EMPLOYMENT AND NON-COMPETE AGREEMENT

        This Employment and Non-Compete Agreement is made as of March __, 2005,
between HANGER ORTHOPEDIC GROUP, INC., a Delaware corporation (the "Company");
and John Rush, M.D. ("Employee"). The Company and Employee agree as follows:

        1.     Employment. The Company agrees to employ Employee and Employee
accepts such employment by the Company upon the terms and conditions set forth
in this Agreement, for the period beginning on April 1, 2005 (“Commencement
Date”) and ending upon termination pursuant to Section 4 (the “Employment
Period”).

        2.     Compensation and Benefits. In consideration for the valuable
services to be rendered by Employee and for Employee’s agreement not to compete
against the Company as described in Section 5 and not to disclose or use
Confidential Information of the Company as described in Section 6, the Company
hereby agrees to provide the following to Employee:

                (a)     During the first year of the Employment Period, the
Company will pay Employee a gross salary at the annual rate of $330,000.00, net
of all applicable payroll taxes and other normal deductions (the “Base Salary”),
payable at the bi-weekly gross rate of $12,692.30. Employee’s Base Salary may be
adjusted annually in January of each year based on an annual performance salary
review as determined in the reasonable discretion of the Company’s Board of
Directors or a committee thereof. Employee also shall be entitled to (i) an
automobile allowance in the amount of Seven Hundred Dollars ($700.00) per month
and one (1) parking space in the parking garage at the Company’s headquarters in
Bethesda, Maryland, and (ii) vacation, sick leave and medical and other benefits
that are consistent with those received by other similarly-situated senior
executives of the Company as determined in the sole discretion of the Company’s
Board of Directors.

                (b)     Within thirty (30) days after the commencement of
Employee’s employment with the Company, Employee shall receive a lump sum cash
payment in the gross amount of Thirty-Five Thousand Dollars ($35,000.00), net of
applicable payroll taxes and other normal deductions (“Payment”). The Payment
shall be evidenced by a one (1) year forgivable promissory note (the “Note”) to
be executed prior to or at the time of receipt of the Payment, which Note shall
be forgiven upon the first to occur of (i) the termination of Employee’s
employment with the Company upon Employee’s death or permanent disability under
Section 4(a), without Cause under Section 4(d) or for Good Reason under Section
4(e); or (ii) if Employee remains continuously employed by the Company for a
period of at least one (1) year following the Commencement Date, all as further
set forth in the Note. In the event Employee’s employment is terminated prior to
the one-year anniversary of the Commencement Date for a reason other than upon
Employee’s death or permanent disability under Section 4(a), without Cause under
Section 4(d) or for Good Reason under Section 4(e), then the Note shall become
immediately due and payable upon such termination, as further set forth in the
Note.

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                (c)     Employee shall also be eligible to receive cash bonus
compensation (the “Bonus”) for each full calendar year during the Employment
Period and for the pro-rated portion of 2005 during which Employee is employed
by the Company. Employee’s target Bonus (“Target Bonus”) is fifty percent (50%)
of the Base Salary and is contingent on the Employee meeting certain performance
criteria and the Company achieving certain year-end financial criteria, and, in
the event Employee exceeds certain performance criteria and the Company exceeds
certain year-end financial criteria, Employee’s maximum Bonus (“Maximum Bonus”)
is one hundred percent (100%) of the Base Salary, all to be determined in the
reasonable discretion of the Company’s Board of Directors and its Compensation
Committee. The Employee shall be entitled to such increases in the Target Bonus
and the Maximum Bonus during the Employment Period as shall be determined and
approved by the Compensation Committee of the Company’s Board of Directors, in
its sole discretion, taking into account the performance of the Company and the
Employee and other factors generally considered relevant to the salaries of
executives holding similar positions with enterprises comparable to the Company.
Notwithstanding the foregoing, in the event that the Employee or the Company
fail to attain their minimum respective criteria in any given year, the Board of
Directors of the Company and its Compensation Committee may, in their reasonable
discretion, decline to award any Bonus to Employee.

                (d)     On the third (3rd) business day following the
Commencement Date, Employee shall receive 10,000 restricted shares of stock of
the Company. On the first annual anniversary of the Commencement Date, Employee
will receive an additional 10,000 restricted shares of stock of the Company. In
addition to the foregoing grants of restricted shares of stock, Employee may
have the opportunity to receive options to purchase stock or restricted shares
of stock of the Company in a manner consistent with any stock option or
restricted share plan adopted by the Company. The determination as to the amount
of additional stock, if any, to be purchased under such stock option or
restricted share plan shall be subject to the sole discretion of the Board of
Directors of the Company or a committee thereof. All grants of restricted shares
of stock of the Company or options to purchase stock of the Company shall be
governed by the applicable plans of the Company with respect to such stock.

                (e)     Employee shall receive the relocation benefits set forth
in the Executive Relocation Program, consistent with the relocation policies and
procedures of the Company for executives, as previously disclosed by the Company
to Employee.

        3.    Services. During the Employment Period, Employee agrees (i) to
devote Employee’s best efforts and substantially all of Employee’s business time
and attention to the business affairs of the Company (except for reasonable
vacation periods subject to the reasonable approval of the Company or reasonable
periods of illness or other incapacity); (ii) to serve as the Company’s Chief
Medical Officer and render such services as the Company may from time to time
direct; provided, however, that Employee recognizes and agrees that the Company
may change Employee’s job description as set forth in this Section 3 as a result
of a good faith restructuring of the Company’s operations; and (iii) that
Employee will not, except with the prior written consent of the Company, become
engaged in or render services for any business other than the business of the
Company.

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        4.    Termination. The Employment Period will continue from the
Commencement Date until terminated by Employee’s death or permanent disability
which renders the Employee unable to perform Employee’s duties hereunder (as
determined by the Company in its good faith judgment); Employee’s resignation
upon prior written notice to the Company of sixty (60) days; the Company for
Cause; the Company without Cause upon prior notice to Employee of thirty (30)
days; or Employee for Good Reason upon prior written notice to the Company of
sixty (60) days. For purposes of this Section 4, “Cause” shall mean (i) the
repeated failure or refusal of Employee to follow the lawful directives of the
Company or its designee (except due to sickness, injury or disabilities), (ii)
gross inattention to duty or any other willful, reckless or grossly negligent
act (or omission to act) by Employee, which, in the good faith judgment of the
Company, materially injures the Company, including the repeated failure to
follow the policies and procedures of the Company, (iii) a material breach of
this Agreement by Employee or (iv) the commission by Employee of a felony or
other crime involving moral turpitude or the commission by Employee of an act of
financial dishonesty against the Company. For purposes of this Section 4, “Good
Reason” shall mean any act by the Board of Directors of the Company that, within
six (6) months following a Change in Control, materially reduces (A) the scope
of Employee’s position and duties with the Company without Employee’s consent or
(B) the Base Salary set forth in Section 2(a) or the Target Bonus set forth in
Section 2(c) (as distinguished from the Bonus payments received thereunder),
with Employee being required to give written notice to terminate Employee’s
employment with the Company within six (6) months following such Change in
Control in order for the termination to be considered for Good Reason.

        5.    Non-Compete.

                (a)     In the event the Employment Period is terminated under
Section 4(b) or Section 4(c), then this Section 5 will apply to Employee. In the
event the Employment Period is otherwise terminated, such as without Cause, then
no part of this Section 5 will apply to Employee.

                (b)     Employee recognizes and acknowledges that by virtue of
accepting employment as a senior executive of the Company hereunder, Employee
will have access to and will acquire valuable training and highly specialized
knowledge, enhance Employee’s professional skills and experience, and learn
proprietary trade secrets and Confidential Information of the Company. In
consideration of the foregoing and this employment contract, Employee agrees
that during the Employment Period and for two (2) years thereafter (the
“Non-Compete Period”), Employee will not directly or indirectly (whether as
employee, director, owner, stockholder, consultant, partner (limited or general)
or otherwise) own, manage, control, participate in, consult with, advertise on
behalf of, render services for or in any manner engage in any Business at any
location within the continental United States of America; nor shall Employee
solicit any other Person to engage in any of the foregoing activities or
knowingly request, induce or attempt to influence any Company Patient, Company
Referral Source or Company supplier to curtail any business they are currently,
or within the thirty-six (36) month period ending on the earlier of the
termination of the Employment Period or the then current date have been,
transacting with the Company (the “Non-Compete”). Nothing herein will prevent
Employee from being a passive owner of not more than 1% of the outstanding stock
of any class of a corporation which is engaged in the Business and which is
publicly traded, so long as Employee has no participation in the business of
such corporation. Furthermore, during the Non-Compete Period, Employee shall
not, without the Company’s prior written consent, directly or indirectly,
knowingly solicit or encourage or attempt to influence any Company Employee to
leave the employment of the Company. Employee agrees that the restraint imposed
under this Section 5 is reasonable and not unduly harsh or oppressive.

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                (c)     If, at the time of enforcement of any provision of
Section 5(b), a court or arbitrator holds that the restrictions stated therein
are unreasonable or unenforceable under circumstances then existing, the Company
and Employee agree that the maximum period, scope or geographical area
reasonable or permissible under such circumstances will be substituted for the
stated period, scope or area.

                (d)     Since a material purpose of this Agreement is to protect
the Company’s investment in the Employee and to secure the benefits of
Employee’s background and general experience in the industry, the parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Section 5. Therefore, in the event of a breach
by Employee of any of the provisions of this Section 5, the Company or its
successors or assigns may, in addition to other rights and remedies existing in
its favor, apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions of this Agreement.

        6.    Confidential Information. Employee acknowledges that the
information, product specifications, service specifications, manufacturing
procedures, technology, designs, know-how, research and development programs,
sales methods, sales levels and quantities, costs, margins, customer usages and
requirements, computer programs, data and trade secrets (collectively,
“Confidential Information”) obtained by Employee during the course of Employee’s
performance under this Agreement, and previously if Employee has already been an
employee of the Company, concerning the business or affairs of the Company are
the property of the Company. For purposes of this Agreement, “trade secret”
means information of the Company, including any formula, pattern, compilation,
program, device, method, technique or process, that derives independent economic
value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other Persons who can obtain economic
value from its disclosure or use, and that is the subject of efforts by the
Company to maintain its secrecy that are reasonable under the circumstances,
including but not limited to: (a) techniques, plans and materials used by the
Company, (b) marketing methods and strategies employed by the Company, and (c)
all lists of past, present or prospective patients, customers, referral sources
and suppliers of the Company. Employee agrees that Employee will not disclose to
any unauthorized Person or use for Employee’s own account any of such
Confidential Information without the written consent of the Company, unless and
to the extent that the aforementioned matters become generally known to and
available for use by the public other than as a result of Employee’s acts or
omissions to act or become known to Employee lawfully outside the scope of
Employee’s employment under this Agreement. Employee agrees to deliver to the
Company at the termination of Employee’s employment, or at any other time the
Company may request, all memoranda, notes, plans, records, reports and other
items and documents (and copies thereof) relating to the business of the Company
which Employee may then possess or have under Employee’s control.

        7.    Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, sent by overnight courier
(e.g., Federal Express) or mailed by first class certified mail, return receipt
requested, to the recipient at the address below indicated:

  To the Company: Vice President, Human Resources
Hanger Orthopedic Group, Inc.
Two Bethesda Metro Center, Suite 1200
Bethesda, Maryland 20814

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  To Employee: John Rush, M.D.
10260 Longview Drive
Lone Tree, Colorado 80124-9774

or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered,
sent or mailed.

        8.    Miscellaneous. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law. The parties agree that (i) the provisions of this Agreement shall be
severable in the event that any of the provisions hereof are for any reason
whatsoever invalid, void or otherwise unenforceable, (ii) such invalid, void or
otherwise unenforceable provisions shall be automatically replaced by other
provisions which are as similar as possible in terms to such invalid, void or
otherwise unenforceable provisions but are valid and enforceable and (iii) the
remaining provisions shall remain enforceable to the fullest extent permitted by
law. This Agreement embodies the complete agreement and understanding among the
parties and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Employee and the Company, and
their respective successors and assigns. Employee may not assign Employee’s
rights or delegate Employee’s obligations hereunder without the prior written
consent of the Company. The Company may assign its rights and delegate its
duties hereunder without the consent of Employee to Permitted Transferees. All
questions concerning the construction, validity and interpretation of the
Agreement will be governed by the internal law, and not the law of conflicts, of
the State of Maryland. All disputes under this Agreement shall be submitted to
and governed by binding arbitration with an arbitrator from the American
Arbitration Association; except only that the Company may seek relief in a court
of competent jurisdiction in the event of a claimed violation of Section 5 or
Section 6 of this Agreement. Any provision of this Agreement may be amended or
waived only with the prior written consent of the Company and Employee.

        9.    Severance.

                (a)     In the event that Employee’s employment with the Company
is terminated under Section 4(a), Section 4(b) or Section 4(c), Employee shall
receive no severance payments or salary continuation whatsoever.

                (b)     In the event Employee’s employment with the Company is
terminated under Section 4(d) or Section 4(e), then the Company shall provide
Employee with salary continuation in a total aggregate amount equal to one (1)
year of Employee’s Base Salary at the time of termination of the Employment
Period to be paid out in equal installments over the twelve (12) month period
following the termination of the Employment Period.

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                (c)     Provided (i) Employee remains continuously employed by
the Company through the fifth (5th) annual anniversary of the Commencement Date
(“Fifth Anniversary”); and (ii) Employee has not been offered the position of
CEO of the Company prior to the Fifth Anniversary (with the parties agreeing
that any offer of the CEO position may provide for Employee to actually become
CEO on a date following the Fifth Anniversary), Employee shall have a one-time
right, during the six (6) month period commencing on the Fifth Anniversary, to
voluntarily resign from his position with the Company pursuant to Section 4(b),
in which case Employee shall receive (A) salary continuation in a total
aggregate amount equal to eighteen (18) months of Employee’s Base Salary at the
time of termination of the Employment Period to be paid out in equal
installments over the eighteen (18) month period following the termination of
the Employment Period; and (B) an amount equal to the average of the annual
Bonus received by Employee pursuant to Section 2(c) over the then preceding
three (3) year period, multiplied by one and one half (1.5), with such amount
also to be paid out in equal installments over the eighteen (18) month period
following the termination of the Employment Period.

                (d)     Notwithstanding anything herein to the contrary, each of
the following shall, without limiting any other remedies available to the
Company, be considered a breach of this Agreement completely relieving the
Company of any obligations due or owing at any time to Employee under this
Section 9: (i) the failure of Employee to use his best efforts to ensure a
smooth transition to Employee’s successor; (ii) the breach by Employee of any of
the provisions of Section 5, if applicable, and/or Section 6; or (iii) any act
of directly or indirectly (whether as employee, director, owner, stockholder,
consultant, partner (limited or general) or otherwise) owning, managing,
controlling, participating in, consulting with, advertising on behalf of,
rendering services for or in any manner engaging in any Business, it being
understood that Employee shall be entitled to engage in such acts in a manner
that does not violate the provisions of Section 5, if applicable, and/or or
Section 6 but shall forfeit his right to the payments under this Section 9 as a
result thereof. Nothing in this Section 9 shall preclude the Company from
exercising any rights or remedies available to it at law or in equity.

        10.    Definitions.

                (a)    “Business” shall mean any competitive business of
fabricating, distributing, wholesaling or retailing of orthotics or prosthetics,
or the operation of clinics to fit patients for orthotics or prosthetics, or any
other related orthotic or prosthetic businesses in which the Company is engaged
during and at the expiration of the Employment Period, specifically including,
without limitation, the formation and/or operation of comprehensive managed care
organizations providing healthcare company clients with customized, national
networks of orthotics and/or prosthetics patient-care and accountable healthcare
services, including through dedication to clinical outcomes, science-based
guidelines, sound medical reasoning and efficient system solutions designed to
help reduce administrative expense.

                (b)     A “Change in Control” shall be deemed to exist if:

                         (i)     a person, as defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (other than Employee or a group
including Employee), either (1) acquires twenty percent (20%) or more of the
combined voting power of the outstanding securities of the Company having the
right to vote in elections of directors and such acquisition shall not have been
approved within sixty (60) days following such acquisition by a majority of the
Continuing Directors (as hereinafter defined) then in office, or (2) acquires
fifty percent (50%) or more of the combined voting power of the outstanding
securities of the Company having a right to vote in elections of directors; or

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                          (ii)     Continuing Directors shall for any reason
cease to constitute a majority of the Board of Directors of the Company; or

                          (iii)     the Company disposes of all or substantially
all of the business of the Company to a party or parties other than a Permitted
Transferee pursuant to a partial or complete liquidation of the Company, sale of
assets (including stock of a subsidiary of the Company) or otherwise; or

                          (iv)     the Board of Directors of the Company
approves the Company’s consolidation or merger with or into any other Person
(other than a Permitted Transferee), or any other Person’s consolidation or
merger with or into the Company, which results in all or part of the outstanding
shares of stock of the Company being changed in any way or converted into or
exchanged for stock or other securities or cash or any other property.

                (c)     The “Company”shall include the Company and any other
past, present or future direct or indirect subsidiaries of the Company
(including subsidiaries of subsidiaries).

                (d)    “Company Employee”shall mean any Person who is an
employee of the Company at any time during the twenty-four (24) month period
ending on the earlier of the termination of the Employment Period or the then
current date.

                (e)    “Company Patient” shall mean any Person who is a patient
or customer of the Company at any time during the thirty-six (36) month period
ending on the earlier of the termination of the Employment Period or the then
current date.

                (f)    “Company Referral Source” shall mean any Person who has
been a referral source of the Company at any time during the thirty-six (36)
month period ending on the earlier of the termination of the Employment Period
or the then current date.

                (g)    “Continuing Director” shall mean a member of the Board of
Directors of the Company who either was a member of the Board of Directors of
the Company on the date of this Agreement or who subsequently became a member of
the Board of Directors of the Company and whose election, or nomination for
election, was approved by a vote of at least two-thirds (2/3) of the Continuing
Directors then in office.

                (h)    “Person” shall mean and include an individual, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, an unincorporated organization and a governmental entity or any
department or agency thereof.

                (i)    “Permitted Transferee”shall mean (a) any successor by
merger or consolidation to the Company or any Permitted Transferee; (b) any
purchaser of all or substantially all of the Company’s or any Permitted
Transferee’s assets; (c) any parent or subsidiary corporation of the Company;
and (d) any lender to (i) the Company, (ii) any Permitted Transferee and/or
(iii) any affiliate of the Company or of any Permitted Transferee.

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        11.     Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

[ The next page is the signature page. ]

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        IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.

WITNESS: EMPLOYEE:

____________________________________ _________________________________ Name:
John Rush, M.D.

Attest (Seal): HANGER ORTHOPEDIC GROUP, INC.

By: ________________________________ By: ______________________________
       Jason P. Owen, Secretary        Ivan R. Sabel, CEO

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