AMENDED AND RESTATED
EMPLOYMENT AND NON-COMPETE AGREEMENT  



        This
Amended and Restated Employment and Non-Compete Agreement is made as of October __, 2004
and amends and restates the Employment and Non-Compete Agreement, dated as of January 1,
2003, between SOUTHERN PROSTHETIC SUPPLY, INC., a Georgia corporation (the
“Company”); and RONALD N. MAY (“Employee”) (the
“Agreement”). The Company and Employee agree to amend and restate the Agreement
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 the date of this Agreement and ending
          upon termination pursuant to paragraph 4 (the “Employment Period”).
          The parties acknowledge Employee’s existing employment with the
          Company’s parent corporation, Hanger Orthopedic Group, Inc.
          (“Hanger”), and wish to substitute this Agreement, which sets forth
          Employee’s expanded duties with the Company as well as an increase in
          compensation as set forth herein, in place of all prior employment agreements
          between the parties, including but not limited to the Employment and Non-Compete
          Agreement dated as of November 1, 1996 between Hanger and Employee and the
          Deferred Compensation Agreement between Employee and the Company dated March 27,
          1996. 



         2.       
          Compensation and Benefits. 



               
    (a)       
          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
          paragraph 6, the Company hereby agrees that during the year of the Employment
          Period during which this amended and restated Agreement is executed, the Company
          will pay Employee a bi-weekly gross salary at the minimum annual rate of
          $219,502.00 per annum (the “Base Salary”), payable at the bi-weekly
          gross rate of $8,442.38. Employee’s Base Salary may, but is not required
          to, be increased annually in January of each year based on an annual performance
          salary review as determined in the reasonable discretion of the Company.
          Employee also shall be entitled to (1) an automobile allowance in the amount of
          Seven Hundred Dollars ($700.00) per month, (2) five (5) weeks of vacation per
          year, and (3) sick leave, medical and other benefits that are consistent with
          those received by other similarly-situated senior executives of Hanger and its
          subsidiaries as determined in the sole discretion of Hanger’s Board of
          Directors. Employee shall receive life insurance in an amount equal to one (1)
          times Employee’s Base Salary (in addition to the life insurance in an
          amount equal to one (1) times Employee’s Base Salary provided by the
          Company as part of Employee’s base benefit program), with the premiums for
          such policy to be paid by the Company, and Employee shall also receive the
          option to participate in the Company’s supplemental life and accidental
          death and dismemberment policies, with the premiums for such policies to be paid
          by Employee, all in accordance with the terms and conditions of such policies as
          generally applied by the Company. 



               
    (b)       
          In addition to the Base Salary, Employee may have the opportunity to receive
          options to purchase stock or restricted shares of stock of Hanger in a manner
          consistent with any stock option or restricted share plan adopted by Hanger. The
          determination as to the amount of 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 Hanger or a committee thereof. 


















               
    (c)       
          Employee shall also be eligible to receive cash bonus compensation for each full
          calendar year during the Employment Period (or, in the event that Employee is
          employed for less than a full calendar year in any given year during the
          Employment Period, for the prorated portion of the year Employee actually is
          employed). 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 Hanger 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 Hanger’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 Hanger’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, Hanger or the
          Company fail to attain their minimum respective criteria in any given year, the
          Board of Directors of Hanger and its Compensation Committee may, in their
          reasonable discretion, decline to award any bonus to Employee. 



               
    (d)       
          For all payments made or required to be made pursuant to the terms of this
          Agreement, including any payments made with respect to the Employee’s
          termination of employment for any reason, the Company shall pay the Employee an
          amount sufficient to cover the gross-up of any excise, income and other taxes
          resulting from the imposition of the parachute penalties of the Internal Revenue
          Code or applicable state tax laws. 



         3.       
          Services. During the Employment Period, Employee agrees to devote
          Employee’s best efforts and all of Employee’s business time and
          attention to the business affairs of the Company (except for reasonable vacation
          periods subject to the approval of the Company or reasonable periods of illness
          or other incapacity). During the Employment Period, Employee agrees to serve the
          Company as its President and Chief Operating Officer and to render such services
          as the Company or Hanger may from time to time direct; provided,
          however, that Employee recognizes and agrees that Hanger or the Company
          may change Employee’s job description as set forth in this paragraph as a
          result of a good faith restructuring of the Company’s or Hanger’s
          operations. During the Employment Period, Employee agrees 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. 



         4.       
          Termination. The Employment Period will continue from the date of this
          Agreement unless terminated earlier by (a) Employee’s death or permanent
          disability which renders Employee unable to perform Employee’s duties
          hereunder (as determined by the Company in its good faith judgment), (b) by
          Employee’s resignation upon prior written notice to the Company of sixty
          (60) days, (c) the Company for Cause, or (d) the Company without Cause upon
          prior notice to Employee of thirty (30) days. For purposes of this paragraph 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 or repeated 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 Employee’s 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 of an act of financial dishonesty against the
          Company. 









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        In
the event Employee’s employment is terminated by the Company as a result of
Employee’s permanent disability under paragraph 4(a) or without Cause under paragraph
4(d) or in the event Employee elects to terminate his employment with the Company under
paragraph 4(b) within six (6) months after the occurrence of both a Change in Control (as
defined below) and a Relocation (as defined below), then the following severance terms
shall apply: (A) as set forth in paragraph 2 herein, Employee shall receive the Base
Salary through the date of termination of the Employment Period and the prorated portion
of the bonus compensation for the portion of the year Employee is employed during the year
in which the Employment Period is terminated, (B) the Company shall pay to Employee a
severance payment equal to eighteen (18) months of Employee’s then current Base
Salary, with such payment to be made within thirty (30) days following the last day of the
Employment Period (except that, in the event that Employee’s employment was
terminated as a result of Employee’s permanent disability under paragraph 4(a), the
severance payment under this paragraph 4(B) shall be reduced by the aggregate of the
disability pay benefits that Employee will receive during the eighteen (18) month period
immediately following Employee’s termination), (C) all stock options granted to
Employee prior to the date of termination of employment shall immediately fully vest and
Employee shall have ninety (90) days following the last day of the Employment Period to
exercise such options, and (D) Employee will be provided with outplacement services
commensurate with those provided to other senior corporate officers of Hanger through a
vendor selected by Hanger. 



         5.       
          Non-Compete. 



               
    (a)       
          In the event the Employment Period is terminated pursuant to paragraphs 4(b),
          4(c) or 4(d) above, then the non-compete provisions of this paragraph 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, including knowledge
          of the Company’s fabrication, distribution, wholesaling and retailing
          methods and strategies, enhance Employee’s professional skills and
          experience, and learn proprietary trade secrets and Confidential Information of
          the Company and Hanger. In consideration of the foregoing, the severance terms
          contained in paragraph 4 and of this Agreement, 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 competitive
          business of fabricating, distributing, wholesaling or retailing of orthotics or
          prosthetics products and services, or the operation of clinics to fit patients
          for orthotics or prosthetics components, or any other related businesses in
          which the Company or Hanger is engaged at within the twelve (12) month period
          immediately prior to the expiration of the Employment Period, at any location
          within the United States; nor shall Employee solicit any other Person (as
          hereinafter defined) to engage in any of the foregoing activities or knowingly
          request, induce or attempt to influence any then existing patient, customer,
          referral source or supplier of the Company or Hanger to curtail any business
          they are currently, or in the last 36 months have been, transacting with the
          Company or Hanger (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 a competitive business of the
          Company and which is publicly traded, so long as Employee has no participation
          in the management or 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 employee to leave the employment of the Company. Employee agrees
          that the restraint imposed under this paragraph 6 is reasonable and not unduly
          harsh or oppressive. 










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    (c)       
          If, at the time of enforcement of any provision of paragraph 5(b) above, 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 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 paragraph 5. Therefore, in the event of a breach by Employee
          of any of the provisions of this paragraph 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,
          observations, data and trade secrets (collectively, “Confidential
          Information”) obtained by Employee during the course of Employee’s
          performance under this Agreement, and previously since Employee has already been
          an employee of the Company or Hanger, concerning the business or affairs of the
          Company and Hanger are the property of the Company and/or Hanger, as
          appropriate. For purposes of this Agreement, “trade secret” means any
          method, program or compilation of information which is used in Hanger’s or
          the Company’s business, including but not limited to: (a) techniques, plans
          and materials used, (b) marketing methods and strategies employed, and (c) all
          lists of past, present or prospective patients, customers, referral sources and
          suppliers. 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 promptly 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
          documents (and copies thereof) relating to the business of Hanger or the Company
          which Employee may then possess or have under Employee’s control. 










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         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	 
	 	 	c/o Hanger Orthopedic Group, Inc.
	 	 	Two Bethesda Metro Center, Suite 1200
	 	 	Bethesda, Maryland 20814	 
	
 	To Employee:	Ronald N. May
	 	 	11245 Linbrook Lane
	 	 	Duluth, Georgia 30097-5737








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
          (as hereinafter defined). 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 Georgia. 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 the non-compete provisions 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.       
          Definitions. 



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










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    (b)       
          “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 or Hanger; 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. 



               
    (c)       
          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 (A) acquires
          twenty percent (20%) or more of the combined voting power of the outstanding
          securities of Hanger or 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 Hanger or 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 Hanger; or 



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



               
          
    (iv)       
          the Board of Directors of Hanger approves Hanger’s or 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
          Hanger or the Company, which results in all or part of the outstanding shares of
          stock of the Company or Hanger being changed in any way or converted into or
          exchanged for stock or other securities or cash or any other property. 



               
    (d)       
          “Continuing Director” shall mean a member of the Board of
          Directors of Hanger who either was a member of the Board of Directors of Hanger
          on the date of this Agreement or who subsequently became a member of the Board
          of Directors of Hanger 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. 



               
    (e)       
          “Relocation” shall be defined as the relocation of
          Employee’s principal site of employment to a location more than fifty (50)
          miles from the Employee’s principal place of employment as of the date of
          this Agreement. 









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         10.       
          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 amended and restated Agreement on the day
and year first above written. 


			
	WITNESS:


	 	EMPLOYEE:



			
			
			
	____________________________________	 	_____________________________________
	 	 	Ronald N. May
			
			
	


Attest (Seal):	 	SOUTHERN PROSTHETIC SUPPLY, INC.
			
			
			
	


By:__________________________________	 	


By:___________________________________
	      Glenn M. Lohrmann, Secretary	 	      Thomas F. Kirk, Vice President
			



















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