SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
[X] Filed by registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-12
LANGER, INC.
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(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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount previously paid:
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2) Form, schedule or registration statement No.:
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3) Filing party:
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4) Date filed:
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1
LANGER, INC.
450 COMMACK ROAD
DEER PARK, NEW YORK 11729
May ___, 2002
To Our Shareholders:
On behalf of your Company's Board of Directors, I cordially invite you
to attend the Annual Meeting of Shareholders to be held on Wednesday, June 19,
2002, at 11:00 A.M., local time, at the Company's executive offices at 450
Commack Road, Deer Park, NY 11729.
The accompanying Notice of Meeting and Proxy Statement cover the
details of the matters to be presented.
A copy of the Company's annual report for the ten-month period ended
December 31, 2001 is included herewith.
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING, I URGE
THAT YOU PARTICIPATE BY COMPLETING AND RETURNING YOUR PROXY CARD AS SOON AS
POSSIBLE. YOUR VOTE IS IMPORTANT AND WILL BE GREATLY APPRECIATED. YOU MAY REVOKE
YOUR PROXY AND VOTE IN PERSON IF YOU DECIDE TO ATTEND THE ANNUAL MEETING.
Cordially,
LANGER, INC.
Andrew H. Meyers
President and
Chief Executive Officer
LANGER, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 19, 2002
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders,
and any adjournments or postponements thereof (the "Meeting"), of Langer, Inc.,
a New York corporation (the "Company"), which will be held on Wednesday, June
19, 2002 at 11:00 A.M., local time, at the Company's executive offices at 450
Commack Road, Deer Park, NY 11729, for the following purposes:
1. To elect five members to serve on the Board of Directors until the
next annual meeting of shareholders and until their successors are duly
elected and qualified (Proposal 1);
2. To approve a proposal to reincorporate the Company under the laws
of the State of Delaware by merging the Company with and into a newly
formed wholly-owned subsidiary of the Company incorporated in the State of
Delaware, as described in the accompanying Proxy Statement (Proposal 2);
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the year ending December 31, 2002 (Proposal 3);
and
4. To transact such other business as may properly be brought before
the Meeting.
Shareholders of record at the close of business on May 15, 2002 shall be
entitled to notice of and to vote at the Meeting. A copy of the Annual Report of
the Company for the ten-month period ended December 31, 2001 is included
herewith.
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND
RETURN IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE, WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING. YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU DECIDE
TO ATTEND THE MEETING.
By order of the Board of Directors
Steven Goldstein
Secretary
May ___, 2002
LANGER, INC.
450 COMMACK ROAD
DEER PARK, NEW YORK 11729
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
JUNE 19, 2002
INTRODUCTION
PROXY SOLICITATION AND GENERAL INFORMATION
This Proxy Statement and the enclosed form of proxy (the "Proxy Card") are
being furnished to the holders of common stock, par value $0.02 per share (the
"Common Stock"), of Langer, Inc., a New York corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors (the
"Board" or "Board of Directors") of the Company for use at the Annual Meeting of
Shareholders to be held on Wednesday, June 19, 2002 at the Company's executive
offices at 450 Commack Road, Deer Park, NY 11729, at 11:00 A.M., local time, and
at any adjournment or postponement thereof (the "Meeting"). This Proxy Statement
and the Proxy Card are first being sent to shareholders on or about May [__],
2002.
At the Meeting, holders of Common Stock (the "Shareholders") will be asked:
1. To elect five members to serve on the Board of Directors until the
next annual meeting of shareholders and until their successors are duly
elected and qualified (Proposal 1);
2. To approve a proposal to reincorporate the Company under the laws
of the State of Delaware by merging the Company with and into a newly
formed wholly-owned subsidiary of the Company incorporated in the State of
Delaware, as described herein (the "Reincorporation") (Proposal 2).
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the year ending December 31, 2002 (Proposal 3);
and
4. To transact such other business as may properly be brought before
the Meeting.
1
The Board of Directors has fixed the close of business on May 15, 2002 as
the record date for the determination of Shareholders entitled to notice of and
to vote at the Meeting. Each such Shareholder will be entitled to one vote for
each share of Common Stock held on all matters to come before the Meeting and
may vote in person or by proxy authorized in writing.
Shareholders are requested to complete, sign, date and promptly return the
Proxy Card in the enclosed envelope. Common Stock represented by properly
executed proxies received by the Company and not revoked will be voted at the
Meeting in accordance with instructions contained therein. If the Proxy Card is
signed and returned without instructions, the shares will be voted FOR the
election of each nominee for director named herein (Proposal 1), FOR the
approval of the reincorporation of the Company under the laws of the State of
Delaware (Proposal 2), and FOR the ratification of the appointment of Deloitte &
Touche LLP as the Company's independent auditors (Proposal 3). A Shareholder who
so desires may revoke its proxy at any time before it is voted at the Meeting
by: (i) delivering written notice to the Company (attention: Secretary); (ii)
duly executing and delivering a proxy bearing a later date; or (iii) casting a
ballot at the Meeting. Attendance at the Meeting will not in and of itself
constitute a revocation of a proxy.
A Shareholder may designate a person or persons other than those persons
designated on the Proxy Card to act as the Shareholder's proxy. The shareholder
may use the Proxy Card to give another person authority by striking out the
names appearing on the Proxy Card, inserting the name(s) of another person(s)
and delivering the signed card to such person(s). The person(s) designated by
the shareholder must present the signed Proxy Card at the meeting in order for
the shares to be voted.
Where the Shareholder is not the record holder, such as where the shares
are held through a broker, nominee, fiduciary or other custodian, the
Shareholder must provide voting instruction to the record holder of the shares
in accordance with the record holder's requirements in order to ensure the
shares are properly voted.
The Board of Directors knows of no other matters that are to be brought
before the Meeting other than as set forth in the Notice of Meeting. If any
other matters properly come before the Meeting, the persons named in the
enclosed form of proxy, or their substitutes, will vote in accordance with their
discretion on such matters.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE; QUORUM
Only Shareholders as of the close of business on May 15, 2002 (the
"Record Date") are entitled to notice of and to vote at the Meeting. As of the
Record Date, there were [4,200,922] shares of Common Stock outstanding and
entitled to vote, with each share entitled to one vote. See "Security Ownership
of Certain Beneficial Owners and Management." The presence at the Meeting, in
person or by duly authorized proxy, of the holders of a majority of the shares
of Common Stock entitled to vote constitute a quorum for this Meeting.
2
REQUIRED VOTES
The affirmative vote of a plurality of the votes cast in person or by proxy
is necessary for the election of directors (Proposal 1). The affirmative vote of
the holders of at least two-thirds of the outstanding shares of the Company's
Common Stock entitled to vote is necessary to approve the Reincorporation of the
Company as a Delaware corporation (Proposal 2). The affirmative vote of a
majority of the votes cast in person or by proxy is necessary for the approval
and ratification of the appointment of independent auditors (Proposal 3).
Brokers holding shares for beneficial owners must vote those shares
according to the specific instructions they receive from beneficial owners. If
specific instructions are not received, brokers may be precluded from exercising
their discretion, depending on the type of proposal involved. Shares as to which
brokers have submitted executed Proxy Cards but have not exercised discretionary
authority or received instructions from beneficial owners are considered "broker
non-votes," and, along with Shares as to which a shareholder abstains from
voting, will be counted for purposes of determining whether there is a quorum.
Votes at the Meeting will be tabulated by an inspector of elections
appointed by the Company or the Company's transfer agent. Since the affirmative
vote of a plurality of votes cast is required for the election of directors
(Proposal 1), abstentions and "broker non-votes" will have no effect on the
outcome of such election. Since the affirmative vote of holders of at least
two-thirds of the outstanding shares of the Company's Common Stock entitled to
vote is necessary to approve the Reincorporation of the Company as a Delaware
corporation (Proposal 2), "broker non-votes" and abstentions will have the same
effect as a vote against the proposed Reincorporation. Since the affirmative
vote of a majority of the votes cast is necessary for the ratification of the
appointment of the independent auditors (Proposal 3), abstentions will have the
same effect as a negative vote, but "broker non-votes" will have no effect on
the outcome of the vote.
PROXY SOLICITATION
The Company will bear the costs of the solicitation of proxies for the
Meeting. Directors, officers and employees of the Company may solicit proxies
from Shareholders by mail, telephone, personal interview or otherwise. Such
directors, officers and employees will not receive additional compensation but
may be reimbursed for out-of-pocket expenses in connection with such
solicitation. Brokers, nominees, fiduciaries and other custodians have been
requested to forward soliciting material to the beneficial owners of Common
Stock held of record by them, and such custodians will be reimbursed for their
reasonable expenses.
3
IT IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE SHAREHOLDERS'
INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU INTEND TO BE
PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED PROXY
CARD TO ENSURE THAT YOUR STOCK WILL BE REPRESENTED. IF YOU ARE PRESENT AT THE
MEETING AND DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON BY
GIVING WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY PRIOR TO THE VOTE. PLEASE
RETURN YOUR EXECUTED PROXY PROMPTLY.
CHANGE IN CONTROL
Effective February 13, 2001, Andrew H. Meyers, Greg Nelson and Langer
Partners LLC, and its designees ("Offerors"), acquired a controlling interest in
the Company when they purchased 1,362,509 validly tendered shares of the Company
at $1.525 per share, or approximately 51% of the then outstanding Common Stock
of the Company, under the terms of a December 27, 2000 Tender Offer Agreement
(the "Tender"). The aggregate purchase price paid by the Offerors in the Tender
was $2,077,826, all of which, to the Company's knowledge, was funded through
working capital or personal funds. Pursuant to the terms of the Tender, the
Offerors were granted 180 day options to purchase up to 1,400,000 shares of the
Company's Common Stock, with an initial exercise price of $1.525 per share,
rising up to $1.60 per share (the "Options"). Upon the closing of the Tender,
the Board of Directors of the Company resigned in favor of Andrew H. Meyers
(President and Chief Executive Officer), Burtt Ehrlich (Chairman of the Board),
Jonathan R. Foster, Greg Nelson and Arthur Goldstein. In consideration of such
persons acting as directors, the Company issued 30,000 options to each of the
four new outside members of the Board of Directors.
4
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, certain information
regarding beneficial ownership of our Common Stock by (i) each person or entity
who is known to us owning beneficially 5% or more of our Common Stock, (ii) each
of our directors and nominees for directors, (iii) each of our executive
officers and (iv) all executive officers, directors and nominees for director as
a group. Unless otherwise indicated, each of the shareholders shown in the table
has sole voting and investment power with respect to the shares beneficially
owned. Unless otherwise indicated, the address of each person named in the table
below is c/o 450 Commack Road, Deer Park, New York 11729.
SHARES BENEFICIALLY
NAME AND ADDRESS OWNED(1) PERCENT
Langer Partners LLC 1,591,856(2) 37.0%
Andrew H. Meyers 960,913(3) 22.6%
Gregory R. Nelson 227,721(4) 5.4%
Burtt R. Ehrlich 201,474(4)(5) 4.8%
Arthur Goldstein 62,787(4) 1.5%
Jonathan R. Foster 128,360(4) 3.0%
Steven Goldstein 46,338(6) 1.1%
Anthony J. Puglisi 0 *
Ronald E. Buron 0 *
All officers, directors and nominees 1,627,593(3)(4)(5)(6) 36.9%
as a group (8 persons)
- ------------------------------
* Less than 1%
(1) For purposes of this table, a person is deemed to have "beneficial
ownership" of any share of Common Stock that such person has the right to
acquire within 60 days.
(2) Includes 100,000 options granted to Kanders & Co. Inc. exercisable
immediately. Warren B. Kanders is the sole voting member and sole manager
of Langer Partners LLC and the sole shareholder of Kanders & Co. Inc.
(3) Includes 58,333 shares issuable under stock options exercisable within
sixty days.
(4) Includes 30,000 options granted to each of the four outside directors,
which are immediately exercisable.
(5) Includes 46,600 shares held in trust by Mrs. Burtt Ehrlich as Trustee for
David Ehrlich and 33,400 shares held in trust by Mrs. Burtt Ehrlich as
Trustee for Julie Ehrlich as to which Mr. Ehrlich disclaims beneficial
ownership.
(6) Includes 26,666 shares issuable under stock options exercisable within
sixty days.
5
PROPOSAL 1
ELECTION OF DIRECTORS
The By-laws of the Company provide that the Company shall have between
three and seven directors, with such number to be fixed by the Board of
Directors. Effective at the time and for the purposes of the Meeting, the number
of directors of the Company, as fixed by the Board of Directors pursuant to the
By-laws of the Company, is five.
Directors of the Company are elected annually at the annual meeting of
shareholders. Their terms of office continue until the next annual meeting of
shareholders and until their successors have been elected and qualified in
accordance with the Company's By-laws. There are no family relationships among
any of the directors or executive officers of the Company.
Unless otherwise specified, each proxy received will be voted for the
election as directors of the five nominees named below to serve until the next
annual meeting of shareholders and until their successors shall have been duly
elected and qualified.
Each of the nominees has consented to be named a nominee in the Proxy
Statement and to serve as a director if elected. Should any nominee become
unable or unwilling to accept a nomination or election, the persons named in the
enclosed proxy will vote for the election of a nominee designated by the Board
of Directors or will vote for such lesser number of directors as may be
prescribed by the Board of Directors in accordance with the By-laws of the
Company.
The following persons have been nominated as directors:
BURTT R. EHRLICH, 62, has been non-executive Chairman of the Board and a
Director of the Company since February 13, 2001. He has served as a director of
Armor Holdings, Inc. since January 1996. Mr. Ehrlich served as Chairman and
Chief Operating Officer of Ehrlich Bober Financial Corp. (the predecessor of
Benson Eyecare Corporation) from December 1986 until October 1992 and as a
director of Benson Eyecare Corporation from October 1992 until November 1995.
ANDREW H. MEYERS, 45, has been the President and Chief Executive Office and
a Director of the Company since February 13, 2001, and an employee from December
28, 2000 as an advisor to the Board of Directors since December 2000. He has
been an executive in the orthotics industry since 1979. From March 1992 to
December 1996, Mr. Meyers was the President and Chief Executive Officer of
Advanced Orthopedic Technologies, Inc. ("AOTI"), a publicly held company which,
during such period, grew from annual revenues of approximately $5 million in
1992 to approximately $18 million in 1996. In December 1996, AOTI was acquired
by NovaCare Orthotics and Prosthetics, Inc. and Mr. Meyers supervised its
integration into NovaCare, and, from December 1996 until July 1999, Mr. Meyers
served NovaCare in various executive positions, most recently being Executive
Vice President of Sales and Marketing. When NovaCare sold its orthotics and
prosthetics business to Hanger Orthopedic Group in July 1999, Mr. Meyers became
Hanger's Executive Vice President of Marketing, Public Relations and Strategic
Planning. In September
6
2000, Mr. Meyers resigned from Hanger to pursue his strategy of acquiring a
company in the musculoskeletal industry.
JONATHAN R. FOSTER, 44, has been a Director of the Company since February
13, 2001. He joined Howard Capital Management in 1994 as President. In addition
to overseeing the firm's operations and strategic development, he manages the
portfolios of numerous individuals and families. Mr. Foster also is responsible
for managing Howard Capital Management's West Coast operations. With two decades
of experience in finance and wealth management, Mr. Foster previously was
managing general partner of Jonathan R. Foster & Co., LP, a private investment
boutique he founded in 1987. Prior to that, he was an associate director of
Bear, Stearns & Co., LP. Mr. Foster's earlier finance experience includes
positions at Edelman Group and Oppenheimer & Company. Mr. Foster is a director
of Troma Entertainment, Inc. He received his BA in Political Science from the
University of Pennsylvania.
ARTHUR GOLDSTEIN, 70, has been a Director of the Company since February 13,
2001. He is President of AGA Associates, investment advisors founded in 1986.
Prior to that, Mr. Goldstein was a financial advisor at several brokerage firms.
His management experience includes President of Butler Industries, Div. of
Safeguard Ind. (SFE, NYSE), and Chairman of Rudor Industries, a multi-division
service organization. He was also Chairman of Gerber Industries, designers of
department store interiors, from 1980 to 1983. Mr. Goldstein received his BS in
Management from Rensselaer Polytechnic Institute. He was also a trustee of New
York Medical College and a member of the Young Presidents Organization.
GREG NELSON, 52, has been a Director of the Company since February 13,
2001. He was a co-founder of DonJoy Orthopedics, a sports medicine knee brace
company, which today is called dj Orthopedics. As President, he helped grow the
company from a start-up operation to annual sales of over $70 million. DonJoy
was sold in 1987 to Smith+Nephew, a British-based healthcare company. Mr. Nelson
is currently Chairman of BREG, Inc., which he helped co-found in 1990. BREG is a
diverse orthopedic company with product lines including cold therapy, pain care
products, knee bracing and soft goods.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR EACH OF THE ABOVE-NAMED
DIRECTOR NOMINEES.
INFORMATION CONCERNING MEETINGS OF THE BOARD OF DIRECTORS, BOARD COMMITTEES AND
DIRECTOR COMPENSATION
During the ten-month period ended December 31, 2001, the Board of Directors
held four meetings. The Board of Directors has an Audit Committee, a
Compensation Committee, and a Nominating Committee. During the ten-month period
ended December 31, 2001, all of the directors in office attended at least 75% of
the total number of meetings of the Board of Directors and the Committees of the
Board of Directors on which they served.
7
AUDIT COMMITTEE
The functions of the Audit Committee are, among other things, to consult
with the Company's internal accountants and independent auditors to review the
Company's financial statements and ascertain compliance with appropriate audit
procedures. The Audit Committee consisted of Arthur Goldstein (Chairman), Burtt
R. Ehrlich, and Jonathan R. Foster. The members of the Audit Committee are
independent within the meaning of Rule 4200(a)(14) of the National Association
of Securities Dealers listing standards. The Audit Committee met two times
during the ten-month period ended December 31, 2001. The Audit Committee is
governed by a written charter approved by the Board of Directors.
COMPENSATION COMMITTEE
The functions of the Compensation Committee are, among other things, to be
responsible for devising, implementing, and administering all of the
compensation programs adopted for the benefit of the Company's employees,
officers, and directors. The Compensation Committee consisted of Jonathan R.
Foster (Chairman), Andrew H. Meyers, and Greg Nelson. The Compensation Committee
met one time during the ten-month period ended December 31, 2001.
NOMINATING COMMITTEE
The functions of the Nominating Committee are to identify, evaluate and
nominate officers and directors of the Company. The Nominating Committee will
consider nominees recommended by shareholders. The names of such nominees should
be forwarded to Burtt R. Ehrlich, Chairman of the Committee, at 450 Commack
Road, Deer Park, New York 11729, who will submit them to the committee for its
consideration. The Nominating Committee consisted of Burtt R. Ehrlich
(Chairman), Jonathan R. Foster, and Andrew H. Meyers. The Nominating Committee
did not meet during the ten-month period ended December 31, 2001.
COMPENSATION OF DIRECTORS
Directors who are not executive officers of the Company are compensated
through the issuance of stock and stock options. However, during the ten-month
period ended December 31, 2001, the directors who are not executive officers did
not receive any stock or stock options. Mr. Ehrlich also receives annual
compensation of $10,000 for his services as non-executive Chairman of the Board.
All Directors are reimbursed for their out-of-pocket expenses in connection with
their attendance at meetings.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
No director, executive officer, or person nominated to become a director or
executive officer has, within the last five years: (i) had a bankruptcy petition
filed by or against, or a receiver, fiscal agent or similar officer appointed by
a court for any business of such person or entity with respect to which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time; (ii) has been convicted in a
criminal
8
proceeding or is currently subject to a pending criminal proceeding (excluding
traffic violations or similar misdemeanors); (iii) has been subject to any
order, judgment or decree, not subsequently reversed, suspended or vacated, of
any court of competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any type of
business, securities or banking activities or practice; or (iv) has been found
by a court of competent jurisdiction (in a civil action), the Securities and
Exchange Commission (the "Commission") or the Commodity Futures Trading
Commission to have violated a federal or state securities or commodities law,
which judgment or other finding has not been reversed, suspended or vacated.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
1. The Audit Committee has reviewed and discussed with management the audited
financial statements for the ten-month period ended December 31, 2001.
2. The Audit Committee has discussed with Deloitte & Touche LLP, the Company's
independent auditors, the matters required to be discussed by Statement of
Auditing Standards No. 61 (Communications with Audit Committees).
3. The Audit Committee has received the written disclosures and the letter
from Deloitte & Touche LLP required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and has
discussed Deloitte & Touche LLP's independence with Deloitte & Touche LLP.
4. Based on the reviews and discussions referred to in paragraphs (1) through
(3) above, the Audit Committee recommended to the Board of Directors of the
Company that the audited financial statements for the ten-month period
ended December 31, 2001 be included in the Company's Annual Report and Form
10-K for filing with the Securities and Exchange Commission.
Respectfully submitted,
Arthur Goldstein (Chairman)
Burtt R. Ehrlich
Jonathan R. Foster
AUDIT FEES
The aggregate fees billed by Deloitte & Touche LLP, the Company's
independent auditors, for professional services rendered for the audit of the
Company's annual financial statements for ten-month period ended December 31,
2001 and for the review of the financial statements included in the Company's
quarterly reports on Form 10-Q for the ten-month period ended December 31, 2001
were $96,700.
9
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Deloitte and Touche LLP did not bill the Company for any professional
services rendered for information technology services relating to financial
information system design and implementation for the ten-month period ended
December 31, 2001.
ALL OTHER FEES
Deloitte & Touche LLP billed the Company $45,000 for the ten month period
ended December 31, 2001 for services rendered in connection with the offering of
the Company's 4% convertible subordinated notes due August 31, 2006.
The Audit Committee has considered whether the provision of non-audit
services by Deloitte & Touche LLP is compatible with maintaining their
independence.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, age and position of each of the
Company's executive officers and significant employees as of April 20, 2002. The
executive officers of the Company are appointed by and serve at the discretion
of the Board of Directors of the Company.
NAME AGE POSITION
- ---- --- --------
Burtt R. Ehrlich 62 Non-executive Chairman of the Board of Directors
Andrew H. Meyers 45 President and Chief Executive Officer
Anthony J. Puglisi 53 Vice President and Chief Financial Officer
Steven Goldstein 36 Vice President and Secretary
Ronald E. Buron 47 Vice President of Sales
See the table of nominees for election as directors for biographical data
with respect to Messrs. Ehrlich and Meyers.
ANTHONY J. PUGLISI has been Vice President and Chief Financial Officer of
the Company since April 15, 2002. Prior to joining the Company, Mr. Puglisi was
Senior Vice President and Chief Financial Officer of Netrex Corporation, from
September 2000 to October 2001. Mr. Puglisi was Executive Vice President and
Chief Financial Officer of Olsten Corporation from 1993 to 2000, President of
IMC Magnetics Corp. from 1989 to 1993, and Vice President and Chief Financial
Officer of IMC Magnetics Corp. from 1979 to 1989. Mr. Puglisi is currently a
member of the board of directors of China Products of North America and the
Arthritis Foundation- Long Island Chapter.
STEVEN GOLDSTEIN has been a Vice President and Secretary of the Company
since February 13, 2001 and an employee of the Company since December 28, 2000.
Mr. Goldstein
10
was a Vice President of Clinical Sales and Marketing for Hanger
Orthopedic Group, a national provider of orthotic and prosthetic services, since
July 1999. In June 1999, Hanger acquired NovaCare's Orthotics and Prosthetics
Division, where he served as Director, Clinical Sales and Marketing. In 1996,
NovaCare acquired Advanced Orthopedic Technologies where he served as Regional
Director of Patient Care Facilities. In 1996, Advanced Orthopedic Technologies
acquired Med-Tech Orthotics and Prosthetics, a private organization, where he
served as President and Chief Executive Officer.
RONALD E. BURON has been Vice President of Sales of the Company since
November 1, 2001. From 1992 through 2001, Mr. Buron held a variety of positions
with Fusion Sales, a General Electric sales channel partner, most recently as
general manager.
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the compensation
paid or awarded by the Company to the Chief Executive Officer and our other most
highly compensated executive officers whose annual salary and bonus during 2001
exceeded $100,000 (collectively, the "Named Executive Officers").
ANNUAL COMPENSATION
FISCAL LONG-TERM COMPENSATION:
NAME AND YEAR SALARY BONUS OTHER COMMON STOCK UNDERLYING
PRINCIPAL POSITION ENDED(4) $ $ $ OPTIONS (#)
- ------------------ -------- -- -- --- -----------
Andrew H. Meyers Dec. 31, 2001 145,132 93,000 (3) -0-
President and Chief Feb. 28, 2001 6,731(1) -0- (3) 175,000
Executive Officer
Steven Goldstein Dec. 31, 2001 117,686(2) 30,000 (3) -0-
Vice President and Feb. 28, 2001 -0- -0- (3) 80,000
Secretary
(1) Mr. Meyers' employment commenced on December 28, 2000 in an unpaid capacity
as an advisor to the Board of Directors, and his official duties as
President and Chief Executive Officer, and his compensation, commenced on
February 13, 2001.
(2) Mr. Goldstein's employment commenced February 13, 2001.
(3) Less than 10% of the total annual salary and bonus.
(4) The fiscal period ended December 31, 2001 is comprised of only ten months.
11
AGGREGATE OPTION EXERCISES IN FISCAL YEAR 2001 AND 2001 FISCAL YEAR END OPTION
VALUES
The table below sets forth information regarding unexercised options held
by the Company's Named Executive Officers as of December 31, 2001. No options
were exercised by the Company's executive officers during the ten-month period
ended December 31, 2001.
NUMBER OF SHARES OF COMMON STOCK UNDERLYING
UNEXERCISED OPTIONS AT FISCAL VALUE OF UNEXERCISED IN-THE-MONEY
NAME YEAR END OPTIONS AT FISCAL YEAR END (1)
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Andrew H. Meyers 58,333 116,667 $345,623 $691,252
Steven Goldstein 26,666 53,334 $157,996 $316,004
(1) The closing bid price of the Company's Common Stock as reported by NASDAQ
on December 31, 2001 was $7.45. Value is calculated on the difference
between the option exercise price of in-the-money options and $7.45,
multiplied by the number of shares of Common Stock underlying the option.
EMPLOYMENT AGREEMENTS
As of December 28, 2000, the Company entered into an Employment Agreement
with Andrew H. Meyers that provides that he will serve as President and Chief
Executive Officer for a three-year term that will expire December 31, 2003,
subject to early termination as described below. The agreement provides for a
base salary of $175,000. Mr. Meyers also received options under 1992 Stock
Option Plan effective as of December 28, 2000 to purchase 175,000 shares of
Common Stock at an exercise price per share equal to $1.525. These options vest
over a period of three years from the date of grant. Pursuant to his employment
agreement, Mr. Meyers may be entitled, at the discretion of the Compensation
Committee of the Board, to participate in the other option plans and other bonus
plans the Company has adopted based on his performance and the Company's overall
performance. The Company is required to purchase $1 million of life insurance
payable to a beneficiary designated by Mr. Meyers. The Company also has the
right to purchase $5 million of key-man life insurance on Mr. Meyers' life. A
"change in control" of the Company will allow Mr. Meyers to terminate his
employment agreement and to receive payment of $300,000 over a period of one
year in addition to any accrued but unpaid obligations of the Company, as well
as the vesting of all 175,000 options granted to him under the employment
agreement. Mr. Meyers will also be entitled to such payment and the acceleration
of such vesting on the 175,000 options upon the termination of his employment
agreement by the Company without cause. Such 175,000 options will terminate in
the event that Mr. Meyers' employment agreement is terminated by the Company for
cause. Mr. Meyers has also agreed to certain confidentiality and non-competition
provisions and subject to certain exceptions and limitations, to not sell,
transfer or dispose of the shares of Common Stock of options for the purchase of
Common Stock of the Company owned by him until December 31, 2003.
As of December 28, 2000, the Company entered into an Employment Agreement
with Steven Goldstein that provides that he will serve as Vice President for a
three-year term expiring December 31, 2003, at a base salary of $140,000 for the
first year, $155,000 for the second year and $165,000 for the third year. In
addition to his base salary, Mr. Goldstein received options under the
12
1992 Stock Option Plan effective as of December 28, 2000 to purchase 80,000
shares of Common Stock at an exercise price per share equal to $1.525. These
options vest over a period of three years from the date of the grant. Pursuant
to his employment agreement, Mr. Goldstein will be entitled, at the discretion
of the Compensation Committee of the Board, to participate in the incentive
stock option plan and other bonus plans the Company has adopted based on his
performance and the Company's overall performance. Additionally, the Agreement
provides for a $50,000 signing bonus, of which $30,000 was paid immediately and
$20,000 was paid on February 13, 2002, and for a guaranteed minimum bonus of
$10,000 per year for each of the three years of the contract, provided that Mr.
Goldstein has not voluntarily terminated this Agreement without "Good Reason" or
that the Company has not terminated the Agreement for cause. In the event of
termination of Mr. Goldstein's employment for Good Reason or disability, all
unvested remaining options will vest immediately. Such 80,000 options will
terminate in the event that Mr. Goldstein's employment agreement is terminated
by the Company for cause. Mr. Goldstein has agreed to certain confidentiality
and non-competition provisions, and to not sell, transfer or dispose of the
80,000 options (and underlying shares) granted to him under his employment
agreement until December 31, 2003.
As of December 3, 2001, the Company entered into an Employment Agreement
with Ronald E. Buron that provides that he will serve as Vice President of Sales
for a three-year term expiring December 31, 2004 at an annual salary of
$120,000. In addition to his salary, Mr. Buron received options under the 2001
Stock Incentive Plan effective as of December 3, 2001 to purchase 75,000 shares
of Common Stock at an exercise price equal to $6.50 per share. These options
vest and become exercisable three years from the date of grant. Pursuant to his
employment agreement, Mr. Buron will be entitled, at the discretion of the
Compensation Committee of the Board, to participate in the bonus plan the
Company has adopted based on his performance and the Company's overall
performance. Mr. Buron has agreed to certain confidentiality and non-competition
provisions.
As of April 15, 2002, the Company entered into an Employment Agreement with
Anthony J. Puglisi that provides that he will serve as Vice President and Chief
Financial Officer of the Company for a three year term expiring April 15, 2005.
The agreement provides for a base salary of $175,000. Mr. Puglisi also received
options under the Company's 2001 Stock Incentive Plan to purchase 90,000 shares
of Common Stock at an exercise price per share equal to $8.07. These options
vest over a period of three years from the date of grant. Pursuant to his
employment agreement, Mr. Puglisi may be entitled, at the discretion of the
Compensation Committee of the Board, to participate in the bonus plan the
Company has adopted based on his performance and the Company's overall
performance. A "change in control" of the Company will allow Mr. Puglisi to
terminate his employment agreement and to receive payment of one year's salary
paid over a period of one year in addition to any accrued but unpaid bonus, as
well as the vesting of all 90,000 options granted to him under the employment
agreement. Mr. Puglisi will also be entitled to such payment and the
acceleration of such vesting on the 90,000 options upon the termination of his
employment agreement by the Company without cause. Such 90,000 options will
terminate in the event that Mr. Puglisi's employment agreement is terminated by
the Company for cause. Mr. Puglisi has also agreed to certain confidentiality
and non-competition provisions.
13
OFFICER BONUS AND SEVERANCE AGREEMENTS
As an incentive to the Company's executive officers prior to the Tender who
were not Directors (Daniel J. Gorney, President and CEO; Thomas G. Archbold,
Chief Financial Officer; and Ronald Spinelli, Vice President of Operations) to
remain in the employ of the Company through the closing of the Tender and to
assist in the transition period following the Closing, the Company agreed to pay
stay bonuses to such executives if certain performance targets are met at the
month end preceding the Closing of the Tender. Such bonuses were up to $20,000
for Mr. Gorney, $20,000 for Mr. Archbold and $25,000 for Mr. Spinelli, with
minimum guaranteed bonuses to Messrs. Archbold and Spinelli of $5,000 each. To
receive such bonus, such individuals were required to remain in the employ of
the Company for 90 days following the Closing of the Tender. The only bonuses
due and payable are the minimum bonuses which have not yet been paid. Langer
will provide three months base salary as a severance payment to Messrs. Archbold
and Spinelli if they are terminated without cause within six months of the
Closing of the Tender. Mr. Spinelli's employment was terminated and he was paid
three months severance in March 2001. The Company committed to continue to
employ Mr. Gorney, and Mr. Gorney committed to remain employed with the Company,
for three months after the Closing of the Offer; thereafter Mr. Gorney was
entitled to receive three months base salary as a severance payment.
REPORT ON EXECUTIVE COMPENSATION BY THE COMPENSATION COMMITTEE
COMPENSATION POLICY
The policy of the Compensation Committee is to determine or recommend
compensation of the Company's officers reflecting the contribution of such
officers to growth in revenue and earnings, to implement strategic compensation
plans consistent with long term growth objectives of the Company and to enhance
stockholder value. Contributions to specific corporate objectives are evaluated
in setting compensation policy, including growth in revenue and earnings, the
development of new business opportunities, and other strategic initiatives. The
Company's compensation program consists of base salary, bonus and long-term
incentive compensation comprised of the award of stock options and restricted
stock under the Company's 1992 Stock Option Plan and 2001 Stock Incentive Plan.
Compensation decisions, other than base compensation for executive officers with
multi-year contracts, are generally made on a calendar year basis.
14
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER AND PRESIDENT
During the year ended December 31, 2001 (which consisted of only 10 months
commencing March 1, 2001, because of a change in the Company's fiscal year), the
Chief Executive Officer of the Company received, in addition to the compensation
payable under his employment agreement with the Company (see "Employment
Agreements"), a cash bonus of $93,000 which was awarded by the Board of
Directors upon the recommendation of the Compensation Committee (with Mr. Meyers
recused) based upon the Company's completion of a sale of convertible
subordinated notes for an aggregate of approximately $14.6 million and the
completion of the realignment of the Company's management team and operations to
position the Company for growth.
Respectfully submitted,
Jonathan R. Foster
Andrew H. Meyers
Greg Nelson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Foster, Meyers, and Nelson served on the Compensation Committee in
the ten months ended December 31, 2001. Mr. Meyers is the Company's President
and Chief Executive Officer. During the ten months ended December 31, 2001, no
executive officer of the Company (i) served as a member of the Compensation
Committee (or other Board of Directors committee performing similar functions
or, in the absence of any such committee, the Board of Directors) of another
entity, one of whose executive officers served on the Company's Compensation
Committee, (ii) served as director of another entity, one of whose executive
officers served on the Company's Compensation Committee, or (iii) served as
member of the Compensation Committee (or other Board of Directors committee
performing similar functions or, in the absence of any such committee, the Board
of Directors) of another entity, one of whose executive officers served as a
director of the Company.
PERFORMANCE GRAPH
The following graph compares the performance of an investment of $100 in
the Company's Common Stock with the performance of an investment of $100 in the
NASDAQ (U.S.) Index, for the period from January 1, 1997, through December 31,
2001. The stock price performance shown on the graph is not necessarily
indicative of future price performance.
[GRAPH]
15
The comparisons in the chart below are based upon historical data and are
not indicative of, nor intended to forecast, future performance of the Company's
common stock.
12/31/01 2/28/01 2/29/00 2/26/99 2/27/98 2/28/97
-------- ------- ------- ------- ------- -------
Langer, Inc. 426 286 97 107 81 100
NASDAQ (U.S.) 149 164 359 175 135 100
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CONSULTING AGREEMENT WITH KANDERS & COMPANY, INC. In 2001, the Company
entered into, a Consulting Agreement (the "Consulting Agreement") with Kanders &
Company, Inc., the sole shareholder of which is Warren B. Kanders, the sole
manager and voting member of Langer Partners LLC a principal shareholder of the
Company. The Consulting Agreement provides that during its term Kanders &
Company, Inc. will act as a non-exclusive consultant to the Company and will
provide the Company with general investment banking and financial advisory
services, including assistance in the development of a corporate financing and
acquisition strategy. The Consulting Agreement provides for an initial term of
three years. Pursuant to the Agreement, Kanders & Company, Inc. is to receive an
annual fee of $100,000, and was granted options, exercisable immediately
("Consultant's Options") to purchase 100,000 shares of the Company at a price of
$1.525 per share and reimbursement for out-of-pocket expenses. The Consulting
Agreement indemnifies Kanders & Company, Inc., against any claims brought
against the Company or Kanders & Company, Inc. arising out of activities
undertaken by Kanders & Company, Inc. at the request of the Company. In
addition, the Consulting Agreement provides for separate engagement letters in
connection with specific transactions for which Kanders & Company, Inc. will
provide additional services for the Company. Kanders & Company, Inc. agreed
that, during the term of the Consulting Agreement and for a period of one year
thereafter, it will not solicit or engage in any business competitive with the
business of the Company or, subject to certain limitations, invest in or give
financial support to any business competitive with that of the Company. In
connection with the issuance of the Consultant's Options, the Company granted to
Kanders & Company, Inc. certain compulsory, demand and "piggy-back" registration
rights with respect to the securities issuable upon exercise of the Consultant's
Options. The Consultant's Registration Rights Agreement contains certain
covenants and agreements customary for such agreements, including an agreement
by the Company to indemnify Kanders & Company, Inc. from certain liabilities
under the Securities Act in connection with the registration of the securities
underlying the Consultant's Options.
LOAN TO STEVEN GOLDSTEIN. In April 2002, the Company made a full-recourse
secured two-year term loan to Mr. Steven Goldstein, a Vice President and the
Secretary of the Company, in the principal sum of $21,000, which bears interest
at the rate of 4% per year, compounded quarterly. Interest and principal are
payable in full on the due date, April 3, 2004. The loan is secured by a pledge
of all Company Common Stock now owned or hereafter acquired by Mr. Goldstein. At
the present time, Mr. Goldstein owns 19,672 shares of the Company's Common
Stock and has options to acquire an additional 80,000 shares of Common Stock.
The loan may be prepaid in whole or in part at any time by Mr. Goldstein
without penalty and must be repaid upon termination of his employment with the
Company or the sale of any shares of the
16
Company's common stock owned by Mr. Goldstein, to the extent of the proceeds
received upon any such sale.
PROPOSAL NO. 2
REINCORPORATION IN DELAWARE
GENERAL
On May ___, 2002, the Board of Directors unanimously approved, and
recommends for Shareholder approval, the change of the Company's state of
incorporation from New York to Delaware (the "Reincorporation"). The transaction
will not result in any significant change in the business, management, assets,
liabilities or net worth of the Company. Reincorporation in Delaware will allow
the Company to take advantage of certain provisions of the corporate laws of
Delaware. The purposes and effects of the proposed transaction are summarized
below.
In order to effect the Company's Reincorporation in Delaware, the Company
will be merged with and into Langer, Inc. ("New Langer"), a wholly-owned
subsidiary of the Company to be incorporated in Delaware. Following the
Reincorporation, New Langer will qualify to conduct business in New York as a
foreign corporation. Pending the Reincorporation, New Langer will not engage in
any activities except in connection with the proposed Reincorporation. The
mailing address of its principal executive offices and its telephone number will
be the same as those of the Company. As part of its approval and recommendation
of the Company's Reincorporation in Delaware, the Board of Directors has
approved, and recommends to the Shareholders for their adoption and approval, an
Agreement and Plan of Merger (the "Reincorporation Agreement"), pursuant to
which the Company will be merged with and into New Langer. The full texts of the
Reincorporation Agreement, the Certificate of Incorporation (the "New Langer
Certificate of Incorporation") and Bylaws (the "New Langer Bylaws") of New
Langer, under which the Company's business would be conducted after the
Reincorporation, are set forth as Appendices A, B and C, respectively, hereto.
The discussion contained in this Proxy Statement is qualified in its entirety by
reference to such Appendices and such Appendices should be read carefully in
connection herewith.
In the following discussion of the proposed Reincorporation, the term
"Company" includes either or both the Company and New Langer, as the context may
require, without regard to the state of incorporation.
Upon Shareholder approval of the Reincorporation and the receipt by the
Company of the required third party consents to the Reincorporation, if any, and
upon the filing of appropriate certificates of merger by the Secretaries of
State of the States of New York and Delaware, the Company will be merged with
and into New Langer pursuant to the Reincorporation Agreement, resulting in a
change in the Company's state of incorporation from New York to Delaware. The
Company will then be subject to the Delaware General Corporation Law ("DGCL")
and the New Langer Certificate of Incorporation and the New Langer Bylaws. The
effectiveness of the Reincorporation is conditioned upon the filing by both the
Company and New Langer of Articles of Merger with the State of New York and a
Certificate of Merger with the State of Delaware.
17
Upon the effective time of the Reincorporation, each outstanding share of Common
Stock and each share of Common Stock held in the treasury of the Company will be
automatically converted into one share of Common Stock of New Langer.
Outstanding options to purchase shares of Common Stock will be converted
automatically into options to purchase the same number of shares of Common Stock
of New Langer, at the same exercise price and the same terms. Each employee
stock plan and any other employee benefit plan to which the Company is a party,
whether or not such plan relates to the Common Stock, will be assumed by New
Langer and, to the extent any such plan provides for the issuance or purchase of
Common Stock, it will be deemed to provide for the issuance or purchase of
shares of Common Stock of New Langer.
PRINCIPAL REASONS FOR CHANGING THE COMPANY'S STATE OF INCORPORATION
The Board of Directors of the Company believes that the Reincorporation
will provide flexibility for both the management and business of the Company.
Delaware is recognized both domestically and internationally as a favorable
legal and regulatory environment within which to operate. Such an environment
will enhance the Company's operations and its ability to effect acquisitions and
other transactions. For many years, Delaware has followed a policy of
encouraging incorporation in that state and, in furtherance of that policy, has
adopted comprehensive, modern and flexible corporate laws which are periodically
updated and revised to meet changing business needs. As a result, many major
companies have initially chosen Delaware for their domicile or have subsequently
reincorporated in Delaware. The Delaware courts have developed considerable
expertise in dealing with corporate issues, and a substantial body of case law
has developed construing Delaware law and establishing public policies with
respect to Delaware companies, thereby providing greater predictability with
respect to corporate legal affairs.
Delaware law is more familiar to lenders and investors, and therefore may
provide the Company with a more favorable legal environment in which to seek
additional financing. Because Delaware corporate law is more predictable and
familiar to lenders and investors than is New York corporate law, and because
Delaware courts have substantially greater experience in handling matters of a
corporate nature, the Board of Directors believes that changing the Company's
domicile from New York to Delaware would make the Company more attractive to new
and existing shareholders, lenders and investors. The Board of Directors also
believes that the Reincorporation will provide flexibility for both the
management and business of the resulting Company.
The Board of Directors has determined that the most practical and
economical means of reincorporating the Company in the State of Delaware would
be through a reincorporation merger of the Company with and into a wholly-owned
subsidiary of the Company incorporated in Delaware for such purpose. Merger with
a wholly-owned subsidiary is the usual means of reincorporation in another
jurisdiction, since it is inexpensive to accomplish and will qualify as a
tax-free reorganization. Since a reincorporation merger is the usual and most
practical and economical means of reincorporating the Company in Delaware, it
was the only alternative considered by the Board of Directors.
18
DISSENTERS' RIGHTS
Under the New York Business Corporation Law and the Delaware General
Corporation Law (the "DGCL"), the Company's Shareholders are not entitled to
dissenter's rights with respect to the Reincorporation or to demand appraisal of
their shares as a result of the approval of the Reincorporation.
EFFECTS ON THE COMPANY
Upon the effective date of the Reincorporation, the business and internal
affairs of the Company will be governed by the DGCL. The New Langer Certificate
of Incorporation provides greater limitations on the personal liability of
directors to the Company and its Shareholders and expanded indemnification
provisions. The Reincorporation will not result in a significant change in the
business, assets or liabilities of the Company. If the Reincorporation Agreement
is approved, the Board of Directors of the Company will be comprised of the same
five members elected at the Meeting to comprise the Company's Board of
Directors. The directors elected in connection with the current Proposal No. 1
for election of Company directors will serve until the next annual meeting of
the Shareholders of the New Langer, or until their respective successors are
elected and qualified. The New Langer Bylaws will continue to allow a minimum of
3 and a maximum of 7 directors, as provided for currently in the Company's
Charter and Bylaws. Immediately after the Reincorporation, New Langer will also
have the same executive officers as did the Company prior to the
Reincorporation.
CAPITALIZATION
The Company's current Certificate of Incorporation authorizes the issuance
of a total of 10,250,000 shares, of which (i) 10,000,000 shares are common
stock, par value $0.02 per share, and (ii) 250,000 shares are preferred stock,
$1.00 par value, issuable in series and on such terms and with such relative
rights, preferences and other terms as the Board of Directors may determine at
the time of issuance of each series of preferred stock (such preferred stock
being so-called "blank check" preferred stock). The New Langer Certificate of
Incorporation authorizes the issuance of a total of 50,250,000 shares, of which
(i) 50,000,000 shares would be common stock, par value $0.02 per share, and (ii)
250,000 shares would be "blank check" preferred stock. At the present time, no
shares of New Langer preferred stock or Company Preferred Stock are outstanding.
The proposed increase in the authorized Common Stock would assure that an
adequate supply of authorized, unissued shares is available for general
corporate needs and to provide the Company with the necessary flexibility to
issue stock in connection with acquisitions, merger transactions or financings
without the expense and delay incidental to obtaining Shareholder approval of an
amendment to the Charter at the time of such action, except as may be required
for a particular issuance by applicable law or by the rules of any stock
exchange on which the Company's securities may then be listed.
19
The additional authorized shares of Common Stock may be used for such
purposes as raising additional capital or the financing of an acquisition or
business combination. Such shares would, however, be available for issuance
without further action by the Shareholders, unless required by applicable law.
The additional shares of Common Stock for which authorization is sought would be
identical to the shares of the Common Stock of the Company now authorized.
Holders of Common Stock do not have preemptive rights to subscribe for
additional securities which may be issued by the Company. The issuance of
additional shares of Common Stock may, among other things, have a dilutive
effect on the earnings per share and on the equity and voting power of existing
holders of Common Stock and may adversely affect the market price of the Common
Stock. Although the Board of Directors has no present intention of issuing
additional shares for such purposes, the proposed increase in the number of
authorized shares of Common Stock could enable the Board of Directors to render
more difficult or discourage an attempt by another person or entity to obtain
control of the Company. Such additional shares could be issued by the Board of
Directors in a public or private sale, merger or similar transaction, increasing
the number of outstanding shares and thereby diluting the equity interest and
voting power of a party attempting to obtain control of the Company. The
increase in the authorized shares of Common Stock has not, however, been
proposed for an anti-takeover-related purpose and the Company has no knowledge
of any current efforts to obtain control of the Company or to effect large
accumulations of its Common Stock. Certain provisions of the Bylaws of both the
Company and New Langer relating to the calling of special shareholders meetings
could also have the effect of deterring takeover attempts because of the
procedural provisions contained therein.
This proposed increase in the authorized Common Stock is not part of any
plan by the Company to adopt a series of amendments to its Charter or Bylaws so
as to render the takeover of the Company more difficult. Moreover, the Company
is not submitting this Proposal to enable it to frustrate any efforts by another
party to acquire a controlling interest or to seek representation on the Board
of Directors.
The Company believes that the proposed increase in the number of authorized
shares of Common Stock will provide several long-term advantages to the Company
and its Shareholders. The passage of this Proposal will facilitate the Company
to pursue acquisitions or enter into transactions which the Board of Directors
believes provide the potential for growth and profit. If additional authorized
shares are available, transactions dependent upon the issuance of additional
shares will be less likely to be undermined by delays and uncertainties
occasioned by the need to obtain Shareholder authorization to provide for the
shares necessary to consummate such transactions. The consummation of such
transactions do not generally require the approval of Shareholders, however
where the issuance of additional shares of Common Stock could, in the aggregate,
equal or exceed 20% of the then outstanding shares of Common Stock of the
Company, Shareholder approval may be required under applicable stock exchange or
similar rules. The ability to issue shares, as the Board of Directors determines
from time to time to be in the Company's best interests, will also permit the
Company to avoid the extra expenses which would be incurred in holding special
Shareholders meetings solely to approve an increase in the number of shares
which the Company has the authority to issue.
20
As of the effective time of the Reincorporation, all the outstanding Common
Stock of the Company shall automatically become an equal number of shares of
common stock of New Langer, and no shares of preferred stock of New Langer shall
then be outstanding.
BLANK CHECK PREFERRED STOCK
Both the Company and New Langer authorize the Board of Directors to issue
shares of Preferred Stock in series with such preferences as designated at the
time of issuance The Board of Directors of New Langer does not currently intend
to seek stockholder approval prior to any issuance of shares of its Preferred
Stock if the Reincorporation proposal is approved, except as required by law or
regulation. Frequently, opportunities arise that require prompt action, and the
Board of Directors believes that the delay necessary for stockholder approval of
a specific issuance would be a detriment to New Langer and its stockholders. The
Board of Directors does not intend to issue any Preferred Stock except on terms
which the Board of Directors deems to be in the best interests of New Langer and
its then existing stockholders. The foregoing has been the policy of the
Company's Board of Directors.
At the present time, there are no classes or series of Preferred Stock
issued or outstanding in the Company or New Langer, and none would be issuable
as a result of the Reincorporation. The voting rights and other rights to be
accorded to any unissued series of Preferred Stock of New Langer would be fixed
by the Board of Directors of New Langer. Accordingly, if the Board of New Langer
so authorizes hereafter in connection with an issuance of Preferred Stock, the
holders of Preferred Stock may be entitled to vote separately as a class in a
connection with approval of certain extraordinary corporation transactions or
might be given a disproportionately large number of votes, including votes for
the election of Directors. Such Preferred Stock could also be convertible into a
large number of shares of common stock of New Langer under certain circumstances
or have other terms that might make acquisition of a controlling interest in New
Langer more difficult or more costly, including the right to elect additional
directors to the Board of Directors of New Langer. Potentially, Preferred Stock
could be used to create voting impediments or to frustrate persons seeking to
effect a merger or otherwise to gain control of New Langer. Also, Preferred
Stock could be privately placed with purchasers who might side with the
management of New Langer in opposing a hostile tender offer or other attempt to
obtain control.
STOCK CERTIFICATES
It will not be necessary for Shareholders of the Company to exchange their
existing stock certificates for certificates of New Langer; outstanding stock
certificates of the Company should not be destroyed or sent to the Company.
After the Reincorporation, Shareholders of the Company may continue to make
sales or transfers using their pre-Reincorporation stock certificates. New
Langer will issue new certificates representing shares of New Langer common
stock for transfers occurring after the Reincorporation. On request, New Langer
will issue new certificates to anyone who holds pre-Reincorporation stock
certificates. Any request for new certificates will be subject to normal stock
transfer requirements, including proper endorsement, signature guarantee, if
required, and payment of applicable taxes.
TRANSFERABILITY OF SHARES
Shareholders whose shares of Common Stock were freely tradable before the
Reincorporation will own shares of New Langer that are freely tradable after the
Reincorporation.
Similarly, any Shareholders holding securities with transfer restrictions
before the Reincorporation will hold shares of New Langer that have the same
transfer restrictions after the Reincorporation. For purposes of computing the
holding period under Rule 144 promulgated under the Securities Act, those who
hold New Langer stock certificates will be deemed to have acquired their shares
on the date they originally acquired their pre-merger shares.
After Reincorporation, New Langer will continue to be a publicly held
company, and, like the Company's shares, shares of New Langer common stock will
be traded on the NASDAQ Small Cap Market. New Langer will also file with the
Securities and Exchange Commission and provide to its shareholders the same
types of information that the Company has previously filed and provided.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION
The discussion of U.S. federal income tax consequences set forth below is
for general information only and does not purport to be a complete discussion or
analysis of all potential tax consequences that may apply to a Shareholder. The
Company strongly urges you to consult your tax advisors to determine the
particular tax consequences to you of the Reincorporation, including the
applicability and effect of federal, state, local, foreign and other tax laws.
The following discussion sets forth the principal U.S. federal income tax
consequences of the reincorporation to the Company's Shareholders who hold their
shares as a capital asset. It does not address all of the federal income tax
consequences that may be relevant to particular Shareholders based upon their
individual circumstances or to Shareholders who are subject to
21
special rules, such as financial institutions, tax-exempt organizations,
insurance companies, dealers in securities, foreign holders or holders who
acquired their shares pursuant to the exercise of employee stock options or
otherwise as compensation. The following disclosure is based on the Internal
Revenue Code, laws, regulations, rulings and decisions in effect as of the date
of this proxy statement (the "Code"), all of which are subject to change,
possibly with retroactive effect, and to differing interpretations. The
following disclosure does not address the tax consequences to the Company's
Shareholders under state, local and foreign laws. The Company has neither
requested nor received a tax opinion from legal counsel with respect to the
consequences of the Reincorporation. No rulings have been or will be requested
from the Internal Revenue Service with respect to the consequences of the
Reincorporation. There can be no assurance that future legislation, regulations,
administrative rulings or court decisions would not alter the consequences set
forth below.
The Reincorporation provided for in the Reincorporation Agreement is
intended to be a tax-free reorganization under the Code. Assuming the
Reincorporation qualifies as a tax-free reorganization, no gain or loss will be
recognized to the holders of the Company's Common Stock as a result of
consummation of the Reincorporation, and no gain or loss will be recognized by
the Company or New Langer. Each holder (as of the effective time of the
Reincorporation) of the Company's Common Stock will have the same basis in the
stock of New Langer received by that holder pursuant to the Reincorporation as
that holder has in the Company's stock held by that holder at the time the
Reincorporation is consummated. Each Shareholder's holding period with respect
to the New Langer common stock will include the period during which that holder
held the corresponding Company stock, provided the latter was held by such
holder as a capital asset at the time of consummation of the Reincorporation was
consummated.
ACCOUNTING TREATMENT
In accordance with generally accepted accounting principles, the Company
expects that the merger will be accounted for as a reorganization of entities
under common control and recorded at historical cost. This will have no
significant impact on the Company's financial statements.
SIGNIFICANT CHANGES CAUSED BY THE REINCORPORATION
In general, the Company's corporate affairs are governed at present by the
Business Corporation Law of New York (the "New York Law"), by the certificate of
incorporation filed in New York (the "The Company's Certificate") and the
by-laws adopted pursuant to New York Law (the "The Company's By-laws"). The
Company's Certificate and The Company's By-laws are available for inspection
during business hours at the Company's principal executive offices. In addition,
copies may be obtained by writing to the Company. If the Shareholders approve
this Proposal No. 2, the Company will merge into, and its business will be
continued by, New Langer. Following the merger, issues of corporate governance
and control would be controlled by the General Corporation Law of Delaware
("Delaware Law"), rather than New York Law. The Company's Certificate and the
Company's By-laws will be replaced by the New Langer Certificate and the New
Langer By-laws, forms of which are attached as Appendices B and C,
22
respectively, to this proxy statement. Accordingly, the differences among these
documents and between New York Law and Delaware Law are relevant to your
decision whether to approve the Reincorporation.
Certain differences between New York Law and Delaware Law and between the
various organizational documents that the Board of Directors, with the advice of
counsel, considers to be significant are discussed below. Shareholders are
advised that many provisions of Delaware Law and New York Law may be subject to
differing interpretations, and that those offered in this proxy statement may be
incomplete in certain respects. The following discussion is not a substitute for
direct reference to the statutes themselves or for professional guidance as to
how to interpret them. In addition, the following discussion is qualified in its
entirety by reference to Delaware Law, New York Law, case law applicable in
Delaware and in New York, and the organizational documents of each of the
Company and New Langer. Shareholders are requested to read the following
discussion in conjunction with the Reincorporation Agreement, the New Langer
Certificate and the New Langer By-laws attached to this proxy statement.
Under New York Law a person who owns stock of the Company is referred to as
a "shareholder." Under Delaware Law such person is known as a "stockholder."
Such terms have the same meaning and are used herein interchangeably.
Company Name
Following the Reincorporation, the name of the Company will continue to be
Langer, Inc.
Shares of Capital Stock
The Company's Certificate authorizes 10,000,000 shares of Common Stock and
250,000 shares of preferred stock, of which [4,200,922] shares of Common Stock
were issued and outstanding as of the Record Date, and no shares of preferred
stock were outstanding. The New Langer Certificate will authorize 50,000,000
shares of common stock and 250,000 shares of preferred stock. No shares of any
capital stock will be issued by New Langer in connection with the
Reincorporation, other than the shares into which our shares of Common Stock
will convert. New Langer shares of Common Stock will be reserved for issuance in
an amount to equal the number of shares of Company Common Stock currently
reserved for issuance pursuant to currently outstanding options, warrants, or
other rights to purchase Company Common Stock. No shares of New Langer preferred
stock will be issued in the Reincorporation.
Board of Directors
Both New York Law and Delaware Law permit "classified" boards of directors,
which means the directors have staggered terms that do not all expire at once.
New York Law permits as many as four classes, while Delaware Law permits up to
three classes. The Company does not currently have a classified board.
23
Amendment of Certificate of Incorporation and By-Laws
Delaware Law allows a Board of Directors to recommend that stockholders
amend the certificate of incorporation, and a majority of the outstanding shares
entitled to vote at a stockholders' meeting are generally sufficient to approve
that amendment. Under New York Law, except for certain ministerial changes to
the certificate of incorporation that the Board of Directors may authorize and
except as otherwise required by the certificate of incorporation, the Board of
Directors recommends an amendment to the certificate of incorporation for
approval by shareholders, and a majority of the outstanding shares entitled to
vote at a shareholders' meeting is sufficient to approve that amendment. Both
laws require that a majority of the holders of any particular class of stock
must approve the amendment if it would have an adverse effect on the holders of
that class. In addition, both laws allow a corporation to require a vote larger
than a majority on special types of issues.
Under the Company Bylaws, the New Langer Bylaws, New York Law and Delaware
Law, the By-laws may be amended or repealed, or new by-laws may be adopted, by
the shareholders entitled to vote in the election of directors or by the Board
of Directors.
Who May Call a Special Meeting of Shareholders
Under both New York Law and Delaware Law, the Board of Directors or anyone
authorized in the certificate of incorporation or by-laws may call a special
meeting of shareholders. Currently, the Company's By-laws provide that a special
meeting can be called by the directors, the President, or the President and
Secretary upon the written request of a majority of the shareholders. The New
Langer By-laws will continue this provision.
Right of Shareholders to Inspect Shareholder List
Under New York Law, a shareholder of record may inspect the list of
shareholders of record if at least five days previously the shareholder issued a
written demand to do so. A corporation may deny a shareholder's demand if the
shareholder refuses to give an affidavit that its inspection is not for certain
purposes unrelated to company business and that the shareholder has not been
involved in the last five years in selling or offering to sell a list of record
shareholders. A New York corporation must also produce a list of shareholders as
of the record date if a shareholder requests the list at the annual meeting.
Under Delaware Law, any stockholder may, upon making a demand under oath stating
the purpose thereof, inspect the stockholders' list for any purpose reasonably
related to that person's interest as a stockholder. In addition, for at least
ten days prior to each stockholders' meeting, as well as at the meeting, a
Delaware corporation must make available for examination a list of stockholders
entitled to vote at the meeting.
Vote Required for Certain Transactions
Until February 1998, New York Law required the holders of at least
two-thirds of the outstanding stock entitled to vote of a New York corporation
to approve certain mergers,
24
consolidations or sales of all or substantially all the corporation's assets
that may occur outside the ordinary course of business. Since February 1998, a
New York corporation then in existence, which would include the Company, may
provide in its certificate of incorporation that the holders of a majority of
the outstanding stock entitled to vote may approve such transactions. The
Company has not, however, adopted such a provision in its certificate of
incorporation, and so the holders of at least two-thirds of the Company's
outstanding stock entitled to vote must approve such transactions.
Under Delaware Law, unless the certificate of incorporation or by-laws
provide otherwise (but in no case may such requirement be less than one-third of
the outstanding stock entitled to vote on such transactions), the holders of a
majority of the outstanding stock entitled to vote on such transactions have the
power to approve a merger, consolidation, or sale of all or substantially all
the assets. The New Langer Certificate does not contain any provision otherwise,
so the holders of a majority of the outstanding stock entitled to vote thereon
may approve a merger, consolidation, or sale of all or substantially all of New
Langer's assets. Notwithstanding the foregoing, under Delaware Law the vote of
the stockholders of the surviving corporation is not required to authorize a
merger if these three conditions are met:
o the merger agreement does not amend the surviving corporation's
certificate of incorporation;
o each share of stock of the surviving corporation that is outstanding
or in the treasury immediately prior to the effective date of the
merger is to be an identical outstanding or treasury share of the
surviving corporation after the effective date; and
o the merger results in no more than a 20% increase in its outstanding
common stock.
Special vote requirements may apply to certain business combinations with
interested shareholders. See the discussion of these requirements below under
the heading "Business Combinations with Interested Shareholders."
Removal of Directors by Shareholders
Under New York Law, directors may be removed for cause by the shareholders,
or, if the certificate of incorporation or by-laws provide, by either the
shareholders or the directors. Furthermore, if the certificate of incorporation
or by-laws so provide, directors may be removed without cause by a vote of the
shareholders. The Company's Certificate and By-laws provide that directors may
be removed with or without cause by the shareholders, and that directors may be
removed with cause by the Board of Directors. After the Reincorporation,
directors under Delaware Law would generally be subject to removal with or
without cause by a majority of the stockholders, unless the certificate of
incorporation provides otherwise, but in a Delaware corporation with a
classified board, unless the certificate of incorporation provides otherwise,
directors can only be removed by shareholders for cause.
25
Limitation of Directors' Liability
Both New York Law and Delaware Law permit a corporation to limit a
director's personal liability for actions taken in that director's official
capacity. Under New York Law, a director is not liable to the corporation for
the benefit of its creditors or shareholders for damages if the director has
acted in good faith and with the same degree of care that an ordinarily prudent
person would exercise in similar circumstances. New York Law also permits a
corporation to include in its certificate of incorporation a provision
eliminating or limiting the personal liability of a director, with certain
specific exceptions, to the corporation or its shareholders for damages for any
breach of duty in that capacity. The Company's Certificate contains a provision
that limits or eliminates a director's liability for any breach of duty in his
capacity as a director to the maximum extent permitted by law. Under Delaware
Law limits on a director's liability must be addressed in the certificate of
incorporation. The New Langer Certificate limits directors' monetary liability
to the fullest extent permitted by Delaware Law. However, in some cases
directors may be liable despite these limitations. Delaware Law forbids any
limitation of liability where (1) a director breached the duty of loyalty to the
corporation or its stockholders, (2) a director's acts or omissions were not in
good faith or involved intentional misconduct or a knowing violation of law, (3)
a director received an improper personal benefit from a transaction involving
the corporation, or (4) a director authorized an unlawful dividend or stock
repurchase or redemption.
Indemnification of Directors and Officers; Insurance
With some variations, both New York Law and Delaware Law allow a
corporation to "indemnify," that is, to make whole, any person who is or was a
director or officer of the corporation if that person is held liable for
something that person did or failed to do in an official capacity. Besides
covering court judgments, out-of-court settlements, fines, and penalties, both
laws also allow the corporation to advance certain reasonable expenses the
person incurs or to reimburse the person's expenses after they are incurred. The
right to indemnification under both laws does not normally exclude other rights
of recovery the indemnified person may have.
Additionally, each of the two laws permits a corporation to purchase
insurance for its directors and officers against some or all of the costs of
such indemnification or against liabilities arising from actions and omissions
of the insured person, even though the corporation may not have power to
indemnify the person against such liabilities. New York Law, however, restricts
the kinds of claims that may be made under insurance purchased by the
corporation against these liabilities. For example, there would be no insurance
coverage if the person to be indemnified was guilty of deliberate dishonesty and
that dishonesty was material to the event that produced the claim, or if the
person gained some financial profit or other advantage to which he or she was
not legally entitled.
Neither New York Law nor Delaware Law permits indemnification of a director
or officer if a court finds the person liable to the corporation itself, unless
the court determines otherwise. Furthermore, if the corporation sues the person
because of some act or omission, the corporation does not need to indemnify the
person unless a court determines the person was not liable. In
26
addition, New York Law and Delaware Law generally require that the person to be
indemnified must have acted in good faith and in a manner he or she reasonably
believed was consistent with the best interests of the corporation.
The Company's By-laws do provide for the indemnification of directors, and
the New Langer Certificate and By-laws provide for indemnification to the
fullest extent permitted by Delaware Law.
If the Reincorporation is approved by the Company's Shareholders, the New
York Law indemnification provisions will continue to apply to acts and omissions
that occurred prior to the effective date of the Reincorporation.
Transactions with Interested Directors
New York Law provides several methods for establishing the validity of
transactions between a corporation and interested directors, including a vote by
the uninterested directors. The comparable provision of Delaware Law provides
that no transaction between a corporation and an interested director is void or
voidable solely because such director is present at or participates in the
meeting or because that director's votes are counted if the material facts of
that director's interest are known to the board of directors and the board of
directors in good faith authorizes the transaction by vote of a majority of the
disinterested directors, or if that director's interest is disclosed to
stockholders and the stockholders in good faith approve the transaction.
Loans and Guarantees of Obligations for Directors
Under New York Law, a corporation may not lend money to or guarantee the
obligation of a director unless (1) the shareholders (other than the interested
director) approve the transaction or (2) the certificate of incorporation
provides that the board may approve any such loan or guarantee that it
determines will benefit the corporation. The Company's Certificate makes no
provision for approval by the Board of Directors of such a loan or guaranty. For
purposes of shareholder approval, the holders of a majority of the votes of the
shares entitled to vote constitute a quorum, but shares held by directors who
are benefited by the loan or guarantee are not included in the quorum. Under
Delaware Law, a board of directors may authorize loans or guarantees of
indebtedness to, or otherwise assist, employees, officers, and directors
whenever, in the judgment of the board of directors, such a loan, assistance or
guaranty may reasonably be expected to benefit the corporation.
Issuance of Rights and Options to Directors, Officers, and Employees
New York Law requires that the issuance of options or rights to purchase
stock to directors, officers or employees of a corporation as an incentive to
service or continued service to the corporation must be authorized as required
by the policies of all stock exchanges or automated quotation systems on which
the corporation's shares are listed or authorized for trading, or, if the
corporation's shares are not so listed or authorized, by a majority of the votes
cast at a meeting of shareholders by the holders of shares entitled to vote
thereon, or be
27
authorized by and consistent with a plan adopted by such a vote of shareholders.
The Delaware Law does not require stockholder approval of such transactions.
Consideration for Shares
Under New York Law, consideration for the issuance of shares may consist of
money or other property, tangible or intangible, labor or services actually
received, a binding obligation to pay the purchase price, a binding obligation
to perform services, or any combination of the above. Stock certificates may not
be issued until the amount of consideration determined to be stated capital has
been paid in the form of cash, services rendered, personal or real property, or
any combination of these, plus consideration for the balance, if any, which may
include the above-referenced binding obligations. Under Delaware Law a
corporation can receive cash, services, personal or real property, leases of
real property or any combination of these as payment in full or in part for the
shares. A purchaser of shares under Delaware Law may pay an amount equal to or
greater than the par value of those shares if the corporation receives a binding
obligation of the purchaser to pay the balance of the purchase price.
Dividends; Redemption of Stock
Subject to its charter provisions, under both New York Law and Delaware
Law, a corporation may generally pay dividends, redeem shares of its stock or
make other distributions to shareholders if the corporation is solvent and would
not become insolvent because of the dividend, redemption, or distribution. The
assets applied to such a distribution may not be greater than the corporation's
surplus.
Under New York Law, dividends may be paid or distributions made out of
surplus only, so that the net assets of the corporation remaining after any such
payment or distribution must be at least equal to the amount of stated capital.
Delaware Law defines surplus as the excess of net assets over stated capital and
permits the board to adjust stated capital. If there is no stated capital.
Delaware Law allows the corporation to apply net profits from the current or
preceding fiscal year, or both, in payment of a dividend or redemption unless
the corporation's net assets are less than the capital represented by issued and
outstanding stock that has a preference on any distribution of assets.
In general, with certain restrictions, New York Law permits a corporation
to provide in its certificate of incorporation for redemption of one or more
classes or series of its shares. One such restriction provides that common stock
may be redeemed, with certain exceptions, only when the corporation has an
outstanding class of common shares that is not subject to redemption. Delaware
Law permits redemption of a corporation's common stock only when, among other
things, no class of preferred stock is outstanding, with certain exceptions.
Appraisal Rights
Generally, "appraisal rights" entitle dissenting shareholders to receive
the fair value of their shares in a merger or consolidation of a corporation or
in a sale of all or substantially all its
28
assets. New York Law also extends appraisal rights to an exchange of a
corporation's shares. New York Law provides that dissenting shareholders have no
appraisal rights if their shares are listed on the New York Stock Exchange or
another national securities exchange, including the NASDAQ National Market
(where the Company's stock is trading). However, in the case of shares not
listed on an exchange, appraisal rights under New York Law allow a voting and
dissenting shareholder of a New York corporation, with various exceptions, to
receive fair value for its shares in such transactions. One exception is a
merger between a parent corporation and its subsidiary when the parent owns at
least 90% of the subsidiary. In this case, a shareholder of the parent
corporation has no appraisal rights. On the other hand, appraisal rights are
available to shareholders who are not allowed to vote on a merger or
consolidation and whose shares will be cancelled or exchanged for cash or
something else of value other than shares of the surviving corporation or
another corporation. When appraisal rights are available, the shareholder may
have to request the appraisal and follow other required procedures.
Similarly, under Delaware Law, appraisal rights are not available to a
stockholder if, among other things, the corporation's shares are listed on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc., held by more than 2,000 stockholders of record, or if the
corporation will be the surviving corporation in a merger that does not require
the approval of the surviving corporation's stockholders. However, regardless of
the foregoing, a dissenting shareholder in a merger or consolidation has
appraisal rights under Delaware Law if the transaction requires the exchange of
shares for anything of value other than one or more of the following:
o shares of stock of the surviving corporation or of a new corporation
that results from the merger or consolidation;
o shares of another corporation that will be listed on a national
securities exchange, designated as a national market system security
on an interdealer quotation system by the National Association of
Securities Dealers, Inc., or held by more than 2,000 stockholders of
record after the merger or consolidation occurs; or
o cash instead of fractional shares of the surviving corporation or
another corporation.
Business Combinations with Interested Shareholders
Provisions in both New York Law and Delaware Law may help to prevent or
delay changes of corporate control. In particular, both New York Law and
Delaware Law restrict or prohibit an interested shareholder from entering into
certain types of business combinations unless the Board of Directors approves
the transaction in advance.
Under New York Law, an interested shareholder is generally prohibited from
entering into certain types of business combinations with a New York corporation
for a period of five years after becoming an "interested shareholder," unless
the Board of Directors approved either the business combination or the
acquisition of stock by the interested shareholder before the
29
interested shareholder acquired its shares. An "interested shareholder" under
New York Law is generally a beneficial owner of at least 20% of the
corporation's outstanding voting stock or is an affiliate or associate of a
corporation who owned at least 20% of the outstanding stock within the
preceding five years. "Business combinations" under New York Law include the
following:
o mergers and consolidations between corporations or with an interested
shareholder;
o sales, leases, mortgages, pledges, transfers or other dispositions to
an interested shareholder of assets with an aggregate market value
which either equals 10% or more of the corporation's consolidated
assets or outstanding stock, or represents 10% or more of the
consolidated earning power or net income of the corporation;
o issues and transfers to an interested shareholder of stock with an
aggregate market value of at least 5% of the aggregate market value of
the outstanding stock of the corporation;
o liquidation or dissolution of the corporation proposed by or in
connection with an interested shareholder;
o reclassification or recapitalization of stock that would increase the
proportionate stock ownership of an interested shareholder; and
o the receipt by an interested shareholder of benefit from loans,
guarantees, pledges or other financial assistance or tax benefits
provided by the corporation.
New York Law allows such a business combination to take place five or more
years after the interested shareholder became an interested shareholder if the
transaction is approved by a majority of the voting stock not owned by the
interested shareholder or by an affiliate or associate of the interested
shareholder. Business combinations are also permitted when certain statutory
"fair price" requirements are met and in certain other circumstances.
Section 203(a) of Delaware Law generally prohibits an interested
stockholder from entering into certain types of business combinations with a
Delaware corporation for three years after becoming an interested stockholder
unless:
o before the stockholder became an interested stockholder, the Board of
Directors approved the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder;
o after the transaction that resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85%
of the voting stock of the corporation outstanding at the time the
transaction commenced, subject to technical calculation rules; or
30
o on or after the time the interested stockholder became an interested
stockholder, the board of directors approved the business combination,
and at least two-thirds of the outstanding voting stock that is not
owned by the interested stockholder also ratified the business
combination at a stockholders' meeting.
An "interested stockholder" under Delaware Law is any person other than the
corporation and its majority-owned subsidiaries who owns at least 15% of the
outstanding voting stock or is an affiliate or associate of the corporation who
owned at least 15% of the outstanding stock within the preceding three years,
and this definition includes affiliates of the corporation. Briefly described,
the prohibited combinations include:
o mergers or consolidations;
o sales, leases, exchanges, mortgages, pledges, transfers or other
dispositions of 10% or more of (1) the aggregate market value of all
assets of the corporation or (2) the aggregate market value of all the
outstanding stock of the corporation;
o any transactions resulting in the issuance or transfer by the
corporation of stock in the corporation to the interested stockholder
except in limited instances;
o receipt by the interested stockholder of the benefit of loans,
advances, guarantees, pledges or other financial benefits provided by
the corporation; and
o any other transaction, with certain exceptions, that increases the
proportionate share of the stock owned by the interested stockholder.
Delaware Law permits a corporation to elect not to be governed by the
provisions of Section 203. The Board of Directors has determined that it would
not be in the best interests of the Company and our shareholders to make such an
election and, accordingly, the New Langer Certificate does not include an
election by the Company not to be governed by the Section 203 provisions.
Proxies
Under New York Law, a proxy cannot be voted or acted upon after 11 months
from its date unless the proxy provides for a longer period. Under Delaware Law
a proxy cannot be voted or acted upon after three years from its date unless the
proxy provides for a longer period.
Number of Directors; Filling Vacancies
The Company's By-laws provide that the number of directors constituting the
Board of Directors may be fixed from time to time by action of the shareholders
or by a majority vote of the entire Board of Directors, provided that the number
of directors must be at least three. The Company currently has four members on
its Board of Directors.
31
The New Langer Certificate provides that the number of directors
constituting the Board of Directors shall be fixed from time to time exclusively
pursuant to a resolution adopted by a majority of the Board of Directors,
provided that such number shall be no fewer than three and no more than eleven.
In addition, the New Langer Certificate provides that any vacancy on the New
Langer Board of Directors that results from death, resignation,
disqualification, removal or other causes and any newly created directorships
resulting from an increase in the number of directors shall be filled by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors, or a successor or
successors may be chosen at a special meeting of our stockholders called for
that purpose, and that any director elected by the Board to fill such vacancy
shall hold office until the next election of the class for which the director
was chosen, his successor is elected and qualified, or his resignation, removal
or death.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
REINCORPORATION OF THE COMPANY FROM NEW YORK TO DELAWARE.
32
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP has audited the financial statements of
the Company for the ten-month period ended December 31, 2001. The Board of
Directors desires to continue the services of Deloitte & Touche LLP for the year
ended December 31, 2002. Accordingly, the Board of Directors will recommend to
the Meeting that the shareholders ratify the appointment by the Board of
Directors of the firm of Deloitte & Touche LLP to audit the financial statements
of the Company for the current year ending December 31, 2002. Representatives of
that firm are expected to be present at the Meeting, shall have the opportunity
to make a statement if they desire to do so and are expected to be available to
respond to appropriate questions. In the event the shareholders do not ratify
the appointment of Deloitte & Touche LLP, the appointment will be reconsidered
by the Audit Committee and the Board of Directors.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present any other matter for action at the Meeting other than as set
forth in the Notice of Annual Meeting and this Proxy Statement. If any other
matters properly come before the Meeting, it is intended that the shares
represented by the proxies will be voted, in the absence of contrary
instructions, in the discretion of the persons named in the proxy.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and any
persons who own more than 10% of the Company's capital stock to file with the
Commission (and, if such security is listed on a national securities exchange,
with such exchange), various reports as to ownership of such capital stock. Such
persons are required by Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely upon reports and representations submitted by the directors,
executive officers and holders of more than 10% of the Company's capital stock,
all Forms 3, 4 and 5 showing ownership of and changes of ownership in the
Company's capital stock during the ten-month period ended December 31, 2001 were
timely filed with the Commission and NASDAQ.
33
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the ten-month
period ended December 31, 2001, is being mailed to shareholders along with this
Proxy Statement. Any Shareholder who has not received a copy of the Annual
Report to Shareholders and wishes to do so should contact the Company's
Secretary by mail at the address set forth in the Notice of Annual Meeting or by
telephone at (631) 667-1200.
FORM 10-K
The Company will provide, without charge, to each shareholder as of the
Record Date, on the written request of the shareholder, a copy of the Company's
Annual Report on Form 10-K for the ten-month period ended December 31, 2001,
including the financial statements and schedules, as filed with the Securities
and Exchange Commission. Stockholders should direct the written request to the
Company's Secretary by mail at the address set forth in the Notice of Annual
Meeting.
PROPOSALS BY SHAREHOLDERS
Any proposal of a Shareholder intended to be presented at the annual
meeting of shareholders to be held in 2003 must be received by the Company no
later than ________ to be considered for inclusion in the Proxy Statement and
form of proxy for the 2003 annual meeting. Proposals must comply with Rule 14a-8
promulgated by the Commission pursuant to the Exchange Act.
FOR THE BOARD OF DIRECTORS
STEVEN GOLDSTEIN, SECRETARY
34
APPENDIX A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (hereinafter called the "Agreement"),
dated as of April _______, 2002, is between Langer, Inc., a New York corporation
("Old Company"), and Langer, Inc., a Delaware corporation ("Company").
WHEREAS, on the date hereof the Old Company is a corporation duly organized
and existing under the laws of the State of New York, having authorized capital
stock of 10,250,000 shares, of which 10,000,000 shares are designated as common
stock, $0.02 par value per share ("Old Company Common Stock"), and 250,000
shares are designated as preferred stock, $1.00 par value per share ("Old
Company Preferred Stock"), issuable in one or more classes or series with the
Board of Directors having the right to designate the rights, preferences, and
limitations thereof.
WHEREAS, the Company is a corporation duly organized and existing under the
laws of the State of Delaware, currently having an authorized capital stock of
50,000,000 shares of common stock, $0.02 par value per share (the "Company
Common Stock"), and 250,000 shares of preferred stock, $1.00 par value per share
("Company Preferred Stock" or "Preferred Stock"), issuable in one or more
classes or series with the Board of Directors having the right to designate the
rights, preferences, and limitations thereof.
WHEREAS, there are no shares of Old Company Preferred Stock outstanding,
and there are _____________ shares of Old Company Common Stock issued and
outstanding which are owned by various shareholders of the Old Company, and such
shares constitute all of the issued and outstanding capital stock of the Old
Company;
WHEREAS, there are no shares of Company Preferred Stock outstanding, and
there is one (1) share of Company Common Stock issued and outstanding, which is
owned by the Old Company, and such share constitutes all of the issued and
outstanding capital stock of the Company;
WHEREAS, the respective boards of directors of the Old Company and the
Company have determined that it is advisable and in the best interests of each
such corporation that the Old Company merge with and into the Company as
authorized by the statutes of the states of New York and Delaware, upon the
terms and subject to the conditions of this Agreement; and
WHEREAS, the Board of Directors of the Company has approved this Agreement,
and the Old Company has approved this Agreement in its capacity as the sole
stockholder of the Company; and
WHEREAS, the Board of Directors of the Old Company has unanimously approved
this Agreement by resolution and will submit this Agreement to the stockholders
of the Old Company for their approval as required by law;
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, the Old Company and the Company hereby agree as follows:
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1. MERGER. Upon the terms and subject to the conditions set forth in this
Agreement, the Old Company shall be merged with and into the Company (the
"Merger"), and the Company shall be the surviving corporation (sometimes
hereafter referred to as the "Surviving Corporation"). The name of the Surviving
Corporation shall be Langer, Inc. The Merger shall become effective upon the
later to occur of the date and time of filing of the certificate of merger, in
the form attached hereto, and other documents required by law, if any, providing
for the Merger, with the Secretary of State of the State of New York and with
the Secretary of State of the State of Delaware (the "Effective Time" or the
"Effective Date").
2. GOVERNING DOCUMENTS.
a. The Certificate of Incorporation of the Company, filed on
____________, shall be the Certificate of Incorporation of the Surviving
Corporation without change or amendment until thereafter amended in accordance
with applicable law.
b. The Bylaws of the Company, as in effect immediately prior to the
Effective Date, shall be the Bylaws of the Surviving Corporation without change
or amendment until thereafter amended in accordance with the Company's
Certificate of Incorporation or Bylaws, and in accordance with applicable law.
References to "the Corporation" in the Bylaws of the Company shall include the
Old Company, in addition to the Company, so that any person who was a director
or officer of the Old Company or is or was serving at the request of the Old
Company as a director, employee or agent of another corporation, partnership,
joint venture, trust, association or other entity shall stand in the same
position under the provisions of said Bylaws with respect to the Company as he
would if he had served the Company in the same capacity or is or was so serving
such other entity at the request of the Company, as the case may be.
3. SUCCESSION; OFFICERS AND DIRECTORS.
a. On the Effective Date, the separate corporate existence of the Old
Company shall cease, and the Company, as the Surviving Corporation, shall
possess all the rights, privileges, powers and franchises of a public and
private nature and be subject to all the restrictions, disabilities and duties
of the Old Company; and all property, real personal and mixed, and all debts due
to the Old Company on whatever account, including share subscriptions and all
other things in action belonging to the Old Company, shall be vested in the
Surviving Corporation; and all and every other interest shall be thereafter the
property of the Surviving Corporation as they were of the Old Company, and the
title to any real estate vested, by deed or otherwise, in the Old Company, shall
not revert or be in any way impaired by reason of the Merger; but all rights of
creditors and all liens upon any property of the Old Company shall be preserved
unimpaired, and all debts, liabilities and duties of the Old Company shall
thence forth attach to the Surviving Corporation and may be enforced against it
to the same extent as if such debts, liabilities and duties had been incurred or
contracted by the Surviving Corporation. All corporate acts, plans, policies,
agreements, arrangements, approvals and authorizations of the Old Company, its
shareholders, board of directors and committees thereof, officers and agents
which were valid and effective immediately prior to the Effective Date shall be
taken for all purposes as the acts, plans, policies, agreements, arrangements,
approvals and authorizations of the Company and shall be as effective and
binding thereon as the same were with respect to the Old Company.
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b. The directors of the Old Company immediately prior to the Effective
Time shall automatically become the directors of the Surviving Corporation as of
the Effective Time, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation. The committees of the
Board of Directors immediately prior to the Effective Time shall automatically
become the committees of the Board of Directors of the Surviving Corporation as
of the Effective Time, with the same charters and duties, and the same members.
The officers of the Old Company immediately prior to the Effective Time shall
automatically become the officers of the Surviving Corporation, in each case
until their respective resignations or their respective successors are duly
elected or appointed and qualified. The employees and agents of the Old Company
immediately prior to the Effective Time shall automatically become the employees
and agents of the Surviving Corporation as of the Effective Time, having the
same duties, rights and benefits which they had as employees and agents of the
Old Company.
4. FURTHER ASSURANCES. From time to time, as and when required by the
Company, or by its successors and assigns, there shall be executed and delivered
on behalf of the Old Company such deeds and other instruments, and there shall
be taken or caused to be taken by it all such further and other action, as shall
be appropriate or necessary in order to vest, perfect or confirm, of record or
otherwise, in the Company the title to and possession of all property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of the Old Company, and otherwise to carry out the purposes of this
Agreement, and the officers and directors of the Company are fully authorized in
the name and on behalf of the Old Company or otherwise, to take any and all such
action and to execute, deliver, file, and/or record any and all instruments,
papers, and documents which shall be or become necessary, proper, or convenient
to carry out or put into effect any of the provisions of this Agreement and Plan
of Merger or of the Merger.
5. CONVERSION AND CANCELLATION OF COMMON STOCK.
a. At the Effective Date, each of the shares of Old Company Common
Stock issued and outstanding immediately prior to the Effective Time and all
rights in respect thereof shall, by virtue of this Merger, automatically and
without any action on the part of the holder thereof, the Old Company, the
Company or any other person, each be converted into one fully paid,
nonassessable share of Company Common Stock. Each share of Old Company Common
Stock held as treasury shares (if any) shall likewise be converted into one
share of the Company Common Stock.
b. The certificates evidencing the Old Company Common Stock
outstanding immediately prior to the Effective Time shall, at and after the
Effective Time, automatically and without any act on the part of the holder
thereof, the Old Company, the Company or any other person, evidence the Company
Common Stock.
c. All outstanding options and/or warrants for shares of Old Company
Common Stock outstanding immediately prior to the Effective Time shall be
converted, automatically and without any act on the part of the holder thereof,
the Old Company, the Company or any other person, into options exercisable for a
like number of shares of Company Common Stock. All plans of the Old Company for
the issuance of options to acquire Old Company Common Stock shall, at the
Effective Time, shall automatically be assumed by the Company and shall
automatically be amended to cover and authorize the award of options to
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purchase Company Common Stock. There shall be, automatically at the Effective
Time, a number of shares of Company Common Stock reserved under such plans which
equals the number of shares of Old Company Common Stock that were reserved for
issuance immediately prior to the Effective Time.
d. On the Effective Date, the one share of the Company Common Stock
presently issued in the name of the Old Company shall be cancelled and retired,
and no shares of Company Common Stock or other security of the Company shall be
issued in respect thereof.
6. AMENDMENT. Subject to the applicable law, this Agreement may be amended,
modified or supplemented by written agreement of the parties at any time prior
to the Effective Date. However, no amendment, modification or supplement may be
made after the adoption of the Agreement by the Stockholders of the Old Company
which changes the Agreement in a way which, in the judgment of the Board of
Directors of the Old Company, would have a material adverse effect on the
Shareholders of the Old Company, unless such amendment, modification or
supplement is approved by such shareholders.
7. ABANDONMENT. At any time prior to the Effective Date, this Agreement may
be terminated and the Merger may be abandoned by the Board of Directors of
either the Old Company or the Company, or both, notwithstanding prior approval
of this Agreement by the stockholders of the Old Company entitled to vote
thereon, if (i) this Agreement shall not have received the requisite approval of
the Stockholders of the Old Company; or (ii) the Board of Directors of the Old
Company determines for any reason in its sole judgment that the consummation of
the transaction would be inadvisable or not in the best interests of the Old
Company and its Stockholders.
8. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and the same
agreement.
IN WITNESS WHEREOF, the Old Company and the Company have caused this
Agreement and Plan of Merger to be signed by their respective duly authorized
officers as of the date first above written.
Attest: LANGER, INC., A NEW YORK CORPORATION
By:
- ---------------------------------------- ---------------------------------
Steven Goldstein, Secretary Andrew H. Meyers, President
Attest: LANGER, INC., A DELAWARE CORPORATION
By:
- ---------------------------------------- ---------------------------------
Steven Goldstein, Secretary Andrew H. Meyers, President
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EXHIBIT 1 TO THE AGREEMENT AND PLAN OF MERGER
CERTIFICATE OF MERGER
OF
LANGER, INC.
(A NEW YORK CORPORATION)
AND
LANGER, INC.
(A DELAWARE CORPORATION)
----------------
It is hereby certified that:
1. The constituent business corporations participating in the merger herein
certified are:
(i) Langer, Inc., which is incorporated under the laws of the State of
Delaware ("Langer (DE)") and shall be the surviving corporation in the
merger; and
(ii) Langer, Inc., which is incorporated under the laws of the State of New
York ("Langer (NY)").
2. An Agreement and Plan of Merger (the "Merger Agreement"), dated as of May
___, 2002, between Langer (DE) and Langer (NY) has been approved, adopted,
certified, executed, and acknowledged by each of the aforesaid constituent
corporations in accordance with the provisions of subsection (c) of Section 252
of the General Corporation Law of the State of Delaware.
3. The name of the surviving corporation (the "Surviving Corporation") in the
merger herein certified is Langer, Inc., which will continue its existence as
the Surviving Corporation under its present name upon the effective date of said
merger pursuant to the provisions of the General Corporation Law of the State of
Delaware.
4. The Certificate of Incorporation of the Surviving Corporation shall continue
as its certificate of incorporation.
5. The executed Merger Agreement between the aforesaid constituent corporations
is on file at the principal place of business of the Surviving Corporation, the
address of which is as follows:
Langer, Inc.
450 Commack Road
Deer Park, New York 11729
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6. A copy of the Merger Agreement will be furnished by the Surviving
Corporation, on request, and without cost, to any stockholder of each of the
aforesaid constituent corporations.
7. The authorized capital stock of Langer (NY), a constituent corporation which
is not a corporation under the General Corporation Law of the State of Delaware,
is as follows:
Total number of authorized shares of all classes: 10,250,000
Number and par value of authorized shares of each class:
Preferred Stock, $1.00 par value per share: 250,000
Common Stock, $0.02 par value per share: 10,000,000
Dated: As of ____________, 2002 LANGER , INC., a Delaware corporation
By:
-------------------------------
Andrew H. Meyers, President
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APPENDIX B
CERTIFICATE OF INCORPORATION
OF
LANGER, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware" or the
"General Corporation Law"), hereby certifies that:
FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is LANGER, INC.
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware
19808, County of New Castle; and the name of the registered agent of the
Corporation in the State of Delaware is Corporation Service Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is Fifty Million Two Hundred Fifty Thousand (50,250,000)
shares, of which Two Hundred Fifty Thousand (250,000) shares shall be preferred
stock, $1.00 par value per share (hereinafter referred to as "Preferred Stock"),
and of which Fifty Million (50,000,000) shares shall be common stock, $0.02 par
value per share. There is hereby expressly vested in the Board of Directors the
authority to fix in the resolution or resolutions providing for the issue of
each series of Preferred Stock, the voting power and the designations,
preferences and relative, participating, optional or other rights of each such
series, and the qualifications, limitations or restrictions thereof. Shares of
Preferred Stock may be issued from time to time in one or more series as may
from time to time be determined by the Board of Directors, each such series to
be distinctly designated.
FIFTH: The name and the mailing address of the incorporator is:
Jeffrey S. Tullman, Esq.
c/o Kane Kessler, P.C.
1350 Avenue of the Americas, 26th Floor
New York, New York 10019
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware
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may, on the application in a summary way of this Corporation or of any creditor
or stockholder thereof or on the application of any receiver or receivers
appointed for this Corporation under the provisions of Section 291 of Title 8 of
the Delaware Code or on the application of any receiver or receivers appointed
for this Corporation under Section 279 of Title 8 of the Delaware Code, order a
meeting of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of this Corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders of this Corporation, as the case may be, and also on this
Corporation.
EIGHTH: For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and regulation
of the powers of the Corporation and of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of
the Corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed by,
or in the manner provided in, the Bylaws. The phrase "whole Board" and the
phrase "total number of directors" shall be deemed to have the same meaning to
wit, the total number of directors which the Corporation would have if there
were no vacancies. No election of directors need be by written ballot.
2. After the original or other Bylaws of the Corporation have been
adopted, amended, or repealed, as the case may be, in accordance with the
provisions of Section 109 of the General Corporation Law of the State of
Delaware, and after the Corporation has received any payment for any of its
stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be
exercised by the Board of Directors of the Corporation; provided, however, that
any provision for the classification of Directors of the Corporation for
staggered terms pursuant to the provisions of subsection (d) of Section 141 of
the General Corporation Law of the State of Delaware shall be set forth in an
initial Bylaw or in a Bylaw adopted by the stockholders of the Corporation
entitled to vote, unless provisions for such classification shall be set forth
in this Certificate of Incorporation.
3. Whenever the Corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder thereof to
notice of, and the right to vote at, any meeting of stockholders. Whenever the
Corporation shall be authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting power under the
provisions of the certificate of incorporation shall entitle the holder thereof
to the right to vote at any meeting of stockholders except as the provisions of
paragraph (2) of subsection (b) of Section 242 of the General Corporation Law of
the State of Delaware shall otherwise require; provided, however, that no share
of any such class which is otherwise denied voting power shall
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entitle the holder thereof to vote upon the increase or decrease in the number
of authorized shares of said class.
NINTH: No director of the Corporation shall have any personal liability to
the Corporation or to any of its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that this provision eliminating
such personal liability of a director shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law or (iv) for any transaction from
which the director derived an improper personal benefit. If the General
Corporation Law is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law as so amended. Any repeal or
modification of this Article NINTH by the stockholders of the Corporation shall
not adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification with respect to acts or
omissions occurring prior to such repeal or modification.
TENTH: The Corporation shall, to the fullest extent permitted by the
General Corporation Law, as the same may be amended and supplemented, indemnify
all persons acting as directors and officers of the Corporation, whom the
Corporation shall have the power to indemnify under the General Corporation Law
from and against any and all of the expenses, liabilities or other matters
referred to in or covered by the General Corporation Law, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in such indemnified person's official capacity and as to action in any other
capacity while holding such office, and shall continue as to a person who has
ceased to be a director or officer, and shall inure to the benefit of the heirs,
executors and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner and at the time prescribed by said laws, and
all rights at any time conferred upon the stockholders of the Corporation by
this Certificate of Incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on May ____, 2002. -----------------------------------
Jeffrey S. Tullman, Incorporator
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APPENDIX C
BYLAWS OF
LANGER, INC., A DELAWARE CORPORATION
ARTICLE I -- STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Subject to change by resolution of the Board of
Directors, the annual meeting of the stockholders of the Corporation for the
purpose of electing directors and for the transaction of such other business as
may be brought before the meeting shall be held on a date fixed, from time to
time, by the Board of Directors of the Corporation, and each successive annual
meeting shall be held on a date within thirteen months after the date of the
preceding annual meeting. The meeting may be held at such time and such place
within or without the State of Delaware as shall be fixed by the Board of
Directors and stated in the notice of the meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the President, a majority of the Board of Directors or the
Chairman of the Board or by a majority of the stockholders of record of all
shares entitled to vote. Special meetings shall be held on the date and at the
time and place either within or without the State of Delaware as specified in
the notice thereof.
SECTION 3. NOTICE OF MEETINGS. Except as otherwise expressly required by
law or the Certificate of Incorporation of the Corporation, written notice
stating the place and time of the meeting and the purpose or purposes of such
meeting shall be given by the Secretary to each stockholder entitled to vote
thereat at his address as it appears on the records of the Corporation not less
than ten nor more than sixty days prior to the meeting. Notice of any meeting of
stockholders shall not be required to be given to any stockholder who shall
attend such meeting in person or by proxy; and if any stockholder shall, in
person or by attorney hereunto duly authorized, waive notice of any meeting, in
writing or by telephone or facsimile, whether before or after such meeting be
held, the notice thereof need not be given to him. The attendance of any
stockholder at a meeting, in person or by proxy, without protesting prior to the
conclusion of the meeting the lack of notice of such meeting, shall constitute a
waiver of notice by such stockholder. Notice of any adjourned meeting of
stockholders need not be given except as provided in Section 5 of this Article
I.
SECTION 4. QUORUM. Subject to the provisions of law in respect of the vote
that shall be required for a specific action, the number of shares the holders
of which shall be present or represented by proxy at any meeting of stockholders
in order to constitute a quorum for the transaction of any business shall be at
least a majority of all the shares issued and outstanding and entitled to vote
at such meeting. Where a separate vote by a class or series is required, a
majority of the outstanding shares of such class or series, present in person or
represented by proxy, shall constitute a quorum entitled to take action with
respect to that vote on that matter and the affirmative vote of the majority of
shares of such class or series present in person or represented by proxy at the
meeting shall be the act of such class.
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SECTION 5. ADJOURNMENT. At any meeting of stockholders, whether or not
there shall be a quorum present, the holders of a majority of the shares voting
at the meeting, whether present in person at the meeting or represented by proxy
at the meeting, may adjourn the meeting from time to time. Except as provided by
law, notice of such adjourned meeting need not be given otherwise than by
announcement of the time and place of such adjourned meeting at the meeting at
which the adjournment is taken. At any adjourned meeting at which a quorum shall
be present, any business may be transacted which might have been transacted at
the meeting as originally called.
SECTION 6. ORGANIZATION. The Chairman of the Board or, in his absence or
non-election, the Vice Chairman or, in his absence or non-election, the
President or, in the absence of both the foregoing officers, a Vice President
shall call meetings of the stockholders to order and shall act as Chairman of
such meetings. In the absence of all of the foregoing officers, holders of a
majority in number of the shares of the capital stock of the Corporation present
in person or represented by proxy and entitled to vote at such meeting shall
elect a Chairman, who may be the Secretary of the Corporation. The Secretary of
the Corporation shall act as secretary of all meetings of the stockholders; but
in the absence of the Secretary, the Chairman may appoint any person to act as
secretary of the meeting.
SECTION 7. VOTING. Each stockholder shall, except as otherwise provided by
law or by the Certificate of Incorporation or any certificate of designation
with respect to any class or series of preferred stock, at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of
capital stock entitled to vote held by such stockholder, but no proxy shall be
voted on after three years from its date, unless said proxy provides for a
longer period. Every proxy must be signed by the stockholder or by the
stockholder's attorney-in-fact, and shall be filed with the Inspectors of
Election, if any, prior to being voted upon. Directors shall be elected by a
plurality of the votes of the shares present in person or represented by proxy
at the meeting and entitled to vote on the election of directors. Any other
action shall be authorized by a vote of a majority of the votes cast except
where the General Corporation Law prescribes a different percentage of votes
and/or a different exercise of voting power, and except as may be otherwise
prescribed by the provisions of the Certificate of Incorporation or these
Bylaws. In the election of directors, and for any other action, voting need not
be by ballot, unless the Board of Directors in its discretion, or the officer of
the Corporation presiding at a meeting of stockholders, in his or her
discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
SECTION 8. STOCKHOLDERS LIST. The officer of the Corporation who has charge
of the stock ledger of the Corporation shall prepare and make a complete list of
the stockholders entitled to vote at any meeting of stockholders, arranged in
alphabetical order with the address of each and the number of shares held by
each, shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole thereof and may be inspected by any stockholder who is present.
The stock ledger of the Corporation shall be the only evidence as to who are the
stockholders entitled to examine the ledger, the list required by this Section 8
of Article I or the books of the Corporation, or to vote in person or by proxy
at any meeting of stockholders.
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SECTION 9. ADDRESSES OF STOCKHOLDERS. Each stockholder shall designate to
the Secretary of the Corporation an address at which notices of meetings and all
other corporate notices may be served upon or mailed to him, and if any
stockholder shall fail to designate such address, corporate notices may be
served upon him by mail directed to him at his last known post office address.
SECTION 10. INSPECTORS OF ELECTION. The Board of Directors may at any time
appoint one or more persons to serve as Inspectors of Election at the next
succeeding annual meeting of stockholders or at any other meeting or meetings
and the Board of Directors may at any time fill any vacancy in the office of
Inspector. If the Board of Directors fails to appoint Inspectors, or if any
Inspector appointed be absent or refuses to act, or if his office becomes vacant
and be not filled by the Board of Directors, the Chairman of any meeting of the
stockholders may appoint one or more temporary Inspectors for such meeting. Each
Inspector, if any, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspectors at such meeting.
The Inspectors, if any, shall determine the number of shares of stock
outstanding and the voting power of each, the shares of stock represented at the
meeting, the existence of a quorum, the validity and effect of proxies, and
shall receive votes, ballots, or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots, or consents, determine the result, and do such acts as are
proper to conduct the election or vote with fairness to all stockholders. On
request of the person presiding at the meeting, the Inspector or Inspectors, if
any, shall make a report in writing of any challenge, question, or matter
determined by him or them and execute a certificate of any fact found by him or
them. Except as otherwise required by subsection (e) of Section 231 of the
General Corporation Law, the provisions of that Section shall not apply to the
corporation. All proxies shall be filed with the Inspectors of Election of the
meeting before being voted upon.
SECTION 11. ACTION BY CONSENT. Unless otherwise provided in the Certificate
of Incorporation, any action required to be taken at any meeting of
stockholders, or any action which may be taken at any meeting of such
stockholders, may be taken without a meeting, without prior notice and without a
vote if a consent in writing, setting forth the action so taken, shall be signed
by the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted and shall be
delivered to the Secretary or other officer or agent of the Corporation having
the custody of the book in which proceedings of meetings of the stockholders are
recorded. Action taken pursuant to this paragraph shall be subject to the
provisions of Section 228 of the General Corporation Law.
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ARTICLE II -- BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The property, affairs and business of the
Corporation shall be managed by or under the direction of the Board of
Directors. The Board of Directors shall have the power and authority to
authorize the officers of the Corporation to enter into such agreements as the
Board of Directors shall deem appropriate, including the power and authority to
authorize the seal of the Corporation to be affixed to all papers that may
require it.
SECTION 2. NUMBER, QUALIFICATION AND TERM OF OFFICE. The number of
directors shall be not less than three nor more than seven persons, as
determined by the Board of Directors. Directors need not be stockholders. The
directors shall be elected at the annual meeting of stockholders except as
otherwise provided for filling vacancies. Each director shall hold office for
the term for which he is appointed or elected and until his successor shall have
been elected and shall qualify, or until his death or until he shall resign or
shall have been removed in the manner hereinafter provided. Directors need not
be elected by ballot, except upon demand of any stockholder. The Chairman of the
Board, if one be elected, and the Vice Chairman of the Board, if one be elected,
shall be chosen from among the directors. The number of directors may be
increased or decreased by action of the stockholders or of the directors.
SECTION 3. CHAIRMAN OF THE BOARD. Unless otherwise provided by the Board of
Directors, the Chairman of the Board shall be a non-executive officer of the
Corporation. The Chairman shall preside, if present, at all meetings of the
stockholders and at all meetings of the Board of Directors and shall perform
such other duties and have such other powers as from time to time may be
assigned by the Board of Directors or prescribed by these Bylaws.
SECTION 4. VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board, if
any, shall, at the request of the Chairman of the Board or in his absence or
disability, perform the duties of the Chairman of the Board and when so acting
shall, have all the powers of, and be subject to all restrictions upon, the
Chairman of the Board and shall perform such other duties and have such other
powers as from time to time may be assigned to him by the Chairman of the Board
or prescribed by these Bylaws.
SECTION 5. QUORUM AND MANNER OF ACTION. Except as otherwise provided by law
or these Bylaws, a majority of the entire Board of Directors shall be required
to constitute a quorum for the transaction of business at any meeting, except
when a vacancy or vacancies prevents such majority, whereupon a majority of the
directors in office shall constitute a quorum, provided that such majority shall
constitute at least one-half of the whole Board. The act of a majority of a
quorum of the Board of Directors shall be the act of the Board of Directors. In
the absence of a quorum, a majority of the directors present may adjourn any
meeting from time to time until a quorum be had. Notice of any adjourned meeting
need not be given. The directors shall act only as a board and individual
directors shall have no power as such. In the event that the Board of Directors
shall be unable to take action on any matter because of a deadlock, upon the
motion of any director the matter shall be submitted to a vote of the
stockholders. Any action so approved by a majority vote of the stockholders
shall be the action of the Board of Directors, however, any director who voted
against the action taken by the stockholders prior to the submission of such
matter to the stockholders may, within ten days following such stockholder vote,
dissent
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in writing to such action to the Secretary of the Corporation, who shall enter
such dissent in the minutes of the Corporation.
SECTION 6. PLACE OF MEETINGS; ETC. The Board of Directors may hold its
meetings, have one or more offices and keep the books and records of the
Corporation at such place or places within or without the State of Delaware as
the Board may from time to time determine or as shall be specified or fixed in
the respective notices or waivers of notice thereof.
SECTION 7. REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held for the election of officers and the transaction of other business
as soon as practicable after each annual meeting of stockholders, and other
regular meetings of said Board shall be held at such times and places as said
Board shall direct. No notice shall be required for any regular meeting of the
Board of Directors but a copy of every resolution fixing or changing the time or
place of regular meetings shall be mailed to every director at least three days
before the first meeting held in pursuance thereof.
SECTION 8. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by the Chairman of the Board, the President, or any one Director. The
Secretary or any Assistant Secretary shall give notice of the time and place of
each special meeting by mailing a written notice of the same to each director at
his last known post office address at least three business days before the
meeting or by causing the same to be delivered personally or to be transmitted
by telecopier, overnight mail, telegraph, cable, wireless, telephone or orally
at least twenty-four hours before the meeting to each director. In the event the
Secretary or Assistant Secretary shall fail to give the notice of a special
meeting called in accordance with this Section 8, the person who called such
meeting shall be empowered to give notice of such meeting in accordance with the
immediately preceding sentence.
SECTION 9. ACTION BY CONSENT. Any action required or permitted to be taken
at any meeting of the Board or of any committee thereof may be taken without a
meeting, if a written consent thereto is signed by all members of the Board or
of such committee, as the case may be, and such written consent is filed with
the minutes of proceedings of the Board or committee.
SECTION 10. ORGANIZATION. At each meeting of the Board of Directors, the
Chairman of the Board or in his absence, the Vice Chairman of the Board, or in
his absence, the President, or in his absence or non-election, a director chosen
by a majority of the directors present shall act as Chairman. The Secretary or,
in his absence, an Assistant Secretary or, in the absence of both the Secretary
and an Assistant Secretary, any person appointed by the Chairman shall act as
secretary of the meeting.
SECTION 11. RESIGNATIONS. Any director of the Corporation may resign at any
time by giving written notice to the Board of Directors, the President or the
Secretary of the Corporation. The resignation of any director shall take effect
at the time specified therein, and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 12. REMOVAL OF DIRECTORS. Except as otherwise provided by law, any
director or the entire Board of Directors may be removed, with or without cause,
by the affirmative vote of the holders of a majority of the shares then entitled
to vote at an election of directors.
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SECTION 13. VACANCIES. Any vacancy in the Board of Directors caused by
death, resignation, removal, disqualification, an increase in the number of
directors or any other cause shall be filled by a majority of the directors then
in office, though less than a quorum, or by a sole remaining director, and the
directors so chosen shall hold office until the next annual election of
directors and until their successors are duly elected and qualified, or until
their earlier resignation or removal.
SECTION 14. COMPENSATION OF DIRECTORS. Directors may receive such
reasonable sums for their services and expenses as may be directed by resolution
of the Board; provided that nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for their services and expenses.
SECTION 15. COMMITTEES. By resolution or resolutions passed by a majority
of the whole Board at any meeting of the Board of Directors, the directors may
designate one or more committees of the Board of Directors, each committee to
consist of two or more directors. To the extent provided in said resolution or
resolutions, unless otherwise provided by law, such committee or committees
shall have and may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, including the power
and authority to authorize the seal of the Corporation to be affixed to all
papers that may require it. No committee, however, shall have the power to
declare dividends or to authorize the issuance of shares of capital stock of the
Corporation. Further, the Board of Directors may designate one or more directors
as alternate members of a committee who may replace an absent or disqualified
member at any meeting. If an alternative member of a committee is not selected
by the Board of Directors, and in the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. A committee may
make such rules for the conduct of its business and may appoint such committees
and assistants as it shall from time to time deem necessary. A majority of the
members of a committee shall constitute a quorum for the transaction of business
of such committee. Regular meetings of a committee shall be held at such times
as such committee shall from time to time by resolution determine. No notice
shall be required for any regular meeting of a committee but a copy of every
resolution fixing or changing the time or place of regular meetings shall be
mailed to every member of such committee at least three days before the first
meeting held in pursuance thereof. Special meetings of a committee may be called
by the Chairman of such committee or the Secretary of such committee, or any two
members thereof. The Secretary of the Corporation or the Secretary of such
committee shall give notice of the time and place of each special meeting by
mail at least two days before such meeting or by telegraph, cable, wireless,
telephone or orally at least twenty-four hours before the meeting to each member
of such committee.
SECTION 16. PARTICIPATION IN MEETINGS. Members of the Board of Directors or
of any committee may participate in any meeting of the Board or committee, as
the case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation shall constitute presence in person at such
meeting.
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SECTION 17. INTERESTED DIRECTORS. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted by such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or the committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts to his
or their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE III --OFFICERS
SECTION 1. NUMBER. The officers of the Corporation shall consist of a
President, a Treasurer and a Secretary and, if deemed necessary, expedient or
desirable by the Board of Directors, a Chairman of the Board, a Vice-Chairman of
the Board, and one or more Executive Vice Presidents or other Vice-Presidents.
In addition, the Board may elect one or more Vice Presidents and such other
officers as may be appointed in accordance with the provisions of Section 3 of
this Article III. Any number of offices may be held by the same person, as the
directors may determine. Except as may otherwise be provided in the resolutions
of the Board of Directors choosing him, no officer other than the Chairman or
Vice-Chairman of the Board, if any, need be a director.
SECTION 2. ELECTION, TERM OF OFFICE AND QUALIFICATION. The officers shall
be elected annually by the Board of Directors at their first meeting after each
annual meeting of the stockholders of the Corporation. Each officer, except such
officers as may be appointed in accordance with the provisions of Section 3 of
this Article, shall hold office until his successor shall have been duly elected
and qualified, or until his death or until he shall have resigned or shall have
become disqualified or shall have been removed in the manner hereinafter
provided.
SECTION 3. SUBORDINATE OFFICERS. The Board of Directors or the President
may from time to time appoint such other officers, including one or more
Assistant Treasurers and one or more Assistant Secretaries, and such agents and
employees of the Corporation as may be deemed necessary or desirable. Such
officers, agents and employees shall hold office for such period and upon such
terms and conditions, have such authority and perform such duties as in these
Bylaws provided or as the Board of Directors or the President may from time to
time prescribe. The Board of Directors or the President may from time to time
authorize any officer to appoint and remove agents and employees and to
prescribe the powers and duties thereof.
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SECTION 4. REMOVAL. Any officer may be removed, either with or without
cause, by the affirmative vote of a majority of the Board of Directors.
SECTION 5. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Board of Directors, the President or the Secretary. Any
such resignation shall take effect at the date of receipt of such notice or at
any later time specified therein; and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 6. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled for
the unexpired portion of the term in the manner prescribed in these Bylaws for
regular election or appointment to such office.
SECTION 7. PRESIDENT. The President shall be the Chief Executive Officer of
the Corporation and shall have general direction of the affairs of the
Corporation and general supervision over its several officers, subject, however,
to the control of the Board of Directors, and in general shall perform such
duties and, subject to the other provisions of these Bylaws, have such powers
incident to the office of President and perform such other duties and have such
other powers as from time to time may be assigned to him by the Board of
Directors.
SECTION 8. VICE PRESIDENTS. A Vice President may sign with the Treasurer or
an Assistant Treasurer or the Secretary or an Assistant Secretary certificates
of stock of the Corporation and shall have such other powers and shall perform
such other duties as from time to time may be assigned to him by the Board of
Directors or the President or prescribed by these Bylaws.
SECTION 9. SECRETARY. The Secretary shall keep or cause to be kept, in
books provided for the purpose, the minutes of the meetings of the stockholders,
the Board of Directors and any committee when so required, shall see that all
notices are duly given in accordance with the provisions of these Bylaws and as
required by law, shall be custodian of the records and the seal of the
Corporation and see that the seal is affixed to all documents, the execution of
which on behalf of the Corporation under its seal is duly authorized in
accordance with the provisions of these Bylaws, shall keep or cause to be kept a
register of the post office address of each stockholder, may sign with the
Chairman of the Board, the President or any Vice President certificates of stock
of the Corporation, and in general shall perform such duties and have such
powers incident to the office of Secretary and shall perform such other duties
and have such other powers as from time to time may be assigned to him by the
Board of Directors or the President or prescribed by these Bylaws.
SECTION 10. ASSISTANT SECRETARIES. Any Assistant Secretary shall, at the
request of the Secretary or in his absence or disability, perform the duties of
the Secretary and when so acting shall have all the powers of, and be subject to
all the restrictions upon, the Secretary and shall perform such other duties and
have such other powers as from time to time may be assigned to him by the
President, the Secretary or the Board of Directors or prescribed by these
Bylaws.
SECTION 11. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be
responsible to the Board of Directors and the President for all financial
control and internal audit of the Corporation and its subsidiaries. He shall
perform such other duties as may be assigned to him by the Board of Directors,
the President or prescribed by these Bylaws.
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SECTION 12. TREASURER. The Treasurer shall have charge and custody of, and
be responsible for, all funds and securities of the Corporation, and deposit all
such funds in the name of the Corporation in such banks, trust companies or
other depositaries as shall be selected in accordance with the provisions of
these Bylaws, shall at all reasonable times exhibit his books of account and
records, and cause to be exhibited the books of account and records of any
corporation controlled by the Corporation to any of the directors of the
Corporation upon application during business hours at the office of the
Corporation, or such other corporation, where such books and records are kept,
shall, if called upon to do so, receive and give receipts for monies due and
payable to the Corporation from any source whatsoever, may sign with the
Chairman of the Board, the President or any Vice President certificates of stock
of the Corporation, and in general shall perform such duties and have such
powers incident to the office of Treasurer and such other duties and have such
other powers as from time to time may be assigned to him by the Board of
Directors or the President or prescribed by these Bylaws.
SECTION 13. ASSISTANT TREASURERS. Any Assistant Treasurer shall, at the
request of the Treasurer or in his absence or disability, perform the duties of
the Treasurer and when so acting shall have all the powers of, and be subject to
all the restrictions upon, the Treasurer and shall perform such duties and have
such other powers as from time to time may be assigned to him by the President,
the Treasurer or the Board of Directors or prescribed by these Bylaws.
SECTION 14. OTHER OFFICERS. Such officers as the Board of Directors may
choose shall perform such duties and have such powers as may be appropriate to
such officer or as from time to time may be assigned to them by the Board of
Directors. The Board of Directors may delegate to any other officer of the
Corporation the power to choose such other officers and to prescribe their
respective duties and powers.
SECTION 15. SALARIES. The salaries of the officers shall be fixed from time
to time by the Board of Directors. No officer shall be prevented from receiving
such salary by reason of the fact that he is also a director of the Corporation.
SECTION 16. AUTHORITY OF OFFICERS. The officers of the Corporation shall
have such duties and authority as set forth in these Bylaws and as shall be
determined from time to time by the Board of Directors.
ARTICLE IV -- SHARES AND TRANSFER OF SHARES
SECTION 1. CERTIFICATES OF STOCK. Certificates for shares of the capital
stock of the Corporation shall be in such form not inconsistent with law as
shall be approved by the Board of Directors. They shall be numbered in order of
their issue and shall be signed by the Chairman of the Board or the President or
any Vice President and the Treasurer or any Assistant Treasurer, or the
Secretary or any Assistant Secretary of the Corporation, and the seal of the
Corporation shall be affixed thereto. Any of or all the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who shall have signed or whose facsimile signature shall have been placed upon
any such certificate or certificates shall cease to be such officer or officers
of the Corporation, whether because of death, resignation or otherwise, before
such certificate or certificates shall have been delivered by the Corporation,
such certificate or certificates may
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nevertheless be adopted by the Corporation and be issued and delivered as though
the person or persons who signed such certificate or certificates or whose
facsimile signature shall have been used thereon had not ceased to be such
officer or officers of the Corporation.
SECTION 2. UNCERTIFICATED SHARES. Subject to any conditions imposed by the
General Corporation Law, the Board of Directors of the Corporation may provide
by resolution or resolutions that some or all of any or all classes or series of
the stock of the Corporation shall be uncertificated shares. Within a reasonable
time after the issuance or transfer of any uncertificated shares, the
Corporation shall send to the registered owner thereof any written notice
prescribed by the General Corporation Law.
SECTION 3. FRACTIONAL SHARE INTERESTS. The Corporation may, but shall not
be required to, issue fractions of a share. If the Corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such fractions are
determined, or (3) issue scrip or warrants in registered form (either
represented by a certificate or uncertificated) or bearer form (represented by a
certificate) which shall entitle the holder to receive a full share upon the
surrender of such scrip or warrants aggregating a full share. A certificate for
a fractional share or an uncertificated fractional share shall, but scrip or
warrants shall not unless otherwise provided therein, entitle the holder to
exercise voting rights, to receive dividends thereon, and to participate in any
of the assets of the Corporation in the event of liquidation. The Board of
Directors may cause scrip or warrants to be issued subject to the conditions
that they shall become void if not exchanged for certificates representing the
full shares or uncertificated full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are exchangeable may
be sold by the Corporation and the proceeds thereof distributed to the holders
of scrip or warrants, or subject to any other conditions which the Board of
Directors may impose.
SECTION 4. TRANSFER OF STOCK. Transfer of shares of the capital stock of
the Corporation shall be made only on the books of the Corporation by the holder
thereof, or by his attorney hereunto authorized by a power of attorney duly
executed and filed with the Secretary of the Corporation, or a transfer agent of
the Corporation, if any, on surrender of the certificate or certificates for
such shares properly endorsed. A person in whose name shares of stock stand on
the books of the Corporation shall be deemed the owner thereof as regards the
Corporation, and the Corporation shall not be bound to recognize any equitable
or other claim to or interest in such shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Delaware.
SECTION 5. LOST, DESTROYED AND MUTILATED CERTIFICATES. The holder of any
stock issued by the Corporation shall immediately notify the Corporation of any
loss, destruction or mutilation of the certificate therefor or the failure to
receive a certificate of stock issued by the Corporation, and the Board of
Directors or the Secretary of the Corporation may, in its or his discretion,
cause to be issued to such holder a new certificate or certificates of stock,
upon compliance with such rules, regulations and/or procedures as may be
prescribed or have been prescribed by the Board of Directors with respect to the
issuance of new certificates in lieu of such lost, destroyed or mutilated
certificate or certificates of stock issued by the Corporation which are not
received, including reasonable indemnification to indemnify it against any claim
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that may be made against it on account of the alleged loss, theft or destruction
of any such certificate or the issuance of such new certificate.
SECTION 6. TRANSFER AGENT AND REGISTRAR; REGULATIONS. The Corporation
shall, if and whenever the Board of Directors shall so determine, maintain one
or more transfer offices or agencies, each in the charge of a transfer agent
designated by the Board of Directors, where the shares of the capital stock of
the Corporation shall be directly transferable, and also one or more registry
offices, each in the charge of a registrar designated by the Board of Directors,
where such shares of stock shall be registered, and no certificate for shares of
the capital stock of the Corporation, in respect of which a Registrar and/or
Transfer Agent shall have been designated, shall be valid unless countersigned
by such Transfer Agent and registered by such Registrar, if any. The Board of
Directors shall also make such additional rules and regulations as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the capital stock of the Corporation.
SECTION 7. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, to express
consent to corporate action in writing without a meeting, to receive payment of
any dividend or other distribution or allotment of any rights, to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date which shall not be more than sixty nor less than ten days before
the date of such meeting, nor more than sixty days prior to any other action,
and only such stockholders as shall be stockholders of record of the date so
fixed shall be entitled to such notice of and to vote at such meeting and any
adjournment thereof, to express consent to any such corporate action to receive
payment of such dividend or to receive such allotment of rights, or to exercise
such rights, as the case may be, notwithstanding any transfer of any stock on
the books of the Corporation after any such record date fixed as aforesaid. If
the stock transfer books are to be closed for the purpose of determining
stockholders entitled to notice of or to vote at a meeting in the case of a
merger or consolidation, the books shall be closed at least twenty days before
such meeting.
SECTION 8. BENEFICIAL OWNERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
law.
ARTICLE V -- GENERAL PROVISIONS
SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall end on
such date of each year as shall be determined by the Board of Directors of the
Corporation.
SECTION 2. WAIVERS OF NOTICE. Whenever any notice of any nature is required
by law, the provisions of the Certificate of Incorporation or these Bylaws to be
given, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time
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stated therein, and whether before or after such notice is required to be given,
shall be deemed equivalent thereto.
SECTION 3. QUALIFYING IN FOREIGN JURISDICTION. The Board of Directors shall
have the power at any time and from time to time to take or cause to be taken
any and all measures which they may deem necessary for qualification to do
business as a foreign corporation in any one or more foreign jurisdictions and
for withdraw therefrom.
SECTION 4. REGISTERED OFFICE. The registered office of the Corporation
shall be in the City of Dover, County of Kent, State of Delaware.
SECTION 5. OTHER OFFICES. The Corporation may also have offices at such
other places, both within and without the State of Delaware as the Board of
Directors may from time to time determine.
SECTION 6. PROXIES. Except as otherwise provided in these Bylaws or in the
Certificate of Incorporation of the Corporation, and unless otherwise provided
by resolution of the Board of Directors, the Chairman of the Board may appoint
from time to time an attorney or attorneys, or agent or agents, of the
Corporation, on behalf and in the name of the Corporation, to cast the votes
which the Corporation may be entitled to cast as a stockholder or otherwise in
any other corporation any of whose stock or other securities may be held by the
Corporation, at meetings of the holders of the stock or other securities of such
other corporation, or to consent in writing to any action by such other
corporation, and may instruct the person or persons so appointed as to the
manner of casting such votes or giving such consent, and may execute or cause to
be executed on behalf and in the name of the Corporation and under its corporate
seal, or otherwise, all such written proxies or other instruments as he may deem
necessary or proper in the premises.
SECTION 7. SEAL. The Board of Directors shall provide a suitable seal
containing the name of the Corporation, which seal shall be in the charge of the
Secretary and which may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise. If and when so directed by the
Board of Directors, a duplicate of the seal may be kept and be used by an
officer of the Corporation designated by the Board. Unless otherwise required by
law, no seal shall be necessary to evidence any agreement or other act of the
Corporation.
SECTION 8. DIVIDENDS. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, and may be
paid in cash, in property, or in shares of the capital stock. Before payment of
any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board of Directors from time to
time in its absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve.
SECTION 9. DISBURSEMENTS. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons at the Board of Directors may from time to time designate.
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ARTICLE VI -- AMENDMENTS
These Bylaws may be altered, amended or repealed, in whole or in part,
or new Bylaws may be adopted by either the stockholders or by the Board of
Directors, provided, however, that notice of such alteration, amendment, repeal
or adoption of new Bylaws be contained in the notice of such meeting of
stockholders or Board of Directors, as the case may be. All such amendments must
be approved by either the holders of a majority of the outstanding capital stock
entitled to vote thereon or by a majority of the entire Board of Directors then
in office.
CERTIFICATION
The undersigned, being the Secretary of Langer, Inc., a Delaware
corporation (the "Corporation"), hereby certify that the foregoing is a true and
complete copy of the Bylaws of the Corporation as adopted on ______________,
2002, and ratified by the sole stockholder of the Corporation on ______________,
2002, and that said bylaws are in full force and effect on the date hereof,
without amendment or modification.
Date:
----------------------- --------------------------------
Steven Goldstein, Secretary
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LANGER, INC.
ANNUAL MEETING OF STOCKHOLDERS, JUNE 19, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Andrew H. Meyers and Steven Goldstein as
proxies, each with full power of substitution, and hereby authorizes them to
appear and vote, as designated below, all shares of Common Stock of Langer,
Inc., held of record by the undersigned on May 15, 2002, at the Annual Meeting
of Stockholders to be held on June 19, 2002, and any adjournments or
postponements thereof, and in their discretion upon any and all other matters
which may properly be brought before the meeting or any adjournments or
postponements thereof, and hereby revokes all earlier proxies of the
undersigned.
The undersigned hereby directs this Proxy to be voted:
1. Election of directors:
FOR the election as directors of all nominees listed below (except as
marked to the contrary below) [ ]
or
WITHHOLD AUTHORITY to vote for all nominees listed below [ ]
Burtt R. Ehrlich
Andrew H. Meyers
Jonathan R. Foster
Arthur Goldstein
Greg Nelson
(Instruction: To withhold authority to vote for any of the above listed
nominees, please strike a line through that individual's name.)
2. Approval of the merger of the Company with and into its wholly owned
subsidiary, known as Langer, Inc., a Delaware corporation, to effect the
reincorporation of the Company in Delaware. For:/ / Against:/ / Abstain:/ /
3. Approval of independent auditors. For:/ / Against:/ / Abstain:/ /
4. In their discretion, the named proxies may vote on such other business as
may properly come before the Annual Meeting, or any adjournments or
postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH
THE STOCKHOLDER'S SPECIFICATIONS ABOVE. THE PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE
MAILING OF THE NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS TO THE UNDERSIGNED.
Date: , 2002 ----------------------------------
---------- Signature of Stockholder
----------------------------------
Signature if held jointly
NOTE: PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. IF SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN OR OTHER REPRESENTATIVE
CAPACITY, PLEASE GIVE FULL TITLE. IF SIGNING ON BEHALF OF A CORPORATION,
PARTNERSHIP OR OTHER LEGAL ENTITY, PLEASE SIGN IN CORPORATE, PARTNERSHIP OR
ENTITY NAME AND GIVE FULL TITLE.