Exhibit (d)(1)(H)
THE OPTIONS GRANTED PURSUANT HERETO AND THE UNDERLYING SHARES OF COMMON STOCK
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND SUCH
STATE SECURITIES LAWS.
VOID AFTER 5:00 P.M. ON _______, 2010
THE LANGER BIOMECHANICS GROUP, INC.
Date of Original Issuance: ________ ___, 2000 Register No.:________
THIS IS TO CERTIFY THAT, for value received, Kanders & Company, Inc., its
successors or assigns (each, a "Holder"), has been granted 100,000 options (each
a "Langer Option"), each Langer Option entitling the owner thereof to purchase
from THE LANGER BIOMECHANICS GROUP, INC., a New York corporation (the
"Company"), at any time prior to 5:00 p.m., New York City time, on _______, 2010
(the "Expiration Time"), one duly authorized, validly issued, fully paid and
nonassessable share of the common stock, par value $.02 per share (the "Common
Stock"), of the Company, as adjusted from time to time in accordance with the
terms and provisions of this Option Agreement (each, an "Option Share"), all
subject to the terms and conditions contained herein. Subject to adjustment as
provided below, the exercise price per share (the "Exercise Price") shall be
$1.525.
The number of Option Shares and the Exercise Price per share set forth
above are subject to adjustment as provided herein. Unless otherwise expressly
set forth herein, all capitalized terms used but not otherwise defined herein
shall have respective meanings attributed thereto in Section 12.
The Langer Options shall not be evidenced by any instrument or agreement
apart from this Option Agreement (the "Option Agreement").
1. Vesting and Exercise of Langer Options.
1.1 The Langer Options shall vest (subject to acceleration and termination
under the provisions hereof) in three installments as follows: Options as to
33,333 shares shall vest on each of December 31, 2001 and December 31, 2002 and
Options as to 33,334 shares shall vest on December 31, 2003. Notwithstanding the
foregoing, upon the death or Disability of the principal stockholder of the
Holder, a pro rata portion of the Langer Options equal to (a)(i) the number of
days elapsed between the date hereof and the date of such death or Disability as
compared to (ii) the total number of days between the date hereof and December
31, 2003 (b) less the number of Options that have already vested shall vest
immediately, and the remainder of the unvested Langer Options shall
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expire and shall no longer be exercisable. Furthermore, the Langer Options shall
expire immediately and no longer be exercisable upon the failure to complete the
tender offer contemplated by the Tender Offer Agreement, other than as a result
of a breach by the Company of the Tender Offer Agreement or a failure by the
Company to satisfy any of the conditions to the offer set forth in the Tender
Offer Agreement. Notwithstanding the provisions of Section 1.2 below, any Langer
Options which vest upon the death or Disability of the principal stockholder of
the Holder shall be exercisable at any time prior to the Expiration Time or
within three months (one year in the case of Disability) after the date of such
death of Disability, whichever is earlier.
1.2 Upon the vesting of the Langer Options, the Langer Options may be
exercised, in whole or in part, but not as to less than 10,000 Langer Options
or, if less, the number of Langer Options evidenced hereby, prior to the
Expiration Time by surrendering this Option Agreement, with the exercise form
provided for herein duly executed by the Holder or by the Holder's duly
authorized attorney-in-fact, at the principal office of the Company, presently
located at 450 Commack Road, Deer Park, New York 11729, or at such other office
or agency in the United States as the Company may designate by notice to the
Holder (in either event, the "Company Offices"), accompanied by either (a)
payment in full, either in the form of cash, wire transfer, bank cashier's check
or certified check payable to the order of the Company, of the aggregate
Exercise Price payable in respect of the Langer Options being exercised or (b) a
written notice to the Company that the Holder is exercising the Langer Options
on a "cashless" basis by authorizing the Company to withhold from issuance a
number of shares of Common Stock issuable upon such exercise of the Langer
Options which when multiplied by the Current Market Price of the Common Stock is
equal to the aggregate Exercise Price payable in respect of the number Langer
Options being exercised (and such withheld shares of Common Stock shall no
longer be issuable under this Option Agreement). If fewer than all of the Langer
Options are exercised, the Company shall, upon each exercise prior to the
Expiration Time, execute and deliver to the Holder a new Option Agreement (dated
as of the date hereof) and otherwise identical hereto, evidencing the balance of
the Langer Options that remain exercisable.
1.3 On the date of exercise of the Langer Options, the Holder shall be
deemed to have become the holder of record for all purposes of the Option Shares
to which the exercise relates.
1.4 As soon as practicable, but not in excess of five (5) days, after the
exercise of all or part of the Langer Options, the Company, at its expense
(including the payment by it of any applicable issue taxes), will cause to be
issued in the name of and delivered to the Holder a certificate or certificates
evidencing the number of Option Shares to which the Holder shall be entitled
upon such exercise, provided that the Company shall not be required to pay any
taxes payable as a result of the issuance of any certificate or certificates in
a name other than that of the Holder, in which case the Company shall not be
required to issue or deliver such certificate(s) unless or until the person or
persons requesting issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
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1.5 Each certificate representing Option Shares obtained upon exercise of
a Langer Option shall bear a legend as follows unless such Option Shares have
been registered under the Act and the issuance complies with any applicable
state securities laws:
"The securities represented by this
certificate have been acquired for
investment and have not been registered
under the Securities Act of 1933, as
amended (the "Act"). The securities may
not be sold, assigned, pledged,
hypothecated or otherwise transferred
except pursuant to an effective
registration statement under the Act and
in compliance with applicable state
securities laws, or the Company receives
an opinion of counsel, reasonably
satisfactory to the Company, that such
registration is not required and that the
sale, assignment, pledge, hypothecation or
transfer is in compliance with applicable
state securities laws."
2. Issuance of Common Stock; Reservation of Shares.
2.1 The Company covenants and agrees that it will at all times reserve and
keep available, free and clear from preemptive rights, out of its authorized but
unissued Common Stock, solely for the purpose of issuance upon the exercise of
Langer Options as provided herein, such number of shares of Option Shares as
shall then be issuable upon the exercise of all Langer Options then outstanding.
2.2 The Company covenants and agrees that all Option Shares that may be
issued upon the exercise of all or part of the Langer Options will, upon
issuance in accordance with the terms hereof, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof.
2.3 The Company further covenants and agrees that if any shares of Common
Stock reserved for the purpose of the issuance of Option Shares upon exercise of
the Langer Options require registration with, or approval of, any governmental
authority under any federal or state law before such shares may be validly
issued or delivered upon exercise, then the Company will promptly use its best
efforts to effect such registration or obtain such approval, as the case may be.
3. Adjustments of Exercise Price and Number and Character of Shares Issuable
Upon Exercise.
3.1 Upon each adjustment of the Exercise Price as a result of the
calculations made in this Section, this Option Agreement shall thereafter
evidence the right to receive, at the adjusted Exercise Price, that number of
Option Shares (calculated to the nearest one-hundredth) obtained by dividing (i)
the product of the aggregate number of Option Shares covered by this Option
Agreement immediately prior to such adjustment and the Exercise Price in effect
immediately prior to such
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adjustment of the Exercise Price by (ii) the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
3.2 The Exercise Price will be adjusted from time to time as provided
herein.
3.2.1 Extraordinary Dividends and Distributions. In case the Company
at any time or from time to time after the date hereof shall declare, order, pay
or make a dividend or other distribution (including, without limitation, any
distribution of other or additional stock or other securities or property or
options by way of dividend or spin-off, reclassification, recapitalization or
similar corporate rearrangement) on the Common Stock other than (a) a dividend
payable in additional shares of Common Stock or (b) a regularly scheduled cash
dividend payable out of consolidated earnings or earned surplus, determined in
accordance with generally accepted accounting principles, then, in each such
case, subject to Section 3.3, the Exercise Price in effect immediately prior to
the close of business on the record date fixed for the determination of holders
of any class of securities entitled to receive such dividend or distribution
shall be reduced, effective as of the close of business on such record date, to
a price determined by multiplying such Exercise Price by a fraction
(a) the numerator of which shall be the Current Market Price
in effect on such record date or, if the Common Stock trades on an
ex-dividend basis, on the date prior to the commencement of ex-dividend
trading, less the amount of such dividend or distribution (as determined
in good faith by the Board of Directors of the Company) applicable to one
share of Common Stock, and
(b) the denominator of which shall be such Current Market
Price.
3.2.2 Treatment of Stock Dividends, Stock Splits, etc. In case the
Company at any time or from time to time after the date hereof shall declare or
pay any dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, the Exercise Price in
effect immediately prior to the payment of such dividend or the consummation of
such subdivision shall concurrently with the effectiveness of such dividend or
subdivision be proportionately decreased.
3.2.3 Adjustments for Combinations, etc. In case the outstanding
shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Exercise Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
3.2.4 Issuances of Common Stock and Related Matters. (a) Issuances
of Common Stock. If at any time the Company shall issue or sell any additional
shares of Common
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Stock (other than any such issuances or sales pursuant to options or warrants
that are outstanding as of the date hereof) in exchange for consideration in an
amount per additional share of Common Stock less than the Exercise Price at the
time the additional shares of Common Stock are issued or sold, then (A) the
Exercise Price shall be reduced to a price determined by dividing (x) an amount
equal to the sum of (1) the number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied by the then existing Exercise
Price, plus (2) the consideration, if any, received by the Company upon such
issue or sale, by (y) the total number of shares of Common Stock outstanding
immediately after such issue or sale; and (B) the number of shares of Common
Stock into which this Option Agreement is convertible shall be adjusted to equal
the product obtained by multiplying the Exercise Price in effect immediately
prior to such issue or sale by the number of shares of Common Stock into which
this Option Agreement is convertible immediately prior to such issue or sale and
dividing the product thereof by the Exercise Price resulting from the adjustment
made pursuant to this Section 3.2.4(a).
(b) Issuance of Convertible Securities. If at any time the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Company is the surviving
corporation) issue or sell, any convertible securities, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange shall be less than the Exercise Price in effect immediately prior to
the time of such issue or sale, then the number of shares of Common Stock into
which this Option Agreement is convertible and the Exercise Price shall be
adjusted as provided in Section 3.2.4(a) on the basis that the maximum number of
additional shares of Common Stock necessary to effect the conversion or exchange
of all such convertible securities shall be deemed to have been issued and
outstanding and the Company shall have received all of the consideration payable
therefor, if any, as of the date of actual issuance of such convertible
securities. If the maximum number of additional shares of Common Stock necessary
to effect the conversion or exchange is indeterminable as a result of a
conversion or exercise price which adjusts over time, the determination of
adjustments pursuant to this Section 3.2.4(b) shall be determined at the time of
actual conversion or exercise of such convertible securities and an adjustment
shall be made only upon actual conversions or exchanges which are below the
Exercise Price on the date of issuance of such convertible securities. No
further adjustments of the number of shares of Common Stock into which this
Option Agreement is convertible and the Exercise Price shall be made upon the
actual issue of such Common Stock upon conversion or exchange of such
convertible securities.
(c) Other Provisions Applicable to Adjustments. The following
provision shall be applicable to the making of adjustments of the number of
shares of Common Stock into which this Option Agreement is convertible and the
Exercise Price provided for in this Section 3.2.4. To the extent that any
additional shares of Common Stock or any convertible securities or any warrants
or other rights to subscribe for or purchase any additional shares of Common
Stock or any convertible securities shall be issued for cash consideration, the
consideration received by the Company therefor shall be the amount of the cash
received by the Company therefor, or, if such additional shares of Common Stock
or convertible securities are offered by the Company for
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subscription, the subscription price, or, if such additional shares of Common
Stock or convertible securities are sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering price (in
any such case subtracting any amounts paid or receivable for accrued interest or
accrued dividends and without taking into account any compensation, discounts or
expenses paid or incurred by the Company for and in the underwriting of, or
otherwise in connection with, the issuance thereof). To the extent that such
issuance shall be for a consideration other than cash, then, except as herein
otherwise expressly provided, the amount of such consideration shall be deemed
to be the fair value of such consideration at the time of such issuance as
determined in good faith by the Board of Directors of the Company. In case any
additional shares of Common Stock or any convertible securities or any warrants
or other rights to subscribe for or purchase such additional shares of Common
Stock or convertible securities shall be issued in connection with any merger in
which the Company issues any securities, the amount of consideration therefor
shall be deemed to be the fair value, as determined in good faith by the Board
of Directors of the Company, of such portion of the assets and business of the
nonsurviving corporation as such Board in good faith shall determine to be
attributable to such additional shares of Common Stock, convertible securities,
warrants or other rights, as the case may be. The consideration for any
additional shares of Common Stock issuable pursuant to any warrants or other
rights to subscribe for or purchase the same shall be the consideration received
by the Company for issuing such warrants or other rights plus the additional
consideration payable to the Company upon exercise of such warrants or other
rights. The consideration for any additional shares of Common Stock issuable
pursuant to the terms of any convertible securities shall be the consideration
received by the Company for issuing warrants or other rights to subscribe for or
purchase such convertible securities, plus the consideration paid or payable to
the Company in respect of the subscription for or purchase of such convertible
securities, plus the additional consideration, if any, payable to the Company
upon the exercise of the right of conversion or exchange in such convertible
securities. In case of the issuance at any time of any additional shares of
Common Stock or convertible securities in payment or satisfaction of any
dividends upon any class of stock other than Common Stock, the Company shall be
deemed to have received for such additional shares of Common Stock or
convertible securities a consideration equal to the amount of such dividend so
paid or satisfied. Whenever the Board of Directors of the Company shall be
required to make a determination in good faith of the fair value of any
consideration, such determination shall, if requested by the holder of this
Option Agreement, be supported by an opinion of an investment banking firm of
recognized national standing selected by the holder of this Option Agreement and
acceptable to the Company.
3.3 De Minimis Adjustments. If the amount of any adjustment of the
Exercise Price per share required pursuant to this Section 3 would be less than
$.02, such amount shall be carried forward and adjustment with respect thereto
made at the time of and together with any subsequent adjustment which, together
with such amount and any other amount or amounts so carried forward, shall
aggregate a change in the Exercise Price of at least $.02 per share. All
calculations under this Option Agreement shall be made to the nearest .001 of a
cent or to the nearest one-hundredth of a share, as the case may be.
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3.4 Abandoned Dividend or Distribution. If the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive
a dividend or other distribution (which results in an adjustment to the Exercise
Price under the terms of this Option Agreement) and shall, thereafter, and
before such dividend or distribution is paid or delivered to shareholders
entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Exercise Price and number of
shares of Common Stock purchasable upon exercise of the Langer Options by reason
of the taking of such record shall be reversed, and any subsequent adjustments,
based thereon, shall be recomputed.
3.5 Adjustments To Exercise Price and Number of Shares. Notwithstanding
any adjustment in the Exercise Price or in the number or kind of shares of
Common Stock purchasable upon exercise of the Langer Options, any Option
Agreement theretofore or thereafter executed and delivered may continue to
express the same number and kind of shares of Common Stock as are stated in this
Option Agreement, as initially issued.
3.6 Fractional Shares. Notwithstanding any adjustment pursuant to Section
3 in the number of shares of Common Stock covered by this Option Agreement or
any other provision of this Option Agreement, the Company shall not be required
to issue fractions of shares upon exercise of Langer Options or to distribute
certificates which evidence fractional shares. In lieu of fractional shares, the
Company shall make payment to the Holder, at the time of exercise of Langer
Options as herein provided, in an amount in cash equal to such fraction
multiplied by the Current Market Price of a share of Common Stock on the date of
exercise of Langer Options.
4. Consolidation, Merger, etc.
4.1 Adjustments for Consolidation, Merger, Sale of Assets, Reorganization,
etc. In case the Company after the date hereof (a) shall consolidate with or
merge into any other Person and shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) shall permit any other
Person to consolidate with or merge into the Company and the Company shall be
the continuing or surviving Person but, in connection with such consolidation or
merger, the Common Stock or Other Securities shall be changed into or exchanged
for stock or other securities of any other Person or cash or any other property,
or (c) shall transfer all or substantially all of its properties or assets to
any other Person, or (d) shall effect a capital reorganization or
reclassification of the Common Stock or Other Securities (other than a capital
reorganization or reclassification resulting in the issue of additional shares
of Common Stock for which adjustment in the Exercise Price is provided in
Section 3.2.1), then, and in the case of each such transaction, proper provision
shall be made so that, upon the basis and the terms and in the manner provided
in this Option Agreement, the Holder of this Option Agreement, upon the exercise
of a Langer Option at any time after the consummation of such transaction, shall
be entitled to receive the kind and amount of shares of stock and other
securities and property receivable upon such consolidation, merger, transfer or
recapitalization, by a holder of the number of securities of the Company for
which a Langer Option might have been exercised immediately prior to such
consolidation, merger, transfer or
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recapitalization. This provision shall similarly apply to successive
consolidations, mergers or recapitalizations.
4.2 Assumption of Obligations. Notwithstanding anything contained in this
Option Agreement to the contrary, the Company shall not effect any of the
transactions described in clauses (a) through (d) of Section 4.1 unless, prior
to the consummation thereof, each Person (other than the Company) which may be
required to deliver any stock, securities, cash or property upon the exercise of
Langer Options as provided herein shall assume, by written instrument delivered
to, and reasonably satisfactory to, the Holder of this Option Agreement, (a) the
obligations of the Company under this Option Agreement (and if the Company shall
survive the consummation of such transaction, such assumption shall be in
addition to, and shall not release the Company from, any continuing obligations
of the Company under this Option Agreement) and (b) the obligation to deliver to
the Holder such shares of stock, securities, cash or property as, in accordance
with the foregoing provisions of this Section 4, the Holder may be entitled to
receive.
5. No Dilution or Impairment.
The Company shall not, by amendment of its certificate of incorporation or
through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Option
Agreement, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against dilution or
other impairment. Without limiting the generality of the foregoing, the Company
(a) shall not permit the par value of any shares of stock receivable upon the
exercise of Option Agreement to exceed the amount payable therefor upon such
exercise, (b) shall take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of stock, free from all taxes, liens, security interests,
encumbrances, preemptive rights and charges on the exercise of the Langer
Options from time to time outstanding and (c) shall not take any action which
results in any adjustment of the Exercise Price if the total number of shares of
Common Stock (or Other Securities) issuable after the action upon the exercise
of all of the Langer Options would exceed the total number of shares of Common
Stock (or Other Securities) then authorized by the Company's certificate of
incorporation and available for the purpose of issue upon such exercise.
6. Registration Rights.
Reference is hereby made to that certain Registration Rights Agreement
pertaining to the Option Shares dated as of ________________ (the "Registration
Rights Agreement") between the Company and Holder. Holder may assign its rights
and benefits in, to and under the Registration Rights Agreement to any Holder in
accordance with the terms of the Registration Rights Agreement.
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7. Replacement of Securities.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Option Agreement and of
reasonably satisfactory indemnification, the Company shall promptly execute and
deliver to the Holder a new Option Agreement of like tenor and date. Any such
new Option Agreement executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute an additional contractual obligation
on the part of the Company.
8. Registration.
This Option Agreement, as well as all other Option Agreements issued
pursuant hereto shall be numbered and shall be registered in a register (the
"Option Register") maintained at the Company Offices as they are issued. The
Option Register shall list the name, address and Social Security or other
Federal Identification Number, if any, of all Holders. The Company shall be
entitled to treat the Holder as set forth in the Option Register as the owner in
fact of the Langer Options as set forth therein for all purposes and shall not
be bound to recognize any equitable or other claim to or interest in such Langer
Options on the part of any other person, and shall not be liable for any
registration of transfer of Langer Options that are registered or to be
registered in the name of a fiduciary or the nominee of a fiduciary unless made
with the actual knowledge that a fiduciary or nominee is committing a breach of
trust in requesting such registration of transfer, or with such knowledge of
such facts that its participation therein amounts to bad faith.
9. Transfer.
9.1 Permissible Transferees. This Option Agreement and the right to
purchase Langer Options evidenced hereby may be transferred, sold, assigned or
hypothecated in whole or in part, at any time, or from time to time, provided
that the Company shall not be required to issue Option Agreements as a result of
any transfer granting the Holder the right to purchase less than 5,000 Option
Shares. Any such transfer shall be effected by executing the form of assignment
at the end hereof, and (ii) surrendering this Option Agreement for cancellation
to the Company; whereupon the Company shall issue, in the name or names
specified by Holder a new Option Agreement or Option Agreements of like tenor
and representing in the aggregate rights to purchase the same number of shares
of Common Stock as are purchasable hereunder.
9.2 Transfer of Option. The registered Holder of this Option Agreement, by
its acceptance hereof, agrees that it will not sell, assign, pledge, hypothecate
or otherwise transfer this Option Agreement or the Langer Options evidenced
hereby except (i) pursuant to an effective registration under the Act and in
compliance with applicable state securities laws or (ii) if the Company receives
an opinion of counsel, reasonably satisfactory to the Company, that such
registration is not required and that the sale, assignment, pledge,
hypothecation or transfer is in compliance with applicable state securities laws
or (iii) to family members of the Holder or trusts established for the benefit
of family members of the Holder.
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10. Exchange.
This Option Agreement may be exchanged for another Option Agreement or
Option Agreements entitling the Holder thereof to purchase a like aggregate
number of Option Shares as the Langer Options evidenced hereby, provided the
Company shall not be required to issue as a result of any request for exchange
an Option Agreement granting the Holder the right to purchase less than 5,000
Option Shares. A Holder desiring to exchange this Option Agreement shall make
such request in writing delivered to the Company, and shall surrender this
Option Agreement therewith. Thereupon, the Company shall execute and deliver to
the person entitled thereto a new Option Agreement or Option Agreements, as the
case may be, as so requested.
11. Notices.
11.1 In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend (other than a regularly scheduled
cash dividend payable out of consolidated earnings or earned surplus,
determined in accordance with generally accepted accounting principles, in
an amount not exceeding the amount of the immediately preceding cash
dividend for such period) or other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company,
any consolidation or merger involving the Company and any other Person,
any transaction or series of transactions in which more than 50% of the
voting securities of the Company are transferred to another Person, or any
transfer, sale or other disposition of all or substantially all the assets
of the Company to any other Person,
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) then, in any case, the Company shall mail to each Holder a
notice specifying (i) the date or expected date on which any such record
is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right, and
(ii) the date or expected date on which any such reorganization,
reclassification, recapitalization, consolidation, merger, transfer, sale,
disposition, dissolution, liquidation or winding-up is to take place and
the time, if any such time is to be fixed, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange
their shares of Common Stock (or Other Securities) for the
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securities or other property deliverable upon such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at
least 15 days prior to the date therein specified.
11.2 In each case of any adjustment or readjustment in the shares of
Common Stock (or Other Securities) issuable upon the exercise of the Langer
Options, the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms of this Agreement and prepare a
certificate, signed by the Chairman of the Board, President or one of the Vice
Presidents of the Company, and by the Chief Financial Officer, the Treasurer or
one of the Assistant Treasurers of the Company, setting forth such adjustment or
readjustment and showing in reasonable detail the method of calculation thereof
and the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or to be received by the Company for
any Additional Shares of Common Stock issued or sold or deemed to have been
issued, (b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Exercise Price in effect immediately prior to such
issue or sale and as adjusted and readjusted (if required by Section 3) on
account thereof. The Company shall forthwith mail a copy of each such
certificate to each holder of a Langer Option and shall, upon the written
request at any time of any holder of a Langer Option, furnish to such holder a
like certificate setting forth the Exercise Price at the time in effect and
showing in reasonable detail how it was calculated. The Company shall also keep
copies of all such certificates at its principal office and shall cause the same
to be available for inspection at such office during normal business hours by
any holder of a Langer Option or any prospective purchaser of a Langer Option
designated by the holder thereof.
11.3 All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered in person, against written receipt
therefor, or two days after being sent, by registered or certified mail, postage
prepaid, return receipt requested, and, if to the Holder, at such address as is
shown on the Option Register or as may otherwise may have been furnished to the
Company in writing in accordance with this Section 11 by the Holder and, if to
the Company, at the Company Offices or such other address as the Company shall
give notice thereof to the Holder in accordance with this Section 11.
12. Definitions.
As used herein, unless the context otherwise requires, the following terms
shall have the meanings indicated:
"Current Market Price" shall mean, on any date specified herein, the
average of the daily Market Price during the 10 consecutive trading days
commencing 15 trading days before such date, except that, if on any such date
the shares of Common Stock are not listed or admitted for trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date.
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<PAGE>
"Disability" shall mean the termination to the principal stockholder of
the Holder as a result of such principal stockholder's being unable to
substantially perform his duties to the Holder for 90 consecutive days
(exclusive of vacation) or for 180 days in any 360 day period due to any
physical or mental illness or injury.
"Market Price" shall mean, on any date specified herein, the amount per
share of the Common Stock, equal to (a) the last reported sale price of such
Common Stock, regular way, on such date or, in case no such sale takes place on
such date, the average of the closing bid and asked prices thereof regular way
on such date, in either case as officially reported on the principal national
securities exchange on which such Common Stock is then listed or admitted for
trading, or (b) if such Common Stock is not then listed or admitted for trading
on any national securities exchange but is designated as a national market
system security by the NASD, the last reported trading price of the Common Stock
on such date, or (c) if there shall have been no trading on such date or if the
Common Stock is not so designated, the average of the closing bid and asked
prices of the Common Stock on such date as shown by the NASD automated quotation
system, or (d) if such Common Stock is not then listed or admitted for trading
on any national exchange or quoted in the over-the-counter market, the fair
value thereof (as of a date which is within 20 days of the date as of which the
determination is to be made) determined in good faith by the Board of Directors
of the Company.
"Other Securities" shall mean any stock (other than Common Stock) and
other securities of the Company or any other Person (corporate or otherwise)
which the holders of the Options at any time shall be entitled to receive, or
shall have received, upon the exercise of the Options, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 4 or otherwise.
"Person" shall mean any individual, firm, corporation, partnership, trust,
joint venture, association, joint stock company, limited liability company,
unincorporated organization or any other entity or organization, including a
government or agency or subdivision thereof, and shall include any successor (by
merger or otherwise) of such entity.
"Tender Offer Agreement" shall mean the Tender Offer Agreement among the
Company, [the Holder], and ______, dated as of _________ ___, 2000.
13. Miscellaneous.
13.1 Amendments. Any amendment or modification of the this Option
Agreement shall require the written consent signed by the party against whom
enforcement of the modification or amendment is sought.
13.2 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Option Agreement.
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<PAGE>
13.3 Entire Agreement. This Option Agreement (together with the other
agreements and documents being delivered pursuant to or in connection with this
Option Agreement) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
13.4 Binding Effect. This Option Agreement shall inure solely to the
benefit of and shall be binding upon, the Holder and the Company and their
permitted assignees, respective successors, legal representatives and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Option
Agreement or any provisions herein contained.
13.5 Governing Law; Jurisdiction. This Option Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of New
York, without giving effect to conflict of laws principles thereof or the actual
domiciles of the parties. The Company and the Holder hereby agree that any
action, proceeding or claim against either of them arising out of, or relating
in any way to the this Option Agreement shall be brought and enforced in any of
the state or federal courts located in the County of New York, State of New York
and irrevocably submits to such jurisdiction.
13.6 Waiver, Etc. The failure of the Company or the Holder to at any time
enforce any of the provisions of the this Option Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the
validity of this Option Agreement or the Langer Options or any provision hereof
or the right of the Company or any Holder to thereafter enforce each and every
provision of the this Option Agreement or the Langer Options. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Option Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, non-compliance or non-
fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
13.7 Interpretation. Any word or term used in this Option Agreement in any
form shall be masculine, feminine, neuter, singular or plural, as proper reading
requires. The words "herein", "hereof", "hereby" or "hereto" shall refer to this
Option Agreement unless otherwise expressly provided. Any reference herein to a
Section shall be a reference to a Section of this Option Agreement unless the
context otherwise requires.
Dated: ________ ___, 2000
THE LANGER BIOMECHANICS GROUP, INC.
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<PAGE>
By:
---------------------------------
Name:
Title: President
ATTEST:
--------------------------------
Name:
Title: Secretary
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<PAGE>
EXERCISE NOTICE
Dated:_______________, ____
TO: THE LANGER BIOMECHANICS GROUP, INC.
The undersigned hereby irrevocably elects to exercise the Langer
Options to purchase ____ shares of Common Stock, par value $______ per share
("Common Stock"), of The Langer Biomechanics Group, Inc. and hereby makes
payment of $________ therefor. The undersigned hereby requests that certificates
for shares issuable pursuant to this exercise be issued and delivered as
follows:
----------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: _______________________________________________________
Please type or print in block letters)
Taxpayer
Identification
Number: _______________________________________________________
Address: _______________________________________________________
_______________________________________________________
_______________________________________________________
Signature: _______________________________________________________
(Signature must conform in all respects to the name of
the Holder as set forth on the face of the Options.)
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________________________________________________
(Please type or print in block letters
hereby sells, assigns and transfers unto:
Name: _______________________________________________________
(Please type or print in block letters)
Taxpayer
Identification
Number: _______________________________________________________
Address: _______________________________________________________
_______________________________________________________
_______________________________________________________
the right to purchase _____ shares of common stock, par value $.02 per share, of
The Langer Biomechanics Group, Inc. (the "Company") pursuant to the Option
Agreement dated _________, 2000, between the undersigned and the Company and
does hereby irrevocably constitute and appoint ___________________________
Attorney-in-Fact, to transfer the same on the books of the Company with full
power of substitution in the premises.
Dated: ____________________________________________________________
Signature: ________________________________________________________
(Signature must conform in all respects to the name of
the Holder as set forth on the face of the Options.)
