HANGER ORTHOPEDIC
GROUP, INC. 



SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN 



Effective Date:
January 1, 2004



        HANGER
ORTHOPEDIC GROUP, INC., a Delaware corporation (the “Company”), together with
its subsidiaries and affiliates (collectively referred to herein as the
“Employer”), hereby establishes the Hanger Orthopedic Group, Inc. Supplemental
Executive Retirement Plan (the “Plan”), as of the Effective Date, as follows: 



    1.       Purpose.
The purpose of the Plan is to promote the best interests of the           Company and
Company stockholders by attracting and retaining key management           employees
having a strong interest in the success of the Company and its           subsidiaries and
affiliates and encouraging their service, loyalty and good           counsel.  



    2.       Definitions.
The following terms have the following meanings unless the           context clearly
indicates otherwise:  



        (a)                 “Accrued
Benefit” means the annual benefit amount calculated pursuant           to Section 5.  





        (b)                 “Applicable
Interest Rate” means one hundred twenty percent (120%) of           the applicable
federal long-term rate rounded to the nearest two-tenths of one           percent,
compounded annually, in effect under Code Section 1274 for the month           for which
the determination is made.  





        (c)                 “Base
Salary” means the annual base salary paid by the Employers to an           employee
during a calendar year, prior to giving effect to any salary reduction
          agreement to which Code Sections 125, 132(f), or 402(a)(8) applies or any
          voluntary deferred compensation election, but not including any other kind of
          extra or additional compensation. If the rate of Base Salary changes during a
          calendar year the higher rate shall be annualized to determine Base Salary for
          the year.  





        (d)                 “Beneficiary” means
the person or entity designated by a Participant           to be his or her beneficiary
for purposes of receiving benefits under the Plan           in the event the Participant
dies before receiving payment in full of the           Participant’s vested Accrued
Benefit. A designation of Beneficiary shall be           valid and in effect only if a
properly executed designation, in such form as the           Committee prescribes for
this purpose, is filed and received by the Committee           before the death of the
Participant. If a Participant designates his or her           Spouse as a Beneficiary,
such Beneficiary designation automatically shall become           null and void on the
date of the Participant’s divorce or legal separation           from such Spouse. If
a valid Beneficiary designation is not in effect at the           time of the Participant’s
death, the estate of the Participant is deemed to           be the sole Beneficiary. If
the Committee is uncertain as to the identity of the           Participant’s
Beneficiary, the Committee may deem the estate of the           Participant to be the
sole Beneficiary. A legal minor shall not qualify as a           Beneficiary under the
Plan.  





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        (e)                 “Board” means
the Board of Directors of Hanger Orthopedic Group, Inc.  





        (f)                 “Change
in Control Event” means any one of the following:  





	 	        (i)                 a
person, as defined in Sections 13(d) and 14(d) of the Securities Exchange Act
          of 1934 (other than the Participant or a group including the Participant),
          either (A) 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 (B) 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  







	 	        (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 subsidiary or other affiliate of the Company
          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 approves the Company’s consolidation or merger with           or
into any other person (other than a wholly-owned subsidiary of the Company),           or
any other person’s consolidation or merger with or into the Company,           which
results in all or part of the outstanding shares of common 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.  







        (g)                 “Code” means
the Internal Revenue Code of 1986, as it may be amended           from time to time and
as interpreted by regulations and rulings issued pursuant           to the Code. Any
references to a specific provision shall be deemed to include           references to any
successor Code provision.  





        (h)                 “Committee” means
the Compensation Committee of the Board. The Vice           President of Human Resources
shall provide routine administration of the Plan.  





        (i)                 “Company” means
Hanger Orthopedic Group, Inc., or any successor.  





        (j)                 “Continuing
Director” means a member of the Board who either was a           member of the Board
on the date hereof or who subsequently became a Director 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.  





        (k)                 “Effective
Date” means January 1, 2004.  




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        (l)                 “Final
Average Salary” means a Participant’s average Base Salary           for the
three (3) calendar years during which the Participant’s Base Salary           was
the highest within the last five (5) consecutive calendar years ending with           the
calendar year in which occurs the Participant’s termination of           employment.
If the Participant has fewer than three (3) averaging years for this           purpose,
the actual number of years in which Base Pay is earned shall be used to
          determine Final Average Salary.  





        (m)                 “Participant” means
an employee of the Company or other Employer who           is employed in a key
management position and who is initially designated in this           Plan, or
subsequently in writing by the Committee, as a Participant; provided,           however,
if a Participant transfers out of employment in a key management           position, but
remains an employee, the Committee shall, in its discretion,           determine the
extent to which Plan benefits shall continue to accrue and/or vest           following
such transfer.  





        (n)                 “Spouse” means
the surviving spouse of the Participant, as such term           is defined in the law of
the State of residency of the Participant at the           applicable time.  





        (o)                 “Year
of Credited Service” means twelve (12) full months of employment           with the
Employer measured from a Participant’s initial coverage date (as           that term
is described in Section 5).  





        (p)                 “Year
of Vesting Service” means twelve (12) full months of employment           with the
Employer measured from an employee’s most recent employment date           with the
Employer. Unless otherwise determined by the Committee, service for           this
purpose is limited to regular, full-time salaried employment by the Company           or
other Employer, including periods of authorized leave of absence.  





    3.       Eligibility
for Participation and Entitlement to Accrued Benefit.  



        (a)                 The
Committee is authorized to designate as Participants those key management
          employees it determines should be awarded coverage by this Plan. In addition,
          the Committee is authorized to increase the applicable percentage set forth in
          the Participant’s Table, described in Section 5, for a Participant who is
          promoted.  





        (b)                 Subject
to subsection (c), a Participant shall be entitled to the           Participant’s
vested Accrued Benefit upon the first to occur of:  





	 	        (i)                 Normal
retirement; defined as termination of employment with the Employers and
          attainment of age sixty-five (65);  







	 	        (ii)                 Early
retirement; defined as termination of employment with the Employers and
          attainment of age sixty-two (62), provided the Participant has completed at
          least five (5) Years of Vesting Service; or  







	 	        (iii)                 Deferred
vested retirement; defined as any other termination of employment with           a vested
interest in the Participant’s Accrued Benefit.  







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        (c)                 Notwithstanding
subsections (a) or (b) or any other Plan provision, one hundred           percent of a
Participant’s unpaid Accrued Benefit shall be forfeited and           not eligible
for payment if the Committee determines as of the           Participant’s
termination of employment, or subsequently, that any of the           following has
occurred:  





	 	        (i)                 The
Participant, in a willful and continuous manner, failed to discharge the
          Participant’s duties and responsibilities as an employee after having been
          given notice and an opportunity to cure; the Participant committed a material
          act of dishonesty involving the Company; or the Participant was convicted of a
          felony; and/or  







	 	        (ii)                 The
Participant materially violated any confidentiality agreement or other           covenant
restricting actions detrimental to the Company as set forth in written
          agreements entered into by the Company and the Participant.  







    4.       Vesting.
A Participant’s entitlement to his or her Accrued Benefit           hereunder vests
and becomes nonforfeitable at the rate of twenty percent (20%)           per Year of
Vesting Service. The Committee may apply a shorter vesting schedule           in the case
of any Participant, should it choose to do so.  



    5.       Amount
of Accrued Benefit. Subject to other Plan provisions limiting or           reducing
benefits, the amount of a Participant’s Accrued Benefit shall be           equal to
the Participant’s Final Average Salary multiplied by the           applicable
percentage, as determined by the Committee and set out in the           Participants’ Table,
attached hereto and incorporated herein by this           reference, multiplied by a
fraction determined as follows:  



        (a)                 If
a Participant’s initial coverage date (determined by the Committee and           set
out in the Participants’ Table) occurs on or before the           Participant’s
forty-fifth (45th) birthday, the numerator of the fraction           shall be the
Participant’s total number of Years of Credited Service as of           the
Participant’s termination of employment or twenty (20) Years of           Credited
Service (whichever is less) and the denominator shall be twenty (20)           Years of
Credited Service.  





        (b)                 If
a Participant’s initial coverage date (as described in (a)) occurs after
          the Participant’s forty-fifth (45th) birthday, the numerator of
          the fraction shall be the maximum number of Years of Credited Service that
could           be completed between the Participant’s initial Plan coverage date
and the           Participant’s sixty-fifth (65th) birthday or, if less,
the           Participant’s total number of Years of Credited Service as of the
          Participant’s termination of employment, and the denominator shall be the
          maximum number of Years of Credited Service that could be completed between the
          Participant’s initial Plan coverage date and the Participant’s
          sixty-fifth (65th) birthday.  





    6.       Form
and Commencement of Payments to a Participant.  



        (a)        Form.
A Participant’s Accrued Benefit shall be paid in the form of a           single
annual payment for fifteen (15) consecutive calendar years.  





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        (b)        Commencement.
Payments shall commence on a Company payroll date in           January of the calendar
year next following the calendar year in which occurs           the earlier of the
Participant’s normal or early retirement dates.  





        (c)       Reduction
for Early Commencement. Any benefit payments commencing before           age
sixty-five (65) shall be reduced to reflect the number of years by which the
          benefit payment commencement date precedes the date on which normal retirement
          benefits would commence, with the reduction being two percent (2%) per year.
          There is no actuarial increase for commencement of payments after the January
          following attainment of age sixty-five (65).  





        (d)       Accelerated
Distribution. The Committee may, in its discretion,           accelerate payment of
the vested Accrued Benefit of a deferred vested retiree at           any time so that
installment payments may commence in the January following the           Participant’s
termination of employment or in any subsequent January,           reduced for early
payment. Alternatively, the Committee may, in its discretion,           discount the
installments that would normally (without acceleration) be payable           to a
deferred vested retiree after reaching age sixty-five (65), using the
          Applicable Interest Rate, to their present value and make payment in full in a
          single lump sum payment to the deferred vested retiree at any time before
          installment payments have begun.  





        (e)       Death
While In Pay Status. If a Participant who is receiving installment           payments
of his or her Accrued Benefits dies before payment in full is           completed, any
remaining payments shall be made to the Participant’s           Beneficiary.  





    7.       Death
Benefit.  



        (a)        Amount.
If a Participant who has a vested interest in his or her Accrued           Benefit dies
before payment of the Participant’s vested Accrued Benefit has           commenced,
the Beneficiary of the Participant shall be entitled to receive a           death benefit
hereunder. The death benefit is equal to the deceased           Participant’s vested
Accrued Benefit at the time of death.  





        (b)       Form.
The death benefit shall be paid in the form of a single annual           payment for
fifteen (15) consecutive calendar years.  





        (c)       Commencement.  





	 	        (i)                 Upon
the death of a Participant eligible for early or normal retirement, death
          benefit payments shall commence on a payroll date in January of the calendar
          year next following the calendar year in which the Participant’s death
          occurs. Any payments commencing before the Participant would have reached age
          sixty-five (65) shall be reduced to reflect the number of years by which the
          benefit payment commencement date precedes the date on which normal retirement
          benefits would have commenced to the Participant, with the reduction being at
          the rate of two percent (2%) per year.  







	 	        (ii)       
         Upon the death of a Participant who is not eligible for early or normal
          retirement at the time of death, the Committee shall discount the installment
          payments that would otherwise be payable to the Participant, had the
Participant           survived to age sixty-five (65), using the Applicable Interest
Rate, to their           present value and make payment in full in a single lump sum
payment to the           Beneficiary.  







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    8.       Other
Terminations of Employment. If employment terminates before the           Participant
is vested in any Accrued Benefits, no benefits are payable           hereunder.  



    9.       Committee
Discretion. The Committee has discretion to interpret and           administer the
terms of the Plan and to modify its rules and policies as in           effect from time
to time. The Committee may adopt rules concerning distributions           including
minimum amount requirements for installment payments. The Committee           may, in its
discretion, pay either installment or lump sum death benefits to any
          Beneficiary, notwithstanding Section 7(c). In the event installment payment
          amounts fall below applicable minimum amounts, the amount due may be reduced to
          its present value, using the Applicable Interest Rate, and paid out in a single
          lump sum amount. The Committee’s interpretation and administration of the
          Plan shall be final and binding on the Participants.  



    10.       Effect
of Change in Control Event.  



        (a)                 If
a Change in Control Event is determined by the Committee to have occurred           while
a Participant is actively employed by the Company or another Employer, the
          Participant shall be immediately and fully vested in the Participant’s
          Accrued Benefit determined as of the date of the Change of Control Event.  





        (b)       
         If a Change in Control Event is determined by the Committee to have occurred
          while a Participant is actively employed by the Company or another Employer,
the           Committee may, in its sole discretion, establish an irrevocable grantor
trust,           to be entered into by the Company and the trustee thereof, for the
purpose of           holding assets sufficient to fund some or all of the liability or
contingent           liability of the Company to pay benefits hereunder to the
Participant. Funding           of such irrevocable grantor trust shall be in the
discretion of the Board.  





        (c)                 If
a Change in Control Event is determined by the Committee to have occurred           while
the Participant is no longer actively employed by the Company or other           Employer
and before any periodic payments being made hereunder on behalf of a
          Participant are completed, the Company shall cash out, in single lump sum
          payment amount, the present value of any remaining payments yet to be made to
or           on behalf of the Participant. Present value in this situation shall be
          determined as of the first day of the month following the month in which the
          Change in Control Event occurred using the Applicable Interest Rate. If
payments           on behalf of the Participant have not yet commenced as of the date of
this           determination of present value, it shall be further assumed that payments
would           have commenced on the later of such date of determination of present
value or           the first day of the calendar year following the sixty-fifth (65th)
          birthday of the Participant.  





    11.       Deductions.
Anything in the Plan notwithstanding, a Participant’s           Employer may deduct
from any payment hereunder all amounts owed to the Company           or another Employer
by the Participant for any reason and all taxes required by           law or governmental
regulation to be deducted or withheld.  




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    12.       Unfunded
Plan. This Plan is unfunded and is maintained by the Company           primarily for
the purpose of providing deferred compensation for a select group           of management
or highly compensated employees. The Company may authorize           creation of a trust
or other arrangements to assist the Company in meeting its           obligations under
the Plan. However, any liability to any person with respect to           the Plan shall
be based solely upon contractual obligations created pursuant to           the Plan.
Nothing contained in this Plan and no action taken pursuant to its           terms shall
create or be construed to create a trust of any kind, or a fiduciary
          relationship between the Company and the Participant, or any other person. The
          right of the Participant to receive benefits hereunder shall be an unsecured
          claim against the general assets of the Participant’s Employer and neither
          the Participant nor any other person shall have any rights in or against any
          amounts which may be earmarked by the Company in order to implement this Plan
or           any other specific assets of the Company or other Employers.  



    13.       Named
Fiduciary and Claims Procedure. The Committee is the named           fiduciary. The
Plan is unfunded. Direct payment is the basis of payment of           benefits under the
Plan. Claims shall be determined in accordance with the           following claims
procedure:  



        (a)                 A
claim for benefits shall be deemed filed when the Vice President of Human
          Resources (or such other officer as is designated by the Committee from time to
          time) (the “Administrator”) receives written notice from either the
          person claiming a benefit (hereafter referred to as “claimant”), or
an           Employer, that a Participant has either retired, died, or terminated the
          Participant’s employment for any other reason. Upon receipt of this
written           notice, the Administrator shall determine the benefits, if any, payable
to the           claimant. The Administrator shall communicate in writing to the claimant
the           benefits, if any, so determined within ninety (90) days after the date the
          Administrator receives the written notice described above that a claim has been
          filed. If special circumstances require, the 90-day period set forth in the
          preceding sentence may be extended up to a period of ninety (90) additional
          days, provided the Administrator furnishes the claimant a written notice, prior
          to the expiration of the initial 90-day period, of the extension, specifying
the           special circumstances requiring the extension and the date by which the
          Administrator expects to determine the benefits payable, if any.  





        (b)                 If
any claim for benefits is subject to a dispute or is partially or wholly
          denied, the Administrator shall provide the claimant a written notice setting
          forth in a manner calculated to be understood by the claimant the specific
          reason(s) for the benefit determination made by the Administrator; specific
          reference(s) to pertinent Plan provisions on which the benefit determination is
          based; a description of any additional material or information necessary for
the           claimant to perfect the claim and an explanation of why such material or
          information is necessary; necessary information as to the requirements for
          submitting the disputed claim for a review under subsection (c) below; and a
          statement of the claimant’s right to bring a civil action under ERISA
          Section 502(a) following an adverse benefit determination.  





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        (c)                 A
claimant who, upon receipt of the written notice in (b) above, desires a           review
of the benefit determination made by the Administrator must file not           later than
sixty (60) days (subject to circumstantial extensions) after such           receipt a
written request for a review of the benefit determination. Such           written request
must be filed with the Administrator, who will forward it to the           Committee. The
requested review shall be conducted by the Committee in such a           manner so as to
provide the claimant a full and fair review of the           claimant’s claim and
the initial determination. Upon receipt by the           Committee of a written request
for such a review, the Committee shall advise the           claimant in writing that the
claimant or the claimant’s duly authorized           representative, may review
documents pertinent to the disputed claim and the           claimant may submit written
issues and comments to the Committee for           consideration during the review.  





        (d)                 The
Committee shall review the disputed claim and render a decision not later           than
sixty (60) days following the receipt by the Committee of the written           request
for a review, unless special circumstances require an extension of the           time for
processing, in which case the decision shall be rendered not later than           one
hundred twenty (120) days following such receipt. A written notice of any           such
extension shall be furnished to the claimant prior to the commencement of           the
extension.  





        (e)                 The
Committee shall render its decision on review in writing to the claimant           within
the applicable time period set forth in (d) above (but not later than           five (5)
days after the determination is made) and shall include specific           reasons for
the decision, written in a manner calculated to be understood by the           claimant,
as well as references to the pertinent Plan provisions on which the           decision is
based. Should the Committee fail to render its decision within the           applicable
time period the claim shall be deemed to have been denied.  





        (f)                 “Written
notice” includes electronic notification meeting the           requirements of ERISA
regulation 2520.104b-1(c)(1)(i), (iii), and (iv).  





    14.           No
Contract of Employment. The Plan is an expression of the           Company’s
current policy with respect to Company executives who meet the           eligibility
requirements set forth in the Plan. The Plan is not a contract of           employment,
nor does it provide any Participant with a right to continue in the           employment
of the Company or any Employer. No Participant, Beneficiary or other           person
shall have any legal or other right to any benefit payments except in
          accordance with the terms of the Plan, and then only while the Plan is in
effect           and subject to the Company’s right to amend or terminate the Plan.  



    15.           Amendment
or Termination. There is no time limit on the duration of the           Plan.
However, the Company, by action of the Compensation Committee of the Board
          certified in writing by one member of that Committee or by the Secretary or an
          Assistant Secretary of the Company, may at any time and for any reason, amend
or           terminate the Plan.  



    16.           Assignment.
The right of a Participant or any other person to the payment           of benefits under
this Plan shall not be assigned, transferred, pledged or           encumbered except as
otherwise provided by law, and no rights or benefits           hereunder shall be subject
to attachment or legal process for or against a           Participant or his or her
Beneficiary.  



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    17.           Effect
on Retirement Plans. Any benefits accrued pursuant to this Plan           shall not
be deemed compensation to the Participant for the purpose of computing           benefits
under any qualified retirement plan or other benefit plan, whether           qualified or
nonqualified, which may be maintained by an Employer.  



    18.           Severability.
If any of the provisions of the Plan shall be held to be           invalid, or shall be
determined to be inconsistent with the purpose of the Plan,           the remainder of
the Plan shall not be affected thereby.  



    19.           Binding
upon Successors. This Plan shall be binding upon and inure to the           benefit
of the Company and its successors and assigns and the Participants and           their
heirs, executors, administrators, and legal representatives.  



    20.           Governing
Law. This Plan shall be construed in accordance with and           governed by the
laws of the State of Delaware to the extent not preempted by           federal law.  





























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PARTICIPANTS’
TABLE 




	NAME
	INITIAL

COVERAGE

DATE
	DATE OF

65th BIRTHDAY
	APPLICABLE

PERCENTAGE

	Ivan R. Sabel	January 1, 2004	March 2, 2010	90%
	

	Thomas F. Kirk	January 1, 2004	September 27, 2010	85%
	

	Richmond L. Taylor	January 1, 2004	June 30, 2013	80%
	

	George E. McHenry	January 1, 2004	July 12, 2017	75%
	

	Ronald N. May	January 1, 2004	October 6, 2011	65%
	

	Edward L. Mitzel	January 1, 2004	January 29, 2024	65%
	

	Brian Wheeler	January 1, 2004	November 8, 2025	65%
	

	Mike Murphy	January 1, 2004	September 19, 2025	65%
	






























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