was approximately $52,000
as compared to other income, net of expense in 1994 of approximately
$113,000. The difference of $165,000 was attributable primarily to
the changes in exchange rates which generated a gain of
$135,000 in 1994 compared to a loss of $79,000 in 1995. The balance of
the differences relate to several different accounts of income and
expense that may not recur from year to year.
1994 Compared to 1993
Sales of all instruments for 1994 decreased by $1,545,000 or
22.8%, over 1993. The decrease was attributable to several factors.
Management believed that the pending introduction of the Company's
new Model 400 IONSCAN caused a deferral of purchases until the Model
400 was available. Furthermore, because the Company relies upon
sales to governmental agencies, which are subject to mandated
procurement processes and budgetary constraints, the selling cycle
for its products often extends over long periods, which can result in
significant variations in quarterly sales. The Company believed its
sales in the fourth quarter of 1994 were significantly impacted by
these factors. Because of the announcement of the Model 400, the
Company anticipated that its remaining Model 350's will be sold at
lower prices over a longer period of time than previously expected.
Accordingly, it offered reduced prices to certain customers as
inducements to secure more timely purchase commitments and had
reduced prices on outstanding quotations in order to expedite buying
decisions. Based upon the favorable initial reaction to its Model
400, the Company believed that the Company's instrument sales will
increase in 1995. In addition, in late March 1995, the Company's
Canadian operation received a contract to build 4 heavy water
analyzers for use at a nuclear facility in Asia. The contract is
valued at Cdn. $984,000 with delivery in mid-1996. See Item 1,
"Business -- Description of the Company's Business."
Revenues of the Research and Development Business decreased by
$711,000, or 70.5%, in 1994 compared to 1993. Most of the Company's
past research and development projects have been from Canadian
governmental agencies. Many of these agencies experienced budget
cutbacks which reduced the amount of research and development funds
available. However, the Company has been awarded a contract to
design and build an airborne laser-fluorosensor system, by the
Emergencies Science Division, Environment Canada. The contract has a
value of approximately Cdn. $1,967,000, with a substantial portion of
that Contract being billed in 1995. The Company has several
proposals outstanding involving potential new applications of its
IONSCAN technology with U.S., Canadian and European governmental
agencies. As a result of these factors, 1995 revenues for the
Research and Development Business were significantly improved from
1994.
Gross profit for the Instrument and Research and Development
Businesses as a percentage of sales for the year ended December 31,
1994 decreased from 49.4% in 1993 to 22.6% in 1994. The gross profit
as a percentage of sales on the Research and Development Business
decreased from 6.5% to a negative 44.6% and the gross profit as a
percentage of sales on the Instruments Business decreased from 55.8%
to 26.4%. As a result of the decline in the value of its inventory
of Model 350s, which resulted from the introduction of the Model 400,
the Company has provided approximately $800,000 in inventory and
other charges against the remaining inventory of Model 350s. This
charge reduced the Instruments Business's gross profit percentage by
approximately 15.3%. The remaining decrease in gross profit
percentage was due primarily to volume variances as a result of
cutbacks in planned Model 350 production to meet the anticipated
reduction in sales levels.
Selling, general and administrative expenses in 1994 increased
by $235,000, or 7.5%, over 1993. Selling expenses decreased by
$274,000, or 14.9%, as a result of reduced commissions resulting from
reduced unit sales during 1994, offset in part by the expenses
incurred in connection with the opening of the Company's Paris
office. General and administrative expenses increased by $509,000,
or 40%, primarily as a result of the impact of Canadian pension
expense of approximately $100,000 in 1994 against a pension credit of
$206,000 in 1993, which was the result of converting from a defined
benefit plan to a money purchase plan similar to the 401(k) savings
plans available to the Company's U.S. employees. Also, payroll costs
increased during the first three quarters of the year, in
anticipation of increased volume which did not materialize.
Subsequently, significant staff reductions were implemented. In
addition, a reserve against accounts receivable of approximately
$110,000 was established.
Unfunded research and development in 1994, applied to IONSCAN
technology, doubled to $362,000 from 1993 levels. The increase was
primarily attributable to the development of the Company's new Model
400 instrument.
Interest expense increased by $38,000, or 23.2%, as a result
of higher average borrowings and rising interest rates.
Other income, net of expense, in 1994 was $113,000 as compared
to $34,000 in 1993, an increase in other income of $79,000 or 232%.
Although this category consists of several different accounts of
income and expense that may not recur from year to year, the single
biggest increase in income was in the foreign exchange account which
increased by $99,000. Sales of IONSCAN units are quoted in U.S.
dollars, while production costs are in Canadian dollars. As a result
of the weakening of the Canadian dollar against the U.S. dollar
during 1994, substantial foreign exchange gains were realized.
In 1994, the Company had a net reduction in its Canadian
deferred tax assets of $75,000. In 1993, the Company had a net tax
benefit of $153,000, composed of prior years' assessments by Revenue
Canada of $147,000 and a net recognition of $300,000 in Canadian
deferred tax assets.
Capital Resources and Liquidity
Operating Activities
The Company incurred substantial net losses during the three
years ending December 31, 1992, primarily as a result of the
Company's change in its business strategy from airborne exploration
to development of analytical specialty instruments, especially an
advanced proprietary Ion Mobility Spectrometer called IONSCAN (See
Item 1, "Business"). For the year ended December 31, 1993, the
Company recorded its first year of profitability in recent history,
with a recorded net income of $595,000. The Company was unable to
sustain profitability and incurred net losses of $2,565,000 and
$827,000, for the years ended December 31, 1994 and 1995,
respectively. As a result of the continuing losses, the
Company continues to experience periodic severe cash shortages. The
Company has cut operating expenses and restructured its payments
to suppliers to conserve cash.
The Company follows the practice of manufacturing to a sales
forecast and, as a result, may have an inventory imbalance when sales
are not realized in the same time frame as units are manufactured.
In December 1995, the Company completed a sale of a portion of
its investment in Labco. The proceeds were added to working capital.
The Company will endeavor to sell its remaining interest in Labco,
subject to the conditions contained in the Stock Purchase Agreement.
See Note 2 of Notes to Financial Statements for additional
information.
Financing Activities
In the past, the Company has obtained financing through the
private sale of its equity securities and from working capital lines
of credit.
On May 9, 1995, the Company completed the private placement of
its securities to two institutional investors. The private placement
consisted of 125 units priced at $6,000 each for an aggregate sales
price of $750,000. Each unit ("Unit") consisted of 2,500 shares of
the Company's common stock and a five year warrant to purchase 2,500
shares of the Company's common stock at $2.00 per share. In
addition, in order to induce the institutional investors to enter
into this transaction, an additional three year warrant to acquire
37,500 shares of the Company's common stock at $2.00 per share was
issued.
On June 30, 1995, the Company completed an additional private
placement in which it sold an additional 28 Units, including 22 Units
to 17 members of senior management and the Company's Board of
Directors, for proceeds aggregating $168,000. This private placement
did not include the additional three year warrant.
Effective June 30, 1995, the Company, pursuant to the terms of
its Certificate of Incorporation, as amended, converted all of the
outstanding shares of the Company's convertible preferred stock, par
value $1.25 per share, into shares of the Company's common stock, par
value $0.01 per share, at a conversion ratio of 0.3217 shares of
common stock for each outstanding share of convertible preferred
stock. As a result, effective June 30, 1995, the Company issued
122,599 shares of common stock in exchange for 381,099 shares of the
convertible preferred stock.
On August 30, 1995, the Company's stockholders at the
Company's Annual Meeting approved a one-for-four reverse stock split,
which went into effect on September 25, 1995. See note 7 of Notes to
Consolidated Financial Statements.
Both the Company and its Canadian subsidiary have substantial
tax loss and research and development tax credit carryforwards to
offset projected 1995 and 1996 tax liabilities.
The Company has been experiencing cash flow shortages since
mid-1994. This is the result of the need for capital to support
higher levels of accounts receivable and inventory caused primarily
by uneven sales patterns during the quarters. This situation was
exacerbated by the Company's converting its production from its Model
350 IONSCAN to its newly introduced Model 400 IONSCAN. The Company
needs additional amounts of capital in order to proceed with product
and applications development. During 1995 the Company did not generate
positive cash flow from operations. During the middle of the year,
the Company was able to generate additional cash to meet its
cash requirements through a private equity placement. If additional
capital is required in the future in excess of cash generated by
operations, the Company presently intends to raise such additional
capital through the private placement of its equity and/or debt
securities and/or the sale of the remaining stock in its 26%
ownership in Labco. However, there can be no assurances that the
Company will be able to raise the needed capital or as to the terms
or timing thereof.
On September 28, 1995, the Company entered into an Agreement
with the Toronto-Dominion Bank pursuant to which the Bank agreed that
the Company's Canadian subsidiary ("BRL") had until September 30,
1995 to come into compliance with certain covenants specified in the
Agreement. In exchange, the Company agreed to dispose of its
interest in Labco and to remit a portion of the proceeds to BRL. In
addition, the Company provided the Bank with additional collateral to
secure its advances to BRL. At September 30, BRL was in compliance
with these requirements. However, at December 31, 1995 BRL was not
in compliance with the minimum working capital requirement and at
January 31, 1996 and February 29, 1996, BRL's borrowings under the
line of credit exceeded the amount available thereunder. The bank
has notified BRL of such default, and without waiving any other
remedies available to it, will charge BRL an interest rate of 21% on
the excess of such allowable borrowings. Based upon the Company's
historical sales patterns and sales through March 22, 1996, BRL
anticipates being in compliance with the borrowing formulas as of
March 31, 1996. However, there can be no assurances that the Company
will be in compliance with the terms of the facility or that the
Company will remain in compliance in the future. Management believes
that the Bank will continue to provide funding in accordance with past
practices, however, the Company cannot predict what actions, if any,
the Bank may take or as to the timing thereof.
The Company's 12-1/2% Convertible Subordinated Debentures
("Debentures"), in the principal amount of $300,000 comes due on July
15, 1996. Although the Company believes that it will be able to
generate sufficient cash in order to repay the principal when due,
there can be no assurances that it will be able to do so in the time
necessary to avoid a default under the terms of the Debentures. If
the Company has insufficient funds to repay the Debentures, it will
seek amendments, waivers, extensions, modifications and/or other
measures in order to prevent such default. However, there can be no
assurances that the Company will be successful in preventing such a default.
Investment Activities
Purchases of fixed assets for the years 1993, 1994 and 1995
were $120,000, $490,000 and $359.000, respectively. During this
three-year period, the investments made by the Company were primarily
for IONSCAN related equipment.
During 1995, the incremental cash required for the DrugAlert
product line was approximately $75,000.
The Company anticipates that for 1996 it will require
approximately $150,000 in fixed asset additions. The Company has no
major commitments for capital purchases at this time. The funds
required for this equipment would be provided by financing or
investment activities.
Pursuant to the terms of a Stock Purchase Agreement, dated
December 8, 1995, between the Company and Labco, on December 13, 1995
the Company sold to Labco 647,238 shares of Labco's common stock for
an aggregate purchase price of $809,000. The purchase price
consisted of $300,000 in cash, cancellation of all amounts owed by
the Company to Labco pursuant to certain intercompany agreements and
cancellation of $57,000 in accounts receivable due to Labco. The
proceeds were added to working capital. The Company continues to own
approximately 26% of Labco's common stock outstanding. See note 2
of Notes to Consolidated Financial Statements for additional
information.
Inflation
Inflation was not a material factor in either the sales or the
operating expenses of the Company during the periods presented
herein.
Disclosure Regarding Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward looking statements. Certain information in
Items 1, 2, 3, 7 and 8 of this Form 10-K includes information that is
forward looking, such as the Company's opportunities to increase sales
through among other things, the development of new applications and markets
for its Ionscan equipment and technology, its success with its DrugAlert
product line, exposure to fluctuations in foreign currencies and periodic
liquidity and capital requirements. The matters referred to in forward
looking statements could be affected by the risks and incertainties involved
in the Company's business. These risks and uncertainties include, but are not
limited to, the effect of economic and market conditions, the impact of both
foreign and domestic governmental budgeting decisions and the timing thereof
the ability of the Company to successfully develop abd market new product
applications and the ability of the Company to comply with the covenants of
its loan agreements as well as certain other risks described in Item 7 in
"Managements Discussion and Analysis of Financial Condition and Results of
Operations." Subsequent written and oral forward looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the cautionary statements in this paragraph
and elsewhere in this Form 10-K.
Item 8. Financial Statements and Supplementary Data.
Financial statements and supplementary financial information
are contained on pages __ through ___.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
<TABLE>
Name Position with the Company and Affiliates Director Since
<S> <C> <C>
Stanley S. Binder Director, President and Chief Executive 1991
Officer of the Company; Director of Barringer
Laboratories, Inc. ("Labco").
John H.Davies Director and Executive Vice President 1992
of the Company; President and Chief
Executive Officer of Barringer Research
Ltd.
John J. Harte Director and Vice President, 1986
Special Projects, of the Company;
Chairman of the Board of Labco.
Richard D. Condon Director of the Company 1992
John D. Abernathy Director of the Company 1993
James C. McGrath Director of the Company 1994
Richard S. Rosenfeld Vice President-Finance, Chief Financial
Officer, Treasurer and Assistant Secretary
of the Company --
Kenneth S. Wood Vice President and Secretary of the
Company; President of Barringer Instruments,
Inc. ("BII") --
</TABLE>
Mr. Stanley S. Binder, 54, is a Director and the President and
Chief Executive Officer of the Company. He is also a Director of
Labco. From July 1977 to May 1989, Mr. Binder served as Chief
Financial Officer to Keystone Camera Products Corporation, Clifton,
New Jersey, and its predecessors, the principal business of which was
the manufacture of low cost point and shoot cameras. Keystone Camera
Products Corporation filed a petition for protection under the
bankruptcy laws in January 1991. In July 1989, Mr. Binder joined the
Company and has since held the following offices with the Company:
President from 1989 to the present date, Chief Operating Officer from
1989 to June 1990, Chief Financial Officer from 1989 until July 1993,
and Chief Executive Officer from July 1990 to the present date. Mr.
Binder is also an independent general partner in the Special
Situations Fund III, L.P., a substantial investor in the Company.
See Item 13, "Certain Relationships and Related Transactions."
Mr. John H. Davies, 60, is a Director and Executive Vice
President of the Company and the President and Chief Executive
Officer of Barringer Research Ltd.("BRL"). Mr. Davies joined BRL in
1967 and has been an Executive Vice President and Director of the
Company since January 1992. Mr. Davies has served BRL as a Vice
President, and a Senior Vice President; and currently as BRL's
President (since 1984) and Chief Executive Officer (since August
1989).
Mr. John J. Harte, 54, is a Director and Vice President, Special
Projects, of the Company and Chairman of the Board of Labco, and has
held such positions since joining the Company and Labco in 1986. He
is a certified public accountant and, since 1978, has been and
continues to be a Vice President of Mid-Lakes Distributing Inc., a
manufacturer and distributor of heating and air conditioning parts
and equipment located in Chicago, Illinois.
Mr. Richard D. Condon, 61, has been a Director of the Company
since February 1992. From 1989 through 1995, he has worked as a
consultant to and director of Analytical Technology, Inc., Boston,
Massachusetts, a scientific instrumentation company.
Mr. John D. Abernathy, 59, a Director of the Company since
October, 1993, is a certified public accountant and, since January
1995, has been Executive Director of Patton Boggs LLP, a law firm.
He is also a Director of Oakhurst Capital, Inc., a distributor of
automotive parts and accessories; and since June 1995, he has been a
Director of Wahlco Environmental Systems, Inc. which designs,
manufactures and sells air pollution control and power plant
efficiency equipment. From March 1994 to January 1995, he was a
financial and management consultant. From March 1991 to March 1994,
he was the Managing Director of Summit Solomon & Feldesman, a law
firm in dissolution since March 1993. From July 1983 until June
1990, Mr. Abernathy was Chairman and Chief Executive Partner of BDO
Seidman, a public accounting firm.
Mr. James C. McGrath, 53, a Director of the Company since January
1994, is an international security consultant. Since July 1989, he
has been President of McGrath International, Inc., a management
consulting firm specializing in the security field.
Mr. Richard S. Rosenfeld, 49, is a certified public accountant
and has been Vice President-Finance and Chief Financial Officer of
the Company since July 1993; he has also been the Treasurer and
Assistant Secretary of the Company since January 1992, and was a
consultant to the Company from July 1991 to December 1991. From July
1984 to October 1990, he was Controller, Vice President-Finance, for
Keystone Camera Products Corporation, Clifton, New Jersey, the
principal business of which was the manufacture of low cost point and
shoot cameras. Keystone Camera Products Corporation filed a petition
for protection under the bankruptcy laws in January 1991.
Mr. Kenneth S. Wood, 45, has been a Vice President of the Company
and the President of BII since January 1992 and the Secretary of the
Company since March 1993. He was Vice President of Operations for
BII from April 1990 to January 1992. From July 1978 until April
1990, he was Program Director for Lockheed Electronics, the principal
business of which is aerospace and defense electronics.
All Directors are elected by the holders of the Company's common
stock, par value $.01 per share ("Common Stock"), the Company's Class
A convertible preferred stock, par value $2.00 per share ("Class A
Convertible Preferred Stock"), and the Company's Class B convertible
preferred stock, par value $2.00 per share ("Class B Convertible
Preferred Stock"), to serve one (1) year terms or until their
successors shall be elected and shall qualify. Mr. Binder has an
employment and consulting agreement with the Company. See Item 11,
"Certain Compensation Arrangements." Other officers serve at the
discretion of the Board of Directors.
There are no family relationships among any of the directors and
executive officers.
Under Section 16(a) of the Securities Exchange Act of 1934, the
Company's directors, executive officers, and persons holding more
than ten percent of the Company's Common Stock are required to report
their initial ownership of the Company's Common Stock and any changes
in such ownership to the Securities and Exchange Commission. These
persons also are required to furnish the Company with a copy of all
Section 16(a) forms they file. The Company is obligated to disclose
any failures to, on a timely basis, file such reports. To the
Company's knowledge, based solely on a review of such reports and any
amendments thereto which have been furnished to the Company, the
Company has not identified any reports required to be filed during
the 1995 fiscal year that were not filed on a timely manner.
Item 11. Executive Compensation.
Executive Officer Compensation.
The following table sets forth the compensation paid for the past
three fiscal years to the President and Chief Executive Officer of
the Company and each other executive officer of the Company whose
total annual salary and bonus are $100,000 or more:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
<S> <C> <C> <C> <C> <C> <C>
Other
Annual Restricted Securities
Name and Principal Compen- Stock Underlying LTIP All Other
Position Year Salary Bonus sation Awards Options Payouts Compensation(1)
Stanley S. Binder 1995 $171,491 - - - 45,000 - $ 5,940
President and Chief 1994 167,757 - - - - - 5,940
Executive Officer 1993 148,272 $17,400 - - - - 5,492
John H. Davies 1995 125,775* - $12,149 - 31,250 -
Executive Vice 1994 120,582* - - - - - 5,741*
President of the 1993 115,785* 15,600 - - - -
Company; President
and Chief Executive
Officer of Barringer
Research Ltd.
Kenneth S. Wood 1995 114,190 - - - 26,250 - 2,283
Vice President and 1994 109,751 - - - - - 2,436
Secretary of the 1993 97,874 14,400 - - - 2,386
Company; President
of Barringer Instruments,
Inc.
Richard S. Rosenfeld 1995 96,000 - - - 22,500 - 4,410
Vice President Finance, 1994 90,400 - - - - - 4,545
Treasurer and Chief 1993 68,094 12,600 - - - - 1,976
Financial Officer of the
Company
</TABLE>
___________________________
* Amounts converted to US dollars at the average exchange rate for
the respective year.
(1) Represents amounts contributed by the Company pursuant to the
Company's tax-qualified 401(k) deferred compensation plan ("401(k)
Plan"). The 401(k) Plan provides that the Company will make matching
contributions to the participants in the 401(k) Plan equal to 100% of
the first 2% of a participant's salary contributed and 50% of the
next 5% of a participant's salary contributed, which contributions
vest proportionately over a five year period commencing at the end of
the participant's first year with the Company.
The other annual compensation for Mr. John Davies represented
the payment of previously accrued and unpaid vacation pay.
The following table summarizes certain information relating to
the grant of options to purchase Common Stock to each of the
executives included in the Summary Compensation Table above. None of
such options is presently exercisable.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
Individual Grants
<S> <C> <C>
Percent of Total
Number of Options/SARs Potential Realizable Values
Securities Granted to Exercise At Assumed Annual Rates of
Underlying Employees in or Base Stock Price Appreciation for
Name Options/SARs Fiscal Year(3) Price Expiration Option Term
Granted (#)(2) ($/sh) Date 5%($) 10%($)
_______________________________________________________________________________________________________________________
Stanley S. Binder 45,000 24.80% $2.00 3/10/2000 $25,865 $54,946
John H. Davies 31,250 17.20% $2.00 3/10/2000 $17,268 $38,157
Kenneth S. Wood 26,250 14.50% $2.00 3/10/2000 $14,505 $32,052
Richard S. Rosenfeld 22,500 12.40% $2.00 3/10/2000 $12,432 $27,473
(1) The Company did not grant any stock appreciation rights in 1995.
(2) For a description of certain terms of the options listed above,
see Note 7 of Notes to Consolidated Financial Statements.
(3) Options covering a total of 181,375 Shares of Common Stock were
granted in 1995.
The following table sets forth information with respect to the
executive officers named in the foregoing Summary Compensation Table
concerning the exercise of stock options during 1995 and unexercised
options held by such executive officers as of December 31, 1995, the
end of the last fiscal year:
AGGREGATED OPTION EXERCISES IN 1995 AND
FISCAL YEAR-END OPTION VALUES
Individual Grants
Value of
Unexercised
in-the-Money
Number of Securities Options at
Underlying Unexercised Year-End
Shares Acquired Value Options at Year-end Exercisable/
Name On Exercise Realized(1) Exercisable/Unexercisable Unercisable
Stanley S. Binder - - 0/45,000 -
John H. Davies - - 0/31,250 -
Kenneth S. Wood - - 3,000/38,250 -
Richard S. Rosenfeld - - 1,250/27,500 -
_______________________________
(1) Dollar values are calculated by determining the difference
between the fair market value of the Common Stock underlying the
options and the exercise price of the options on the date of
exercise.
The Company's Canadian subsidiary, Barringer Research Ltd.,
maintained a defined benefit pension plan for its Canadian employees
that was terminated on December 31, 1993. Mr. Davies was a
participant in that plan. His projected annual benefit at age 65 has
been set at approximately Cdn. $74,000, which amount may be subject
to change only in response to changes in the Canadian pension
regulatory scheme.
Directors' Compensation.
The Board has adopted a compensation plan for outside directors.
Outside directors are entitled to an annual retainer paid at the rate
of $2,500 per quarter and a fee of $1,000 for each meeting attended.
In addition, outside directors are eligible to participate in the
1991 Warrant Plan (as described below). Although Mr. Harte is a non-
employee director, he does not participate in the Company's
compensation plan for non-directors. Mr. Harte receives a fee of
$2,000 per month for services he renders to the Company, and a fee of
$1,000 for each meeting he attends in his capacity as a director.
The Board of Directors has adopted the 1991 Directors Warrant
Plan (the "1991 Warrant Plan"). Under the 1991 Warrant Plan, each
non-employee director, upon election or appointment to the Board,
will be sold, at $0.40 per warrant, 3,750 warrants, each of which may
be exercised within five years to purchase one share of Common Stock
at an exercise price to be determined by the Board at the time of
such sale, which exercise price shall not be less than the market
price for the shares underlying the warrants at the time of issuance
of such warrants. The 1991 Warrant Plan provides that each such new
director shall use the first quarterly director's fees to pay the
purchase price for such warrants.
Certain Compensation Arrangements.
The Company has entered into an Employment and Consulting
Agreement with Stanley S. Binder, the President and Chief Executive
Officer of the Company, (the "Employment Agreement"), pursuant
to which Mr. Binder receives compensation for his services as
President of the Company at an initial annual rate of $120,000,
subject to increases equal to percentage increases in the
Consumer Price Index as well as by increases authorized by
the Company's Executive Compensation Committee. Mr. Binder's
annual salary effective May 31, 1994 is $171,491. The Employment
Agreement renews automatically each year, unless either party gives
the other six months prior written notice of non-renewal. In
addition, the Employment Agreement provided for the grant to Mr.
Binder of an option to purchase 25,000 shares of Common Stock at
an exercise price of $4.00 per share, which approximated
market value at the time that the Employment Agreement was executed.
The Employment Agreement also provided that the Company would
grant to Mr. Binder a non-qualified option to purchase 25,000 shares
of Common Stock at an exercise price of $8.00 per share, subject
to anti-dilution provisions, which option would become exercisable
immediately as to all shares subject thereto. Such non-qualified
option has been exercised by Mr. Binder, pursuant to the Stock
Option Exercise Program. See Item 13, "Certain Relationships
and Related Transactions." Mr. Binder does not receive any
additional compensation for his services to Labco. During 1995, Mr.
Binder received a non-qualified option to purchase 45,000 shares of
the Company's common stock at $2.00 per share.
Compensation Committee Interlocks and Insider Participation.
The Company's Executive Compensation Committee (the "Committee")
is comprised of Messrs. Abernathy, Harte and McGrath. During the
fiscal year ended December 31, 1995, Mr. Harte was also the Vice
President, Special Projects, of the Company. Messrs. Abernathy and
McGrath were not officers or employees of the Company during fiscal
1995.
The Company owns a 26% common share equity interest in Labco.
Mr. Harte is Chairman of the Board of Labco, and Mr. Binder is a
Director of Labco. Mr. Binder served on the compensation committee
of Labco's Board of Directors during fiscal 1995. Except as
described in the preceding sentence, no executive officer of the
Company and no member of the Committee is a member of any other
business entity that has an executive officer that sits on the
Company's Board or on the Committee.
On April 21, 1994, Mr. Binder exercised options to purchase
37,500 shares of Common Stock pursuant to the Stock Option Exercise
Program, in exchange for which Mr. Binder executed notes payable to
the Company in the amount of $203,000. In 1995, for the period in
which no interest accrued on the amounts payable to the Company (from
January 1, 1995 through April 21, 1995), Mr. Binder received benefits
of $5,469 under the Stock Option Exercise Program, representing
interest otherwise payable on such $203,000. See Item 12, "Certain
Relationships and Related Transactions" for a description of the
Stock Option Exercise Program. In April of 1993, the Company had
provided to Mr. Binder an unsecured demand loan of $20,000 in
connection with the incurrence by Mr. Binder of tax liability upon
exercising certain of his non-qualified stock options. That loan did
not bear interest for the first year, after which interest accrued at
a rate equivalent to the then current prime rate.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of March 1, 1996, the number
of shares of Common Stock, Class A Convertible Preferred Stock and
Class B Convertible Preferred Stock owned by each director and all
directors and executive officers as a group and any persons
(including any "group" as used in Section 13(d)(3) of the Securities
Exchange Act of 1934) known by the Company to own beneficially 5% or
more of such securities. As of March 1, 1996, there were 3,479,131
shares of Common Stock, 82,500 shares of Class A Convertible
Preferred Stock and 257,500 shares of Class B Convertible Preferred
Stock issued and outstanding. As of that date, none of the officers
and directors owned shares of the Company's Class A Preferred Stock,
or any of the Company's Convertible Debentures.
</TABLE>
<TABLE>
Common Stock Class A Convertible Class B Convertible Total Common Stock and
Preferred Stock Preferred Stock Common Stock Equivalent(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Name of Beneficial Owner Number Percent of Number of Percent of Number of Percent of Number of Percent of
Shares Class Shares Class Shares Class Shares Class
Stanley S. Binder 50,000 1.4 - - - - 107,500(2) 3.0
John H. Davies 53,279 1.5 - - - - 97,029 2.8
John J. Harte 22,500 * - - - - 46,250 1.3
Richard D. Condon 5,000 * - - - - 21,250 *
John D. Abernathy 4,000 * - - - - 17,750 *
James C. McGrath 5,000 * - - - - 21,250 *
Kenneth S. Wood 10,000 * - - - - 51,250 1.5
Richard S. Rosenfeld 5,400 * - - - - 39,150 1.1
All directors and
executive officers
as a group consisting
of eight (8) persons 155,179 4.5 - - - - 401,429 10.8
Special Situations
Fund III, L.P. 369,553 10.6 - - - - 626,220 16.8
153 E. 53rd St.
NY, NY 10022
Special Situations 83,333 2.4 - - - - 176,666 4.9
Cayman Fund LP
153 E 53rd St.
NY, NY 10022
John R. Purcell - - 100,000 38.3 32,290 1.2
700 Canal Street
Stamford, CT 06902-5921 11,527
Herbert Boeckmann II
155595 Roscoe Blvd. 8,337 60,000 23.3 27,711 *
Sepulveda, CA 93134-6503
Colman Abbe c/o
Hampshire Grp 3,477 - - - 25,000 9.7 15,300 *
919 3rd Ave.
NY, NY 10022
Nancy A. Abbe
c/o Hampshire Grp 516 * - - 25,000 9.7 8,589 *
919 3rd Ave.
NY, NY 10022
R.R. Bowlin 14,984 * - - 25,000 9.7 23,057 *
Ft. Wayne, IN
Esther & Carlos Otto 1,694 * 14,060 17.0% - - 6,337 *
Cheyenne, WY
Elizabeth Butenschoen 1,538 * 6,530 7.9% - - 3,694 *
Colfax, CA
______________________________________________________________________________________________________________________
*Less than 1%
</TABLE>
(1) Common Stock Equivalents for each person or entity assumes the exercise
of all outstanding warrants for Common Stock, the conversion of each
outstanding share of Convertible Preferred Stock, Class A Convertible Preferred
Stock and Class B Convertible Preferred Stock into Common Stock and the
issuance of all shares of Common Stock subject to options for such person or
entity.
(2) Does not include 369,553 shares of Common Stock owned by Special
Situations Fund III, L.P., of which Mr. Binder is an Independent General
Partner. Mr. Binder disclaims any beneficial interest in such shares.
Item 13. Certain Relationships and Related Transactions
Under the Company's policies and procedures set forth by the Board
of Directors for reviewing related party transactions, any
transaction between the Company and its respective officers,
directors or principal stockholders must be on terms no less
favorable to the Company than can be obtained from unaffiliated third
parties and must be approved by a majority of the disinterested
directors of the Company. Loans will not be made to officers,
directors or 5% stockholders except those made pursuant to the
Company's Stock Option Exercise Program (as described below) and
those made for bona fide business purposes. The Company believes
that these measures ensure that the terms of any related party
transaction will be at least as fair as those that could be obtained
in arm's length transactions, unless intended to constitute
additional compensation to the parties involved.
In connection with the Company's stock option plan, the Board of
Directors has approved a stock option exercise program ("Stock Option
Exercise Program"). The Stock Option Exercise Program permits all
employees of the Company and its subsidiaries who are granted stock
options (pursuant to either qualified or non-qualified plans) to
finance the exercise of such options by causing the Company to issue
the shares underlying such options upon receipt by the Company from
the employee of a note evidencing indebtedness to the Company in an
amount equal to the exercise price. Such loans, which are secured by
the underlying shares of Common Stock, are interest-free for one year
from the date on which the employee exercises his option, after which
interest accrues at rate per annum equivalent to the prime rate,
which rate is changed monthly. Pursuant to the Stock Option Exercise
Program, on April 21, 1994, Mr. Binder and Mr. Wood exercised options
to purchase 37,500 shares, of Common Stock and 10,000 shares of
Common Stock, respectively, in exchange for which Mr. Binder and Mr.
Wood executed notes payable to the Company in the amount of $203,000
and $71,600, respectively. In 1995, for the period in which no
interest accrued to the Company (from January 1, 1995 through April
21, 1995 ), Mr. Binder and Mr. Wood received benefits of $5,469 and
$1,929 respectively, under the Stock Option Exercise Program,
representing interest otherwise payable on such notes.
On May 9, 1995 the Company sold to the special Situations Fund
III, L.P. ("SSF III"), a current shareholder and an investment group
of which Mr. Binder is an Independent General Partner, and to the
Special Situations Fund Cayman, L.P., an affiliate of SSF III
(collectively, with SSF III, "SSF"), an aggregate of 125 units at a
purchase price of $6,000 per unit for an aggregate purchase price of
$750,000. Each unit consists of 2,500 shares of Common Stock and a
five-year warrant to purchase 2,500 shares of Common Stock at $2.00
per share, subject to certain anti-dilutive provisions. As an
inducement to enter into the transaction and in lieu of a transaction
fee, the Company also issued to SSI warrants, exercisable for three
years, to purchase an aggregate of 37,500 shares of Common Stock at
$2.00 per share, subject to certain anti-dilutive provisions. In
addition, on June 30, 1995, the company sold 22 units to certain
officers and directors of the Company for an aggregate purchase price
of $132,000. Such units were identical to those sold to SSF. For
information relating to Mr. Binder's indebtedness to the Company.
See Item 11, "Compensation Committee Interlocks and Insider
Participation" above.
Pursuant to the terms of a Stock Purchase Agreement, dated
December 8, 1995 ("Agreement"), by and between the Company and Labco
on December 13, 1995 the Company sold to Labco 647,238 shares of Labco's
common stock for an aggregate purchase price of $809,000. The purchase
price consisted of $300,000 in cash, cancellation of all amounts owed
by the Company to Labco pursuant to certain intercompany agreements
(aggregating $452,000) and cancellation of $57,000 in accounts
receivable due to Labco. After giving effect to the sale of the Labco
shares, the Company continued to own 432,475 shares of Labco stock.
Mr. John Harte is Chairman of the Board of Labco and Mr. Stanley Binder
is a Director of Labco. See Note 2 of Notes to Consolidated Financial
Statements.
For a description of certain other relationships, see Item 11,
"Management -- Compensation Committee Interlocks and Insider
Participation."
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements.
The following financial statements of Barringer Technologies Inc.
are included in Part II, Item 8, and set forth on Pages 27 through 45
of this report.
Report of Independent Certified Public Accountants
Consolidated Statements of Operations for the Years Ended December
31, 1995, 1994 and 1993.
Consolidated Balance Sheets - December 31, 1995 and 1994
Consolidated Statements of Shareholders' Equity for the Years
Ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the Years Ended December
31, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements
(a)(2) Financial Statement Schedule.
The following schedule is set forth on page 46 filed herewith:
Schedule II - Valuation and Qualifying Accounts
All other schedules called for by Regulation S-X are not submitted
because they are not applicable or not required or because the
required information is not material or is included in the financial
statements or notes thereto.
(b) Reports on Form 8-K.
Item 5. Other Events - On December 27, 1995, the Company
filed a Form 8-K regarding the sale of a portion of its stock
ownership in Barringer Laboratories, Inc.
(c) Exhibits.
3.1A The Company's Certificate of Incorporation,
as amended.
3.2A By-law of the Company. (1)
4.16 Indenture between the Company and the
Colorado National Bank of Denver as Trustee, (4)
dated July 15, 1981.
4.17 Unit Purchase Agreement and Forms of Warrant
Agreements by and between the Company ,
Special Situations Fund III, L.P. and (7)
Special Situations Cayman Fund, L.P. dated
May 9, 1995.
4.18 Form of Warrant Agreement by and between the
Company and Ontario Development Corporation. (7)
4.19 Form of Subscription Agreement and Form of
Warrant Agreement by and between the Company
and each of Stanley S. Binder, John H.
Davies, Richard S. Rosenfeld, Helene Hollub, (7)
Adam Street Joint Venture, Richard D.
Condon, John J. Harte, John D. Abernathy and
James C. McGrath.
4.20 Form of Warrant Agreement by and between the
Company and Barringer Laboratories, Inc. (7)
10.15 Employment Agreement, dated as of July 10,
1989, between the Company and Stanley S. (1)
Binder.
10.16 Barringer Resources, Inc. 1990 Stock Option (3)
Plan.
10.24 License Agreement dated February 27, 1989
between Canadian Patents and Development
Limited - Societe Canadienne Des Brevets Et (2)
D'Exploitation Limite and Barringer
Instruments Limited.
10.25 Contribution Agreement dated December 22,
1989 by and among Defense Industial Research
Program, the Department of National Defense, (2)
Barringer Research Limited and Barringer
Instruments Limited.
10.31 Form of Stock Purchase Agreement dated as of
November 30, 1992 by and between the Company (5)
and certain accredited investors.
10.33 Stock Purchase Agreement dated as of
February 2, 1993 by and between the Company (5)
and Special Situations Caymans Fund, L.P.
10.34 Form of Stock Purchase Agreement dated as of
December 13, 1993 by and between the Company (5)
and certain accredited investors.
10.36 Loan Agreement dated September 20, 1994
between Ontario Development Corporation and (6)
Barringer Research Limited.
10.37 Credit Facility between the Company and the (8)
Toronto Dominion Bank
10.38 Agreement between the Toronto-Dominion Bank
and Barringer Technologies Inc. and (9)
Barringer Research Limited dated September
28, 1995.
21 Subsidiaries of Barringer Technologies Inc.
23.1 Consent of Independent Certified Public Accountants
23.2 Consent of Independent Certified Public Accountants
27 Financial Data Schedule
____________________________
(1) Incorporated by reference to the identically numbered exhibit to
the Registrant's Registration Statement on Form S-1, File No. 33-31626.
(2) Incorporated by reference to the identically numbered exhibit to the
Registrant's Registration Statement on Form S-l , File No.33-43094.
(3) Incorporated by reference to Exhibit 10.25 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, File No. 0-3207.
(4) Incorporated by reference to Exhibit 4.3 to Registration Statement
on Form S-1, File No. 2-70458.
(5) Incorporated by reference to the identically numbered exhibit to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, File No. 0-3207.
(6) Incorporated by reference to the identically numbered exhibit to
the Registrant's Annual Report 10-K for the fiscal year ended
December 31, 1994, File No. 0-3207.
(7) Incorporated by reference to the identically numbered exhibit to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1995, File No. 0-3207.
(8) Incorporated by reference to Exhibit 10.36 to the Company's Annual
Report on Form 10-K/A-1 for the fiscal year ended December 31, 1994,
File No. 0-3207.
(9) Incorporated by reference to the Exhibit 10.1 to the Company's
Form 8-K filed on October 13, 1995, File No. 0-3207.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BARRINGER TECHNOLOGIES INC.
By:/s/Stanley S. Binder
Stanley S. Binder, President
and Chief Executive Officer
Dated: March 29, 1996
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature Title Date
/s/ Stanley S. Binder President, Chief March 29, 1996
______________________ Executive Officer
Stanley S. Binder and Director
/s/ John D. Abernathy
______________________ Director March 29, 1996
John D. Abernathy
Director March 29, 1996
/s/ Richard D. Condon
______________________
Richard D. Condon Director March 29, 1996
/s/ John H. Davies
___________________ Director March 29, 1996
John H. Davies
/s/ John J. Harte
_________________
John J. Harte Director March 29, 1996
/s/ James C. McGrath
_____________________ Director March 29, 1996
James C. McGrath
/s/ Richard S. Rosenfeld
________________________Vice President-Finance, March 29, 1996
Richard S. Rosenfeld Chief Financial Officer
and Treasurer (Principal
Financial Officer and
Principal Accounting
Officer)
INDEX TO FINANCIAL STATEMENTS
Page
Financial Statement
Report of Independent Certified Public Accountants 27
Consolidated Statements of Operations for the Years Ended
December 31, 1995, 1994 and 1993 28
Consolidated Balance Sheets - December 31, 1995 and 1994 29
Consolidated Statements of Shareholders' Equity for the Years
Ended December 31, 1995, 1994 and 1993 31
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995 32
Notes to Consolidated Financial Statements 33
Financial Statement Schedule
Schedule II - Valuation and Qualifying Accounts
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Barringer Technologies Inc.
New Providence, New Jersey
We have audited the accompanying consolidated balance sheets of
Barringer Technologies Inc. as of December 31, 1995 and 1994 and the
related consolidated statements of operations, shareholders' equity,
and cash flows for each of the three years in the period ended
December 31, 1995. We have also audited the schedule listed in the
accompanying index. These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and schedule based
on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and schedule are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements and schedule. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall presentation of the financial statements and schedule. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Barringer Technologies Inc. at December 31, 1995 and
1994, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
Also, in our opinion, the schedule presents fairly, in all material
respects, the information set forth therein.
BDO SEIDMAN, LLP
WOODBRIGE, NEW JERSEY
MARCH 27, 1996
BARRINGER TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
YEAR ENDED DECEMBER 31,
1995 1994 1993
<S> <C> <C>
Sales $ 6,374,000 $ 5,514,000 $7,770,000
Cost of Sales 3,804,000 4,269,000 3,930,000
_______________________________________________
Gross profit 2,570,000 1,245,000 3,840,000
_______________________________________________
Operating expenses:
Selling, general and
administrative 3,305,000 3,352,000 3,117,000
Unfunded research and development 151,000 362,000 182,000
_______________________________________________
3,456,000 3,714,000 3,299,000
_______________________________________________
( 886,000) (2,469,000) 541,000
Other income (expense)
Interest expense (240,000) (202,000) (164,000)
( 52,000) 113,000 63,000
________________________________________________
Other (292,000) (89,000) (101,000)
Income (loss) before income
tax provision (benefit) (1,178,000) (2,558,000) 440,000
Income tax provision (benefit)
(note 8) - 75,000 (153,000)
________________________________________________
Income (loss) from continuing
operations (1,178,000) (2,633,000) 593,000
Operation held for sale (note 2)
Income from operations 258,000 68,000 2,000
Gain on sale of a portion
of investment 93,000 - -
________________________________________________
351,000 68,000 2,000
Net income (loss) (827,000) (2,565,000) 595,000
Preferred stock dividends (82,000) ( 108,000) (114,000)
________________________________________________
Net income (loss) attributable to
common shareholders $(909,000) $ (2,673,000) $ 481,000
==================================================
Per Share Data (Note 1):
Continuing operations
Operation held for sale: $ (0.39) $ (0.97) $ 0.20
Operations 0.08 0.02 -
Gain 0.03 - -
___________________________________________________
$ (0.28) $ (0.95) $ 0.20
===================================================
Weighted average shares outstanding 3,283,000 2,827,000 2,570,000
===================================================
See notes to consolidated financial statements.
</TABLE>
BARRINGER TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
ASSETS DECEMBER 31,
1995 1994
Current Assets:
Cash $ 43,000 $ 267,000
Receivables, less allowances of
$41,000 and $539,000 (note5) 1,533,000 2,565,000
Inventories 1,621,000 1,790,000
Prepaid expenses and other 250,000 220,000
Deferred tax asset (note 8) 225,000 225,000
____________________________________
Total current assets 3,672,000 5,067,000
Property and equipment, net (note 4) 586,000 1,364,000
Investment in unconsolidated
subsidiary (note 2) 334,000 -
Other 143,000 361,000
_______________________________________
$ 4,735,000 $ 6,792,000
=======================================
See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY DECEMBER 31,
1995 1994
Current Liabilities:
Bank indebtedness and other notes (note 5) 744,000 1,160,000
Accounts payable 1,278,000 1,632,000
Accrued liabilities 723,000 949,000
Accrued payroll and related taxes 257,000 444,000
Current portion of long-term debt (note 6) 300,000 230,000
___________________________
Total current liabilities 3,302,000 4,415,000
Other non-current liabilities 108,000 451,000
Minority interest in subsidiary (note 2) - 740,000
Commitments and contingencies (note 9 and 10)
Shareholders' equity (notes 6 and 7):
Convertible preferred stock $1.25 par value,
1,000,000 shares authorized, 0 and 444,000
shares outstanding, respectively
- 555,000
Class A convertible preferred stock,$2.00
par value, 1,000,000 shares
authorized, 83,000 shares outstanding,
less discount of $64,000 101,000 101,000
Class B convertible preferred stock, $2.00
par value, 730,000 shares authorized,
258,000 and 318,000 shares outstanding,
respectively 515,000 635,000
Common Stock, $0.01 par value, 7,000,000
and 5,000,000 shares authorized, respectively
and 3,479,000 and 2872,000 shares outstanding,
respectively 35,000 29,000
Additional paid-in capital 17,685,000 16,036,000
Accumulated deficit (16,542,000) (15,633.000)
Cumulative foreign currency translation
adjustment (456,000) (524,000)
_______________________________
1,338,000 1,199,000
Less: common stock in treasury, at cost,
31,000 shares (13,000) (13,000)
______________________________
Total shareholders' equity 1,325,000 1,186,000
_______________________________
$ 4,735,000 $ 6,792,000
=================================
See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
<TABLE>
Common stock Preferred stock Class A Class B Paid in Accu Foreign Trea.
pfd stk pfd stk
Total equity shrs am't shrs am't shrs am't shrs am't capital deficit Transl stock
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1992 $ 709 2,423 $ 24 452 $ 564 166 203 471 941 12,765 (13,441) $(325) $(22)
Exercise of stock
options/warrants 1,315 156 2 1,313
1993 dividend on 0 11 114 (114)
preferred stock
Conversion of preferred
stock to common 0 63 1 (7) (9) (83) (102) (153) (306) 416
Subscription receivable
payments 100 100
Sale of common stock
in private
placement, net 768 109 1 767
Sale of treasury stock 225 208 17
Net income 595 595
Translation adjustments (66) (66)
____________________________________________________________________________________________________
Balance
December 31, 1993 3,646 2,762 28 445 555 83 101 318 635 15,683 (12,960) (391) (5)
Exercise of stock options/
warrants 168 72 1 167
Issuance of common stock
pursuant to settlement
of 1993 litigation 70 12 78 (8)
1994 dividend on preferred
stock 0 26 108 (108)
Net Loss (2,565) (2,565)
Translation
adjustment (133) (133)
______________________________________________________________________________________________________
Balance December
31, 1994 1,186 2,872 29 445 555 83 101 318 635 16,036 (15,633) (524) (13)
Sale of units in private
placement, net 888 383 4 884
Conversion of preferred
stock 0 159 2 (445) (555) (60) (120) 673
Change in warrant
exercise price
in payment of debt 10 10
1995 dividend on
preferred stock 0 65 82 (82)
Net loss (827) (827)
Translation adjustment 68 68
_____________________________________________________________________________________________________
$1,325 3,479 35 0 $ 0 83 $ 101 258 $ 515 $17,685*$(16,542) $(456) $ (13)
=======================================================================================================
* At December 31, 1995, net of notes receivable of $274 from the sale of stock.
</TABLE>
See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
1995 1994 1993
Operating Activities:
Net income (loss) $(827,000) $(2,565,000) 595,000
Items not affecting cash:
Depreciation and amortization 362,000 711,000 625,000
Inventory write-down and receivable
reserves 656,000 1,210,000 -
Minority interest - ( 76,000) (2,000)
Income and gain from
operation held for sale (351,000) - -
Pension expense (recovery) (147,000) - (92,000)
Deferred tax expense - 75,000 (300,000)
Prepaid pension cost (78,000) 132,000 (132,000)
Other 71,000 235,000 (2,819,000)
Decrease (increase) in non-cash working
capital balances: (397,000) 206,000 (2,819,000)
______________________________________
Cash used in operating
activities (711,000) (72,000) (2,152,000)
______________________________________
Investing Activities
Purchase of equipment and other (358,000) (847,000) (498,000)
Escrowed cash on sale
of Canadian subsidiary - 225,000 (225,000)
Proceeds on sale of partial
interest in Labco 300,000
Proceeds on sale of equipment 25,000
_______________________________________
Cash used in investing activities (58,000) (622,000) (698,000)
_______________________________________
Financing Activities
Reduction in long-term debt - (184,000) (43,000)
Increase (decrease) in bank
debt and other (412,000) 488,000 407,000
Proceeds on issuance of
securities and other 888,000 171,000 2,308,000
Rent inducement 108,000 - -
Receipt of subscriptions receivable - - 100,000
Cash provided by financing
activities 584,000 475,000 2,772,000
_____________________________________
Decrease in cash (185,000) (219,000) (78,000)
Cash-beginning of year 267,000 486,000 564,000
Less cash held for sale (39,000)
_____________________________________
Cash-end of year $ 43,000 $ 267,000 486,000
=====================================
Changes in components of non-cash
working capital balances
related to operations:
Receivables $ 38,000 1,249,000 $ (3,075,000)
Inventories (281,000) (987,000) (593,000)
Other current assets 60,000 ( 58,000) (50,000)
Other assets (12,000) - -
Accounts payable and
accrued liabilities (202,000) 2,000 899,000
_____________________________________
Decrease (increase) in operating
assets net of operating
liabilities arising from cash
transactions $(397,000) 206,000 (2,819,000)
======================================
See notes to consolidated financial statements.
1. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements comprise the
accounts of the Company and its continuing subsidiary companies.
All intercompany transactions have been eliminated.
Principles of Translation
Assets and liabilities of the Company's foreign subsidiaries are
translated by using year-end exchange rates and income statement
items are translated at average exchange rates for the year.
Translation adjustments are accumulated in a separate component of
shareholders' equity.
Inventories
Materials and supplies are carried at the lower of average cost or
replacement cost. Finished goods and work-in process are carried
at the lower of average cost or net realizable value.
Property and Equipment
Property and equipment are carried at cost. Depreciation of owned
equipment is computed on a straight-line basis over the estimated
useful lives of the related assets, generally from three to ten
years. Leasehold improvements are amortized over the term of the
related lease, generally from five to ten years, which
approximates the useful lives of these improvements. Equipment
under capital leases is amortized on a straight-line basis over
the term of the lease, generally four to ten years, which
approximates the estimated useful lives of the leased equipment.
Per Share Data
Income (loss) per common share is based on the weighted average
number of common shares outstanding and where dilutive, includes
common share equivalents outstanding.
Statement of Cash Flows
For purposes of the Statement of Cash Flows, the Company considers
all highly liquid investments with an original maturity of three
months or less to be cash equivalents.
Revenue Recognition
The Company recognizes revenue on the percentage of completion
method for its research and development contracts with progress
measured based on the ratio of costs incurred to the total
estimated cost, and generally, when product is shipped for all
other sales. Where the Company receives contracts for the design
and construction of specialty instruments that require long
manufacturing times, the Company will also recognize revenue on
the percentage of completion method similar to its recognition
method in the research and development business.
For the year ended December 31, 1995, the Company had recognized
revenues of $264,000 on jobs in process and had incurred related
costs of $183,000, of which $210,000 were billed to customers at
December 31, 1995.
Financial Instruments and Credit Risk Concentration
Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of trade accounts
receivable. Concentrations of credit risk with respect to such
receivables are limited to primarily governmental agencies.
Long-Lived Assets
Long-lived assets, such as property and equipment, are evaluated for
impairment when events of changes in circumstances indicate that the carrying
amount of the assets may not be recoverable through the estimated undiscounted
future cash flows from the use of these assets. When any such impairment
exists, the related assets will be written down to fair value. This policy
is in accordance with Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to
be Disposed of", which is effective for the fiscal years beginning after
December 15, 1995. No write-downs have been necessary through December 31,
1995.
Stock Based Compensation
The Company does not presently intend to adopt the fair value based method
for accounting for stock compensation plans as permitted by Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation", which is effective for transactions entered into in fiscal
years that begin after December 15, 1995.
Fair Value of Financial Instruments
The carrying amounts reported in the consolidated balance sheets for cash
and cash equivalents, accounts receivable, accounts payable and accrued
liabilities approximate fair value because of the immediate or short-term
maturity of these finance instruments.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates. Many of the Company's
estimates and assumptions used in the financial statements relate to the
Company's products, which are subject to technology and market changes. It is
reasonably possible that changes may occur in the near term that would affect
management's estimates with respect to inventories and equipment.
2. Investment in Unconsolidated Subsidiary
During the first quarter of 1995, the Company started to actively
seek a purchaser for its then 47% interest in Barringer
Laboratories, Inc ("Labco"). Accordingly, the financial
statements had been reclassified, where appropriate, to reflect
Labco as an operation held for sale.
Pursuant to the terms of a Stock Purchase Agreement, dated
December 8, 1995 ("Agreement"), by and between the Company and
Labco, on December 13, 1995 the Company sold to Labco 647,238
shares of Labco's common stock for an aggregate purchase price of
$809,000, resulting in a gain of $93,000. The purchase price
consisted of $300,000 in cash, cancellation of all amounts owed
by the Company to Labco pursuant to certain intercompany
agreements (aggregating $452,000) and cancellation of $57,000
in accounts receivable due to Labco. After giving effect to
the sale of the Labco shares, the Company continued to own 432,475
shares of Labco stock.
Under the terms of the Agreement, all intercompany agreements
between the Company and Labco terminated and certain collateral
securing the Company's obligations thereunder was returned to the
Company. However, pursuant to the terms of the Agreement, Labco
retained 88,260 shares of Labco stock owned by the Company. In
the event that Labco meets certain pre-tax earnings goals for
1996, those shares will be returned to the Company. If Labco does
not meet such goals, all or a portion of such shares will be
retained by Labco. The Company has considered the value of the
retained shares in the computation of its gain on the sale of the
Labco shares, and has reduced its gain accordingly.
The Company also agreed to terminate all voting arrangements
allowing it to vote shares of Labco stock not owned by it and
agreed for a period of 24 months not to enter into any such voting
arrangements. In addition, the Company granted Labco a right of
first refusal until January 2, 1997 giving Labco the right, for a
period of thirty days, to purchase shares of Labco stock owned by
the Company in the event that the Company wishes to sell any
additional shares. In connection with such right, the Company
agreed to certain restrictions on the transferability of any Labco
stock owned until January 2, 1997.
The right of first refusal and the related restrictions will
terminate upon the first to occur of (a) the sale, within twelve
months of the date of the Agreement, of Labco stock sufficient to
give any one person or entity ownership of 50% or more of the
Labco stock, or (b) the change of more than three members of the
Board of Directors of Labco, other than as a result of
resignation, during any twelve month period after the date of the
Agreement.
After the transaction described above, the Company presently
retained a 26% ownership interest in the common stock of
Labco and will report Labco under the equity method of accounting.
The following are the condensed results of operations and
condensed balance sheet for Labco.
Condensed Results of Operations
For the year ended December 31,
1995 1994
Revenues $ 6,758,000 $5,941,000
Costs and expenses 6,198,000 5,797,000
___________________________
560,000 144,000
Minority interest (302,000) (76,000)
_____________________________
Net income attributable
to investment $ 258,000 $ 68,000
=============================
Condensed Balance Sheet
December 31,
1995
Current assets $1,362,000
Property and equipment, net 541,000
Other noncurrent assets 47,000
__________
Total assets $1,950,000
==========
Current liabilities $ 908,000
Long-term liabilities 33,000
Equity 1,009,000
_________
Total liabilities and equity $1,950,000
===========
3. Inventories
At December 31, 1995 and 1994, the Company had work in process of
$1,010 ,000 and $982,000, and finished goods of $611,000 and
$808,000, respectively.
4. Property and Equipment
The major categories of property and equipment are as follows (in 000's):
December 31,
1995 1994
Owned:
Office equipment $ 350,000 $ 359,000
Machinery and equipment 1,687,000 2,856,000
Leasehold improvement 64,000 1,012,000
________________________
2,101,000 4,227,000
Accumulated depreciation (1,515,000 (3,279,000)
________________________
586,000 948,000
________________________
Capital leases:
Machinery and equipment - 912,000
Accumulated amortization - (496,000)
________________________
- 416,000
________________________
Totals $ 586,000 $ 1,364,000
========================
5. Bank Indebtedness, Other Notes and Accrued Liabilities
The Company's Canadian subsidiary, Barringer Research Ltd.
("BRL"), has a financing arrangement with the Ontario Development
Corporation ("ODC") for a Cdn $1,000,000 export line of credit.
BRL may borrow up to Cdn $1,000,000 on a formula basis of 90% of
export accounts receivable plus 70% of the value of export
purchase orders (subject to Cdn $300,000 sub-limit). The rate of
interest is adjusted quarterly and was 11.0% at December 31, 1995.
At December 31, 1995, US$448,000 was borrowed and the line was
fully utilized to the extent of available collateral. BRL also
has a line of credit financing arrangement with the
Toronto-Dominion Bank ("Bank") that provides up to Cdn $1,000,000
based on eligible receivables. The rate of interest is Canadian
prime plus 1.5% (9% at December 31, 1995). At December 31, 1995,
US$295,000 was borrowed. At December 31, 1995, the Company had an
additional availability of approximately $100,000 under this
facility. This facility is guaranteed by the Company.
Commencing in March, 1995, BRL had not been in compliance with the
collateral coverage covenant of the loan agreement. The amount of
funds borrowed were in excess of the amount allowed pursuant to
the collateral formula. At that time, the Bank agreed to give BRL
approximately six months to come back into compliance. During
this time, the Bank continued to finance BRL's needs. On
September 28, 1995, the Company entered into an agreement
("Agreement") with the bank, pursuant to which the Bank agreed
that the BRL may have until September 30, 1995 to come into
compliance with certain amended covenants specified in the
Agreement and to maintain such requirements thereafter. In
exchange, the Company agreed to remit 50% of the net proceeds
realized on the sale of a portion of its stock in Labco (see Note 2) to
BRL. In addition, the Company agreed to provide the Bank with
additional collateral to secure its advances to BRL making
substantially all the assets of the Company pledged as collateral.
As of September 30, 1995, BRL was in compliance with such
covenants. However, at December 31, 1995 BRL was not in compliance
with the minimum working capital requirement and at January 31,1996
and February 29, 1996, BRL's borrowings under the line of credit
exceeded the amount available thereunder. The bank has notified
BRL of such default, and without waiving any other remedies
available to it, will charge BRL an interest rate of 21% on the
excess of such allowable borrowings. Based upon the Company's
historical sales patterns and sales through March 22, 1996, BRL
anticipates being in compliance with the borrowing formula as of
March 31, 1996. However, there can be no assurances that BRL will
be in compliance with the terms of the facility or that the Company
will remain in compliance in the future. Management believes that
the Bank will continue to provide funding according with past
practices, however, the Company cannot predict what actions, if any,
the Bank may take or as to the timing thereof.
Accrued liabilities consisted of the following at December 31,:
1995 1994
Accrued commissions 27,000 404,000
Accrued other 696,000 545,000
_____________________
$ 723,000 $ 949,000
===========+=========
6. Long-term Debt and Other Liabilities
Long-term debt consists of the following at December 31,:
1995 1994
12 1/2% Convertible subordinated $ 300,000 $ 300,000
debentures (a)
Capital leases - 344,000
Other (b) 108,000 37,000
___________________
408,000 681,000
Less: Current portion (300,000) (230,000)
____________________
$ 108,000 $ 451,000
=====================
(a) The 12 1/2% Convertible Subordinated Debentures are due July
17, 1996 and are convertible at face amount into common stock any
time before maturity at $32.00 per share (9,375 shares of common
stock reserved at December 31, 1995). Under the terms of the
Indenture, the Company may not pay cash dividends, nor any payment
on account of the purchase, redemption or other acquisition or
retirement of its capital stock.
(b) Other long-term liabilities in 1995 represents rents payable
on the Company's Canadian facility.
7. Shareholders' Equity
Private Offering
On May 9, 1995, the Company completed the private placement
of its securities to two institutional investors. The private
placement consisted of 125 units priced at $6,000 each for an
aggregate sales price of $750,000. Each unit ("Unit") consisted
of 2,500 shares of the Company's common stock and a five year
warrant to purchase 2,500 shares of the Company's common stock at
$2.00 per share. In addition, in order to induce the
institutional investors to enter into this transaction, an
additional three year warrant to acquire 37,500 shares of the
Company's common stock at $2.00 per share was issued.
On June 30, 1995, the Company completed an additional private
placement in which it sold an additional 28 Units, including 22
Units to 17 members of senior management and the Company's Board
of Directors, for proceeds aggregating $168,000. This private
placement did not include the additional three year warrant.
Due from Officers/Shareholders
In connection with the exercise of options to acquire 190,000
shares of the Company's Common Stock, two officers of the Company
signed full recourse interest bearing (no interest the first year,
prime rate thereafter) unsecured promissory demand notes
aggregating $274,000 that was available to them under the
Company's stock option purchase program. Under that program the
Company has arranged for a market-maker in the Company's Common
Stock, to coordinate the orderly sale in the open market of a
portion of the Common Stock to be received by the employees upon
the exercise of their options in an amount sufficient to repay the
loan and related interest. As of December 31, 1995, the notes
were still outstanding.
Common Stock Outstanding or Reserved for Issuance
The following table sets forth the number of shares of Common
Stock outstanding as of December 31, 1995 as well as the number of
shares of Common Stock that would be outstanding in the event that
all of the options and warrants are exercised and all Series of
Convertible Preferred Stock and Debentures are converted into
Common Stock.
Exercise, Common stock
conversion outstanding
or option or reserved
price for issuance
Common stock 3,479,131
Convertible subordinated notes $32.00 9,375
Class A convertible preferred stock $0.38 108,983
Class B convertible preferred stock $0.39 332,587
Stock options (I) $2.00 to $14.00 234,500
Private placement warrants (ii) $2.00 420,000
Other warrants (iii) $4.00 to $14.23 68,750
________________
Total 4,653,326
================
(I) Stock Options - Pursuant to the Company's 1990 Stock Option
Plan the Company may issue both incentive stock options and
qualified stock options. Options granted are exercisable after
the expiration of two years from the date of grant and until the
expiration of five years after the date of grant. Options are
exercisable only during the optionee's employment with the Company
or a subsidiary of the Company. The Company may also grant stock
options to consultants as authorized by the Board of Directors.
These options are exercisable at varying times from date of grant
and expire five years from date of grant.
During 1995, non-qualified options to purchase 181,375 shares at a
price of $2.00 per share were issued to 20 employees and 5,625
options were canceled. The 1995 options expire on March 10, 2000
and are exercisable as to forty percent (40%) of the optioned
shares after one (1) year, sixty percent (60%) after two years,
eighty percent (80%) after three years and one hundred percent
(100%) after four (4) years. During 1994 no options were issued
and 6,250 options were canceled. During 1993, options to purchase
13,750 shares of common stock at a price of $14.00 per share were
issued to 6 employees and 25,000 options were canceled.
Stock options expire between July 17, 1996 and March 10, 2000.
(ii) Private Placement Warrants
In connection with the Company's private placement (see section
above titled Private Offering) warrants to purchase 420,000 shares
of the Company's common stock at $2.00 per share were sold to a
group of private investors and senior management. The warrants
expire between May 9, 1998 and June 29, 2000.
(iii) Other warrants - During 1994, 60,600 Class D Warrants and
16,537 Underwriter's Warrants were exercised, with 22,958 shares
of common stock and 16,537 Class E Warrants being issued. The
exercise of these warrants raised $165,000 of capital for the
Company. Both the Class D Warrants and the Class E Warrants have
expired.
In September 1994, the Company issued warrants to purchase 6,250
shares of the Company's common stock at $5.25 per share to the
Ontario Development Corporation in connection with their increase
in the export financing facility available to the Company's
Canadian subsidiary, from Cdn. $500,000 to Cdn. $1,000,000) See
Note 5 for additional information.
On December 31, 1991, the Board of Directors adopted the 1991
Directors Warrant Plan ("Plan"). Pursuant to the Plan, each non-
employee director will be sold a five-year warrant to purchase
15,000 shares of Common Stock at an exercise price to be
determined by the Board at the time of such sale, but shall not be
less than the current market price for such shares at the time of
issuance of the warrant. During 1994, options to purchase 3,750
shares were issued to a Director at $9.64 per share, subject to
adjustment. None were sold in 1995.
On April 7, 1995, the Company issued warrants to purchase 6,250
shares of the Company's common stock at $4.00 per share to
Barringer Laboratories in connection with their extending an
intercompany obligation, which has subsequently been paid.
The other warrants expire between April 1, 1996 and January 12,
1999.
Increase in Authorized Shares
At the reconvened 1995 Annual Meeting of Stockholders, the
Company's stockholders approved an amendment to the Company's
Certificate of Incorporation to increase the number of authorized
shares of capital stock of the Company from 7,000,000 to
12,000,000, comprised of 7,000,000 shares of Common Stock,
1,000,000 shares of Convertible Preferred Stock, par value $1.25
per share and 4,000,000 shares of Preferred Stock, par value $2.00
per share.
8. Income Taxes
Effective January 1, 1993 the Company prospectively adopted
Financial Accounting Standards No 109 "Accounting for Income
Taxes". The adoption had no effect on prior year financial
statements presented. Accordingly, there was no cumulative effect
adjustment required in the year ended December 31, 1993.
The provision for income taxes (benefits) charged to continuing
operations are as follows:
1995 1994 1993
Current Tax Expense (Benefit):
U.S. - - -
Canadian - - $147,000
Total Current - - 147,000
_____________________________
Deferred Tax Expense (Benefit):
Canadian - $75,000 (300,000)
_____________________________
Total Deferred - 75,000 (300,000)
_____________________________
Total income tax provision
(benefit) $ 0 $75,000 $(153,000)
=============================
Deferred tax assets are comprised of the following temporary
differences and carryforwards at December 31:
1995 1994
Nondeductible allowances against trade $ 15,000 $206,000
receivables
Nondeductible inventory reserves 90,000 133,000
Nondeductible expense accruals 50,000 52,000
Depreciation 50,000 82,000
Other 10,000 10,000
Tax benefit of U.S. operating 6,870,000 6,552,000
loss carry forwards
Tax benefit of Canadian operating loss
and investment credit carry forwards 790,000 850,000
_________________________
Gross deferred tax assets 7,875,000 7,885,000
Deferred tax assets valuation allowance (7,650,000) (7,660,000)
_________________________
Net deferred tax asset $ 225,000 $ 225,000
asset ==========================
As a result of the Company's history of losses, a valuation
allowance has been provided for all U.S. deferred tax assets and
for substantially all of the Canadian deferred tax assets. The
net deferred tax asset relates to the Company's Canadian
subsidiary, which has available tax credits and loss
carryforwards. The Canadian subsidiary has a history of
profitability, despite the consolidated losses of the Company.
Based on this history and estimated 1996 earnings, which includes
earnings from certain contracts, as well as available tax planning
strategies, management considers realization of the unreserved
deferred tax asset more likely than not. During 1995 the Canadian
subsidiary realized tax loss carryforwards of approximately
$75,000 with a tax benefit of approximately $29,000.
The Company's income tax provision (benefit) differed from the
amount of income tax determined by applying the applicable
statutory U.S. federal income tax rate to pretax income from
continuing operations as a result of the following:
1995 1994 1993
Income taxes (benefit) computed $ (280,000) $ (821,000) $155,000
at the U.S. statutory rate
U.S. losses for which no tax 398,000 943,000 315,000
benefit has been recognized
Consolidated subsidiaries
outside the U.S.:
Change in deferred tax asset (89,000) 75,000 (300,000)
valuation allowance
Use of Canadian tax credits
and netoperating loss carry
forwards to offset Canadian
income net of effect of U.S./
Canada tax rate differential
Provision (benefit) for
income taxes (29,000) (122,000) (323,000)
____________________________________
$ 0 $ 75,000 $ (153,000)
====================================
At December 31, 1995, the Company has net operating loss carry
forwards of approximately $13,152,000 for federal income tax
purposes which expire in varying amounts through 2011. The
Company also has Canadian net operating loss carryforwards of
approximately $2,190,000 and research and development
investment tax credits of approximately $730,000 which expire in
varying amounts through 2005.
9. Commitments
The Company rents facilities, automobiles and equipment under
various operating leases. Rental expenses under such leases
amounted to $280,000, $191,000 and $108,000 for 1995, 1994 and
1993, respectively.
At December 31, 1995, the aggregate minimum commitments pursuant
to operating leases are as follows:
Year ending December 31,
1996 $275,000
1997 269,000
1998 160,000
1999 121,000
2000 and thereafter 545,000
10. Pension Plan
The Company's Canadian subsidiary's defined benefit pension plan,
which covered its Canadian employees, was terminated at December
31, 1993. At the same time, it established a money purchase plan
that is structured after the 401(k) salary deferral plan
available to all U.S. employees and as such, does not establish
any corporate obligation other than a discretionary matching
formula to employee contributions. As a result of the
termination, the Company recognized a gain of $214,000,
representing the excess of the Plan's projected benefit obligation
over the accumulated benefit obligation, in 1993 and recognized an
additional gain in 1995 of $172,000, representing the excess of
the Plan's assets over the cost of providing the annuities to the
participants for the value of their termination benefits. This
excess will be put into a money purchase contract and used by the
Company to provide for its matching contributions under the new
arrangement. This amount is being carried as a deferred pension
expense asset on the balance sheet.
The Company maintains a 401(k) salary deferral plan instituted for
all U.S. employees with more than one year of service. As a money
purchase plan, it does not establish any Company liability other
than a matching formula to employee contributions. The aggregate
cost of the plan for 1995, 1994 and 1993 was $15,700 , $16,000 and
$14,000.
11. Supplemental Disclosures of Cash Flow Information
The Company made cash payments for interest of $180,000, $246,000
and $189,000 for the three years ended December 31, 1995.
Additionally, income taxes of $123,000, $3,500 and none were paid
for the three years ended December 31, 1995, respectively.
In the three years ended December 31, 1995, the Company issued
Preferred Stock dividends in the amount $114,000, $108,000 and
$82,000 in the form of 11,338, 25,291 and 137,485 shares of common
stock, respectively.
12. Information Concerning the Company's Principal Activities
A summary of the Company's continuing operations by geographic
area for the years ended December 31, is as follows:
1995 1994 1993
Total sales of goods and services:
United States $1,867,000 $ 1,862,000 $4,061,000
Canada 5,110,000 5,593,000 6,185,000
Europe 1,599,000 - -
Eliminations (2,202,000) (1,941,000) (2,476,000)
____________________________________
Totals $ 6,374,000 $ 5,514,000 $7,770,000
=====================================
Income (loss) from continuing
operations:
United States $(1,548,000) $(2,653,000) $ (902,000)
Canada 270,000 20,000 1,495,000
Europe 100,000 - -
____________________________________
$(1,178,000) $(2,633,000) $ 593,000
=====================================
Identifiable assets:
United States $ 4,253,000 $6,400,000 $8,982,000
Canada 6,248,000 4,422,000 3,890,000
Europe 696,000 - -
Eliminations (6,462,000) (4,030,000) (3,933,000)
_____________________________________
Totals $ 4,735,000 $6,792,000 $8,939,000
======================================
Export sales, including sales from Canada to other countries,
comprised 73.6% of total revenues and were made primarily to
Western Europe, Asia and Central and South America.
A summary of the Company's continuing operations by principal
activity for the three years ended December 31, 1995 is as follows
(in $000's):
<TABLE>
Total Elimination Res & Dev Instruments Corp & other
1995:
<S> <C> <C> <C> <C>
Sales of goods $ 6,374 $ 1,052 $ 5,250 $ 72
======= ==================================
Operating income (loss) $ (886) $ (311) $ 268 $ (843)
==================================
Interest expense and other (292)
________
Loss before income taxes $ (1,178)
=========
Depreciation and amortization $ 362 $ 45 $ 314 $ 3
======== ==================================
Capital expenditures $ 359 $ 10 $ 349 -
======== ==================================
Identifiable assets $ 4,735 $(6,462) $ 275 $ 7,589 $ 3,333
======================================================
</TABLE>
<TABLE>
Total Elimination Res & Dev Instruments Corp & other
1994:
<S> <C> <C> <C> <C>
Sales of goods $ 5,514 $ 298 $ 5,216 -
======== =================================
Operating income (loss) $ (2,469) $ (208) $ (1,075) $(1,186)
=================================
Interest expense and other (89)
_________
Loss before income taxes $ (2,558)
=========
Depreciation and amortization $ 320 $ 8 $ 280 $ 32
======== =================================
Capital expenditures $ (491) - $ (491) -
=========
Identifiable assets $ 5,003) $(4,030) $ 302 $ 5,486 $ 3,245
==============================================
46Identifiable assets - held
for sale $ 1,789
________
Identifiable assets - per
balance sheet $ 6,792
========
</TABLE>
<TABLE>
Total Elimination Res & Dev Instruments Corp & other
1993:
<S> <C> <C> <C> <C>
Sales of goods $7,770 $ 1,009 $ 6,761 -
====== ===================================
Operating income (loss) $ 541 $ (56) $ 1,709 $ (1,112)
===================================
Interest expense and other (101)
_______
Income before income taxes $ 440
======
Depreciation and amortization $ 214 $ 20 $ 162 $ 32
====== ===================================
Capital expenditures $ 120 - $ 116 $ 4
====== ===================================
Identifiable assets - $7,144 $(3,933 $ 325 $ 6,363 $ 4,389 )
continuing operations ===============================================
Identifiable assets -
held for sale 1,795
_____
Identifiable assets - per $8,939
balance sheet ======
</TABLE>
13. Fourth Quarter Adjustments
During the fourth quarter of 1995, the Company recorded
adjustments for estimated losses on inventories and receivables of
approximately $450,000 and $200,000, respectively. During the fourth
quarter of 1994, the Company recorded adjustments for estimated losses on
inventories and receivables of approximately $800,000 and $515,000
respectively, and approximately $665,000 to reverse certain sales
recorded in prior quarters.
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31,
SCHEDULE II
(IN $000'S)
Balance Balance
begin end
period Addition Deduction Recovery period
Allowance for doubtful accounts and sales allowances:
1995: 539 221 719 41
1994:
Continuing operations 25 526 17 5 539
1993:
Continuing operations 40 5 20 25
EXHIBIT NO. DESCRIPTION PAGE NO.
31A The Company's Certificate of Incorporation,
as amended
21 Subsidiaries of Barringer Technologies, Inc.
23.1 Consent of Independent Certified Public
Accountants
23.2 Consent of Independent Certified Public
Accountants
27 Financial Data Schedule
EXHIBIT 3.1A
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESEARCH INC.
THE UNDERSIGNED, for the purpose of forming a corporation
pursuant to the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY as follows:
FIRST: The name of the corporation is BARRINGER RESEARCH INC.
(hereinafter called the "Corporation").
SECOND: Its registered office in the State of Delaware is
located at No. 100 West Tenth Street, in the City of Wilmington, County of
New Castle. The name and address of its registered agent is The
Corporation Trust Company, No. 100 West Tenth Street, Wilmington, Delaware
19899.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock that the
Corporation shall have authority to issue is two million (2,000,000) shares
of Common Stock, of the par value of $.01 per share.
FIFTH: The name and mailing address of the incorporator is
Denis Pinkernell, 277 Park Avenue, New York, New York 10017.
SIXTH: The names and mailing addresses of the persons who are
to serve as directors of the Corporation until the first annual meeting of
stockholders or until their successors are elected and qualify are as
follows:
Dr. Anthony R. Barringer 304 Carlingview Drive
Rexdale, Ontario, Canada
Dr. D. Richard Clews 304 Carlingview Drive
Rexdale, Ontario, Canada
Mr. Robert J. Armstrong 366 Bay Street
Toronto 1, Ontario, Canada
SEVENTH: Subject to the provisions of the General Corporation
Law of the State of Delaware, the number of directors of the Corporation
shall be determined as provided in the By-laws.
EIGHTH: All corporate powers of the Corporation shall be
exercised by the Board of Directors. In furtherance and not in limitation
of the powers conferred by the laws of the State of Delaware, the Board of
Directors is expressly authorized:
1. To make, alter or repeal the By-laws of
the Corporation.
2. By a suitable By-law or by a resolution
passed by a majority of the entire Board of
Directors to designate two or more of their number
to constitute a committee or committees with such
name or names as may be determined from time to
time by resolution of the Board of Directors, which
committee or committees, to the extent provided in
such resolution or resolutions or in the By-laws of
the Corporation, shall have and may exercise the
powers of the Board of Directors in the management
of the business and affairs of the Corporation, and
may have power to authorize the seal of the
Corporation to be affixed to all papers which may
require it.
3. To fix and determine and vary from time
to time the amount of working capital and reserve
funds of the Corporation; to determine whether any
and if any, what part of the net profits of the
Corporation or of its surplus or of its net assets
in excess of its capital shall be declared in
dividends and paid to the stockholders, and to
direct and determine the use and disposition of any
such net profits or of any such surplus or of any
such net assets in excess of capital.
4. To remove at any time, for cause or
without cause, any officer or employee of the
Corporation, or to confer such power on any
committee or officer; provided, however, that any
officer elected or appointed by the Board of
Directors may be removed only by the affirmative
vote of a majority of the Board of Directors then
in office.
5. Subject to the provisions of the statutes
of Delaware, to exercise any and all other powers,
in addition to the powers expressly conferred by
law and by this Certificate of Incorporation which
may be conferred upon it by the Corporation through
appropriate by-law provisions.
NINTH: The Board of Directors may from time to time offer for
subscription, or otherwise issue or sell, or grant rights, warrants, or
options for the subscription to or purchase of, any and all of the
authorized stock of the Corporation not then issued or which may have been
issued and reacquired as treasury stock by the Corporation, and any or all
of any increased stock of any class that may hereafter by authorized, for
such consideration as the directors may determine. The Board of Directors
may, at the time of such issue and sale, or at the time of granting of such
rights, warrants or options, specify in amount or value the part of the
consideration received on such issue and sale over and above the par value
of such stock, which shall be capital and which shall be surplus,
respectively. Bonds, debentures, certificates of indebtedness or other
securities may be issued, sold or disposed of pursuant to resolution of the
Board of Directors for such consideration and upon such terms and
conditions as may be deemed advisable by the Board of Directors in the
exercise of its discretion.
TENTH: Each director and each officer of the Corporation shall
be indemnified by the Corporation to the full extent permitted under the
General Corporation Law of the State of Delaware.
THE UNDERSIGNED, being the incorporator hereinbefore named for
the purpose of forming a corporation pursuant to the General Corporation
Law of the State of Delaware, DOES MAKE this Certificate, hereby declaring
and certifying that the facts herein stated are true and, accordingly, has
hereunto set his hand this 6th day of September, 1967.
_______________________________
Denis Pinkernell
STATE OF NEW YORK:
ss.:
COUNTY OF NEW YORK :
BE IT REMEMBERED, that on this ______ day of ___________, 1967,
personally came before me, _______________, a Notary Public for the State
of New York, DENIS PINKERNELL, the party to the foregoing Certificate of
Incorporation, known to me personally to be such, and acknowledged said
Certificate to be the act and deed of the signer and that the facts therein
stated are truly set forth.
GIVEN under my hand and seal of office the day and year
aforesaid.
_________________________________
Notary Public
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESEARCH INC.
(Pursuant to 242 of the General Corporation Law)
THE UNDERSIGNED, D. RICHARD CLEWS and ROBERT J. ARMSTRONG,
being the duly elected Executive Vice President and Secretary,
respectively, of BARRINGER RESEARCH INC., a Delaware corporation (the
"Corporation"), for the purpose of amending the Certificate of
Incorporation of the Corporation pursuant to 242 of the General
Corporation Law, DO HEREBY CERTIFY THAT:
FIRST: The name of the Corporation is BARRINGER RESEARCH
INC. The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of the State of Delaware on September 7,
1967.
SECOND: The Board of Directors of the Corporation, at a
meeting thereof duly called and held on March 12, 1980, duly adopted and
approved and declared advisable the following resolution with respect to
the amendment of Article FOURTH of the Certificate of Incorporation of the
Corporation to increase the authorized capitalization to ten million shares
of Common Stock, par value $.01 per share, in accordance with the
provisions of 242 of the General Corporation Law:
RESOLVED that, subject to the approval of stockholders of
the Corporation at the Annual Meeting thereof to be held on May
14, 1980, Article FOURTH of the Certificate of Incorporation of
the Corporation be amended to read and provide in its entirety
as follows:
"FOURTH: The total number of shares of
stock that the Corporation shall have authority to
issue is ten million (10,000,000) shares of Common
Stock of the par value of $.01 per share.
THIRD: At the annual meeting of stockholders of the
Corporation duly called and held on May 14, 1980, in accordance with 242
of the General Corporation Law of the State of Delaware the holders of a
majority of the outstanding Common Stock of the Company voted in favor of
the Amendment of the Certificate of Incorporation as herein set forth in
accordance with the provisions of 242 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands this 14th day of May, 1980.
_______________________________
D. Richard Clews
Executive Vice President
ATTEST: _______________________________
Robert J. Armstrong
Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESEARCH INC.
(Pursuant to 242 of the General Corporation Law)
THE UNDERSIGNED, D. RICHARD CLEWS and ROBERT J. ARMSTRONG,
being the duly elected Executive Vice President and Secretary,
respectively, of BARRINGER RESEARCH INC., a Delaware corporation (the
"Corporation"), for the purpose of amending the Certificate of
Incorporation of the Corporation pursuant to Section 242 of the General
Corporation Law, DO HEREBY CERTIFY THAT:
FIRST: The name of the Corporation is BARRINGER RESEARCH
INC. The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of the State of Delaware on September 7,
1967.
SECOND: The Board of Directors of the Corporation, at a
meeting thereof duly called and held on May 22, 1980, duly adopted and
approved and declared advisable the following resolution with respect to
the amendment of Article FIRST of the Certificate of Incorporation of the
Corporation to change the name of the corporation in accordance with the
provisions of Section 242 of the General Corporation Law:
RESOLVED that, subject to approval of stockholders of the
Corporation, Article FIRST of the Certificate of Incorporation
of the Corporation be amended to read and provide in its
entirety to read as follows:
"FIRST: The name of the Corporation is BARRINGER
RESOURCES INC. (hereinafter called the "Corporation")."
THIRD: The holders of a majority of the outstanding shares
of Common Stock ($.01 par value) of the Corporation, the only outstanding
class of stock of the Corporation, by written consent pursuant to Section
228 of the General Corporation Law of the State of Delaware, consented to the
amendment of the Certificate of Incorporation as herein set forth in
accordance with the provisions of Section 242 of the General Corporation Law
ofthe State of Delaware.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands this 30th day of May, 1980.
________________________________
D. Richard Clews
Executive Vice President
ATTEST:
________________________________
Robert J. Armstrong
Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESOURCES INC.
(Pursuant to Section 242 of the General Corporation Law)
THE UNDERSIGNED, D. RICHARD CLEWS and ROBERT J. ARMSTRONG,
being the duly elected and acting Executive Vice President and Secretary,
respectively, of BARRINGER RESOURCES INC., a Delaware corporation (the
"Corporation"), for the purpose of amending the Certificate of
Incorporation of the Corporation pursuant to Section 242 of the General
Corporation Law, DO HEREBY CERTIFY THAT:
FIRST: The name of the Corporation is BARRINGER RESOURCES
INC. The original Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware on September 7, 1967, under the
name of BARRINGER RESEARCH INC.
SECOND: The Board of Directors of the Corporation at a
meeting thereof called and held on April 30, 1981, duly adopted and
approved and declared advisable the following resolution with respect to
the amendment of the Certificate of Incorporation by the addition of
Articles ELEVENTH and TWELFTH thereto relating to higher voting
requirements required with respect to certain transactions in accordance
with the provisions of Section 242 of the General Corporation Law:
RESOLVED, that subject to the approval of the stockholders of
the Corporation, the Certificate of Incorporation of the
Corporation be amended to add Articles ELEVENTH and TWELFTH to
the Certificate of Incorporation of the Corporation to read and
provide in their entirety as follows:
"ELEVENTH: The affirmative vote of the holders of at
least eighty percent (80%) of the outstanding shares of Common
Stock entitled to vote thereon shall be required to authorize,
adopt or approve any of the following: (i) any plan of merger
or consolidation of the Corporation with or into any other
corporation holding more than ten percent (10%) of the
Corporation's voting stock (such corporation hereinafter
referred to as a "Related Company") or any affiliate of a
Related Company; or (ii) any sale, lease or exchange or other
disposition of all or substantially all of the assets of the
Corporation to any Related Company or any affiliate of a
Related Company."
"TWELFTH: Article ELEVENTH and this Article TWELFTH may
not be amended, except by the affirmative vote of the holders
of at least eighty percent (80%) of the outstanding shares of
Common Stock of the Corporation entitled to vote thereon."
THIRD: The foregoing amendment to the Certificate of
Incorporation of the Corporation was approved by the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock ($.01
par value) of the Corporation, the only outstanding class of stock of the
Corporation, at the Annual Meeting of the Corporation held June 10, 1981 in
accordance with the provisions of Section 242 of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands this 10th day of June, 1981.
___________________________
D. Richard Clews
Executive Vice President
ATTEST:
___________________________
Robert J. Armstrong
Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESOURCES INC.
(Pursuant to 242 of the General Corporation Law)
THE UNDERSIGNED, ANTHONY R. BARRINGER and ROBERT J. ARMSTRONG,
being the duly elected President and Secretary, respectively, of BARRINGER
RESOURCES INC., a Delaware corporation (the "Corporation"), for the
purposes of amending the Certificate of Incorporation pursuant to Section
242 of the General Corporation Law, DO HEREBY CERTIFY THAT:
FIRST: The name of the Corporation is BARRINGER RESOURCES
INC. The original Certificate of Incorporation was filed with the
Secretary of State of Delaware on September 7, 1967, under the name of
BARRINGER RESEARCH INC.
SECOND: The Board of Directors of the Corporation at a
meeting thereof duly called and held on January 21, 1983, duly adopted and
approved and declared advisable the following resolution with respect to
the amendment of Article FOURTH of the Certificate of Incorporation of the
Corporation to increase the authorized capitalization to 10,100,000 shares
comprised of 10,000,000 shares of Common Stock, par value $.01 per share,
and 100,000 shares of Class B Common Stock, par value $.01 per share
("Class B Common Stock"), in accordance with the provisions of Section 242
of the General Corporation Law:
RESOLVED, that subject to the approval of the Stockholders of
the Corporation at the Annual Meeting thereof to be held on May 11,
1983, Article FOURTH of the Certificate of Incorporation of the
Corporation be amended to read and provide in its entirety as
follows:
FOURTH: Section 1. Authorized Shares
The total number of shares of stock the Corporation shall have
authority to issue is ten million one hundred thousand
(10,100,000) shares comprised of 10,000,000 shares of Common
Stock, par value $.01 per share ("Common Stock"), and 100,000
shares of Class B Common Stock, par value $.01 per share
("Class B Common Stock").
Section 2. Rights of the Classes
The shares of Common Stock and Class B Common Stock shall be
identical in every respect and shall be entitled to all of the
rights and privileges pertaining to common stock without
limitations, prohibitions, restrictions or qualifications,
except as otherwise expressly set forth in this Article.
Section 3. Voting Powers
The holders of Common Stock shall be entitled to one (1) vote
per share on all matters on which holders of common stock are
entitled to vote. The holders of Class B common stock shall be
entitled to one hundred (100) votes per share on all matters on
which holders of common stock of the Corporation are entitled
to vote. The holders of Common Stock and Class B Common Stock
shall vote as a single class on all matters, except as otherwise
required by law. No holder of Common Stock or Class B Common
Stock shall have any preemptive or preferential rights of
subscription to any shares of any class of stock in this
Corporation, whether now or hereafter authorized.
Section 4. Conversion of Class B Common Stock into Common
Stock
Any holder of Class B Common Stock may, at any time and from
time to time, by written notice to the Secretary of the
Corporation, convert said shares into a like number of shares
of Common Stock.
Section 5. Restrictions on the Right to Transfer or
Hypothecate Class B Common Stock
No holder of Class B Common Stock shall have the right or power
to sell, transfer, assign, pledge, hypothecate, or otherwise
dispose of any share of Class B Common Stock, provided,
however, that in the event the Board of Directors of the
Corporation, at a meeting thereof duly called and held or by
unanimous written consent, shall consent to a sale, transfer,
assignment, pledge, hypothecation or other disposition, upon
the recording thereof in the minutes of such meeting or the
filing of a copy of such written consent with the Secretary of
the Corporation, such sale, transfer, assignment, pledge,
hypothecation or other disposition of shares of Class B Common
Stock may be effected in accordance with the terms of such
consent, and such shares of Class B Common Stock shall remain
outstanding.
In the event that any holder of Class B Common Stock shall
sell, assign, transfer, pledge, hypothecate or otherwise
dispose of any share of Class B Common Stock without such
consent, such shares shall automatically and immediately upon
the occurrence of such event be converted into, and shall be,
an equal number of shares of Common Stock.
THIRD: At the Annual Meeting of Stockholders of the
Corporation duly called and held on May 11, 1983, in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware the holders of the majority of the outstanding Common Stock of the
Corporation, the only outstanding class of stock of the Corporation, voted
in favor of the amendment of the Certificate of Incorporation as set forth
herein.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands this 11th day of May, 1983.
__________________________________
Anthony R. Barringer
President
Attest:
__________________________________
Robert J. Armstrong
Secretary
CERTIFICATE
FOR RENEWAL AND REVIVAL OF CHARTER
Barringer Resources Inc, a corporation organized under the laws of
Delaware, the certificate of incorporation of which was filed in the
office of the Secretary of State on the 7th day of September 1967,
and recorded in the office of the Recorder of Deeds for ____________
County, the charter of which was voided for non-payment of taxes, now
desires to procure a re storation, renewal and revival of its
charter, and hereby certifies as fo llows:
1. The name of this corporation is Barringer Resources Inc.
2. Its registered office in the State of Delaware is located at
Corporation Trust Center, 1209 Orange Street, City of Wilmington,
Zip Code 19801 County of New Castle the name and address of the registered
agent is The Corporation Trust Company.
3. The date when the restoration, renewal, and revival of
the ch arter of this company is to commence is the 28th day of
February, name be ing prior to the date of the expiration of the
charter. This renewal and revival of the charter of this
corporation is to be perpetual.
4. This corporation were duly organized and carried on the
busin ess authorized by its charter until the 1st day of March A.D.
1986, at wh ich time its charter became inoperative and void for
non-payment of taxes and this certificate for renewal and revival if
filed by authority of th e duly elected directors of the corporation
in accordance with the laws o f the State of Delaware.
IN TESTIMONY WHEREOF, and in compliance with the provisions
of Se ction 312 of the General Corporation Law of the State of
Delaware, as ame nded, providing for the renewal, estimates and
restoration of charters, A .R. Barringer the last and acting
President, and R.J. Armstrong, the last and acting Secretary of
Barringer Resources Inc., have hereunto set thei r hands to this
certificate this 30th day of July 1986.
_______________________________
Last and Acting President
__________________________________
Attest: Last and Acting S ecretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESOURCES INC.
(Pursuant to Section 242 of the General Corporation Law)
THE UNDERSIGNED, ANTHONY R. BARRINGER and DENIS R. PINKERNELL,
being the duly elected President and Assistant Secretary, respectively, of
BARRINGER RESOURCES INC., a Delaware corporation (the "Corporation"), for
the purposes of amending the Certificate of Incorporation pursuant to
Section 242 of the General Corporation Law, DO HEREBY CERTIFY THAT:
FIRST: The name of the Corporation is BARRINGER RESOURCES INC.
The original Certificate of Incorporation was filed with the Secretary of
State of the State of Delaware on September 7, 1967, under the name of
BARRINGER RESEARCH INC.
SECOND: The Board of Directors of the Corporation at a meeting
thereof duly called and held on January 20, 1988, duly adopted and approved
and declared advisable the following resolution with respect to the
amendment of Article FOURTH of the Certificate of Incorporation of the
Corporation to increase the authorized capitalization to 11,100,000 shares
comprised of 10,000,000 shares of Common Stock, par value $.01 per share,
and 100,000 shares of Class B Common Stock, par value $.01 per share
("Class B Common Stock"), and 1,000,000 shares of Preferred Stock, per
value $1.25 per share, in accordance with the provisions of Section 242 of
the General Corporation Law:
RESOLVED, that subject to the approval of the
Stockholders of the Corporation, Article FOURTH of the
Certificate of Incorporation of the Corporation be amended to
read and provide in its entirety as follows:
FOURTH: Section 1. Authorized Shares.
The total number of shares of stock the Corporation shall
have authority to issue is eleven million one hundred
thousand (11,100,000) shares comprised of 10,000,000
shares of Common Stock, par value $.01 per share ("Common
Stock"), and 100,000 shares of Class B Common Stock, par
value $.01 per share ("Class B Common Stock") and
1,000,000 of Preferred Stock, par value $l.25 per share
("Preferred Stock").
Section 2. Preferred Stock
The designations, voting powers, preferences and
relative, participating, optional or other special
rights, and the qualifications, limitations or
restrictions thereof, of the Preferred Stock are as
follows:
A. Dividends. The holders of the Preferred
Stock shall be entitled to receive or have set apart for
payment dividends thereon at the rate of $.10 per share
per annum, and no more, payable semi-annually for the
last preceding dividend period on the last days of June
and December in each year in shares of Common Stock
valued for such purpose-at the average closing price of
the Common Stock in the over-the-counter market over the
20 trading days immediately prior to the record date for
each semi-annual payment as quoted by NASDAQ in the over-
the-counter market (or organized exchange). No dividend
shall be paid or set apart for payment on the Common
Stock or Class B Common Stock of the Corporation or any
other class of stock or series thereof ranking junior to
the Preferred Stock, unless and until dividends at the
rate of $.10 per share per annum on the Preferred Stock
shall have been paid or set apart for payment in full.
B. Liquidation Preference. In the event of any
voluntary or involuntary liquidation, dissolution or
winding up of the Corporation under any circumstances or
any voluntary liquidation or winding up of the
Corporation, which shall be deemed to have occurred upon
the sale of all or substantially all of its assets, the
holders of Preferred Stock will be entitled to receive,
prior to and in preference to any distribution of the
assets or surplus funds of the Corporation to the holder
of any other shares of Capital Stock by reason of the
ownership thereof, an amount equal to $1.25 per share and
no more (the "Preferential Amount"). If, upon the
occurrence of such an event, the assets and funds thus
distributed among the holders of Preferred Stock shall be
insufficient to permit the payment to such holder of the
full Preferential Amount, then the entire assets and
funds of the Corporation legally available for
distribution shall be distributed ratably among the
holders of Preferred Stock. After the payment or setting
apart of the full Preferential Amount required to be paid
to the holders of the Preferred Stock, the holders of
Capital Stock ranking in liquidation junior to the
Preferred Stock shall be entitled to receive all
remaining assets or surplus funds of the Corporation.
C. Consents of Preferred Stock. Without the
affirmative vote or written consent of the holders of a
majority of the shares of Preferred Stock at the time
outstanding, the Corporation shall not:
(a) agree to be acquired, directly or
indirectly, by another entity by means of merger,
consolidation or otherwise, resulting in the exchange of
outstanding shares of Capital Stock for securities or
other consideration issued or paid by the acquiring
corporation or its subsidiaries, or sell all, or
substantially all, of its assets; or
(b) alter, change or amend the preferences,
rights or privileges of holders of the Preferred Stock
contained herein or in the Certificate of Incorporation
or By-Laws of the Corporation or elsewhere as in effect
on the date that this Certificate of Amendment is filed
with the Secretary of the State of Delaware; or
(c) alter, change or amend the Certificate
of Incorporation or the By-Laws of the Corporation or
otherwise to provide for the authorization and issuance
of any additional class or series of Capital Stock,
including additional shares of Preferred Stock having any
rights, preferences or priorities equivalent to or
greater than (either in any particular aspect or in the
aggregate) the Preferred Stock; or
(d) agree to a voluntary liquidation,
dissolution, or winding up of the Corporation; or
(e) adopt and/or implement any stock option
or similar employee stock bonus or incentive plan, except
the Permitted Stock Plans.
D. Voting Rights. In addition to the voting
rights granted to the holders of the Preferred Stock by
the laws of the State of Delaware and by Section C
hereof, each holder of Preferred Stock shall be entitled
at each meeting of the stockholders of the Corporation to
that number of votes which is equal to the number of
shares of Common Stock into which each share of Preferred
Stock is convertible on the record date with respect to
such meeting for each share of such stock standing in his
name on the books of the Corporation.
E. Conversion.
(a) Conversion by Holder. Each share of
Preferred Stock shall be convertible, at the option of
the holder thereof, at any time prior to the fourth
anniversary of the date of issuance thereof, into fully
paid and nonassessable shares of Common Stock, in
accordance with the Conversion Formula (as defined
below).
Before any holder of Preferred Stock shall be
entitled to convert the same into shares of Common Stock,
the holder shall (i) surrender the certificate(s)
therefor, duly endorsed, at the office of the Corporation
or of any transfer agent for the Common Stock, or (ii)
notify the Corporation or any transfer agent that such
certificates have been lost, stolen or destroyed and
execute an agreement satisfactory to the Corporation to
indemnify the Corporation against any loss incurred by it
in connection therewith, and shall give written notice to
the Corporation at such office that the holder elects to
convert the same and shall state therein the number of
shares of Preferred Stock being converted. Thereupon,
the Corporation shall promptly issue and deliver at such
office to such holder(s) of Preferred Stock a
certificate(s) for the number of shares of Common Stock
to which the holder shall be entitled.
Such conversion shall be deemed to have been made
immediately prior to the closing of business on the date
of such surrender of the shares of Preferred Stock to be
converted or delivery of the aforementioned
indemnification agreement, and the person or persons
entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common
Stock on such date.
(b) Conversion by the Corporation. The
Corporation may require the conversion of all (but not
less than all) of the Preferred Stock in accordance with
the Conversion Formula (as defined below) (i) at any time
after the fourth anniversary of the date of issuance of
such Preferred Stock, or (ii) immediately upon a
consolidation, merger or sale of substantially all of the
assets of the Corporation under circumstances where the
Corporation is not the surviving entity, or (iii) upon
the repurchase by the Corporation of all of its then
outstanding Class A Warrants or all of its Class B
Warrants issued by the Corporation in connection with the
sale of Units under a certain Purchase Agreement dated
May 10, 1988 between the Corporation and Purchasers named
therein.
Upon the occurrence of such an event specified in
this Section E, and upon the election of the Corporation
to require the conversion of all of the Preferred Stock,
the outstanding shares of Preferred Stock shall be
converted automatically without any further action by the
holders of such shares and whether or not the
certificates representing such shares are surrendered to
the Corporation or its transfer agent. The Corporation,
however, shall give prompt written notice of such
conversion to each holder of Preferred Stock at his last
address listed in the Corporation records.
The Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock
issuable upon such conversion unless certificates
evidencing shares of the Preferred Stock being converted
are either delivered to the Corporation or any transfer
agent, as hereinafter provided, or the holder notifies
the Corporation or any transfer agent that such
certificates have been lost, stolen, or destroyed and
executes an agreement satisfactory to the Corporation to
indemnify the Corporation against any loss incurred by it
in connection therewith. Thereupon, there shall be
issued and delivered to such holder, promptly at such
office in the holder's name as shown on such surrendered
certificate or certificates, a certificate or
certificates for the number of shares of Common Stock
into which the shares of the Preferred Stock surrendered
were convertible on the date on which such conversion
occurred.
(c) Conversion Price and Conversion
Formula. The Purchase Price per share (the "Purchase
Price Per Share") shall be $l.25 and the initial
Conversion Price per share for Preferred Stock (the
"Conversion Price") shall be $l.25, subject to adjustment
from time to time as provided herein. Each share of the
Preferred Stock shall be convertible into that number of
shares of Common Stock that results from dividing the
Purchase Price Per Share by the Conversion Price in
effect at the time of conversion (the "Conversion
Formula").
(d) Adjustment of Conversion Price for
Stock Splits and Combinations. If the Corporation shall
at any time, or from time to time, after the date of the
issuance of the Preferred Stock, effect a subdivision of
the outstanding Common Stock, the Conversion Price in
effect immediately before that subdivision shall be
proportionately decreased, and conversely, if the
Corporation shall at any time or from time to time after
the original issue date of the Preferred Stock combine
the outstanding shares of Common Stock, the Conversion
Price in effect immediately before the combination shall
be proportionately increased. Any adjustment under this
subsection (d) shall become effective at the close of
business on the date the subdivision or combination
becomes effective.
(e) Adjustment of Conversion Price for
Certain Dividends and Distributions. If the Corporation
at any time, or from time to time, after the date of the
issuance of the Preferred Stock, shall make or issue, or
fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other
distribution payable in additional shares of Common
Stock, then, and in each such event, the Conversion Price
then in effect shall be decreased as of the date of such
issuance or, at the time or upon the event such a record
date shall have been fixed, as of the close of business
on such record date (the "Record Date"), by multiplying
the Conversion Price then in effect by a fraction,
determined as follows:
(i) the numerator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the Record Date; and
(ii) the denominator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the Record Date plus the number of
shares of Common Stock issuable in payment of such
dividend or distribution; provided, however, if such
Record Date shall have been fixed ana such dividend is
not fully paid or if such distribution is not fully made
on the date fixed therefor, the Conversion Price shall be
recomputed accordingly as of the closing of the business
on such Record Date, and thereafter the Conversion Price
for such Preferred Stock shall be adjusted pursuant to
this section (e) as of the time of each action, or
payment of such dividends or distributions.
(f) Adjustment for Reclassification,
Exchange or Substitution. If the Common Stock issuable
upon the conversion of the Preferred Stock shall be
changed into the same or a different number of shares of
a different class or classes of stock, or other
securities or property, whether by reclassification,
exchange, substitution or other transaction having
similar effect (other than a subdivision or combination
of shares or stock dividend provided for above, or a
reorganization, merger, consolidation, or sale of assets
provided for elsewhere in this Section E) then and in
each such event the holder of each share of Preferred
Stock shall have the right thereafter to convert such
share into the kind and amount of shares of stock and
other securities and property receivable upon such
reclassification, exchange, substitution or other
transaction having similar effect, as did or shall the
holders of shares of Common Stock, as if such shares of
Preferred Stock had been converted into Common Stock
immediately prior to the Record Date with respect to such
reclassification, exchange or substitution, all subject
to further adjustment as provided herein.
(g) Reorganization, Mergers,
Consolidations, or Sales of Assets. If at any time, or
from time to time, there shall be (other than a
subdivision, combination, reclassification, exchange or
substitution of shares provided for elsewhere in this
Section E) a capital reorganization involving a merger or
consolidation of the Corporation with or into another
corporation, or the sale or transfer of all or
substantially all of the Corporation's properties and
assets to any other person (a "sale"), then, as a part of
such reorganization, merger, consolidation or sale, due
and adequate provision shall be made so that the holders
of the Preferred Stock shall thereafter be entitled to
receive upon conversion of the Preferred Stock, the
number of shares or other securities or property of the
Corporation, or of the successor corporation resulting
from such merger reorganization, consolidation or sale,
as to which a holder of Common Stock deliverable upon
conversion would have been entitled to receive as a
result of such reorganization, merger, consolidation, or
sale. In any such case, appropriate adjustment shall be
made in respect to the rights of the holders of the
Preferred Stock after the reorganization, merger,
consolidation or sale to the end that the provisions of
this Section E (including adjustment of the Conversion
Price then in effect and the number of shares purchasable
upon conversion of the Preferred Stock) shall be
applicable after that event as nearly equivalent as may
be practicable.
(h) Sale of Shares Below Conversion Price.
If at any time, or from time to time, after the date of
issuance of the Preferred Stock and while any shares of
the Preferred Stock are outstanding, the Corporation
shall issue or sell Additional Shares of Common Stock
(as hereinafter defined) or options, warrants, convertible
securities or other rights to acquire Common Stock other
than as (i) a dividend or other distribution on any class
of stock permitted by (e), (ii) a subdivision or combination
of shares of Common Stock as provided for in (d) hereof,
or (iii) a reclassification, exchange, substitution or other
transaction having similar effect as provided for in (f)
hereof, for a consideration per share less than the
Conversion Price in effect immediately prior to the
event, or without consideration, then, and thereafter
successively upon each such issuance, the Conversion
Price in effect immediately prior to the issuance of such
shares shall forthwith be reduced to a price (calculated
to the nearest full cent) determined by dividing (a) an
amount equal to (i) the total number of shares of Common
Stock outstanding immediately prior to such issuance
multiplied by the Conversion Price in effect immediately
prior to such issuance, plus (ii) the consideration, if
any, received by the Company upon such issuance by (b)
the total number of shares of Common Stock outstanding
immediately after such issuance provided, however, that
no adjustment otherwise required hereunder, shall be made
unless the reduction in Conversion Price required by this
Section, together with all prior reductions which have
not resulted in an adjustment to the Conversion Price,
shall result in a reduction of the Conversion Price by at
least $0.05 per share.
For purposes of this (h), the price received by the
Corporation for such Additional Shares of Common Stock
shall be computed as follows:
(x) Cash and Property. If such consideration
consists of:
(a) cash, the consideration shall be
aggregate amount of cash received by the Corporation;
(b) property (including intellectual
property) other than cash, the consideration shall be the
fair market value thereof at the time of such issue, as
determined in good faith by the Board; and
(c) part of cash or part property and/or
stock or other securities of the Corporation or both, the
consideration shall be the amount equal to the sum of
cash and fair market value of the property actually
received by the Corporation computed consistently with
the prior paragraphs herein and determined in good faith
by the Board.
(y) Options. Shares of the Corporation called
for pursuant to options and warrants which are held as of
the date of a conversion of Preferred Stock by option or
warrant holders, and which are not exercised, and have
not terminated or lapsed, at the time of such conversion,
will be deemed to have been issued, for purposes of the
definitions and calculations hereof, at a price per share
determined by dividing:
(a) the total amount, if any, received and
receivable by the Corporation as consideration for the
issuance of such options or warrants, plus the minimum
aggregate amount of additional consideration (as set
forth in the instrument relating thereto, without regard
to any provision contained therein for a subsequent
adjustment of such consideration) payable to the
Corporation upon the exercise of such options or
warrants, by
(b) the maximum number of such shares (as
set forth in the instrument relating thereto, without
regard to any provisions contained therein for a
subsequent adjustment of such number) issuable upon the
exercise of such options or warrants.
(i) Definitions. The terms "Additional Shares of
Common Stock" as used herein shall mean all shares of
Common Stock issued or deemed issued by the Corporation
after the issuance date of the Preferred Stock, whether
or not subsequently reacquired or retired by the
Corporation, other than shares of Common Stock issued (i)
upon conversion of the Preferred Stock, (ii) upon
conversion of $696,000 principal amount of the
Corporation's 12 1/2% Convertible Subordinated Debentures
due in 1996, or any options or warrants or (iii) upon
exercise of options granted to purchase up to 1,197,500
shares of Common Stock of the Corporation under its stock
option plans.
(j) Accountants' Certificate of Adjustment.
In each case of an adjustment of readjustment of the
Conversion Price for the number of shares of Common Stock
or other securities issuable upon conversion of the
Preferred Stock, the Corporation, at its expense, shall
cause independent certified public accountants of
recognized standing selected by the Corporation (who may
be the independent certified Public accountants then
auditing the books of the Corporation) to compute such
adjustment or readjustment in accordance herewith and
prepare a certificate showing such adjustment or
readjustment, and shall mail such certificate, by first
class mail, postage prepaid, to each registered holder or
Preferred Stock at the holder's address as shown in the
Corporation's books. The certificate shall set forth
such adjustment or readjustment, showing in detail the
facts upon which such adjustment or readjustment is
based, including a statement of (i) the consideration
received or to be received by the Corporation for any
Additional Shares of Common Stock issued or sold, (ii)
the Conversion Price both before and after such
adjustment or readjustment, and (iii) the number of
Additional Shares of Common Stock and the type and
amount, if any, of other property which at the time would
be received upon conversion of the Preferred Stock.
(k) Fractional Shares. No fractional
shares of Common Stock shall be issued upon conversion of
Preferred Stock. In lieu of any fractional shares to
which the holder would otherwise be entitled, the
Corporation shall pay, in cash, an amount equal to the
product of (i) such fraction of a share, multiplied by
(ii) the fair market value of one share of the
Corporation's Common Stock on the date of conversion, as
determined in good faith by the Board.
(1) Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve
and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Preferred
Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion
of all outstanding shares of the Preferred Stock, and if
at any time the number of authorized but unissued, shares
of Common Stock shall not be sufficient to effect the
conversion of all the outstanding shares of Preferred
Stock, the Corporation will, subject to the requirements
of applicable state law, take such corporate action as
may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common
Stock to such number of shares of Common Stock as shall
be sufficient for such purposes.
F. Nonassessable Status of Stock. All the share
of Preferred Stock for which the full consideration
determined by the Board of Directors (which shall be not
less than the par value of such shares) has been paid or
delivered, in cash or property in accordance with the
resolutions of the Board of Directors authorizing the
issuance of such shares, shall be deemed fully paid-stock
and the holder of such shares shall not be liable for any
further call or assessment or any other payment thereon.
Section 3. Rights of the Classes of Common Stock.
The shares of common Stock and Class B Common Stock shall
be identical in every respect and shall be entitled to
all of the rights and privileges pertaining to common
stock without limitations, prohibitions, restrictions or
qualifications, except as otherwise expressly set forth
in this Article Fourth.
Section 4. Voting Powers.
The holders of Common Stock shall be entitled to one (1)
vote per share on all matters on which holders of common
stock are entitled to vote. The holders of Class B
Common Stock shall be entitled to one hundred (100) votes
per share on all matters on which holders of common stock
of the Corporation are entitled to vote. The holders of
Common Stock, Class B Common Stock and the Preferred
Stock shall vote as a single class on all matters, except
as otherwise required herein or by law. No holder of
Common Stock or Class B Common Stock shall have preemptive
or preferential rights of subscription to any shares of any
class of stock in this Corporation, whether nor or hereafter
authorized.
Section 5. Conversion of Class B Common Stock into
Common Stock.
Any holder of Class B Common Stock may, at any time and
from time to time, by written notice to the Secretary of
the Corporation, convert said shares into a like number
of shares of Common Stock.
Section 6. Restrictions on the Right to Transfer or
Hypothecate Class B Common Stock.
No holder of Class B Common Stock shall have the right or
power to sell, transfer, assign, pledge, hypothecate, or
otherwise dispose of any share of Class B Common Stock,
provided, however, that in the event the Board of
Directors of the Corporation, at a meeting thereof duly
called and held or by unanimous written consent, shall
consent to a sale, transfer, assignment, pledge,
hypothecation or other disposition, upon the recording
thereof in the minutes of such meeting or the filing of a
copy of such written consent with the Secretary of the
Corporation, such sale, transfer, assignment, pledge,
hypothecation or other disposition of shares of Class B
Common Stock may be effected in accordance with the terms
of such consent, and such shares of Class B Common Stock
shall remain outstanding.
In the event that any holder of Class B Common
Stock shall sell, assign, transfer, pledge, hypothecate
or otherwise dispose of any share of Class B Common Stock
without consent, such shares shall automatically and
immediately upon the occurrence of such event be
converted into, and shall be, an equal number of shares
of Common Stock.
THIRD: In accordance with the provisions of
Section 242 of the General Corporation Law of the State
of Delaware the holders of the majority of the
outstanding Common Stock and Class B Common Stock of the
Corporation, authorized the amendment of the Certificate
of Incorporation as set forth herein, by written consent
pursuant to Section 228 of the General Corporation Law.
IN WITNESS WHEREQF, the undersigned have hereunto set their
hands this 15th day of , 1988
_____________________________
Anthony R. Barringer
President
______________________________
Denis R. Pinkernell
Assistant Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESOURCES INC.
(Pursuant to Section 242 of the General Corporation Law)
THE UNDERSIGNED, ANTHONY R. BARRINGER and DENIS R. PINKERNELL,
being the duly elected President and Assistant Secretary, respectively, of
BARRINGER RESOURCES INC., a Delaware corporation (the "Corporation"), for
the purposes of amending the Certificate of Incorporation pursuant to
Section 242 of the General Corporation Law, DO HEREBY CERTIFY THAT:
FIRST: The name of the Corporation is BARRINGER RESOURCES INC.
The original Certificate of Incorporation was filed with the Secretary of
State of the State of Delaware on September 7, 1967, under the name of
BARRINGER RESEARCH INC.
SECOND: The Board of Directors of the Corporation at a meeting
thereof duly called and held on January 20, 1988, duly adopted and approved
and declared advisable the following resolution with respect to the
amendment of Article FOURTH of the Certificate of Incorporation of the
Corporation to increase the authorized capitalization to 11,100,000 shares
comprised of 10,000,000 shares of Common Stock, par value $.01 per share,
and 100,000 shares of Class B Common Stock, par value $.01 per share
("Class B Common Stock"), and 1,000,000 shares of Preferred Stock, per
value $1.25 per share, in accordance with the provisions of Section 242 of
the General Corporation Law:
RESOLVED, that subject to the approval of the
Stockholders of the Corporation, Article FOURTH of the
Certificate of Incorporation of the Corporation be amended to
read and provide in its entirety as follows:
FOURTH: Section 1. Authorized Shares.
The total number of shares of stock the Corporation shall
have authority to issue is eleven million one hundred
thousand (11,100,000) shares comprised of 10,000,000
shares of Common Stock, par value $.01 per share ("Common
Stock"), and 100,000 shares of Class B Common Stock, par
value $.01 per share ("Class B Common Stock") and
1,000,000 of Preferred Stock, par value $1.25 per share
("Preferred Stock").
Section 2. Preferred Stock
The designations, voting powers, preferences and
relative, participating, optional or other special
rights, and the qualifications, limitations or
restrictions thereof, of the Preferred Stock are as
follows:
A. Dividends. The holders of the Preferred
Stock shall be entitled to receive or have set apart for
payment dividends thereon at the rate of $.10 per share
per annum, and no more, payable semi-annually for the
last preceding dividend period on the last days of June
and December in each year in shares of Common Stock
valued for such purpose-at the average closing price of
the Common Stock in the over-the-counter market over the
20 trading days immediately prior to the record date for
each semi-annual payment as quoted by NASDAQ in the over-
the-counter market (or organized exchange). No dividend
shall be paid or set apart for payment on the Common
Stock or Class B Common Stock of the Corporation or any
other class of stock or series thereof ranking junior to
the Preferred Stock, unless and until dividends at the
rate of $.10 per share per annum on the Preferred Stock
shall have been paid or set apart for payment in full.
B. Liquidating Preference. In the event of any
voluntary or involuntary liquidation, dissolution or
winding up of the Corporation under any circumstances or
any voluntary liquidation or winding up of the
Corporation, which shall be deemed to have occurred upon
the sale of all-or substantially all of its assets, the
holders of Preferred Stock will be entitled to receive,
prior to and in preference to any distribution of the
assets or surplus funds of the Corporation to the holder
of any other shares of Capital Stock by reason of the
ownership thereof, an amount equal to $1.25 per share and
no more (the "Preferential Amount"). If, upon the
occurrence of such an event, the assets and funds thus
distributed among the holders of Preferred Stock shall be
insufficient to permit the payment to such holder of the
full Preferential Amount, then the entire assets and
funds of the Corporation legally available for
distribution shall be distributed ratably among the
holders of Preferred Stock. After the payment or setting
apart of the full Preferential Amount required to be paid
to the holders of the Preferred Stock, the holders of
Capital Stock ranking in liquidation junior to the
Preferred Stock shall be entitled to receive all
remaining assets or surplus funds of the Corporation.
C. Consents of Preferred Stock. Without the
affirmative vote or written consent of the holders of a
majority of the shares of Preferred Stock at the time
outstanding, the Corporation shall not:
(a) agree to be acquired, directly or
indirectly, by another entity by means of merger,
consolidation or otherwise, resulting in the exchange of
outstanding shares of Capital Stock for securities or
other consideration issued or paid by the acquiring
corporation or its subsidiaries, or sell all, or
substantially all, of its assets; or
(b) alter, change or amend the preferences,
rights or privileges of holders of the Preferred Stock
contained herein or in the Certificate of Incorporation
or By-Laws of the Corporation or elsewhere as in effect
on the date that this Certificate of Amendment is filed
with the Secretary of the State of Delaware; or
(c) alter, change or amend the Certificate
of Incorporation or the By-Laws of the Corporation or
otherwise to provide for the authorization and issuance
of any additional class or series of Capital Stock,
including additional shares of Preferred Stock having any
rights, preferences or priorities equivalent to or
greater than (either in any particular aspect or in the
aggregate) the Preferred Stock; or
(d) agree to a voluntary liquidation,
dissolution, or winding up of the Corporation; or
(e) adopt and/or implement any stock option
or similar employee stock bonus or incentive plan, except
the Permitted Stock Plans.
D. Voting Rights. In addition to the voting
rights granted to the holders of the Preferred Stock by
the laws of the State of Delaware and by Section C
hereof, each holder of Preferred Stock shall be entitled
at each meeting of the stockholders of the Corporation to
that number of votes which is equal to the number of
shares of Common Stock into which each share of Preferred
Stock is convertible on the record date with respect to
such meeting for each share of such stock standing in his
name on the books of the Corporation.
E. Conversion.
(a) Conversion by Holder. Each share of
Preferred Stock shall be convertible, at the option of
the holder thereof, at any time prior to the fourth
anniversary of the date of issuance thereof, into fully
paid and nonassessable shares of Common Stock, in
accordance with the Conversion Formula (as defined
below).
Before any holder of Preferred Stock shall be
entitled to convert the same into shares of Common Stock,
the holder shall (i) surrender the certificate(s)
therefor, duly endorsed, at the office of the Corporation
or of any transfer agent for the Common Stock, or (ii)
notify the Corporation or any transfer agent that such
certificates have been lost, stolen or destroyed and
execute an agreement satisfactory to the Corporation to
indemnify the Corporation against any loss incurred by it
in connection therewith, and shall give written notice to
the Corporation at such office that the holder elects to
convert the same and shall state therein the number of
shares of Preferred Stock being converted. Thereupon,
the Corporation shall promptly issue and deliver at such
office to such holder(s) of Preferred Stock a
certificate(s) for the number of shares of Common Stock
to which the holder shall be entitled.
Such conversion shall be deemed to have been made
immediately prior to the closing of business on the date
of such surrender of the shares of Preferred Stock to be
converted or delivery of the aforementioned
indemnification agreement, and the person or persons
entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of
Common Stock on such date.
(b) Conversion by the Corporation. The
Corporation may require the conversion of all (but not
less than all) of the Preferred Stock in accordance with
the Conversion Formula (as defined below) (i) at any time
after the fourth anniversary of the date of issuance of
such Preferred Stock, or (ii) immediately upon a
consolidation, merger or sale of substantially all of the
assets of the Corporation under circumstances where the
Corporation is not the surviving entity, or (iii) upon
the repurchase by the Corporation of all of its then
outstanding Class A Warrants or all of its Class B
Warrants issued by the Corporation in connection with the
sale of Units under a certain Purchase Agreement dated
May 10, 1988 between the Corporation and Purchasers named
therein.
Upon the occurrence of such an event specified in
this Section E, and upon the election of the Corporation
to require the conversion of all of the Preferred Stock,
the outstanding shares of Preferred Stock shall be
converted automatically without any further action by the
holders of such shares and whether or not the
certificates representing such shares are surrendered to
the Corporation or its transfer agent. The Corporation,
however, shall give prompt written notice of such
conversion to each holder of Preferred Stock at his last
address listed in the Corporation records.
The Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock
issuable upon such conversion unless certificates
evidencing shares of the Preferred Stock being converted
are either delivered to the Corporation or any transfer
agent, as hereinafter provided, or the holder notifies
the Corporation or any transfer agent that such
certificates have been lost, stolen, or destroyed and
executes an agreement satisfactory to the Corporation to
indemnify the Corporation against any loss incurred by it
in connection therewith. Thereupon, there shall be
issued and delivered to such holder, promptly at such
office in the holder's name as shown on such surrendered
certificate or certificates, a certificate or
certificates for the number of shares of Common Stock
into which the shares of the Preferred Stock surrendered
were convertible on the date on which such conversion
occurred.
(c) Conversion Price and Conversion
Formula. The Purchase Price per share (the "Purchase
Price Per Share") shall be $1.25 and the initial
Conversion Price per share for Preferred Stock (the
''Conversion Price") shall be $l.25, subject to
adjustment from time to time as provided herein. Each
share of the Preferred Stock shall be convertible into
that number of shares of Common Stock that results from
dividing the Purchase Price Per Share by the Conversion
Price in effect at the time of conversion (the
"Conversion Formula").
(d) Adjustment of Conversion Price for
Stock Splits and Combinations. If the Corporation shall
at any time, or from time to time, after the date of the
issuance of the Preferred Stock, effect a subdivision of
the outstanding Common Stock, the Conversion Price in
effect immediately before that subdivision shall be
proportionately decreased, and conversely, if the
Corporation shall at any time or from time to time after
the original issue date of the Preferred Stock combine
the outstanding shares of Common Stock, the Conversion
Price in effect immediately before the combination shall
be proportionately increased. Any adjustment under this
subsection (d) shall become effective at the close of
business on the date the subdivision or combination
becomes effective.
(e) Adjustment of Conversion Price for
Certain Dividends and Distributions. If the Corporation
at any time, or from time to time, after the date of the
issuance of the Preferred Stock, shall make or issue, or
fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other
distribution payable in additional shares of Common
Stock, then, and in each such event, the Conversion Price
then in effect shall be decreased as of the date of such
issuance or, at the time or upon the event such a record
date shall have been fixed, as of the close of business
on such record date (the "Record Date"), by multiplying
the Conversion Price then in effect by a fraction,
determined as follows:
(i) the numerator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the Record Date; and
(ii) the denominator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the Record Date plus the number of
shares of Common Stock issuable in payment of such
dividend or distribution; provided, however, if such
Record Date shall have been fixed and such dividend is
not fully paid or if such distribution is not fully made
on the date fixed therefor, the Conversion Price shall be
recomputed accordingly as of the closing of the business
on such Record Date, and thereafter the Conversion Price
for such Preferred Stock shall be adjusted pursuant to
this section (e) as of the time of each action, or
payment of such dividends or distributions.
(f) Adjustment for Reclassification,
Exchange or Substitution. If the Common Stock issuable
upon the conversion of the Preferred Stock shall be
changed into the same or a different number of shares of
a different class or classes of stock, or other
securities or property, whether by reclassification,
exchange, substitution or other transaction having
similar effect (other than a subdivision or combination
of shares or stock dividend provided for above, or a
reorganization, merger, consolidation, or sale of assets
provided for elsewhere in this Section E) then and in
each such event the holder of each share of Preferred
Stock shall have the right thereafter to convert such
share into the kind and amount of shares of stock and
other securities and property receivable upon such
reclassification, exchange, substitution or other
transaction having similar effect, as did or shall the
holders of shares of Common Stock, as if such shares of
Preferred Stock had been converted into Common Stock
immediately prior to the Record Date with respect to such
reclassification, exchange or substitution, all subject
to further adjustment as provided herein.
(g) Reorganization, Mergers,
Consolidations, or Sales of Assets. If at any time, or
from time to time, there shall be (other than a
subdivision, combination, reclassification, exchange or
substitution of shares provided for elsewhere in this
Section E) a capital reorganization involving a merger or
consolidation of the Corporation with or into another
corporation, or the sale or transfer of all or
substantially all of the Corporation's properties and
assets to any other person (a "sale"), then, as a part of
such reorganization, merger, consolidation or sale, due
and adequate provision shall be made so that the holders
of the Preferred Stock shall thereafter be entitled to
receive upon conversion of the Preferred Stock, the
number of shares or other securities or property of the
Corporation, or of the successor corporation resulting
from such merger reorganization, consolidation or sale,
as to which a holder of Common Stock deliverable upon
conversion would have been entitled to receive as a
result of such reorganization, merger, consolidation, or
sale. In any such case, appropriate adjustment shall be
made in respect to the rights of the holders of the
Preferred Stock after the reorganization, merger,
consolidation or sale to the end that the provisions of
this Section E (including adjustment of the Conversion
Price then in effect and the number of shares purchasable
upon conversion of the Preferred Stock) shall be
applicable after that event as nearly equivalent as may
be practicable.
(h) Sale of Shares Below Conversion Price.
If at any time, or from time to time, after the date of
issuance of the Preferred Stock and while any shares of
the Preferred Stock are outstanding, the Corporation
shall issue or sell Additional Shares of Common Stock
(as hereinafter defined) or options, warrants, convertible
securities or other rights to acquire Common Stock other
than as (i) a dividend or other distribution on any class
of stock permitted by (e), (ii) a subdivision or combination
of shares of Common Stock as provided for in (d) hereof, or
(iii) a reclassification, exchange, substitution or other
transaction having similar effect as provided for in (f)
hereof, for a consideration per share less than the
Conversion Price in effect immediately prior to the event,
or without consideration, then, and thereafter successively
upon each such issuance, the Conversion Price in effect
immediately prior to the issuance of such shares shall
forthwith be reduced to a price (calculated to the
nearest full cent) determined by dividing (a) an amount
equal to (i) the total number of shares of Common Stock
outstanding immediately prior to such issuance multiplied
by the Conversion Price in effect immediately prior to
such issuance, plus (ii) the consideration, if any,
received by the Company upon such issuance by (b) the
total number of shares of Common Stock outstanding
immediately after such issuance provided, however, that
no adjustment otherwise required hereunder, shall be made
unless the reduction in Conversion Price required by this
Section, together with all prior reductions which have
not resulted in an adjustment to the Conversion Price,
shall result in a reduction of the Conversion Price by at
least $0.05 per share.
For purposes of this (h), the price received by the
Corporation for such Additional Shares of Common Stock
shall be computed as follows:
(x) Cash and Property. If such
consideration consists of:
(a) cash, the consideration shall be aggregate
amount of cash received by the Corporation;
(b) property (including intellectual property)
other than cash, the consideration shall be the fair
market value thereof at the time of such issue, as
determined in good faith by the Board; and
(c) part of cash or part property and/or stock or
other securities of the Corporation or both, the
consideration shall be the amount equal to the sum of
cash and fair market value of the property actually
received by the Corporation computed consistently with
the prior paragraphs herein and determined in good faith
by the Board.
(y) Options. Shares of the Corporation
called for pursuant to options and warrants which are
held as of the date of a conversion of Preferred Stock by
option or warrant holders, and which are not exercised,
and have not terminated or lapsed, at the time of such
conversion, will be deemed to have been issued, for
purposes of the definitions and calculations hereof, at a
price per share determined by dividing:
(a) the total amount, if any, received and
receivable by the Corporation as consideration for the
issuance of such options or warrants, plus the minimum
aggregate amount of additional consideration (as set
forth in the instrument relating thereto, without regard
to any provision contained therein for a subsequent
adjustment of such consideration) payable to the
Corporation upon the exercise of such options or
warrants, by
(b) the maximum number of such shares (as set
forth in the instrument relating thereto, without regard
to any provisions contained therein for a subsequent
adjustment of such number) issuable upon the exercise of
such options or warrants.
(i) Definitions. The terms "Additional
Shares of Common Stock" as used herein shall mean all
shares of Common Stock issued or deemed issued by the
Corporation after the issuance date of the Preferred
Stock, whether or not subsequently reacquired or retired
by the Corporation, other than shares of Common Stock
issued (i) upon conversion of the Preferred Stock, (ii)
upon conversion of $696,000 principal amount of the
Corporation's 12 1/2% Convertible Subordinated Debentures
due in 1996, or any options or warrants or (iii) upon
exercise of options granted to purchase up to 1,197,500
shares of Common Stock of the Corporation under its stock
option plans.
(j) Accountants' Certificate of Adjustment.
In each case of an adjustment of readjustment of the
Conversion Price for the number of shares of Common Stock
or other securities issuable upon conversion of the
Preferred Stock, the Corporation, at its expense, shall
cause independent certified public accountants of
recognized standing selected by the Corporation (who may
be the independent certified Public accountants then
auditing the books of the Corporation) to compute such
adjustment or readjustment in accordance herewith and
prepare a certificate showing such adjustment or
readjustment, and shall mail such certificate, by first
class mail, postage prepaid, to each registered holder or
Preferred Stock at the holder's address as shown in the
Corporation's books. The certificate shall set forth
such adjustment or readjustment, showing in detail the
facts upon which such adjustment or readjustment is
based, including a statement of (i) the consideration
received or to be received by the Corporation for any
Additional Shares of Common Stock issued or sold, (ii)
the Conversion Price both before and after such
adjustment or readjustment, and (iii) the number of
Additional Shares of Common Stock and the type and
amount, if any, of other property which at the time would
be received upon conversion of the Preferred Stock.
(k) Fractional Shares. No fractional
shares of Common Stock shall be issued upon conversion of
Preferred Stock. In lieu of any fractional shares to
which the holder would otherwise be entitled, the
Corporation shall pay, in cash, an amount equal to the
product of (i) such fraction of a share, multiplied by
(ii) the fair market value of one share of the
Corporation's Common Stock on the date of conversion, as
determined in good faith by the Board.
(1) Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve
and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Preferred
Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion
of all outstanding shares of the Preferred Stock, and if
at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the
conversion of all the outstanding shares of Preferred
Stock, the Corporation will, subject to the requirements
of applicable state law, take such corporate action as
may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common
Stock to such number of shares of Common Stock as shall
be sufficient for such purposes.
F. Nonassessable Status of Stock. All the share
of Preferred Stock for which the full consideration
determined by the Board of Directors (which shall be not
less than the par value of such shares) has been paid or
delivered, in cash or property in accordance with the
resolutions of the Board of Directors authorizing the
issuance of such shares, shall be deemed fully paid-stock
and the holder of such shares shall not be liable for any
further call or assessment or any other payment thereon.
Section 3. Rights of the Classes of Common Stock.
The shares of Common Stock and Class B Common Stock shall
be identical in every respect and shall be entitled to
all of the rights and privileges pertaining to common
stock without limitations, prohibitions, restrictions or
qualifications, except as otherwise expressly set forth
in this Article Fourth.
Section 4. Voting Powers.
The holders of Common Stock shall be entitled to one (1)
vote per share on all matters on which holders of common
stock are entitled to vote. The holders of Class B
Common Stock shall be entitled to one hundred (100) votes
per share on all matters on which holders of common stock
of the Corporation are entitled to vote. The holders of
Common Stock, Class B Common Stock and the Preferred
Stock shall vote as a single class on all matters, except
as otherwise required herein or by law. No holder of
Common Stock or Class B Common Stock shall have preemptive
or preferential rights of subscription to any shares of any
class of stock in this Corporation, whether nor or hereafter
authorized.
Section 5. Conversion of Class B Common Stock into
Common Stock.
Any holder of Class B Common Stock may, at any time and
from time to time, by written notice to the Secretary of
the Corporation, convert said shares into a like number
of shares of Common Stock.
Section 6. Restrictions on the Right to Transfer or
Hypothecate Class B Common Stock.
No holder of Class B Common Stock shall have the right or
power to sell, transfer, assign, pledge, hypothecate, or
otherwise dispose of any share of Class B Common Stock,
provided, however, that in the event the Board of
Directors of the Corporation, at a meeting thereof duly
called and held or by unanimous written consent, shall
consent to a sale, transfer, assignment, pledge,
hypothecation or other disposition, upon the recording
thereof in the minutes of such meeting or the filing of a
copy of such written consent with the Secretary of the
Corporation, such sale, transfer, assignment, pledge,
hypothecation or other disposition of shares of Class B
Common Stock may be effected in accordance with the terms
of such consent, and such shares of Class B Common Stock
shall remain outstanding.
In the event that any holder of Class B Common Stock
shall sell, assign, transfer, pledge, hypothecate or
otherwise dispose of any share of Class B Common Stock
without consent, such shares shall automatically and
immediately upon the occurrence of such event be
converted into, and shall be, an equal number of shares
of Common Stock.
THIRD: In accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware
the holders of the majority of the outstanding Common
Stock and Class B Common Stock of the Corporation,
authorized the amendment of the Certificate of
Incorporation as set forth herein, by written consent
pursuant to Section 228 of the General Corporation Law.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands this 15th day of , 1988
_____________________________
Anthony R. Barringer
President
______________________________
Denis R. Pinkernell
Assistant Secretary
CERTIFICATE OF RESTORATION, RENEWAL AND REVIVAL OF
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESOURCES INC.
UNDER SECTION 312 OF THE DELAWARE
GENERAL CORPORATION CODE
_______________________________
The last acting President and assistant secretary of Barringer
Resources Inc., a corporation organized and existing under the laws of the
State of Delaware, HEREBY CERTIFY AS FOLLOWS:
1. The name of the corporation is Barringer Resources Inc. The
date of filing of its original Certificate of Incorporation in the office
of the Secretary of State is September 7, 1967.
2. The registered office of the corporation in the State of
Delaware is located at 1209 Orange Street, City of Wilmington, County of
New Castle, and the name of its registered agent at said address is the
Corporation Trust Company.
3. The date when the restoration, renewal and revival of the
certificate of incorporation of the corporation is to be effective is the
28th day of February, 1989, same being prior to the date of the expiration
of the certificate of incorporation of said corporation and its becoming
void by operation of law and by proclamation of the Governor. The
restoration, renewal and revival of the certificate of incorporation of
this corporation is to be for a perpetual term.
4. The corporation was organized under the laws of the State of
Delaware.
5. The corporation was duly organized and was authorized to engage
in the business activities set forth in its Certificate of Incorporation
until the 1st day of March, 1989, at which time its charter became
inoperative and void by operation of law and was subsequently repealed by
proclamation of the Governor for non-payment of taxes.
6. This Certificate for Restoration, Renewal and Revival is filed
by the authority of the last acting Director of the corporation in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, we have signed this certificate this _____
day of October, 1989.
_____________________________
Frank J. Abella, Jr.,
Last Acting President
ATTEST:
___________________
Denis R. Pinkernell,
Last Acting Assistant
Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESOURCES INC.
(Pursuant to Section 242 of the General Corporation Law)
THE UNDERSIGNED, STANLEY S. BINDER and DENIS R. PINKERNELL,
being the duly elected President and Assistant Secretary, respectively,
of BARRINGER RESOURCES INC., a Delaware corporation (the "Corporation"),
for the purposes of amending the Certificate of Incorporation pursuant
to Section 242 of the General Corporation Law, DO HEREBY CERTIFY THAT:
FIRST: The name of the Corporation is BARRINGER
RESOURCES INC. The original Certificate of Incorporation was filed
with the Secretary of State of the State of Delaware on September
7, 1967, under the name of BARRINGER RESEARCH INC.
SECOND: The Board of Directors of the Corporation at a
meeting thereof duly called and held on January 4, 1990, duly
adopted and approved and declared advisable the following
resolution with respect to the amendment of Article FOURTH of the
Certificate of Incorporation of the Corporation to:
RESOLVED, that subject to the approval of the
Stockholders of the Corporation, Article FOURTH of the
Certificate of Incorporation of the Corporation be
amended to read and provide in its entirety as follows:
FOURTH: Section 1. Authorizing Shares. The total
number of shares of stock the Corporation shall have
authority to issue is twenty-two million shares
(22,000,000)
comprised of 20,000,000 shares of Common Stock, par
value S.01 per share ("Common Stock"), and 1,000,000
shares of Convertible Preferred Stock, par value $l.25
per share ("Convertible Preferred Stock") and 1,000,000
shares of Preferred Stock, par value $2.00 per share
("Preferred Stock").
Section 2. Convertible Preferred Stock
The designations, voting powers, preferences and
relative, participating, optional or other special
rights, and the qualifications, limitations or
restrictions thereof, of the Convertible Preferred Stock
are as follows:
A. Dividends. The holders of the Convertible Preferred
Stock shall be entitled to receive or have set apart for payment
dividends thereon at the rate of $.10 per share per annum, and no
more, payable semi-annually for the last preceding dividend period
on the last days of June and December in each year in shares of
Common Stock valued for such purpose at the average closing price
of the Common Stock in the over-the-counter market over the 20
trading days immediately prior to the record date for each semi-
annual payment as quoted by NASDAQ in the over-the-counter market
(or set apart for payment on the Common Stock of the Corporation or
any other class of stock or series thereof ranking junior to the
Preferred Stock, unless and until dividends at the rate of $.10 per
share per annum on the Convertible Preferred Stock shall have been
paid or set apart for payment in full.
B. Liquidating Preferences. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation under any circumstances or any voluntary liquidation or
winding up of the Corporation, which shall be deemed to have
occurred upon the sale of all or substantially all of its assets,
the holders of Convertible Preferred Stock will be entitled to
receive, prior to and in preference to any distribution of the
assets or surplus funds of the Corporation to the holder of any
other shares of Capital Stock by reason of the ownership thereof,
an amount equal to $1.25 per share and no more (the "Preferential
Amount"). If, upon the occurrence of such an event, the assets and
funds thus distributed among the holders of Convertible Preferred
Stock shall be insufficient to permit the payment to such holder of
the full Preferential Amount, then the entire assets and funds of
the Corporation legally available for distribution shall be
distributed ratably among the holders of Convertible Preferred
Stock. After the payment or setting apart of the full Preferential
Amount required to be paid to the holders of the Convertible
Preferred Stock, the holders of Convertible Preferred Stock shall
be entitled to receive all remaining assets or surplus funds of the
Corporation.
C. Consents of Convertible Preferred Stock. Without the
affirmative vote or written consent of the holders of a majority of
the shares of Convertible Preferred Stock at the time outstanding,
the Corporation shall not:
(a) agree to be acquired, directly or indirectly, by
another entity by means of merger, consolidation or otherwise,
resulting in the exchange of outstanding shares of Capital Stock
for securities or other consideration issued or paid by the
acquiring corporation or its subsidiaries, or sell all, or
substantially all, of its assets; or
(b) alter, change or amend the preferences, rights or
privileges of holders of the Convertible Preferred Stock contained
herein or in the By-Laws of the Corporation or elsewhere as in
effect on the date that this Certificate of Amendment is filed with
the Secretary of the State of Delaware; or
(c) alter, change or amend the Certificate of
Incorporation or the By-Laws of the Corporation or otherwise to
provide for the authorization and issuance of any additional class
or series of Capital Stock, including additional shares of
preferred stock having any rights, preferences or priorities
equivalent to or greater than (either in any particular aspect or
in the aggregate) the Convertible Preferred Stock; or
(d) agree to a voluntary liquidation, dissolution, or
winding up of the Corporation; or
(e) adopt and/or implement any stock option or
similar employee stock bonus or incentive plan, except the
Permitted Stock Plans.
D. Voting Riqhts. In addition to the voting rights
granted to the holders of the Convertible Preferred Stock by the
laws of the State of Delaware and by Section C hereof, each holder
of Convertible Preferred Stock shall be entitled at each meeting of
the stockholders of the Corporation to that number of votes which
is equal to the number of shares of Common Stock into which each
share of Convertible Preferred Stock is convertible on the record
date with respect to such meeting for each share of such stock
standing in his name on the books of the Corporation.
E. Conversion.
(a) Conversion by Holder. Each share of Convertible
Preferred Stock shall be convertible, at the option of the holder
thereof, at any time prior to the fourth anniversary of the date of
issuance thereof, into fully paid and nonassessable shares of
Common Stock, in accordance with the Conversion Formula (as defined
below).
Before any holder of Convertible Preferred Stock shall be
entitled to convert the same into shares of Common Stock, the
holder shall (i) surrender the certificate(s) therefor, duly
endorsed, at the office of the Corporation or of any transfer agent
for the Common Stock, or (ii) notify the Corporation or any
transfer agent that such certificates have been lost, stolen or
destroyed and execute an agreement satisfactory to the Corporation
to indemnify the Corporation against any loss incurred by it in
connection therewith, and shall give written notice to the
Corporation at such office that the holder elects to convert the
same and shall state therein the number of shares of Convertible
Preferred Stock being converted. Thereupon, the Corporation shall
promptly issue and deliver at such office to such holder(s) of
Convertible Preferred Stock a certificate(s) for the number of
shares of Common Stock to which the holder shall be entitled.
Such conversion shall be deemed to have been made immediately
prior to the closing of business on the date of such surrender of
the shares of Convertible Preferred Stock to be converted or
delivery of the aforementioned indemnification agreement, and the
person or persons entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such shares of Common Stock on such
date.
(b) Conversion by the Corporation. The Corporation may
require the conversion of all (but not less than all) of the
Convertible Preferred Stock in accordance with the Conversion
Formula (as defined below) (i) at any time after the fourth anniversary
of the date of issuance of such Convertible Preferred Stock, or (ii)
immediately upon a consolidation, merger or sale of substantially all of
the assets of the Corporation under circumstances where the Corporation
is not the surviving entity, or (iii) upon the repurchase by the
Corporation of all of its then outstanding Class A warrants or all
of its Class B Warrants issued by the Corporation in connection
with the sale of Units under a certain Purchase Agreement dated May
10, 1988 between the Corporation and Purchasers named therein.
Upon the occurrence of such an event specified in this
Section E, and upon the election of the Corporation to require the
conversion of all of the Convertible Preferred Stock, the
outstanding shares of Convertible Preferred Stock shall be
converted automatically without any further action by the holders
of such shares and whether or not the certificates representing
such shares are surrendered to the Corporation or its transfer
agent. The Corporation, however, shall give prompt written notice
of such conversion to each holder of Convertible Preferred Stock at
his last address listed in the Corporation's records.
The Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such conversion
unless certificates evidencing shares of the Convertible Preferred
Stock being converted are either delivered to the Corporation or
any transfer agent, as hereinafter provided, or the holder notifies
the Corporation or any transfer agent that such certificates have
been lost, stolen, or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation
against any loss incurred by it in connection therewith.
Thereupon, there shall be issued and delivered to such holder,
promptly at such office in the holder's name as shown on such
surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which
the shares of the Convertible Preferred Stock surrendered were
convertible on the date on which such conversion occurred.
(c) Conversion Price and Conversion Formula. The Purchase
Price per share (the ''Purchase Price Per Share") shall be $1.25
and the initial Conversion Price per share for Convertible
Preferred Stock (the "Conversion Price") shall be $1.25, subject to
adjustment from time to time as provided herein. Each share of the
Convertible Preferred Stock shall be convertible into that number
of shares of Common Stock that results from dividing the Purchase
Price Per Share by the Conversion Price in effect at the time of
conversion (the "Conversion Formula").
(d) Adjustment of Conversion Price for Stock splits and
Combinations. If the Corporation shall at any time, or from time
to time, after the date of the issuance of the Convertible
Preferred Stock, effect a subdivision of the outstanding Common
Stock, the Conversion Price in effect immediately before that
subdivision shall be proportionately decreased, and conversely, if
the Corporation shall at any time or from time to time after the
original issue date of the Convertible Preferred Stock combine the
outstanding shares of Common Stock, the Conversion Price in effect
immediately before the combination shall be proportionately
increased. Any adjustment under this subsection (d) shall become
effective at the close of business on the date the subdivision or
combination becomes effective.
(e) Adjustment of Conversion Price for Certain Dividends
and Distributions. If the Corporation at any time, or from time to
time, after the date of the issuance of the Convertible Preferred
Stock, shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a
dividend or other distribution payable in additional shares of
Common Stock, then, and in each such event, the Conversion Price
then in effect shall be decreased as of the date of such issuance
or, at the time or upon the event such a record date shall have
been fixed, as of the close of business on such record date (the
"Record Date), by multiplying the Conversion Price then in effect
by a fraction, determined as follows:
(i) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to
the Record Date; and
(ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to
the Record Date plus the number of shares of Common Stock issuable
in payment of such dividend or distribution; provided however, if
such Record Date shall have been fixed and such dividend is not
fully paid or if such distribution is not fully made on the date
fixed therefor, the Conversion Price shall be recomputed
accordingly as of the closing of the business on such Record Date,
and thereafter the Conversion Price for such Convertible Preferred
Stock shall be adjusted pursuant to this section (e) as of the time
of each action, or payment of such dividends or distributions.
(f) Adjustment for Reclassification, Exchange or
Substitution. If the Common Stock issuable upon the conversion
of the Convertible Preferred Stock shall be changed into the same
or a different number of shares of a different class or classes of
stock, or other securities or property, whether by
reclassification, exchange, substitution or other transaction
having similar effect (other than a subdivision or combination of
shares or stock dividend provided for above, or a reorganization,
merger, consolidation, or sale of assets provided for elsewhere in
this Section E) then and in each such event the holder of each
share of Convertible Preferred Stock shall have the right
thereafter to convert such share into the kind and amount of shares
of stock and other securities and property receivable upon such
reclassification, exchange, substitution or other transaction
having similar effect, as did or shall the holders of shares of
Common Stock, as if such shares of Convertible Preferred Stock had
been converted into Common Stock immediately prior to the Record
Date with respect to such reclassification, exchange or
substitution, all subject to further adjustment as provided herein.
(g) Reorganization, Mergers Consolidations, or Sales of
Assets. If at any time, or from time to time, there shall be
(other than a subdivision combination, reclassification, exchange
or substitution of shares provided for elsewhere in this Section E)
a capital reorganization involving a merger or consolidation of the
Corporation with or into another corporation, or the sale or
transfer of all or substantially all of the Corporation's
properties and assets to any other person (a "sale"), then, as a
part of such reorganization, merger, consolidation or sale, due and
adequate provision shall be made so that the holders of the
Convertible Preferred Stock shall thereafter be entitled to receive
upon conversion of the Convertible Preferred Stock, the number of
shares or other securities or property of the Corporation, or of
the successor corporation resulting from such merger,
reorganization, consolidation or sale, as to which a holder of
Common Stock deliverable upon conversion would have been entitled
to receive as a result of such reorganization, merger,
consolidation, or sale. In any such case, appropriate adjustment
shall be made in respect to the rights of the holders of the
Convertible Preferred Stock after the reorganization, merger,
consolidation or sale to the end that the provisions of this
Section E (including adjustment of the Conversion Price then in
effect and the number of shares purchasable upon conversion of the
Convertible Preferred Stock) shall be applicable after that event
as nearly equivalent as may be practicable.
(h) Sale of Shares Below Conversion Price. If at any
time, or from time to time, after the date of issuance of the Convertible
Preferred Stock and while any shares of the Convertible Preferred
Stock are outstanding, the Corporation shall issue or sell Additional
Shares of Common Stock (as hereinafter defined) or options, warrants,
convertible securities or other rights to acquire Common Stock other
than as (i) a dividend or other distribution on any class of stock permitted
by subsection (e) above, (ii) a subdivision or combination of shares of
Common Stock as provided for in subsection (d) above, or (iii) a
reclassification, exchange, substitution or other transaction
having similar effect as provided for in subsection (f) above, for
a consideration per share less than the Conversion Price in effect
immediately prior to the event, or without consideration, then, and
thereafter successively upon each such issuance, the Conversion
Price in effect immediately prior to the issuance of such shares
shall forthwith be reduced to a price (calculated to the nearest
full cent) determined by dividing (a) an amount equal to (i) the
total number of shares of Common Stock outstanding immediately
prior to such issuance multiplied by the Conversion Price in effect
immediately prior to such issuance, plus (ii) the consideration, if
any, received by the Corporation upon such issuance by (b) the
total number of shares of Common Stock outstanding immediately
after such issuance provided, however, that no adjustment otherwise
required hereunder, shall be made unless the reduction in
Conversion Price required by this subsection (h), together with all
prior reductions which have not resulted in an adjustment to the
Conversion Price, shall result in a reduction of the Conversion
Price by at least $0.05 per share.
For purposes of this subsection (h), the price received by
the Corporation for such Additional Shares of Common Stock shall be
computed as follows:
(x) Cash and Property. If such consideration
consists of:
(a) cash, the consideration shall be aggregate amount of
cash received by the Corporation;
(b) property (including intellectual property) other than
cash, the consideration shall be the fair market value thereof at
the time of such issue, as determined in good faith by the Board;
and
(c) part of cash or part property and/or stock or other
securities of the Corporation or both, the consideration shall be
the amount equal to the sum of cash and fair market value of the
property actually received by the Corporation computed consistently
with the prior paragraphs herein and determined in good faith by
the Board.
(y) Options. Shares of the Corporation called for
pursuant to options and warrants which are held as of the date of a
conversion of Convertible Preferred Stock by option or warrant
holders, and which are not exercised, and have not terminated or
lapsed, at the time of such conversion, will be deemed to have been
issued, for purposes of the definitions and calculations hereof, at
a price per share determined by dividing:
(a) the total amount, if any, received and receivable by
the Corporation as consideration for the issuance of such options
or warrants, plus the minimum aggregate amount of additional
consideration (as set forth in the instrument relating thereto,
without regard to any provision contained therein for a subsequent
adjustment of such consideration) payable to the Corporation upon
the exercise of such options or warrants, by
(b) the maximum number of such shares (as set forth in the
instrument relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such options or warrants.
(i) Definitions. The terms "Additional Shares of
Common Stock" as used herein shall mean all shares of Common Stock
issued or deemed issued by the Corporation after the issuance date
of the Convertible Preferred Stock, whether or not subsequently
reacquired or retired by the Corporation, other than shares of
Common Stock issued (i) upon conversion of the Convertible
Preferred Stock, (ii) upon conversion of $693,000 principal amount
of the Corporation's 12 1/2% Convertible Subordinated Debentures
due in 1996, or any options or warrants or (iii) upon exercise of
options granted to purchase up to 1,197,500 shares of Common Stock
of the Corporation under its stock option plans.
(i) Accountants' Certificate of Adjustment. In each
case of an adjustment of readjustment of the Conversion Price for
the number of shares of Common Stock or other securities issuable
upon conversion of the Convertible Preferred Stock, the
Corporation, at is expense, shall cause independent certified
public accountants of recognized standing selected by the
Corporation (who may be the independent certified public
accountants then auditing the books of the Corporation) to compute
such adjustment or readjustment in accordance herewith and prepare
a certificate showing such adjustment or readjustment, and shall
mail such certificate by first class mail, postage prepaid, to each
registered holder or Convertible Preferred Stock at the holder's
address as shown in the Corporation's books. The certificate shall
set forth such adjustment or readjustment, showing in detail the
facts upon which such adjustment or readjustment is based,
including a statement of (i) the consideration received or to be
received by the Corporation for any Additional Shares of Common
Stock issued or sold, (ii) the Conversion Price both before and
after such adjustment or readjustment, and (iii) the number of
Additional Shares of Common Stock and the type and amount, if any,
of other property which at the time would be received upon
conversion of the Convertible Preferred Stock.
(k) Fractional Shares. No fractional shares of Common
Stock shall be issued upon conversion of Convertible Preferred
Stock. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay, in cash, an
amount equal to the product of (i) such fraction of a share,
multiplied by (ii) the fair market value of one share of the
Corporation's Common Stock on the date of conversion, as determined
in good faith by the Board.
(1) Reservation of Stock Issuable Upon Conversion.
The Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of the shares of the
Convertible Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Convertible Preferred
Stock, and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the
conversion of all the outstanding shares of Convertible Preferred
Stock, the Corporation will, subject to the requirements of
applicable state law, take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares of Common
Stock as shall be sufficient for such purposes.
F. Nonassessable Status of Stock. All the share of
Convertible Preferred Stock for which the full consideration
determined by the Board of Directors (which shall be not less than
the par value of such shares) has been paid or delivered, in cash
or property in accordance with the resolutions of the Board of
Directors authorizing the issuance of such shares, shall be deemed
fully paid stock and the holder of such shares shall not be liable
for any further call or assessment or any other payment thereon.
SECTION 3. Preferred Stock
The Preferred Stock may be issued from time to time in one or more
series with such designations, preferences and relative
participating, optional or other special rights and qualifications,
limitations or restrictions thereof, as shall be stated in
the resolutions adopted by the Board of Directors providing for the
issuance of such Preferred Stock or series thereof; and the Board
of Directors is hereby expressly vested with authority to fix such
designations, preferences and relative participating, optional or
other special rights or qualifications, limitations or restrictions
for each series, including, but not by way of limitation, the power
to fix the redemption and liquidation preferences, the rate of
dividends payable and the time for and priority of payment thereof and to
determine whether such dividends shall be cumulative or not and to
provide for and fix the terms of conversion of such Preferred Stock
or any series thereof into Common Stock of the Corporation and fix
the voting power, if any, of shares of Preferred Stock or any
series thereof.
THIRD: At a Special Meeting of the Stockholders of the
Corporation duly called and held an February 13, 1990, in
accordance with the provisions of Section 242 of the General
Corporation law of the State of Delaware, the holders of the
majority of the outstanding Common Stock and Convertible Preferred
Stock of the Corporation voted in favor of the amendment of the
Certificate of Incorporation as set forth herein.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands
this 13th day of February, 1990 and affirm that the statements made
therein are true add correct under the penalties of perjury.
____________________________
Stanley S. Binder
President
____________________________
Denis R. Pinkernell
Assistant Secretary
CERTIFICATE OF DESIGNATION
OF
CLASS A CONVERTIBLE PREPERRED STOCK
(Pursuant to Section 151 of the General Corporation Law of the
State of Delaware)
BARRINGER RESOURCES INC., a corporation organized and
existing under the General Corporation Law of the State of
Delaware (the "Corporation"), in accordance with the provisions
of Section 103 thereof, HEREBY CERTIFIES:
That pursuant to the authority conferred upon the Board
of Directors by the Certificate of Incorporation of the
Corporation as amended, the Board of Directors on February 13,
1990 adopted the following resolution creating a series of
500,000 shares of Preferred Stock designated as Class A
Convertible Preferred Stock:
RESOLVED, that pursuant to the authority conferred
upon the Board of Directors of the Corporation by
Article FOURTH of the Amended Certificate of
Incorporation of the Corporation, there is hereby
established a Class A Convertible Preferred Stock of
the par value of $2.00 per share (hereinafter called
the "Class A Convertible Preferred Stock") consisting
of 500,000 shares and designated Class A Convertible
Preferred Stock, and that, subject to the limitations
provided by law and by Article FOURTH of the Amended
Certificate of Incorporation, the designations, voting
powers, preferences and relative, participating,
optional or other special rights, and the
qualifications, limitations or restrictions thereof, of
the Class A Convertible Preferred Stock are as follows:
A. Dividends. The holders of shares of Class A
Convertible Preferred Stock shall be entitled to
receive or have set apart for payment dividends thereon
at the rate of $.16 per share per annum, payable
semiannually for the last preceding dividend on the
last days of June and December in each year in, at the
option of the Corporation, cash or shares of Common
Stock valued for such purpose at the average closing
price of the Common Stock in the over-the-counter
market over the twenty (20) trading days immediately
prior to the recorded date for each semiannual payment
an quoted on NASDAQ, as the average of the bid and
offer prices quoted for such period in the pink sheets
published by the National Quotation Bureau. The amount
of dividends payable per share for each dividend period
will be computed by dividing by two the $.16 annual
rate.
B. Liquidating Preferences. In the event of any
voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation under any circumstances
or any voluntary liquidation or winding-up of the
Corporation, which shall be deemed to have occurred
upon the sale of all or substantially all of its
assets, the holders of Class A Convertible Preferred
Stock will be entitled to receive, prior to and in
preference to any distribution of the assets of surplus
funds of the Corporation to the holder of any other
shares of Capital Stock by reason of the ownership
thereof, but on a parity with the holders of the
Convertible Preferred Stock, an amount equal to $2.00
per share plus accrued and unpaid dividends up to and
inclusive of the date of liquidation (the "Class A
Preferential Amount"). If, upon the occurrence of such
an event, the assets and funds thus distributed among
the holders of Class A Convertible Preferred Stock
shall be insufficient to permit the payment to such
holder of the full Class A Preferential Amount, then
the entire assets and funds of the Corporation legally
available for distribution shall be distributed ratably
among the holders of Class A Convertible Preferred
Stock and the Convertible Preferred Stock. After
payment or setting apart of the full Class A
Preferential Amount required to be paid to the holders
of the Class A Convertible Preferred Stock, the holders
of the Class A Convertible Preferred Stock shall be
entitled to receive all remaining assets or surplus
funds of the Corporation on a parity with the holders
of the Convertible Preferred Stock.
C. Consents of Class A Convertible Preferred
Stock. Without the affirmative vote or consent of the
holders of the majority of the shares of Class A
Convertible Stock at the time outstanding, the
Corporation shall not:
(a) Alter, change or amend the preferences,
rights or privileges of holders of the Class A
Convertible Preferred Stock contained herein or in the
By-laws of the Corporation or elsewhere as in effect on
the date that this Certificate of Designation is filed
with the Secretary of the State of Delaware; or
(b) Alter, change or amend the Certificate of
Incorporation or the By-laws of the Corporation or
otherwise to provide for the authorization and issuance
of any additional class or series of Capital Stock,
including additional shares of Preferred Stock having
any rights, preferences or priorities equivalent to or
any greater than (either in any particular aspect or in
the aggregate) the Class A Convertible Preferred Stock;
or
(c) Agree to a voluntary liquidation,
dissolution, or winding-up of the Corporation.
D. Voting Rights. In addition to the voting
rights granted to the holders of the Class A
Convertible Preferred Stock by the laws of the state of
Delaware and by Section C hereof, each holder of Class
A Convertible Preferred Stock shall be entitled at each
meeting of the stockholders of the Corporation to that
number of votes which is equal to the number of shares
of Common Stock into which each share of Convertible
Preferred Stock is convertible on the record date with
respect to such meeting for each share of such stock
outstanding in his name on the books of the
Corporation.
E. Conversion.
(a) Conversion by Holder. Each share of Class A
Convertible Preferred Stock shall be convertible, at
the option of the holder thereof, at any time after (i)
one (1) year after the date of issuance of the Class A
Convertible Preferred Stock; or (ii) the closing price
of Common Stock shall have been $3.00 or more per share
for sixty (60) consecutive trading days, in accordance
with the conversion formula (as defined below), subject
to adjustment as described below.
Before any holder of Class A Convertible Preferred
Stock shall be entitled to convert the same into shares
of Common Stock, the holders shall (i) surrender the
Certificate(s) therefor, duly endorsed, at the office
of the Corporation or of any transfer agent for the
Common Stock, or (ii) notify the Corporation or any
transfer agent that such certificate has been lost,
stolen or destroyed and execute an agreement
satisfactory to the Corporation to indemnify the
Corporation against any loss incurred by it in
connection therewith, and shall give written notice to
the Corporation at such office that the holder elects
to convert the same and shall state therein the number
of shares of Class A Convertible Preferred Stock being
converted. Thereupon, the Corporation shall promptly
issue and deliver at such office to such holder(s) of
Class A Convertible Preferred Stock a certificate(s)
for the number of shares of Common Stock to which the
holder shall be entitled.
Such conversion shall be deemed to have been made
immediately prior to the closing of business on the
date of such surrender of the shares of Class A
Convertible Preferred Stock to be converted or delivery
of the aforementioned Indemnification Agreement, and
the person or persons entitled to receive these shares
of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or
holders of such shares of Common Stock on such date.
(b) Conversion Price and Conversion Formula. The
initial conversion price per share for Class A
Convertible Preferred Stock (the "Conversion Price")
shall be $2.00, subject to adjustment from time to time
as provided herein. Each share of Class A Convertible
Preferred Stock shall be convertible into that number
of shares of Common Stock that results from dividing
$2.00 by the Conversion Price in effect at the time of
conversion (the "Conversion Formula").
(c) Adjustments of Conversion Price for Stock
Splits and Combinations. If the Corporation shall at
any time, or from time to time, after the date of the
issuance of the Class A Convertible Preferred Stock,
effect a subdivision of the outstanding Common Stock,
the Conversion Price in effect immediately before that:
subdivision shall be proportionately decreased, and
conversely, if the Corporation shall at any time or
from to time after the original issue date of the Class
A Convertible Preferred Stock combine the outstanding
shares of Common Stock, the Conversion Price in effect
immediately before the combination shall be
proportionately increased. Any adjustment under this
Subsection (c) shall become effective at the close of
business on the date the subdivision or combination
becomes effective.
(d) Adjustment of Conversion Price for Certain
Dividends and Distributions. If the Corporation at any
time, or from time to time, after the date of the
issuance of the Class A Convertible Preferred Stock,
shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in
additional shares of Common Stock, then, and in each
such event, the Conversion Price then in effect shall
be decreased as of the date of such issuance or, at the
time or upon the event such a record date shall have
been fixed, as of the close of business on such record
date (the "Record Date"), by multiplying the Conversion
Price then in effect by a fraction, determined as
follows:
(i) The numerator of which shall be the total
number of shares of Common stack issued and outstanding
immediately prior to the Record Date; and
(ii) The denominator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the Record Date plus the number of
shares of Common Stock issuable in payment of such
dividend or distribution; provided, however, if such
Record Date shall have been fixed and such dividend is
not fully paid or if such distribution is not fully
made on the date fixed therefor, the Conversion Price
shall be recomputed accordingly as of the closing of
the business on such Record Date and thereafter the
Conversion Price for such Class A Convertible Preferred
Stock shall be adjusted pursuant to this Section (d) at
the time of such action, or payment of such dividends
or distributions.
(e) Adjustment for Reclassification, Exchange or
Substitution. If the Common Stock issuable upon the
conversion of the Class A Convertible Preferred Stock
shall be changed into the same or different number of
shares of a different class or classes of stock, or
other securities or property, whether by
reclassification, exchange, substitution or other
transaction having similar effect (other than a
subdivision or combination of shares or stock dividend
provided for above, or a reorganization, merger,
consolidation, or sale of assets provided for elsewhere
in this Section E) then and in each such event the
holder of each share of Class A Convertible Preferred
Stock shall have the right thereafter to convert such
shares into the kind and amount of shares of stock and
other securities and property receivable upon such
reclassification, exchange, substitution or other
transaction having similar effect, as did or shall the
holders of shares of Common Stock have, as if such
shares of Class A Convertible Preferred Stock had been
converted into Common Stock immediately prior to the
Record Date with respect to such reclassification,
exchange or substitution, all subject to further
adjustment as provided herein.
(f) Reorganization, Mergers, Consolidations, or
Sales of Assets. If at any time, or from time to time,
there shall be (other than at subdivision, combination,
reclassification, exchange or substitution or shares
provided for elsewhere in this Section E) a capital
reorganization involving a merger or consolidation of
the Corporation with or into another corporation, or
the sale or transfer of all or substantially all of the
Corporation's properties and assets to any other person
(a "sale"), then, as a part of such reorganization,
merger, consolidation or sale, there shall be due and
adequate provision shall be made so that the holders of
the Class A Convertible Preferred Stock shall
thereafter be entitled to receive upon conversion of
the Class A Convertible Preferred Stock, the number of
shares or other securities or property of the
Corporation, or of the successor corporation resulting
from such merger, reorganization, consolidation or
sale, as to which a holder of Common Stock deliverable
upon conversion would have been entitled to receive as
a result of such reorganization, merger, consolidation,
or sale. In any such case, appropriate adjustment
shall be made in respect to the rights of the holders
of the Class A Convertible Preferred Stock after the
reorganization, merger, consolidation or sale to the
end that the provisions of this Section E (including
adjustment of the Conversion Price then in effect and
the number of shares purchasable upon conversion of the
Class A Convertible Preferred Stock) shall be
applicable after that event as nearly equivalent as may
be practicable.
(g) Sale of Shares Below Conversion Price. If at
any time, or from time to time, after the date of
issuance of the Class A Convertible Preferred Stock and
while any shares of the Class A Convertible Preferred
Stock are outstanding, the Corporation shall issue or
sell Additional Shares of Common Stock (as hereinafter
defined) or options, warrants, convertible securities
or other rights to acquire Common Stock other than an
(i) a dividend or other distribution of any class of
stock permitted by subsection (d) above, (ii) a
subdivision or combination of shares of Common Stock as
provided for in subsection (c) above, or (iii) a
reclassification, exchange, resubstitution or other
transaction having similar effect as provided for in
subsection (e) above, for a consideration per share
less than the Conversion Price in effect immediately
prior to the event, or without consideration, then, and
thereafter successively upon each such issuance, the
Conversion Price in effect immediately prior to the
issuance of such shares shall forthwith be reduced to a
price (calculated to the nearest full cent) determined
by dividing (a) an amount equal to (i) the total number
of shares of Common Stock outstanding immediately prior
to such issuance multiplied by the conversion Price in
effect immediately prior to such issuance, plus (ii)
the consideration, if any, received by the Corporation
upon such issuance by (b) the total number of shares of
Common Stock outstanding immediately after such
issuance provided, however, that no adjustment
otherwise required hereunder, shall be made unless the
reduction in Conversion Price required by this
subsection (h), together with all prior reductions
which have not resulted in an adjustment to the
Conversion Price, shall result in a reduction of the
Conversion Price by at lease $0.05 per share.
For purposes of this subsection (h), the price
received by the Corporation for such Additional Shares
of Common Stock shall be computed as follows:
(x) Cash and Property. If such
consideration consists of:
(a) cash, the consideration shall be the
aggregate amount of cash received by the Corporation;
(b) property (including intellectual property)
other than cash, the consideration shall be the fair
market value thereof at the time of such issue, as
determined in good faith by the Board; and
(c) part cash or part property and/or stock or
other securities of the Corporation or both, the
consideration shall be the amount equal to the sum of
the cash and fair market value of the property actually
received by the Corporation computed consistently with
the prior paragraphs herein and determined in good
faith by the Board.
(y) Options. Shares of the Corporation called
for pursuant to options and warrants which are held as
of the date of a conversion of Class A Convertible
Preferred Stock by option or warrant holders, and which
are not exercised, and have not terminated or lapsed,
at the time of such conversion, will be deemed to have
been issued, for purposes of the definitions and
calculations hereof, at a price per share determined by
dividing:
(a) the total amount, if any, received and
receivable by the Corporation as consideration for the
issuance of such options or warrants, plus the minimum
aggregate amount of additional consideration (as set
forth in the instrument relating thereto, without
regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such options or
warrants, by
(b) the maximum number of such shares (as set
forth in the instrument relating thereto, without
regard to any provisions contained therein for a
subsequent adjustment of such number) issuable upon the
exercise of such options or warrants.
(h) Definitions. The terms "Additional Shares of
Common Stock" as used herein shall mean all shares of
Common Stock issued or deemed issued by the Corporation
after the issuance date of the Class A Convertible
Preferred Stock, whether or not subsequently reacquired
or retired by the Corporation, other than shares of
Common Stock issued (i) upon conversion of the Class A
Convertible Preferred Stock, (ii) upon conversion of
$693,000 principal amount of the Corporation's 12-1/2%
Class A Convertible Subordinated Debentures due in
1996, or any options or warrants or (iii) upon exercise
of options or warrants or (iv) upon exercise of options
granted to purchase shares of Common Stock of the
Corporation under its stock option plans.
(i) Accountant's Certificate of Adjustment. In
each case of an adjustment of readjustment of the
Conversion Price for the number of shares of Common
Stock or the securities issuable upon conversion of the
Class A Convertible Preferred Stock, the Corporation,
at its expense, shall cause independent certified
public accountants of recognized standing selected by
the Corporation (who may be the independent certified
public accountants then auditing the books of the
Corporation) to compute such adjustment or readjustment
in accordance herewith and prepare a certificate
showing such adjustment or readjustment, and shall mail
such certificate by first class mail, postage prepaid,
to each registered holder of Class A Convertible
Preferred Stock at the holder's address as shown in the
Corporation's books. The certificate shall set forth
such adjustment or readjustment, showing in detail the
facts upon which such adjustment or readjustment is
based, including a statement of (i) the consideration
received or to be received by the Corporation for any
Additional Shares of Common Stock issued or sold, (ii)
the Conversion Price both before and after such
adjustment (or readjustment, and (iii) the number of
Additional Shares of Common Stock and the type and
amount, if any, of other property which at the time
would be received upon conversion of the Class A
Convertible Preferred Stock.
(j) Fractional Shares. No fractional shares of
Common Stock shall be issued upon conversion of Class A
Convertible Preferred Stock. In lieu of any fractional
shares to which the holder would otherwise be entitled,
the Corporation shall pay, in cash. an amount equal to
the product of (i) such fraction of a share, multiplied
by (ii) the fair market value of one share of the
Corporations' Common Stock on the date of conversion,
as determined in good faith by the Board.
(k) Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve
and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Class A
Convertible Preferred Stock, such number of its shares
of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding
shares of the Class A Convertible Preferred Stock, and
if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to
effect the conversion of all the outstanding shares of
Class A Convertible Preferred Stock, the Corporation
will, subject to the requirements of applicable state
law, take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of
shares of Common Stock as shall be sufficient for such
purposes.
F. Nonassessable Status of Stock. All the
shares of Class A Convertible Preferred Stock for which
the full consideration determined by the Board of
Directors (which shall be not less than the par value
of such shares) has been paid or delivered, in cash or
property in accordance with the resolutions of the
Board of Directors authorizing the issuance of such
shares, shall be deemed fully paid stock and the holder
of such shares shall not be liable for any further call
or assessment or any other payment thereon.
G. Redemption of Class A Convertible Preferred
Stock. Subject to the limitations of the laws of the
State of Delaware, the Corporation may, any time after
the closing price of the Common Stock has been $3.00 or
more for ninety (90) consecutive trading days, redeem
all or a portion of such shares of Class A Convertible
Preferred Stock at a redemption price equal to $2.00
per share, plus an amount equal to any accumulated and
accrued but unpaid dividends upon thirty (30) days
written notice to the holders of the Class A
Convertible Preferred Stock. If less than all of the
outstanding shares of the Class A Convertible Preferred
Stock are to be redeemed, the Corporation shall redeem
from each holder of Class A Convertible Preferred Stock
on a pro rata basis.
IN WITNESS WHEREOF, the undersigned have hereunto set
their hands this 27th day of November, 1990 and affirm that the
statements made herein are true and correct under the penalties
of perjury.
BARRINGER RESOURCES INC.
By:____________________________
Stanley S. Binder, President
Attest:
________________________________________
Denis R. Pinkernell, Assistant Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BARRINGER RESOURCES INC.
(Pursuant to Section 242 of the General Corporation Law)
THE UNDERSIGNED, Stanley S. Binder and Denis R. Pinkernell, being the
duly elected and acting President and Secretary, respectively, of BARRINGER
RESOURCES INC., a Delaware corporation (the "Corporation"), for the purpose
of amending the Certificate of Incorporation of the Corporation pursuant to
Section 242 of the General Corporation Law, DO HEREBY CERTIFY THAT:
FIRST: The name of the Corporation is BARRINGER RESOURCES
INC. The original Certificate of Incorporation of the Corporation
was filed with the Secretary of State of the State of Delaware on
September 7, 1967 under the name of Barringer Research, Inc.
SECOND: The Board of Directors of the Corporation, at a
meeting thereof duly called and held on September 14, 1990, duly
adopted and approved and declared advisable the following
resolution with respect to the amendment to Article FIRST of the
Certificate of Incorporation of the Corporation to change the name
of the Corporation in accordance with the provisions of Section 242
of the General Corporation Law:
RESOLVED, that, subject to approval of stockholders
of the Corporation, Article FIRST of the Certificate of
Incorporation of the Corporation be amended to read and
provide in its entirety to read as follows:
"FIRST: The name of the Corporation is BARRINGER
TECHNOLOGIES INC.hereinafter called the "Corporation")."
THIRD: The holders of a majority of the outstanding shares of
Common Stock ($.01 par value) and the outstanding shares of $1.25
Convertible Preferred Stock of the Corporation, the only
outstanding classes of stock of the Corporation entitled to notice
of and to vote at the deferred Annual Meeting of Stockholders of
the Corporation held on February 12, 1991 approved the amendment of
the Certificate of Incorporation as herein set forth in accordance
with the provisions of Section 242 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands
this 13th day of February, 1991.
_______________________________
Stanley S. Binder, President
_______________________________
Denis R. Pinkernell, Secretary
CERTIFICATE OF DECREASE IN THE NUMBER OF
SHARES OF CLASS A CONVERTIBLE PREFERRED STOCK
AND
CERTIFICATE OF DESIGNATION OF CLASS B
CONVERTIBLE PREFERRED STOCK
(Pursuant to Section 151 of the General Corporation Law of
the State of Delaware)
BARRINGER TECHNOLOGIES INC., a corporation organized
and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), in accordance with the provisions
of Section 103 thereof, HEREBY CERTIFIES:
That pursuant to the authority conferred upon the Board
of Directors by the Certificate of Incorporation of the
Corporation, as amended, the Board of Directors on November 18,
1991 adopted the following resolutions decreasing the number of
shares of Class A Convertible Preferred Stock previously
designated by Certificate of Designation filed with the Secretary
of State of Delaware on November 27, 1991 from 500,000 shares to
270,000 shares, and designating a series of 730,000 shares of
Class B Convertible Preferred Stock:
RESOLVED, that the resolutions designating an
additional 500,000 shares of Class A Convertible
Preferred Stock be rescinded, and pursuant to Section
151(g) of the General Corporation Law of the State of
Delaware, the number of shares of Class A Convertible
Preferred Stock previously designated by Certificate of
Designation filed with the Secretary of State of
Delaware on November 27, 1991 be decreased to 270,000
shares of such Class A Convertible Stock; and
RESOLVED, that pursuant to the authority conferred
upon the Board of Directors of the Corporation by
Article FOURTH of the Amended Certificate of
Incorporation of the Corporation, there is hereby
designated a Class B Convertible Preferred Stock, par
value $2.00 per share (hereinafter called the "Class B
Convertible Preferred Stock") , and that, subject to
the limitations provided by law and by Article FOURTH
of the Amended Certificate of Incorporation, the
designations, voting powers, preferences and relative,
participating, optional or other special rights, and
the qualifications, limitations or restrictions
thereof, of the Class B Convertible Preferred Stock are
as follows:
A. Dividends. The holders of shares of Class A
Convertible Preferred Stock shall be entitled to
receive or have set apart for payment dividends thereon
at the rate of $.16 per share per annum, payable
semiannually from the last preceding dividend on the
last days of June and December in each year in, at the
option of the Corporation, cash or shares of Common
Stock valued for such purpose at the average daily bid
and offer price of the Common Stock in the over-the-
counter market over the twenty (20) trading days
immediately prior to the record date for each
semiannual payment as quoted on the National
Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or, if the Common Stock is
not quoted on NASDAQ during such period, the average of
the bid and offer prices quoted for such period in the
pink sheets published by the National Quotation Bureau.
The amount of dividends payable per share for each
dividend period will be computed by dividing by two the
$.16 annual rate.
B. Liquidating Preferences. In the event of any
voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation under any circumstances
or any voluntary liquidation or winding-up of the
Corporation, which shall be deemed to have occurred
upon the sale of all or substantially all of its
assets, the holders of Class B Convertible Preferred
Stock will be entitled to receive, prior to and in
preference to any distribution of the assets of surplus
funds of the Corporation to the holder of any other
shares of capital stock of the Corporation by reason of
the ownership thereof, but on a parity with the holders
of the Class A Convertible Preferred Stock and the
Convertible Preferred Stock, par value $1.25 per share
of the Corporation (the "Convertible Preferred Stock"),
an amount equal to $2.00 per share plus accrued and
unpaid dividends up to and inclusive of the date of
liquidation (the "Class B Preferential Amount"). If,
upon the occurrence of such an event, the assets and
funds thus distributed among the holders of Class B
Convertible Preferred Stock shall be insufficient to
permit the payment to such holder of the full Class B
Preferential Amount, then the entire assets and funds
of the Corporation legally available for distribution
shall be distributed ratably among the holders of Class
B Convertible Preferred Stock, Class A Convertible
Preferred Stock and the Convertible Preferred Stock.
After payment or setting apart of the full Class B
Preferential Amount required to be paid to the holders
of the Class B Convertible Preferred Stock, the holders
of the Class B Convertible Preferred Stock shall be
entitled to receive all remaining assets or surplus
funds of the Corporation on a parity with the holders
of the Class A Convertible Preferred Stock and
Convertible Preferred Stock.
C. Consents of Class A Convertible Preferred
Stock. Without the affirmative vote or consent of the
holders of the majority of the shares of Class B
Convertible Stock at the time outstanding, the
Corporation shall not:
(a) Alter, change or amend the preferenced,
rights or privileges of holders of the Class B
Convertible Preferred Stock contained herein or in the
By-laws of the Corporation elsewhere as in effect on
the date that this Certificate of Designation is filed
with the Secretary of the State of Delaware; or
(b) Alter, change or amend the Certificate of
Incorporation or the By-laws of the Corporation or
otherwise provide for the authorization and issuance of
any additional class or series of capital stock,
including additional shares of Preferred Stock having
any rights, preferences or priorities equivalent to or
any greater than (either in any particular aspect or in
the aggregate) the Class B Convertible Preferred Stock;
or
(c) Agree to a voluntary liquidation,
dissolution, or winding-up of the Corporation.
D. Voting Rights. In addition to the voting
rights granted to the holders of the Class B
Convertible Preferred Stock by the laws of the State of
Delaware and by Section C hereof, each holder of Class
B Convertible Preferred Stock shall be entitled at each
meeting of the stockholders of the Corporation to that
number of votes which is equal to the number of shares
of Common Stock into which each share of Class B
Convertible Preferred Stock is convertible on the
record date with respect to such meeting for each share
of such stock outstanding in his name on the books of
the Corporation.
E. Conversion.
(a) Conversion by Holder. Each share of Class B
Convertible Preferred Stock shall be convertible at the
option of the holder thereof, at any time after the
date of issuance into one share of Common Stock, at the
conversion price and subject to adjustment as described
below.
Before any holder of Class B Convertible Preferred
Stock shall be entitled to convert the same into shares
of Common Stock, the holders shall (i) surrender the
Certificate(s) therefor, duly endorsed, at the office
of the Corporation or of any transfer agent for the
Common Stock, or (ii) notify the Corporation or any
transfer agent that such certificate has been lost,
stolen or destroyed and execute an agreement
satisfactory to the Corporation to indemnify the
Corporation against any loss incurred by it in
connection therewith, and shall give written notice to
the Corporation at such office that the holder elects
to convert the same and shall state therein the number
of shares of Class B Convertible Preferred Stock being
converted. Thereupon, the Corporation shall promptly
issue and deliver at such office to such holder(s) of
Class B Convertible Preferred Stock a certificate(s)
for the number of shares of Common Stock to which the
holder shall be entitled.
Such conversion shall be deemed to have been made
immediately prior to the closing of business on the
date of such surrender of the shares of Class B
Convertible Preferred Stock to be converted or delivery
of the aforementioned Indemnification Agreement, and
the person or persons entitled to receive these shares
of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or
holders of such shares of Common Stock on such date.
(b) Conversion Price and Conversion Formula. The
conversion price per share for Class B Convertible
Preferred Stock (the "Conversion Price") shall be
$2.00, subject to adjustment from time to time as
provided herein. Each share of Class B Convertible
Preferred Stock shall be convertible into that number
of shares of Common Stock that results from dividing
$2.00 by the Conversion Price in effect at the time of
conversion (the "Conversion Formula").
(c) Adjustments of Conversion Price for Stock
Splits and Combinations. If the Corporation shall at
any time, or from time to time, after the date of the
issuance of the Class B Convertible Preferred Stock,
effect a subdivision of the outstanding Common Stock,
the Conversion Price in effect immediately before the
subdivision shall be proportionately decreased, and
conversely, if the Corporation shall at any time or
from time to time after the original date of the Class
B Convertible Preferred Stock combine the outstanding
shares of Common Stock, the Conversion Price in effect
immediately before the combination shall be pro
portionately increased. Any adjustment at the close of
business on the date the subdivision or combination
becomes effective.
(d) Adjustment of Conversion Price for Certain
Dividends and Distributions. If the Corporation at any
time, or from time to time, after the date of the
issuance of the Class B Convertible Preferred Stock,
shall make or issue, or fix a record date for the
determination of holders of Common Stock. entitled to
receive, a dividend or other distribution payable in
additional shares of Common Stock, then, and in each
such event, the Conversion Price then in effect shall
be decreased as of the date of such issuance or, at the
time or upon the event such a record date shall have
been fixed, as of the close of business on such record
date (the "Record Date"), by multiplying the Conversion
Price then in effect by a fraction, determined as
follows:
(i) The numerator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the Record Date; and
(ii) The denominator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the Record Date plus the number of
shares of Common Stock issuable in payment of such
dividend or distribution; provided, however, if such
Record Date shall have been fixed and such dividend is
not fully paid or if such distribution is not fully
made on the date fixed therefor, the Conversion shall
be recomputed accordingly as of the closing of the
business on such Record Date and thereafter the
Conversion Price for such Class B Convertible Preferred
Stock shall be adjusted pursuant to this Section (d) at
the time of such action, or payment of such dividends
or distributions.
(e) Adjustments for Reclassification, Exchange or
Substitution. If the Common Stock issuable upon the
conversion of the Class B Convertible Preferred Stock
shall be changed into the same or different number of
shares of a different class or classes of stock, or
other securities or property, whether by reclassi
fication, exchange, substitution or other transaction
having similar effect (other than a subdivision or
combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation, or
sale of assets provide for elsewhere in this Section E)
then and in each such event the holder of each shares
of Class B Convertible Preferred Stock shall have the
right thereafter to convert such shares into the kind
and amount of shares of stock and other securities and
property receivable upon such reclassification,
exchange, substitution or other transaction having
similar effect, as did or shall the holders of shares
of Class B Convertible Preferred Stock had been
converted into Common Stock immediately prior to the
Record Date with respect to such reclassification,
exchange or substitution, all subject to further
adjustments as provided herein.
(f) Reorganization, Mergers, Consolidations, or
Sales of Assets. If at any time, or from time to time,
there shall be (other than a subdivision, combination,
reclassification, exchange or substitution or shares
provided for elsewhere in this Section E) a capital
reorganization involving a merger or consolidation of
the Corporation with or into another corporation, or
the sale or transfer of all or substantially all of the
Corporation's properties and assets to any other person
(a "sale"), then, as a part of such reorganization,
merger, consolidation or sale, there shall be due and
adequate provision shall be made so that the holders of
the Class B Convertible Preferred Stock shall
thereafter be entitled to receipt upon conversion of
the Class B Convertible Preferred Stock, the number of
shares or other securities or property of the
Corporation, or of the successor corporation resulting
from such merger, reorganization, consolidation or
sale, as to which a holder of Common Stock deliverable
upon conversion would have been entitled to receive as
a result of such reorganization, merger, consolidation,
or sale. In any such case, appropriate adjustment
shall be made in respect to the rights of the holders
of the Class B Convertible Preferred Stock after the
reorganization, merger, consolidation or sale to the
end that the provisions of this Section E (including
adjustment of the Conversion Price then in effect and
the number of shares purchasable upon conversion of the
Class B Convertible Preferred Stock) shall be
applicable after that event as nearly equivalent as may
be practicable.
(g) Sale of Shares Below Conversion Price. If at
any time, or from time to time, after the date of
issuance of the Class B Convertible Preferred Stock and
while any shares of the Class B Convertible Preferred
Stock are outstanding, the Corporation shall issue or
sell Additional Shares of Common Stock (as hereinafter
defined) or options, warrants, convertible securities
or other rights to acquire Common Stock other than as
(i) a dividend or other distribution of any class of
stock permitted by subsection (d) above, (ii) a
subdivision or combination of shares of Common Stock as
provided for in subsection (c) above, or (iii) a re
classification, exchange, substitution or other
transaction having similar effect as provided for in
subsection (e) above, for a consideration per share
less than the Conversion Price in effect immediately
prior to the event, or without consideration, then, and
thereafter successively upon each such issuance, the
Conversion Price in effect immediately prior to the
issuance of such shares shall forthwith be reduced to a
price (calculated to the nearest full cent) determined
by dividing (a) an amount equal to (i) the total number
of shares of Common Stock outstanding immediately prior
to such issuance multiplied by the Conversion Price in
effect immediately prior to such issuance, plus (ii)
the consideration, if any, received by the Corporation
upon such issuance by (b) the total number of shares of
Common stock outstanding immediately after such
issuance provided, however, that no adjustment
otherwise required hereunder, shall be made unless the
reduction in Conversion Price required by this
subsection (g), together with all prior reductions
which have not resulted in an adjustment to the
Conversion Price, shall result in a reduction of the
Conversion Price by at least $0.05 per share.
For purposes of this subsection (g), the price
received by the Corporation for such Additional Shares
of Common Stock shall be computed as follows:
(x) Cash and Property. If such consideration
consists of:
(a) cash, the consideration shall be the
aggregate amount of cash received by the Corporation;
(b) property (including intellectual property)
other than cash, the consideration shall be the fair
market value thereof at the time of such issue, as
determined in good faith by the Board; and
(c) part cash or part property and/or stock or
other securities of the Corporation or both, the
consideration shall be the amount equal to the sum of
the cash and fair market value of the property actually
received by the Corporation computed consistently with
the prior paragraphs herein and determined in good
faith by the Board.
(y) Options. Shares of the Corporation
called for pursuant to options and warrants which are
held as of the date of a conversion of Class B
Convertible Preferred Stock by option or warrant
holders, and which are not exercised, and have not
terminated or lapsed, at the time of such conversion,
will be deemed to have been issued, for purposes of the
definitions and calculations hereof, at a price per
share determined by dividing;
(a) the total amount, if any, received and
receivable by the Corporation as consideration for the
issuance of such options or warrants, plus the minimum
aggregate amount of additional consideration (as set
forth in the instrument relating thereto, without
regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such options or
warrants, by
(b) the maximum number of such shares (as set
forth in the instrument relating thereto, without
regard to any provisions contained therein for a subse
quent adjustment of such number) issuable upon the
exercise of such options or warrants.
(h) Definitions. The terms "Additional Shares of
Common Stock" as used therein shall mean all shares of
Common Stock issued or deemed issued by the Corporation
after the issuance date of the Class B Convertible
Preferred Stock, whether or not subsequently reacquired
or retired by the Corporation, other than shares of
Common Stock issued (i) upon conversion of the Class A
or Class B Convertible Preferred Stock, (ii) upon
conversion of the Corporation's 12 1/2% Class A
Convertible Subordinated Debentures due in 1996, or any
options or warrants or (iii) upon exercise of options
or warrants or (iv) upon exercise of options granted to
purchase shares of Common Stock of the Corporation
under its stock option plans.
(i) Accountants' Certificate of Adjustment. In
each case of an adjustment of readjustment of the
Conversion Price for the number of shares of Common
Stock or the securities issuable upon conversion of the
Class B convertible Preferred Stock, the Corporation,
at its expense, shall cause independent certified
public accountants of recognized standing selected by
the Corporation (who may be the independent certified
public accountants then auditing-the books of the
Corporation) to compute such adjustment or readjustment
in accordance herewith and prepare a certificate
showing such adjustment or readjustment, and shall mail
such certificate by first class mail, postage prepaid,
to each registered holder of Class B Convertible
Preferred Stock at the holder's address as shown in the
Corporation's books. The certificate shall set forth
such adjustment or readjustment, showing in detail the
facts upon which such adjustment or readjustment is
based, including a statement of (i) the consideration
received or to be received by the Corporation for any
Additional Shares of Common Stock issued or sold, (ii)
the Conversion Price both before and after such
adjustment or readjustment, and (iii) the number of
Additional Shares of Common Stock and the type and
amount, if any, of other property which at the time
would be received upon conversion of the Class B
Convertible Preferred Stock.
(j) Fractional Shares. No fractional shares of
Common Stock shall be issued upon conversion of Class B
Convertible Preferred Stock. In lieu of any fractional
shares to which the holder would otherwise be entitled,
the Corporation shall pay, in cash, an amount. equal to
the product of (i) such fraction of a share, multiplied
by (ii) the fair market value of one share of the
Corporation's Common Stock on the date of conversion,
as determined in good faith by the Board.
(k) Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve
and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Class B
Convertible Preferred Stock, such number of its shares
of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding
shares of Class B Convertible Preferred Stock, and if
at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to
effect the conversion of all the outstanding shares of
Class B Convertible Preferred Stock, the Corporation
will, subject to the requirements of applicable state
law, take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of
shares of Common Stock as shall be sufficient for such
purposes.
F. Nonassessable Status of Stock. All the
shares of Class B Convertible Preferred Stock for which
the full consideration determined by the Board of
Directors (which shall be not less than the par value
of such shares) has been paid or delivered, in cash or
property in accordance with the resolutions of the
Board of Directors authorizing the issuance of such
shares, shall be deemed fully paid stock and the holder
of such shares shall not be liable for any further call
or assessment or any other payment thereon.
G. Redemption of Class B Convertible Preferred
Stock. Subject to the limitations of the laws of the
State of Delaware, the Corporation may, at any time
after the average bid and offer price of the Common
Stock has been $3.00 or more for ninety (90)
consecutive trading days, as quoted on NASDAQ, or, if
the Common Stock is not quoted on NASDAQ during such
period, the average of the bid and offer prices quoted
for such period in the pink sheets published by the
National Quotation Bureau, redeem all or a portion of
such shares of Class B Convertible Preferred Stock at
redemption price equal to $2.00 per share, plus an
amount equal to any accumulated and accrued but unpaid
dividends upon thirty (30) days written notice to the
holders of the Class B Convertible Preferred Stock. If
less than all of the outstanding shares of Class B
Convertible Preferred Stock are to be redeemed, the
Corporation shall redeem from each holder of Class B
Convertible Preferred Stock on a pro rata basis.
IN WITNESS WHEREOF, the undersigned have hereunto set
their hands this day of November, 1991 and affirm that the
statements made herein are true and correct under the penalties
of perjury.
BARRINGER TECHNOLOGIES, INC.
By:_____________________________
Stanley S. Binder, President
Attest:
_____________________________
Denis R. Pinkernell, Secretary
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF DECREASE IN THE
NUMBER OF SHARES OF CLASS A
CONVERTIBLE PREFERRED STOCK
AND
CERTIFICATE OF DESIGNATION OF CLASS B
CONVERTIBLE PREFERRED STOCK
(Pursuant to Section 103(f) of the General Corporation Law of the
State of Delaware)
BARRINGER TECHNOLOGIES INC., a Delaware corporation
(the "Corporation") , pursuant to Section 103 (f ) of the General
Corporation Law of the State of Delaware, HEREBY CERTIFIES:
That the Certificate Of Decrease In The Number Of
Shares Of Class A Convertible Preferred Stock And Certificate of
Designation Of Class B Convertible Preferred Stock filed in the
Office of the Secretary of the State of Delaware on December 2,
1991, contained certain inaccuracies therein, namely, the words
"consisting of 730,000 shares and designated Class B Convertible
Preferred Stock" were erroneously dropped at the end of the
seventh line of the second "Resolved" paragraph, and references
to "Class A" on the first line of paragraph "A. Dividends" and
the heading "C. Consent of Class A Convertible Preferred Stock"
should in each instance refer to Class B Convertible Preferred
Stock; and
That the Resolution adopted by the Board of Directors
of the Corporation on November 18, 1991 decreasing the
designation of Class A Convertible Preferred Stock and
designating 730,000 shares of Class B Convertible Preferred Stock
reads and provides in its entirety is as follows:
RESOLVED, that the resolutions
designating an additional 500,000 shares of
Class A Convertible Preferred Stock be
rescinded, and pursuant to Section 151(g) of
the General Corporation Law of the State of
Delaware, the number of shares of Class A
Convertible Preferred Stock previously
designated by Certificate of Designation
filed with the Secretary of State of Delaware
on November 11, 1990 be decreased to 270,000
shares of such Class A Convertible Stock; and
RESOLVED, that pursuant to the authority
conferred upon the Board of Directors of the
Corporation by Article FOURTH of the Amended
Certificate of Incorporation of the
Corporation, there is hereby designated a
Class B Convertible Preferred Stock, par
value $2.00 per share (hereinafter called the
"Class B Convertible Preferred Stock"),
consisting of 730,000 shares and designated
Class B Convertible Preferred Stock and that,
subject to the limitations provided by law
and by Article FOURTH of the Amended
Certificate of Incorporation, the
designations, voting powers, preferences and
relative, participating, optional or other
special rights, and the qualifications,
limitations or restrictions thereof, of the
Class B Convertible Preferred Stock are as
follows:
A. Dividends. The holders of shares
of Class B Convertible Preferred Stock shall
be entitled to receive or have set apart for
payment dividends thereon at the rate of $.16
per share per annum, payable semiannually
from the last preceding dividend on the last
days of June and December in each year in, at
the option of the Corporation, cash or shares
of Common Stock valued for such purpose at
the average daily bid and offer price of the
Common Stock in the over-the-counter market
over the twenty (20) trading days immediately
prior to the record date for each semiannual
payment as quoted on the National Association
of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or, if the Common
Stock is not quoted on NASDAQ during such
period, the average of the bid and offer
prices quoted for such period in the pink
sheets published by the National Quotation
Bureau. The amount of dividends payable per
share for each dividend period will be
computed by dividing by two the $.16 annual
rate.
B. Liquidating Preferences. In the
event of any voluntary or involuntary
liquidation, dissolution or winding-up of the
Corporation under any circumstances or any
voluntary liquidation or winding-up of the
Corporation, which shall be deemed to have
occurred upon the sale of all or
substantially all of its assets, the holders
of Class B Convertible Preferred Stock will
be entitled to receive, prior to and in
preference to any distribution of the assets
of surplus funds of the Corporation to the
holder of any other shares of capital stock
of the Corporation by reason of the ownership
thereof, but on a parity with the holders of
the Class A Convertible Preferred Stock and
the Convertible Preferred Stock, par value
$1.25 per share of the Corporation (the
"Convertible Preferred Stock"), an amount
equal to $2.00 per share plus accrued and
unpaid dividends Lip to and inclusive of the
date of liquidation (the "Class B
Preferential Amount"). ""f, upon the
occurrence of such an event, the assets and
funds thus distributed among the holders of
Class B Convertible Preferred Stock shall be
insufficient to permit the payment to such
holder of the full Class B Preferential
Amount, then the entire assets and funds of
the Corporation legally available for
distribution shall be distributed ratably
among the holders of Class B Convertible
Preferred Stock, Class A Convertible
Preferred Stock and the Convertible Preferred
Stock. After payment or setting apart of the
full Class B Preferential Amount required to
be paid to the holders of the Class B
Convertible Preferred stock, the holders of
the Class B Convertible Preferred Stock shall
be entitled to receive all remaining assets
or surplus funds of the Corporation on a
parity with the holders of the Class A
Convertible Preferred Stock and Convertible
Preferred Stock.
C. Consents of Class B Convertible
Preferred Stock. Without the affirmative
vote or consent of the holders of the
majority of the shares of Class B Convertible
Stock at the time outstanding, the
Corporation shall not:
(a) Alter, change or amend the
preferenced, rights or privileges of holders
of the Class B Convertible Preferred Stock
contained herein or in the By-laws of the
Corporation elsewhere as in effect on the
date that this Certificate of Designation is
filed with the Secretary of the State of
Delaware; or
(b) Alter, change or amend the
Certificate of Incorporation or the By-laws
of the Corporation or otherwise provide for
the authorization and issuance of any
additional class or series of capital stock,
including additional shares of Preferred
Stock having any rights, preferences or
priorities equivalent to or any greater than
(either in any particular aspect or in the
aggregate) the Class B Convertible Preferred
Stock; or
(c) Agree to a voluntary liquidation,
dissolution, or winding-up of the
Corporation.
D. Voting Rights. In addition to the
voting rights granted to the holders of the
Class B Convertible Preferred Stock by the
laws of the State of Delaware and by Section
C hereof, each holder of Class B Convertible
Preferred Stock shall be entitled at each
meeting of the stockholders of the
Corporation to that number of votes which is
equal to the number of shares of Common Stock
into which each share of Class B Convertible
Preferred Stock is convertible on the record
date with respect to such meeting for each
share of such stock outstanding in his name
on the books of the Corporation.
E. Conversion.
(a) Conversion by Holder. Each share
of Class B Convertible Preferred Stock shall
be convertible, at the option of the holder
thereof, at any time after the date of
issuance into one share of Common Stock, at
the conversion price and subject to
adjustment as described below.
Before any holder of Class B Convertible
Preferred Stock shall be entitled to convert
the same into shares of Common Stock, the
holders shall (i) surrender the
Certificate(s) therefor, duly endorsed, at
the office of the Corporation or of any
transfer agent for the Common Stock, or (ii)
notify the Corporation or any transfer agent
that such certificate has been lost, stolen
or destroyed and execute an agreement
satisfactory to the Corporation to indemnify
the Corporation against any loss incurred by
it in connection therewith, and shall give
written notice to the Corporation at such
office that the holder elects to convert the
same and shall state therein the number of
shares of Class B Convertible Preferred Stock
being converted. Thereupon, the Corporation
shall promptly issue and deliver at such
office to such holder(s) of Class B
Convertible Preferred Stock a certificate(s)
for the number of shares of (Common Stock to
which the holder shall be entitled.
Such conversion shall be deemed to have
been made immediately prior to the closing of
business on the date of such surrender of the
shares of Class B Convertible Preferred Stock
to be converted or delivery of the
aforementioned Indemnification Agreement, and
the person or persons entitled to receive
these shares of Common Stock issuable upon
such conversion shall be treated for all pur
poses as the record holder or holders of such
shares of Common Stock on such date.
(b) Conversion Price and Conversion
Formula. The conversion price per share for
Class B Convertible Preferred Stock (the
"Conversion Price") shall be $2.00, subject
to adjustment from time to time as provided
herein. Each share of Class B Convertible
Preferred stock shall be convertible into
that number of shares of Common Stock that
results from dividing $2.00 by the Conversion
Price in effect eat the time of conversion
(the "Conversion Formula").
(c) Adjustments of Conversion Price for
Stock Splits and Combinations. If the
Corporation shall at any time, or from time
to time, after the date of the issuance of
the Class B Convertible Preferred Stock,
effect a subdivision of the outstanding
Common Stock, the Conversion Price in effect
immediately before the subdivision shall be
proportionately decreased, and conversely, if
the Corporation shall at any time or from
time to time after the original date of the
Class B Convertible Preferred Stock combine
the outstanding shares of Common Stock, the
Conversion Price in effect immediately before
the combination shall be proportionately
increased. Any adjustment at the close of
business on the date the subdivision or
combination becomes effective.
(d) Adjustment of Conversion Price for
Certain Dividends and Distributions. If the
Corporation at any time, or from time to
time, after the date of the issuance of the
Class B Convertible Preferred Stock, shall
make or issue, or fix a record date for the
determination of holders of Common Stock
entitled to receive, a dividend or other
distribution payable in additional shares of
Common Stock, then, and in each such event,
the Conversion Price then in effect shall be
decreased as of the date of such issuance or,
at the time or upon the event such a record
date shall have been fixed, as of the close
of business on such record date (the "Record
Date"), by multiplying the Conversion Price
then in effect by a fraction, determined as
follows:
(i) The numerator of which shall be the
total number of shares of Common Stock issued
and outstanding immediately prior to the
Record Date; and
(ii) The denominator of which shall be
the total number of shares of Common Stock
issued and outstanding immediately prior to
the Record Date plus the number of shares of
Common Stock issuable in payment of such
dividend or distribution; provided, however,
if such Record Date shall have been fixed and
such dividend is riot fully paid or if such
distribution is not fully made on the date
fixed therefor, the Conversion shall be
recomputed accordingly as of the closing of
the business on such Record Date and
thereafter the Conversion Price for such
Class B Convertible Preferred Stock shall be
adjusted pursuant to this Section (d) at the
time of such action, or payment of such divi
dends or distributions.
(e) Adjustments for Reclassification,
Exchange or Substitution. If the Common
Stock issuable upon the conversion of the
lass B Convertible Preferred Stock shall be
changed into the same or different number of
shares of a different class or classes of
stock, or other securities or property,
whether by reclassification, exchange,
substitution or other transaction having
similar effect (other than a subdivision or
combination of shares or stock dividend
provided for above, or a reorganization,
merger, consolidation, or sale of assets
provide for elsewhere in this Section E) then
and in each such event the holder of each
shares of Class B Convertible Preferred Stock
shall have the right thereafter to convert
such shares into the kind and amount of
shares of stock and other securities and
property receivable upon such
reclassification, exchange, substitution or
other transaction having similar effect, as
did or shall the holders of shares of Class B
Convertible Preferred Stock had been
converted into Common Stock immediately prior
to the Record Date with respect to such
reclassification, exchange or substitution,
all subject to further adjustments as
provided herein.
(f) Reorganization, Mergers,
Consolidations, or Sales of Assets. If at any
time, or from time to time, there shall be
(other than a subdivision, combination,
reclassification, exchange or substitution or
shares provided for elsewhere in this Section
E) a capital reorganization involving a
merger or consolidation of the Corporation
with or into another corporation, or the sale
or transfer of all or substantially all of
the Corporation's properties and assets to
any other person (a "sale"), then, as a part
of such reorganization, merger, consolidation
or sale, there shall be due and adequate
provision shall be made so that the holders
of the Class B Convertible Preferred Stock
shall thereafter be entitled to receipt upon
conversion of the Class B Convertible
Preferred Stock, the number of shares or
other securities or property of the
Corporation, or of the successor corporation
resulting from such merger, reorganization,
consolidation or sale, as to which a holder
of Common Stock deliverable upon conversion
would have been entitled to receive as a
result of such reorganization, merger,
consolidation, or sale. In any such case,
appropriate adjustment shall be made in
respect to the rights of the holders of the
Class B Convertible Preferred Stock after the
reorganization, merger, consolidation or sale
to the end that the provisions of this
Section E (including adjustment of the
Conversion Price then in effect and the
number of shares purchasable upon conversion
of the C:lass B Convertible Preferred Stock)
shall be applicable after that event as
nearly equivalent as may be practicable.
(g) Sale of Shares Below Conversion
Price. If at any time, or from time to time,
after the date of issuance of the Class B
Convertible Preferred Stock and while any
shares of the Class B Convertible Preferred
Stock are outstanding, the Corporation shall
issue or sell Additional Shares of Common
Stock (as hereinafter defined) or options,
warrants, convertible securities or
otherrights to acquire Common Stock other
than as (i) a dividend or other distribution
of any class of stock permitted by subsection
(d) above, (ii) a subdivision or combination
of shares of Common Stock as provided for in
subsection (c) above, or (iii) a re
classification, exchange, substitution or
other transaction having similar effect as
provided for in subsection (e) above, for a
consideration per share less than the
Conversion Price in effect immediately prior
to the event, or without consideration, then,
and thereafter successively upon each such
issuance, the Conversion Price in effect
immediately prior to the issuance of such
shares shall forthwith be reduced to a price
(calculated to the nearest full cent)
determined by dividing (a) an amount equal to
(i) the total number of shares of Common
Stock outstanding immediately prior to such
issuance multiplied by the Conversion Price
in effect immediately prior to such issuance,
plus (ii) the consideration, if any, received
by the Corporation upon such issuance by (b)
the total number of shares of Common stock
outstanding immediately after such issuance
provided, however, that no adjustment
otherwise required hereunder, shall be made
unless the reduction in Conversion Price
required by this subsection (g), together
with all prior reductions which have not
resulted in an adjustment to the Conversion
Price, shall result in a reduction of the
Conversion Price by at least $0.05 per share.
For purposes of this subsection (g), the
price received by the Corporation for such
Additional Shares of Common Stock shall be
computed as follows:
(x) Cash and Property. If such
consideration consists of:
(a) cash, the consideration shall be
the aggregate amount of cash received by the
Corporation;
(b) property (including intellectual
property) other than cash, the consideration
shall be the fair market value thereof at the
time of such issue, as determined in good
faith by the Board; and
(c) part cash or part property and/or
stock or other securities of the Corporation
or both, the consideration shall be the
amount equal to the sum of the cash and fair
market value of the property actually
received by the Corporation computed
consistently with the prior paragraphs herein
and determined in good faith by the Board.
(y) Options. Shares of the
Corporation called for pursuant to options
and warrants which are held as of the date of
a conversion of Class B Convertible Preferred
Stock by option or warrant holders, and which
are not exercised, and have not terminated or
lapsed, at the time of such conversion, will
be deemed to have been issued, for purposes
of the definitions and calculations hereof,
at a price per share determined by dividing;
(a) the total amount, if any, received
and receivable by the Corporation as
consideration for the issuance of such
options or warrants, plus the minimum
aggregate amount of additional consideration
(as set forth in the instrument relating
thereto, without regard to any provision
contained therein for a subsequent adjustment
of such consideration) payable to the
Corporation upon the exercise of such options
or warrants, by
(b) the maximum number of such shares
(as set forth in the instrument relating
thereto, without regard to any provisions
contained therein for a subsequent adjustment
of such number) issuable upon the exercise of
such options or warrants.
(h) Definitions. The terms "Additional
Shares of Common Stock" as used therein shall
mean all shares of Common Stock issued or
deemed issued by the Corporation after the
issuance date of the Class B Convertible
Preferred Stock, whether or not subsequently
reacquired or retired by the Corporation,
other than shares of Common Stock issued (i)
upon conversion of the Class A or Class B
Convertible Preferred Stock, (ii) upon
conversion of the Corporation's 12 1/2% Class
A Convertible Subordinated Debentures due in
1996, or any options or warrants or (iii)
upon exercise of options or warrants or (iv)
upon exercise of options granted to purchase
shares of Common Stock of the Corporation
under its stock option plans.
(i) Accountants' Certificate of
Adjustment. In each case of an adjustment of
readjustment of the Conversion Price for the
number of shares of Common Stock or the
securities issuable upon conversion of the
Class B convertible Preferred Stock, the
Corporation, at its expense, shall cause
independent certified public accountants of
recognized standing selected by the
Corporation (who may be the independent
certified public accountants then auditing
the books of the Corporation) to compute each
adjustment or readjustment in accordance
herewith and prepare a certificate showing
such adjustment or readjustment, and shall
mail such certificate by first class mail,
postage prepaid, to each registered holder of
Class B Convertible preferred stock at the
holder's address as shown in the
Corporation's books. The certificate shall
set forth such adjustment or readjustment,
showing in detail the facts upon which such
adjustment or readjustment is based,
including a statement of (i) the
consideration received or to be received by
the Corporation for any Additional Shares of
Common Stock issued or sold, (ii) the
Conversion Price both before and after such
adjustment or readjustment, and (iii) the
number of Additional Shares of Common Stock
and the type and amount, if any, of other
property which at the time would be received
upon conversion of the Class B Convertible
Preferred Stock.
(j) Fractional Shares. No fractional
shares of Common Stock shall be issued upon
conversion of Class B Convertible Preferred
Stock. In lieu of any fractional shares to
which the holder would otherwise be entitled,
the Corporation shall pay, in cash, an amount
equal to the product of (i) such fraction of
a share, multiplied by (ii) the fair market
value of one share of the Corporation's
Common Stock on the date of conversion, as
determined in good faith by the Board.
(k) Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all
times reserve and keep available out of its
authorized but unissued shares of Common
Stock, solely for the purpose of effecting
the conversion of the shares of the Class B
Convertible Preferred Stock, such number of
its shares of Common Stock as shall from time
to time be sufficient to effect the conver
sion of all outstanding shares of Class B
Convertible Preferred Stock, and if at any
time the number of authorized but unissued
shares of Common Stock shall not be
sufficient to effect the conversion of all
the outstanding shares of Class B Convertible
Preferred Stock, the Corporation will,
subject to the requirements of applicable
state law, take such corporate action as may,
in the opinion of its counsel, be necessary
to increase its authorized but unissued
shares of Common Stock to such number of
shares of Common Stock as shall be sufficient
for such purposes.
F. Nonassessable Status of Stock. All
the shares of Class B Convertible Preferred
Stock for which the full consideration
determined by the Board of Directors (which
shall be not less than the par value of such
shares) has been paid or delivered, in cash
or property in accordance with the
resolutions of the Board of Directors
authorizing the issuance of such shares,
shall be deemed fully paid stock and the
holder of such shares shall not be liable for
any further call or assessment or any other
payment thereon.
G. Redemption of Class B Convertible
Preferred Stock. Subject to the limitations
of the laws of the State of Delaware, the
Corporation may, at any time after the
average bid and offer price of the Common
Stock has been $3.00 or more for ninety (90)
consecutive trading days, as quoted on
NASDAQ, or, if the Common Stock is not quoted
on NASDAQ during such period, the average of
the bid and offer prices quoted for such
period in the pink sheets published by the
National Quotation Bureau, redeem all or a
portion of such shares of Class B
(Convertible Preferred Stock at a redemption
price equal to $2.00 per share, plus an
amount equal to any accumulated and accrued
but unpaid dividends upon thirty (30) days
written notice to the holders of the Class B
Convertible Preferred Stock. If less than
all of the outstanding shares of Class B
Convertible Preferred Stock are to be
redeemed, the Corporation shall redeem from
each holder of Class B Convertible Preferred
Stock on a pro rata basis.
IN WITNESS WHEREOF, the undersigned have hereunto set
their hands this 4th day of December, 1991 and affirm
that the statements made herein are true and correct under the
penalties of perjury.
BARRINGER TECHNOLOGIES, INC.
_____________________________
Stanley S. Binder, President
Attest:
______________________________
Denis R. Pinkernell, Secretary
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
BARRINGER TECHNOLOGIES, INC.
Barringer Technologies, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of
the State of Delaware (the "Corporation"), does hereby certify
that:
FIRST: At a meeting of the Board of Directors of the
Corporation resolutions were adopted setting forth a proposed
amendment to the Certificate of Incorporation of the Corporation,
declaring the said amendment to be advisable and calling a
meeting of the stockholders of the Corporation for consideration
thereof. The resolution setting forth the proposed amendment is
as follows:
RESOLVED, that the Certificate of
Incorporation of the Corporation be amended by
changing Article TENTH to read and provide in its
entirety as follows:
"TENTH: (a) A director of this Corporation
shall not be liable to the Corporation or its
stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing
violation of the law, (iii) under Section 174 of
the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an
improper personal benefit. This Article shall not
limit the liability of a director for any act or
omission occurring prior to the date this Article
TENTH becomes effective.
(b) The Corporation shall indemnify any
person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving
at the request of the Corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other
enterprise, to the fullest extent permitted by
applicable law. The determination as to whether
such person has met the standard required for
indemnification shall be made in accordance with
applicable law.
Expenses incurred by such director, officer,
employee or agent in defending a civil or criminal
action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of
such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such person to
repay such amount if it shall ultimately be
determined that he is not entitled to be
indemnified by the Corporation as authorized in
this Article TENTH.
(c) The provisions of this Article TENTH
shall be deemed to be a contract between the
Corporation and each person who serves as such
director, officer, employee or agent of the
Corporation in any such capacity at any time while
this Article TENTH is in effect. No repeal or
modification of the foregoing provisions of this
Article TENTH nor, to the fullest extent permitted
by law, any modification of law shall adversely
affect any right of protection of a director,
officer, employee or agent of the Corporation
existing at the time of such repeal or
modification."
SECOND: Thereafter, pursuant to resolution of its Board of
Directors, the annual meeting of the stockholders of the
Corporation was duly called and held, upon notice in accordance
with Section 222 of the General Corporation Law of the State of
Delaware, at which meeting the holders of the majority of the
outstanding stock of the Corporation voted in favor of the
amendment of the Certificate of Incorporation as set forth
herein.
THIRD: The amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by its President and attested by its
Secretary this day of , 1996.
ATTEST: BARRINGER TECHNOLOGIES, INC.
____________________________ By:____________________________
Kenneth S. Wood, Secretary Stanley S. Binder, President
CERTIFICATE OF AMENDMENT
of
CERTIFICATE OF INCORPORATION
of
BARRINGER TECHNOLOGIES INC.
Barringer Technologies Inc., a corporation organized and
existing under the General Corporation Law of the State of
Delaware (the "Corporation"), does hereby certify that:
The following amendment to the Corporation's Certificate of
Incorporation approved by the Corporation's Board of Directors
and stockholders was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the
State of Delaware:
"Section 1 of Article FOURTH of the Certificate of
Incorporation, as amended, of Barringer Technologies Inc. is
hereby amended to read in its entirety as follows:
FOURTH: Section 1. Authorized Shares. The total number
of shares of stock which the Corporation shall have
authority to issue is 12,000,000 shares, consisting of
7,000,000 shares of Common Stock, having a par value of $.01
per share ("Common Stock"), 1,000,000 shares of Convertible
Preferred Stock, having a par value of $1.25 per share
("Convertible Preferred Stock"), and 4,000,000 shares of
Preferred Stock, having a par value of $2.00 per share
("Preferred Stock").
Effective at 11:58 p.m. (the "Effective Time") on
September 22, 1995 (the "Effective Date"), each four (4)
shares of authorized Common Stock issued and outstanding or
held in the treasury of the Corporation immediately prior to
the Effective Time shall automatically be reclassified and
changed into one (1) validly issued, fully paid and
nonassessable share of Common Stock (a "New Share"). Each
holder of record of shares of Common Stock so reclassified
and changed shall at the Effective Time automatically become
the record owner of the number of New Shares as shall result
from such reclassification and change. Each such record
holder shall be entitled to receive, upon the surrender of
the certificate or certificates representing the shares of
Common Stock so reclassified and changed at the office of
the transfer agent of the Corporation in such form and
accompanied by such documents, if any, as may be prescribed
by the transfer agent of the Corporation, a new certificate
or certificates representing the number of New Shares of
which he or she is the record owner after giving effect to
the provisions of this Article FOURTH. The Corporation
shall not issue fractional New Shares. Stockholders
entitled to receive fractional New Shares shall receive, in
lieu thereof, cash in an amount equal to the product of (a)
the number of shares of the Common Stock held by such holder
immediately prior to the Effective Time which have not been
classified into a whole New Share, (b) multiplied by (i) the
average of the closing bid and closing asked prices of the
Common Stock as reported on the NASDAQ Small Capitalization
Market on the Effective Date, or (ii) if the Common Stock is
not listed on the NASDAQ Small Capitalization Market on the
Effective Date, the average of the bid and offer prices on
the last day prior to the Effective Date on which such
prices were published by the National Quotation Bureau."
In accordance with Section 103(e) of the General Corporation
Law of the State of Delaware, the amendment set forth in this
Certificate shall not become effective until 11:58 p.m. on
September 22, 1995.
IN WITNESS WHEREOF, Barringer Technologies Inc. has caused
this Certificate to be signed and attested by its duly authorized
officers, this day of September, 1995.
BARRINGER TECHNOLOGIES INC.
By:____________________________
Richard S. Rosenfeld,
Vice President
ATTEST:
_____________________________
Kenneth S. Wood, Secretary
EXHIBIT 21
BARRINGER TECHNOLOGIES INC.
LIST OF SUBSIDIARIES
Name Jurisdiction of Incorporation
Barringer Instruments, Inc. Delaware
Barringer Consumer Products, LLC New Jersey
Barringer Research Ltd. Ontario, Canada
Barringer Instruments Ltd Ontario, Canada
Barringer Europe, SARL France
Barringer Instruments UK, Ltd United Kingdom
Candata Resources, Inc. Colorado
EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Barringer Technologies, Inc.
New Providence, New Jersey
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-8 (No.
2-94631) of our report dated March 27, 1996, relating to the
consolidated financial statements and schedule of Barringer
Technologies, Inc. appearing in the Company's Annual report on Form
10-K for the year ended December 31, 1995.
We also consent to the references to us under the caption "Experts"
in the Prospectus.
BDO SIEDMAN, LLP
Woodbridge, New Jersey
Mach 27, 1996
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Barringer Technologies, Inc.
New Providence, New Jersey
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-78888)
of our report dated March 27, 1996, relating to the consolidated financial
statements and schedule of Barringer Technologies, Inc. appearing in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
We also consent to the references to us under the caption "Experts" in the
Prospectus.
BDO SEIDMAN, LLP
Wooodbridge, New Jersey
March 27, 1996
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