-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UdcjRTasO3kfkC6TjWzgWz2zS3W21sAD/OaZZRU7jsBDHS7MInxZppg5wsbsj7HJ 6K/4/b2LUsBM6NO2C/wVyg== /in/edgar/work/0001073307-00-000023/0001073307-00-000023.txt : 20001120 0001073307-00-000023.hdr.sgml : 20001120 ACCESSION NUMBER: 0001073307-00-000023 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001113 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANGER BIOMECHANICS GROUP INC CENTRAL INDEX KEY: 0000725460 STANDARD INDUSTRIAL CLASSIFICATION: [3842 ] IRS NUMBER: 112239561 STATE OF INCORPORATION: NY FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-12991 FILM NUMBER: 772219 BUSINESS ADDRESS: STREET 1: 450 COMMACK ROAD CITY: DEER PARK STATE: NY ZIP: 11729 BUSINESS PHONE: 5166671200 MAIL ADDRESS: STREET 1: 450 COMMACK ROAD CITY: DEER PARK STATE: NY ZIP: 11729 8-K 1 0001.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): NOVEMBER 13, 2000 THE LANGER BIOMECHANICS GROUP, INC. (Exact name of registrant as specified in its charter) NEW YORK 0-12991 11-2239561 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification Number) 450 COMMACK ROAD DEER PARK, NEW YORK 11729 (Address of principal executive offices) (Zip Code) (631) 667-1200 (Registrant's telephone number, including area code) NOT APPLICABLE (Former Name or Former Address, if Changed Since Last Report) Item 1. Changes in Control of Registrant. (b) On November 13, 2000, The Langer Biomechanics Group, Inc. (the "Company") entered into a non-binding Term Sheet for Revised Transaction, dated November 10, 2000, with OrthoStrategies, Inc. ("OSI") (the "Term Sheet"). The Term Sheet amends the previously announced proposed acquisition of the Company by OSI. In lieu of a cash merger in which the shareholders of the Company would receive $1.75 per share in cash, the Term Sheet contemplates that the transaction would take the form of a cash tender offer by OSI for up to 75% of the outstanding shares of common stock of the Company for $1.525 per share, with a minimum tender condition of 51%. Upon commencement of the proposed tender offer, Andrew H. Meyers, the President and principal stockholder of OSI, would become interim Chief Executive Officer and President of the Company. In addition, upon completion of the proposed tender offer, it is contemplated that all or nearly all of the current directors of Langer would resign, to be replaced by Andrew H. Meyers and other designees of OSI. Furthermore, upon successful completion of the proposed tender offer, OSI would be issued an 180 day option to purchase up to 1,400,000 shares of common stock of the Company, with an initial exercise price of $1.525 per share, rising to $1.60 per share prior to expiration. The proceeds from this warrant, if exercised, are expected to be utilized for working capital and in connection with possible future acquisitions by the Company. The commencement of the tender offer will be subject to a number of conditions, including, among others, the execution of a formal acquisition agreement, the obtaining of financing by OSI and the meeting of minimum net worth and net working capital parameters by the Company. No shareholder vote is necessary in connection with this transaction. Reference is made to the Term Sheet for the complete details thereof, a copy of which is attached hereto as Exhibit 1 and incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. ----------------------------------------- (c) Exhibits 10.1 The Term Sheet 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: November 17, 2000 The Langer Biomechanics Group, Inc. By: /s/ Thomas G. Archbold ------------------------------------- Name: Thomas G. Archbold Title: Chief Financial Officer 3 EX-10 2 0002.txt EXHIBIT 10.1 TERM SHEET FOR REVISED TRANSACTION NOVEMBER 10, 2000 - -------------------------------------------------------------------------------- The following is an outline of the terms of a proposed transaction between OrthoStrategies, Inc. (or a subsidiary thereof) ("OSI") and The Langer Biomechanics Group, Inc. ("Langer" or the "Company"): 1. OrthoStrategies (OSI) and related investors tender offer for Langer shares: (A) One Dollar and Fifty Two and one-half Cents ($1.525) per share. (B) Offer for up to Seventy-Five Percent (75%) of the outstanding shares of Langer. (C) Minimum Required Tender - Fifty-One (51%) Percent of outstanding shares. (D) Assumes total outstanding shares does not exceed 2,613,181. (E) Assumes the only outstanding options are as set forth on Exhibit B. (i) with respect to options held by the management group - Messrs. Granat, Ardia, Altholtz and Gorney: All in the money options will be retired on the Closing Date of the tender by the Company's payment of the excess of $1.525 over the exercise price. All out of the money options will be cancelled on such date. (ii) All other holders of existing options may retain them. 2. Acquisition Agreement: (A) Langer would support and recommend the tender (subject to the Langer Board's fiduciary duties). Langer would agree to certain operating restrictions during the interim period until the tender was completed (except with the approval of OSI). Langer Board to approve and recommend (subject to their fiduciary duties) all transactions referred to herein. (B) Documents referred to in Paragraphs 2,3,4 and 5 would be executed at same time as Acquisition Agreement; this is targeted for as early as possible in November, 2000. The Acquisition Agreement would contain a Net Worth Target ($2,200,000) and a Net Working Capital Target ($1,700,000). When Langer October 27 financials are available, certified by the CFO of Langer (targeted for as early as possible in November, 2000), a comparison would be made to determine if the targets were achieved. If the targets are achieved and the Acquisition Agreements had been signed, OSI would have to proceed with the tender offer in accordance with Paragraph 1 above. If the targets were not met, OSI could decline to proceed with the tender offer, or at its option, proceed with the tender offer. OSI could also, in its discretion, elect to proceed with the tender offer prior to availability of the October 27 financials. Once the tender offer was sent out to the public, there would be no further Net Worth or Net Working Capital closing condition. (C) Acquisition Agreement would contain reps, warranties and covenants (similar to merger agreement) but, as with merger agreement, these would generally be closing conditions, rather than obligations which survive the closing of the tender offer. (D) Assuming the Acquisition Agreements are signed, and the Net Worth and Net Working Capital targets are met with the October 27 financials, both OSI and Langer will proceed as rapidly as possible to commence and conclude the tender offer. 3. Supervision of Langer operations during interim periods: (A) Although the intention is to move as rapidly as possible after the signing of the Acquisition Agreement to commencement of the tender, if there is any interim period from the signing of the Acquisition Agreement until commencement of the tender, Andrew H. Meyers and Steve Ardia, the Chairman of Langer, will coordinate so as to provide Mr. Meyers with data and information on Langer's operations. (B) Simultaneously with the commencement of the tender, Mr. Meyers will become Acting President and CEO of Langer, with full CEO powers to operate Langer, subject only to the Board of Directors. (C) Andrew H. Meyers would be appointed as an "Observer" to the Board on the commencement of the tender offer, with the right to attend and participate in all meetings and receive all notices and reports, but not to vote, and would be excluded from deliberations specific to the transactions with OSI or Andrew H. Meyers. (D) During the period Andrew H. Meyers is acting President and CEO, he will not receive a salary but will receive reimbursement of approved expenses. (E) CEO appointment effective during the interim period from commencement of tender offer until the tender is completed or abandoned. -2- (F) Board to approve employment/compensation arrangements for Andrew H. Meyers and Steven Goldstein to be effective on Closing Date, with compensation packages approximating current executive compensation arrangements. 4. The Shareholder Group set forth on Exhibit A agrees: (A) to lockup their shares until abandonment of tender. (B) to tender their shares to OSI in the tender offer. (C) to sell their shares to at same $1.525 price to OSI even if tender is superceded by competing offer. (D) Ken Granat, Tom Altholtz and Steve Ardia would agree to resign from the Board upon completion of tender. Andrew H. Meyers and three other designees of OSI will be appointed to the Langer Board effective on completion of tender. (E) Following completion of the tender, Langer will continue to maintain Director's and Officer's liability insurance comparable to that currently in effect. 5. To enable OSI to increase the capital of Langer, Langer grants OSI the option to purchase up to 1,400,000 shares. The option term is one hundred eighty (180) days after the Closing Date. The option exercise price per share will vary depending on when after the Closing Date the option is exercised: 0-90 days $1.525 91-120 days $1.550 121-150 days $1.575 151-180 days $1.600 The tender offer statement and related disclosure documents may disclose that: the option may or may not be exercised; Langer may need additional financing and subject to then current Board approval, such financing may be provided by OSI or related investors upon other terms, including funding provided by convertible notes, preferred stock or other methods; and the sales prices, conversion prices or exercise prices of such securities may be lower or higher than the option exercise price or then current market prices. -3- 6. Coverage of Expenses: (A) In the event the tender offer closes, OSI and Langer shall each bear their own transaction expenses. It is estimated that Langer's expenses shall be $125,000. (B) In the event that Langer fails to meet Net Worth/Net Working Capital Targets and OSI declines to proceed, Langer to pay OSI's reasonable expenses up to a maximum of $75,000; if OSI proceeds with tender, this obligation (B) would no longer apply. (C) In the event that OSI has met all closing conditions and Langer breaches acquisition or related agreements and therefor OSI declines to proceed, Langer to pay OSI's reasonable expenses. (D) In the event the tender offer by OSI is not completed due to a higher competing offer, Langer to pay OSI's reasonable expenses. (E) In the event Langer has met all closing conditions and OSI breaches the acquisition or related agreements, OSI will pay Langer's reasonable expenses up to a maximum of $100,000, which shall be personally guaranteed by Andrew H. Meyers. 7. Certain Compensation Programs. (A) The bonus program for Messrs. Gorney, Spinelli and Archibald as set forth in Section 1(b)(iv) of the LOI will continue to apply if the tender offer closes, but with the original Target Net Worth and Target Net Working Capital in the LOI. (B) It is contemplated that Langer will have a pool of up to $25,000 for purposes of compensating certain directors for their active role in negotiating the acquisition contemplated hereby. 8. Certain Binding Provisions. (A) Neither Langer, nor any officer or director of Langer, nor any related party shall, directly or indirectly, make, solicit or encourage proposals or bids, or subject to their fiduciary duties, hold discussions or negotiations or furnish information regarding the acquisition of an interest in Langer or any of its assets or capital stock or any merger, consolidation, reorganization, recapitalization or tender offer involving Langer, from, with or to any person or entity, whether or not affiliated with Langer, until the occurrence of the Outside Termination Date (as defined below). The "OUTSIDE TERMINATION DATE" shall be deemed to occur on 11:59 p.m., EST, December 1, 2000. -4- In the event that the Outside Termination Date occurs, and a definitive Acquisition Agreement has not been entered into, then either Langer or OSI may terminate their obligations under Paragraphs 8(A) and 8(B) on written notice, and upon such termination, OSI, Purchaser and their affiliates, on the one hand, and Langer and its affiliates, on the other hand, shall have no further obligations to each other (except that Paragraphs 8(C), and 8(D) shall survive the termination of this agreement). (B) Access to Information. Subject to the confidentiality requirements of Paragraphs 8(C) and 8(D), Langer shall provide to OSI and its representatives full access, upon reasonable prior notice during business hours, and in such manner as does not interfere with the conduct of Langer's business, to the facilities, assets and all books and records, contracts and other relevant information pertaining to Langer and its businesses, and to the personnel of the Langer and the accountants of Langer. (C) Confidentiality. Section 3(a) of the Letter of Intent dated September 14, 2000 shall remain in effect and is incorporated by reference herein. (D) Publicity. Due to the confidential nature of this transaction no party shall make any announcement or disclosure regarding the transaction without the prior consent of the others, unless and except as required by applicable law. Notwithstanding this Paragraph 8(D), OSI acknowledges and agrees that Langer may be required to disclose in a public announcement and to file with the Securities and Exchange Commission the terms and conditions of this term sheet and of the Acquisition Agreement and otherwise make proper disclosure under federal and state securities laws, and consents to the same, subject to timely review by and consultation with OSI. Upon the execution of this letter, Langer and OSI shall issue a mutually approved press release. 9. Effect of Term Sheet. It is expressly understood that this term sheet is merely an expression of intent and neither party hereto shall have any obligation to the other (except as set forth in Paragraph 8 hereof which shall be binding obligations of the parties hereto), until such time as, and as provided in a definitive Acquisition Agreement, agreeable both as to form and substance to each party, has been executed and delivered. This term sheet shall not create rights or confer any benefit on third parties. This term sheet shall supersede and replace all discussions, term sheets, proposals and letters between the parties with respect to the acquisition of Langer by OSI, including, without limitation, the Letter of Intent dated September 14, 2000 (other than Section 3(a) thereof). Neither OSI, nor Purchaser, nor Langer may assign any rights or obligations under this term sheet. -5- ACCEPTED AND AGREED: THE LANGER BIOMECHANICS GROUP, INC. By: /s/ Stephen V. Ardia ------------------------------- Stephen V. Ardia Chairman of the Board ORTHOSTRATEGIES, INC. By: /s/ Andrew H. Meyers ------------------------------ Andrew H. Meyers President -6- Schedule A Certain Shareholders and Shares Owned by Them --------------------------------------------- PER PROXY DIRECTOR SHARES OWNED SHARES TOTAL ---------------- ------------- ---------- Ken Granat 730,353 (1) 7,000 737,353(1) Steve Ardia 66,333 7,000 73,333 Dr. Justin Wernick 224,867 224,867 Dan Gorney 20,000 20,000 Tom Altholtz 44,500 7,000 51,500 Donald Cecil 248,553 248,553 ------- ----- ------- 1,334,606 21,000 1,355,606 --------- ------ --------- NOTES: (1) Also includes 40,000 Shares recently acquired via option exercise (2) Directors shares reflect 12,000 shares issued to Directors for Fy 2000 services and 9,000 authorized to be issued for Fy 2001 services. (3) A good faith effort will be made to also include other Shareholders who had been brought into Langer by Ken Granat. -7- Schedule B Outstanding Options and Warrants -------------------------------- Grant Number Exercise Expiration Date of Shares Price Date ---------- ----------- ---------- ----------- Ken Granat 10/02/97 25,000 1.875 10/02/02 11/30/98 20,000 1.125 11/30/08 Steve Ardia 11/30/98 75,000 1.125 11/30/08 Tom Altholtz 11/30/98 5,000 1.125 11/30/08 Dan Gorney 11/30/98 75,000 1.125 11/30/08 05/18/99 25,000 1.5 05/18/09 Tom Archbold 06/14/99 25,000 1.5 06/14/09 Steve Kamalic 07/03/00 5,000 1.56 07/03/10 Ron Spinelli 10/01/99 20,000 2 10/01/09 Barbara Pirrone 06/19/96 3,000 2.1875 06/19/01 06/19/96 3,000 2.1875 06/19/02 Steve Berman 01/02/97 1,000 1.5625 01/02/02 02/03/97 1,000 1.9375 02/03/02 03/03/97 12,500 1.75 03/03/02 04/01/97 5,500 1.625 04/01/02 TOTAL OPTIONS OUTSTANDING: 301,000 ------- -8- -----END PRIVACY-ENHANCED MESSAGE-----