U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.
For the fiscal year ended December 31, 1998
Commission File Number: 0-3207
Barringer Technologies Inc.
(Name of small business issuer in its charter)
Delaware 84-0720473
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
30 Technology Drive, Warren, NJ 07059
(Address, Including Zip Code, of Principal Executive Offices)
(908) 222 - 9100
(Issuer's Telephone Number)
Securities registered pursuant to Section 12(b) of the Exchange Act: NONE
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $.01 per share
Common Stock Purchase Warrants
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-K contained in this form and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by nonaffiliates computed
by reference to the price at which the stock was sold, or the average bid and
asked price of such stock, is $31,291,000 as of March 26, 1999.
State the number of shares of each of the issuer's classes of common stock,
outstanding as of the latest practicable date.
Outstanding as of March 26, 1999
Common Stock, $.01 par value 7,394,072
<PAGE>
Barringer Technologies Inc. (the "Company") is filing this amendment
to its Annual Report on Form 10-K for the fiscal year ended December 31, 1998 to
update and correct certain information contained in the Summary Compensation
Table.
Item 11. Executive Compensation
The following table sets forth a summary of all compensation paid for the
last three fiscal years to the Chief Executive Officer of the Company and each
of the other executive officers of the Company whose total annual salary and
bonus are $100,000 or more (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
Securities
Restricted Underlying All Other
Name and Fiscal Salary Bonus(1) Other Annual Stock Options/ LTIP Compensation
Principal Position Year ($) ($) Compensation ($) Award(s) SARs (#) Payouts ($) ($)(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stanley S. Binder 1998 $250,000 $182,000 -- -- 87,500 (2) -- $89,265 (3)(4)
Chairman and Chief 1997 200,000 350,000 -- -- 87,500 -- 9,500
Executive Officer 1996 171,491 63,000 -- -- 55,000 -- 2,925
John H. Davies* 1998 $149,782 $ 46,000 -- -- 34,000 (2) -- $45,815 (4)
Vice Chairman 1997 136,440 160,000 -- -- 34,000 -- 6,811
1996 125,775 43,200 -- -- 38,250 -- 6,317
Kenneth S. Wood 1998 $164,063 $ 65,000 -- -- 31,500 (2) -- $29,040 (4)
President and Chief 1997 130,000 170,000 -- -- 31,500 -- 8,480
Operating Officer 1996 111,815 39,600 -- -- 33,750 -- 2,199
Richard S. Rosenfeld 1998 $125,000 $ 34,000 -- -- 27,300 (2) -- $22,720 (4)
Vice President-Finance, 1997 107,500 115,000 -- -- 27,300 -- 7,085
Chief Financial Officer 1996 96,000 34,200 -- -- 27,500 -- 1,872
</TABLE>
* Amounts converted to U.S. dollars at the average exchange rate for the
respective year.
(1) Includes amounts contributed by the Company pursuant to the Company's
tax-qualified 401(k) deferred compensation plan ("401(k) Plan"). In 1998
and 1997, 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 5.0% of a participant's salary contributed. 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 2.0% of a
participant's salary contributed and 50.0% of the next 5.0% of a
participant's salary contributed. Company contributions to the 401(k) Plan
vest proportionately over a five-year period, commencing at the end of the
participant's first year with the Company. Amounts paid during 1998 on
behalf of the Named Executive Officers were $10,000, $7,215, $10,000 and
$10,000 for Messrs. Binder, Davies, Wood and Rosenfeld, respectively.
(2) Represents repricing of options previously granted. See "Option Repricing."
(3) Includes premiums paid by the Company for term life insurance for Mr.
Binder during 1998 in the amount of $5,865.
(4) Includes amounts accrued pursuant to the Barringer Technologies Inc.
Supplemental Executive Retirement Plan (the "SERP Plan"). Amounts accrued
during 1998 for the Named Executive Officers were $73,400, $38,600,
$19,040, and $12,720 for Messrs. Binder, Davies, Wood and Rosenfeld,
respectively.
<PAGE>
Effective January 1, 1998, the Company adopted the SERP Plan. The SERP Plan
provides eligible participants with certain retirement benefits supplemental to
the Company's 401(k) Plan. Pursuant to the SERP Plan, the Company will make
annual contributions to the account of each participant equal to a variable
percentage of the participant's base salary and annual cash bonus depending on
the Company's achievement of certain performance targets. The actual percentage
contribution will be determined by the Executive Compensation Committee, subject
to certain parameters. A participant will become vested under the SERP Plan
after five years of participation therein. A participant may elect to receive
benefits under the SERP Plan commencing at age 60 and is entitled to receive
either a lump-sum payment of his or her account balances upon retirement or to
use the account balance to purchase an annuity. In the event of the termination
of a participant's employment under certain circumstances set forth in the SERP
Plan, the participant will be entitled to receive his or her account balance
whether or not the participant has become vested under the SERP Plan. Currently,
each of the Named Executive Officers participates in the SERP Plan.
Option Grants
The following table summarizes certain information relating to the grant of
options to purchase Common Stock to each of the Named Executive Officers:
<PAGE>
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year(1)
Number of Percent of Total
Securities Options/SARs Potential realizable value
Underlying Granted to Exercise or of assumed annual rates of
Options/SARs Employees ins Base Price Expiration stock price appreciation
Name Granted(#)(2,3) Fiscal Year ($/sh) Date For option term
5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Stanley S. Binder 87,500 19.1% $ 6.19 10/21/08 $ 340,625 $ 863,211
John H. Davies 34,000 7.4 6.19 10/21/08 132,357 335,419
Kenneth S. Wood 31,500 6.9 6.19 10/21/08 122,625 310,756
Richard S. Rosenfeld 27,300 6.0 6.19 10/21/08 106,275 269,322
</TABLE>
(1) The Company did not grant any stock appreciation rights in 1998.
(2) Twenty-five percent of each option grant is exercisable after the first
anniversary of the date of grant, 50% is exercisable after the second
anniversary, 75% is exercisable after the third anniversary and 100% is
exercisable after the fourth anniversary.
(3) Represents repricing of options previously granted. See "Option Repricing."
Options Exercised in Last Fiscal Year and Fiscal Year-End Option Values
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of stock options during 1998 and
unexercised options held by such Named Executive Officers as of December 31,
1998.
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1998 and
Fiscal Year-End Option Values
Number of Unexercised
Securities Underlying Value of Unexercised
Shares Options/SARs in-the-money Options
Acquired On Value at Year-End(#) at Year-End($)(1)
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Stanley S. Binder -- -- 77,250 110,250 $553,031 $377,531
John H. Davies -- -- 53,688 49,813 384,367 197,110
Kenneth S. Wood -- -- 46,313 45,188 197,110 332,820
Richard S. Rosenfeld -- -- 38,625 38,675 276,516 148,710
</TABLE>
(1) Based on a closing price of $8.625 per share for the Common Stock as of
December 31, 1998.
Option Repricing
On October 21, 1998, the Company's Board of Directors approved the
repricing of options exercisable for an aggregate of 287,700 shares of Common
Stock previously granted to key employees of the Company (including the Named
Executive Officers) and the Company's non-employee diresctors pursuant to the
Company's 1997 Stock Compensation Program (the "Repricing"). Pursuant to the
Repricing, option holders exchanged options, certain of which were vested and
presently exercisable, with exercise prices ranging from $9.38 to $13.88 per
share for new stock options covering the same number of shares and having an
exercise price of $6.19 per share, the closing price of the Common Stock on the
NASDAQ National Market on October 21, 1998. Options granted pursuant to the
Repricing vest over a four-year period, with 25% of the options becoming
exercisable in each year commencing one year after the date of the Repricing
and will expire ten years after the Repricing.
<PAGE>
1997 Stock Compensation Program
In May 1997, the Company adopted the Barringer 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 an
ownership interest, or to increase their ownership interest, in the Company as
an incentive to remain in the service of the Company. The Stock Compensation
Program authorizes the granting of incentive stock options, non-qualified stock
options, stock appreciation rights, performance shares and stock bonus awards to
employees and consultants of the Company and its subsidiaries, 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"). In connection with the Stock
<PAGE>
Compensation Program, 600,000 shares of Common Stock are reserved for issuance,
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. The Stock
Compensation Program is administered by the Executive Compensation Committee.
Options and awards granted under the Stock Compensation Program may have an
exercise or payment price as established by the Executive Compensation
Committee; 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.
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 10 years from the date of grant. Options granted under the Independent
Director Plan vest one year following the date of grant and expire if not
exercised on or before the fifth anniversary thereof. Unless otherwise specified
by the Executive Compensation Committee, options and awards (other than pursuant
to the Independent Director Plan) vest in four equal installments on the first,
second, third and fourth anniversaries of the date of grant. Vesting of any
option or award granted under the Stock Compensation Program may be accelerated
in certain circumstances, including upon the occurrence of a "Change in Control
Event" (as defined in the Stock Compensation Program).
Options and awards granted under the Stock Compensation Program are
nontransferable, except by will or by the laws of descent and distribution.
However, the Executive Compensation Committee 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 are paid to the participant's estate by
the Company and the participant's estate or any permitted transferee has 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
are paid to the participant by the Company and the participant or any permitted
transferee has 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 has the right
to collect all vested awards immediately and the participant or any permitted
transferee has the right to exercise vested options for a period ending on the
earlier of the expiration dates of such options or awards or 30 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 terminate as of the date of termination of employment
or service.
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.
<PAGE>
Prior to the Repricing, stock options exercisable for an aggregate of
403,700 shares of Common Stock were outstanding under the Employee Plans. These
options expire 10 years after the date of grant and had a weighted average
exercise price of $10.57 per share. Such options were exercisable annually in
25% increments beginning with the first anniversary of the date of grant. In
connection with the Repricing, 263,700 of such options, certain of which were
vested and presently exercisable, were canceled and new options exercisable for
an aggregate of 263,700 shares of Common Stock were granted. The new options
expire 10 years after the date of grant and have an exercise price of $6.19 per
share. Such options vest over a four-year period and are exercisable annually in
25% increments beginning with the first anniversary of the date of grant. In
addition, prior to the Repricing, options exercisable for an aggregate of 24,000
shares of Common Stock were outstanding under the Independent Director Plan.
These were exercisable one year from the date of grant, were to expire five
years from the date of grant and had a weighted average exercise price of $12.83
per share. In connection with the Repricing, all of such options, certain of
which were vested and presently exercisable, were canceled and new options
exercisable for an aggregate of 24,000 shares of Common Stock were granted
outside the 1997 Stock Compensation Program. The new options expire 10 years
after the date of grant and have an exercise price of $6.19 per share. Such
options vest over a four-year period and are exercisable annually in 25%
increments beginning with the first anniversary of the date of grant.
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 or her 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. As of March 1, 1999,
Messrs. Binder and Wood were indebted to the Company in the approximate amounts
of $277,000 and $13,050, respectively, for loans made pursuant to the Exercise
Program. During 1998, the largest aggregate amount of indebtedness of Messrs.
Binder and Wood pursuant to such loans were $272,525 and $13,050, respectively.
The rate of interest charged on each such loan during 1998 was the prime
lending rate charged by Summit Bank.
Stock Purchase Program
In December 1998, the Company sold an aggregate of 153,000 shares of Common
Stock held in the treasury to the senior executive officers of the Company and
certain of the Company's independent directors at a purchase price of $8.375 per
share, the closing price of the Common Stock on the date of the sale.
Substantially all of the purchase price for the shares of Common Stock sold was
paid in the form of five-year non-recourse promissory notes aggregating
approximately $1.3 million secured by pledges of the underlying Common Stock.
The notes bear interest at a rate of 4.52% per annum. In January 1999, the
Company sold an additional 10,000 shares of Common Stock to Ms. Lavet at a
purchase price of $9.75 per share, the closing price of the Common Stock on the
date of sale. The consideration paid by Ms. Lavet was substantially the same as
described above, except that Ms. Lavet's note bears interest at a rate of 4.64%
per annum. The number of shares of Common Stock purchased by each of the
individuals and the principal amount of the notes due from each of the
individuals is set forth below.
<TABLE>
<CAPTION>
Number of Principal amount
Name shares purchased of notes
<S> <C> <C>
Stanley S. Binder 50,000 $418,250
John H. Davies 20,000 167,300
Kenneth S. Wood 23,000 192,395
Richard S. Rosenfeld 20,000 167,300
John D. Abernathy 10,000 83,650
Richard D. Condon 10,000 83,650
James C. McGrath 10,000 83,650
<PAGE>
John J. Harte 10,000 83,650
Lorraine M. Lavet 10,000 97,400
</TABLE>
Employment Agreements
The Company has entered into a five-year employment agreement with Mr.
Binder, the President and Chief Executive Officer of the Company (the
"Employment Agreement"), effective January 1, 1998. Under the Employment
Agreement Mr. Binder received a base salary of $250,000 for 1998. Mr. Binder's
salary is subject to certain adjustments and to periodic increases as determined
by the Board of Directors. In addition, Mr. Binder is entitled to receive up to
a total of three special bonuses during the term of the Employment Agreement, in
the amount of $65,000, $65,000 and $70,000, respectively, in the event that the
Company's EBITDA (as defined in the Employment Agreement), exceeds certain
targeted amounts for any fiscal year during the term of the Employment
Agreement. Mr. Binder received the first of these special bonuses in 1998.
Pursuant to the Employment Agreement, Mr. Binder is also entitled to participate
in the Company's cash bonus plan and to participate in the SERP Plan. Also,
under the terms of the Employment Agreement, in 1997, Mr. Binder received stock
options covering 50,000 shares of Common Stock having an exercise price of
$11.78 per share (equal to the fair market value on the date of grant). In the
Employment Agreement, the Company has agreed to maintain a $1.0 million term
life insurance policy for Mr. Binder's benefit. Mr. Binder is entitled to
several perquisites, including a car allowance and reimbursement for the cost of
certain financial planning services.
In the event that Mr. Binder's employment is terminated pursuant to a
Without Cause Termination, or Mr. Binder terminates his employment for Good
Reason (as such terms are defined in the Employment Agreement), Mr. Binder will
be entitled to a severance payment equal to 2.99 times his then-current base
salary and to certain other severance benefits. In addition, upon the occurrence
of a Change in Control Event (as such term is defined in the Employment
Agreement), Mr. Binder has the right to terminate his employment within 180
days, in which event the termination will be treated as a termination for Good
Reason with the effects specified above. In addition, the Company has agreed to
pay Mr. Binder additional amounts, if necessary, to pay any excise tax
Mr. Binder may become subject to in the event that any payment made to him under
the Employment Agreement constitutes an "excess parachute payment" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended.
Pursuant to the Employment Agreement, Mr. Binder has agreed to certain
confidentiality, work-for-hire and non-competition covenants.
The Company has entered into three-year employment agreements with each of
Messrs. Wood and Rosenfeld effective September 1, 1998, pursuant to which
Messrs. Wood and Rosenfeld receive annual base salaries of $150,000 and
$125,000, 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 and to participate in the SERP Plan. In the employment
agreements, the Company has agreed to maintain term life insurance policies for
the benefit of each of them in an amount not less than four times Mr. Wood's
base salary and not less than three times Mr. Rosenfeld's base salary. The
employment agreements for each of Messrs. Wood and Rosenfeld provide, among
other things, that, in the event of a termination of employment by the Company
without cause, the employee will be entitled to receive a severance payment
equal to his then current base salary for a period of twelve months from the
effective date of such termination. In the event that Messrs. Wood and/or
Rosenfeld are terminated pursuant to a Without Cause Termination (as defined in
the employment agreements), they are entitled to receive their base salary as in
effect at the time of such termination for a period of twelve months from the
effective date of such termination. Upon the occurrence of a "change in control"
of the Company, the employee will be entitled to receive the greater of his
annual base salary pursuant to the employment agreement or his then current
annual base salary for the remainder of the term (payable in a single lump sum).
Both of the employment agreements also contain certain confidentiality,
work-for-hire and non-competition provisions which continue in effect following
the termination of the employee's employment by the Company.
<PAGE>
Directors' Compensation
Outside directors are entitled to an annual retainer of $3,000 per quarter
(plus a $500 quarterly fee for each committee chairperson) and a fee of $1,000
for each meeting attended and $500 for each committee meeting attended
(regardless of whether or not the committee meeting is held on the same day as a
meeting of the Board of Directors). Pursuant to the terms of the 1997 Stock
Compensation Program, each director who has not been a full-time employee of the
Company or any subsidiary for at least the prior 12 months receives an option to
purchase 3,000 shares of Common Stock each year on the earlier of (i) the date
of the Company's annual meeting of stockholders, or (ii) June 1. Options granted
to such directors under the 1997 Stock Compensation Program have an exercise
price equal to the fair market value per share as of the date of grant. See
"1997 Stock Compensation Program."
Compensation Committee Interlocks and Insider Participation
The Company's Executive Compensation Committee is comprised of
Messrs. Abernathy, Condon, Harte and McGrath. No executive officer of the
Company and no member of the Executive 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 Executive Compensation Committee.
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 are also 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, except as set forth below, the Company has
not identified any reports required to be filed during the year ended December
31, 1998 that was not filed in a timely manner. Mr. Davies did not timely file
a Form 4 in connection with his purchase of 20,000 shares of Common Stock on
December 10, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to its
Annual Report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.
BARRINGER TECHNOLOGIES INC.
By: /s/ Stanley S. Binder
---------------------------
Stanley S. Binder, Chairman
and Chief Executive Officer
Dated: April 8, 1999
