Exhibit 4(d)
HANGER ORTHOPEDIC GROUP, INC.
Non-Qualified Stock Option Agreement
THIS AGREEMENT is made as of March 18, 2002, by and between HANGER
ORTHOPEDIC GROUP, INC., a Delaware corporation (the "Company"), and Xxxx
Xxxxxxxx (the "Optionee").
W I T N E S S E T H:
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WHEREAS, the Company desires to grant to Optionee a non-qualified stock
option to purchase twenty thousand (20,000) shares of the Company's common
stock, par value $0.01 per share (the "Common Stock"), in consideration for
Optionee's service to the Company.
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,
the Company hereby grants to Optionee the right and option to purchase from the
Company all or part of an aggregate of twenty thousand (20,000) 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 (the "Code").
2. Option Price and Time of Exercise. The per-share purchase price at
which the shares subject to option hereunder may be purchased by Optionee
pursuant to his exercise of this option shall be $9.20, which price equals the
closing sale price per share of the Common Stock on the New York Stock Exchange
on March 18, 2002, the date of grant of this option. 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, after the day preceding the
tenth anniversary hereof (the "Option Period").
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 by Optionee and valued at their fair market value on the
date of exercise of the option, or (iii) by a combination of (i) and/or (ii)
above.
4. Non-transferability of Option; Restricted Securities. This option is
not transferable by Optionee, except only after the written consent of the
Company, which shall not be unreasonably withheld, in connection with a merger
of the Optionee or the transfer by the Optionee of all or substantially all of
its assets (including this option), in which event this option may be
transferred by the Optionee to such successor after the issuance of the written
consent of the Company. The shares of Common Stock acquired by Optionee upon any
exercise of this option shall be "restricted securities" within the meaning of
Rule 144(a)(3) under the Securities
Act of 1933, and Optionee shall be required to comply with and satisfy all
applicable laws in any resale transactions conducted by Optionee which involve
any such shares of Common Stock so acquired by Optionee under this option.
5. Exercise After Death or Termination of Service to the Company. In the
event Optionee dies before the expiration of this option, Optionee's estate, or
the person or persons to whom his rights under this option shall pass by will or
the laws of descent and distribution, may exercise this option, to the extent
exercisable at the date of death, at any time within twelve (12) months
following Optionee's death (but in any event before the expiration of the Option
Period). In the event Optionee ceases to be employed by the Company or a
subsidiary of the Company by reason of termination of employment other than for
cause (as defined in Optionee's Employment Agreement with the Company or a
subsidiary of the Company) or other than for the voluntary termination of
employment by Optionee, before expiration of the Option Period, the shares of
Common Stock underlying this option, to the extent not previously exercised,
shall become fully vested and exercisable, with this option thereafter being
exercisable at any time within twelve (12) months immediately following such
termination of employment (but in any event before the expiration of the Option
Period). If Optionee's employment is otherwise terminated for cause or the
voluntary termination of employment by Optionee, this option shall immediately
terminate at the time of such termination of employment.
6. Adjustments Upon Certain Events. If the Company shall at any time
increase or decrease the number of its outstanding shares of Common Stock by
means of the payment of a stock dividend, a stock split or subdivision of
shares, a consolidation or combination of shares, or through a reclassification
of the then outstanding shares of Common Stock, then the aggregate number of
shares of Common Stock subject to this Option and the exercise price of this
Option shall be adjusted proportionately.
7. Merger, Consolidation, Acceleration of Option Vesting.
(a) Effect of Transaction. Upon the occurrence of any of the following
events, if the notice required by Section 7(b) hereof shall have first been
given, the option granted hereunder shall automatically terminate and be of no
further force and effect whatsoever, without the necessity for any additional
notice or other action by the Company: (i) the merger, consolidation or
liquidation of the Company or the acquisition of its assets or stock pursuant to
a nontaxable reorganization, unless the surviving or acquiring corporation, as
the case may be, shall assume all outstanding options of the Company or
substitute new options for them pursuant to Section 425(a) of the Code; (ii) the
dissolution or liquidation of the Company; (iii) the appointment of a receiver
for all or substantially all of the Company's assets or business; (iv) the
appointment of a trustee for the Company after a petition has been filed for the
Company's reorganization under applicable statutes; or (v) the sale, lease or
exchange of all or substantially all of the Company's assets and business.
(b) Notice of Such Occurrences. At least 30 days' prior written notice
of any event described in Section 7(a) hereof, except the transactions described
in subsections 7(a)(iii) and (iv) as to which no notice shall be required, shall
be given by the Company to Optionee. If
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Optionee is so notified, he may exercise all or a portion of the entire
unexercised portion of this option at any time before the occurrence of the
event requiring the giving of notice, regardless of whether all conditions of
exercise relating to continuation of employment for specified periods of time
have been satisfied. Such notice shall be deemed to have been given when
delivered personally to Optionee or when mailed to Optionee by registered or
certified mail, postage prepaid, at Optionee's last address known to the
Company.
8. Binding Effect, Entire Agreement. Subject to the limitations stated
above, this Agreement shall be binding upon and inure to the benefit of the
personal representatives of Optionee and the successors of the Company. This
Agreement constitutes the entire agreement between the parties and cannot be
altered, modified, or changed in any way unless made in writing and signed by
the party against whom such alteration, modification, or change is asserted.
This Agreement shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its duly authorized officer and attested by its Secretary, and Optionee has
affixed his signature hereto.
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Optionee
Attest: HANGER ORTHOPEDIC GROUP, INC.
/s/ Xxxxx Xxxxxxxx /s/ Xxxx X. Xxxxx
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Xxxxx Xxxxxxxx Xxxx X. Xxxxx
Secretary Chairman and Chief Executive Officer
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