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EXHIBIT 10(zzz)
HANGER ORTHOPEDIC GROUP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of June 14, 1995, by and between
HANGER ORTHOPEDIC GROUP, INC., a Delaware corporation (the "Company"), and
Xxxxxx X. Xxxxxx (the "Optionee").
W I T N E S E T H:
WHEREAS, the Company desires to grant to the Optionee a stock
option under the Company's 1993 Stock Option Plan for Non-Employee Directors
(the "Plan") to purchase shares of the Company's common stock, par value $.01
per share (the "Common Stock"), in consideration for the Optionee's service as
a member of the Board of Directors of the Company (the "Board of Directors").
NOW, THEREFORE, the parties hereto, intending to be legally
bound, do agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions
of this Agreement and the Plan, the Company hereby grants to the Optionee the
right and option to purchase from the Company all or part of an aggregate of
5,000 shares of Common Stock. This option is not intended to qualify as an
incentive stock option within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended.
2. OPTION PRICE AND TIME OF EXERCISE. The per-share
purchase price at which the shares subject to option may be purchased by
Optionee pursuant to the exercise of this option shall be $3.00, which price
equals the closing sale price per share of the Common Stock on the American
Stock Exchange on June 14, 1995, the date of grant of this option. In
accordance with Section 6(a) of the Plan, such date is the third business day
following the June 9, 1995 Annual Meeting of Shareholders. The Optionee's
right to exercise this option shall vest as to 25% of the shares of Common
Stock underlying the option at the end of each of the first four years
following the date hereof. The right to exercise the option shall be
cumulative to the extent not theretofore exercised. The right to exercise the
option shall in all events expire, except as provided in Paragraph 5 below, at
the close of business on June 14, 2005.
3. METHOD OF EXERCISE AND PAYMENT FOR SHARES. This
option shall be exercised by written notice directed to the Company at its
principal office, specifying the number of shares to be acquired upon such
exercise and indicating whether the exercise is being paid for (i) in cash,
(ii) in shares of Common Stock already owned
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by the Optionee and valued at their fair market value on the date of exercise
of the option, or (ii) by a combination of (i) and (ii) above.
4. NON-TRANSFERABILITY. This option is not transferable
by the Optionee except as otherwise provided in Paragraph 5 below, and during
the Optionee's lifetime is exercisable only by him or her.
5. EXERCISE AFTER TERMINATION OF MEMBERSHIP ON THE BOARD
OF DIRECTORS. In the event of termination of the Optionee's membership on the
Board of Directors by reason of total and permanent disability, this option
shall continue to mature and become exercisable in accordance with Paragraph 3
above and the Optionee may exercise the matured installment(s) at any time
within one year after such disability, but in no event after the expiration
date of the option. In the event of the termination of the Optionee's
membership on the Board of Directors by reason of the death of the Optionee,
the option shall immediately mature and become exercisable in full by the
Optionee's legal representative at any time within one year after death, but in
no event after the expiration date of the option. In the event of the
termination of the Optionee's membership on the Board of Directors other than
by reason of total and permanent disability or death, this option will expire
three months after such termination.
6. ADJUSTMENT. If there shall be any change in the
Common Stock through a merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, exchange of stock or other change in the corporate
structure, appropriate adjustments shall be made in the aggregate number and
kind of shares or other securities subject to this option and in the purchase
price of this option to reflect such change.
7. MERGER, CONSOLIDATION OR LIQUIDATION. At least 30
days prior written notice of a merger, consolidation or liquidation of the
Company shall be given by the Company to the Optionee, in which case vesting
shall accelerate and the Option shall become fully exercisable. Upon the
occurrence of a merger, consolidation or liquidation of the Company, this
option shall automatically terminate unless the surviving or acquiring
corporation shall assume this option or substitute a new option for it.
8. OPTION NON-ASSIGNABLE AND NON-TRANSFERABLE. This
option and all rights hereunder shall be non-assignable and non-transferable
other than by will or the laws of descent and distribution and shall be
exercisable during the Optionee's lifetime only by the Optionee or the
Optionee's guardian or legal representative.
9. LIMITATION OF RIGHTS.
(a) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan
nor this option shall constitute or be evidence of any agreement or
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understanding, express or implied, that the Optionee has a right to continue as
a member of the Company's Board of Directors for any period of time.
(b) NO STOCKHOLDER'S RIGHTS FOR OPTIONS. The Optionee
shall have no rights as a stockholder with respect to the shares covered by
this option until the date of the issuance of a stock certificate therefor, and
no adjustment will be made for any dividends or other rights for which the
record date is prior to the date such certificate is issued.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be signed by its President and its Secretary, and the Optionee has affixed his
or her signature hereto.
XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Optionee
Attest: HANGER ORTHOPEDIC GROUP, INC.
XXXXXXX X. XXXXX By: XXXX X. XXXXX
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Xxxxxxx X. Xxxxx Xxxx X. Xxxxx
Secretary President
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