<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(c) (2)
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
The Langer Biomechanics Group, Inc. _
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee:
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(I) (1) 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
Rule0-11(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:
<PAGE>
THE LANGER BIOMECHANICS GROUP, INC.
450 Commack Road
Deer Park, New York 11729
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS - OCTOBER 2, 1998
------------------------
TO THE SHAREHOLDERS OF THE LANGER BIOMECHANICS GROUP, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of The
Langer Biomechanics Group, Inc. (the "Company") will be held at the Company's
offices located at 450 Commack Road, Deer Park, New York 11729, on October 2,
1998, at 9:00 A.M., for the following purposes:
1. To elect a Board of Directors to serve until the next Annual Meeting of
Shareholders and until their successors are duly elected and qualified;
2. To ratify the selection by the Board of Directors of Deloitte & Touche
LLP to serve as independent auditors for the fiscal year ending
February 27, 1999, and;
3. To transact such other business as may properly be presented for action
at the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on August 7,
1998 as the record date for the determination of shareholders entitled
to notice of, and to vote at, this meeting or any adjournment thereof.
Holders of a majority of the outstanding shares must be present in
person or by proxy in order for the meeting to be held. WHETHER OR NOT
YOU EXPECT TO ATTEND THE ANNUAL MEETING, YOUR PROXY VOTE IS IMPORTANT.
ACCORDINGLY, YOU ARE REQUESTED TO MARK, SIGN AND DATE THE ENCLOSED
PROXY FORM AND RETURN IT IN THE ACCOMPANYING STAMPED ENVELOPE. The
giving of such proxy will not affect your right to revoke such proxy
before it is exercised or to vote in person should you later decide to
attend the meeting.
All shareholders are cordially invited to attend this meeting.
By Order of the Board of Directors
DR. JUSTIN WERNICK
Secretary
August 14, 1998
IT IS IMPORTANT THAT THE ENCLOSED PROXY FORM BE COMPLETED
AND RETURNED PROMPTLY.
<PAGE>
THE LANGER BIOMECHANICS GROUP, INC.
450 Commack Road
Deer Park, New York 11729
-------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 2, 1998
SOLICITATION AND REVOCATION OF PROXIES
This statement is furnished in connection with the solicitation by
the Board of Directors of The Langer Biomechanics Group, Inc., a New York
corporation (the "Company"), of proxies to be voted at the Annual Meeting of the
Shareholders of the Company to be held on October 2, 1998 at 9:00 A.M., at the
Company's offices located at 450 Commack Road, Deer Park, New York 11729, and
any adjournments thereof.
A form of proxy is enclosed for use at the meeting. The proxy may be
revoked by a shareholder at any time before it is voted by execution of a proxy
bearing a later date or by written notice to the Secretary before the meeting,
and any shareholder present at the meeting may revoke his proxy thereat and vote
in person if he so desires. When such proxy is properly executed and returned,
the shares it represents will be voted at the meeting in accordance with any
instructions noted thereon. If no direction is indicated, all shares represented
by valid proxies received pursuant to this solicitation (and not revoked prior
to exercise) will be voted FOR the election of the nominees of directors named
herein, FOR the ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for fiscal 1999, and, as recommended by the Board
of Directors, with regard to all other matters or, if no such recommendation is
given, in their own discretion.
The cost of soliciting proxies on behalf of the Board of Directors will
be borne by the Company. In addition to solicitation by mail, proxies may be
solicited by directors, officers or regular employees of the Company (who will
receive no extra compensation for these services) in person or by telephone or
telefax. The Company will also request brokerage houses, custodians, nominees
and fiduciaries to forward these proxy materials to the beneficial owners of the
common stock, par value $.02 per share, of the Company ("Common Stock") and will
reimburse such holders for their reasonable expenses in connection therewith.
The approximate date of mailing of this proxy statement is August 14, 1998.
Only shareholders of record at the close of business on August 7, 1998
will be entitled to notice of, and to vote at, the Annual Meeting. At the close
of business on such record date the Company had issued and outstanding 2,586,281
shares of Common Stock. Each share entitles the holder thereof to one vote and a
vote of the majority of shares present, or represented, and entitled to vote at
the meeting is required to approve each proposal to be acted upon at the
meeting.
All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the shareholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum but are not counted for any purpose in determining whether a matter has
been approved.
NOMINATION AND ELECTION OF DIRECTORS
Four persons are nominees for election to hold office until the next
annual meeting and until their respective successors are elected and qualified.
Unless authority to vote for the election of directors shall have been withheld,
it is intended that proxies in the accompanying form will be voted at the
meeting for the election of the four nominees named below. If any nominees, for
any reason presently unknown to the Company, should refuse or be unable to
serve, the shares represented by the proxies will be voted for such person as
shall be designated by the Board of Directors to replace any such nominee.
The following information is submitted concerning the nominees named
for election as directors based upon information received by the Company from
such person:
<PAGE>
<TABLE>
<CAPTION>
Director Director
Nominee Age Office Since
-------- --- ------ --------
<S> <C> <C> <C>
Kenneth Granat 53 Chairman of the Board 1995
Gary L. Grahn 54 President, Chief Executive Officer
And Director 1995
Dr. Justin Wernick 62 Chief Medical Director,
Secretary and Director 1971
Thomas I. Altholz 47 Director 1997
</TABLE>
Mr. Granat has been Chairman of the Board of Directors of the Company
since January 4, 1995. Since 1987, he has been President of Active Screw and
Fastener Inc., an Elk Grove Village, Illinois company engaged in full line
distribution of fasteners with plants in Chicago, Illinois and Tucson, Arizona.
Since 1991, he has also been Vice President and a Director of Trigran
Investments Inc., Deerfield, Illinois, the general partner and investment
advisor for Trigran Investments, L.P., a more than 10 percent shareholder of the
Company. Mr. Granat holds a J.D. from the University of Illinois as well as a
B.B.A. degree in Business from the University of Michigan.
Mr. Grahn has been President and Chief Executive Officer of the Company
since January 2, 1995 and a Director since August 1995. From 1992 to 1994, he
was President of PML Inc., a management consulting firm which specializes in
marketing and business development assignments for consumer businesses. From
1989 to 1992, Mr. Grahn was Vice President - General Manager of R. Stevens,
Inc., a subsidiary of Delphi Technology, Inc., a privately-held company which
markets Automated Photo Machines. Previously, he has been Executive Vice
President for the American Photo Group, a multi-plant processor of consumer
products, located in Atlanta, Georgia. He holds an M.B.A. in Marketing
Management from the University of Rochester Graduate School of Business and a
B.A. in Mathematics/Economics from Gettysburg College.
Dr. Wernick is a co-founder of the Company and has been Executive Vice
President (until July 1, 1997), Secretary and a Director of the Company since
its formation. Effective July 1, 1997, Dr. Wernick has been serving as Chief
Medical Director of the Company. Dr. Wernick is a Diplomate of the American
Board of Podiatric Orthopedics, a Fellow of the American College of Foot
Orthopedics and of the American Academy of Podiatric Sports Medicine and a
member of several other professional societies. In 1975, he was the President of
the Nassau County division, Podiatry Society of the State of New York and was
presented the Podiatrist of the Year Award from that Society in that same year.
Since 1969, he has held various academic positions at the New York College of
Podiatric Medicine and since 1979 has been serving as a professor with the
Department of Orthopedic Sciences at the New York College of Podiatric Medicine.
He has guest lectured and directed educational programs, both nationally and
internationally, at many other podiatric colleges and seminars during the past
20 years. He has co-authored a book entitled "Practical Manual for a Basic
Approach to Biomechanics" in 1972 and a reported entitled "Radiologic Study of
Motion of the Foot within a Ski Boot" which was published in the Journal of the
American Podiatry Association for which he is also a corresponding consultant.
Dr. Wernick received his podiatric medical degree from M.J. Lewi College of
Podiatry (now known as the New York College of Podiatric Medicine).
Mr. Altholz has been a Director since June 1997. Mr. Altholz has been
President, owner and CEO of TIA Solutions, Highland Park, Illinois, a business
consulting firm, since 1996. From 1980 to November 1995, he was President and
owner of Inlander Steindler Paper Company (ISP), a paper distribution company
with regional sales and warehousing centers in the Midwest, which company was
acquired by Alco Standard in November 1995. He has served on several industry
advisory Boards such as Minnesota Mining and Manufacturing (3M) and Scott Paper,
and was Chairman of Affiliated Paper Companies. He is a member of the Board of
Directors of Regal Ware, Inc., a company engaged in manufacturing and marketing
of housewares products, and Northmoor Country Club and also is a member of the
Board of Trustees of Ripon College. Mr. Altholz received his B.A. in Economics
from Ripon College in Ripon, Wisconsin.
The Board of Directors held six meetings during the fiscal year ended
February 28, 1998. Each Director attended all of these meetings.
While the Company has an Audit Committee, there are no Nominating or
Compensation Committees. The Audit Committee was formed to review the adequacy
of the Company's internal controls and to meet periodically with management and
independent auditors. The Committee, which currently consists of Messrs. Granat
and Altholz, did not meet in fiscal 1998.
<PAGE>
BENEFICIAL OWNERSHIP OF THE COMPANY'S SECURITIES
The following table sets forth, as of August 7, 1998, the shares of
Common Stock owned beneficially and of record (unless otherwise indicated) by
each person owning more than five percent (5%) of the outstanding shares, each
director and director nominee of the Company, each executive officer of the
Company named in the Summary Compensation Table below (excluding one officer who
is no longer employed by the Company) and all directors and officers of the
Company as a group.
<TABLE>
<CAPTION>
Number of
Name (and address of 5% holders) Shares Owned Percent
- -------------------------------- ------------ -------
<S> <C> <C>
Kenneth Granat 683,153 (1) 25.5%
155 Pfingsten, Suite 360
Deerfield, Illinois 60015
Donald Cecil 244,153 9.4%
1114 Avenue of the Americas
New York, New York 10036
Dr. Justin Wernick 234,867 9.1%
450 Commack Road
Deer Park, New York 11729
Gary L. Grahn 170,000 (2) 6.4%
450 Commack Road
Deer Park, New York 11729
Thomas I. Altholz 25,000 1.0%
59 Lakewood Place
Highland Park, Illinois 60035
All Directors and Officers
As a Group (5 persons) 1,128,020 (3) 40.7%
</TABLE>
(1) Includes 90,000 shares issuable under outstanding stock
options and 552,753 held by Trigran Investments L.P. Mr.
Granat is a Director and Vice President of the general partner
of Trigran Investments L.P. An additional 30,000 shares are
owned by the Granat Family Limited Partnership of which Mr.
Granat is a general partner and 10,400 shares are owned by a
trust of which Mr. Granat is a beneficiary.
(2) Includes 80,000 shares issuable under outstanding stock
options.
(3) Includes an aggregate of 185,000 shares issuable under
outstanding stock options.
The Company is not aware of any late filings during the fiscal year
ended February 28, 1998 required by Section 16(a) of the Exchange Act
of 1934.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
the cash compensation paid by the Company during each of the Company's
last three fiscal years to the Company's Chief Executive Officer and to
each of the Company's executive officers who received salary and bonus
payments in excess of $100,000 during the last fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Fiscal Salary Bonus Other Options
Principal Positions Year $ $ $ (No. of Shares)
------------------- ------ ----------- ------ ---- ---------------
<S> <C> <C> <C> <C> <C>
Gary L. Grahn 1998 160,000 53,440 (1) -
President and 1997 160,000 28,000 (1) 30,000
Chief Executive Officer (1) 1996 159,846 - (1) 50,000
Thomas F. Belleau 1998 102,042 5,000 (1) -
Vice President - Finance 1997 68,462 - (1) -
Chief Financial Officer (2)
</TABLE>
(1) Less than 10% of the total annual salary and bonus
(2) As of March 1998, Mr. Belleau left the employ of the Company
OPTION GRANTS IN LAST FISCAL YEAR
There were no option grants to any of the Company's named
executive officers in the last fiscal year.
FISCAL YEAR-END OPTION VALUES
The table below sets forth information regarding unexercised
options held by the Company's named executive officers as of February
28, 1998. No options were exercised by the Company's named executive
officers during fiscal 1998.
<TABLE>
<CAPTION>
No. of Securities Underlying Value of Unexercised
Unexercised Options At In-The-Money Options
Fiscal Year End At Fiscal Year End
Name Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C>
Gary L. Grahn 80,000/0 37,500/0
Thomas F. Belleau 10,000/0 0/0
</TABLE>
<PAGE>
COMPENSATION OF DIRECTORS
The Company compensates its outside directors at a rate of
$1,500 per meeting attended in person.
EMPLOYMENT AGREEMENTS
On December 13, 1994, the Company entered into an employment
agreement (the "Employment Agreement") with Gary L. Grahn, President
and Chief Executive Officer, commencing March 1, 1995 and continuing
for a one year period, with automatic renewal for additional one year
terms unless sooner terminated in accordance with the Employment
Agreement. The Employment Agreement provides for Mr. Grahn to receive
an annual base salary of $160,000, subject to adjustment as determined
by the Board of Directors of the Company. Pursuant to the Employment
Agreement, Mr. Grahn may be entitled to receive a bonus of up to 50% of
his base salary depending on profits achieved by the Company. In
addition, pursuant to the Employment Agreement, Mr. Grahn was granted
options to purchase 50,000 shares of the common stock at an exercise
price of $.75 per share for a five year term. Such options may be
exercised, on a cumulative basis, as to 33 1/3% thereof per year
commencing on the date of grant. The Employment Agreement also provides
for competitive restrictions on Mr. Grahn's business activities, absent
the Company's prior written approval, for a period of two years after
the termination or expiration of the Employment Agreement.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected the accounting firm of
Deloitte & Touche LLP to serve as independent auditors of the Company
and proposes the ratification of such decision. A representative of
Deloitte & Touche LLP is expected to be present at the meeting to make
a statement if he wishes to do so and to respond to appropriate
shareholder questions.
The Board of Directors recommends a vote FOR ratification of the selection of
Deloitte & Touche LLP as the independent auditors for the Company for the
fiscal year Ending February 27, 1999.
SHAREHOLDER PROPOSALS
Shareholders who wish to present proposals for action at the
1999 Annual Meeting should submit their proposals in writing to the
Secretary of the Company at the address of the Company set forth on the
first page of this Proxy Statement. Proposals must be received by the
Secretary no later than April 17, 1999 for inclusion in the next year's
proxy statement and proxy card.
<PAGE>
ANNUAL REPORT TO SHAREHOLDERS
The Annual Report to shareholders of the Company for the year
ended February 28, 1998, including audited consolidated financial
statements, has previously been mailed to the shareholders, but such
report is not incorporated in this Proxy Statement and is not deemed to
be a part of the proxy solicitation material.
OTHER MATTERS
The Board of Directors of the Company does not know of any
other matters that are to be presented for action at the Annual
Meeting. Should any other matters come before the meeting or any
adjournments thereof, the persons named in the enclosed proxy will have
the discretionary authority to vote all proxies received with respect
to such matters in accordance with their judgements.
A copy of the Company's Annual Report on Form 10-K, as filed
with the Securities and Exchange Commission (exclusive of exhibits),
will be furnished without charge to any shareholder upon written
request to Gary L. Grahn, President and Chief Executive Officer, 450
Commack Road, Deer Park, New York 11729.
By Order of the Board of Directors
Dr. Justin Wernick
Secretary
Deer Park, New York
August 14, 1998
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN
THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL
AND YOUR COOPERATION WILL BE APPRECIATED.
<PAGE>
THE LANGER BIOMECHANICS GROUP, INC.
450 Commack Road, Deer Park, New York 11729
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, acknowledging receipt of the proxy statement
dated August 14, 1998 of The Langer Biomechanics Group, Inc., hereby
constitutes and appoints Kenneth Granat and Dr. Justin Wernick, and
each or any of them, attorney, agent and proxy of the undersigned, with
full power of substitution to each of them, for and in the name, place
and stead of the undersigned, to appear and vote all the shares of
stock of The Langer Biomechanics Group, Inc., standing in the name of
the undersigned on the books of said corporation on August 7, 1998, at
the Annual Meeting of Shareholders of The Langer Biomechanics Group,
Inc., to be held at the offices of the Company at 450 Commack Road,
Deer Park, New York 11729, on October 2, 1998 at 9:00 A.M., and any and
all adjournments thereof.
When properly executed, this proxy will be voted as designated
by the undersigned. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED
FOR THE ELECTION OF DIRECTORS AND FOR THE FOLLOWING PROPOSALS, WHICH
ARE SET FORTH IN THE PROXY STATEMENT.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY
(except as written in on the line below) For ALL nominees
KENNETH GRANAT, GARY L. GRAHN, |_| For the individual(s) below
DR. JUSTIN WERNICK, THOMAS ALTHOLZ (Instruction: To withhold authority
to vote for any individual nominee,
please write in name on line below)
</TABLE>
- --------------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING FEBRUARY 27,
1999.
|_| FOR |_| AGAINST |_| ABSTAIN
3. FOR SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
MEETING AND ANY ADJOURNMENTS THEREOF.
Please sign exactly as your name appears hereon. When shares
are held by joint tenants, both should sign. When signing as
attorney, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.
_____________________, 1998
--------------------------
Signature
--------------------------
Signature, if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY IN
THE ENCLOSED ENVELOPE.
THE LANGER BIOMECHANICS GROUP, INC.
450 Commack Road
Deer Park, New york 11729
