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Exhibit 10.1

 

AGREEMENT AND GENERAL RELEASE

 

This AGREEMENT AND GENERAL RELEASE (this “Agreement”) is dated as of May 21, 2012 (the “Effective Date”), by and between Hanger Prosthetics & Orthotics, Inc., a Delaware corporation (the “Company”); and Thomas F. Kirk, an individual residing at 801 West Fifth Street, Apartment 2506, Austin, Texas 78703 (“Executive”). The Company and Executive are hereinafter collectively referred to as the “parties.” Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Fifth Amended and Restated Employment Agreement, effective as of January 1, 2012, between the Company and Executive (the “Employment Agreement”).

 

In consideration of the mutual promises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows:

 

1.             Subject to Section 6.3 of the Employment Agreement, the parties agree that Executive’s employment with the Company and its affiliates will end upon Executive’s retirement at the close of business on December 31, 2012 (the “Retirement Date”), and that this Agreement sets forth the terms and conditions regarding the cessation of and retirement from Executive’s employment with the Company. Furthermore, Executive recognizes and agrees that this Agreement, which includes the Final Release attached hereto as Exhibit A (as defined herein), sets forth all consideration and/or compensation (e.g., salary, bonus, commission, vacation pay, equity grants under all applicable equity plans) to which Executive is entitled in connection with Executive’s employment with the Company and the cessation thereof and retirement therefrom, and that, except as specifically set forth herein in Paragraphs 2 and 10 and in the Final Release in Paragraph 2 thereof, Executive has no right to any further compensation and/or consideration from the Company, whether pursuant to the Employment Agreement or otherwise. Specifically, all of the provisions of Sections 1, 2, 3 (except Sections 3.1, 3.2, 3.4, 3.5, 3.6 and 3.7, which shall survive through the Retirement Date), 6 (except Sections 6.3 and 6.6, which shall survive through the Retirement Date) and 7 of the Employment Agreement will cease to be in effect as of the Effective Date. All other provisions of the Employment Agreement will remain in effect on and after the Effective Date pursuant to their terms.

 

2.             The Company agrees to employ Executive and to provide certain payments and benefits to Executive pursuant to the terms and conditions set forth below:

 

(a)           The Company will use its best efforts to cause the Board of Directors of Hanger Orthopedic Group, Inc. (“Hanger”) to elect Executive to the executive officer position of Vice Chairman of Hanger.

 

(b)           Between the date Executive executes this Agreement and his Retirement Date, and subject to Section 6.3 of the Employment Agreement, Executive will perform his duties as Vice Chairman of Hanger (as prescribed by the Board of Directors of Hanger) and provide support and assistance as necessary or appropriate for the transition of his former duties as Chief Executive Officer of Hanger and an officer of the applicable direct and indirect subsidiaries of Hanger.

 

(c)           During the term of this Agreement, the Company will continue Executive’s current salary payments, on their regular schedule, and will continue his current employee benefits during such time, subject to any changes in coverage required by the terms of

 



 

the applicable employee benefits plan.

 

(d)           Notwithstanding any contrary provisions in the Employment Agreement or any other document, as a condition for Executive to:

 

(i)      Be eligible to receive the bonus, if any, provided for in Section 3.2 of the Employment Agreement for the Termination Year (i.e., 2012);  and

 

(ii)     Receive the benefit payments provided under the Hanger Supplemental Executive Retirement Plan;

 

Executive must execute on or immediately following Executive’s last day of employment with the Company, and not revoke, the Acknowledgement, Agreement and Final General Release attached hereto as Exhibit A (the “Final Release”).  In connection therewith, and contingent on the effectiveness of the Final Release, the Company shall waive the requirement that Executive provide one (1) year’s advance notice of his expected Retirement Date to permit Executive to retire on December 31, 2012 and still be eligible to receive the bonus payment described in Paragraph (d)(i) hereof.  Such waiver of the one (1) year’s notice requirement for retirement shall not apply for any purpose other than Executive’s eligibility to be paid the 2012 annual bonus, if any.

 

(e)           Notwithstanding any provision of any equity plans or award agreements thereunder to the contrary:

 

(i)      No shares of restricted stock granted to Executive shall vest after the Retirement Date; and

 

(ii)     Executive’s vested stock options may be exercised until, and shall terminate upon, the applicable dates set forth in the option award agreements.

 

(f)            For purposes of all equity, retirement and benefit plans, and any agreements relating thereto, and notwithstanding any contrary provisions therein, Executive’s employment and service will be deemed to end on the Retirement Date.

 

3.             In exchange for the Company’s execution of this Agreement and Executive’s receipt of the consideration and benefits set forth in Paragraph 2, 5 and 14 hereof and the release set forth in Paragraph 4 hereof, Executive agrees to and hereby does release and discharge the Company and its parent, subsidiary and affiliated companies, and their respective owners, agents, employees, directors, officers and all their predecessors, successors and assigns (“Hanger Related Parties”), from any and all claims, causes of action, damages, demands and recoveries of any kind, whether known or unknown, which Executive, either individually or in any representative capacity, has or ever has had, or ever in the future may have and which are based on acts or omissions occurring up to and including the date of this Agreement, including, without limitation, any and all claims, causes of action, damages, demands and recoveries arising out of or relating to Executive’s employment with the Company and its affiliates, including, without limitation, the change in his titles, duties and responsibilities and change in the terms of his Employment Agreement, as specified in this Agreement, and the cessation of and/or retirement from such employment; provided that Executive does not waive any claims for workers’

 

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compensation benefits or vested benefits under the Company or Hanger benefit plans, if applicable. Included within the release set forth in the preceding sentence, without limiting its scope, are claims arising under Title VII of the Civil Rights Act of 1964, as amended, or the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), or any other federal, state or local civil rights or employment law and/or contract or tort law. Executive does not waive claims under workers’ compensation laws or that may arise after the date this Agreement is executed. EXECUTIVE UNDERSTANDS THAT THIS AGREEMENT RELEASES ALL CLAIMS BASED ON FACTS OR OMISSIONS OCCURRING ON OR BEFORE THE DATE OF THIS AGREEMENT, EVEN IF EXECUTIVE DOES NOT, AT THE TIME EXECUTIVE SIGNS THIS AGREEMENT, HAVE KNOWLEDGE OF THOSE FACTS OR OMISSIONS.

 

4.             In exchange for Executive’s execution of this Agreement and the Company’s receipt of the release set forth in Paragraph 3, the Company agrees to and hereby does release and discharge Executive and all of Executive’s predecessors, successors and assigns (“Executive’s Related Parties”), from any and all claims, causes of action, damages, demands and recoveries of any kind, whether known or unknown, which the Company, either individually or in any representative capacity, has, e


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