Committees

The purpose of the Audit Committee (“Committee”) of the Board of Directors (“Board”) of Hanger, Inc. (the “Company”) is to (A) assist the Board in oversight of (i) the integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the qualifications and independence of the independent registered public accounting firm (the “Independent Auditor”), and (iv) the performance of the Company’s internal audit function and Independent Auditor; and (B) review and approve an audit committee report as required by the Securities and Exchange Commission to be included in the Company’s annual proxy statement.

Membership

The Committee will consist of not less than three members of the Board. Each member of the Committee will meet the requirements of the applicable rules of the New York Stock Exchange and the Securities and Exchange Commission and, accordingly, (i) will have no relationship to the Company that may interfere with the exercise of his or her independence from management and the Company nor receive consulting or other fees from the Company (other than Board or Committee fees), and (ii) will be financially literate, or be able to become financially literate within a reasonable period of time after appointment to the Committee. At least one member of the Committee shall be deemed to be an “audit committee financial expert” within the meaning of Securities and Exchange Commission rules and at least one member of the Committee must have accounting or related financial management expertise. The member of the Committee deemed to be an “audit committee financial expert” and the member having accounting or related financial management expertise may be the same member. No member will serve as a member of the audit committee of more than two other public company boards of directors.

Meetings and Subcommittees

The Committee shall meet at least four times per year or more frequently as circumstances require. The Committee may form and delegate authority to subcommittees when appropriate.

Responsibilities

The Committee’s oversight responsibilities will include the following:

Independent Registered Public Independent Auditor

1. The Committee will have the ultimate authority and responsibility (a) to select (or nominate for shareholder approval), evaluate and, where appropriate, replace the Independent Auditor, (b) for the compensation of the Independent Auditor (the funding of which the Company shall provide), and (c) the oversight of the work of the Independent Auditor (including resolution of disagreements between management and the Independent Auditor regarding financial reporting).
2. The Committee shall obtain and review a report from the Independent Auditor at least annually regarding (a) the Independent Auditor’s internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the Independent Auditor, (c) any steps taken to deal with any such issues, and (d) all relationships between the Independent Auditor and the Company, in accordance with the Public Company Accounting Oversight Board standards.
3. The Committee will (a) monitor and pre-approve all audit and non-audit services provided by the Independent Auditor and the respective fees paid to the Independent Auditor for such; (b) discuss with the Independent Auditor any such disclosed relationships and their impact on the Independent Auditor’s objectivity or independence; and (c) take appropriate action in response to the Independent Auditor’s report with respect to relationships between the Independent Auditor and the Company referenced in Section (2)(d) to satisfy the Committee of the firm’s independence.
4. The Committee will review and discuss with the Independent Auditor the annual audit plan and its scope.
5. The Committee shall review with the Independent Auditor any audit problems or difficulties and management’s response thereto.
6. The Committee shall serve as the Board’s primary avenue of communication with the Independent Auditor, which shall report directly to the Committee, and shall ensure understanding by the Independent Auditor and management that the Independent Auditor is ultimately accountable to the Committee.
7. The Committee shall provide the opportunity for the Independent Auditor to meet with the full Board as deemed necessary and appropriate by the Committee.
8. The Committee shall be responsible for establishing policies for the Company’s hiring of employees or former employees of the Independent Auditor.

Internal Auditors

9. The Committee shall serve as the Board’s primary avenue of communication with the Director of Internal Audit, who shall report directly to the Committee.
10. The Committee shall meet with the Director of Internal Audit at least quarterly and the Director of Internal Audit shall communicate with the Chief Executive Officer and Chief Financial Officer at least quarterly.
11. The Committee shall instruct the Director of Internal Audit to attend all regularly scheduled Committee meetings, except for executive sessions to which he or she is not specifically invited.
12. The Committee shall review an annual report provided by the Director of Internal Audit on the results of annual internal audit activities, and the Director of Internal Audit shall keep the Committee informed about regulatory matters, internal controls issues and internal audit matters.
13. The Committee shall review and concur in the appointment, replacement, reassignment or dismissal of the Director of Internal Audit.
14. The Committee shall confirm and assure the independence of the internal auditors.
15. The Committee shall review the scope of the annual internal audit plan and the degree of coordination with the Independent Auditor.
16. The Committee shall review periodically the internal audit activities, staffing and budget.

Financial Statements

17. The Committee shall inquire of the Independent Auditor and management as to the acceptability and appropriateness of financial accounting practices and disclosures used or proposed by the Company in connection with the preparation of the financial statements.
18. The Committee shall review and discuss with management and the Independent Auditor at the completion of the annual audit examination:
• The Company’s financial statements and related financial disclosures, including (a) the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and (b) Sarbanes-Oxley Act Sections 302 and 906 internal controls disclosures and certifications, as included in its filing on Form 10-K,
• The Independent Auditor’s audit of the financial statements and its report,
• Any significant changes in the audit plan,
• The SAS 61 Communication (as hereinafter defined), and
• Any other matters required to be disclosed.
19. The Committee shall review with management and the Independent Auditor the Company’s quarterly financial statements including (a) the “Management’s Discussion and Analysis of Financial Condition” and (b) Sarbanes- Oxley Act Sections 302 and 906 internal controls disclosures and certifications, to be included in the Company’s Quarterly Reports on Form 10-Q and review with the Independent Auditor the matters required to be discussed by Statement on Auditing Standards AU Section 722 as in effect at that time.
20. The Committee shall review and approve related-party transactions that are required to be disclosed in accordance with Securities and Exchange Commission regulations and discuss with management the business rationale for such transactions, if any.

Internal Financial and Accounting Control and Compliance Oversight Responsibilities

21. The Committee shall consider and review with the Independent Auditor, internal auditor and other members of management:
• Adequacy of the Company’s internal controls.
• Significant findings (“material weaknesses” and “significant deficiencies”) and recommendations of the Independent Auditor and internal auditor together with management’s proposed responsive actions.
22. The Committee is responsible for establishing whistleblower procedures to receive, retain and address complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, including procedures for employees’ confidential and anonymous submission of concerns.
23. The Committee shall discuss with the Company’s general counsel legal matters that may have a material impact on the Company’s financial statements or the Company’s compliance policies and internal controls; and consult with the Board’s Quality and Technology Committee with respect to the Company’s healthcare standards compliance policies.

Reporting

24. The Committee will review its own performance and the adequacy of this Charter on an annual basis and recommend changes, as necessary, to the Board.
25. The Committee shall report its activities to the Board at each regularly scheduled quarterly Board meeting and make recommendations to the Board with respect to matters within the purview of the Committee, as necessary or appropriate.
26. The Committee will prepare a report each year for inclusion in the Company’s annual proxy statement stating whether (a) the Committee reviewed and discussed the audited financial statements with management, (b) the Committee discussed with the Independent Auditor the matters required to be discussed by Auditing Standards No. 61 (AICPA, Professional Standards, Vol. 1. AU Section 380), as amended, as adopted by the Public Company Accounting Oversight Board in Auditing Standards No. 1301 (the “SAS 61 Communication”), (c) the Committee received the written disclosures and letter from the Independent Auditor required by the Public Company Accounting Oversight Board, and (iv) based on the foregoing review and discussions, the Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K.

Access and Communication

27. The Committee shall meet periodically, separately and privately with the Independent Auditor, the internal auditor and with the Company’s Chief Financial Officer and accounting officers to discuss any matters the Committee or these groups believe should be discussed privately with the Committee. The Committee will also inquire if management has placed any restrictions on the scope of activity of the independent or internal auditors.
28. The Committee shall have reasonable access to members of management, employees and any relevant information.

Advisors; Expenses

29. The Committee shall have the authority to engage outside legal, accounting and other advisors without Board approval. The Company shall provide funding for such engagements and any ordinary administrative expenses of the Committee.

Earnings Releases

30. The Committee shall, prior to releasing, review the Company’s earnings press releases and financial information and earnings guidance provided by the Company to shareholders and analysts.

Risk Assessment and Management

31. The Committee shall review with management and the Independent Auditor compliance with laws, regulations and internal procedures and contingent liabilities and discuss policies with respect to risk assessment and risk management.

As adopted by the Board of Directors on May 14, 2020

The Compensation Committee (the “Committee”) shall discharge the responsibilities of the Board of Directors of Hanger, Inc. (the “Company”) with respect to the Company’s compensation programs and compensation of the Company’s executives and directors. The Committee has overall responsibility for approving and evaluating the director and officer compensation plans, policies and programs of the Company.

COMMITTEE MEMBERSHIP AND QUALIFICATIONS

The Committee shall consist of not less than three members of the Board of Directors, each of whom shall (i) meet the independence requirements of the New York Stock Exchange LLC (the “NYSE”) that apply to any director serving on the compensation committee of the board of directors of an NYSE-listed company and (ii) shall be a “Non-Employee Director” under the qualifications set forth in Rule 16b-3 of the Securities Exchange Act of 1934.

Additionally, only those Committee members who satisfy the requirements of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code may participate in compensation decisions with respect to “qualified performance-based compensation” to the extent the Committee determines it is necessary to satisfy the conditions of the exemption from the deduction limit under Section 162(m).

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, on the recommendation of the Company’s Corporate Governance and Nominating Committee. 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 after recommendation by the Corporate Governance and Nominating Committee 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 agendas for Committee meetings.

MEETINGS

The Committee shall meet at least four times annually, or more frequently as circumstances dictate. Any member of the Committee may call meetings of the Committee.

The Committee shall meet regularly without Company management present. 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. A member of management shall not, however, be present at any discussion or review where his or her performance and compensation is being determined.

RESPONSIBILITIES AND DUTIES

In furtherance of its purpose, the Committee shall have the following responsibilities and duties:

SETTING COMPENSATION FOR EXECUTIVE OFFICERS AND DIRECTORS

1. The Committee shall review and approve the overall compensation philosophy of the Company.
2. The Committee shall review and approve corporate goals and objectives relevant to Chief Executive Officer and other executive officer compensation.
3. The Committee shall evaluate the performance of the Chief Executive Officer and other executive officers in light of those corporate goals and objectives set and, based on such evaluation shall determine and approve (either as a committee or together with the other independent directors, as directed by the Board of Directors) the annual salary, bonus, long-term incentive compensation (such as equity awards) and other executive benefits, direct and indirect, of the Chief Executive Officer and shall review the recommendations for the other executive officers as made by the Chief Executive Officer, and determine and approve the annual salary, bonus, long-term incentive compensation (such as equity awards) and other executive benefits of the other executive officers.
4. In determining the long-term incentive component of compensation of the Chief Executive Officer and the other executive officers, the Committee will consider various evaluation criteria, including the Company’s performance and relative shareholder return, the value of similar incentive awards to chief executive officers and other executive officers at comparable companies, the awards given to the Company’s Chief Executive Officer and other executive officers in past years and other relevant business and industry factors and trends.
5. In connection with executive compensation programs, the Committee shall:
1. Review and recommend to the Board of Directors, or approve, new executive compensation programs;
2. Review on a periodic basis the operations of the Company’s executive compensation programs to determine whether they are properly coordinated and achieving their intended purpose(s); and
3. Establish and periodically review policies for the administration of executive compensation programs.
6. The Committee shall periodically review and approve the perquisites offered to executive officers.
7. The Committee shall review and recommend to the Board of Directors compensation of directors as well as review and make recommendations in connection with directors’ and officers’ indemnification and insurance matters.
8. The Committee shall review and recommend to the Board of Directors, or approve, any contracts or other transactions with current or former directors and executive officers of the Company, including consulting arrangements, employment contracts, and severance or termination agreements.

INCENTIVE, EQUITY-BASED AND EXECUTIVE COMPENSATION PLANS

9. The Committee shall review the Company’s cash-based incentive compensation plans in which executive officers participate and the Company’s equity-based plans from time to time and, if necessary, shall either (a) amend such plans to the extent of the Committee’s authority under such plans or (b) make recommendations to the Board to amend such plans. In all cases, the Committee shall have and shall exercise all the authority of the Board of Directors with respect to the administration of such plans.
10. The Committee shall make recommendations to the Board of Directors with respect to the establishment of new cash-based incentive compensation plans in which executive officers will participate and new equity-based plans.
11. The Committee shall review and approve all equity compensation plans of the Company that are not otherwise subject to the approval of the Company’s shareholders.
12. The Committee shall review and make recommendations to the Board of Directors, or approve, all awards pursuant to the Company’s equity-based plans. The Committee may delegate certain equity granting authority to the Chief Executive Officer on an annual basis within the parameters of the securities law, applicable stock exchange rules and the terms of any existing equity compensation plan.
13. The Committee shall review and make recommendations to the Board of Directors regarding the approval of employee pension, profit sharing and benefit plans in which the majority of participants are executive officers.

Compensation Recovery Policy administration

14. The Committee shall be responsible for administering the Compensation Recovery Policy and for evaluating and recommending to the independent members of the Company’s Board of Directors whether recovery is appropriate, mandatory or impracticable under such policy and the specific amount, if any, to be recovered by the Company.

OVERSIGHT AND REPORTING

15. The Committee shall have the authority to engage an independent executive compensation consulting firm to assist the Committee in the performance of its responsibilities. Such assistance shall include the identification of executive compensation practices and data of other comparable corporations and the making of recommendations to the Committee relating to the form and terms of the Company’s executive incentive plans.
16. The Committee shall prepare annually a report on executive compensation (the “Compensation Report”) for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations of the Securities and Exchange Commission.
17. As part of its review and determinations concerning compensation of the executive officers and in connection with its preparation of the Compensation Report, the Committee shall take into account the advisory shareholder vote on executive compensation (the “say on pay” vote) for the most recent annual meeting of the Company in accordance with applicable laws and regulations (including voting standards) and prior say on pay votes.
18. The Committee shall determine and recommend to the Board of Directors a desired frequency for say on pay votes to be proposed to the Company’s shareholders at the annual meeting at least once every six years and in accordance with applicable laws, regulations and listing standards and prior shareholder votes.
19. The Committee shall, with the assistance of management, periodically evaluate the Company’s compensation policies and practices to assess whether potential actions to be taken by the Company’s employees in response to such policies and practices are likely to have a material adverse effect on the Company.
20. The Committee shall determine stock ownership guidelines for the executive officers and monitor compliance with such guidelines.
21. 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.
22. The Committee shall maintain minutes or other records of meetings and activities of the Committee.

DELEGATION TO SUBCOMMITTEES

To the extent applicable law permits, the Committee shall have the authority to delegate any of its responsibilities to a subcommittee of the Committee or to one or more officers of the Company.

STUDIES, INVESTIGATIONS AND ADVISORS

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. In addition, the Committee shall have the sole authority to retain legal counsel, compensation consultants, accountants, or other advisors to assist in the conduct of any such study or investigation or to otherwise provide advice to the Committee, including the authority to approve fees payable to such experts and any other terms of retention without approval from the Board of Directors or the management of the Company. The Committee will select a consultant or other advisor only after taking into consideration all factors relevant to that person’s independence from the management of the Company, including the following: (a) the provision of other services to the Company by the person that employs the consultant or other adviser; (b) the amount of fees received from the Company by the person that employs the consultant or other adviser, as a percentage of the total revenue of the person that employs the consultant or other advisor; (c) the policies and procedures of the person that employs the consultant or other advisor that are designed to prevent conflicts of interest; (d) any business or personal relationship of the consultant or other advisor with a member of the Committee; (e) any stock of the Company owned by the consultant or other advisor; (f) any business or personal relationship of the consultant or other advisor, or the person employing the advisor, with an executive officer; and (g) any other factors bearing on the consultant’s or other advisor’s independence as determined by applicable rules; provided that nothing in the foregoing may be construed to require the Committee to implement or act consistently with the advice or recommendations of the consultant or other advisor or to affect the ability or obligation of the Committee to exercise its own judgment in fulfillment of its duties. The foregoing evaluation shall not apply to in-house legal counsel. The Company shall pay any fees or expenses, including the ordinary administrative expenses of the Committee, that are necessary and appropriate in carrying out the Committee’s duties and reasonable compensation for any consultant or other advisor retained by the Committee.

ANNUAL PERFORMANCE EVALUATION

The Committee shall perform a review and evaluation, at least annually, of the performance of the Committee, including by 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 appropriate. The Committee shall conduct such evaluations and reviews in such manner as it deems appropriate.

As amended and adopted by the Board of Directors on August 18, 2021.

Statement of Purpose

The Corporate Governance & 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 four 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 at a minimum shall include, among other factors, strength of character, mature judgment, career specialization, relevant technical skills or financial acumen, diversity of viewpoints (which includes gender, ethnic or racial diversity, diversity of background, and/or other attributes that result in a more diverse and inclusive Board of Directors) 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 and must consent to any director’s appointment to any other for-profit 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 criteria for selection of directors established by the Board of Directors and recommend such changes in that criteria 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 for such persons.
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. 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.
11. 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 Certificate of Incorporation and By-laws of the Company and recommend to the Board of Directors, as conditions dictate, that it propose amendments to the Certificate 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 Chairman of the Board of Directors or the lead independent director, as applicable, 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.

Board of Director’s Orientation & Education and Development Program

The Committee shall oversee and maintain a comprehensive orientation process for all new directors. The Committee shall also administer the Board of Director’s Education and Development Program and shall report at least annually to the full Board of Directors on individual director compliance with the program requirements. The Committee may from time to time establish limitations or conditions on reimbursements to directors for continuing education expenses.

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 16, 2022

Statement of Purpose

The Quality & Compliance Committee (the “Committee”) is chartered by the Board of Directors to provide assistance to the Board in executing its responsibilities concerning:

1.   The Company’s environment regarding quality patient care, products and services, including patient and customer satisfaction;

2.  The Company’s clinical, scientific, technical and outcomes strategies; 

3. The Company’s compliance program, including providing input and guidance into the annual goals and performance review of the Chief Compliance Officer (CCO); and

4. The Company’s regulatory, legal and professional standards and efforts to maintain ethical and compliant operations. 

Composition and Meetings

The Quality & Compliance Committee shall consist of at least two directors appointed by, and who serve at the request of the Board. The Board shall designate one of the members of the Committee as its Chair. The Committee shall meet at least quarterly, or more frequently as circumstances may dictate. The Committee shall work with the Audit Committee as needed to review the Compliance Program. The Committee Chair will approve an agenda in advance of each meeting. 

Responsibilities and Duties 

The Quality & Compliance Committee shall oversee the Company’s quality and compliance strategic initiatives and/or monitor and evaluate the overall effectiveness of the programs as outlined below: 

1.  Oversee the Company’s overall programs inclusive of quality committees, compliance and scientific initiatives impacting clinical care, products and services. Activities include reviewing, periodic monitoring and approval of each program’s: (a) organization, implementation and effectiveness; (b) defined initiatives, indicators, and risk management.

2.  Support the CCO in the development and implementation of Compliance programs across all Hanger businesses.  Direct governance and leadership in all regulatory and clinical compliance matters within Hanger, Inc. except those financial reporting items specifically identified as the responsibility of the Audit Committee. Coordinate with the Audit Committee to ensure coverage of all areas. Direct CCO and CISO (Chief Information Security Officer) to coordinate monitoring of compliance with HIPAA rules and increased cyber security threats. 

3.  Support and review the development of clinical guidelines and outcomes measures.

4.  Evaluate effectiveness of the Company’s scientific and technological efforts and investments in developing new clinical services, products and businesses.

5.  Ensure proper communication of significant quality and compliance issues to the full Board of Directors.

6.  Review and reassess the adequacy of this Charter at least annually. Submit changes to the Charter to the Board for approval.

The Quality & Compliance Committee has the authority to conduct any investigation appropriate to fulfil its responsibilities, and it has direct access to anyone in the Company, as well as, any third party who may perform consulting services for the Company related to the scope of the Committee’s responsibilities. The Quality & Compliance Committee has the ability to retain, at the Company’s expense, legal, accounting or other experts it deems necessary in the performance of its duties. 


As adopted on November 12, 2020