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’
2
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