HANGER ORTHOPEDIC GROUP INC
EMPLOYMENT AND NON-COMPETE AGREEMENT
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<FILENAME>dbk116g.htm
<DESCRIPTION>EMPLOYMENT AND NON-COMPETE AGREEMENT
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EMPLOYMENT AND
NON-COMPETE AGREEMENT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
 Employment and  Non-Compete  Agreement is made as of March __, 2005,  between  HANGER
 ORTHOPEDIC  GROUP,  INC., a Delaware corporation (the "Company"); and John Rush, M.D.
("Employee"). The Company and Employee agree as follows: </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.
&nbsp;&nbsp;&nbsp;&nbsp;<U>Employment</U>. The
Company agrees to employ Employee and Employee accepts           such employment by the
Company upon the terms and conditions set forth in this           Agreement, for the
period beginning on April 1, 2005 (&#147;Commencement           Date&#148;) and ending
upon termination pursuant to Section 4 (the           &#147;Employment Period&#148;).  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.
&nbsp;&nbsp;&nbsp;&nbsp;<U>Compensation and
Benefits</U>. In consideration for the valuable services to           be rendered by
Employee and for Employee&#146;s agreement not to compete against           the Company
as described in Section 5 and not to disclose or use Confidential           Information
of the Company as described in Section 6, the Company hereby agrees           to provide
the following to Employee:  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;          During
the first year of the Employment Period, the Company will pay Employee a           gross
salary at the annual rate of $330,000.00, net of all applicable payroll           taxes
and other normal deductions (the &#147;Base Salary&#148;), payable at the
          bi-weekly gross rate of $12,692.30. Employee&#146;s Base Salary may be adjusted
          annually in January of each year based on an annual performance salary review
as           determined in the reasonable discretion of the Company&#146;s Board of
Directors           or a committee thereof. Employee also shall be entitled to (i) an
automobile           allowance in the amount of Seven Hundred Dollars ($700.00) per month
and one (1)           parking space in the parking garage at the Company&#146;s
headquarters in           Bethesda, Maryland, and (ii) vacation, sick leave and medical
and other benefits           that are consistent with those received by other
similarly-situated senior           executives of the Company as determined in the sole
discretion of the           Company&#146;s Board of Directors.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;          Within
thirty (30) days after the commencement of Employee&#146;s employment           with the
Company, Employee shall receive a lump sum cash payment in the gross           amount of
Thirty-Five Thousand Dollars ($35,000.00), net of applicable payroll           taxes and
other normal deductions (&#147;Payment&#148;). The Payment shall be           evidenced
by a one (1) year forgivable promissory note (the &#147;Note&#148;) to           be
executed prior to or at the time of receipt of the Payment, which Note shall           be
forgiven upon the first to occur of (i) the termination of Employee&#146;s
          employment with the Company upon Employee&#146;s death or permanent disability
          under Section 4(a), without Cause under Section 4(d) or for Good Reason under
          Section 4(e); or (ii) if Employee remains continuously employed by the Company
          for a period of at least one (1) year following the Commencement Date, all as
          further set forth in the Note. In the event Employee&#146;s employment is
          terminated prior to the one-year anniversary of the Commencement Date for a
          reason other than upon Employee&#146;s death or permanent disability under
          Section 4(a), without Cause under Section 4(d) or for Good Reason under Section
          4(e), then the Note shall become immediately due and payable upon such
          termination, as further set forth in the Note.  </FONT></P>






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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;          Employee
shall also be eligible to receive cash bonus compensation (the           &#147;Bonus&#148;)
for each full calendar year during the Employment Period and           for the pro-rated
portion of 2005 during which Employee is employed by the           Company. Employee&#146;s
target Bonus (&#147;Target Bonus&#148;) is fifty           percent (50%) of the Base
Salary and is contingent on the Employee meeting           certain performance criteria
and the Company achieving certain year-end           financial criteria, and, in the
event Employee exceeds certain performance           criteria and the Company exceeds
certain year-end financial criteria,           Employee&#146;s maximum Bonus (&#147;Maximum
Bonus&#148;) is one hundred percent           (100%) of the Base Salary, all to be
determined in the reasonable discretion of           the Company&#146;s Board of
Directors and its Compensation Committee. The           Employee shall be entitled to
such increases in the Target Bonus and the Maximum           Bonus during the Employment
Period as shall be determined and approved by the           Compensation Committee of the
Company&#146;s Board of Directors, in its sole           discretion, taking into account
the performance of the Company and the Employee           and other factors generally
considered relevant to the salaries of executives           holding similar positions
with enterprises comparable to the Company.           Notwithstanding the foregoing, in
the event that the Employee or the Company           fail to attain their minimum
respective criteria in any given year, the Board of           Directors of the Company
and its Compensation Committee may, in their reasonable           discretion, decline to
award any Bonus to Employee.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;          On
the third (3<SUP>rd</SUP>) business day following the Commencement Date,
          Employee shall receive 10,000 restricted shares of stock of the Company. On the
          first annual anniversary of the Commencement Date, Employee will receive an
          additional 10,000 restricted shares of stock of the Company. In addition to the
          foregoing grants of restricted shares of stock, Employee may have the
          opportunity to receive options to purchase stock or restricted shares of stock
          of the Company in a manner consistent with any stock option or restricted share
          plan adopted by the Company. The determination as to the amount of additional
          stock, if any, to be purchased under such stock option or restricted share plan
          shall be subject to the sole discretion of the Board of Directors of the
Company           or a committee thereof. All grants of restricted shares of stock of the
Company           or options to purchase stock of the Company shall be governed by the
applicable           plans of the Company with respect to such stock.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;          Employee
shall receive the relocation benefits set forth in the Executive           Relocation
Program, consistent with the relocation policies and procedures of           the Company
for executives, as previously disclosed by the Company to Employee.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;<U>Services</U>.
During the Employment Period, Employee agrees (i) to devote           Employee&#146;s
best efforts and substantially all of Employee&#146;s business           time and
attention to the business affairs of the Company (except for reasonable
          vacation periods subject to the reasonable approval of the Company or
reasonable           periods of illness or other incapacity); (ii) to serve as the Company&#146;s
          Chief Medical Officer and render such services as the Company may from time to
          time direct; provided, however, that Employee recognizes and agrees that the
          Company may change Employee&#146;s job description as set forth in this Section
          3 as a result of a good faith restructuring of the Company&#146;s operations;
          and (iii) that Employee will not, except with the prior written consent of the
          Company, become engaged in or render services for any business other than the
          business of the Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination</U>.
The Employment Period will continue from the Commencement           Date until terminated
by Employee&#146;s death or permanent disability which           renders the Employee
unable to perform Employee&#146;s duties hereunder (as           determined by the
Company in its good faith judgment); Employee&#146;s           resignation upon prior
written notice to the Company of sixty (60) days; the           Company for Cause; the
Company without Cause upon prior notice to Employee of           thirty (30) days; or
Employee for Good Reason upon prior written notice to the           Company of sixty (60)
days. For purposes of this Section 4, &#147;Cause&#148;          shall mean (i) the
repeated failure or refusal of Employee to follow the lawful           directives of the
Company or its designee (except due to sickness, injury or           disabilities), (ii)
gross inattention to duty or any other willful, reckless or           grossly negligent
act (or omission to act) by Employee, which, in the good faith           judgment of the
Company, materially injures the Company, including the repeated           failure to
follow the policies and procedures of the Company, (iii) a material           breach of
this Agreement by Employee or (iv) the commission by Employee of a           felony or
other crime involving moral turpitude or the commission by Employee of           an act
of financial dishonesty against the Company. For purposes of this Section           4,
&#147;Good Reason&#148; shall mean any act by the Board of Directors of the
          Company that, within six (6) months following a Change in Control, materially
          reduces (A) the scope of Employee&#146;s position and duties with the Company
          without Employee&#146;s consent or (B) the Base Salary set forth in Section
2(a)           or the Target Bonus set forth in Section 2(c) (as distinguished from the
Bonus           payments received thereunder), with Employee being required to give
written           notice to terminate Employee&#146;s employment with the Company within
six (6)           months following such Change in Control in order for the termination to
be           considered for Good Reason.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;<U>Non-Compete</U>.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;          In
the event the Employment Period is terminated under Section 4(b) or Section
          4(c), then this Section 5 will apply to Employee. In the event the Employment
          Period is otherwise terminated, such as without Cause, then no part of this
          Section 5 will apply to Employee.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;          Employee
recognizes and acknowledges that by virtue of accepting employment as a           senior
executive of the Company hereunder, Employee will have access to and will
          acquire valuable training and highly specialized knowledge, enhance
          Employee&#146;s professional skills and experience, and learn proprietary trade
          secrets and Confidential Information of the Company. In consideration of the
          foregoing and this employment contract, Employee agrees that during the
          Employment Period and for two (2) years thereafter (the &#147;Non-Compete
          Period&#148;), Employee will not directly or indirectly (whether as employee,
          director, owner, stockholder, consultant, partner (limited or general) or
          otherwise) own, manage, control, participate in, consult with, advertise on
          behalf of, render services for or in any manner engage in any Business at any
          location within the continental United States of America; nor shall Employee
          solicit any other Person to engage in any of the foregoing activities or
          knowingly request, induce or attempt to influence any Company Patient, Company
          Referral Source or Company supplier to curtail any business they are currently,
          or within the thirty-six (36) month period ending on the earlier of the
          termination of the Employment Period or the then current date have been,
          transacting with the Company (the &#147;Non-Compete&#148;). Nothing herein will
          prevent Employee from being a passive owner of not more than 1% of the
          outstanding stock of any class of a corporation which is engaged in the
Business           and which is publicly traded, so long as Employee has no participation
in the           business of such corporation. Furthermore, during the Non-Compete
Period,           Employee shall not, without the Company&#146;s prior written consent,
directly           or indirectly, knowingly solicit or encourage or attempt to influence
any           Company Employee to leave the employment of the Company. Employee agrees
that           the restraint imposed under this Section 5 is reasonable and not unduly
harsh or           oppressive.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;          If,
at the time of enforcement of any provision of Section 5(b), a court or
          arbitrator holds that the restrictions stated therein are unreasonable or
          unenforceable under circumstances then existing, the Company and Employee agree
          that the maximum period, scope or geographical area reasonable or permissible
          under such circumstances will be substituted for the stated period, scope or
          area.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;          Since
a material purpose of this Agreement is to protect the Company&#146;s
          investment in the Employee and to secure the benefits of Employee&#146;s
          background and general experience in the industry, the parties hereto agree and
          acknowledge that money damages may not be an adequate remedy for any breach of
          the provisions of this Section 5. Therefore, in the event of a breach by
          Employee of any of the provisions of this Section 5, the Company or its
          successors or assigns may, in addition to other rights and remedies existing in
          its favor, apply to any court of law or equity of competent jurisdiction for
          specific performance and/or injunctive or other relief in order to enforce or
          prevent any violations of the provisions of this Agreement.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;<U>Confidential
Information</U>. Employee acknowledges that the information,           product
specifications, service specifications, manufacturing procedures,           technology,
designs, know-how, research and development programs, sales methods,           sales
levels and quantities, costs, margins, customer usages and requirements,
          computer programs, data and trade secrets (collectively, &#147;Confidential
          Information&#148;) obtained by Employee during the course of Employee&#146;s
          performance under this Agreement, and previously if Employee has already been
an           employee of the Company, concerning the business or affairs of the Company
are           the property of the Company. For purposes of this Agreement, &#147;trade
          secret&#148; means information of the Company, including any formula, pattern,
          compilation, program, device, method, technique or process, that derives
          independent economic value, actual or potential, from not being generally known
          to, and not being readily ascertainable by proper means by, other Persons who
          can obtain economic value from its disclosure or use, and that is the subject
of           efforts by the Company to maintain its secrecy that are reasonable under the
          circumstances, including but not limited to: (a) techniques, plans and
materials           used by the Company, (b) marketing methods and strategies employed by
the           Company, and (c) all lists of past, present or prospective patients,
customers,           referral sources and suppliers of the Company. Employee agrees that
Employee           will not disclose to any unauthorized Person or use for Employee&#146;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&#146;s acts or omissions to act or become known to Employee
lawfully           outside the scope of Employee&#146;s employment under this Agreement.
Employee           agrees to deliver to the Company at the termination of Employee&#146;s
          employment, or at any other time the Company may request, all memoranda, notes,
          plans, records, reports and other items and documents (and copies thereof)
          relating to the business of the Company which Employee may then possess or have
          under Employee&#146;s control.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>.
Any notice provided for in this Agreement shall be in writing           and shall be
either personally delivered, sent by overnight courier           (<U>e.g.</U>, Federal
Express) or mailed by first class certified mail, return           receipt requested, to
the recipient at the address below indicated:  </FONT></P>


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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To the Company: </FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vice President, Human Resources<BR>
Hanger
Orthopedic Group, Inc.<BR>Two Bethesda Metro
Center, Suite 1200<BR>Bethesda,
Maryland 20814</FONT></TD>
</TR>
</TABLE>
<BR>


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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To Employee: </FONT></TD>
<TD WIDTH=77%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>John Rush, M.D.<BR>10260 Longview Drive<BR>Lone Tree, Colorado 80124-9774</FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;<U>Miscellaneous</U>. 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&#146;s           rights or
delegate Employee&#146;s obligations hereunder without the prior           written
consent of the Company. The Company may assign its rights and delegate           its
duties hereunder without the consent of Employee to Permitted Transferees.           All
questions concerning the construction, validity and interpretation of the
          Agreement will be governed by the internal law, and not the law of conflicts,
of           the State of Maryland. All disputes under this Agreement shall be submitted
to           and governed by binding arbitration with an arbitrator from the American
          Arbitration Association; except only that the Company may seek relief in a
court           of competent jurisdiction in the event of a claimed violation of Section
5 or           Section 6 of this Agreement. Any provision of this Agreement may be
amended or           waived only with the prior written consent of the Company and
Employee.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;<U>Severance</U>.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;          In
the event that Employee&#146;s employment with the Company is terminated           under
Section 4(a), Section 4(b) or Section 4(c), Employee shall receive no           severance
payments or salary continuation whatsoever.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;          In
the event Employee&#146;s employment with the Company is terminated under
          Section 4(d) or Section 4(e), then the Company shall provide Employee with
          salary continuation in a total aggregate amount equal to one (1) year of
          Employee&#146;s Base Salary at the time of termination of the Employment Period
          to be paid out in equal installments over the twelve (12) month period
following           the termination of the Employment Period.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;          Provided
(i) Employee remains continuously employed by the Company through the           fifth (5<SUP>th</SUP>)
annual anniversary of the Commencement Date (&#147;Fifth           Anniversary&#148;);
and (ii) Employee has not been offered the position of CEO           of the Company prior
to the Fifth Anniversary (with the parties agreeing that           any offer of the CEO
position may provide for Employee to actually become CEO on           a date following
the Fifth Anniversary), Employee shall have a one-time right,           during the six
(6) month period commencing on the Fifth Anniversary, to           voluntarily resign
from his position with the Company pursuant to Section 4(b),           in which case
Employee shall receive (A) salary continuation in a total           aggregate amount
equal to eighteen (18) months of Employee&#146;s Base Salary at           the time of
termination of the Employment Period to be paid out in equal           installments over
the eighteen (18) month period following the termination of           the Employment
Period; and (B) an amount equal to the average of the annual           Bonus received by
Employee pursuant to Section 2(c) over the then preceding           three (3) year
period, multiplied by one and one half (1.5), with such amount           also to be paid
out in equal installments over the eighteen (18) month period           following the
termination of the Employment Period.  </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;          Notwithstanding
anything herein to the contrary, each of the following shall,           without limiting
any other remedies available to the Company, be considered a           breach of this
Agreement completely relieving the Company of any obligations due           or owing at
any time to Employee under this Section 9: (i) the failure of           Employee to use
his best efforts to ensure a smooth transition to           Employee&#146;s successor;
(ii) the breach by Employee of any of the provisions           of Section 5, if
applicable, and/or Section 6; or (iii) any act of directly or           indirectly
(whether as employee, director, owner, stockholder, consultant,           partner
(limited or general) or otherwise) owning, managing, controlling,           participating
in, consulting with, advertising on behalf of, rendering services           for or in any
manner engaging in any Business, it being understood that Employee           shall be
entitled to engage in such acts in a manner that does not violate the
          provisions of Section 5, if applicable, and/or or Section 6 but shall forfeit
          his right to the payments under this Section 9 as a result thereof. Nothing in
          this Section 9 shall preclude the Company from exercising any rights or
remedies           available to it at law or in equity.  </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;<U>Definitions</U>.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Business&#148;</B> shall
mean any competitive business of fabricating,           distributing, wholesaling or
retailing of orthotics or prosthetics, or the           operation of clinics to fit
patients for orthotics or prosthetics, or any other           related orthotic or
prosthetic businesses in which the Company is engaged during           and at the
expiration of the Employment Period, specifically including, without
          limitation, the formation and/or operation of comprehensive managed care
          organizations providing healthcare company clients with customized, national
          networks of orthotics and/or prosthetics patient-care and accountable
healthcare           services, including through dedication to clinical outcomes,
science-based           guidelines, sound medical reasoning and efficient system
solutions designed to           help reduce administrative expense.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;          A
<B>&#147;Change in Control&#148;</B> shall be deemed to exist if:  </FONT></P>


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



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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6 </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;          Continuing
Directors shall for any reason cease to constitute a majority of the           Board of
Directors of the Company; or  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;          the
Company disposes of all or substantially all of the business of the Company           to
a party or parties other than a Permitted Transferee pursuant to a partial or
          complete liquidation of the Company, sale of assets (including stock of a
          subsidiary of the Company) or otherwise; or  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;          the
Board of Directors of the Company approves the Company&#146;s consolidation           or
merger with or into any other Person (other than a Permitted Transferee), or
          any other Person&#146;s consolidation or merger with or into the Company, which
          results in all or part of the outstanding shares of stock of the Company being
          changed in any way or converted into or exchanged for stock or other securities
          or cash or any other property.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;          The
<B>&#147;Company&#148;</B>shall include the Company and any other past,           present
or future direct or indirect subsidiaries of the Company (including
          subsidiaries of subsidiaries).  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Company
Employee&#148;</B>shall mean any Person who is an employee of           the Company at
any time during the twenty-four (24) month period ending on the           earlier of the
termination of the Employment Period or the then current date.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Company
Patient&#148;</B> shall mean any Person who is a patient or           customer of the
Company at any time during the thirty-six (36) month period           ending on the
earlier of the termination of the Employment Period or the then           current date.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Company
Referral Source&#148;</B> shall mean any Person who has been a           referral source
of the Company at any time during the thirty-six (36) month           period ending on
the earlier of the termination of the Employment Period or the           then current
date.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Continuing
Director&#148;</B> shall mean a member of the Board of           Directors of the Company
who either was a member of the Board of Directors of           the Company on the date of
this Agreement or who subsequently became a member of           the Board of Directors of
the Company and whose election, or nomination for           election, was approved by a
vote of at least two-thirds (2/3) of the Continuing           Directors then in office.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Person&#148;</B> shall
mean and include an individual, a partnership, a           joint venture, a corporation,
a limited liability company, a trust, an           unincorporated organization and a
governmental entity or any department or           agency thereof.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Permitted
Transferee&#148;</B>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&#146;s or any Permitted           Transferee&#146;s
assets; (c) any parent or subsidiary corporation of the           Company; and (d) any
lender to (i) the Company, (ii) any Permitted Transferee           and/or (iii) any
affiliate of the Company or of any Permitted Transferee.  </FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7 </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp; <U>Counterparts</U>.
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.  </FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[ The next page is the
signature page. ]  </FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8 </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above
written. </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>WITNESS:</FONT></TD>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EMPLOYEE:</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>____________________________________</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>_________________________________</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Name: John Rush, M.D.</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>Attest (Seal):</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>HANGER ORTHOPEDIC GROUP, INC.</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>By: ________________________________</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By: ______________________________</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jason P. Owen, Secretary</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ivan R. Sabel, CEO</FONT></TD></TR>
</TABLE>
<BR>
<BR>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9 </FONT></P>



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