Document:

Exhibit 10.3

July 2, 2007

Mr. Linwood A. Staub

2968 Burnt House Hill

Doylestown, PA 18902

Dear Woody:

On behalf of KCI, it is a pleasure to confirm the employment offer we recently discussed.  The specific terms and conditions of your new position will be as follows:

                    Position
Title:                                       President, Global VAC

                    Employment
Status:                             Regular Full-Time, Exempt

                    Annual Base
Salary:                             $350,000 ($14,583.33 paid on the 15th and last day of the month)

                    Immediate
Supervisor:                         Catherine Burzik, President and CEO

                    Location:                                              8023
Vantage Drive

                                                                                 San
Antonio, TX  78230

                    Start
Date:                                            July
30, 2007

                    Group Health Plan Effective Date:      Upon start date

                                                                                 (Pending
receipt of enrollment forms)

In addition to your base salary, you will be eligible for an incentive bonus opportunity with a target bonus value equal to 55% of your annual base salary as part of the Annual Incentive Bonus (AIB) program.  AIB awards will be determined on both individual
and corporate performance and will require that you remain in a bonus eligible position through December 31 of the year in question, except as otherwise set forth herein. For 2007, your target bonus opportunity will be pro-rated based on your start date.  This
is a discretionary incentive award, subject to change or termination at the Company's sole discretion.

Your position is eligible for participation in the Company’s equity plan. A recommendation will be made to the Compensation Committee of the Board of Directors that you receive a new hire equity grant with a Black-Scholes value of approximately $1,350,000. This
grant will consist of shares of non-qualified stock options (which vest ratably over 4 years) and shares of restricted stock (60% of the value will be in options and 40% in restricted shares);  the specific number of shares granted will be calculated at the
Company’s sole discretion and will be communicated to you separately. The option exercise price will be set as the closing price on your start date (or the next subsequent closing price if your start date is a date on which the market is closed).  The
restricted shares will vest 33% on each of the 4th, 5th and 6th anniversaries of the grant date (but based on financial performance this vesting could be accelerated to as early as 33% on each of the 1st, 2nd and
3rd anniversaries of the grant date as further specified in the award agreement).  Your position is also eligible for consideration for future annual grants. All equity grant recommendations are subject to CEO and Board of Directors approval, and all
grants are governed by the 2004 Equity Plan Document (the “Equity Plan”), which is subject to change.

 

Mr. Woody Staub

July 2, 2007

Page 2

To assist you with your pending relocation from Pennsylvania to San Antonio, Texas, the Company will provide the following:  (Please contact our relocation coordinator, Deborah Allen, at 210-255-6476.)

     1.     You will receive a one-time relocation allowance of $25,000 (less applicable withholding taxes).

     2.     The Company will arrange for packing, transport and delivery and unpacking of your household goods by a

              national freight carrier.  These services will be direct billed to the Company.

     3.     The Company will arrange for transport of one personal vehicle by a contracted van line/open air carrier if

             distance is over 500 miles; two vehicles if distance is over 1000 miles or you will be reimbursed $.35 per

             mile for driving your vehicle(s) from Doylestown, PA to San Antonio.  You will also be reimbursed

             reasonable meals and lodging expenses en route based on travel by the most direct route.

     4.     The Company will arrange for temporary housing for up to 90 days from your start date, which will be

             covered at 100% of the cost.

     5.     You will be reimbursed for a house-hunting trip to San Antonio for you and your spouse for up to 6 nights.

     6.     The company will pay for a final move trip for you and your eligible dependents of one-way airfare (if your

             cars have been shipped) arranged through our Corporate Travel Department.

     7.     The Company will reimburse you reasonable and customary real estate closing costs for the sale of your

             Doylestown, PA home (including realtor’s commission), excluding seller paid points, prorated taxes,

             prorated interest and seller’s allowances. This reimbursement will be grossed up for tax purposes.

     8.     The Company will reimburse you normal closing costs for the purchase of your San Antonio residence, with

             a maximum of 1% for a loan origination fee and excluding discount points, prepaids and homeowner

             association fees. This reimbursement will be grossed up for tax purposes.

     9.     During your first 90 days of employment the Company will pay for one round-trip economy ticket every

             other weekend for you to return to Pennsylvania (or as otherwise agreed).

No other move related expenses will be reimbursed or paid directly by the Company. All accommodations must be arranged through our Corporate Travel Department.   Should you voluntarily resign your position with KCI within one year of your start date, you
will be required to reimburse the Company all relocation-related expenses that the Company has covered (as described in paragraphs 1-8 above).

 

Mr. Woody Staub

July 2, 2007

Page 3

You will also be provided with a one-time signing bonus of $100,000 (subject to applicable withholding).  This bonus will be paid as soon as practical following your start date.

As an Executive Committee member, you will be entitled to tax planning assistance (up to $1,500 annually) and an executive physical exam (up to $1,200 annually).

You will be asked to sign the attached Executive Retention Agreement which generally provides that in the event your employment is terminated by the Company other than for Cause   (as that term is defined in the Equity Plan), you will receive a severance payment
equal to one years’ base salary and one year’s target bonus (or two years base salary and two years’ target bonus if your termination other than for cause is within 24 months of a change–in-control).

You will be entitled to 20 days annual vacation (in addition to regularly-scheduled Company holidays)

This letter serves to establish the entirety of your employment relationship with KCI and its subsidiaries, and supersedes any previous understanding that may have been implied or expressed, either verbally or in writing, by any representative of the Company.

This offer is contingent upon satisfactory completion of our pre-employment screening, including a test for the use of illegal drugs, a criminal background check and professional references.  In addition, by your first day of employment, you will be required to
complete a Form I-9 establishing your right to work in the United States.  Employment relationships with KCI and its subsidiaries are at-will and may be terminated by notification from either party at any time, with or without cause.

If you find the above terms and conditions of employment acceptable, please sign below and return the original to me, with a fax copy of this signature page to me at 210-255-6756.  Our offer is also contingent upon your signing and returning to me a copy of the
Non-Disclosure Agreement (attached separately) – please fax a signed signature page for that as well.

Woody, it is my sincere hope you will find your experience with KCI to be personally and professionally rewarding.  I look forward to a mutually prosperous working relationship.

Sincerely,

KCI                                                                                          
UNDERSTOOD AND AGREED:

 /s/ R. James Cravens       July 16, 2007    
                                      /s/ Linwood A.
Staub           July 18, 2007

R. James Cravens               
                                                                 
Linwood A. Staub                     Date

Senior Vice President, Human ResourcesExhibit 10.4

 

EXECUTIVE RETENTION AGREEMENT

          This Executive Retention Agreement (the "Agreement") is effective as of July 30, 2007 (the "Effective Date"), by and between Woody Staub (the "Executive"), and Kinetic Concepts, Inc. ("KCI" or the "Company")
(together the "Parties").

RECITALS

                    WHEREAS, the Executive has accepted employment by the Company as President, Global VAC and has significant strategic and management
responsibilities necessary to the continued successful operation of the Company’s business;

                    WHEREAS, the Board of Directors of the Company (the "Board") has determined that it is in the best interests of the Company and its stockholders to
assure that the Company will have the continued dedication and objectivity of the Executive;

                    WHEREAS, the Board believes that it is imperative to provide the Executive with certain severance benefits upon the Executive’s termination
of employment under the circumstances described herein that provide the Executive with the financial incentive and encouragement necessary to remain with the Company on a long-term basis.

                     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:

               1.  Term of Agreement.  The Company and the Executive agree that this Agreement will be in effect from the Effective Date until the termination of the
Executive's employment with the Company as set forth in Section 2 herein.

               2.  At-Will Employment.  While this Agreement is in effect, the Executive's employment with the Company shall continue to be at-will and, as such, may
be terminated by the Executive or the Company at any time, for any reason and with or without advance notice, subject to the Company's severance obligations set forth herein.

               3.  Definition of Terms.  The following terms referred to in this Agreement shall have the following meanings:

                    (a)     Change in Control.  A Change in Control means the first to occur of any one of the following events:
(i) consummation of any sale, lease, exchange, or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company (together with the assets of the Company's direct and indirect subsidiaries) to any
Person or group of related Persons, as that term is used in Section 13(d) of the Exchange Act (a "Group"), together with any affiliates thereof; or (ii) any Person or Group becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of Shares representing more than 50% of the aggregate voting power of the issued and outstanding stock entitled to vote in the election of directors of the Company; or (iii) the shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company.

                    (b)     Qualifying Termination.  A "Qualifying Termination" shall mean the Executive's (i) termination of
employment by the Company without "Cause;" or (ii) the Executive's resignation from employment for "Good Reason."

                    (c)     Cause.  "Cause" shall mean conduct involving one or more of the following:  (i) the substantial
and continuing failure of the Executive to render services to the Company or any subsidiary or affiliate in accordance with the Executive’s obligations and position with the Company, subsidiary or affiliate; provided that the Company or any subsidiary or
affiliate provides the Executive with adequate notice of such failure and, if such failure is capable of cure, the Executive fails to cure such failure within 30 days of the notice; (ii) dishonesty, gross negligence, or breach of fiduciary duty; (iii) the Executive's
indictment of, conviction of, or no contest plea to, an act of theft, fraud or embezzlement; (iv) the commission of a felony; or (v) a material breach of the terms of an agreement between the Executive and the Company or any subsidiary or affiliate on the other hand
or a material breach of any Company policy.

                    (d)     Good Reason.  "Good Reason" shall mean one or more of the following:  (i) the material reduction
of Executive’s duties and/or responsibilities, which is not cured within 30 days after the Executive provides written notice to the Company; provided, however, it shall not be considered Good Reason if, upon or following a Change in Control, the
Executive's duties and responsibilities remain the same as those prior to the Change in Control but the Executive's title and/or reporting relationship is changed; (ii) the material reduction of Executive's base salary, other than across-the-board decreases in base
salary applicable to all executive officers of the Company; or (iii) the relocation of the Executive to a business location in excess of fifty (50) miles from the Company’s headquarters in San Antonio.

                    (e)     Disability.  For purposes of this Agreement, "Disability" shall mean that the Executive is unable,
with or without reasonable accommodation, to perform one or more essential functions of his or her position as an employee of the Company as the result of his or her incapacity due to physical or mental impairment for more than 90 days (not necessarily consecutive)
in any 180-day period.

               4.  Severance Benefits Upon a Qualifying Termination.

                    (a)     Qualifying Termination in Connection with a Change in Control.  If the Executive experiences a
Qualifying Termination upon or within 24 months following a Change of Control, then the Executive shall be entitled to receive the following severance benefits, which shall be in addition to any salary earned and vacation accrued up to and including the date of
termination, as determined by the Company: (i) a severance payment in the amount of two times  the sum of the Executive's annual base salary plus annual target bonus, payable as a lump sum payment within five business days of the date the Executive executes and
returns a full waiver and release of all claims in a form provided by the Company; and (ii) if the Executive timely elects COBRA health insurance continuation coverage, reimbursement of COBRA premiums for up to 18 months following the date of termination. 

                    (b)     Qualifying Termination not in Connection with a Change in Control.  If the Executive experiences a
Qualifying Termination that is not in connection with a Change of Control as described in Section 4(a) herein, then the Executive shall be entitled to receive the following severance benefits, which shall be in addition to any salary earned and vacation accrued up to
and including the date of termination, as determined by the Company: (i) a severance payment in the amount of the Executive's annual base salary plus annual target bonus, payable as a lump sum payment within five business days of the date the Executive executes and
returns a full waiver and release of all claims in a form provided by the Company; and (ii) if the Executive timely elects COBRA health insurance continuation coverage, reimbursement of COBRA premiums for up to 12 months following the date of termination.

               5.  Termination of Executive's Employment Other than a Qualifying Termination

                    (a)     Termination on Account of Executive's Disability or Death.  If the Company terminates the
Executive’s employment as a result of the Executive’s Disability or due to the death of the Executive, then the Executive shall not be entitled to receive any severance benefits and shall only be entitled to receive any salary earned and vacation accrued
up to and including the date of termination; provided, however, that this provision shall not have any effect upon any rights the Executive or his estate may have under the terms of any Company short or long-term disability policy or life insurance policy.

                    (b)     Termination for Cause or Resignation without Good Reason.  If the Executive is terminated for Cause or
resigns from employment without Good Reason, then the Executive shall not be entitled to receive any severance benefits and shall only be entitled to receive any salary earned and vacation accrued up to and including the date of termination

               6.  Conditions to Severance Benefits.

                    (a)      No severance benefits shall be made under Sections 4(a) and (b) unless and until the Executive shall, in
consideration of such benefits, execute a full waiver and release of all claims in a form provided by the Company.

                    (b)      The Executive acknowledges and agrees that he or she is not entitled to any severance or change in control
benefits provided under the terms of the 1997 KCI Severance Pay Plan or any similar agreement, plan or arrangement, other than the Company's stock option plans.

                    (c)     All payment of severance benefits under this Agreement shall comply with section 409A of the Internal Revenue
Code.

               7.  Successors.

                    (a)     Company’s Successors.  Any successor (or parent thereof) to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) or to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations
under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under this Agreement, the term "Company" shall include any successor (or parent thereof)
to the Company’s business and/or assets.

                    (b)     Executive’s Successors.  All rights of the Executive hereunder shall inure to the benefit of,
and be enforceable by, the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  Executive shall have no right to assign any of his obligations or duties under this Amended
Agreement to any other person or entity.

               8.  Notice.

                    (a)     General.  Notices and all other communications contemplated by this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid.  In the case of the Executive, mailed notices shall be addressed to him at the home address
which he most recently communicated to the Company in writing.  In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its General Counsel.

                    (b)     Notice of Termination.  Any termination by the Company for Cause or by the Executive for Good
Reason shall be communicated by a written notice of termination to the other party hereto.  Such notice shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provision so indicated.

               9.  Arbitration.  All disputes relating to or arising out of this Agreement or otherwise in connection with the Executive's employment with, or termination
from, the Company, shall be settled by binding arbitration in accordance with the Company's standard arbitration policy and procedures.

             10.  Miscellaneous Provisions.

                    (a)     Waiver.  No provision of this Agreement shall be amended, modified, waived or discharged unless the
modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officer of the Company (other than the Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this
Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

                    (b)     Choice of Law.  The validity, interpretation, construction and performance of this Amended Agreement
shall be governed by the laws of the State of Texas.

                    (c)     Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

                    (d)     Employment Taxes.  All payments made pursuant to this Agreement will be subject to withholding of
applicable income and employment taxes and other authorized deductions.

                    (e)     No Representations.  Each party acknowledges that it is not relying and has not relied on any promise,
representation or statement made by or on behalf of the other party that is not set forth in this Amended Agreement.

                    (f)     Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same instrument.

                    (g)     Prior Agreements.  Except as specifically set forth on Exhibit A hereto, this Agreement shall
supersede all prior arrangements, whether written or oral, and understandings regarding the subject matter of this Agreement.

[Signatures to Follow on Next Page]

 

                    IN WITNESS WHEREOF, each of the Parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of
July 19, 2007.

 

COMPANY                                                                           
KINETIC CONCEPTS, INC.

                                                                                               By:  
  /s/  Catherine Burzik                                   

                                                                                                Title:  President
and Chief Executive Officer

EXECUTIVE                                                                         Date:                                                                     

                                                                                                
Woody Staub

                                                                                               
/s/  Linwood A.
Staub                                            

                                                                                                Date:  July
18,
2007

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}]]