-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IlnlIO7Vph6ZLpIUxGWBw4RQfIYEfUayl1V8ffhpWApihWJz6INP6od9a+20v0Ct jtGMRYAS2R30J5jKVv2xfg== 0000905718-99-000244.txt : 19990419 0000905718-99-000244.hdr.sgml : 19990419 ACCESSION NUMBER: 0000905718-99-000244 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990416 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARRINGER TECHNOLOGIES INC CENTRAL INDEX KEY: 0000010119 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 840720473 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-03207 FILM NUMBER: 99595524 BUSINESS ADDRESS: STREET 1: 219 SOUTH STREET CITY: NEW PROVIDENCE STATE: NJ ZIP: 07974 BUSINESS PHONE: 9086658200 MAIL ADDRESS: STREET 1: 219 SOUTH STREET CITY: NEW PROVIDENCE STATE: NJ ZIP: 07974 FORMER COMPANY: FORMER CONFORMED NAME: BARRINGER RESOURCES INC DATE OF NAME CHANGE: 19910331 FORMER COMPANY: FORMER CONFORMED NAME: BARRINGER RESEARCH INC DATE OF NAME CHANGE: 19800821 DEF 14A 1 PROXY STATEMENT 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: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12 BARRINGER TECHNOLOGIES INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) - -------------------------------------------------------------------------------- (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: ------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------- (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): ------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------- [ ] 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: -------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: -------------------------------------------------------------- (3) Filing Party: -------------------------------------------------------------- (4) Date Filed: -------------------------------------------------------------- BARRINGER TECHNOLOGIES INC. 30 Technology Drive Warren, New Jersey 07059 Notice of Annual Meeting of Stockholders to be held Wednesday, May 12, 1999 The Annual Meeting of Stockholders of Barringer Technologies Inc. (the "Company") will be held at the The Somerset Hills Hotel, 200 Liberty Corner Road, Warren, New Jersey 07059 on Wednesday, May 12, 1999, at 10:00 a.m., local time, to consider and take action on the following: 1. The election of eight 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 Company's Stock Compensation Program to increase the number of shares of Common Stock available for grant thereunder from 600,000 to 1,100,000. 3. The ratification of the appointment of BDO Seidman, LLP as independent auditors of the Company's 1999 financial statements. 4. 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, April 1, 1999 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, April 30, 1999 and will be available at the Annual Meeting. /s/ Richard S. Rosenfeld RICHARD S. ROSENFELD Vice President - Finance Chief Financial Officer Secretary and Treasurer Warren, New Jersey April 16, 1999 ================================================================================ 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. ================================================================================ BARRINGER TECHNOLOGIES INC. 30 Technology Drive, Warren, New Jersey 07059 April 16, 1999 - -------------------------------------------------------------------------------- PROXY STATEMENT - -------------------------------------------------------------------------------- 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 at The Somerset Hills Hotel, 200 Liberty Corner Road, Warren, New Jersey 07059 on Wednesday, May 12, 1999 (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, 1998, this Proxy Statement and the accompanying form of proxy are first being mailed to stockholders on or about April 16, 1999. 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 April 1, 1999 (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 0.361745 of a vote, and each share of Class B Convertible Preferred Stock will be entitled to 0.355839 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 7,393,454, 38,616, and 22,500, respectively, representing 7,393,454, 13,969, and 8,006 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 amend the Company's 1997 Stock Compensation Program (the "Stock Compensation Program") to increase the number of shares of Common Stock available for grant thereunder and the proposal to ratify the appointment of BDO Seidman, LLP as the auditors for the 1999 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 for the purpose of determining whether a quorum is present and not as votes cast and, therefore, will have no effect on each of the proposals to be considered at the Annual Meeting. Any stockholder giving a proxy has the power to revoke the proxy prior to the voting thereof by: (i) 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. Under Delaware law, stockholders will not have 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 solicitation of proxies may be made 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 ONE ELECTION OF DIRECTORS At the Annual Meeting, a board of eight 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 John D. Abernathy, Stanley S. Binder, Richard D. Condon, John H. Davies, John J. Harte, Lorraine M. Lavet, James C. McGrath and Kenneth S. Wood for election as directors, all of whom have consented to serve as directors. All nominees are currently directors of the Company and, except Ms. Lavet and Mr. Wood, have been elected by the stockholders. 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. Set forth below is certain information as of April 1, 1999 regarding the Board of Directors' nominees for election. See "Security Ownership of Certain Beneficial Owners and Management" for additional information regarding such persons. John D. Abernathy, 61, Director since 1993. Mr. Abernathy is a certified public accountant. Since January 1995, he has been Executive Director of Patton Boggs, LLP, a Washington, D.C. law firm. From March 1994 to January 1995, he was an independent 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. Stanley S. Binder, 57, Director since 1991. Mr. Binder joined the Company in July 1989 and has served as Chairman of the Board since February 1991 and Chief Executive Officer since July 1990. Mr. Binder also served as President of the Company from July 1989 until May 1998, Chief Operating Officer from 1989 to June 1990 and Chief Financial Officer from 1989 until July 1993. Mr. Binder is also an independent general partner in the Special Situations Fund III, L.P. ("SSF III"), a substantial investor in the Company. Mr. Binder is a past director of the American Electronics Association and a past chairman of its New Jersey Council. Mr. Binder is a member of the Executive, Nominating and Technology and Strategic Planning Committees of the Board. Richard D. Condon, 64, Director since 1992. Mr. Condon is currently an independent consultant. From January 1996 to October 1998, Mr. Condon was a consultant to and director of Amherst Process Instruments, Inc., a scientific instrumentation company. Prior thereto, from 1989 until December 1995, Mr. Condon was a consultant to and director of Analytical Technology, Inc., Boston, Massachusetts, a scientific instrumentation company. He is a member of the Executive Compensation and Technology and Strategic Planning Committees of the Board. John H. Davies, 62, Director since 1992. Mr. Davies joined the Company in October 1967 and has been Vice Chairman of the Company since May 1998. From January 1992 to May 1998, he served as Executive Vice President of the Company. He has been 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, 57, Director since 1986. Mr. Harte 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. From 1991 until January 1997, Mr. Harte also was Vice President, Special Projects, of the Company. He is a member of the Audit and Finance, Executive Compensation and Nominating Committees of the Board. Lorraine M. Lavet, 38, Director since 1999. Ms. Lavet has been Chief Operating Officer of the American Electronics Association since September 1996. Prior thereto, from September 1994 to August 1996, Ms. Lavet was President and Chief Executive Officer of the Fairfax County Chamber of Commerce. James C. McGrath, 56, 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. Kenneth S. Wood, 47, Director since 1999. Mr. Wood joined the Company in 1990 and has been President and Chief Operating Officer of the Company since May 1998. From January 1992 until May 1998, he served as Vice President of Operations of Barringer Instruments Inc. He served as Secretary of the Company from March 1993 until May 1998. Committees of the Board of Directors The Company has an Executive Committee, an Executive Compensation Committee, an Audit and Finance Committee, a Nominating Committee, and a Technology and Strategic Planning Committee The Executive Committee exercises such authority as is delegated to it from time to time by the full Board of Directors. The Executive Committee is presently comprised of Messrs. Abernathy, Binder (Chairman) and Davies. In 1998, the Executive Committee met once. 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 participants and establishing performance goals. The Compensation Committee is presently comprised of Messrs. Abernathy, Condon, Harte and McGrath (Chairman). In 1998, the Compensation Committee met five 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), Harte and McGrath. In 1998, the Audit Committee met two times. The Nominating Committee receives recommendations for, reviews and evaluates the qualifications of, 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 is presently comprised of Messrs. Binder, Davies and Harte (Chairman). In 1998, the Nominating Committee did not meet. The Nominating Committee will consider appropriate persons proposed by security holders as potential nominees for membership on the Board of Directors. Pursuant to the Company's by-laws, a stockholder wishing to nominate a person for election to the Board of Directors must deliver written notice of the name of the proposed nominee to the Secretary of the Company at its principal executive office not less than 60 nor more than 90 days prior to the date of the meeting; provided, however, that if the date of the meeting is first publicly announced or disclosed less than 70 days prior to the date of the meeting, such advance notice must be given not more than ten days after such date is first so announced or disclosed. Any stockholder desiring to nominate any person for election as a director of the Company must deliver with such notice a statement in writing setting forth the name of the person to be nominated, the number and class of all shares of each class of stock of the Company beneficially owned by such person, the information regarding such person required by paragraphs (a),(e) and (f) of Item 401 of Regulation S-K adopted by the Securities and Exchange Commission, such person's signed consent to serve as a director of the Company if elected, the stockholder's name and address and the number and class of all shares of each class of stock of the Company beneficially owned by the stockholder. 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 1998, the Technology Committee met two times. Meetings of the Board of Directors The Board held nine meetings in 1998. No director of the Company attended fewer than 75% of the aggregate number of meetings of the Board and committees of the Board during 1998, or the portion thereof during which he or she served as a director or committee member. Compensation of Directors 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 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 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." Executive Compensation The following table sets forth a summary of all compensation paid for the past 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 $100,000 or more (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE Annual Compensation Long-Term Compensation Other Annual Restricted Securities All Other Name and Principal Fiscal Compen- Stock Underlying LTIP Compensation Position Year Salary($) Bonus(1)($) sation($) Awards($) Options/SARs(#) Payouts($) ($)(1) ---- --------- ----------- --------- --------- --------------- ---------- ---------- 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 1997 130,000 170,000 -- -- 31,500 -- 8,480 Chief 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
- ------------------ * Amounts converted to US 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% of the next 5% 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 $12,720 for Messrs. Binder, Davies, Wood and Rosenfeld, respectively. Effective January 1, 1998, the Company adopted the SERP Plan. The SERP Plan provides eligible participants with certain retirement benefits supplemental to the Company's 401(k) Plan. Pursuant to the SERP Plan, the Company will make annual contributions to the account of each participant equal to a variable percentage of the participant's base salary and annual cash bonus depending on the Company's achievement of certain performance targets. The actual percentage contribution will be determined by the Compensation Committee, subject to certain parameters. A participant will become vested under the SERP Plan after five years of participation therein. A participant may elect to receive benefits under the SERP Plan commencing at age 60 and is entitled to receive either a lump-sum payment of his or her account balances upon retirement or to use the account balance to purchase an annuity. In the event of the termination of a participant's employment under certain circumstances set forth in the SERP Plan, the participant will be entitled to receive his or her account balance whether or not the participant has become vested under the SERP Plan. Currently, each of the Named Executive Officers participates in the SERP Plan. The following table summarizes certain information relating to the grant of options to purchase Common Stock to each of the Named Executive Officers:
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1) Number of Percent of Total Securities Options/SARs Potential realizable value at Underlying Granted to Exercise assumed annual rates of stock Options/SARs Employees in or Base Price Expiration price appreciation for option Name Granted (#)(2)(3) Fiscal Year ($/sh) Date term 5% 10% -- --- Stanley S. Binder 87,500 19.1% $ 6.19 10/21/08 $340,625 $863,211 John H. Davies 34,000 7.4 6.19 10/21/08 132,357 335,419 Kenneth S. Wood 31,500 6.9 6.19 10/21/08 122,625 310,756 Richard S. Rosenfeld 27,300 6.0 6.19 10/21/08 106,275 269,322
- --------------- (1) The Company did not grant any stock appreciation rights in 1998. (2) Twenty-five percent of each option grant is exercisable after the first anniversary of the date of grant, 50% is exercisable after the second anniversary, 75% is exercisable after the third anniversary and 100% is exercisable after the fourth anniversary. (3) Represents repricing of options previously granted. See "Option Repricing." Options Exercised in Last Fiscal Year and Fiscal Year-End Option Values The following table sets forth information with respect to the Named Executive Officers concerning the exercise of stock options during 1998 and unexercised options held by such Named Executive Officers as of December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES Number of Unexercised Securities Underlying Value of Unexercised Shares Options/SARs in-the-money Options Acquired Value at Year-End(#) at Year-End($)(1) Name on Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable ---- --------------- ------------ ------------------------- ------------------------- Stanley S. Binder - - $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 - ----------
(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 directors pursuant to the Company's 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 $6.19 per share, the closing price of the Common Stock on the NASDAQ National Market on October 21, 1998. Options granted pursuant to the Repricing vest over a four-year period, with 25% of the options becoming exercisable in each year commencing one year after the date of the Repricing and will expire ten years after the Repricing. The following table sets forth all stock option/SAR repricings during the fiscal year ended December 31, 1998 and during the Company's last ten fiscal years relating to the Named Executive Officers:
TEN-YEAR OPTION/SAR REPRICINGS Length of Number of Market original securities price of Exercise option term underlying stock at price at remaining at options/SARs time of time of New date of repriced or repricing or repricing or exercise repricing or Name Date amended(#) amendment($) amendment($) price($) amendment ---- ---- ---------- ------------ ------------ -------- --------- Stanley S. Binder 10/21/98 50,000 $6.19 $9.375 $6.19 8.3 yrs. 10/21/98 37,500 6.19 11.78 6.19 9.1 yrs. John H. Davies 10/21/98 25,000 6.19 9.375 6.19 8.3 yrs. 10/21/98 9,000 6.19 11.78 6.19 9.1 yrs. Kenneth S. Wood 10/21/98 22,500 6.19 9.375 6.19 8.3 yrs. 10/21/98 9,000 6.19 11.78 6.19 9.1 yrs. Richard S. Rosenfeld 10/21/98 19,500 6.19 9.375 6.19 8.3 yrs. 10/21/98 7,800 6.19 11.78 6.19 9.1 yrs.
For an explanation of the reasons and bases for the Repricing, see "Report of the Executive Compensation Committee on Executive Compensation--Option Repricing." 1997 Stock Compensation Program In May 1997, the Company adopted 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 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 Compensation Committee. Options and awards granted under the Stock Compensation Program may have an exercise or payment price as established by the 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 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 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 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. 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 were to 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 options 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 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. See "Option Repricing". 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 April 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 at 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. Name Number of Shares Purchased Principal Amount of Notes 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 John J. Harte 10,000 83,650 Lorraine M. Lavet 10,000 97,400 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, 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. Both 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, respectively. 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, each 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. Compensation Committee Interlocks and Insider Participation The Company's Compensation Committee is comprised of Messrs. Abernathy, Condon, Harte and McGrath. 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. REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION The Executive Compensation Committee of the Board of Directors, consisting entirely of non-management directors, approves all policies under which compensation is paid or awarded to the Company's executive officers. The Committee is comprised of Messrs. Abernathy, Condon, Harte and McGrath. Compensation Philosophy The Company's executive compensation program is designed to attract and retain superior executive talent, to provide incentives and rewards to executive officers who will contribute to the long-term success of the Company and to closely align the interests of executives with those of the Company's stockholders. The principal elements of the Company's executive compensation program consist of: (i) base annual salary, (ii) the Company's Annual Incentive Plan and (iii) grants and awards made pursuant to the Company's Stock Compensation Program. The Committee evaluates the level and adequacy of executive compensation through a process which includes an informal analysis of the compensation practices of similarly situated entities in the Company's peer group as well as those of other applied technology companies. During 1997, the Company retained the Hay Group to make recommendations to the Committee regarding the structure and level of executive compensation. The Committee incorporated a number of the suggestions made by the Hay Group in determining 1998 compensation for the Company's key executives. The Committee does not rely on quantitative methods or mathematical formulas in setting compensation for a particular executive officer. Instead, the members of the Committee determine appropriate compensation levels after examining a number of factors, including the compensation practices of comparable companies, the Company's historical performance and future prospects, the job responsibilities of each executive, the past and expected contributions of individual executives and other criteria deemed relevant by the Committee. Annual Base Salaries The Company has entered into employment agreements with each executive officer, other than Mr. Davies, which specify minimum annual base salaries. See "Employment Agreements." Each year, annual base salaries for the executive officers are proposed by the Chief Executive Officer and are evaluated by the Committee based upon a number of criteria, including the base salary of the executive in the prior year, the executive's job responsibilities, the Committee's subjective evaluation of the executive's performance and contribution to the success of the Company, relevant inflation rates and other factors. The Committee also considers external factors, including the market for qualified executives, and the annual base salaries for comparable positions at peer companies. Adjustments may be made in an executive's base compensation at the discretion of the Executive Compensation Committee if deemed warranted by individual circumstances. Annual Incentive Plan At the recommendation of the Hay Group, effective January 1, 1998 the Company eliminated its previous bonus program and adopted the Annual Incentive Plan. Pursuant to the Annual Incentive Plan, at the beginning of each year the Committee, with input from the Chief Executive Officer, establishes team goals for the Company's executive management, including certain performance goals, such as the achievement of sales and net income budgets, manufacturing milestones and market share targets. The Committee also sets individual goals for each executive officer. The individual goals typically reflect the team goals, but also cover matters related to the individual's area of responsibility or individual performance, such as the achievement of sales targets, research and development goals or educational and professional accomplishments. Under the Annual Incentive Plan, each individual is entitled to a targeted bonus (expressed as a percentage of base salary) assuming that all of the group and individual goals are met. The actual bonus paid for any year varies from the targeted amount based on the level of achievement of the team and individual goals, but may not exceed 100% of the executive's base salary. Aggregate bonuses payable under the Annual Incentive Plan may not exceed 10% of the Company's pre-tax income. For fiscal 1998, bonuses aggregating $262,000 were paid under the Annual Incentive Plan. See "Executive Compensation--Summary Compensation Table." The aggregate bonuses paid for 1998 were significantly lower than those paid in 1997 when the Company's performance significantly exceeded expectations. The Committee believes that the bonus limitations described above will assure that annual bonuses remain closely tied to the achievement of the Company's performance goals. Stock Options The third component of executive compensation is awards made pursuant to the Company's Stock Compensation Program. Under the Stock Compensation Program, the Committee has the right to grant stock options and other awards to qualifying executives. Stock options are designed to align the interests of the Company's executives more closely with those of the stockholders. The Company typically grants stock options at an exercise price equal to the fair market value of the Common Stock on the date of grant. These options generally vest at the rate of 25% per year, with the first installment vesting at the end of one year from the date of employment (for options granted upon initial employment) or the date of grant and are typically exercisable within ten years from the date of grant. The Committee believes that the granting of stock options provides powerful incentives for the creation of long-term value for the Company's stockholders as the full benefit of the stock options cannot be realized unless stock price appreciation occurs over a number of years. The size of individual stock grants are based upon the recommendations of the Chief Executive Officer and the Committee's subjective evaluation of the Company's performance and prospects, the responsibilities and contributions of the individual recipient, the practices of comparable companies and other factors deemed relevant by the Committee, including stock option grants made in prior years. Option Repricing In the fourth quarter of 1998, the trading price of the Common Stock declined significantly as a result of factors which the Committee believed were outside the control of the Company's executive officers. These factors included the general decline in stock prices of small capitalization stocks, the decline in stock prices of companies in the security technology industry, which, in the Committee's view, resulted primarily from uncertainty over the timing of procurements to be made by the Federal Aviation Administration, and the unexpected difficulties encountered in finding suitable acquisition candidates. As a result of the decline in the price of the Common Stock, the exercise price of options previously granted by the Committee under the Stock Compensation Program exceeded the market price of the Common Stock, thereby significantly undermining the incentives intended to be created by the option grants. To preserve that incentive, in October 1998, the Board of Directors approved the cancellation of the underwater options and the granting of replacement options with an exercise price of $6.19 per share, the closing price of the Common Stock on the date of the repricing (the "Repricing"). In exchange for the repricing of their options, option holders were required to re-start the vesting periods attributable to their option grants. In addition, the vesting period of repriced options held by independent directors was changed from one year to a four-year with 25% of the options vesting in each year. See "Option Repricing." Stock Purchase Program During 1998, the Committee discussed ways in which to increase the stock ownership of the Company's directors and executive officers. The Committee sought to respond to investor concerns that management did not own a sufficient stake in the Company. The Committee studied a number of alternatives to increase management's ownership position, including the granting of additional stock options and instituting a program requiring directors and senior executives to maintain minimum levels of stock ownership. The Committee is continuing to study this issue. However, in order to address these concerns promptly, in December 1998 the Board of Directors approved a one-time stock purchase program pursuant to which the Company sold an aggregate of 153,000 shares of Common Stock to the senior executive officers and directors at a purchase price of $8.375 per share, the closing price of the Common Stock on the date of the Board action. In addition, pursuant to this stock purchase program, 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. Pursuant to this stock purchase program, the executives and directors paid for the shares of Common Stock primarily in the form of non-recourse promissory notes secured by pledges of the underlying Common Stock. See "Stock Purchase Program." Compensation of the Chief Executive Officer As disclosed in last year's proxy statement, in 1997 the Company entered into a new five-year employment agreement with Mr. Binder. See "Employment Agreements." Pursuant to that agreement, Mr. Binder received a base salary of $250,000 in 1998. Mr. Binder also received a cash bonus of $117,000 under the Annual Incentive Plan, which was significantly lower than the bonus paid to Mr. Binder in 1997. The lower bonus paid in 1998 reflected the Company's financial performance during the year as compared to 1997. In addition, Mr. Binder received a $65,000 special bonus pursuant to this terms of his employment agreement because the Company's EBITDA (as defined in Mr. Binder's agreement) for 1998 exceeded budget. The Committee considered the overall level of Mr. Binder's cash compensation appropriate in view of Mr. Binder's leadership of the Company through its evolution into the world's leading manufacturer of trace chemical detection equipment, the continued growth in the Company's business and market share, particularly in a year when other manufacturers experienced decreased unit sales, the Company's balance sheet strength and Mr. Binder's contributions to the building of the Company's infrastructure and the increased capabilities and expertise of the senior management team put into place by Mr. Binder. The Committee also considered information provided to it by the Hay Group, which indicated that Mr. Binder's earnings were below peer group averages for the chief executive officers of similarly situated companies. In connection with the Repricing, the Committee granted Mr. Binder options on 87,500 shares of Common Stock. Those options vest over a four-year period. The primary basis for the Committee's determination to reprice Mr. Binder's options was to preserve a strong incentive for him to continue to increase the value of the Company during the remainder of his employment term. The specific bases for the Committee's determinations regarding Mr. Binder's compensation in 1998 included his aggressive leadership, which resulted in the significant strengthening of the Company's balance sheet and the Company's competitive position; his role in completing the Company's April 1998 public offering, his commitment to the development and implementation of the Company's strategic plan, his contribution to the building of the Company's infrastructure and his contributions to the achievement of the Company's performance goals. Pursuant to the stock purchase program described above, in December 1998 the Company sold 50,000 shares of Common Stock to Mr. Binder for $8.375 per share. See "Stock Purchase Program." THE EXECUTIVE COMPENSATION COMMITTEE James C. McGrath (Chairman) John D. Abernathy Richard C. Condon John J. Harte COMPANY STOCK PERFORMANCE GRAPH The following graph provides a comparison of the cumulative total return of the Company's Common Stock with the NASDAQ Stock Market and a Peer Index consisting of the NASDAQ Non-Financial Stocks SIC 0100-5999, 7000-9999 over a period starting from December 31, 1993 and ending on December 31, 1998. The cumulative total returns were prepared by The University of Chicago Graduate School of Business. The graph assumes an initial investment of $100 in each of the Company's Common Stock, the NASDAQ Stock Market and the Peer Index consisting of NASDAQ Non-Financial Stocks SIC 0100-5999, 7000-9999 after the close of the market on December 31, 1993 and that all dividends, if any, were reinvested. [PERFORMANCE GRAPH APPEARS HERE]
Company/Index Name Base Period Indexed/Cumulative Returns - ------------------ ----------- ---------------------------------------------------------------- 12/1993 12/1994 12/1995 12/1996 12/1997 12/1998 ------- ------- ------- ------- ------- ------- Barringer Technologies Inc. 100.0 24.6 6.1 91.4 156.9 94.2 NASDAQ Stock Market 100.0 97.0 136.2 166.8 203.7 282.0 (US & Foreign) NASDAQ Non-Financial Stock 100.0 96.2 134.0 162.8 190.7 280.0 SIC 0100-5999, 7000-9999 (US & Foreign)
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 file such reports on a timely basis. 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 were 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. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of April 1, 1999, the number of shares of Common Stock, Class A Convertible Preferred Stock and Class B Convertible Preferred Stock owned by (i) each Named Executive Officer, (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 April 1, 1999, there were 7,393,454 shares of Common Stock, 38,616 shares of Class A Convertible Preferred Stock and 22,500 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 or Class B Convertible Preferred Stock. The business address for all of the executive officers and directors of the Company is 30 Technology Drive, Warren, New Jersey 07059.
Beneficial Ownership Beneficial Ownership Beneficial Ownership of Class A Convertible of Class B Convertible of Common Stock(1) Preferred Stock Preferred Stock Number of Percent of Number of Percent of Number of Percent of Shares Class Shares Class Shares Class Name Stanley S. Binder(2) -- -- -- -- 216,136 2.9 John H. Davies(3) -- -- -- -- 160,732 2.1 John J. Harte(4) -- -- -- -- 70,100 * Richard D. Condon(5) -- -- -- -- 51,250 * John D. Abernathy(6) -- -- -- -- 44,454 * James C. McGrath(7) -- -- -- -- 41,250 * Kenneth S. Wood(8) -- -- -- -- 96,636 1.3 Lorraine M. Lavet -- -- -- -- 10,000 * Richard S. Rosenfeld(9) -- -- -- -- 84,036 1.1 All directors and executive officers as a group consisting of nine persons -- -- -- -- 774,594 9.9 Austin W. Marxe (10) 153 E. 53rd St. NY, NY 10022 -- -- -- -- 890,821 11.6 Corbyn Investment Management, Inc.(11) -- -- -- -- 612,150 8.3 2330 W. Joppa Road Suite 108 Lutherville, MD 21093 Lionheart Group, Inc. -- -- -- -- 423,100 5.7 230 Park Avenue New York, NY 10169 William D. Witter (12) 153 East 53rd Street -- -- -- -- 655,140 8.9 New York, NY 10022 Angelo Logozzo Ex. UW Frederick D'Amico (13) 3,918 10.1 -- -- 1,417 * 415 S. 3rd Street Hamilton, MT 59840 Max Gerber(14) -- -- 12,500 55.6 4,447 * 26 Broadway New York, NY 10004-1776 Paul Spitzberg(15) -- -- 10,000 44.4 3,558 * 16 Whiteowl Road Tenafly, NJ 07670
- ------------------- * Less than 1% (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 April 1, 1999 for each person or entity. (2) Includes 100,000 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of April 1, 1999 and 12,500 shares of Common Stock issuable upon exercise of warrants owned by Mr. Binder. Excludes shares of Common Stock beneficially owned by SSF III of which Mr. Binder is an independent general partner. Mr. Binder disclaims any beneficial interest in such shares. (3) Includes 69,500 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of April 1, 1999 and 12,500 shares of Common Stock issuable upon the exercise of warrants owned by Mr. Davies. (4) Includes 22,500 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of April 1, 1999 owned by Mr. Harte. (5) Includes 22,500 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of April 1, 1999 and 5,000 shares of Common Stock issuable upon the exercise of warrants owned by Mr. Condon. (6) Includes 22,500 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of April 1, 1999 and 2,500 shares of Common Stock issuable upon the exercise of warrants owned by Mr. Abernathy. (7) Includes 22,500 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of April 1, 1999 owned by Mr. McGrath. (8) Includes 60,000 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of April 1, 1999 owned by Mr. Wood. (9) Includes 50,000 shares of Common Stock issuable upon the exercise of options exercisable within 60 days of April 1, 1999 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's child. (10) Includes (i) 393,579 shares of Common Stock and 229,167 shares of Common Stock issuable upon the exercise of warrants owned by SSF III, (ii) 134,742 shares of Common Stock and 83,333 shares of Common Stock issuable upon the exercise of warrants owned by Special Situations Cayman Fund, L.P. (the "Cayman Fund"), and (iii) 50,000 shares of Common Stock owned by Special Situations Technology Fund, L.P. ("SST"). 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, the Cayman Fund and SSTF. Mr. Binder is an independent general partner of SSF III. Mr. Binder disclaims beneficial ownership of all shares held by SSF III. (11) Consists of 326,150 shares of Common Stock owned by Corbyn Investment Management, Inc. and 286,000 shares of Common Stock owned by Greenspring Fund, Inc. (12) Includes 575,140 shares of Common Stock owned by William D. Witter, Inc. ("WDWI") and 80,000 shares of Common Stock owned by Penfield Partners, L.P. ("PP"). William D. Witter owns 98.6% of WDWI. WDWI is the sole general partner of Pine Creek Advisors Limited Partnership ("PCA") which is a general partner of PP. (13) Includes 1,417 shares of Common Stock issuable upon conversion of the Class A Convertible Preferred Stock. (14) Includes 4,447 shares of Common Stock issuable upon conversion of the Class B Convertible Preferred Stock. (15) Includes 3,558 shares of Common Stock issuable upon conversion of the Class B Convertible Preferred Stock. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In July 1998, the Company made a $500,000 non-recourse loan to Mr. Binder. The loan is repayable on July 5, 2003 and bears interest at the rate of 5.68% per annum, payable annually. Mr. Binder's obligation to repay the loan is secured by 49,000 shares of Common Stock. In addition, the Company has made certain loans to the Named Executive Officers and directors. See "Exercise Program" and "Stock Purchase Program." Mr. Abernathy is currently the Executive Director of Patton Boggs, LLP, a Washington, D.C. law firm. During 1998, the Company retained Patton Boggs, LLP to represent the Company in various matters and has retained such firm in 1999. PROPOSAL TWO INCREASE IN AGGREGATE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR GRANT UNDER THE BARRINGER TECHNOLOGIES INC.1997 STOCK COMPENSATION PROGRAM In February 1997, the Board of Directors adopted, and in May 1997, the stockholders approved, 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. 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 30 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 are currently 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 again becomes eligible for grant under the Stock Compensation Program. The Company receives no consideration for grants of options or awards under the Stock Compensation Program. The Stock Compensation Program is 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 has 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 has 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 is 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 has 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 One -- 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 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 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 automatically vest upon the occurrence of a "Change in Control Event." Options and awards granted under the Stock Compensation Program are 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 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 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 on 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 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 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. 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 were to 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 options 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 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. See "Proposal One -- Election of Directors -- Option Repricing". The following table reflects the stock options grants made by the Company under the Stock Compensation Program to the Named Executive Officers and the groups identified below. The Company has not granted any stock appreciation rights under the Stock Compensation Program. Name Number of Shares Subject to Option Stanley S. Binder 87,500 John H. Davies 34,000 Kenneth S. Wood 31,500 Richard S. Rosenfeld 27,300 All executive officers as a group 180,300 All directors who are not executive officers as a group * All employees, including all current 223,400 officers who are not executive officers - --------------------- * Prior to the Repricing, options exercisable for an aggregate of 24,000 shares of Common Stock had been granted to non-employee directors under the Independent Director Plan. In connection with the Repricing, all of such options were canceled and new options exercisable for an aggregate of 24,000 shares of Common Stock were granted to such directors outside the Stock Compensation Program. See "Proposal 1--Election of Directors--1997 Stock Compensation Program." The Company believes that in order to continue to attract qualified personnel in the future, and in order to retain current key employees, it must have the flexibility to offer stock options and other awards under the Stock Compensation Program. Accordingly, in March 1999, the Board of Directors adopted a resolution approving the amendment to the Stock Compensation Program and directing that it be presented to the stockholders at the Meeting for their approval. If the amendment to the Stock Compensation Program is adopted, the number of shares of Common Stock issuable under the Employee Plans will be increased by 500,000, raising the total number or shares of Common Stock reserved for issuance under the Stock Compensation Program to 1,100,000 shares. After giving effect to such increase, a total of 696,300 shares of Common Stock would be available for future grants under the Stock Compensation Program, constituting 8.2% of the total shares of Common Stock outstanding as of April 1, 1999 on a fully diluted basis. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL TWO. PROPOSAL THREE 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, 1999. 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, 1999. 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 THREE. STOCKHOLDER PROPOSALS Any proposal intended to be presented by a stockholder at the 2000 Annual Meeting of Stockholders must be received by the Company at the address specified below no later than the close of business on December 18, 1999 to be considered for inclusion in the Proxy Statement for the 2000 Annual Meeting. Any proposal should be addressed to Secretary, Barringer Technologies Inc., 30 Technology Drive, Warren New Jersey 07059 and should be sent by certified mail, return receipt requested. Under the Company's by-laws, a stockholder must give advanced written notice of any proposal the stockholder wishes to make at the Annual Meeting. To be timely, a stockholder's notice of any proposal or the name of any person to be nominated by any stockholder for election as a director must be delivered to the Secretary of the Company at its principal executive office not less than 60 nor more than 90 days prior to the date of the meeting; provided, however, that if the date of the meeting is first publicly announced or disclosed less than 70 days prior to the date of the meeting, such advance notice shall be given not more than ten days after such date is first so announced or disclosed. Any stockholder who gives notice of any such proposal must deliver with such notice the text of the proposal to be presented and a brief written statement of the reasons why the stockholder favors the proposal setting forth the stockholder's name and address, the number and class of all shares of each class of stock of the Company beneficially owned by the stockholder and any material interest of the stockholder in the proposal. Any stockholder desiring to nominate any person for election as a director of the Company must deliver with such notice a statement in writing setting forth the name of the person to be nominated, the number and class of all shares of each class of stock of the Company beneficially owned by such person, the information regarding such person required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and Exchange Commission, such person's signed consent to serve as a director of the Company if elected, the stockholder's name and address and the number and class of all shares of each class of stock of the Company beneficially owned by the stockholder. 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 or postponements 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 /s/ Richard S. Rosenfeld Richard S. Rosenfeld Vice President - Finance, Chief Financial Officer Secretary and Treasurer April 16, 1999 A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1998, 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. BARRINGER TECHNOLOGIES INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS, MAY 12, 1999 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 12, 1999 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) PLEASE MARK BOXES [ ] IN BLUE OR BLACK INK 1. Election of directors. FOR all nominees listed below WITHHOLD AUTHORITY (except as marked to the to vote for all nominees contrary below) [ ] listed below [ ] To withhold authority for any individual nominee, print that nominee's name on the space provided below. ________________________________________________________________________________ John D. Abernathy, Stanley S. Binder, Richard D. Condon, John H. Davies, John J. Harte, Lorraine M. Lavet, James C. McGrath and Kenneth S. Wood 2. Proposal to increase the shares of Common Stock reserved for issuance pursuant to the Barringer Technologies Inc. 1997 Stock Compensation Program For [ ] Against [ ] Abstain [ ] 3. Ratification of BDO Seidman, LLP as independent public accountants for 1999. For [ ] Against [ ] Abstain [ ] If you have noted an address change or comments on either side of this card, mark here: [ ] Dated: _________________________, 1999 _____________________________________ 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. EX-99 2 APPENDIX BARRINGER TECHNOLOGIES INC. AMENDED AND RESTATED 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." 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 1,100,000 shares of Common Stock. Up to 1,000,000 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. 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: 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% 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% 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 Naked Rights Which May be Purchased Period Following Date of Grant 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. 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% 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. 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. -----END PRIVACY-ENHANCED MESSAGE-----