Exhibit 10.4

 

HANGER, INC.

Non-Employee Director Non-Qualified Stock Option Agreement

 

THIS AGREEMENT (this “Agreement”) is made by and between HANGER, INC., a
Delaware corporation (the “Company”), and the optionee (“Optionee”) identified
on the Company’s online electronic list of persons to whom an option has been
granted by the Company.

 

W I T N E S S E T H:

 

WHEREAS, the Company desires to grant to the Optionee a stock option under the
Company’s 2016 Omnibus Incentive Plan (the “Plan”) to purchase shares of the
Company’s common stock, par value $.01 per share (the “Common Stock”), in
consideration for the Optionee’s service as a member of the Board of Directors
of the Company (the “Board of Directors”).

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as
follows:

 

1.                                      Grant of Option.  Subject to the terms
and conditions of this Agreement and the Plan, the Company hereby grants to the
Optionee the right and option to purchase from the Company all or part of the
number of shares of Common Stock as set forth on the Company’s online electronic
list as being granted to the Optionee effective as of the date shown on the
Company’s online electronic list as being the date of grant to the Optionee (the
“Grant Date”).  This option is not intended to qualify as an incentive stock
option within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended.

 

2.                                      Option Price and Time of Exercise.  The
per-share purchase price at which the shares subject to option may be purchased
by Optionee pursuant to the exercise of this option shall be the closing sale
price per share of the Common Stock on the New York Stock Exchange on the date
preceding the Grant Date.  Notwithstanding any provisions of the Plan to the
contrary, the Optionee and the Company agree that the Optionee’s right to
exercise this option shall vest as to one-third of the shares of Common Stock
underlying the option at the end of each of the first three years following the
Grant Date.  The right to exercise the option shall be cumulative to the extent
not theretofore exercised.  The right to exercise the option shall in all events
expire, except as provided in Paragraph 5 below, on the day preceding the tenth
anniversary of the Grant Date (the “Grant Expiration Date”).

 

3.                                      Method of Exercise and Payment for
Shares.  This option shall be exercised by the methods set forth in the
instructions relating thereto as contained on the Company’s online website from
which the Optionee has received notice as to the grant of this option by the
Company to the Optionee.  No fractional shares of Common Stock shall be issued
pursuant to the grant of this option, but in lieu thereof, the cash value of
such fraction shall be paid.

 

4.                                      Option Non-Assignable and
Non-Transferable.  This option and all rights hereunder shall be non-assignable
and non-transferable other than by will or the laws of descent

 

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and distribution and shall be exercisable during the Optionee’s lifetime only by
the Optionee or the Optionee’s guardian or legal representative.

 

5.                                      Exercise After Termination of Membership
on the Board of Directors.  In the event of termination of the Optionee’s
membership on the Board of Directors by reason of total and permanent
disability, this option will immediately vest and become exercisable in full at
any time within one year after such disability, but in no event after the Grant
Expiration Date.  In the event of the termination of the Optionee’s membership
on the Board of Directors by reason of the death of the Optionee, the option
shall immediately vest and become exercisable in full by the Optionee’s legal
representative at any time within one year after death, but in no event after
the Grant Expiration Date.  In the event of the termination of the Optionee’s
membership on the Board of Directors other than by reason of total and permanent
disability or death, this option will be exercisable, to the extent exercisable
on the date of such termination, at any time within ninety (90) days after such
termination, but in no event after the Grant Expiration Date.

 

6.                                      Limitation of Rights.

 

(a)                                 No Right to Continue as a Director.  Neither
the Plan nor this option shall constitute or be evidence of any agreement or
understanding, express or implied, that the Optionee has a right to continue as
a member of the Company’s Board of Directors for any period of time, or at any
particular rate of compensation.

 

(b)                                 No Stockholder’s Rights for Options.  The
Optionee shall have no rights as a stockholder with respect to the shares
covered by this option until the date of the issuance of a stock certificate
therefor, and no adjustment will be made for any dividends or other rights for
which the record date is prior to the date such certificate is issued.

 

(c)                                  Restrictions on Sales of Shares.  By
accepting the grant of this option, the Optionee agrees not to sell any shares
of Common Stock acquired upon exercise of this option other than as set forth in
the Plan and at a time when applicable laws, Company policies or an agreement
between the Company and its underwriters do not prohibit a sale.

 

7.                                      Incorporation by Reference.  The terms
of the Plan to the extent not stated herein are expressly incorporated herein by
reference and in the event of any conflict between this Agreement and the Plan,
the terms of the Plan shall govern, control and supersede over the provisions of
this Agreement.  Capitalized terms used in this Agreement and not defined shall
have the meanings given in the Plan.

 

All of the terms and conditions of this Agreement are hereby confirmed,
ratified, approved and accepted by the Company and by the Optionee, who has
accepted this Agreement and its terms pursuant to Optionee’s electronic
submission of Optionee’s confirmation of this Agreement in accordance with the
online instructions relating thereto as set forth on the Company’s online
website relating to options.

 

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