SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
BARRINGER TECHNOLOGIES INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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<PAGE>
BARRINGER TECHNOLOGIES INC.
219 South Street
New Providence, New Jersey 07974
Notice of Annual Meeting of Stockholders
to be held Tuesday, May 13, 1997
The Annual Meeting of Stockholders of Barringer Technologies Inc. (the
"Company") will be held at the Best Western/Murray Hill Inn, 535 Central Avenue,
New Providence, New Jersey 07974 on Tuesday, May 13, 1997, at 10:00 a.m., local
time, to consider and take action on the following:
1. The election of six persons to serve as directors of the
Company until the next annual meeting of stockholders and
until their successors are duly elected and qualified.
2. The adoption of an amendment to the Certificate of
Incorporation of the Company, as amended (the "Certificate of
Incorporation"), to increase the authorized shares of the
Company's Common Stock, par value $.01 per share ("Common
Stock"), from 7,000,000 to 35,000,000.
3. The adoption of the Barringer Technologies Inc. 1997 Stock
Compensation Program.
4. The ratification of the appointment of BDO Seidman,
LLP as independent auditors of the
Company's 1997 financial statements.
5. Such other business as may properly come before the Annual
Meeting and any adjournments or postponements thereof.
Only those holders of record of Common Stock, Class A Convertible
Preferred Stock, par value $2.00 per share, and Class B Convertible Preferred
Stock, par value $2.00 per share, as of the close of business on Thursday, March
20, 1997 will be entitled to notice of, and to vote at, the Annual Meeting and
any adjournments or postponements thereof. All stockholders of the Company are
cordially invited to attend the Annual Meeting.
A list of stockholders entitled to vote will be available for
inspection by interested stockholders at the offices of the Company, commencing
on Friday, May 2, 1997 and will be available at the Annual Meeting.
KENNETH S. WOOD
Vice President and Secretary
New Providence, New Jersey
April , 1997
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YOUR VOTE IS IMPORTANT. WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING OR NOT,
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
POSTAGE-PAID ENVELOPE.
================================================================================
<PAGE>
BARRINGER TECHNOLOGIES INC.
219 South Street, New Providence, New Jersey 07974
April , 1997
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PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Barringer Technologies Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held on Tuesday,
May 13, 1997 (the "Annual Meeting"), and any adjournments or postponements
thereof. The Company's Annual Report to Stockholders, containing financial
statements reflecting the Company's financial position and results of operations
for the year ended December 31, 1996, this Proxy Statement and the accompanying
form of proxy were distributed together beginning April , 1997.
The securities of the Company entitled to vote at the Annual Meeting
are the Company's Common Stock, par value $.01 per share ("Common Stock"), Class
A Convertible Preferred Stock, par value $2.00 per share ("Class A Convertible
Preferred Stock"), and Class B Convertible Preferred Stock, par value $2.00 per
share ("Class B Convertible Preferred Stock"). Each stockholder of record at the
close of business on March 20, 1997 (the "Record Date") is entitled to vote in
accordance with the Company's Certificate of Incorporation, as amended (the
"Certificate of Incorporation").
At the Annual Meeting, each share of Common Stock will be entitled to
one vote, each share of Class A Convertible Preferred Stock will be entitled to
.361745 of a vote, and each share of Class B Convertible Preferred Stock will be
entitled to .355839 of a vote on each matter to come before the Annual Meeting.
The number of shares of Common Stock, Class A Convertible Preferred Stock, and
Class B Convertible Preferred Stock outstanding as of the Record Date was
__________, __________, and __________, respectively, representing __________,
____________, and ___________ votes, respectively.
Voting
The presence in person or by proxy of the holders of shares entitled to
cast a majority of the votes of all shares entitled to vote will constitute a
quorum for purposes of conducting business at the Annual Meeting. Assuming that
a quorum is present, directors will be elected by a plurality vote, the proposal
to increase the authorized number of shares of Common Stock requires the
affirmative vote of a majority of the outstanding Common Stock, the Class A
Convertible Preferred Stock and the Class B Convertible Preferred Stock, voting
together as one class, and the proposals to adopt the Barringer Technologies
Inc. 1997 Stock Compensation Program (the "Stock Compensation Program") and the
proposal to ratify the appointment of BDO Seidman, LLP as the auditors for the
1997 financial statements will each require the affirmative vote of a majority
of the votes cast with respect to such proposals by the holders of the Common
Stock, the Class A Convertible Preferred Stock and the Class B Convertible
Preferred Stock, voting together as one class. For purposes of determining the
votes cast with respect to any matter presented for consideration at the Annual
Meeting, only those votes cast "for" or "against" are included. Pursuant to
Delaware corporate law, abstentions and broker non-votes are counted only for
the purpose of determining whether a quorum is present and, therefore, will have
no effect on the proposals to be considered at the Annual Meeting, except that
such abstentions and broker non-votes will have the same effect as a vote
"against" the proposed amendment to the Certificate of Incorporation.
Any stockholder giving a proxy has the power to revoke the proxy prior
to the voting thereof by: (i) by written notice received by the Secretary of the
Company at any time prior to the voting thereof, (ii) submitting a later-dated
proxy; or (iii) attending the Annual Meeting and voting in person. If a proxy is
properly signed and is not revoked by a stockholder, the shares it represents
will be voted at the Annual Meeting in accordance with the instructions of the
stockholder. If the proxy is signed and returned without specifying choices, the
shares will be voted at the Annual Meeting FOR each of the proposals described
herein. Delaware law does not entitle the Company's stockholders to dissenters'
rights with respect to any of the foregoing proposals. As of the date hereof,
the Board of Directors knows of no other business that will be presented for
consideration at the Annual Meeting. If other business shall properly come
before the Annual Meeting, the persons named in the proxy will vote the shares
according to their best judgment.
PLEASE COMPLETE, SIGN, DATE, AND RETURN THE PROXY CARD IN THE
ACCOMPANYING ENVELOPE, which is postage-paid if mailed in the United States. All
costs relating to the solicitation of proxies will be borne by the Company. The
Company has retained Georgeson & Company to aid in the solicitation of proxies
for a fee estimated not to exceed $10,000, plus reimbursement and out-of-pocket
expenses. Proxies may also be solicited by officers, directors, and employees of
the Company, who will not be compensated separately therefor, personally or by
mail, telephone or facsimile transmissions. On request, the Company also will
reimburse brokers and other persons holding shares of stock in their names or in
those of their nominees for their reasonable expenses in sending proxy material
to, and seeking instructions from, their principals.
PROPOSAL 1. ELECTION OF DIRECTORS
At the Annual Meeting, a board of six directors will be elected to
serve until the next annual meeting of stockholders and until their successors
are duly elected and qualified. The Board of Directors has nominated Messrs.
Stanley S. Binder, John H. Davies, John J. Harte, Richard D. Condon, John D.
Abernathy and James C. McGrath for election as directors. All nominees currently
are directors of the Company, and all have consented to serve as directors. The
Board knows of no reason why any nominee would be unable or unwilling to serve
as a director. If any nominee should for any reason become unable or unwilling
to serve, the shares represented by all valid proxies that would otherwise be
voted for the nominee will be voted for the election of such other person as the
Board of Directors may designate following the recommendation of the Nominating
Committee, or the Board may reduce the number of directors to eliminate the
vacancy.
Background information appears below with respect to the Board of
Directors' nominees for election. See "Security Ownership of Management" and
"Security Ownership of Certain Beneficial Owners" for additional information
regarding such persons.
Stanley S. Binder, 55. Director since 1991. Mr. Binder has been the
President and Chief Executive Officer of the Company since 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. ("SSF
III"), a substantial investor in the Company. See "Certain Relationships and
Related Transactions." Mr. Binder is chairman of the New Jersey Counsel of the
American Electronics Association and is a member of the Board of Directors of
the American Electronics Association. Mr. Binder is a member of the Executive,
Nominating and Technology and Strategic Planning Committees of the Board.
John H. Davies, 61, Director since 1992. Mr. Davies has been Executive
Vice President of the Company since January 1992 and the President and Chief
Executive Officer of Barringer Research Ltd. since August 1989. He is a member
of the Executive, Nominating and Technology and Strategic Planning Committees of
the Board.
John J. Harte, 55, Director since 1986. Mr. Harte has been Vice
President, Special Projects, of the Company since 1991. He is a certified public
accountant and, since 1978, has been a Vice President of Mid-Lakes Distributing
Inc., a manufacturer and distributor of heating and air conditioning parts and
equipment located in Chicago, Illinois. He is a member of the Executive,
Executive Compensation and Nominating Committees of the Board.
Richard D. Condon, 61, Director since 1992. Since January 1996, Mr.
Condon has been a consultant to and director of Amherst Process Instruments,
Inc., a scientific instrumentation company. Prior thereto, from 1989 until
December 1995, Mr. Condon has been a consultant to and director of Analytical
Technology, Inc., Boston, Massachusetts, a scientific instrumentation company.
He is a member of the Audit and Finance and Technology and Strategic Planning
Committees of the Board.
John D. Abernathy, 59, Director since 1993. Mr. Abernathy is a
certified public accountant. Since January 1995, he has been Executive Director
of Patton Boggs, LLP, a law firm. 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. Abernathy is
also a Director of Oakhurst Capital, Inc., a distributor of automotive parts and
accessories. He is a member of the Executive, Audit and Finance and Executive
Compensation Committees of the Board.
James C. McGrath, 54, Director since 1994. Mr. McGrath 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. He is a member of the Audit and Finance and Executive
Compensation Committees of the Board.
Committees of the Board of Directors
The Company has an Executive Compensation Committee, an Audit and
Finance Committee, a Nominating Committee, and a Technology and Strategic
Planning Committee
The Executive Compensation Committee (the "Compensation Committee")
reviews and determines the salaries and other compensation paid to the Company's
officers and other key employees and administers the Company's incentive
compensation and stock plans, which includes selecting participating officers
and employees and establishing performance goals. The Compensation Committee is
presently comprised of Messrs. Harte, Abernathy and McGrath (Chairman). In 1996,
the Compensation Committee met four times.
The Audit and Finance Committee (the "Audit Committee") monitors the
Company's accounting and financial policies and practices, reviews the scope of
the independent accountant's audit and the results of the audit, and reviews and
make recommendations to the Board with respect to the Company's financing needs.
In addition, the Audit Committee recommends to the Board the engagement of the
independent auditors of the Company's financial statements. The Audit Committee
is presently comprised of Messrs. Abernathy (Chairman), Condon and McGrath. In
1996, the Audit Committee met three times.
The Nominating Committee receives recommendations for, reviews and
evaluates the qualifications of, and selects and recommends to the Board of
Directors, nominees for election as directors. In addition, the Nominating
Committee makes recommendations to the Board of Directors regarding the
composition of Board committees. The Nominating Committee will consider
appropriate persons proposed by security holders as potential nominees for
membership on the Board of Directors. Interested persons should submit their
recommendations, together with supporting information, to the committee care of
the Secretary of the Company. The Nominating Committee is presently comprised of
Messrs. Binder, Davies and Harte (Chairman). In 1996, the Nominating Committee
did not meet.
The Technology and Strategic Planning Committee (the "Technology
Committee") is responsible for developing, reviewing, evaluating and making
recommendations to the Board of Directors regarding growth strategies,
allocation of corporate resources, business and product development. The
Technology Committee is presently comprised of Messrs. Condon (Chairman), Binder
and Davies. In 1996, the Technology Committee met twice.
Meetings of the Board of Directors
The Board held four meetings in 1996. No incumbent director of the
Company attended fewer than 75% of the aggregate number of meetings of the Board
and committees of the Board during 1996, or the portion thereof during which he
served as a director or committee member.
Compensation of Directors
Outside directors are entitled to an annual retainer of $2,500 per
quarter and a fee of $1,000 for each meeting attended and $500 for each
committee meeting attended (unless on the same day as a meeting of the Board of
Directors). Directors are not compensated for attendance at telephonic meetings.
In lieu of the annual retainer, Mr. Harte receives a fee of $2,000 per month for
services he renders to the Company. See "Employment Agreements and Compensation
Arrangements."
The Board of Directors has adopted the 1991 Directors Warrant Plan
(the "1991 Warrant Plan"), under which each non-employee director, upon election
or appointment to the Board, is offered 3,750 warrants, at $0.40 per warrant,
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 the
warrants are issued, which may not be less than the then current market price
for the shares underlying the warrants. The 1991 Warrant Plan provides that each
such new director shall use the first quarterly director's fee to pay the
purchase price for such warrants. The Board of Directors has terminated the 1991
Warrant Plan, subject to approval of the Stock Compensation Program by the
stockholders.
Executive Compensation
The following table sets forth a summary of all compensation paid for
the past three fiscal years to the President and Chief Executive Officer of the
Company and each of the other executive officers of the Company whose total
annual salary and bonus are $100,000 or more:
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Other
Annual Restricted Securities
Name and Principal Compen- Stock Underlying LTIP All Other
Position Year Salary($) Bonus($) sation($) Awards($) Options(#) Payouts($) Compensation
($)(1)
Stanley S. Binder 1996 $171,491 $63,000 - - 55,000 - $2,925
President and Chief 1995 171,491 - - - 45,000 - 5,940
Executive Officer 1994 167,757 - - - - - 5,940
John H. Davies 1996 $125,275* $43,200* - - 38,250 - $6,317*
Executive Vice 1995 125,775* - $12,149*(2) - 31,250 - 6,317*
President of the 1994 120,582* - - - - - 5,741*
Company;
Kenneth S. Wood 1996 $111,815 $39,600 - - 33,750 - $2,199
President of 1995 111,815 - - - 26,250 - 2,283
Barringer 1994 109,751 - - - - - 2,436
Instruments,
Inc.
Richard S. Rosenfeld 1996 $96,000 $34,200 - - 27,500 - $1,872
Vice President 1995 96,000 - - - 22,500 - 4,410
Finance-
Chief Financial 1994 90,400 - - - - - 4,545
Officer
</TABLE>
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* 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"). In 1996,
the 401(k) Plan provided that the Company would 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 vested proportionately over a
five-year period, commencing at the end of the participant's first year
with the Company.
(2) The other annual compensation for Mr. Davies represented the payment of
previously accrued and unpaid vacation pay.
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 $54,000, which amount may
be subject to change only in response to changes in the Canadian pension
regulatory scheme.
The following table summarizes certain information relating to the
grant of options to purchase Common Stock to each of the executives named in the
Summary Compensation Table above:
<PAGE>
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<S> <C> <C> <C> <C>
Number of Percent of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Price Expiration
Name Granted (#)(2) Fiscal Year (3) ($/sh) Date
---- -------------- ----------------- -------------- ----------
Stanley S. Binder 55,000 21.7% $1.00 4/25/2001
John H. Davies 38,250 15.1 1.00 4/25/2001
Kenneth S. Wood 33,750 13.3 1.00 4/25/2001
Richard S. Rosenfeld 27,500 10.9 1.00 4/25/2001
</TABLE>
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(1) The Company did not grant any stock appreciation rights in 1996.
(2) The stock options expire on April 25, 2001. Twenty-five percent of each
option grant is exercisable immediately, fifty percent is exercisable
after the first year, seventy-five percent is exercisable after the
second year and one hundred percent is exercisable after the third
year.
(3) Option covering a total of 253,000 shares of Common Stock were granted
in 1996.
The following table sets forth information with respect to the
executives named in the Summary Compensation Table concerning the exercise of
stock options during 1996 and unexercised options held by such executive
officers as of December 31, 1996.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<S> <C> <C> <C> <C>
Number of Unexercised
Securities Underlying Value of Unexercised
Shares Options/SARs in-the-money Options
Acquired Value at Year-End(#) at Year-End($)(1)
Name on Exercise (#) Realized ($) ------------------------- -------------------------
Exercisable/Unexercisable Exercisable/Unexercisable
------------------------- -------------------------
Stanley S. Binder - - 31,750/68,250 $216,156/$476,344
John H. Davies - - 22,062/47,438 150,208/331,105
Kenneth S. Wood - - 33,937/41,063 129,161/287,089
Richard S. Rosenfeld - - 22,125/34,125 108,078/238,172
- ----------
</TABLE>
(1) Based on a closing bid price of $8.375 per share for the Common Stock as of
December 31, 1996.
1990 Option Plan
The Company maintained an option plan (the "1990 Option Plan")
pursuant to which the Company was authorized to grant options covering a total
of 100,000 shares of Common Stock. As of December 31, 1996, options covering a
total of 23,750 shares of Common Stock were outstanding thereunder and no
further options could be granted thereunder. All of such options expired in
January 1997.
Exercise Program
In connection with the options granted by the Company to its employees,
the Board of Directors has approved a stock option exercise program (the
"Exercise Program"). The 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 full-recourse demand 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 the prime rate, which rate is changed monthly. The loans are repaid
with a portion of the proceeds from the sale of the Common Stock to be received
by the employees upon the exercise of their options.
Pursuant to the 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 Exercise
Program, representing interest otherwise payable on such notes.
Employment Agreements and Compensation Arrangements
The Company has entered into an Employment Agreement with Stanley S.
Binder, the President and Chief Executive Officer of the Company (the
"Employment Agreement"), pursuant to which Mr. Binder receives a current base
salary of $171,000, subject to increases equal to percentage increases in the
Consumer Price Index as well as increases authorized by the Company's
Compensation Committee. The Employment Agreement provides that it will be
automatically renewed each year, unless either party gives the other six months
prior written notice of non-renewal. In addition, under the Employment Agreement
Mr. Binder received 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. In addition, Mr. Binder received 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
became exercisable immediately as to all shares subject thereto. Such
non-qualified option has been exercised by Mr. Binder pursuant to the Exercise
Program. See "Certain Relationships and Related Transactions."
The Company has entered into employment agreements with both Kenneth S.
Wood and Richard S. Rosenfeld which run for a term of one year from November 1,
1996, subject to automatic renewal unless either the employee or the Company
gives the other party to the employment agreement 90 days' prior written notice
of non-renewal. Pursuant to the employment agreements, Messrs. Wood and
Rosenfeld receive annual base salaries of $111,815 and $96,000, respectively,
subject to periodic increases at the discretion of the Board of Directors, and
are entitled to participate in any cash bonus plan maintained by the Company.
Both of the employment agreements provide, among other things, that, in the
event of a termination of employment by the Company without cause, or a
termination by the employees in certain circumstances following a "change in
control" of the Company, the employee will be entitled to receive severance
benefits (payable in equal monthly installments) determined on a formula basis.
Both of the employment agreements also contain certain confidentiality and
non-competition provisions which continue in effect for a period of time
following the termination of the employee's employment by the Company.
The Company has entered into a consulting agreement with John J. Harte
(the "Consulting Agreement") pursuant to which Mr. Harte is paid $2,000 per
month for certain services rendered to the Company and its subsidiaries. The
Consulting Agreement provides that it will be renewed automatically each year,
unless either party gives the other six months' prior written notice of
non-renewal. In addition, under the Consulting Agreement, Mr. Harte is entitled
to participate in any grant of stock options to outside board members.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation Committee is comprised of Messrs.
Abernathy, Harte and McGrath. During the year ended December 31, 1996, 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 1996.
Prior to December 1995, the Company controlled Barringer Laboratories
Inc. ("Labco"). Until November 1996, Mr. Harte was the Chairman of the Board of
Labco and Mr. Binder served as a director of Labco. In December 1995 the Company
entered into a Stock Purchase Agreement with Labco (the "Stock Purchase
Agreement") pursuant to which 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 the cancellation of all inter-company obligations and
$300,000 in cash. Under the terms of the Stock Purchase Agreement, Labco
retained an additional 88,260 shares of Labco common stock owned by the Company
(the "Retained Shares") which were to be returned to the Company only if Labco
met certain pre-tax earnings goals for 1996. All voting arrangements allowing
the Company to vote shares of Labco common stock not owned by it were terminated
and the Company agreed for a period of 24 months not to enter into any such
voting arrangements. Under the Stock Purchase Agreement, Labco had the right to
purchase the Company's remaining interest in Labco under certain circumstances
prior to January 2, 1997 and the Company agreed to certain restrictions on the
transferability of its remaining interest in Labco until such date. In October
1996, the Company and Labco entered into a Termination Agreement (the
"Termination Agreement") pursuant to which Labco waived its right to acquire the
Company's remaining interest in Labco and the transfer restrictions applicable
thereto were terminated. Pursuant to the Termination Agreement, the Company
agreed that for a period of three months it would sell its remaining interest in
Labco (including shares issuable upon the exercise of certain warrants held by
the Company) at a price of at least $1.6875 per share (the "Target Price") in a
distribution in which it would not knowingly sell more than 75,000 shares to any
one purchaser or group of related purchasers and further agreed to sell its
shares of Labco common stock if it received an offer to acquire such shares at a
price per share at least equal to the Target Price. In addition, the Company
surrendered the Retained Shares to Labco and agreed that Mr. Binder and Mr.
Harte would resign their positions with Labco upon the disposition by the
Company of at least 250,000 of its remaining shares of Labco Common Stock. In
November 1996, the Company sold its remaining shares of Labco common stock and
Mr. Binder and Mr. Harte resigned as directors of Labco. Except as described
herein, no executive officer of the Company and no member of the Compensation
Committee is a member of any other business entity that has an executive officer
that sits on the Company's Board or on the Compensation Committee. As directors
of Labco, in January 1996 each of Messr. Binder and Harter received options to
purchase 10,000 shares of Labco common stock at an exercise price equal to the
fair market value of the Labco common stock on the date of grant.
Mr. Abernathy is currently the Executive Director of Patton Boggs,
LLP, a Washington, D.C. law firm. During 1996, the Company retained Patton
Boggs, LLP to represent the Company in various matters and expects to retain
such firm in 1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Exchange Act, 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 year ended December 31, 1996 that were not filed
on a timely manner.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 1, 1997, the number of
shares of Common Stock, Class A Convertible Preferred Stock and Class B
Convertible Preferred Stock owned by (i) each executive officer named in the
Summary Compensation Table, (ii) each director, (iii) all directors and
executive officers as a group, and (iv) any person or entity known by the
Company to own beneficially 5% or more of such securities. As of February 1,
1997, there were 5,371,602 shares of Common Stock, 60,165 shares of Class A
Convertible Preferred Stock and 122,500 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 Convertible Preferred Stock,
Class B Convertible Preferred Stock.
<PAGE>
<TABLE>
Beneficial Ownership of Class A Convertible Class B Convertible
Common Stock (1)(2) Preferred Stock Preferred Stock
<S> <C> <C> <C> <C> <C> <C>
Name of Beneficial Owner Number of Percent Number of Percent of Number of Percent of
Shares of Class Shares Class Shares Class
Stanley S. Binder 119,386(3) 2.2% - - - -
John H. Davies 99,544(4) 1.8 - - - -
John J. Harte 54,940(5) 1.0 - - - -
Richard D. Condon 22,000(6) * - - - -
John D. Abernathy 23,954(7) * - - - -
James C. McGrath 22,000(8) * - - - -
Kenneth S. Wood 37,823(9) * - - - -
Richard S. Rosenfeld 34,411(10) * - -
All directors and executive
officers as a group consisting
of eight (8) persons 414,058 7.4 - - - -
Austin W. Marxe 1,026,822(11) 18.0 - - - -
153 E. 53rd St.
NY, NY 10022
Perkins Capital Management, Inc. 721,159(12) 13.5
708 East Lake Street
Wayzata, MN 55391
John R. Purcell 35,583 * - - 100,000 81.6
700 Canal Street
Stamford, CT 06902-5921
Ronald and Kathleen Hanna 7,795 * 21,549 35.8% - -
135 South Horizon Circle
Prescott, AZ 86303
Esther & Carlos Otto 4,724 * 13,060 21.7% - -
5245 Fishing Bridge
Cheyenne, WY 82009
Max Gerber 4,447 * - - 12,500 10.2
26 Broadway
New York, NY 10004-1776
Paul Spitzberg 3,558 * - - 10,000 8.2
16 Whiteowl Road
Tenafly, NJ 07670
*Less than 1%
</TABLE>
<PAGE>
- -------------------------
(1) Assumes the exercise of all outstanding warrants for Common Stock, the
conversion of each outstanding share of Class A Convertible Preferred Stock and
Class B Convertible Preferred Stock into Common Stock and the exercise of all
options exercisable within 60 days of February 1, 1997 for each person or
entity.
(2) Certain amounts shown are subject to adjustment in certain
circumstances.
(3) Includes 40,750 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days of February 1, 1997 and 12,500 shares of
Common Stock issuable upon exercise of warrants owned by Mr. Binder. Excludes
558,561 shares of Common Stock owned by Special Situations Fund III, L.P. ("SSF
III") of which Mr. Binder is an independent General Partner. Mr. Binder
disclaims any beneficial interest in such shares.
(4) Includes 28,312 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days of February 1, 1997 and 12,500 shares of
Common Stock issuable upon the exercise of warrants owned by Mr. Davies.
(5) Includes 8,250 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days of February 1, 1997 and 12,500 shares of
Common Stock issuable upon the exercise of warrants owned by Mr. Harte.
(6) Includes 8,250 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days of February 1, 1997 and 8,750 shares of
Common Stock issuable upon the exercise of warrants owned by Mr. Condon.
(7) Includes 11,250 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days of February 1, 1997 and 6,250 shares of
Common Stock issuable upon the exercise of warrants owned by Mr. Abernathy.
(8) Includes 8,250 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days of February 1, 1997 and 8,750 shares of
Common Stock issuable upon the exercise of warrants owned by Mr. McGrath.
(9) Includes 24,187 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days of February 1, 1997.
(10) Includes 20,375 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days of February 1, 1997 and 5,000 shares of
Common Stock issuable upon the exercise of warrants owned by Mr. Rosenfeld. Also
includes 3,636 shares of Common Stock owned by Mr. Rosenfeld as custodian for a
minor child.
(11) Includes (i) 502,580 shares of Common Stock and 256,667 shares of
Common Stock issuable upon the exercise of warrants owned by SSF III, and (ii)
174,242 shares of Common Stock and 93,333 shares of Common Stock issuable upon
the exercise of warrants owned by Special Situations Cayman Fund, L.P. (the
"Cayman Fund"). AWM Investment Company, Inc. ("AWM") is the sole general partner
of the Cayman Fund and the sole general partner of MGP Advisors Limited ("MGP"),
a general partner of SSF III. Mr. Marxe is the President and Chief Executive
Officer of AWM and the principal limited partner of MGP. Accordingly, Mr. Marxe
may be deemed to be the beneficial owner of all of the shares of Common Stock
held by SSF III and the Cayman Fund. Mr. Binder is an independent general
partner of SSF III. Mr. Binder disclaims beneficial ownership of all shares held
by SSF III.
(12) Consists of 421,159 shares of Common Stock owned by clients of Perkins
Capital Management, Inc. ("Perkins Capital") and 300,000 shares of Common Stock
held by The Perkins Opportunity Fund (the "Perkins Fund"), for which Perkins
Capital acts as investment adviser. Perkins Capital disclaims any beneficial
interest in the shares of Common Stock held by the Perkins Fund.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1995, the Company sold to the SSF III, which is controlled by
Mr. Marxe and of which Mr. Binder is an independent General Partner with
approximately .01% interest in such partnership, and to the Cayman Fund, 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 consisted of 2,500 shares of Common Stock and a five-year
warrant to purchase 2,500 shares of Common Stock at $1.96 per share, subject to
certain anti-dilution provisions. As an inducement to enter into the transaction
and in lieu of a transaction fee, the Company also issued to SSF warrants,
exercisable for three years, to purchase an aggregate of 37,500 shares of Common
Stock at $1.96 per share, subject to certain anti-dilution provisions. In
addition, in June 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.
In July 1996, the Company sold to SSF $450,000 in principal amount of
the Company's 6% Subordinated Convertible Debentures due 1997 (the
"Debentures"). The Debentures bore interest at the rate of 6% per annum, were
convertible into shares of Common Stock at a conversion rate of $2.75 and,
pursuant to their terms, matured 30 days after the consummation of the Company's
November 1996 public offering, unless converted prior thereto. Certain officers
and directors of the Company purchased an additional $100,000 in aggregate
principal amount of the Debentures. All of the Debentures were converted into
shares of Common Stock in December 1996.
<PAGE>
PROPOSAL TWO
AMENDMENT OF CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors believes that it is advisable to amend Article
FOURTH of the Company's Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 7,000,000 to 35,000,000 shares.
Accordingly, in March 1997, the Board of Directors adopted a resolution
approving an amendment to the first paragraph of Article FOURTH of the Company's
Certificate of Incorporation and directing that the amendment be presented to
the stockholders at the Annual Meeting for their approval. Such amendment would
change only the number of authorized shares of Common Stock. If approved by the
stockholders, Section 1 of Article FOURTH would read in its entirety as follows:
Section 1. Authorized Shares. The total number of shares of stock
which the Corporation shall have the authority to issue is 40,000,000 shares,
consisting of 35,000,000 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").
As of the close of business on February 1, 1997, of the 7,000,000
shares of Common Stock presently authorized by the Certificate of Incorporation,
5,371,602 shares were issued and outstanding, 21,764 shares were reserved for
issuance upon the conversion of the Class A Convertible Preferred Stock, 43,590
shares were reserved for issuance upon the conversion of the Class B Preferred
Stock, 1,023,228 shares were reserved for issuance upon the exercise or
conversion of outstanding securities of the Company, and 448,750 shares were
reserved for issuance upon the exercise of outstanding stock options and
warrants granted to officers and directors of the Company. If the proposal to
adopt the Stock Compensation Program is adopted, an additional 600,000 shares of
Common Stock would be reserved for issuance pursuant thereto. Accordingly, if
all of the reserved shares were issued, the outstanding shares of Common Stock
would exceed the number presently authorized.
The Board of Directors has concluded that the Company's authorized
Common Stock should be increased, not only to meet the Company's present
contractual commitments to reserve sufficient authorized but unissued shares of
Common Stock for issuance, but also to allow the Company to react quickly to
market changes and opportunities. Although the Company has no present agreements
or commitments to issue additional shares of Common Stock (except pursuant to
the terms of the Company's outstanding securities, as described above), an
increase in the number of authorized shares of Common Stock would provide the
Company the necessary flexibility to pursue potential financing, acquisition and
merger opportunities, and other potential corporate opportunities, without
incurring the expense and delay of holding a special stockholders meeting to
authorize the issuance of additional shares of Common Stock. If the proposed
amendment is approved by stockholders, no further action or authorization by the
Company's stockholders would be necessary prior to the issuance of additional
shares, except as may be provided by applicable law, regulatory agencies or by
the rules of any stock exchange or national securities association on which the
Company's securities may then be listed or included for trading. For instance,
under the requirements of The NASDAQ National Market System, in which the Common
Stock is currently included, stockholder approval is required in connection with
the establishment of a stock option plan and in connection with an acquisition
in which Common Stock would be issued representing 20% or more of the
outstanding Common Stock prior to such issuance.
The additional shares which would be authorized for issuance if the
proposed amendment is approved by the stockholders would be identical to the
shares of Common Stock now authorized and outstanding. The Company's Common
Stock has no conversion, pre-emptive or other subscription rights and is not
redeemable.
The proposed increase in the number of authorized shares of Common
Stock is not intended to prevent or impede a change in control of the Company.
Further, the Company is not aware of any current effort to acquire control of
the Company. However, the issuance of additional shares of Common Stock could be
used to inhibit, or make more costly, an attempt to acquire control of the
Company. For instance, the issuance of additional shares of Common Stock could
have the effect of diluting earnings and book value per share, and could be used
to dilute the stock ownership of a person or entity seeking to obtain control of
the Company, including upon issuance under a stockholder rights plan or "poison
pill." In addition, shares could be sold to purchasers who might oppose a
specific attempt to gain control of the Company.
If the proposed amendment is approved by the stockholders, it will
become effective upon the filing of a Certificate of Amendment in accordance
with the provisions of the Delaware General Corporation Law.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL TWO.
<PAGE>
PROPOSAL THREE
APPROVAL OF THE BARRINGER TECHNOLOGIES INC.
1997 STOCK COMPENSATION PROGRAM
In February 1997, the Board of Directors adopted, subject to
stockholder approval, the Barringer Technologies Inc. 1997 Stock Compensation
Program (the "Stock Compensation Program") in order to promote the interests of
the Company, its direct and indirect present and future subsidiaries and its
stockholders by providing eligible persons with the opportunity to acquire a
proprietary interest, or to increase their proprietary interest, in the Company
as an incentive to remain in the service of the Company. At the Annual Meeting,
the stockholders will be asked to consider and vote on the adoption of the Stock
Compensation Program. The following is a description of certain of the terms and
conditions of the Stock Compensation Program. Such description does not purport
to be complete and is qualified in its entirety by reference to the full text of
the Stock Compensation Program attached hereto as Annex A.
The Stock Compensation Program authorizes the granting of incentive
stock options, non-qualified supplementary options, stock appreciation rights,
performance shares and stock bonus awards to employees and consultants of the
Company and its subsidiaries (approximately 90 in total), including those
employees serving as officers or directors of the Company (the "Employee
Plans"). The Stock Compensation Program also authorizes automatic option grants
to directors who are not otherwise employed by the Company (the "Independent
Director Plan"). 600,000 shares of Common Stock will be reserved for issuance in
connection with the Stock Compensation Program of which up to 500,000 shares may
be issued under the Employee Plans and up to 100,000 shares may be issued under
the Independent Director Plan. In the event that an option or award granted
under the Stock Compensation Program expires, is terminated or forfeited or
certain performance objectives with respect thereto are not met prior to
exercise or vesting, then the number of shares of Common Stock covered thereby
will again become eligible for grant under the Stock Compensation Program. The
Company will receive no consideration for grants of options or awards under the
Stock Compensation Program.
The Stock Compensation Program will be administered by the
Compensation Committee (the "Administrator") which is comprised of directors who
are "non-employee directors" for purposes of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), so long as the
Stock Compensation Program continues to be governed by the provisions of such
Rule. Subject to applicable law and the terms of the Stock Compensation Program,
the Administrator will have the authority to grant options and awards under the
Stock Compensation Program, including to determine the terms and conditions of
each individual grant, to interpret and administer the provisions of the Stock
Compensation Program, to adopt, amend and rescind rules and regulations
pertaining to the administration of the Stock Compensation Program and to make
all determinations relative thereto. Notwithstanding the foregoing, the
Independent Director Plan has been designed to be "self-executing" in that
options are granted automatically every year. Further, the Administrator will
have only certain limited responsibilities under the Independent Director Plan.
Options and awards granted under the Stock Compensation Program may
have an exercise or payment price as established by the Administrator; provided,
that the exercise price of incentive stock options granted under the Employee
Plans may not be less than the fair market value of the underlying shares on the
date of grant. Options granted under the Independent Director Plan, must have an
exercise price equal to the fair market value of the underlying shares on the
date of grant. Upon exercise or payment of an option or award under the Stock
Compensation Program, the participant will be required to provide the payment
price in full, in cash or in shares of the Company's securities valued at fair
market value on the date of the exercise of the option or award. The Stock
Compensation Program does provide for the "cashless exercise" of options granted
thereunder pursuant to which recipients of options may use the proceeds from the
sale of shares of Common Stock received upon the exercise of options to pay the
exercise price therefor. In connection with any exercise of options or awards,
the Company will have the right to collect or withhold from any payments under
the Stock Compensation Program all taxes required to be withheld under
applicable law. Under the Exercise Program, all employees of the Company and its
subsidiaries who are granted options may finance the exercise of such options.
See "Proposal 1. Election of Directors - Exercise Program."
Unless otherwise provided at the date of grant, no option or award may
vest within one year of the date of grant and no option or award may be
exercised more than ten years from the date of grant. Options granted under the
Independent Director Plan will vest one year following the date of grant and
will expire if unexercised on or before the fifth anniversary thereof. Unless
otherwise specified by the Administrator, options and awards (other than
pursuant to the Independent Director Plan) will vest in four equal installments
on the first, second, third and fourth anniversaries of the date of grant. The
Administrator may accelerate the vesting of any option or award granted under
the Stock Compensation Program, including upon the occurrence of a "Change in
Control Event" (as defined in the Stock Compensation Program). Options granted
under the Independent Director Plan will automatically vest upon the occurrence
of a "Change in Control Event."
Options and awards granted under the Stock Compensation Program will
be nontransferable, except by will or by the laws of descent and distribution.
However, the Administrator may permit the recipient of a non-incentive stock
option granted under the Employee Plans and options granted under the
Independent Director Plan to transfer the option to a family member or a trust
created for the benefit of family members. During the lifetime of a participant,
an option may be exercised only by the participant or a permitted transferee. In
the event that a participant's employment or service terminates as a result of
death, all vested awards will be paid to the participant's estate by the Company
and the participant's estate or any permitted transferee will have the right to
exercise vested options for a period ending on the earlier of the expiration
dates of such options or one year from the date of death. If the participant's
employment or service terminates as a result of retirement or a "disability" (as
set forth in the Stock Compensation Program), all vested awards will be paid to
the participant by the Company and the participant or any permitted transferee
will have the right to exercise vested options for a period ending on the
earlier of the expiration dates of such options or one year from the date of
termination. If the participant's employment or service terminates for cause,
all options and awards will automatically expire upon termination. If the
participant's employment or service terminates other than as a result of death,
disability, retirement or termination for cause, the participant will have the
right to collect on vested awards immediately and the participant or any
permitted transferee will have the right to exercise vested options for a period
ending on the earlier of the expiration dates of such options or awards or
thirty days from the date of termination, subject to extension at the discretion
of the Administrator, or three months from the date of termination in the case
of options granted pursuant to the Independent Director Plan. In all cases, any
unvested options or awards will terminate as of the date of termination of
employment or service.
The Administrator may amend or revise the terms of the Stock
Compensation Program from time to time; however no such amendment or revision
may alter or impair an option or award without the consent of the holder thereof
and no amendment may be made without stockholder approval if such approval is
required pursuant to applicable law. The Stock Compensation Program will
terminate on February 28, 2007, unless earlier terminated by the Board of
Directors. No options or awards may be granted under the Stock Compensation
Program after its termination; however, termination of the Stock Compensation
Program will not affect the status of any option or award outstanding on the
date of termination.
Subject to certain exceptions not discussed herein, neither the
Company nor the participant will recognize taxable income or loss upon the grant
of non-qualified supplementary options, stock appreciation rights or performance
shares, or upon the issuance of any stock bonuses under the Stock Compensation
Program. In general, the participant will recognize ordinary income upon
exercise of a non-qualified supplementary option or stock appreciation right,
payment of performance shares, or lapse of forfeiture restrictions on any stock
bonus. The amount of income recognized generally will equal the difference
between (i) the fair market value of the underlying shares of Common Stock on
the date of the exercise or payment plus the amount of cash and other
consideration, if any, received by the participant and (ii) the exercise or
payment price, if any. The Company generally will receive a corresponding tax
deduction equal to the amount includable in the participant's income.
In addition, neither the Company nor the participant will recognize
taxable income or loss upon the grant or exercise of incentive stock options,
although there may be alternative minimum tax consequences to the participant
upon exercise. Upon subsequent disposition of the shares of Common Stock covered
by incentive stock options, the participant generally will recognize either
capital gain or loss or ordinary income, depending on whether certain holding
period requirements are satisfied. The Company generally will be entitled to a
tax deduction if the participant recognizes ordinary income.
Subject to stockholder approval of the Stock Compensation Program,
incentive stock options exercisable for an aggregate of 135,500 shares of Common
Stock were granted under the Employee Plans to 13 employees on February 28,
1997. These options expire ten years after the date of grant and have an
exercise price, subject to adjustment, of $9.375 per share. Such options are
exercisable annually in one-quarter increments beginning with the first
anniversary of the date of grant. The following is a list of such grants to the
executives named in the Summary Compensation Table above:
Name Number of Shares
Subject to Option
Stanley S. Binder 37,500
John H. Davies 25,000
Kenneth S. Wood 22,500
Richard S. Rosenfeld 19,500
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL THREE.
PROPOSAL FOUR
RATIFICATION OF AUDITORS
The Board of Directors has appointed BDO Seidman, LLP as the Company's
independent public accountants for the year ending December 31, 1997. BDO
Seidman, LLP has served as the Company's independent accountants since 1989.
Although the appointment of independent public accountants is not required to be
approved by stockholders, the Board of Directors believes stockholders should
participate in the selection of the Company's independent public accountants.
Accordingly, the stockholders will be asked at the Annual Meeting to ratify the
Board's appointment of BDO Seidman, LLP as the Company's independent public
accountants for the year ending December 31, 1997. Representatives of BDO
Seidman, LLP will be present at the Annual Meeting. They will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions of the stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL FOUR.
STOCKHOLDER PROPOSALS
Any proposal intended to be presented by a stockholder at the 1998
Annual Meeting of Stockholders must be received by the Company at the address
specified below no later than the close of business on December ___, 1997 to be
considered for inclusion in the Proxy Statement for the 1998 Annual Meeting. Any
proposal should be addressed to Secretary, Barringer Technologies Inc., 219
South Street, New Providence New Jersey 07974 and should be sent by certified
mail, return receipt requested.
OTHER MATTERS
The Board of Directors does not know of any matters, other than those
referred to in the accompanying Notice of Meeting, to be presented at the Annual
Meeting for action by the stockholders. However, if any other matters are
properly brought before the Annual Meeting or any adjournments thereof, it is
intended that votes will be cast with respect to such matters, pursuant to the
proxies, in accordance with the best judgment of the person acting under the
proxies.
By Order of the Board of Directors
Kenneth S. Wood,
Vice President and Secretary
April ___, 1997
A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31,
1996, INCLUDING FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY STATEMENT. THE
ANNUAL REPORT IS NOT TO BE REGARDED AS PROXY SOLICITING MATERIAL OR AS A
COMMUNICATION BY MEANS OF WHICH ANY SOLICITATION IS TO BE MADE.
<PAGE>
- --------------------------------------------------------------------------------
A-2
- --------------------------------------------------------------------------------
ANNEX A
BARRINGER TECHNOLOGIES INC.
1997 STOCK COMPENSATION PROGRAM
A. Purposes. This Barringer Technologies Inc. 1997 Stock Compensation
Program (the "Program") is intended to promote the interests of Barringer
Technologies Inc. (the "Company"), its direct and indirect present and future
subsidiaries (the "Subsidiaries"), and its stockholders, by providing eligible
persons with the opportunity to acquire a proprietary interest, or to increase
their proprietary interest, in the Company as an incentive to remain in the
service of the Company.
B. Elements of the Program. In order to maintain flexibility in the
award of benefits, the Program is comprised of six parts -- the Incentive Stock
Option Plan ("Incentive Plan"), the Supplemental Stock Option Plan
("Supplemental Plan"), the Stock Appreciation Rights Plan ("SAR Plan"), the
Performance Share Plan ("Performance Share Plan"), the Stock Bonus Plan ("Stock
Bonus Plan") and the Independent Director Plan (the "Independent Director
Plan"). Copies of the Incentive Plan, Supplemental Plan, SAR Plan, Performance
Share Plan, Stock Bonus Plan and Independent Director Plan are attached hereto
as Parts I, II, III, IV, V, and VI, respectively, and are collectively referred
to herein as the "Plans." The grant of an option, stock appreciation right,
performance share, or stock bonus under one of the Plans shall not be construed
to prohibit the grant of an option, stock appreciation right, performance share,
or stock bonus under any of the other Plans.
C. Applicability of General Provisions. Unless any Plan specifically
indicates to the contrary, all Plans shall be subject to the General Provisions
of the Program set forth below under the heading "General Provisions of Stock
Compensation Program."
<PAGE>
GENERAL PROVISIONS OF STOCK COMPENSATION PROGRAM
Article 1. Administration. The Program shall be administered by the
Board of Directors of the Company (the "Board of Directors") or any duly created
committee appointed by the Board of Directors and charged with administration of
the Program. The Board of Directors, or any duly appointed committee, when
acting to administer the Program, is referred to as the "Program Administrator."
Any action of the Program Administrator shall be taken by majority vote at a
meeting or by unanimous written consent of all members without a meeting. No
Program Administrator or member of the Board of Directors shall be liable for
any action or determination made in good faith with respect to the Program or
with respect to any option, stock appreciation right, performance share, or
stock bonus granted thereunder. Notwithstanding any other provision of the
Program, administration of the Independent Director Plan, set forth as Part VI
of this Program, shall be self-executing in accordance with the terms of the
Independent Director Plan, and no Program Administrator shall exercise any
discretionary functions with respect to option grants made under such
Independent Director Plan.
Article 2. Authority of Program Administrator. Subject to the other
provisions of this Program, and with a view to effecting its purpose, the
Program Administrator shall have the authority: (a) to construe and interpret
the Program; (b) to define the terms used herein; (c) to prescribe, amend, and
rescind rules and regulations relating to the Program; (d) to determine to whom
options, stock appreciation rights, performance shares, and stock bonuses shall
be granted under the Program; (e) to determine the time or times at which
options, stock appreciation rights, performance shares, or stock bonuses shall
be granted under the Program; (f) to determine the number of shares subject to
any discretionary option or stock appreciation right under the Program and the
number of shares to be awarded as performance shares or stock bonuses under the
Program, as well as the option price and the duration of each option, stock
appreciation right, performance share and stock bonus, and any other terms and
conditions of options, stock appreciation rights, performance shares, and stock
bonuses; and (g) to make any other determinations necessary or advisable for the
administration of the Program and to do everything necessary or appropriate to
administer the Program. All decisions, determinations and interpretations made
by the Program Administrator shall be binding and conclusive on all participants
in the Program and on their legal representatives, heirs, and beneficiaries.
Article 3. Maximum Number of Shares Subject to the Program. The
maximum aggregate number of shares of the Company's Common Stock, par value $.01
per share ("Common Stock"), available pursuant to the Program, subject to
adjustment as provided in Article 6 hereof, shall be 600,000 shares of Common
Stock. Up to 500,000 of such shares may be issued under any Plan that is part of
the Program other than the Independent Director Plan. Up to 100,00 shares may be
issued under the Independent Director Plan. If any of the options or stock
appreciation rights granted under the Program expire or terminate for any reason
before they have been exercised in full, the unissued shares subject to those
expired or terminated options and/or stock appreciation rights shall again be
available for the purposes of the Program. If the performance objectives
associated with the grant of any performance shares are not achieved within the
specified performance objective period, or if the performance share grant
terminates for any reason before the performance objective date arrives, the
shares of Common Stock associated with such performance shares shall again be
available for the purposes of the Program. If any stock provided to a recipient
as a stock bonus is forfeited, the shares of Common Stock so forfeited shall
again be available for purposes of the Program. Any shares of Common Stock
delivered pursuant to the Program may consist, in whole or in part, of newly
issued shares or treasury shares.
Article 4. Eligibility and Participation. All employees of the Company
and the Subsidiaries, whether or not officers or directors of the Company or the
Subsidiaries, all consultants of the Company and the Subsidiaries, whether or
not directors of the Company or the Subsidiaries, and all non-employee directors
of the Company shall be eligible to participate in the Program; provided,
however, that (i) only employees of the Company or the Subsidiaries may
participate in the Incentive Plan, and (ii) only Independent Directors (as
defined in the Independent Director Plan) may participate in the Independent
Director Plan. The term "employee" shall include any person who has agreed to
become an employee and the term "consultant" shall include any person who has
agreed to become a consultant.
Article 5. Effective Date and Term of Program. The Program shall
become effective upon its adoption by the Board of Directors and the
stockholders of the Company; provided, however, that awards may be granted under
the Program prior to obtaining stockholder approval of the Program so long as
such awards are contingent upon such stockholder approval being obtained and may
not be exercised prior to such approval. The Program shall continue in effect
for a term of ten years from the date the Program is adopted by the Board of
Directors unless sooner terminated by the Board of Directors.
Article 6. Adjustments. Subject to the provisions of Articles 18 and
19, in the event that the outstanding shares of Common Stock of the Company are
hereafter increased, decreased, changed into, or exchanged for a different
number or kind of shares or securities through merger, consolidation,
combination, exchange of shares, other reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment shall be made by the Program
Administrator in the maximum number and kind of shares as to which options,
stock appreciation rights, and performance shares may be granted under the
Program. A corresponding adjustment changing the number or kind of shares
allocated to unexercised options, stock appreciation rights, performance shares
and stock bonuses or portions thereof, which shall have been granted prior to
any such change, shall likewise be made. Any such adjustment in outstanding
options and stock appreciation rights shall be made without change in the
aggregate purchase price applicable to the unexercised portion of the option or
stock appreciation right but with a corresponding adjustment in the price for
each share or other unit of any security covered by the option or stock
appreciation right. In making any adjustment pursuant to this Article 6, any
fractional shares shall be disregarded.
Article 7. Termination and Amendment of Program. No options, stock
appreciation rights, performance shares or stock bonuses shall be granted under
the Program after the termination of the Program. The Program Administrator may
at any time amend or revise the terms of the Program or of any outstanding
option, stock appreciation right, performance share or stock bonus issued under
the Program, provided, however, that any stockholder approval necessary or
desirable in order to comply with Rule 16b-3 under the Securities Exchange Act
of 1934, as amended, or with Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code") or other applicable law or regulation shall be obtained
prior to the effectiveness of any such amendment or revision. No amendment,
suspension or termination of the Program or of any outstanding option, stock
appreciation right, performance share or stock bonus shall, without the consent
of the person who has received an option, stock appreciation right, performance
share or stock bonus, impair any of that person's rights or obligations under
any option, stock appreciation right, performance share or stock bonus granted
under the Program prior to such amendment, suspension or termination without
that person's written consent.
Article 8. Privileges of Stock Ownership Notwithstanding the exercise
of any options granted pursuant to the terms of the Program or the achievement
of any performance objective specified in any performance share granted pursuant
to the terms of the Program, no person shall have any of the rights or
privileges of a stockholder of the Company in respect of any shares of stock
issuable upon the exercise of his or her option or achievement of his or her
performance objective until certificates representing the shares have been
issued and delivered. No adjustment shall be made for dividends or any other
distributions for which the record date is prior to the date on which any stock
certificate is issued pursuant to the Program.
Article 9. Reservation of Shares of Common Stock. The Company, during
the term of the Program, will at all times reserve and keep available such
number of shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Program.
Article 10. Tax Withholding. The exercise of any option, stock
appreciation right or performance share, and the grant of any stock bonus under
the Program, are subject to the condition that, if at any time the Company shall
determine, in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any state or federal law is necessary or desirable
as a condition of, or in any connection with, such exercise or the delivery or
purchase of shares pursuant thereto, then, in such event, the exercise of the
option, stock appreciation right or performance share or the grant of such stock
bonus or the elimination of the risk of forfeiture relating thereto shall not be
effective unless such withholding tax or other withholding liabilities shall
have been satisfied in a manner acceptable to the Company.
Article 11. Employment; Service as Director or Consultant. Nothing in
the Program gives to any person any right to continued employment by or service
as a director of or consultant to the Company or the Subsidiaries or limits in
any way the right of the Company, the Subsidiaries or the Company's stockholders
at any time to terminate or alter the terms of that employment or service.
Article 12. Investment Letter; Restrictions or Obligation of the
Company to Issue Securities; Restrictive Legend. Any person acquiring Common
Stock or other securities of the Company pursuant to the Program, as a condition
precedent to receiving the shares of Common Stock or other securities, may be
required by the Program Administrator to submit a letter to the Company stating
that the shares of Common Stock or other securities are being acquired for
investment and not with a view to the distribution thereof. The Company shall
not be obligated to sell or issue any shares of Common Stock or other securities
pursuant to the Program unless, on the date of sale and issuance thereof, the
shares of Common Stock or other securities are either registered under the
Securities Act of 1933, as amended, and all applicable state securities laws, or
exempt from registration thereunder. All shares of Common Stock and other
securities issued pursuant to the Program shall bear a restrictive legend
summarizing the restrictions on transferability applicable thereto, including
those imposed by federal and state securities laws.
Article 13. Covenant Against Competition. The Program Administrator
shall have the right to condition the award to an employee of any option, stock
appreciation right, performance share, or stock bonus under the Program upon the
recipient's execution and delivery to the Company of an agreement not to compete
with the Company during the recipient's employment and for such period
thereafter as shall be determined by the Program Administrator. Such covenant
against competition shall be in a form satisfactory to the Program
Administrator.
Article 14. Rights Upon Termination. If a recipient of an award under
the Program ceases to be a director of the Company or to be employed by or to
provide consulting services to the Company or any Subsidiary (or a corporation
or a parent or subsidiary of such corporation issuing or assuming a stock option
in a transaction to which Section 424(a) of the Code applies), as the case may
be, for any reason other than death or disability, then, unless any other
provision of the Program provides for earlier termination:
(a) subject to Article 21, all options or stock appreciation
rights (other than Naked Rights) shall terminate immediately in the
event the recipient's service or employment is terminated for cause and
in all other circumstances may be exercised, to the extent exercisable
on the date of termination, until (i) three months after the date of
termination in the case of grants under the Independent Director Plan,
and (ii) 30 days after the date of termination in all other cases;
provided, however, that the Program Administrator may, in its
discretion, allow such options or stock appreciation rights (other than
Naked Rights) to be exercised (to the extent exercisable on the date of
termination) at any time within three months after the date of
termination;
(b) subject to Section 5(b) of the SAR Plan, all Naked
Rights not payable on the date of termination of employment shall
terminate immediately;
(c) all performance share awards shall terminate
immediately unless the performance objectives have been achieved and
the performance objective period has expired; and
(d) all stock bonuses which are subject to forfeiture
shall be forfeited as of the date of termination.
Article 15. Rights Upon Disability. If a recipient becomes disabled,
within the meaning of Section 22(e)(3) of the Code, while serving as a director
of the Company or while employed by or rendering consulting services to the
Company or any Subsidiary (or a corporation or a parent or subsidiary of such
corporation issuing or assuming a stock option in a transaction to which Section
424(a) of the Code applies), as the case may be, then, unless any other
provision of the Program provides for earlier termination:
(a) subject to Article 21, all options or stock appreciation
rights (other than Naked Rights) may be exercised, to the extent
exercisable on the date of termination, at any time within one year
after the date of termination due to disability;
(b) all Naked Rights shall be fully paid by the Company as of
the date of disability;
(c) all performance share awards for which all performance
objectives have been achieved (other than continued employment or
service on the Vesting Date) shall be paid in full by the Company; all
other performance shares shall terminate immediately; and
(d) all stock bonuses which are subject to forfeiture shall be
forfeited as of the date of disability.
Article 16. Rights Upon Death of Recipient. If a recipient dies while
serving as a director of the Company or while employed by or rendering
consulting services to the Company or any Subsidiary (or a corporation or a
parent or subsidiary of such corporation issuing or assuming a stock option in a
transaction to which Section 424(a) of the Code applies), as the case may be,
then, unless any other provision of the Program provides for earlier
termination:
(a) subject to Article 21, all options or stock appreciation
rights (other than Naked Rights) may be exercised by the person or
persons to whom the recipient's rights shall pass by will or by the
laws of descent and distribution, to the extent exercisable on the date
of death, at any time within one year after the date of death, unless
any other provision of the Program provides for earlier termination;
(b) all Naked Rights shall be fully paid by the Company as of
the date of death;
(c) all performance share awards for which all performance
objectives have been achieved (other than continued employment or
service on the Vesting Date) shall be paid in full by the Company; all
other performance share awards shall terminate immediately; and
(d) all stock bonuses which are subject to forfeiture shall be
forfeited as of the date of death.
Article 17. Transferability. Options and stock appreciation rights
granted under the Program may not be sold, pledged, assigned or transferred in
any manner by the recipient otherwise than by will or by the laws of descent and
distribution and shall be exercisable (a) during the recipient's lifetime only
by the recipient and (b) after the recipient's death only by the recipient's
executor, administrator or personal representative, provided, however that (i)
the Program Administrator may permit the recipient of a non-incentive stock
option under the Supplemental Plan to transfer the option to a family member or
a trust created for the benefit of family members and (ii) recipients of options
under the Independent Director Plan may transfer such options to a family member
or a trust created for the benefit of family members. In the case of such a
transfer, the transferee's rights and obligations with respect to the option
shall be determined by reference to the recipient and the recipient's rights and
obligations with respect to the option had no transfer been made. The recipient
shall remain obligated pursuant to Articles 10 and 12 hereunder if required by
applicable law. Common Stock which represents either performance shares prior to
the satisfaction of the stated performance objectives and the expiration of the
stated performance objective periods or stock bonus shares prior to the time
that they are no longer subject to risk of forfeiture may not be sold, pledged,
assigned or transferred in any manner.
Article 18 Change in Control. All options granted pursuant to the
Independent Director Plan shall become immediately exercisable upon the
occurrence of a Change in Control Event. With respect to other awards, the
Program Administrator shall have the authority to provide, either at the time
any option, stock appreciation right, performance share or stock bonus is
granted or thereafter, that an option or stock appreciation right shall become
fully exercisable upon the occurrence of a Change in Control Event or that all
restrictions, performance objectives, performance objective periods and risks of
forfeiture pertaining to a performance share or stock bonus award shall lapse
upon the occurrence of a Change in Control Event. As used in the Program, a
"Change in Control Event" shall be deemed to have occurred if:
(a) any person, firm or corporation acquires directly or
indirectly the Beneficial Ownership (as defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended) of any voting security of
the Company and, immediately after such acquisition, the acquirer has
Beneficial Ownership of voting securities representing 50% or more of
the total voting power of all the then-outstanding voting securities of
the Company;
(b) the individuals who (i) as of the effective date of the
Program constitute the Board of Directors (the "Original Directors"),
(ii) thereafter are elected to the Board of Directors and whose
election or nomination for election to the Board of Directors was
approved by a vote of at least 2/3 of the Original Directors then still
in office (such Directors being called "Additional Original
Directors"), or (iii) are elected to the Board of Directors and whose
election or nomination for election to the Board of Directors was
approved by a vote of at least 2/3 of the Original Directors and
Additional Original Directors then still in office, cease for any
reason to constitute a majority of the members of the Board of
Directors;
(c) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company or
the Company shall consummate any such transaction if stockholder
approval is not sought or obtained, other than any such transaction
which would result in holders of outstanding voting securities of the
Company immediately prior to the transaction having Beneficial
Ownership of at least 50% of the total voting power represented by the
voting securities of the surviving entity outstanding immediately after
such transaction, with the voting power of each such continuing holder
relative to such other continuing holders being not altered
substantially in the transaction; or
(d) the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion of the
Company's assets (i.e., 50% or more in value of the total assets of the
Company).
Article 19. Mandatory Exercise. Upon the occurrence of or in
anticipation of a contemplated Change in Control Event, the Company may give a
holder of an option or stock appreciation right written notice requiring such
person either (a) to exercise within a period of time established by the Company
after receipt of the notice each option and stock appreciation right to the
fullest extent exercisable at the end of that period, or (b) to surrender such
option or stock appreciation right or any unexercised portion thereof. Any
portion of such option or stock appreciation right which shall not have been
exercised in accordance with the provisions of the Program by the end of such
period shall automatically lapse irrevocably and the holder shall have no
further rights thereunder.
Article 20. Method of Exercise. Any holder of an option may exercise
his or her option from time to time by giving written notice thereof to the
Company at its principal office, together with payment in full for the shares of
Common Stock to be purchased. The date of such exercise shall be the date on
which the Company receives such notice. Such notice shall state the number of
shares to be purchased. The purchase price of any shares purchased upon the
exercise of any option granted pursuant to the Program shall be paid in full at
the time of exercise of the option by certified or bank cashier's check payable
to the order of the Company or, if permitted by the Program Administrator, by
shares of Common Stock which have been held by the optionee for at least six
months, or by a combination of checks and such shares of Common Stock. The
Program Administrator may, in its sole discretion, permit an optionee to make
"cashless exercise" arrangements, to the extent permitted by applicable law, and
may require optionees to utilize the services of a single broker selected by the
Program Administrator in connection with any cashless exercise. No option may be
exercised for a fraction of a share of Common Stock. If any portion of the
purchase price is paid in shares of Common Stock, those shares shall be valued
at their then Fair Market Value as determined by the Program Administrator in
accordance with Section 4 of the Incentive Plan.
Article 21. Limitation. Notwithstanding any other provision of the
Program, (a) no option may be granted pursuant to the Program more than ten
years after the date on which the Program was adopted by the Board of Directors,
and (b) any option granted under the Program shall, by its terms, not be
exercisable more than ten years after the date of grant; provided, however, that
any option granted under the Independent Director Plan shall, by its terms, not
be exercisable more than five years after the date of grant.
Article 22. Sunday or Holiday. In the event that the time for the
performance of any action or the giving of any notice is called for under the
Program within a period of time which ends or falls on a Sunday or legal
holiday, such period shall be deemed to end or fall on the next day following
such Sunday or legal holiday which is not a Sunday or legal holiday.
Article 23. Governing Law. The Program shall be governed by and
construed in accordance with the laws of the State of New Jersey.
<PAGE>
PLAN I
BARRINGER TECHNOLOGIES INC.
INCENTIVE STOCK OPTION PLAN
Section 1. General. This Barringer Technologies Inc. Incentive Stock
Option Plan ("Incentive Plan") is Part I of the Company's Program. The Company
intends that options granted pursuant to the provisions of the Incentive Plan
will qualify and will be identified as "incentive stock options" within the
meaning of Section 422 of the Code. Unless any provision herein indicates to the
contrary, the Incentive Plan shall be subject to the General Provisions of the
Program.
Section 2. Terms and Conditions. The Program Administrator may grant
incentive stock options to any person eligible under Article 4 of the General
Provisions. The terms and conditions of options granted under the Incentive Plan
may differ from one another as the Program Administrator shall, in its
discretion, determine, as long as all options granted under the Incentive Plan
satisfy the requirements of the Incentive Plan.
Section 3. Duration of Options. Each option and all rights thereunder
granted pursuant to the terms of the Incentive Plan shall expire on the date
determined by the Program Administrator, but in no event shall any option
granted under the Incentive Plan expire later than ten years from the date on
which the option is granted. Notwithstanding the foregoing, any option granted
under the Incentive Plan to any person who owns more than 10% of the combined
voting power of all classes of stock of the Company or a Subsidiary shall expire
no later than five years from the date on which the option is granted.
Section 4. Purchase Price. The option price with respect to any option
granted pursuant to the Incentive Plan shall not be less than the Fair Market
Value of the shares on the date of the grant of the option; except that the
option price with respect to any option granted pursuant to the Incentive Plan
to any person who owns more than 10% of the combined voting power of all classes
of stock of the Company shall not be less than 110% of the Fair Market Value of
the shares on the date the option is granted. "Fair Market Value" shall mean the
fair market value of the Common Stock on the date of grant or other relevant
date. If on such date the Common Stock is listed on a stock exchange or is
quoted on the automated quotation system of NASDAQ, the Fair Market Value shall
be the closing sale price (or if such price is unavailable, the average of the
high bid price and the low asked price) on such date. If no such closing sale
price or bid and asked prices are available, the Fair Market Value shall be
determined in good faith by the Program Administrator in accordance with
generally accepted valuation principles and such other factors as the Program
Administrator reasonably deems relevant.
Section 5. Maximum Amount of Options in Any Calendar Year. The
aggregate Fair Market Value of the Common Stock with respect to which incentive
stock options are exercisable for the first time by any employee during any
calendar year (under the terms of the Incentive Plan and all incentive stock
option plans of the Company and the Subsidiaries) shall not exceed $100,000.
Section 6. Exercise of Options. Unless otherwise provided by the
Program Administrator at the time of grant or unless the installment provisions
set forth herein are subsequently accelerated pursuant to Article 18 of the
General Provisions of the Program or otherwise by the Program Administrator with
respect to any one or more previously granted options, options may only be
exercised to the following extent during the following periods of employment:
<PAGE>
Maximum Percentage of
Shares Covered by
Period Following Option Which May be
Date of Grant Purchased
Less than 12 months 0%
12 months or more and less than 24 months 25%
24 months or more and less than 36 months 50%
36 months or more and less than 48 months 75%
48 months or more 100%
<PAGE>
PLAN II
BARRINGER TECHNOLOGIES INC.
SUPPLEMENTAL STOCK OPTION PLAN
Section 1. General. This Barringer Technologies Inc. Supplemental
Stock Option Plan ("Supplemental Plan") is Part II of the Company's Program. Any
option granted pursuant to the Supplemental Plan shall not be an incentive stock
option as defined in Section 422 of the Code. Unless any provision herein
indicates to the contrary, this Supplemental Plan shall be subject to the
General Provisions of the Program.
Section 2. Terms and Conditions. The Program Administrator may grant
supplemental stock options to any person eligible under Article 4 of the General
Provisions. The terms and conditions of options granted under the Supplemental
Plan may differ from one another as the Program Administrator shall, in its
discretion, determine, as long as all options granted under the Supplemental
Plan satisfy the requirements of the Supplemental Plan.
Section 3. Duration of Options. Each option and all rights thereunder
granted pursuant to the terms of the Supplemental Plan shall expire on the date
determined by the Program Administrator, but in no event shall any option
granted under the Supplemental Plan expire later than ten years from the date on
which the option is granted.
Section 4. Purchase Price. The option price with respect to any option
granted pursuant to the Supplemental Plan shall be determined by the Program
Administrator at the time of grant.
Section 5. Exercise of Options. Unless otherwise provided by the
Program Administrator at the time of grant, or unless the installment provisions
set forth herein are subsequently accelerated pursuant to Article 18 of the
General Provisions of the Program or otherwise by the Program Administrator,
with respect to any one or more previously granted options, options may only be
exercised to the following extent during the following periods of employment or
service:
Maximum Percentage of
Shares Covered by
Period Following Option Which May be
Date of Grant Purchased
Less than 12 months 0%
12 months or more and less than 24 months 25%
24 months or more and less than 36 months 50%
36 months or more and less than 48 months 75%
48 months or more 100%
<PAGE>
PLAN III
BARRINGER TECHNOLOGIES INC.
STOCK APPRECIATION RIGHTS PLAN
Section 1. General. This Barringer Technologies Inc. Stock
Appreciation Rights Plan ("SAR Plan") is Part III of the Company's Program.
Section 2. Terms and Conditions. The Program Administrator may grant
stock appreciation rights to any person eligible under Article 4 of the General
Provisions. Stock appreciation rights may be granted either in tandem with
incentive stock options or supplemental stock options as described in Section 4
of the SAR Plan, or as naked stock appreciation rights as described in Section 5
of the SAR Plan.
Section 3. Mode of Payment. At the discretion of the Program
Administrator, payments to recipients upon exercise of stock appreciation rights
may be made in (a) cash by bank check, (b) shares of Common Stock having a Fair
Market Value (determined in the manner provided in Section 4 of the Incentive
Plan) equal to the amount of the payment, (c) a note in the amount of the
payment containing such terms as are approved by the Program Administrator, or
(d) any combination of the foregoing in an aggregate amount equal to the amount
of the payment.
Section 4. Stock Appreciation Rights in Tandem with Incentive or
Supplemental Stock Options. A SAR granted in tandem with an incentive stock
option or a supplemental stock option (each, an "Option") shall be on the
following terms and conditions:
(a) Each SAR shall relate to a specific Option or portion of
an Option granted under the Incentive Plan or the Supplemental Plan, as
the case may be, and may be granted by the Program Administrator at the
same time that the Option is granted or at any time thereafter prior to
the last day on which the Option may be exercised.
(b) A SAR shall entitle a recipient, upon surrender of the
unexpired related Option, or a portion thereof, to receive from the
Company an amount equal to the excess of (i) the Fair Market Value
(determined in accordance with Section 4 of the Incentive Plan) of the
shares of Common Stock which the recipient would have been entitled to
purchase on that date pursuant to the portion of the Option
surrendered, over (ii) the amount which the recipient would have been
required to pay to purchase such shares upon exercise of such Option.
(c) A SAR shall be exercisable only for the same number of
shares of Common Stock, and only at the same times, as the Option to
which it relates. SARs shall be subject to such other terms and
conditions as the Program Administrator may specify.
(d) A SAR shall lapse at such time as the related Option is
exercised or lapses pursuant to the terms of the Program. On exercise
of the SAR, the related Option shall lapse as to the number of shares
exercised.
Section 5. Naked Stock Appreciation Rights. SARs granted by the
Program Administrator as naked stock appreciation rights ("Naked Rights") shall
be subject to the following terms and conditions:
(a) The Program Administrator may award Naked Rights to
recipients for periods not exceeding ten years. Each Naked Right shall
represent the right to receive the excess of (i) the Fair Market Value
of one share of Common Stock (determined in accordance with Section 4
of the Incentive Plan) on the date of exercise of the Naked Right, over
(ii) the Fair Market Value of one share of Common Stock (determined in
accordance with Section 4 of the Incentive Plan) on the date the Naked
Right was awarded to the recipient.
(b) Unless otherwise provided by the Program Administrator at
the time of award or unless the installment provisions set forth herein
are subsequently accelerated pursuant to Article 18 of the General
Provisions of the Program or otherwise by the Program Administrator
with respect to any one or more previously granted Naked Rights, Naked
Rights may only be exercised to the following extent during the
following periods of employment or service:
Maximum Percentage of
Period Following Naked Rights Which
Date of Grant May be Purchased
Less than 12 months 0%
12 months or more and less than 24 months 25%
24 months or more and less than 36 months 50%
36 months or more and less than 48 months 75%
48 months or more 100%
(c) The Naked Rights solely measure and determine the amounts
to be paid to recipients upon exercise as provided in Section 5(a).
Naked Rights do not represent Common Stock or any right to receive
Common Stock. The Company shall not hold in trust or otherwise
segregate amounts which may become payable to recipients of Naked
Rights; such funds shall be part of the general funds of the Company.
Naked Rights shall constitute an unfunded contingent promise to make
future payments to the recipient.
<PAGE>
PLAN IV
BARRINGER TECHNOLOGIES INC.
PERFORMANCE SHARE PLAN
Section 1. General. This Barringer Technologies Inc. Performance Share
Plan ("Performance Share Plan") is Part IV of the Company's Program. Unless any
provision herein indicates to the contrary, the Performance Share Plan shall be
subject to the General Provisions of the Program.
Section 2. Terms and Conditions. The Program Administrator may grant
performance shares to any person eligible under Article 4 of the General
Provisions. Each performance share grant shall confer upon the recipient thereof
the right to receive a specified number of shares of Common Stock of the Company
contingent upon the achievement of specified performance objectives within a
specified performance objective period including, but not limited to, the
recipient's continued employment or service as a consultant through the period
set forth in Section 5 of this Performance Share Plan. At the time of an award
of a performance share, the Program Administrator shall specify the performance
objectives, the performance objective period or periods and the period of
duration of the performance share grant. Any performance shares granted under
this Plan shall constitute an unfunded promise to make future payments to the
affected person upon the completion of specified conditions.
Section 3. Mode of Payment. At the discretion of the Program
Administrator, payments of performance shares may be made in (a) shares of
Common Stock, (b) a check in an amount equal to the Fair Market Value
(determined in the manner provided in Section 4 of the Incentive Plan) of the
shares of Common Stock to which the performance share award relates, (c) a note
in the amount specified above in Section 3(b) containing such terms as are
approved by the Program Administrator, or (d) any combination of the foregoing
in the aggregate amount equal to the amount specified above in Section 3(b).
Section 4. Performance Objective Period. The duration of the period
within which to achieve the performance objectives shall be determined by the
Program Administrator. The period may not be less than one year nor more than
ten years from the date that the performance share is granted. The Program
Administrator shall determine whether performance objectives have been met with
respect to each applicable performance objective period. Such determination
shall be made promptly after the end of each applicable performance objective
period, but in no event later than 90 days after the end of each applicable
performance objective period. All determinations by the Program Administrator
with respect to the achievement of performance objectives shall be final,
binding on and conclusive with respect to each recipient.
Section 5. Vesting of Performance Shares. Unless otherwise provided by
the Program Administrator at the time of grant, or unless the installment
provisions set forth herein are subsequently accelerated pursuant to Article 18
of the General Provisions of the Program or otherwise by the Program
Administrator, with respect to any one or more previously granted performance
shares, the Company shall pay to the recipient on the date set forth in Column 1
below ("Vesting Date") the percentage of the recipient's performance share award
set forth in Column 2 below.
Column 1 Column 2
Vesting Date Percentage
1 year from Date of Grant 25%
2 years from Date of Grant 25%
3 years from Date of Grant 25%
4 years from Date of Grant 25%
<PAGE>
PLAN V
BARRINGER TECHNOLOGIES INC.
STOCK BONUS PLAN
Section 1. General. This Barringer Technologies Inc. Stock Bonus Plan
("Stock Bonus Plan") is Part V of the Company's Program. Unless any provision
herein indicates to the contrary, the Stock Bonus Plan shall be subject to the
General Provisions of the Program.
Section 2. Terms and Conditions. The Program Administrator may grant
bonuses in the form of shares of Common Stock to any person eligible under
Article 4 of the General Provisions. Each such stock bonus shall be forfeited by
the recipient in the event that the recipient's employment by or service as a
director or consultant to the Company or any Subsidiary terminates within the
time periods specified in Section 3 of the Stock Bonus Plan or within such other
time period as the Program Administrator also may provide at the time of grant.
The Program Administrator also may provide at the time of grant that the Common
Stock subject to the stock bonus shall be forfeited by the recipient upon the
occurrence of other events.
Section 3. Forfeiture of Bonus Shares. Unless otherwise provided by
the Program Administrator at the time of grant, or unless the installment
provisions set forth herein are subsequently accelerated pursuant to Article 18
of the General Provisions of the Program or otherwise by the Program
Administrator with respect to any one or more previously granted bonus shares,
the percentage set forth in Column 2 below of shares of Common Stock issued as a
stock bonus shall be forfeited and transferred back to the Company by the
recipient without payment of any consideration from the Company if the
recipient's employment by or service as a director or consultant to the Company
or any Subsidiary is terminated for any reason during the time periods specified
in Column 1 below:
Column 1 Column 2
Employment or Service Percentage of Bonus
Terminated Within Shares Which are Forfeitable
First 12 months after grant 100%
First 24 months after grant 75%
First 36 months after grant 50%
First 48 months after grant 25%
Beyond 48 months after grant 0%
Section 4. Rights as a Stockholder; Stock Certificates. A recipient
shall have rights as a stockholder with respect to any shares of Common Stock
received as a stock bonus represented by a stock certificate issued in his name
even though all or a portion of such shares remains subject to a risk of
forfeiture hereunder, except that shares subject to forfeiture shall not be
transferable. Stock certificates representing such shares which remain subject
to forfeiture together with a related stock power shall be held by the Company,
and shall be canceled and returned to the Company's treasury if thereafter
forfeited. Stock certificates representing such shares which are vested and no
longer subject to forfeiture shall be delivered to the recipient.
<PAGE>
PLAN VI
BARRINGER TECHNOLOGIES INC.
INDEPENDENT DIRECTOR PLAN
Section 1. General. This Barringer Technologies Inc. Independent
Director Plan ("Independent Director Plan") is Part VI of the Company's Program.
Any option granted pursuant to this Independent Director Plan shall not be an
incentive stock option as defined in Section 422 of the Code. Unless any
provision herein indicates to the contrary, this Independent Director Plan shall
be subject to the General Provisions of the Program.
Section 2. Terms and Conditions. Every year on the earlier of (i) the
date of the Company's annual meeting of stockholders, and (ii) June 1, the
Company shall grant to each Independent Director (as defined below) elected as a
director at such annual meeting (or nominated for election as a director by the
Board of Directors or any nominating committee thereof in the event that such
annual meeting does not occur prior to June 1), or, in the event that the Board
of Directors is divided into two or more classes, continuing or expected to
continue to serve as a director of the Company following such annual meeting, an
option to purchase 3,000 shares of Common Stock. As used in the Independent
Director Plan, the term "Independent Director" means any member of the Board of
Directors who, as of the relevant date of determination, has not been a
full-time employee of the Company or any Subsidiary for at least twelve months
preceding such date.
Section 3. Duration of Options. Each option and all rights thereunder
granted pursuant to the terms of the Independent Director Plan shall expire five
years from the date on which the option is granted. In addition, each option
shall be subject to early termination as provided in the Independent Director
Plan.
Section 4. Purchase Price. The option price with respect to any option
granted pursuant to the Independent Director Plan shall be the Fair Market Value
(determined in accordance with Section 4 of the Incentive Plan) of the shares of
Common Stock to which the option relates.
Section 5. Exercise of Options.
(a) Options granted under the Independent Director Plan shall become
fully exercisable as to 100% of the shares of Common Stock covered thereby one
year after the date of grant, subject to acceleration as set forth in Article 18
of the General Provisions of Stock Compensation Program.
(b) Except as provided in the General Provisions of Stock Compensation
Program, no option may be exercised unless the holder thereof is then a director
of the Company.
(c) Other than as provided in the General Provisions of Stock
Compensation Program, options granted under the Independent Director Plan shall
not be affected by any change of duties or position so long as the holder
continues to be a director of the Company.
<PAGE>
BARRINGER TECHNOLOGIES INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, MAY 13, 1997
The undersigned hereby revokes any prior proxy and appoints Stanley S.
Binder, Kenneth S. Wood, Richard S. Rosenfeld, and each of them, attorneys and
proxies with power of substitution, to vote for and on behalf of the undersigned
at the Barringer Technologies Inc. Annual Meeting of Stockholders to be held on
May 13, 1997 and at any adjournments or postponements thereof (the "Meeting"),
upon the following matters and upon any other business that may properly come
before the Meeting, as set forth in the related Notice of Meeting and Proxy
Statement, both of which have been received by the undersigned.
This proxy, when properly executed, will be voted in the manner
directed by the undersigned stockholder. If this proxy is executed but no
direction is made, this proxy will be voted FOR each of the Proposals.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS.
(CONTINUED, AND TO BE DATED AND SIGNED, ON THE OTHER SIDE)
<PAGE>
PLEASE MARK BOXES [ ] IN BLUE OR BLACK INK
1. Election of directors.
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) [ ] to vote for all nominees
listed below [ ]
To withhold authority for any individual nominee, print that nominee's name on
the space provided below.
- --------------------------------------------------------------------------------
Stanley S. Binder, John H. Davies, John J. Harte, Richard D. Condon,
John D. Abernathy and James C. McGrath
2. Proposal to increase the authorized shares of Common Stock
For [ ] Against [ ] Abstain [ ]
3. Proposal to adopt the Barringer Technologies Inc. 1997 Stock Compensation
Program
For [ ] Against [ ] Abstain [ ]
4. Ratification of BDO Seidman, LLP as independent public accountants for
1997.
For [ ] Against [ ] Abstain [ ]
If you have noted an address change or comments on either side of this card,
mark here: [ ]
Dated: _________________________, 1997
- -------------------------------------
Please sign this proxy and return it promptly whether or not you expect to
attend the Meeting. You may nevertheless vote in person if you attend.
Please sign exactly as your name appears hereon. Give full title if an Attorney,
Executor, Administrator, Trustee, Guardian, etc.
For an account in the name of two or more persons, each should sign, or if one
signs, he or she should attach evidence of authority.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
