Corporate Governance and Nominating Committee

​The Corporate Governance and Nominating Committee (the “Committee”) shall provide assistance to the Board of Directors of Hanger, Inc. (the “Company”) by engaging in the following activities, each of which is described in further detail below:

1. Identifying individuals qualified to become directors and recommending to the Board of Directors candidates for all directorships to be filled by the Board of Directors or by the stockholders of the Company, consistent with the criteria established by the Committee and approved by the Board of Directors;

2. Identifying and recommending directors qualified to serve on the committees established by the Board of Directors;

3. Developing and recommending to the Board of Directors a set of corporate governance guidelines applicable to the Company, including matters of (i) board organization, membership and function, (ii) committee structure and membership and (iii) succession planning for the Chief Executive Officer of the Company;

4. Establishing and maintaining the Company’s corporate governance processes and procedures to promote the conduct of the Company’s business with the highest standards of responsibility, ethics and integrity; and

5. Overseeing the evaluation of the Board of Directors.

Committee Membership and Qualifications


The Committee shall be comprised of at least three members of the Board of Directors, each of whom is determined by the Board of Directors to be “independent” in accordance with the rules of the New York Stock Exchange, Inc. (the “NYSE”) as well as other applicable laws, regulations and rules.

Appointment and Removal of Committee Members


The members of the Committee shall be appointed by the Board of Directors annually or as necessary to fill vacancies. Each member shall serve until his or her successor is duly elected and qualified or until such member’s earlier resignation or removal. Any member of the Committee may be removed, with or without cause, by a majority vote of the Board of Directors.

Chairperson


The Chairperson of the Committee shall be appointed by the Board of Directors in consultation with the Chairman of the Board of Directors. The Chairperson will chair all regular sessions of the Committee and, in consultation with the Chairman of the Board of Directors, set the agenda, frequency and length of the meetings of the Committee.

Meetings


The Committee shall meet at least two times annually, or more frequently as circumstances dictate.  The Committee may invite to its meetings any officer, employee or director of the Company and such other persons as it deems appropriate in order to carry out its responsibilities.

Responsibilities and Duties


The Committee believes the policies and procedures by which it carries out its responsibilities should remain flexible, to best react to changing conditions and to be in the best position to ensure to the Board of Directors and stockholders of the Company that the Company’s governance principles, procedures and practices continue to assist the Board of Directors and the Company’s management to effectively and efficiently promote the best interests of the Company’s stockholders. In furtherance of its purpose, the Committee shall have the following responsibilities and duties:

Recommendations Relating to the Selection of Director Candidates, Director Independence and Related Person Transactions


1. The Committee shall establish criteria for selection of potential directors, taking into account all factors it considers appropriate, which may include, among other factors, strength of character, mature judgment, career specialization, relevant technical skills or financial acumen, diversity of viewpoints and industry knowledge.  

 2. The Committee shall identify individuals believed to be qualified as candidates to serve on the Board of Directors and recommend to the Board of Directors candidates for all directorships to be filled by the Board of Directors or by the stockholders at an annual or special meeting. In identifying candidates for membership on the Board of Directors, the Committee shall take into account the criteria for selection established by the Committee and the extent to which the candidate would fill a present need on the Board of Directors. In fulfilling its responsibilities as outlined above, the Committee shall consult from time to time, as appropriate, with the Chairman of the Board of Directors.

 3. The Committee shall review the qualifications and independence of existing Board of Directors members on an annual basis.  In addition, the Committee will, at least annually, review all directors’ service on the boards of other publicly-held entities to ensure that such service does not detract from a director’s ability to devote the necessary time and attention to the Company.  The Committee will make recommendations to the full Board of Directors on whether each director should stand for re-election. The Committee shall recommend to the Board of Directors the removal of a director where appropriate.   

 4. To avoid any potential conflicts of interest, the Committee will review any director’s appointment to any other publicly-held entity board prior to such director accepting such appointment.

5. The Committee shall consider and make recommendations to the Board of Directors on matters relating to the retirement of Board of Directors members, including term limits or age caps.  

 6. The Committee shall conduct all necessary and appropriate inquiries into the backgrounds and qualifications of possible candidates. In that capacity, the Committee shall have sole authority to retain and to terminate any search firm to be used to assist it in identifying candidates to serve as directors of the Company, including sole authority to approve the fees payable to such search firm and any other terms of retention.

 7. The Committee shall recommend to the Board of Directors standards for determining director independence consistent with the requirements of the Securities and Exchange Commission, the NYSE and other applicable guidelines on best practices. The Committee shall also periodically review the director independence standards established by the Board of Directors and recommend such changes in those standards as the Committee determines to be appropriate.

 8. The Committee shall consider questions of independence and possible conflicts of interest of members of the Board of Directors and executive officers. The Committee shall be responsible for overseeing the implementation of the Company’s Policies and Procedures Regarding Related Person Transactions.

 9. The Committee shall review and make recommendations, as the Committee deems appropriate, regarding the composition and size of the Board of Directors in order to ensure the Board of Directors has the requisite expertise, and its membership consists of persons with sufficiently diverse and independent backgrounds, as necessary to promote the best overall interests of the Company and its stockholders, taking into account the size and breadth of the Company’s business. In fulfilling this responsibility, the Committee shall, as appropriate, consult with the Chairman of the Board of Directors.  

 10. The Committee shall oversee and maintain a comprehensive orientation process for all new directors. The Committee may from time to time establish limitations and conditions on reimbursements to directors for continuing education expenses.

 11. The Committee shall establish the evaluation criteria for the Board of Directors’ annual self-evaluation.  At least annually, and as circumstances otherwise dictate, the Committee shall oversee and manage evaluations of the Board of Directors in order to determine whether the Board of Directors and its committees are functioning effectively.

12. The Committee has adopted a policy pursuant to which a stockholder who has owned at least 2% of the Company’s outstanding shares of common stock for at least one year may recommend a director candidate to the Committee.  The Committee will consider such candidate when there is a vacancy on the Board of Directors either as a result of a director resignation or an increase in the size of the Board of Directors.  There will not be any difference between the manner in which the Committee evaluates a candidate timely recommended by a stockholder and the manner in which the Committee evaluates any other nominee, except that in no event will a candidate recommended by a stockholder be recommended for nomination by the Committee if such candidate is not independent as defined by NYSE listing standards.  The Committee will have sole discretion as to whether to nominate any candidate recommended by a stockholder.

Committee Selection and Composition

 1. The Committee shall recommend members of the Board of Directors to serve on the committees of the Board of Directors, giving consideration to the criteria for service on each committee as set forth in the charter for such committee, as well as to any other factors the Committee deems relevant, and, where appropriate, make recommendations regarding the removal of any member of any committee. In fulfilling this responsibility, the Committee shall, as appropriate, consult with the Chairman of the Board of Directors.

 2. The Committee shall recommend members of the Board of Directors to serve as the Chairperson of the committees of the Board of Directors. In fulfilling this responsibility, the Committee shall  consult with the Chairman of the Board of Directors and the Chief Executive Officer.

 3. The Committee shall establish, monitor and recommend the purpose, structure and operations of the various committees of the Board of Directors and the qualifications and criteria for membership on each committee of the Board of Directors.  In consultation with the Chairman and the Chief Executive Officer, the Committee will make recommendations regarding periodic rotation of directors among the committees and submit such recommendations to the entire Board of Directors for final approval. The Committee shall recommend any term limitations of service on any Board of Directors committee.

 4. The Committee shall periodically review the charter and composition of each committee of the Board of Directors and make recommendations to the Board of Directors for the creation of additional committees or the elimination of Board of Directors committees.


Corporate Governance

 1. The Committee shall consider the adequacy of the articles of incorporation and bylaws of the Company and recommend to the Board of Directors, as conditions dictate, that it propose amendments to the articles of incorporation and by laws for consideration by the Board of Directors and/or the stockholders, as appropriate.

 2. The Committee shall develop and recommend to the Board of Directors a set of corporate governance guidelines appropriate for the Company and consistent with the rules and regulations of the NYSE, the Securities and Exchange Commission and best practices and shall keep abreast of developments with regard to corporate governance to enable the Committee to make recommendations to the Board of Directors in light of such developments as may be appropriate.

 3.  The Committee shall periodically review the Company’s corporate governance guidelines and make recommendations for changes as in its judgment are appropriate.

4. Review and make recommendations to the Board of Directors regarding stockholders’ proposals that relate to corporate governance.


Continuity/Succession Planning Process

 1. The Committee shall oversee and approve the Chief Executive Officer continuity planning process in consultation with the Board of Directors, to address both succession in the ordinary course of business and contingency planning in the case of unexpected events. In this regard, the Committee shall review and evaluate the succession plan relating to the Chief Executive Officer and make recommendations to the Board of Directors with respect thereto.

Review and Reporting

 1. The Committee shall develop and recommend to the Board of Directors for its approval an annual self-assessment process of the Board of Directors and its committees. The Committee shall oversee, and communicate to the Board of Directors the results of, the annual self-assessment of the Board of Directors.

 2. The Committee shall report regularly to the Board of Directors (i) following meetings of the Committee, (ii) with respect to such other matters as are relevant to the Committee’s discharge of its responsibilities and (iii) with respect to such recommendations as the Committee may deem appropriate. The report to the Board of Directors may take the form of an oral report by the Committee’s Chairperson or any other member of the Committee designated by the Committee to make such report.

 3. The Committee shall maintain minutes or other records of meetings and activities of the Committee.


Stockholders and Stock Ownership

 1.  The Committee will maintain stock ownership guidelines for directors of the Company. These guidelines may be waived at the discretion of the Committee for directors joining the Board of Directors from government, academia, or similar professions, or in other situations that the Committee may deem appropriate.

 2. The Committee will establish and maintain procedures for stockholders to communicate directly to a particular director, the non-management directors as a group, the lead independent director, or the full Board of Directors.


Code of Business Conduct and Ethics

The Committee shall periodically review the Company’s Code of Business Conduct and Ethics and take such actions as the Committee deems necessary or appropriate.

Delegation to Subcommittees


The Committee shall have the authority to delegate any of its responsibilities to a subcommittee of the Committee.

Studies and Investigations


The Committee shall have the power and authority to conduct or authorize studies and investigations into any matter of interest or concern within the scope of its responsibilities that the Committee deems appropriate, and shall have the sole authority to retain independent counsel, consultants or other experts to assist in the conduct of any such study or investigation, including the authority to approve fees payable to such experts and any other terms of retention.

Annual Performance Evaluation


The Committee shall review and evaluate, at least annually, the performance of the Committee, including reviewing the compliance of the Committee with this Charter. In addition, the Committee shall review and reassess, at least annually, the adequacy of this Charter and recommend to the Board of Directors any improvements to this Charter that the Committee considers necessary or valuable. The Committee shall conduct such evaluations and reviews in such manner as it deems appropriate.

Last revised: February 7, 2013

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