Document:

Exhibit
10.36

 

Langer,
Inc.

Stock
Option Agreement

Steven
Goldstein, Optionee

 

 

Stock Option Agreement (the “Agreement”) made as of November 12, 2004, by and
between Langer, Inc., a Delaware corporation, having its principal office at
450 Commack Road, Deer Park, New York 11729 (the “Company”), and Steven
Goldstein, residing at 14 Vanad Drive, East Hills, New York 11576 (the
“Optionee”).

 

                Whereas,
the Optionee is the Executive Vice President of, and a valued and trusted
employee of the Company, and the Company believes it to be in the best
interests of the Company and has agreed to award options to the Optionee under
the terms of his employment agreement entered into on or about the date hereof
(the “Employment Agreement,” which includes such agreement as the same may be
amended hereafter), and the Company desires to secure the services of the
Optionee by providing the Optionee with an inducement to enter into such
employment agreement and to remain an officer, employee or consultant of the
Company or one of its subsidiaries through the grant of an option to acquire an
ownership interest in the Company.

 

                Now,
Therefore, the parties agree as follows:

 

1.             Option
Grant.  Subject to the provisions hereinafter set
forth, the Company hereby grants to the Optionee, as of the date hereof (the
“Grant Date”), the right, privilege and option (the “Option”) to purchase all
or any part of an aggregate of Sixty Thousand (60,000) shares (the “Shares”) of
common stock of the Company, par value $0.02 per share (the “Common Stock”),
such number being subject to adjustment as provided herein.

 

2.             Exercise
Price.  Subject to adjustment as provided in Section
7, the purchase price per Share of Common Stock as to which this Option is
exercised (the “Exercise Price”) shall be Seven and 50/100 dollars ($7.50).

 

3.             Exercise
of Option.  The term of the Option shall be for a period
of ten (10) years from the Grant Date and shall expire without further action
being taken at 5:00 p.m., New York time, on November 12, 2014, subject to earlier
termination as provided in Section 5 hereof (the “Expiration Date”).  The Option may be exercised at any time, or
from time to time, prior to the Expiration Date as to any part or all of the
Shares covered by the Option, pursuant to the vesting schedule contained in
Section 4.1 hereof; provided, however, that the Option may not be
exercised as to less than one hundred (100) shares, unless it is exercised as
to all Shares as to which this Option is then exercisable.

 

4.             Vesting
Schedule.

 

                                4.1           The Shares into which this Option is
exercisable shall vest in accordance with the following schedule:

 

 

 

	
  On November 12, 2005:

  	
   

  	
  33,334 shares;

  
	
  On November 12, 2006:

  	
   

  	
  33,333 shares;

  
	
  On November 12, 2007:

  	
   

  	
  33,333 shares.

  
	
   

  	
   

  	
   

  

                                4.2           (a)           Notwithstanding
the foregoing or any contrary or inconsistent provision of this Agreement, the
Option shall vest in full and become immediately exercisable, not later than
immediately prior to the effective date of any Change-of-Control Event (as
hereinafter defined).  The Company hereby
undertakes to give the Optionee notice of any Change of Control Event within
five (5) days thereof.

 

                                                (b)           For purposes of this Agreement,
“Change-of-Control Event” means the occurrence of any one or more of the
following events:  (i) there shall have
been a change in a majority of the Board of Directors of the Company within
twelve (12) month period, unless the appointment of a director or the
nomination for election by the Company’s stockholders of each new director was
approved by the vote of a majority of the directors then still in office who
were in office at the beginning of such twelve (12) month period, or (ii) the
Company shall have been sold by either (A) a sale of all or substantially all
its assets, or (B) a merger or consolidation, other than any merger or
consolidation pursuant to which the Company acquires another entity, or (C) a
tender offer, whether solicited or unsolicited.

 

                                4.3           Notwithstanding the vesting schedule
set forth in Section 4.1 hereof, such vesting schedule may be accelerated by
the Board of Directors or the Compensation Committee of the Board of Directors
(the “Committee”) in their sole decision.

 

5.             Termination.

 

                                5.1           Termination for Any Reason Except
Death, Disability or Cause.  If
Optionee is terminated for any reason (including if the Optionee voluntarily
terminates his employment with the Company) other than Optionee’s death,
disability or cause (as such terms are used in the Employment Agreement), then
this Option, to the extent (and only to the extent) that it is vested in
accordance with the schedule set forth in Section 4.1 hereof on the Termination
Date, may be exercised by Optionee no later than three (3) months after the
Termination Date, or such longer time period not exceeding five (5) years as
may be determined by the Committee, but in any event no later than the
Expiration Date.

 

                                5.2           Termination Because of Death or
Disability.  If Optionee is
terminated because of death or disability (as such term is used in the
Employment Agreement) of Optionee, then this Option, to the extent that it is
vested in accordance with the schedule set forth in Section 4.1 hereof on the
Termination Date, may be exercised by Optionee (or Optionee’s legal
representative or authorized assignee) no later than twelve (12) months after
the Termination Date (or such longer time period not exceeding five (5) years
as may be determined by the Committee), but in any event no later than the
Expiration Date.

 

                                5.3           Termination for Cause.  If an Optionee is terminated for cause (as
such term is used in the Employment Agreement), neither the Optionee, nor the
Optionee’s estate nor such other person who may then hold the Option shall be
entitled to exercise any Option with

 

 

2

 

respect to any Shares whatsoever, after termination of service, whether
or not after termination of service the Optionee may receive payment from the
Company or any subsidiary for vacation pay, for services rendered prior to
termination, for services rendered for the day on which termination occurs, for
salary in lieu of notice, or for any other benefits.  In making such determination, the Committee shall give the
Optionee an opportunity to present to the Committee evidence on his
behalf.  For the purpose of this paragraph,
termination of service shall be deemed to occur on the date when the Company
dispatches notice or advice to the Optionee that Optionee’s service is
terminated.

 

                                5.4           No Obligation to Employ.  Nothing in this Agreement shall confer on Optionee any
right to continue in the employ of, or other relationship with, the Company or
any subsidiary of the Company, or limit in any way the right of the Company or
any affiliate or subsidiary of the Company to terminate Optionee’s employment
or other relationship at any time, with or without cause.  This Agreement does not constitute an
employment contract.  This Agreement
does not guarantee employment for the length of time of the vesting schedule
set forth in Article 4 hereof or for any portion thereof.

 

6.             Manner
of Exercise.

 

                                6.1           Stock Option Exercise Agreement.  To exercise this Option, Optionee (or in the
case of exercise after Optionee’s death, Optionee’s executor, administrator,
heir or legatee, as the case may be) must deliver to the Company an executed stock
option exercise agreement in the form attached hereto as Exhibit A, or,
at the Committee’s sole discretion, in such other form as may be approved by
the Company from time to time (the “Exercise Agreement”), which shall set
forth, inter
alia,
Optionee’s election to exercise this Option, the number of shares being
purchased, any restrictions imposed on the Shares and any representations,
warranties and agreements regarding Optionee’s investment intent and access to
information as may be required by the Company to comply with applicable
securities laws.  If someone other than
Optionee exercises this Option, then such person must submit documentation
reasonably acceptable to the Company that such person has the right to exercise
this Option.

 

                                6.2           Limitations on Exercise.  This Option may not be exercised unless such
exercise is in compliance with all applicable federal and state securities
laws, as they are in effect on the date of exercise.

 

                                6.3           Payment.  The Exercise Agreement shall be accompanied
by full payment of the aggregate Exercise Price for the Shares being purchased
(a) in cash (by check), or (b) provided that a public market for the
Company’s stock exists:  (1) through a
“same day sale” commitment from Optionee and a broker-dealer that is a member
of the National Association of Securities Dealers (an “NASD Dealer”) whereby
Optionee irrevocably elects to exercise this Option and to sell a portion of
the Shares so purchased to pay for the aggregate Exercise Price and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
aggregate Exercise Price directly to the Company; or (2) through a “margin”
commitment from Optionee and an NASD Dealer whereby Optionee irrevocably elects
to exercise this Option and to pledge the Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the NASD

 

 

3

 

Dealer in the amount of the aggregate Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
aggregate Exercise Price directly to the Company.  Notwithstanding the foregoing, the Board of Directors or the
Committee, in their absolute discretion, may allow for the full payment of the
aggregate Exercise Price for the Shares being purchased to be made by any other
method.

 

                                6.4           Tax Withholding.  Prior to the issuance of the Shares upon
exercise of this Option, Optionee must pay or provide for any applicable
federal or state withholding obligations of the Company.  If the Committee elects, Optionee may
provide for payment of withholding taxes upon exercise of this Option by
requesting that the Company retain Shares with a fair market value equal to the
minimum amount of taxes required to be withheld.  In such case, the Company shall issue the net number of Shares to
the Optionee by deducting the Shares retained from the Shares issuable upon
exercise.

 

                                6.5           Issuance of Shares.  Provided that the Exercise Agreement and
payment are in form and substance satisfactory to the Company and counsel for
the Company, the Company shall issue the Shares registered in the name of
Optionee, Optionee’s authorized assignee, or Optionee’s legal representative,
and shall deliver certificates representing the Shares with the appropriate
legends affixed thereto.

 

                7.             Certain Adjustments.

 

                                7.1           Assumption
or Replacement of Options by Successor. 
Subject to the provisions of Section 4.2 above, if a Change-of-Control
Event occurs, the successor company in any Change-of-Control Event (or the
Company, if there is no successor company) may, if approved in writing by the
Committee or Board of Directors prior to any Change-of-Control Event,
(i) substitute equivalent options or provide substantially similar
consideration to the Optionee as was provided to stockholders in such
Change-of-Control Event (after taking into account the existing provisions
hereof), or (ii) issue, in place of this Option a substantially similar
option or substantially similar other securities or substantially similar other
property.

 

                                7.2           Other Treatment.  Subject to the rights set forth in Section
4.2 (including without limitation the provisions for acceleration of vesting
and notice of a Change-of-Control Event) and the rights and limitations set
forth in this Section 7, if a Change-of-Control Event occurs or has occurred,
any outstanding unexercised Options, will be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution,
liquidation, or sale of assets constituting the Change-of-Control Event.

 

                                7.3           Adjustment of Shares.  In the event that the number of outstanding
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in
the capital structure of the Company without consideration, then the Exercise
Price of and number of Shares acquirable upon exercise of this Option will be
proportionately adjusted, subject to any required action by the Board or the
stockholders of the Company and compliance with applicable securities laws; provided,
however, that fractions of a Share will not be issued will be
rounded to the nearest whole Share.

 

4

 

8.             Compliance
With Laws and Regulations.  The exercise
of this Option and the issuance and transfer of Shares to the Optionee shall be
subject to compliance by the Company and Optionee with (i) all applicable
requirements of federal and state securities laws, (ii) all applicable
requirements of any stock exchange or quotation system on which the Company’s
Common Stock may be listed or traded, and (iii) any applicable policy of
the Company regarding the trading of securities of the Company, each at the
time of such issuance and transfer. 
Optionee understands that the Company is under no obligation to register
or qualify the Shares with the Securities and Exchange Commission, any state
securities commission or any stock exchange to effect such compliance.

 

                9.             Nontransferability of Option.  This Option may not be transferred in any
manner other than by will or by the laws of descent and distribution.  During the lifetime of Optionee, the Option
shall be exercisable only by Optionee personally or by the Optionee’s legal
representative.  The terms of this
Option shall be binding upon the executors, administrators, successors and
assigns of Optionee.

 

                10.          Privileges of Stock Ownership.  Optionee shall not have any of the rights of
a stockholder with respect to any Shares until the Shares are issued to
Optionee.

 

                11.          Interpretation.  Any dispute regarding the interpretation of
this Agreement shall be submitted by Optionee or the Company to the Committee
for review.  The resolution of such a
dispute by the Committee shall be final and binding on the Company and Optionee.

 

                12.          Entire Agreement.  This Agreement and the Exercise Agreement
constitute the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof and supersede all prior understandings and
agreements with respect to such subject matter.

 

                13.          Notices.  Any notice required to be given or delivered
to the Company under the terms of this Agreement shall be in writing and
addressed to the Corporate Secretary of the Company at its principal corporate
offices.  Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated above or to such other address as such party may
designate in writing from time to time to the Company.  All notices shall be deemed to have been
given or delivered upon: personal delivery; three (3) days after deposit in the
United States mail by certified or registered mail (return receipt requested);
one (1) business day after deposit with any return receipt express courier
(prepaid); or one (1) business day after transmission by facsimile.

 

                14.          Binding Terms;  Successors and Assigns.  The grant of options herein made is subject
to the approval of the stockholders of the Company, unless the Board of
Directors determines that such approval is not required.  The Company may assign any of its rights
under this Agreement.  This Agreement
shall be binding upon and inure to the benefit of the successors and assigns of
the Company.  Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Optionee and Optionee’s heirs, executors, administrators, legal
representatives, successors and assigns.

 

5

 

                15.          Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, applicable to
agreements made and to be performed entirely within such state, other than
conflict of laws principles thereof directing the application of any law other
than that of New York.

 

                16.          Tax Consequences.  Optionee acknowledges that there may be
adverse tax consequences upon exercise of this Option or disposition of the
Shares and that the Company has advised Optionee to consult a tax advisor prior
to such exercise or disposition.

 

                17.          Covenants
of the Optionee

 

                                The
Optionee agrees (and for any heir, executor, administrator, legal
representative, successor, or assignee of Optionee hereby agrees), as a
condition upon exercise of the Option granted hereunder:

 

                                (a)           Upon the request of the Company, to
execute and deliver a certificate, in form satisfactory to the Company,
certifying that the Shares being acquired upon exercise of the Option are for
such person’s own account for investment only and not with any view to or
present intention to resell or distribute the same.  The Optionee hereby agrees that the Company shall have no
obligation to deliver the Shares issuable upon exercise of the Option unless
and until such certificate shall be executed and delivered to the Company by
the Optionee or any successor.

 

                                (b)           Upon the request of the Company, to
execute and deliver a certificate, in form satisfactory to the Company,
certifying that any subsequent resale or distribution of the Shares by the
Optionee shall be made only pursuant to either (i) a Registration
Statement on an appropriate form under the Securities Act of 1933, as amended
(the “Securities Act”), which Registration Statement has become effective and
is current with regard to the Shares being sold, or (ii) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption the Optionee shall, prior to any offer of sale or sale
of such Shares, obtain a prior favorable written opinion of counsel, in form
and substance satisfactory to counsel for the Company, as to the application of
such exemption thereto.  The foregoing
restriction contained in this subparagraph (b) shall not apply to (x) issuances
by the Company so long as the Shares being issued are registered under the
Securities Act and a prospectus in respect thereof is current, or
(y) re-offerings of Shares by Affiliates of the Company (as defined in
Rule 405 or any successor rule or regulation promulgated under the Securities
Act) if the Shares being re-offered are registered under the Securities Act and
a prospectus in respect thereof is current.

 

                                (c)           That certificates evidencing Shares
purchased upon exercise of the Option shall bear a legend, in form satisfactory
to counsel for the Company, manifesting the investment intent and resale restrictions
of the Optionee described in this Section.

 

                                (d)           That upon exercise of the Option
granted hereby, or upon sale of the Shares purchased upon exercise of the
Option, as the case may be, the Company shall have the right to require the
Optionee to remit to the Company, or in lieu thereof, the Company may

 

6

 

deduct, an amount of shares or cash sufficient to satisfy federal,
state or local withholding tax requirements, if any, prior to the delivery of
any certificate for such Shares or thereafter, as appropriate.

 

                18.          Obligations
of the Company

 

                                18.1         Upon the exercise of this Option in
whole or in part, the Company shall cause the purchased Shares to be issued
only when it shall have received the payment of the aggregate Exercise Price in
accordance with the terms of this Agreement.

 

                                18.2         The Company shall cause certificates
for the Shares as to which the Option shall have been exercised to be
registered in the name of the person or persons exercising the Option, which
certificates shall be delivered by the Company to the Optionee only against
payment of the aggregate Exercise Price in accordance with the terms of this
Agreement for the portion of the Option exercised.

 

                                18.3         In
the event that the Optionee shall exercise this Option with respect to less
than all of the Shares of Common Stock that may be purchased under the terms
hereof, the Company shall issue to the Optionee a new Option, duly executed by
the Company and the Optionee, in form and substance identical to this Option,
for the balance of Shares of Common Stock then issuable pursuant to the terms
of this Option.

 

                                18.4         Notwithstanding anything to the
contrary contained herein, neither the Company nor its transfer agent shall be
required to issue any fraction of a Share of Common Stock in connection with
the exercise of this Option, and the Company shall, upon exercise of this
Option in whole or in part, issue the largest number of whole Shares of Common
Stock to which this Option is entitled upon such full or partial exercise and
shall return to the Optionee the amount of the aggregate Exercise Price paid by
the Optionee in respect of any fractional Share.

 

                                18.5         The Company may endorse such legend or
legends upon the certificates for Shares issued to the Optionee pursuant hereto
and may issue such “stop transfer” instructions to its transfer agent in
respect of such Shares as, in its discretion, it determines to be necessary or
appropriate to: (i) prevent a violation of, or to perfect an exemption from,
the registration requirements of the Securities Act; (ii) implement the
provisions hereof and any agreement between the Company and the Optionee with
respect to such Shares.

 

                                18.6         The Company shall pay all issue or
transfer taxes with respect to the issuance or transfer of Shares to the
Optionee, as well as all fees and expenses necessarily incurred by the Company
in connection with such issuance or transfer, except fees and expenses which
may be necessitated by the filing or amending of a Registration Statement under
the Securities Act, which fees and expenses shall be borne by the Optionee,
unless such Registration Statement under the Securities Act has been filed by
the Company for its own corporate purposes (and the Company so states) in which
event the Optionee shall bear only such fees and expenses as are attributable
solely to the inclusion of the Shares he or she receives in the Registration
Statement.

 

 

7

 

                                18.7         All Shares issued following exercise of
the Option and the payment of the aggregate Exercise Price in accordance with
the terms of this Agreement therefor shall be fully paid and non-assessable to
the extent permitted by law.

 

                19.          Miscellaneous

 

                                19.1         If the Optionee loses this Agreement
representing the Option granted hereunder, or if this Agreement is stolen or
destroyed, the Company shall, subject to such reasonable terms as to indemnity
as the Committee in its sole discretion shall require, enter into a new option
agreement pursuant to which the Company shall issue a new Option, in form and
substance identical to this Option, and in substitution for, the Option so
lost, stolen or destroyed, and in the event this Agreement representing the
Option shall be mutilated, the Company shall, upon the surrender hereof, enter
into a new option agreement pursuant to which the Company shall issue a new
Option, in form and substance identical to this Option, and in substitution
for, the Option so mutilated.

 

                                19.2         This Agreement cannot be amended,
supplemented or changed, and no provision hereof can be waived, except by a
written instrument making specific reference to this Agreement and signed by
the party against whom enforcement of any such amendment, supplement,
modification or waiver is sought. A waiver of any right derived hereunder by
the Optionee shall not be deemed a waiver of any other right derived hereunder.

 

                                19.3         This Agreement may be executed in any
number of counterparts, but all counterparts will together constitute but one
agreement.

 

                                19.4         Any dispute regarding the
interpretation of this Agreement shall be submitted by Optionee or the Company
to the Committee for review.  The
resolution of such a dispute by the Committee shall be final and binding on the
Company and Optionee.

 

[Signature Page Follows:]

 

 

8

 

                In Witness
Whereof, the Company has caused this Agreement to be executed in
duplicate by its duly authorized representative, and Optionee has executed this
Agreement in duplicate as of the Date of Grant.

 

	
   

  	
  Langer, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Steven
  Goldstein, Optionee

  
				

 

 

9

 

EXHIBIT A

 

LANGER,
INC.

STOCK OPTION EXERCISE
AGREEMENT

`

 

                I hereby elect to
purchase the number of shares of Common Stock of Langer, Inc. (the “Company”)
as set forth below:

 

	
  Optionee

  	
   

  	
   

  	
   

  
	
  Social Security Number:

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares Purchased:

  	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
   

  	
   

  	
   

  
	
  Aggregate Exercise Price:

  	
   

  	
   

  	
   

  
	
  Date of Option:

  	
   

  	
   

  	
   

  
	
  Exact Name of Title to Shares:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

1.             DELIVERY OF
EXERCISE PRICE. Optionee hereby delivers to the Company the Aggregate Exercise
Price, to the extent permitted in the Option Agreement (the “Option
Agreement”), as follows (check as applicable and complete):

 

[ ]            in cash (by check)
in the amount of $_____________________;

 

[ ]            by cancellation of
indebtedness of the Company to Optionee in the amount of
$___________________________________;

 

[ ]            by delivery of
______________________________ fully-paid, nonassessable and vested shares of
the Common Stock of the Company owned by Optionee for at least six (6) months
prior to the date hereof (and which have been paid for within the meaning of
SEC Rule 144), or obtained by Optionee in the open public market, and owned
free and clear of all liens, claims, encumbrances or security interests, valued
at the current Fair Market Value of $____________________ per share;

 

[ ]            by tender of a
promissory note in the principal amount of $________________________, secured
by a Pledge Agreement of even date herewith (the par value of the Shares is
tendered in cash (or by check));

 

[ ]            by the waiver
hereby of compensation due or accrued to Optionee for services rendered in the
amount of $____________________________________ ;

 

[ ]            through a
“same-day-sale” commitment, delivered herewith, from Optionee and the NASD
Dealer named therein, in the amount of $_______________________________; or

 

10

 

[ ]            through a “margin”
commitment, delivered herewith from Optionee and the NASD Dealer named therein,
in the amount of $_________________________________________.

 

2.             MARKET STANDOFF
AGREEMENT.  Optionee, if requested by
the Company and an underwriter of Common Stock (or other securities) of the
Company, agrees not to sell or otherwise transfer or dispose of any Common
Stock (or other securities) of the Company held by Optionee during the period
requested by the managing underwriter following the effective date of a registration
statement of the Company filed under the Securities Act, provided that all
officers and directors of the Company are also requested to enter into similar
agreements.  Such agreement shall be in
writing in a form satisfactory to the Company and such underwriter. The Company
is hereby entitled to impose stop-transfer instructions with respect to the
shares (or other securities) subject to the foregoing restriction until the end
of such period.

 

3.             TAX
CONSEQUENCES.  OPTIONEE UNDERSTANDS THAT
OPTIONEE MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF OPTIONEE’S PURCHASE
OR DISPOSITION OF THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED
WITH ANY TAX CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE
PURCHASE OR DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE
COMPANY FOR ANY TAX ADVICE.

 

4.             ENTIRE
AGREEMENT.  The Option Agreement is
incorporated herein by reference. This Exercise Agreement and the Option
Agreement constitute the entire agreement and understanding of the parties and
supersede in their entirety all prior understandings and agreements of the
Company and Optionee with respect to the subject matter hereof, and are
governed by New York law applicable to contracts executed and to be fully
performed therein, other than conflict of laws principles thereof directing the
application of any law other than that of New York.

 

 

	
  Date: _________________________

  	
   

  	
  _________________________________

  
	
   

  	
   

  	
  SIGNATURE OF OPTIONEE

  

 

11Exhibit
10.37

 

 

Langer,
Inc.

Restricted
Stock Award Agreement

 

Restricted
Stock Award Agreement (the “Agreement”) made as of
November 12, 2004, by and between Langer, Inc., a Delaware corporation,
having its principal office at 450 Commack Road, Deer Park, New York 11729 (the
“Company”), and W. Gray Hudkins, an individual residing at 24 Fifth Avenue,
Apt. 701, New York, New York 10011 (“Hudkins”).

 

Whereas, Hudkins has recently agreed to become the
Chief Operating Officer of the Company, with the understanding that he would
receive a restricted stock award as herein provided;  and the Company believes it to be in the best interests of the
Company to induce Hudkins to become its Chief Operating Officer, and the
Company has agreed to award restricted stock to Hudkins under the terms of his
employment agreement entered into on or about the date hereof (the “Employment
Agreement,” which includes such agreement as the same may be amended
hereafter), and the Company desires to secure the services of Hudkins by providing
Hudkins with an inducement to enter into the Employment Agreement and to remain
an officer, employee or consultant of the Company or one or more of its
subsidiaries through the award of restricted stock as herein provided.

 

Now,
Therefore, the parties agree as follows:

 

1.             Restricted
Stock.  Subject to
the provisions hereinafter set forth, the Company hereby grants to Hudkins, as
of the date hereof (the “Grant Date”), a restricted stock award, subject to the
vesting schedule set forth below, of Forty Thousand shares (the “Restricted
Shares”) of common stock of the Company, par value $0.02 per share (the “Common
Stock”).  As more fully described below,
the Restricted Shares granted hereby are subject to forfeiture by Hudkins as
provided herein.

 

2.             Vesting.

 

(a)           The Restricted
Shares shall vest and be deemed earned and become nonforfeitable as follows:

 

                •              on
the first anniversary of the Date of Grant, 13,334 shares;

 

                •              on
the second anniversary of the Date of Grant, 13,333 shares;

 

                •              on
the third anniversary of the Date of Grant, 13,333 shares.

 

 

Notwithstanding
the foregoing, all of
the Restricted Shares shall immediately vest and become nonforfeitable when and
if (i) Hudkins’s employment with the Company is terminated without “cause”
(as such term is used in the employment agreement dated as of ______, 2004, by
and between the Company and Hudkins (the “Employment Agreement”)), or
(ii) Hudkins dies, or (iii) a Change-of-Control Event occurs.  For purposes of this Agreement,
“Change-of-Control Event” means the occurrence of any one or more of the
following events:  (i) there shall have
been a change in a majority of the Board of Directors of the Company within a
two (2) year period, unless the 

 

 

appointment of a director
or the nomination for election by the Company’s stockholders of each new
director was approved by the vote of a majority of the directors then still in
office who were in office at the beginning of such two (2) year period, or (ii)
the Company shall have been sold by either (A) a sale of all or substantially
all its assets, or (B) a merger or consolidation, other than any merger or
consolidation pursuant to which the Company acquires another entity, or (C) a
tender offer, whether solicited or unsolicited.

 

(b)           Notwithstanding the
vesting schedule set forth herein, such vesting schedule may be accelerated by
the Board of Directors or the Compensation Committee of the Board of Directors
(the “Committee”) in their sole decision.

 

(c)           If Hudkins is terminated by the
Company or its subsidiaries for Cause (as defined in the Employment Agreement)
or voluntarily terminates employment by the Company or its subsidiaries, prior
to the satisfaction of the vesting provisions set forth above, no further
portion of the Restricted Shares shall become vested pursuant to this
Agreement, and such unvested Restricted Shares shall be forfeited effective as
of the date that Hudkins ceases to be so employed by the Company or its
subsidiaries.

 

(c)           On the vesting date
the Restricted Shares shall be issued to Hudkins in accordance with the terms
hereof, including Section 3 below.

 

(d)           Nothing in this
Agreement amends the terms of the Employment Agreement, nor shall this
Agreement confer on Hudkins any right to continue in the employ of, or other
relationship with, the Company or any subsidiary of the Company, or limit in
any way the right of the Company or any affiliate or subsidiary of the Company
to terminate Hudkins’s employment or other relationship at any time, with or
without cause.  This Agreement does not constitute an
employment contract.  This Agreement
does not guarantee employment for the length of time of the above vesting
schedule or for any portion thereof.

 

(e)           Tax Consequences.  Hudkins understands that Hudkins may suffer
adverse tax consequences as a result of the grant, vesting or disposition of
the Restricted Shares.  Hudkins
represents that Hudkins has consulted with Hudkins’s own independent tax
consultants as Hudkins deems advisable in connection with the grant, vesting or
disposition of the Restricted Shares and that Hudkins is not relying on the
Company for any tax advice.

 

3.             Issuance and Withholding.

 

(a)           Upon vesting, the
Company shall issue certificates evidencing the vested portion of the
Restricted Shares  registered in the
name of Hudkins, Hudkins’s authorized assignee, or Hudkins’s legal
representative, and shall deliver such certificates to the registered holder
thereof.

 

(b)           Prior to the
issuance of the Restricted Shares, Hudkins must pay or provide for any
applicable federal or state withholding obligations in accordance with Section
16 below.

 

2

 

 

4.             Compliance With Laws and Regulations.  The issuance and transfer of Restricted
Shares shall be subject to compliance by the Company and Hudkins with all
applicable requirements of federal and state securities laws and with all
applicable requirements of any stock exchange or quotation system on which the
Company’s Common Stock may be listed at the time of such issuance or transfer

 

5.             Nontransferability. Until the
Restricted Shares shall be vested and issued and until the satisfaction of any
and all other conditions specified herein, the Restricted Shares may not be
sold, transferred, assigned, pledged or otherwise encumbered or disposed of by
Hudkins, other than by will or by the laws of descent and distribution, except
upon the written consent of the Company and, in any case, in compliance with
the terms and conditions of this Agreement. 
The terms of this Agreement shall be binding upon the executors,
administrators, successors and assigns of Hudkins.

 

6.             Privileges of Stock Ownership.  Hudkins shall not have any of the rights of
a stockholder with respect to any Restricted Shares until the Restricted Shares
are vested and are issued to Hudkins.

 

7.             Interpretation.  Any dispute regarding the interpretation of this Agreement
shall be submitted by Hudkins or the Company to the Committee for review.  The resolution of such a dispute by the
Committee shall be final and binding on the Company and Hudkins.

 

8.             Entire Agreement.  This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersede all prior understandings and agreements with respect to such
subject matter.

 

9.             Notices. 
Any notice required to be given or delivered to the Company under
the terms of this Agreement shall be in writing and addressed to the Corporate
Secretary of the Company at its principal corporate offices.  Any notice required to be given or delivered
to Hudkins shall be in writing and addressed to Hudkins at the address
indicated above or to such other address as Hudkins may designate in writing
from time to time to the Company.  All
notices shall be deemed to have been given or delivered upon: personal
delivery; three (3) days after deposit in the United States mail by certified
or registered mail (return receipt requested); one (1) business day after
deposit with any return receipt express courier (prepaid); or one (1) business
day after transmission by facsimile.

 

10.          Successors and Assigns.  The Company may assign any of its rights
under this Agreement.  This Agreement
shall be binding upon and inure to the benefit of the successors and assigns of
the Company.  Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Hudkins and Hudkins’s heirs, executors, administrators, legal representatives,
successors and assigns.

 

11.          Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, applicable to agreements
made and to be performed entirely within such state, other than conflict of
laws principles thereof directing the application of any law other than that of
Delaware.

 

3

 

 

12.          Acceptance.  Hudkins hereby acknowledges receipt of a copy of this
Agreement.  Hudkins has read and
understands the terms and provisions hereof, and accepts this restricted stock
award subject to all the terms and conditions of this Agreement.  Hudkins acknowledges that there maybe
adverse tax consequences upon the grant or the vesting of this restricted stock
award, issuance or disposition of the Restricted Shares and that the Company
has advised Hudkins to consult a tax advisor regarding the tax consequences of
the grant, vesting, issuance or disposition.

 

13.          Covenants
of Hudkins.  Hudkins
agrees (and for any proper successor hereby agrees) upon the request of the
Committee, to execute and deliver a certificate, in form reasonably
satisfactory to the Committee, regarding applicable Federal and state
securities law matters.

 

14.          Obligations of the Company

 

                (a)           Notwithstanding anything to the contrary contained herein,
neither the Company nor its transfer agent shall be required to issue any
fraction of a share of Common Stock, and the Company shall issue the largest
number of whole Restricted Shares of Common Stock to which Hudkins is entitled
and shall return to Hudkins the amount of any unissued fractional share in
cash.

 

                (b)           The Company may endorse such legend or legends upon the
certificates for Restricted Shares issued to Hudkins pursuant to this Agreement
and may issue such “stop transfer” instructions to its transfer agent in
respect of such Restricted Shares as, in its discretion, it determines to be
necessary or appropriate to: (i) prevent a violation of, or to perfect an
exemption from, the registration requirements of the Securities Act;
(ii) implement the provisions of this Agreement or any other agreement
between the Company and Hudkins with respect to such Restricted Shares; or
(iii) as may be required pursuant to the Company’s certificate of
incorporation, as currently in force or as the same may be amended after the
date hereof.

 

                (c)           The Company shall pay all issue or transfer taxes with
respect to the issuance or transfer of Restricted Shares to Hudkins, as well as
all fees and expenses necessarily incurred by the Company in connection with
such issuance or transfer.

 

                (d)           All
Restricted Shares issued following vesting shall be fully paid and
non-assessable to the extent permitted by law.

 

15.          Section
83(b) Election.  If Hudkins files an election with the
Internal Revenue Service to include the fair market value of any Restricted
Shares in gross income as of the Grant Date, the Restricted Stockholder agrees
to promptly furnish the Company with a copy of such election, together with the
amount of any federal, state, local or other taxes required to be withheld to
enable the Company to claim an income tax deduction with respect to such
election

 

16.          Withholding
Taxes. Hudkins acknowledges that the Company is not
responsible for the tax consequences to Hudkins of the granting, vesting or
issuance of the Restricted Shares, and that it is the responsibility of Hudkins
to consult with Hudkins’s personal tax advisor regarding all matters with
respect to the tax consequences of the granting, vesting and issuance of the
Restricted Shares. The Company shall have the right to deduct from the
Restricted Shares or any payment to be made 

 

 

4

 

with
respect to the Restricted Shares, or any amount otherwise payable by the
Company to Hudkins, any amount that federal, state, local or foreign tax law
requires to be withheld with respect to the Restricted Shares or any such
payment.  Alternatively, the Company may
require that Hudkins, prior to or simultaneously with the Company’s incurring
any obligation to withhold any such amount, pay such amount to the Company in
cash or in shares of the Company’s Common Stock (including shares of Common
Stock retained from the Stock Restricted Award creating the tax obligation),
which shall be valued at the Fair Market Value of such shares on the date of
such payment.  In any case where it is
determined that taxes are required to be withheld in connection with the
issuance, transfer or delivery of the Restricted Shares, the Company may reduce
the number of shares so issued, transferred or delivered by such number of
shares as the Company may deem appropriate to comply with such
withholding.  The Company may also
impose such conditions on the payment of any withholding obligations as may be
required to satisfy applicable regulatory requirements under the Exchange Act,
if any.

 

17.          Miscellaneous

 

                (a)           If Hudkins loses this Agreement representing the
Restricted Shares granted hereunder, or if this Agreement is stolen, damaged or
destroyed, the Company shall, subject to such reasonable terms as to indemnity
as the Committee, in its sole discretion shall require, replace the Agreement.

 

                (b)           The Company may offer to buy the Restricted Shares
actually issued hereunder on such terms and conditions as the Company shall
establish and communicate to Hudkins at the time that such offer is made.

 

                (c)           This Agreement cannot be amended, supplemented or changed,
and no provision hereof can be waived, except by a written instrument making
specific reference to this Agreement and signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver is
sought.  A waiver of any right derived
hereunder by Hudkins shall not be deemed a waiver of any other right derived
hereunder.

 

                (d)           This Agreement may be executed in any number of
counterparts, but all counterparts will together constitute but one agreement.

 

[Remainder
of this Page Intentionally Left Blank]

 

 

 

 

 

5

 

                In Witness Whereof, the Company has caused
this Restricted Stock Award Agreement to be executed by its duly authorized
officer and the Restricted Stockholder has executed this Agreement as of the
date first above written.

 

	
   

  	
  Langer, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Restricted Stockholder:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  W. Gray Hudkins

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]