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EXHIBIT 10(eeee)
AGREEMENT
AGREEMENT, made as of July 31, 1995, by and between HANGER
ORTHOPEDIC GROUP, INC. (the "Company"), 0000 Xxx Xxxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, and XXXXXX X. XXXXXXXXXXX ("RJM") 000 Xxxx Xxxx, Xxx Xxxxxx,
Xxxxxxxxxxx 00000.
WHEREAS, RJM has been serving as Chairman of the Board and
Chief Executive Officer of the Company since 1989;
WHEREAS, RJM has determined to submit, and the Company is
agreeable to accept, his resignation from such positions; and
WHEREAS, RJM and the Company each wish to enter into an
agreement regarding RJM's future relationship with the Company that is
different in terms from the provisions in RJM's Employment Agreement with the
Company dated May 16, 1994.
WHEREAS, RJM and the Company both waive the requirement
contained in the Employment and Non-Compete Agreement dated May 16, 1994 and
RJM to give the Company not less than three months notice.
IT IS NOW, THEREFORE, hereby agreed as follows:
1. RJM will, simultaneously with the execution of this
Agreement, submit his resignation as Chairman of the Board and Chief Executive
Officer of the Company, said resignation will be effective as of the close of
business on July 31, 1995.
2. RJM will remain a director of the Company until the
next Annual Meeting of Shareholders, unless determined otherwise by the
shareholders. Whether RJM will be a member of the slate of directors presented
to the shareholders at the Company's next Annual Meeting will be determined by
the Board in accordance with its normal procedures.
3. RJM will be retained by the Company as an independent
consultant at his current base annual compensation from August 1, 1995 through
July 31, 1996 subject to the conditions set forth herein. For the period from
August 1, 1995 through January 31, 1996, RJM's retention and payment is
guaranteed. For the period from February 1, 1996 through July 31, 1996, RJM's
retention and payment will be contingent upon his availability to the Company
for reasonable assignments as requested by the Company relating to possible
acquisitions or other corporate financing activities. RJM shall receive at
least ten (10) days advance notice of such assignments and the Company agrees
to consider in good faith the opinion of RJM as to the nature and timing of
such assignments. Such assignments shall cumulatively be for no more than one
week duration per quarter unless the assignment relates to a fee-based
transaction pursuant to Paragraphs 4 or 5 hereof. If, during this
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period, RJM is, in the reasonable business judgment of the Board, not available
to perform such assignments in a timely fashion or if RJM is engaged in
business activities or conduct that, in the reasonable business judgment of the
Board, are adversarial or detrimental to the business or business prospects of
the Company, the Board reserves the right to terminate the consulting
arrangement upon written notice to RJM. The nature of any assignments given to
RJM during this consulting period must be approved by the Board.
4. If a transaction, initiated by RJM subsequent to July
31, 1995, results in a sale of the Company, or any portion thereof, RJM will be
paid a fee to be negotiated with the Board at the time a transaction
opportunity is presented by RJM to the Company. The fee will be in accordance
with generally accepted industry standards for comparable transactions.
5. If the Company consummates an acquisition introduced
by RJM subsequent to July 31, 1995, or if RJM is instrumental in raising
capital for the Company, the Company will pay RJM a fee to be negotiated with
the Board on a case-by-case basis prior to any substantive discussions with the
proposed acquisition company or source of financing. Such fee will be in
accordance with generally accepted industry standards for comparable
transactions.
6. With respect to any activities encompassed by
Paragraphs 4 and 5 above, RJM will serve at the direction of the Company's
Chief Executive Officer and/or the Board and the fee arrangement would not be
applicable to a transaction with any company with which the Company has had
prior discussions about sale, acquisition or merger of a material nature, or
which is part of the Company's acquisition candidate file as of July 31, 1995.
7. RJM will continue to receive the health benefits he
is currently receiving through January 31, 1996. RJM will then be eligible to
pay for such benefits through COBRA. RJM will, beginning August 1, 1995,
reimburse the Company for automobile lease payments made on his behalf. RJM
will be paid a $1,000 per month expense allowance from August 1, 1995 through
January 31, 1996.
8. RJM will be reimbursed for any pre-approved business
expenses he incurs in fulfilling his obligations as a consultant when
conducting business performed at the direction of the Company.
9. Stock options previously granted to RJM by the
Company will continue to vest during the period RJM is consulting with the
Company pursuant to this Agreement. If the consulting arrangement is
terminated pursuant to Paragraph 3 hereof, the vesting of options will also
cease at the time of termination. RJM will have six (6) months from the end of
the consulting period to exercise the options.
10. This Agreement supersedes the Employment Agreement
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between RJM and the Company dated May 16, 1994 and the parties hereto agree
that this Agreement, which can only be amended in writing, shall control the
relationship between RJM and the Company subsequent to July 31, 1995, with the
exception that the provisions of Paragraph 5 relating to non-competition and
Paragraph 6 relating to Confidential Information shall remain in full force and
effect during the term of RJM's consulting period.
11. The Company agrees to indemnify RJM for any past,
present or future claims and related expenses to defend such claims brought
against RJM if such claims are related to his duties carried out in his
capacity of employee or director.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of this date first above written.
Attest (Seal): HANGER ORTHOPEDIC GROUP, INC.
XXXXXXX X. XXXXX By: XXXX X. XXXXX
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Xxxxxxx X. Xxxxx Xxxx X. Xxxxx
Secretary President
XXXXXX X. XXXXXXXXXXX
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Xxxxxx X. Xxxxxxxxxxx
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