exhibit10_7.htm


    Exhibit
10.7

    


    Option
Number:                                                                           

    Optionee
Name:                                                                           

    


    


    KINETIC
CONCEPTS, INC.

    2008
OMNIBUS STOCK INCENTIVE PLAN

    NON-EMPLOYEE
DIRECTOR

    NONQUALIFIED
STOCK OPTION AGREEMENT

    


    THIS
AGREEMENT (the “Option Agreement”) is made and entered into as of
_______________, 200__ (the “Date of Grant”), by and between Kinetic Concepts,
Inc., a Texas corporation (the “Company”), and [_________________________] (the
“Optionee”).  Capitalized terms not defined herein shall have the
meaning ascribed to them in the Company’s 2008 Omnibus Stock Incentive Plan (the
“Plan”).  Where the context permits, references to the Company or any
of its Subsidiaries or affiliates shall include the successors to the
foregoing.

     

    Pursuant
to the Plan, the Administrator has determined that the Optionee is to be granted
an option (the “Option”) to purchase Shares, subject to the terms and conditions
set forth in the Plan and herein, and hereby grants such Option.

     

    1. Number of Shares and
Exercise Price.  The Option entitles the Optionee to purchase
[_______] Shares (the “Option Shares”) at a price of $[______] per share (the
“Option Exercise Price”).

     

    2. Option
Term.  The term of the Option and of the Option Agreement (the
“Option Term”) shall commence on the Date of Grant and, unless the Option is
previously terminated pursuant to Paragraph 5 below, shall terminate upon the
expiration of ten (10) years from the Date of Grant (the “Expiration
Date”).  As of the Expiration Date, all rights of the Optionee
hereunder shall terminate.

     

    3. Conditions of
Exercise.

     

    
      	
              (a)  

            	
              Subject
      to Paragraph 5 below, the Option shall become vested and exercisable as to
      one-twelfth (1/12) of the number of the Option Shares on each three-month
      anniversary of the Date of Grant, provided that the Optionee has been
      continuously providing services to the Company as a Board
      member.

               

            


    

    
      	
              (b)  

            	
              Except
      as otherwise provided herein, the right of the Optionee to purchase Option
      Shares with respect to which the Option has become exercisable and vested
      may be exercised in whole or in part at any time or from time to time
      prior to the Expiration Date; provided, however, that the Option may not
      be exercised for a fraction of a Share.

               

            


    

    4. Method of
Exercise.  This Option may be exercised, in whole or in part,
by means of any online broker-assisted exercise procedure approved by the
Administrator, or by delivery of a written notice of exercise to the Company in
such form as may be approved by the Administrator from time to time and which
may be obtained from the Company’s Equity Accounting and Administration
department, accompanied by payment in full of the aggregate Option Exercise
Price which may be made (i) in cash or by check, (ii) to the extent permitted
by applicable law, by means of any cash or cashless exercise procedure through
the use of a brokerage arrangement approved by the Administrator, (iii) in the
form of unrestricted Shares already owned by the Optionee to the extent the
unrestricted Shares have a Fair Market Value on the date of surrender equal to
the aggregate Option Exercise Price of the Shares as to which such Option shall
be exercised and the minimum statutory withholding taxes with respect thereto,
or (iv) any combination of the foregoing.

     

    5. Effect of Termination of
Service; or Change in Control.

     

    
      	
              (a)  

            	
              If
      the Optionee’s service as a Board member terminates for any reason, other
      than by reason of the Optionee’s death or Disability, the Option, to the
      extent vested and exercisable as of the date of such termination, shall
      expire 90 days (one year in the event Optionee fails to be re-elected to
      serve as a Board member) following the date of such termination and the
      Option, to the extent not vested and exercisable as of the date of such
      termination, shall expire as of such date.  The Option shall not
      be exercisable after the Expiration Date.

               

            


    

    
      	
              (b)  

            	
              If
      the Optionee’s employment with or service to the Parent, the Company or
      any of its Affiliates terminates by reason of the Optionee’s death or
      Disability, any portion of the Option that is outstanding at such time
      shall become fully and immediately vested and exercisable, and shall
      expire one year following the date of such termination.  The
      Option shall not be exercisable after the Expiration Date.

               

            


    

    
      	
              (c)  

            	
              In
      the event of a Change in Control, any portion of the Option that is
      outstanding at such time shall become fully and immediately vested and
      exercisable.

               

            


    

    6. Adjustments.  The
Option and all rights and obligations under this Option Agreement are subject to
Section 3 of the Plan.

     

    7. Nontransferability of
Option.  Except by will or under the laws of descent and
distribution and as set forth in the following two sentences, the Optionee may
not sell, transfer, pledge or assign the Option, and, during the lifetime of the
Optionee, only the Optionee may exercise the Option.  Notwithstanding
the foregoing, during the Optionee’s lifetime, the Administrator may, in its
sole discretion, permit the transfer, assignment or other encumbrance of the
Option.  Additionally, subject to the approval of the Administrator
and to any conditions that the Administrator may prescribe, the Optionee may,
upon providing written notice to the Company, elect to transfer the Option (i)
to members of his or her Immediate Family, provided that no such
transfer may be made in exchange for consideration, (ii) by instrument to an
inter vivos or testamentary trust in which the Option is to be passed to
beneficiaries upon the death of the Optionee, or (iii) pursuant to a qualified
domestic relations order within the meaning of Section 414(p) of the Code or any
similar instrument, to the extent permitted by applicable law.  Any
attempted sale, transfer, pledge, assignment, encumbrance or other disposition
of the Option contrary to the provisions hereof shall be null and void and
without effect.

     

    8. Notice.  Whenever
any notice is required or permitted hereunder, such notice shall be in writing
and shall be given by personal delivery, facsimile, first class mail, certified
or registered with return receipt requested.  Any notice required or
permitted to be delivered hereunder shall be deemed to have been duly given on
the date which it is personally delivered or, whether actually received or not,
on the third business day after mailing or 24 hours after transmission by
facsimile to the respective parties named below.

     

    
      	
               
      

            	
              If
      to the Company:

            


    

    
      	 	
              Kinetic
      Concepts, Inc.

              Attn.:  Chief
      Financial Officer

              8023
      Vantage Drive

              San
      Antonio, TX  78230

            
	 	
              Phone:  (210)
      255-6494

              Fax:  (210)
      255-6997

            


    

    


    
      	
               
      

            	
              If
      to the Optionee:

            


    

    
      	 	
              [Name
      of
      Optionee]  ________________________________________

            
	 	
              [Address]  ________________________________________________

            
	 	
              Facsimile:
      ________________________________________________

            


    

    


    


    Either
party may change such party’s address for notices by duly giving notice pursuant
hereto.

     

    9. Compliance with
Laws.

     

    (a) Shares
shall not be issued or credited to the Optionee’s account pursuant to the
exercise of the Option granted hereunder unless the exercise of such Option and
the issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such
compliance.  The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of 1933, as amended, of any
interests in the Plan or any Shares to be issued hereunder or to effect similar
compliance under any state laws.

     

    (b) All
certificates for Shares delivered under the Plan or credited to an Optionee’s
account shall be subject to such stock-transfer orders and other restrictions as
the Administrator may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Shares may then be listed, and any applicable federal or state
securities law, and the Administrator may cause a legend or legends to be placed
on any such certificates to make appropriate reference to such
restrictions.  The Administrator may require, as a condition of the
issuance and delivery of certificates evidencing Shares pursuant to the terms
hereof, that the recipient of such Shares make such agreements and
representations as the Administrator, in its sole discretion, deems necessary or
desirable.

     

    10. Protections Against
Violations of Agreement.  No purported sale, assignment,
mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust
(voting or other) or other disposition of, or creation of a security interest in
or lien on, any of the Option Shares by any holder thereof in violation of the
provisions of this Option Agreement or the Articles of Incorporation or the
Bylaws of the Company, will be valid, and the Company will not transfer any of
such Option Shares on its books nor will any of such Option Shares be entitled
to vote, nor will any dividends be paid thereon, unless and until there has been
full compliance with such provisions to the satisfaction of the
Company.  The foregoing restrictions are in addition to and not in
lieu of any other remedies, legal or equitable, available to enforce said
provisions.

     

    11. Failure to Enforce Not a
Waiver.  The failure of the Company to enforce at any time any
provision of the Option Agreement shall in no way be construed to be a waiver of
such provision or of any other provision hereof.

     

    12. Governing
Law.  The Option Agreement shall be governed by and construed
according to the laws of the State of Texas without regard to its principles of
conflict of laws.

     

    13. Incorporation of the
Plan.  The Plan, as it exists on the date of the Option
Agreement and as amended from time to time, is hereby incorporated by reference
and made a part hereof, and the Option and this Option Agreement shall be
subject to all terms and conditions of the Plan.  In the event of any
conflict between the provisions of the Option Agreement and the provisions of
the Plan, the terms of the Plan shall control, except as expressly stated
otherwise.  The term “Section” generally refers to provisions within
the Plan; provided, however, the term “Paragraph” shall refer to a provision of
this Option Agreement.

     

    14. Amendments.  This
Option Agreement may be amended or modified at any time, but only by an
instrument in writing signed by each of the parties hereto.

     

    15. Rights as a
Shareholder.  Neither the Optionee nor any of the Optionee’s
successors in interest shall have any rights as a shareholder of the Company
with respect to any Option Shares until the Optionee has given written notice of
exercise, has paid in full for such Shares, and has satisfied the requirements
in Sections 13(b) and (d) of the Plan.

     

    16. Agreement Not a Contract of
Service.  Neither the Plan, the granting of the Option, the
Option Agreement nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Optionee has a right to continue to provide services as a director to,
the Company, any Subsidiary or Affiliate thereof for any period of time or at
any specific rate of compensation.

     

    17. Authority of the
Administrator.  The Administrator shall have full authority to
interpret and construe the terms of the Plan and the Option
Agreement.  The determination of the Administrator as to any such
matter of interpretation or construction shall be final, binding and
conclusive.

     

    18. Binding
Effect.  The Option Agreement shall apply to and bind the
Optionee and the Company and their respective permitted assignees or
transferees, heirs, legatees, executors, administrators and legal
successors.

     

    19. Tax
Representation.  The Optionee is advised to review with his or
her own tax advisors the Federal, state, local and foreign tax consequences of
the transactions contemplated by this Option Agreement.  The Optionee
is relying solely on such advisors and is not relying in any part on any
statement or representation of the Company or any of its agents.  The
Optionee understands that he or she (and not the Company) shall be responsible
for any tax liability that may arise as a result of the transactions
contemplated by the Option Agreement.

     

    20. Acceptance.  The
Optionee hereby acknowledges receipt of a copy of the Plan and this Option
Agreement.  Optionee has read and understands the terms and provisions
thereof, and accepts the Option subject to all the terms and conditions of the
Plan and the Option Agreement.

     

    [SIGNATURE
PAGE FOLLOWS]

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    IN
WITNESS WHEREOF, the parties hereto have executed and delivered the Option
Agreement on the day and year first above written.

     

     

    KINETIC
CONCEPTS, INC.

    


    
      	 	
              By:  _________________________________________

            
	 	
              Name:
      _______________________________________

            
	 	
              Title:
      ________________________________________

            


    

    


    


    OPTIONEE

    


    
      	 	
              Signature:  ____________________________________

            
	 	
              Name:  _______________________________________

            
	 	
              Address:  _____________________________________

            
	 	
              ______________________________________

            
	 	
              Telephone
      No.:  ________________________________

            
	 	
              Social
      Security No.:  ____________________________

            
	 	 
      


    

    


    


    
      	
               

              DATE
      OF

              GRANT

            	
               

              NUMBER
      OF

              SHARES
      SUBJECT

              TO
      OPTION

            	
               

              OPTION

              EXERCISE

              PRICE

               

            	
               

              EXPIRATION

              DATE