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                                    EXHIBIT 1

                                   TERM SHEET

         This Term Sheet is intended to summarize the material provisions under
which each of Hanger Orthopedic Group, Inc. ("Hanger") and Jay Alix &
Associates, Inc., now known as AlixPartners, LLC ("AlixPartners") desire to
amend the terms of (i) the Non-qualified Stock Option Agreement, dated as of
December 12, 2001, between Hanger and AlixPartners (the "Option Agreement") and
(ii) the Letter Agreement, dated January 23, 2001 between AlixPartners and
Hanger (the "Letter Agreement"). In the event each of Hanger and AlixPartners
confirm their agreement with the provisions of this Term Sheet by signing this
Term Sheet in the spaces provided below, then within five (5) business days
after the signing of this Term Sheet by both parties, Hanger will present this
matter to its Board of Directors for its approval. In the event of such Board
approval, Hanger will then cause its counsel to prepare the appropriate
transactional documents for the mutual approval of both Hanger and AlixPartners
in order to formally complete this matter. The material terms of this
transaction are as follows:

         1. The Option Agreement will be amended to reduce the number of shares
of Hanger Common Stock underlying the Option Agreement by one-half (1/2) from
1,202,436 shares to 601,218 shares in consideration for the payment by Hanger to
AlixPartners of $2,392,704.00.

         2. In the event the provisions of this Term Sheet are approved by the
Board of Directors of Hanger, then within fifteen (15) business days after such
approval by the Hanger Board of Directors, Hanger will file a registration
statement with the SEC with respect to the remaining 601,218 shares of Hanger
Common Stock which will underlie the Option Agreement after the amendment
thereof as described in the first paragraph of this Term Sheet and Hanger will
use its best efforts to obtain the effectiveness of that registration statement
with the SEC, with the subsequent sale by AlixPartners of such shares (a) being
subject to a volume limitation of no more than 40,000 shares being sellable by
AlixPartners in any calendar week thereafter until all such shares have been
sold, or (b) constituting a larger block trade on terms which are reasonably
acceptable to Hanger.

         3. The Letter Agreement will be amended to reflect that any future
success fees, if earned by AlixPartners, or any previously earned but unpaid
success fees will only be paid in cash, with the right to receive a portion of
any such success fee in the form of a stock option for any further shares of
Hanger Common Stock being hereafter deleted from the terms of the Letter
Agreement.

         By signing this Term Sheet below, each of Hanger and AlixPartners
confirm their agreement with the provisions of this Term Sheet.

HANGER ORTHOPEDIC GROUP, INC.           ALIXPARTNERS, LLC


By:  /s/ Ivan R. Sabel                  By:  /s/ Melvin R. Christiansen
     -------------------------               -----------------------------------
     Name: Ivan R. Sabel                     Name:  Melvin R. Christiansen
     Title: CEO                              Title: Treasurer

Date:  July 23, 2002                    July 19, 2002