Document:

Exhibit
10.34

 

Langer,
Inc.

450 Commack Road

Deer Park, New York 11729

 

November
12, 2004

 

Mr. Andrew H. Meyers

31 The Birches

Roslyn Estates, N.Y. 11576

 

Re:  Employment Agreement and Extension Letter
— Fifth Amendment

 

 

Dear Mr. Meyers:

 

                We
refer to (i) that certain letter agreement dated January 30, 2004, between
Langer, Inc., a Delaware corporation, which is the successor by merger to
Langer, Inc., a New York corporation formerly known as “The Langer
Biomechanical Group, Inc.” (the “Company”) and you (the “Extension Letter”),
which amends that certain Executive Employment Agreement dated as of February
13, 2001 (the “Agreement,” which term, when used herein, includes such
agreement as amended by the Amended Extension Letter and by the provisions of
this letter (this letter being referred to as the “Fifth Amendment”)), between
you and the Company, (ii) that certain letter agreement dated on or about
May 28, 2004 (the “Second Amendment,”) which amended the Extension Letter,
(iii) that certain letter agreement dated on or about August 31, 2004 (the
“Third Amendment”), which further amended the Extension Letter, and (iv) 
that certain letter agreement dated on or about October 28, 2004 (the “Fourth
Amendment”), which further amended the Extension Letter (as so amended, the
“Amended Extension Letter,” which term includes the Amended Extension Letter as
amended herein).

 

                1.             The Amended Extension Letter is
hereby further amended as follows:  the
number “thirty (30)” in the Amended Extension Letter (as provided by the Fourth
Amendment) is changed to “ninety (90)”.

 

                2.             The Executive (as such term is
defined in the Agreement) and the Company hereby agree to an Additional Term
(as such term is defined in the Agreement) which shall commence on January 1,
2005, and shall expire on December 31, 2005, subject to earlier termination in
accordance with the Agreement.

 

                3.             The Executive and the Company
hereby agree that the option to purchase 175,000 shares of the Company’s Common
Stock (the “Option”) is fully vested, and the second sentence of Section 6(b)
of the Agreement is hereby deleted effective as of January 1, 2005.

 

                4.             Notwithstanding any contrary
provision in the Agreement or in the stock option agreement or other documents
and instruments establishing or evidencing the Option, the Option shall be
exercisable so long as the Executive is employed by the Company, and for a
period of one year following termination of his employment.

 

                5.             The Executive and the Company
hereby agree that notwithstanding any contrary or inconsistent provision of the
Agreement, the Company may designate a chief operating officer or other similar
officer who shall have full responsibility for all operations of the business
of the Company, and such officer or officers may be authorized to report
directly to the Executive and the Board of Directors or the Chairman of the
Board of Directors of the Company.  The
Executive hereby agrees that the foregoing

 

 

provision shall not constitute a “Good
Reason” as defined in Section 5(c)(ii) of the Agreement or otherwise constitute
a violation of the Agreement by the Company.

 

6.             The Executive and
the Company hereby agree to add a new Section 13 to the Agreement, which reads
in its entirety as follows:

 

                “13.         Lock-up
Agreement.  (a)  The Executive will not, without the prior
written consent of the Board of Directors of Langer, directly or indirectly,
make any offer, sale, assignment, transfer, pledge, hypothecation or other
encumbrance, contract to sell, grant of an option to purchase or sell, or other
disposition of, or enter into any transaction or device designed to, or which
could reasonably be expected to result in the disposition by any person at any
time in the future of, any Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock (whether now owned by the
Executive or hereafter acquired) (all such securities, the “Executive’s
Securities”) until August 1, 2005.

 

                                (b)           The
Executive will not, without the prior written consent of the Board of Directors
of Langer, directly or indirectly, make any offer, sale, assignment, transfer,
pledge, hypothecation or other encumbrance, contract to sell, grant of an
option to purchase or sell, or other disposition of, or enter into any
transaction or device designed to, or which could reasonably be expected to
result in the disposition by any person at any time in the future of, 90% of
the Executive’s Securities until the first day following the filing with the
Securities and Exchange Commission of Langer’s Annual Report on Form 10-K for
the year ending December 31, 2005.

 

                                (c)           The
Executive will not, without the prior written consent of the Board of Directors
of Langer, directly or indirectly, make any offer, sale, assignment, transfer,
pledge, hypothecation or other encumbrance, contract to sell, grant of an
option to purchase or sell, or other disposition of, or enter into any
transaction or device designed to, or which could reasonably be expected to
result in the disposition by any person at any time in the future of, 50% of
the Executive’s Securities until the first day following the filing with the
Securities and Exchange Commission of Langer’s Annual Report on Form 10-K for
the year ending December 31, 2006.

 

                                (d)           Upon
the consummation of any sale of shares of Common Stock in the open market by
Langer Partners, LLC (“Langer Partners”), Langer Partners shall provide written
notice (the “Partners Notice”) to the Executive of such sale and the percentage
represented by the number of shares of Common Stock sold by Langer Partners in
such sale as compared to the total number of shares of Common Stock owned by
Langer Partners immediately prior to such sale (the “Partners
Percentage”).  Notwithstanding the
provisions of paragraphs (a) through (c) above, if, within 14 days after the
date of the Partners Notice, the Executive notifies Langer Partners and the
Board of Directors of Langer of his intention to sell up to the percentage of
shares of Common Stock owned by the Executive equal to the Partners Percentage,
which notice shall specify the exact number of shares to be sold (the “Sale
Notice”), the Executive shall sell the number of shares specified in the Sale
Notice within the 180 days after the date of the Partners Notice.

 

2

 

(e)           The certificates issued to represent
the Executive’s shares of Common Stock will bear a legend referencing the
restrictions set forth herein, and Langer shall from time to time give
appropriate notices to its transfer agent to apply stop-orders to any stock
certificates evidencing Common Stock owned by the Executive;  provided, however, that the failure of
Langer or its transfer agent to apply such legends or apply such stop-orders
shall not be construed as a waiver, modification or termination of the provisions
hereof.

 

(f)            In addition to the restrictions on
sales set forth herein, if Langer engages in a public offering of its
securities during the term of this Agreement which includes Common Stock or
securities convertible into Common Stock, the Executive shall be deemed to
agree to any restrictions on sales to which a majority of the members of the
Board of Directors agree in connection with such offering, and the Executive
shall enter into such agreements or execute such other documents as may be necessary
or advisable, in the opinion of the Board of Directors and/or the underwriter,
if any, in such offering.”

 

Except as modified herein,
Amended Extension Letter and the Agreement shall remain in full force and
effect.

 

3

 

                Please confirm you agreement to
the foregoing by signing the enclosed copy of this letter and returning it to
the undersigned.

 

	
   

  	
   

  	
  Yours very truly,

  	
   

  
	
   

  	
   

  	
  Langer, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph P. Ciavarella, Vice President

  
	
   

  	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  Agreed as set forth above

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  as of this ____ day of November, 2004:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Andrew H. Meyers

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The undersigned hereby agrees to provide notice in
  accordance with Section 13(d)(i) of the Agreement as set forth in Section 6
  of this letter:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Langer Partners, LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Warren B. Kanders,
  Managing Member

  	
   

  	
   

  
							

 

4

 

Langer, Inc.

450 Commack Road

Deer Park, New York 11729

 

                                                                                                                                October
28, 2004

 

Mr. Andrew H. Meyers

31 The Birches

Roslyn Estates, N.Y. 11576

 

Re:  Employment Agreement and Extension Letter
— Fourth Amendment

 

 

Dear Mr. Meyers:

 

                We refer to
(i) that certain letter agreement dated January 30, 2004, between Langer,
Inc., a Delaware corporation, which is the successor by merger to Langer, Inc.,
a New York corporation formerly known as “The Langer Biomechanical Group, Inc.”
(the “Company”) and you (the “Extension Letter”), which amends that certain
Executive Employment Agreement dated as of February 13, 2001 (the “Agreement,”
which term, when used herein, includes such agreement as amended by the
Extension Letter), between you and the Company, (ii) that certain letter
agreement dated on or about May 28, 2004 (the “Second Amendment,”) which amended
the Extension Letter, and (iii) that certain letter agreement dated on or
about August 31, 2004 (the “Third Amendment”), which further amended the
Extension Letter (as so amended, the “Amended Extension Letter”).

 

                The Amended
Extension Letter is hereby further amended by changing the number “sixty(60)”
to the number “thirty (30)”.

 

Except as modified herein, the Extension Letter shall
remain in full force and effect.

 

                Please confirm you
agreement to the foregoing by signing the enclosed copy of this letter and
returning it to the undersigned.

 

	
   

  	
   

  	
   

  	
  Yours very truly,

  
	
   

  	
   

  	
   

  	
  Langer,
  Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph P. Ciavarella, Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
  Agreed
  as set forth above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  as of
  this 31st day of October, 2004:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Andrew
  H. Meyers

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

5

 

[Letterhead
of Langer, Inc.]

 

                                                                                                                                August
31, 2004

 

Mr. Andrew H. Meyers

31 The Birches

Roslyn Estates, N.Y. 11576

 

Re:  Employment Agreement and Extension Letter
— Third Amendment

 

 

Dear Mr. Meyers:

 

                We refer to
(i) that certain letter agreement dated January 30, 2004, between Langer,
Inc., a Delaware corporation, which is the successor by merger to Langer, Inc.,
a New York corporation formerly known as “The Langer Biomechanical Group, Inc.”
(the “Company”) and you (the “Extension Letter”), which amends that certain
Executive Employment Agreement dated as of February 13, 2001 (the “Agreement,”
which term, when used herein, includes such agreement as amended by the
Extension Letter), between you and the Company, and (ii) that certain
letter agreement dated on or about May 28, 2004 (the “Second Amendment, which
amended the Extension Letter (as so amended, the “Amended Extension Letter”).

 

                The Amended
Extension Letter is hereby further amended by changing (i) the date
“September 30, 2004” therein to “October 31, 2004” and (ii) the number
“ninety (90)” to the number “sixty(60)”.

 

Except as modified herein, the Extension Letter shall
remain in full force and effect.

 

                Please confirm you
agreement to the foregoing by signing the enclosed copy of this letter and
returning it to the undersigned.

 

	
   

  	
   

  	
   

  	
  Yours very truly,

  
	
   

  	
   

  	
   

  	
  Langer,
  Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph P. Ciavarella, Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
  Agreed
  as set forth above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  as of
  this 31st day of August, 2004:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Andrew
  H. Meyers

  	
   

  	
   

  	
   

  

 

 

6

 

 [Letterhead of Langer, Inc.]

 

                                                                                                                                May
28, 2004

 

Mr. Andrew H. Meyers

31 The Birches

Roslyn Estates, N.Y. 11576

 

Re:  Employment Agreement and Extension Letter
— Second Amendment

 

 

Dear Mr. Meyers:

 

                We refer to
(i) that certain letter agreement dated January 30, 2004, between Langer,
Inc., a Delaware corporation, which is the successor by merger to Langer, Inc.,
a New York corporation formerly known as “The Langer Biomechanical Group, Inc.”
(the “Company”) and you (the “Extension Letter”), which amends that certain
Executive Employment Agreement dated as of February 13, 2001 (the “Agreement,”
which term, when used herein, includes such agreement as amended by the
Extension Letter), between you and the Company, and (ii) that certain
letter agreement dated on or about March 30, 2004 (the “First Amendment”),
which amended the Extension Letter (as so amended, the “Amended Extension
Letter”).

 

                The Amended
Extension Letter is hereby further amended by changing the date “June 30, 2004”
therein to “September 30, 2004”.

 

Except as modified herein and by the First Amendment ,
the Extension Letter shall remain in full force and effect.

 

                Please confirm you
agreement to the foregoing by signing the enclosed copy of this letter and
returning it to the undersigned.

 

	
   

  	
   

  	
   

  	
  Yours very truly,

  
	
   

  	
   

  	
   

  	
  Langer,
  Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph P. Ciavarella, Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
  Agreed
  as set forth above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  as of this ___ day of May, 2004:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Andrew
  H. Meyers

  	
   

  	
   

  	
   

  

 

 

7

 

 [Letterhead of Langer, Inc.]

 

                                                                                                                                March
30, 2004

 

Mr. Andrew H. Meyers

31 The Birches

Roslyn Estates, N.Y. 11576

 

Re:  Employment Agreement and Extension Letter

 

 

Dear Mr. Meyers:

 

                We refer to that
certain letter agreement dated January 30, 2004, between Langer, Inc., a
Delaware corporation, which is the successor by merger to Langer, Inc., a New
York corporation formerly known as “The Langer Biomechanical Group, Inc.” (the
“Company”) and you (the “Extension Letter”), which amends that certain
Executive Employment Agreement dated as of February 13, 2001 (the “Agreement,”
which term, when used herein, includes such agreement as amended by the
Extension Letter), between you and the Company.

 

                The Extension
Letter is hereby amended by changing the number “sixty (60)” therein to “thirty
(30) “, and by changing the date “May 31, 2004” therein to “June 30, 2004”.

 

Except as modified herein, the Extension Letter shall
remain in full force and effect.

 

                Please confirm you
agreement to the foregoing by signing the enclosed copy of this letter and
returning it to the undersigned.

 

 

	
   

  	
   

  	
   

  	
  Yours very truly,

  
	
   

  	
   

  	
   

  	
  Langer,
  Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph P. Ciavarella, Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
  Agreed
  as set forth above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  as of this ___ day of March, 2004:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Andrew
  H. Meyers

  	
   

  	
   

  	
   

  

 

 

8

 

[Letterhead
of Langer, Inc.]

 

                                                                                                                                January
30, 2004

 

Mr. Andrew H. Meyers

31 The Birches

Roslyn Estates, N.Y. 11576

 

Re:  Employment Agreement

 

 

Dear Mr. Meyers:

 

                We refer to the
Executive Employment Agreement (the “Agreement”) dated as of February 13, 2001,
between you and Langer, Inc., a Delaware corporation, which is the successor by
merger to Langer, Inc., a New York corporation formerly known as “The Langer
Biomechanical Group, Inc.” (the “Company”), as amended by that certain letter
agreement dated December 1, 2003, between the Company and Mr. Meyers (the
“Extension Letter”).  Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Agreement.

 

                Section 2 of the Agreement is hereby amended and
restated in its entirety to read as follows:

 

                “2.           Term

 

                “The term of the
Executive’s employment under this Agreement shall commence on the date hereof
and shall continue through May 31, 2004 (the “Initial Term” or “Term”), unless
earlier terminated as hereinafter provided. The Executive’s employment shall
continue for one year periods after the Initial Term on a calendar year basis
(each an “Additional Term”) unless either the Executive or Langer gives written
notice to the other not later than sixty (60) days prior to the expiration of
the Initial Term or not later than ninety (90) days prior to the expiration of
any Additional Term, as the case may be, of the decision not to extend the
Executive’s employment.  If this
Agreement is extended beyond the Initial Term, the first Additional Term
thereafter shall deemed to run from January 1, 2004 to December 31, 2004 and
for all purposes hereunder shall be deemed a renewal, as of January 1, 2004.”

 

                In connection with
the foregoing, if the parties enter into a new employment agreement in lieu of
any Additional Term, the parties agree that such new agreement shall commence
effective as of January 1, 2004.

 

This letter, when signed by both parties, shall
supersede the Extension Letter.  Except
as modified herein, the Agreement shall remain in full force and effect.

 

                Please confirm you
agreement to the foregoing by signing the enclosed copy of this letter and
returning it to the undersigned.

 

	
   

  	
   

  	
   

  	
  Yours very truly,

  
	
   

  	
   

  	
   

  	
  Langer,
  Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Anthony J. Puglisi, Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
  Agreed
  as set forth above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  as of this 30th day of
  January, 2004:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Andrew
  H. Meyers

  	
   

  	
   

  	
   

  

 

 

9

 

[Letterhead
of Langer, Inc.]

 

                                                                                                                                December
1, 2003

 

Mr. Andrew H. Meyers

31 The Birches

Roslyn Estates, N.Y. 11576

 

Re:  Employment Agreement dated as of February
13, 2001

 

 

Dear Mr. Meyers:

 

                We refer to the
Executive Employment Agreement (the “Agreement”) dated as of February 13, 2001,
between you and Langer, Inc., a Delaware corporation, which is the successor by
merger to Langer, Inc., a New York corporation formerly known as “The Langer
Biomechanical Group, Inc.” (the “Company”). 
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Agreement.

 

                Section 2 of the Agreement is hereby amended and
restated in its entirety to read as follows:

 

                “2.           Term

 

                The term of the
Executive’s employment under this Agreement shall commence on the date hereof
and shall continue through March 31 2004 (the “Initial Term”), unless earlier
terminated as hereinafter provided. The Executive’s employment shall continue
after the Initial Term on a year-to-year basis (each, an “Additional Term” and,
together with the Initial Term, the “Term”) unless either the Executive or
Langer gives written notice to the other not later than sixty (60) days prior
to the expiration of the Initial Term or not later than ninety (90) days prior
to any Additional Term, as the case may be, of the decision not to extend the
Executive’s employment.”

 

Except as modified herein, the Agreement shall remain
in full force and effect.

 

Please confirm you agreement to the foregoing by
signing the enclosed copy of this letter and returning it to the undersigned.

 

 

	
   

  	
   

  	
   

  	
  Yours very truly,

  
	
   

  	
   

  	
   

  	
  Langer,
  Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Anthony J. Puglisi, Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
  Agreed
  as set forth above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  this 30th day of November, 2003:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Andrew
  H. Meyers

  	
   

  	
   

  	
   

  

 

10Exhibit
10.35

 

Langer,
Inc.

Stock
Option Agreement

W.
Gray Hudkins, 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 W.
Gray Hudkins, residing at 24 Fifth Avenue, Apt. 701, New York, New York 10011
(the “Optionee”).

 

Whereas,
the Optionee has recently agreed to become the Chief Operating Officer of the
Company, with the understanding that he would receive options to purchase the
Company’s common stock;  and the Company
believes it to be in the best interests of the Company to induce the Optionee
to become its Chief Operating Officer, and the Company 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 or more 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 One Hundred Fifty Thousand (150,000) 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:       50,000
shares;

On November 12, 2006:       50,000
shares;

On November 12, 2007:       50,000
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 the Optionee is
terminated for cause (as such term is used in the Employment Agreement),
neither the Optionee, nor the Optionee’s estate nor 

 

 

 

2

 

such
other person who may then hold the Option shall be entitled to exercise any
Option with 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

 

 

 

3

 

from
the NASD 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.          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
Optionee and Optionee’s heirs, executors, administrators, legal
representatives, successors and assigns.

 

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

 

 

 

5

 

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 deduct, an amount of shares or cash sufficient to
satisfy federal, state or local withholding tax

 

 

 

6

 

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:

  
	
   

  
	
   

  	
   

  
	
  W. Gray Hudkins, 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):

 

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

 

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

 

o            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;

 

o            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));

 

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

 

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

 

 

 

10

 

o            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

  

 

 

11

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