Document:

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. 

2 

        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. 

3 

               
    (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. 

4 

         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. 

5 

               
    (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. 

6 

         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. ]  

7 

        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
			

8THIRD AMENDED AND
RESTATED EMPLOYMENT AGREEMENT  

        THIRD
AMENDED AND RESTATED EMPLOYMENT AGREEMENT effective as of the 1st day of January, 2005
(“Agreement”), by and between HANGER PROSTHETICS & ORTHOTICS, INC., a
Delaware corporation (the “Company”), and IVAN R. SABEL (the
“Executive”). 

        WHEREAS,
the Executive and Hanger Orthopedic Group, Inc. (“Hanger”) executed an initial
Employment Agreement on April 29, 1999 (“Original Agreement”), which Original
Agreement was amended by the Amended and Restated Employment Agreement, dated April 22,
2003, and the Second Amended and Restated Employment Agreement, effective as of January 1,
2005 (“Second Amended Agreement”); 

        WHEREAS,
the Second Amended Agreement was assigned from Hanger to the Company pursuant to the
Assignment of Employment Agreement, effective as January 1, 2007, between the Executive,
the Company and Hanger; 

        WHEREAS,
the parties hereto desire to amend the Second Amended Agreement as set forth in this
Agreement, with such amendments to be retroactively effective to January 1, 2005; and 

        WHEREAS,
the Company desires to employ the Executive and to incentivize the Executive to remain in
the employ of the Company, subject to the terms and conditions set forth below. 

        NOW,
THEREFORE, in consideration of the promises and mutual agreements set forth below, both
parties agree as follows: 

        1.
     Employment, Term.

        1.1
     Employment. The Company agrees to employ the Executive in the position and
with the responsibilities, duties, and authority set forth in Section 2. 

        1.2
     Term. The term of the Executive’s employment under this Agreement shall
commence as of the effective date of the Original Agreement and shall terminate on the
fifth anniversary of the effective date thereof, unless extended or sooner terminated in
accordance with this Agreement. In the event the Executive continues to be employed by the
Company following the fifth anniversary of the effective date of the Original Agreement,
this Agreement shall automatically renew for successive one (1) year terms, unless
terminated pursuant to Section 1.3, Section 6 or Section 7 of this Agreement. 

        1.3
     Automatic Extension. As of the fifth anniversary date of the Original
Agreement, and as of each anniversary subsequent thereto (“Automatic Renewal
Date”), unless either party shall have given thirty (30) days’ prior written
notice of non-extension prior to such Automatic Renewal Date, the term of this Agreement
shall be extended automatically for a period of one year. In the event that the Company
gives written notice of non-extension, such notice shall be considered a Termination
without Cause under the provisions of Section 6.4, unless otherwise mutually agreed
between the Parties. 

        1.4
     Office. The Executive's principal office will be located in Bethesda, Maryland.  

        2.
     Position, Duties.

        The
Executive shall serve the Company in the position of Chief Executive Officer. The
Executive shall faithfully and diligently perform the duties appropriate to said position,
which, in addition to those responsibilities assigned to him from time to time by the
Board of Directors of the Company (the “Board of Directors”), shall include,
among other things, responsibility for the overall performance of the Company and all of
the Company’s subsidiaries. The Executive shall devote his full business time and
attention to the performance of his duties and responsibilities hereunder. 

        3.
     Salary, Incentive Bonus, Stock Options, Other Benefits. 

        3.1
      Salary.
During the term of this Agreement, the Company shall pay to the Executive a minimum base
salary at the rate of Five Hundred Twenty Thousand Dollars ($520,000.00) per annum,
payable in accordance with the standard payroll practices of the Company (the “Base
Salary”). The Base Salary shall be increased to Five Hundred Forty-Five Thousand
Dollars ($545,000.00) effective January 1, 2006. The Executive shall be entitled to such
increases in Base Salary during the term hereof as shall be determined and approved by the
Compensation Committee of the Board of Directors in its sole discretion, taking account of
the performance of the Company and the Executive, and other factors generally considered
relevant to the salaries of executives holding similar positions with enterprises
comparable to the Company. 

        3.2
     Bonus. In addition to the Base Salary, the Executive shall participate in
the Company’s current bonus plan for senior corporate officers (the “Bonus
Plan”), as approved by the Compensation Committee of the Board of Directors in each
calendar year during the term of this Agreement. The Executive’s target bonus is
seventy-five percent (75%) of the Base Salary (the “Target Bonus”) and is
contingent on the Executive meeting certain performance criteria and the Company achieving
certain year-end financial criteria, and up to one hundred fifty percent (150%) of the
Base Salary (the “Maximum Bonus”) if the Employee exceeds certain performance
criteria and the Company exceeds certain year-end financial criteria all as determined in
the reasonable discretion of the Board of Directors and its Compensation Committee.
Effective January 1, 2006, the Target Bonus shall be increased to eighty percent (80%) of
the Base Salary and the Maximum Bonus shall be increased to one hundred sixty percent
(160%) of the Base Salary. The Executive shall be entitled to such increases in the
“Target Bonus” and the “Maximum Bonus” during the term hereof as shall
be determined and approved by the Compensation Committee of the Board of Directors in its
sole discretion, taking account of the performance of the Company and the Executive, and
other factors generally considered relevant to the salaries of executives holding similar
positions with enterprises comparable to the Company. The bonus shall be payable upon or
within a reasonable period of time after the receipt of the Company’s audited
financial statements for the applicable calendar year in accordance with the
Company’s normal practices. In the event that the Executive is employed for less than
the full calendar year in the year that his employment under this Agreement terminates
(“Termination Year”), the bonus payable to the Executive shall be subject to
Sections 6 and 7 of this Agreement and calculated based on the Executive meeting certain
performance criteria and the Company achieving certain year-end financial criteria, all as
determined by the Compensation Committee of the Board of Directors, in its sole
discretion. Such bonus shall be pro-rated for the portion of the Termination Year during
which the Executive was employed by the Company. With respect to the bonus for the
Termination Year, any bonus payable pursuant to this Section 3.2 shall be payable to the
Executive on the date on which such bonus payment would otherwise have been paid to the
Executive as if the Termination Date (as defined herein) had not occurred. 

2 

        3.3
     Stock Options.  

             (a)       
          As an incentive for the Executive’s future performance in improving
          shareholder value, the Company shall grant to the Executive options to purchase
          one hundred fifty thousand (150,000) shares of the Company’s common stock,
          $0.01 par value per share (the “Stock”), with such options being
          valued at the closing price of the Stock on the effective date of the Original
          Agreement. The Company shall also grant to the Executive options to purchase a
          minimum of one hundred thousand (100,000) shares of Stock on each of the first,
          second, and third anniversaries of the Original Agreement. The Executive may
          participate in future awards of options to purchase Stock or restricted shares
          in a manner consistent with any stock option plan or restricted share plan
          adopted by the Company for its senior corporate officers. Option or restricted
          share grants subsequent to the foregoing initial three year period shall be
          based upon targets adopted annually by the Board of Directors, which targets may
          be derived from budgets generated by the Company’s management, and the
          determination as to the amount of such options or restricted shares, if any,
          shall be at the sole discretion of the Board of Directors. 

             (b)       
          The options or restricted shares provided in subparagraph (a) of this Section
          3.3 shall be evidenced by a stock option agreement or restricted share grant
          agreement (“Stock Agreement”) between the Executive and the Company,
          which Stock Agreement shall provide for a vesting schedule of four (4) years, in
          equal parts, of the options or restricted shares granted thereunder.
          Notwithstanding any provisions now or hereafter existing under any stock
          incentive plan of the Company, all options or restricted shares granted to the
          Executive shall vest in full immediately upon the Termination Date except for
          termination of employment pursuant to Section 6.3 or Section 6.5(a) hereof, and
          the Executive (or his estate or legal representative, if applicable) shall
          thereafter have twelve (12) months from the Termination Date to exercise such
          options, if applicable. 

             (c)       
          Notwithstanding any provisions now or hereafter existing under any stock option
          plan or restricted share plan of the Company, in the event of a Change in
          Control (as hereinafter defined), all options or restricted shares provided to
          the Executive pursuant to Section 3.3(a) of the Original Agreement or any Stock
          Agreement shall be granted and shall immediately fully vest as of the date of
          such Change in Control with such options or restricted shares being valued at
          the closing price of the Company’s common stock on the day prior to the day
          of the Change of Control. 

3 

        (d)                     For
purposes of this Agreement, 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 the Executive or a group including the
Executive), 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 Stock being changed in                     any way or converted into or
exchanged for stock or other securities or cash or                     any other
property.  

             (e)       
          For purposes of this Agreement, the term “Continuing Director” shall
          mean a member of the Board of Directors who either was a member of the Board of
          Directors 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. 

        3.4
     Senior Corporate Officer Benefits. The Executive shall be entitled to
participate in benefit plans now existing or hereinafter adopted by the Board of Directors
for the senior corporate officers of the Company. Upon a Change in Control, any interest
of the Executive in any future Supplemental Executive Retirement Plan or deferred
compensation plan shall immediately vest. 

        3.5
     Car Allowance and Parking. The Executive shall be provided with (a) a
luxury-class automobile leased by the Company under the same terms and conditions as
enjoyed by other senior corporate officers of the Company, which terms shall include
reimbursement for all fuel, toll, maintenance, insurance and upkeep costs associated with
the vehicle, and (b) a reserved parking space at the Company’s headquarters. Upon
termination of the Executive’s employment under this Agreement for any reason, the
Company may, at its option, demand the prompt return of the automobile, or, upon the
mutual agreement of the Executive and the Company, the Executive may assume the lease for
the automobile. 

4 

        3.6
     Parachute Penalties. For all payments made or required to be made pursuant
to the terms of this Agreement, including any payments made with respect to the
Executive’s termination of employment for any reason, the Company shall determine and
pay the Executive, as soon as practicable, 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. Such determination
and payment by the Company shall be made no later than December 31 of the second calendar
year following the calendar year in which the Executive’s date of termination occurs,
with such date of termination to be the last to occur of termination pursuant to the terms
of this Agreement or the date of “separation from service” as set forth in
Proposed Treasury Regulation Section 1.409A-1(h) (the “Termination Date”). 

        3.7
     Other. The Company agrees to: (a) provide the Executive with a desktop
and/or laptop computer for his use while working at the Company’s headquarters and
the Executive’s local residence, (b) reimburse the Executive for up to Three Thousand
Dollars ($3,000) per year for out-of-pocket expenses incurred by the Executive for
financial and tax planning, (c) provide or reimburse the Executive’s costs for a life
insurance policy for the Executive in a minimum amount of two times the Base Salary in
addition to the one times the Base Salary provided in the base benefit package, payable to
a beneficiary of the Executive’s choosing, (d) provide or reimburse the
Executive’s costs for a long-term care insurance policy covering Executive and
Executive’s spouse and (e) provide or reimburse the Executive’s costs for a
supplemental long term disability insurance policy. 

        4.
     Expense Reimbursement. 

        During
the term of this Agreement, the Company shall reimburse the Executive for all reasonable
and necessary out-of-pocket expenses incurred by him in connection with the performance of
his duties hereunder, upon presentation of proper accounts in accordance with the
Company’s policies and practices for senior corporate officers. 

        5.
     Pension and Welfare Benefits; Vacation. 

        5.1
     Benefit Plans. During the term of this Agreement, the Executive will be
eligible to participate in all employee benefit plans and programs (including, without
limitation, 401(k), medical, dental, life, and disability plans of the Company) offered by
the Company from time to time to its senior corporate officers, subject to the provisions
of such plans and programs as in effect from time to time. The Executive shall be
reimbursed for all deductibles, co-payments and other out-of-pocket expenses, excluding
premium payments, related to all medical, dental, prescription and vision benefits offered
by the Company. 

        5.2
     Vacation. The Executive shall be entitled to five (5) weeks vacation per year.  

5 

        6.
     Termination of Employment.

        6.1
     Death. 

             (a)       
          The Executive’s employment shall be terminated by the Executive’s
          death. In the event of the death of the Executive, the Company shall pay to the
          estate or other legal representative of the Executive the Base Salary and
          vacation as accrued through the Termination Date (at the annual rate then in
          effect) and the bonus provided for in Section 3.2 for the Termination Year (as
          well as any then earned but unpaid bonus for the year preceding the Termination
          Year, if applicable). 

             (b)       
          In addition to the payments described in Section 6.1(a), the Company shall pay a
          death benefit of an additional twenty-four (24) months of Base Salary and an
          additional bonus payment (“Additional Bonus Payment”) equal to two (2)
          times the Target Bonus for the Termination Year. Such payment shall be made in
          one (1) lump sum payment, with such payment to be made to the estate or other
          legal representative of the Executive within forty-five (45) days after receipt
          by the Company of notice of Executive’s death. Rights and benefits of the
          estate or other legal representative of the Executive under the benefit plans
          and programs of the Company shall be determined in accordance with the
          provisions of such plans and programs. 

        6.2
     Disability. 

             (a)       
          If the Executive shall become incapacitated by reason of sickness, accident or
          other physical or mental disability and shall be entitled to payment of benefits
          under the Company’s long term disability plan, the employment of the
          Executive may be terminated by the Company or the Executive. In the event of
          such termination, the Company shall pay to the Executive the Base Salary and
          vacation accrued through the Termination Date (at the annual rate then in
          effect) and the bonus provided for in Section 3.2 for the Termination Year (as
          well as any then earned but unpaid bonus for the year preceding the Termination
          Year, if applicable). 

             (b)       
          In addition to the payments described in Section 6.2(a), the Company shall pay
          to the Executive, for a period of six (6) months following such termination,
          monthly payments consisting of: (i) the difference between the Executive’s
          monthly Base Salary at the Termination Date and the monthly disability pay
          benefits received by the Executive and (ii) an amount equal to one-twenty-fourth
          (1/24) of the Additional Bonus Payment; provided, however, that the Company
          reserves the right to pay such amounts on a bi-weekly basis. On the six (6)
          month anniversary of the Termination Date, Executive shall receive an amount
          equal to (i) eighteen (18) months of the Executive’s monthly Base Salary at
          the Termination Date, less the amount of monthly disability pay benefits to
          which Executive will be entitled over the eighteen (18) month period immediately
          following the six month anniversary of the Termination Date and (ii)
          three-quarters (3/4) of the Additional Bonus Payment. Notwithstanding the
          foregoing, in the event that the Company is no longer a publicly-traded entity
          as of the Termination Date, or ceases to be a publicly-traded entity within the
          six (6) month period immediately following the Termination Date, then the
          Company shall pay to Executive the payments set forth in this Section 6.2(b), or
          any unpaid portion thereof, as applicable, within forty-five (45) days from the
          later of (i) the Termination Date or (ii) the date the Company ceased to be a
          publicly-traded entity. Rights and benefits of the Executive under the other
          benefit plans and programs of the Company shall be determined in accordance with
          the terms and provisions of such plans and programs. Notwithstanding the
          foregoing, in the event that the death of the Executive occurs within six (6)
          months following the Termination Date, the Company shall pay to the
          Executive’s estate any unpaid portion of the amounts due to be paid to the
          Executive pursuant to this Section 6.2(b) within forty-five (45) days following
          receipt by the Company of notice of Executive’s death. Notwithstanding
          anything in this Agreement to the contrary, Executive shall not be entitled to
          any payments under this Section 6.2(b) unless Executive has first duly executed
          the form of agreement and general release attached hereto as Exhibit A
          (“Release”) on or immediately following the Termination Date;
          provided, however, that, in the event of any change in any applicable law (or
          interpretation thereof), the Release shall be subject to reasonable modification
          by the parties so as to preserve the intent of the parties with respect to such
          Release. 

6 

        6.3
     Due Cause. The employment of Executive hereunder may be terminated by the
Company at any time for Due Cause (as hereinafter defined). In the event of such
termination, the Company shall pay to the Executive the Base Salary (at the annual rate
then in effect) and vacation accrued through the Termination Date and not theretofore paid
to the Executive. Rights and benefits of the Executive or his transferee under the benefit
plans and programs of the Company shall be determined in accordance with the provisions of
such plans and programs. For purposes hereof, “Due Cause” shall be defined as
(a) the Executive’s willful and continuing failure to discharge duties and
responsibilities under this Agreement after having been given notice in writing and
opportunity to cure, (b) any material act of dishonesty involving the Company, or (c)
conviction of a felony. 

        6.4
     Termination by the Company Without Cause. 

             (a)       
          The Company may terminate the Executive’s employment at any time, for
          whatever reason it deems appropriate or without reason; provided,
          however, that in the event that such termination is not pursuant to
          Section 6.1 (Death); 6.2 (Disability); 6.3 (Due Cause); 6.5 (Voluntary
          Termination); or 6.6 (Retirement), the Company shall pay to the Executive the
          Base Salary and vacation accrued through the Termination Date (at the annual
          rate then in effect) and the bonus provided for in Section 3.2 for the
          Termination Year (as well as any then earned but unpaid bonus for the year
          preceding the Termination Year, if applicable). 

             (b)       
          In addition to the payments described in Section 6.4(a), the Company shall pay
          to the Executive a severance payment in an amount equal to two (2) years of the
          Base Salary (at the annual rate in effect immediately prior to termination) and
          the Additional Bonus Payment, with such payment to be made to the Executive in
          one lump sum on the six month anniversary of the Termination Date. For eighteen
          (18) months following termination pursuant to this Section 6.4(b), the Company
          shall (i) reimburse the Executive for his reasonable costs of medical and dental
          coverage as provided under COBRA, and (ii) reimburse the Executive for his
          reasonable costs incurred in maintaining his life and disability coverage and
          all other benefits granted to the Executive in Sections 3.4, 3.6, 3.7 and 5.1,
          each at levels substantially equivalent to those provided by the Company to the
          Executive immediately prior to the termination of his employment (including such
          other benefits as shall be provided to senior corporate officers of the Company
          in lieu of such benefits from time to time during the severance payment period),
          on the same basis, including the Company’s payment of premiums and
          contributions, as such benefits are provided to other senior corporate officers
          of the Company or were provided to the Executive prior to the termination. In
          addition, for the period ending on December 31 of the second calendar year
          following the calendar year in which the Executive’s Termination Date
          occurs, the Executive will be provided with outplacement services commensurate
          with those provided to other senior corporate officers of the Company through a
          vendor selected by the Company. Rights and benefits of the Executive or
          transferee under the benefit plans and programs of the Company shall be
          determined in accordance with the provisions of such plans and programs.
          Notwithstanding the foregoing, in the event that the Company is no longer a
          publicly-traded entity as of the Termination Date, or ceases to be a
          publicly-traded entity within the six (6) month period immediately following the
          Termination Date, then the Company shall pay to Executive the payments set forth
          in this Section 6.4(b), or any unpaid portion thereof, as applicable, within
          forty-five (45) days from the later of (i) the Termination Date or (ii) the date
          the Company ceased to be a publicly-traded entity. Notwithstanding the
          foregoing, in the event that the death of the Executive occurs within six (6)
          months following the Termination Date, the Company shall pay to the
          Executive’s estate any unpaid portion of the amounts due to be paid to the
          Executive pursuant to this Section 6.4(b) within forty-five (45) days following
          receipt by the Company of notice of Executive’s death. Notwithstanding
          anything in this Agreement to the contrary, Executive shall not be entitled to
          any payments under this Section 6.4(b) unless Executive has first duly executed
          the Release on or immediately following the Termination Date; provided, however,
          that, in the event of any change in any applicable law (or interpretation
          thereof), the Release shall be subject to reasonable modification by the parties
          so as to preserve the intent of the parties with respect to such Release. 

7 

        6.5
     Voluntary Termination. 

             (a)       
          The Executive may terminate his employment with the Company at any time upon
          sixty (60) days’ prior written notice to the Company and the Company shall
          pay to the Executive the Base Salary and vacation accrued through the
          Termination Date (at the annual rate then in effect) and the bonus provided for
          in Section 3.2 for the Termination Year (as well as any then earned but unpaid
          bonus for the year preceding the Termination Year, if applicable). Except as
          otherwise provided in this Agreement, rights and benefits of the Executive or
          his transferee under the benefit plans and programs of the Company shall be
          determined in accordance with provisions of such plans and programs. 

             (b)       
          In the event that the Company or the Board of Directors alters the scope of the
          Executive’s position and duties as described in Section 2 without the
          consent of the Executive, or the Executive experiences any reduction of the Base
          Salary, Bonus Plan targets (as distinguished from the payments received
          thereunder) or other benefits as described in Sections 3 and 5 of this
          Agreement, the Executive may terminate his employment with the Company upon
          sixty (60) days’ prior written notice to the Company. If the Company does
          not permit the Executive to continue actively working during such notice period,
          the Executive shall be deemed to be on a bona fide leave of absence until the
          last day of such notice period. In the event of a termination of the
          Executive’s employment under this Section 6.5(b), the Company shall pay to
          the Executive the Base Salary and vacation accrued through the Termination Date
          (at the annual rate then in effect) and the bonus provided for in Section 3.2
          for the Termination Year (as well as any then earned but unpaid bonus for the
          year preceding the Termination Year, if applicable). In addition, the Company
          shall pay to the Executive severance and the Additional Bonus Payment and
          provide all benefits and grants in accordance with the provisions of Section
          6.4(b). Notwithstanding the foregoing, in the event that the Company is no
          longer a publicly-traded entity as of the Termination Date, or ceases to be a
          publicly-traded entity within the six (6) month period immediately following the
          Termination Date, then the Company shall pay to Executive the payments set forth
          in this Section 6.5(b), or any unpaid portion thereof, as applicable, within
          forty-five (45) days from the later of (i) the Termination Date or (ii) the date
          the Company ceased to be a publicly-traded entity. Notwithstanding the
          foregoing, in the event that the death of the Executive occurs within six (6)
          months following the Termination Date, the Company shall pay to the
          Executive’s estate any unpaid portion of the amounts due to be paid to the
          Executive pursuant to this Section 6.5(b) within forty-five (45) days following
          receipt by the Company of notice of Executive’s death. Notwithstanding
          anything contained in this Agreement to the contrary, Executive shall not be
          entitled to any payments under this Section 6.5(b) unless Executive has first
          duly executed the Release on or immediately following the Termination Date;
          provided, however, that, in the event of any change in any applicable law (or
          interpretation thereof), the Release shall be subject to reasonable modification
          by the parties so as to preserve the intent of the parties with respect to such
          Release. 

8 

        6.6
     Retirement. 

             (a)       
          In the event of the Executive’s Retirement (as defined in Section 6.6(b)),
          the Company shall pay to the Executive the Base Salary and vacation accrued
          through the date of Retirement (at the annual rate then in effect) and the bonus
          provided for in Section 3.2 for the Termination Year (as well as any then earned
          but unpaid bonus for the year preceding the Termination Year, if applicable).
          Except as otherwise provided in this Agreement, rights and benefits of the
          Executive or his transferee under the benefit plans and programs of the Company
          shall be determined in accordance with provisions of such plans and programs. 

             (b)       
          “Retirement” shall mean the Executive’s voluntary termination of
          employment at or after age sixty-five (65), provided the Executive has given the
          Company written notice of the Executive’s intent to retire no less than one
          (1) year prior to the scheduled Termination Date and the Executive has, as of
          the scheduled Termination Date, been continuously employed with Hanger,
          including any of its direct or indirect subsidiaries, for a period of no less
          than eight (8) years. 

        7.
       Change In Control and Termination Provisions. 

        If
within a two (2) year period following any Change in Control there occurs: 

             (a)       
          any termination of the Executive (other than as set forth in Section 6.1
          (Death), 6.2 (Disability), 6.3 (Due Cause), 6.5 (Voluntary Termination) or 6.6
          (Retirement) of this Agreement); 

9 

             (b)       
          a material diminution of the Executive’s responsibilities, as compared to
          the Executive’s responsibilities immediately prior to the Change in
          Control; 

             (c)       
          any reduction in the Base Salary or Bonus Plan targets (as distinguished from
          the payments received thereunder), as compared to such Base Salary or such
          targets as of the date immediately prior to the Change in Control; 

             (d)       
          any failure to provide the Executive with benefits: (1) at least as favorable as
          those enjoyed by similarly-situated senior corporate officers of the Company
          under the Company’s pension, life insurance, medical, health and accident,
          disability or other written employee plans under which the form and/or amounts
          of benefits are prescribed in applicable documents or (2) granted to the
          Executive by this Agreement; 

             (e)       
          any relocation of the Executive’s principal site of employment to a
          location more than twenty-five (25) miles from the Executive’s principal
          place of employment as of the date immediately prior to the Change in Control;
          or 

             (f)       
          any material breach of this Agreement by the Company; 

then, at the option of the Executive,
exercisable by the Executive within ninety (90) days after the occurrence of any of the
foregoing events, the Executive may resign his employment with the Company (or, if
involuntarily terminated, give notice of his intention to collect benefits under this
Agreement) by delivering a notice in writing (the “Notice of Termination”) to
the Company, and the Executive shall be entitled to receive the Base Salary and vacation
accrued to the Termination Date (at the annual rate then in effect) and the bonus provided
for in Section 3.2 for the Termination Year (as well as any then earned but unpaid bonus
for the year preceding the Termination Year, if applicable). In addition, the Company
shall pay to the Executive severance and the Additional Bonus Payment and provide all
benefits and grants in accordance with the provisions of Section 6.4(b). Notwithstanding
the foregoing, in the event that the Company is no longer a publicly-traded entity as of
the Termination Date, or ceases to be a publicly-traded entity within the six (6) month
period immediately following the Termination Date, then the Company shall pay to Executive
the payments set forth in this Section 7, or any unpaid portion thereof, as applicable,
within forty-five (45) days from the later of (i) the Termination Date or (ii) the date
the Company ceased to be a publicly-traded entity. Notwithstanding the foregoing, in the
event that the death of the Executive occurs within six (6) months following the
Termination Date, the Company shall pay to the Executive’s estate any unpaid portion
of the amounts due to be paid to the Executive pursuant to this Section 7 within
forty-five (45) days following receipt by the Company of notice of Executive’s death.
Notwithstanding anything contained in this Agreement to the contrary, Executive shall not
be entitled to any payments under this Section 7 unless Executive has first duly executed
the Release on or immediately following the Termination Date; provided, however, that, in
the event of any change in any applicable law (or interpretation thereof), the Release
shall be subject to reasonable modification by the parties so as to preserve the intent of
the parties with respect to such Release. 

10 

        8.
     Confidential Information. 

        8.1
     Nondisclosure.Unless the Executive secures the Company’s
written consent, the Executive will not, for a period of two (2) years after the
Termination Date, disclose, use, disseminate, lecture upon, or publish Confidential
Information, whether or not such Confidential Information was developed by him. 

        8.2
     Confidential Information Defined. “Confidential Information” means
information disclosed to the Executive or known by him as a result of his employment with
the Company, not generally known in the industry, about the Company’s services,
products, or customers, including, but not limited to, clinical programs, procedures and
protocols, research, operating manuals, business methods, financial strategic planning,
client retention, customer and supplier lists, data processing, insurance plans, risk
management, marketing, contracting, selling and employees. 

        9.
     Interference With the Company. 

        The Executive
will not, for a period of two (2) years after the Termination Date, directly or indirectly
(i) engage, whether as principal, agent, investor, representative, stockholder (other than
as the holder of not more than five percent (5%) of the stock or equity of any corporation
the capital stock of which is publicly traded), employee, consultant, volunteer or
otherwise, with or without pay, in any activity or business venture anywhere within the
continental United States that is competitive with the business of the Company on the
Termination Date, (ii) solicit or entice or endeavor to solicit or entice away from the
Company any director, officer, employee, agent or consultant of the Company, either on his
own account or for any person, firm, corporation or other organization, regardless of
whether the person solicited would commit any breach of such person’s contract of
employment by reason of leaving the Company’s service; (iii) solicit or entice or
endeavor to solicit or entice away any of the clients or customers of the Company as of
the Termination Date for the purpose of competing with the business of the Company, either
on his own account or for any other person, firm, corporation or organization; (iv) employ
or otherwise utilize (whether as a consultant, advisor or otherwise) any person who was a
director, officer, or employee of the Company at any time during the two years preceding
the Termination Date, unless such person’s employment was terminated by the Company;
or (v) employ or otherwise utilize (whether as a consultant, advisor or otherwise) any
person who is or may be likely to be in possession of any Confidential Information. The
parties hereto agree that if, in any proceeding, the Court or other authority shall refuse
to enforce covenants set forth in this Section 9, because such covenants cover too
extensive a geographic area or too long a period of time, any such covenant shall be
deemed appropriately amended and modified in keeping with the intention of the parties to
the maximum extent permitted by law. 

        10.
     Injunctive Relief. 

        In
the event that the Company seeks an injunction or similar equitable relief for the breach
or threatened breach of the provisions of Sections 8 or 9 of this Agreement, the Executive
agrees that the Executive shall not use the availability of arbitration in Section 15
hereof as grounds for the dismissal of any such injunctive action. 

11 

        11.
     Successors and Assigns. 

        11.1
     Assignmentby the Company. The Company shall require any successors (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform if no
such succession had taken place. As used in this Section, the “Company” shall
mean the Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law and this Agreement shall be binding upon and inure to the
benefit of, the Company, as so defined. The Company and the Executive agree that the
Company may not assign this Agreement without the express, written consent of the
Executive. 

        11.2
     Assignment by the Executive. The Executive may not assign this Agreement or
any part thereof without the prior written consent of a majority of the Board of
Directors; provided, however, that nothing herein shall preclude one or more
beneficiaries of the Executive from receiving any amount that may be payable following the
occurrence of his legal incompetency or his death and shall not preclude the legal
representative of his estate from receiving such amount or from assigning any right
hereunder to the person or persons entitled thereto under his will or, in the case of
intestacy, to the person or persons entitled thereto under the laws of intestacy
applicable to his estate. The term “beneficiaries,” as used in this Agreement,
shall mean a beneficiary or beneficiaries so designated to receive any such amount or, if
no beneficiary has been so designated, the legal representative of the Executive (in the
event of his incompetency) or the Executive’s estate. 

        12.
     Governing Law.  

        This
Agreement shall be deemed a contract made under, and for all purposes shall be construed
in accordance with, the laws of the State of Delaware applicable to contracts to be
performed entirely within such state. In the event that a court of any jurisdiction shall
hold any of the provisions of this Agreement to be wholly or partially unenforceable for
any reason, such determination shall not bar or in any way affect the Company’s right
to relief as provided for herein within the courts of any other jurisdiction. Such
provisions, as they relate to each jurisdiction, are, for this purpose, severable into
diverse and independent covenants. Service of process on the parties hereto at the
addresses set forth herein shall be deemed adequate service of process. 

        13.
     Entire Agreement.  

        This
Agreement contains all the understandings and representations between the parties
pertaining to the subject matter hereof and supersedes all undertakings and agreements,
whether oral or in writing, previously entered into by them. 

12 

        14.
     Amendment, Modification, Waiver.  

        No
provision of this Agreement may be amended or modified unless such amendment or
modification is agreed to in writing and signed by the Executive and by a duly authorized
representative of the Company other than the Executive. Except as otherwise specifically
provided for in this Agreement, no waiver by either party of any breach by the other party
of any condition or provision of this Agreement to be performed by such other party shall
be deemed a waiver of a similar or dissimilar provision or condition at the same or any
prior or subsequent time, nor shall the failure of or delay by either party in exercising
any right, power, or privilege hereunder operate as a waiver thereof to preclude any other
or further exercise thereof, or exercise of any other such right, power, or privilege.
Notwithstanding anything in this Agreement to the contrary, the Company shall unilaterally
have the right to amend this Agreement to comply with Section 409A of the Internal Revenue
Code. 

        15.
     Arbitration.  

        The
Company and the Executive will attempt amicably to resolve disagreements and disputes
hereunder or in connection with the employment of Executive by negotiation. If the matter
is not amicably resolved through negotiation, within thirty (30) days after written notice
from either party, any controversy, dispute or disagreement arising out of or relating to
this Agreement, or the branch thereof, will be subject to exclusive, final, and binding
arbitration, which will be conducted in Washington, DC in accordance with the Labor
Arbitration Rules of Procedure of the American Arbitration Association. Either party may
bring a court action to compel arbitration under this Agreement or to enforce an
arbitration award. 

        16.
     Notices.  

        Any
notice to be given hereunder shall be in writing and delivered personally or sent by
certified mail, postage prepaid, return receipt requested, addressed to the party
concerned at the address indicated below or at such other address as such party may
subsequently be designated by like notice: 

		
	 	 	 	If to the Company:	 	 
	 	 	 	
c/o Hanger Orthopedic Group, Inc.	 	 
	 	 	 	2 Bethesda Metro Center, Suite 1200	 	 
	 	 	 	Bethesda, MD 20814	 	 
	 	 	 	Attention: Chief Operating Officer	 	 
	 	 	 	
If to the Executive:	 	 
	 	 	 	
Ivan R. Sabel	 	 
	 	 	 	4819 Quebec Street, N.W.	 	 
	 	 	 	Washington, D.C. 20016	 	 

13 

        17.
     Severability.  

        Should
any provision of this Agreement be held by a court or arbitration panel of competent
jurisdiction to be enforceable only if modified, such holding shall not affect the
validity of the remainder of this Agreement, the balance of which shall continue to be
binding upon the parties with any such modification to become a part hereof and treated as
though originally set forth in this Agreement. The parties further agree that any such
court or arbitration panel is expressly authorized to modify any such unenforceable
provision of this Agreement in lieu of severing such unenforceable provision from this
Agreement in its entirety, whether by rewriting the offending provision, deleting any or
all of the offending provision, adding additional language to this Agreement, or by making
such other modifications as it deems warranted to carry out the intent and agreement of
the parties as embodied herein to the maximum extent permitted by law. The parties
expressly agree that this Agreement as so modified by the court or arbitration panel shall
be binding upon and enforceable against each of them. In any event, should one or more of
the provisions of this Agreement be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any other
provisions hereof, and if such provision or provisions are not modified as provided above,
this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions
had never been set forth herein. 

        18.
     Withholding.  

        Anything
to the contrary notwithstanding, all payments required to be made by the Company hereunder
to the Executive or his beneficiaries, including his estate, shall be subject to
withholding of such amounts relating to taxes as the Company may reasonably determine it
should withhold pursuant to any applicable law or regulation. In lieu of withholding such
amounts, in whole or in part, the Company may, in its sole discretion, accept other
provisions for payment of taxes as permitted by law, provided it is satisfied in its sole
discretion that all requirements of law affecting its responsibilities to withhold such
taxes have been satisfied. 

        19.
     Survivorship.  

        The
respective rights and obligations of the parties hereunder shall survive any termination
of this Agreement to the extent necessary to the intended preservation of such rights and
obligations. 

[ The next page is the
signature page. ]  

14 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 7th day of
March, 2007. 

		
	 	 	 	HANGER PROSTHETICS & ORTHOTICS, INC.	 	 
	 	 	 	

By: _____________________________________	 	 
	 	 	 	       Brian Wheeler, Vice President	 	 
	 	 	 	       	 	 
	 	 	 	

   
    ______________________________________	 	 
	 	 	 	       
Ivan R. Sabel	 	 

15

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