Item 8.01 Other Events.
On January 24, 2020, Hanger, Inc. (the "Company") announced that the Company, in
its capacity as a nominal defendant, entered into a Stipulation and Agreement of
Settlement ("Stipulation") in the shareholder derivative action filed in the
345th Judicial District Court in Travis County, Texas, Judy v. Asar, et. al.,
Lead Cause No. D-1-GN-15-000625 (the "Derivative Litigation").
Pursuant to the Stipulation, the Company will implement certain corporate
governance changes and modify certain governance practices, including, but not
limited to, the following:
1. Adopt a clawback policy that is substantially consistent with the Securities
and Exchange Commission's rules proposed in July 2015 pursuant to Section 954
of the Dodd-Frank Act;
2. Formalize certain existing practices of the Company's Internal Audit function,
including certain communications, the reporting structure and attendance at
Audit Committee meetings;
3. Establish certain over-boarding limits for directors; and
4. Formalize certain requirements for the director education program.
Additionally, the Company understands that its insurer will pay $400,000 to the
plaintiffs' counsel. Neither the Company, nor any of its current or former
officers and directors, will make a payment under the settlement. Under the
settlement, the Company and its shareholders will release all claims that have
been or might have been asserted in the Derivative Litigation, and the Company
and the directors and officers of the Company named as defendants continue to
deny any liability or wrongdoing in connection with the allegations contained in
the Derivative Litigation.
On January 21, 2020, the Court issued an order preliminarily approving the
proposed settlement and providing for the notice of the settlement to be made to
the Company's shareholders. The full Notice of Proposed Derivative Settlement is
attached as Exhibit 99.1 to the Current Report on Form 8-K and is available on
the Company's Investor Relations page (https://investor.hanger.com).
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