Document:

exhibit-10_1.htm

EXHIBIT 10.1

 

 

ADDENDUM TO

EXECUTIVE RETENTION AGREEMENT

In connection with that Executive Retention Agreement (“Agreement”) executed between Kinetic Concepts, Inc. (the “Company”) and Marty Landon (“Executive”) and dated as of  February 6, 2007, the Company and Executive have agreed that in order for the Agreement to comply with the provisions of Section 409A ("Section 409A") of the Internal Revenue Code of 1986, as amended (the "Code") and the regulations and guidance promulgated thereunder so as not to subject Executive to the payment of additional taxes and interest under Section 409A, the following changes to the Agreement (in bold) have been made effective as of March 19, 2010:

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 (which is not cured within 30 days after the Executive provides written notice), 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 (which is not cured within 30 days after the Executive provides written notice). To be considered a resignation from employment on account of Good Reason, the Executive must provide written notice to the Company (stating that Executive believes one or more of the Good Reason conditions described above exists) within 30 days of the initial existence of such condition, and must resign within 30 days of the Company’s failure to cure such condition.

	
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 which waiver and release shall be delivered to the Company within 45 days following termination of employment.

 

 

	
  

	
In Witness Whereof, each of the Parties has executed this Addendum, in the case of the Company by its duly authorized officer:

 

 

	
COMPANY

	
Kinetic Concepts, Inc.

 

By:   /s/ Catherine Burzik  

 

Title:  President and Chief Executive Officer

 

 

	
EXECUTIVE

	
Marty Landon

 

/s/ Martin J. Landonexhibit-10_2.htm

EXHIBIT 10.2

 

Option Number:    ______________________                                   

Optionee Name:    ______________________                                   

KINETIC CONCEPTS, INC.

2008 OMNIBUS STOCK INCENTIVE PLAN

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 vest at such time or times as are set forth in Appendix A hereto.

 

(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 Employment or Service; or Change in Control.

 

(a) If the Optionee's employment with or service to the Parent, the Company or any of its Affiliates 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 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 180 days following the date of such termination.  The Option shall not be exercisable after the Expiration Date.

 

(c) If the Optionee's employment with or service to the Parent, the Company or any of its Affiliates is terminated by the Company other than for "cause" (as defined in the Plan) within 24 months following a Change in Control, any portion of the Option that is outstanding at such time shall become fully and immediately vested and exercisable.

 

(d) If the Optionee's employment with or service to the Parent, the Company or any of its Affiliates is terminated for "Cause," as defined in the Plan or in any employment agreement, retention agreement, stock grant or award agreement, or other applicable agreement between the Company (or any of its Affiliates or the Parent) and the Optionee (including, without limitation, for violation of any non-compete, non-solicit, non-disclosure, non-disparagement, or other restrictive covenant or agreement), the Optionee shall forfeit, upon written notice from the Company, any and all Options (including any securities, cash or other property issued upon exercise or other settlement of such awards) granted to him or her under this Option Agreement, including, without limitation, vested Options.  The forfeiture obligation of the Optionee under this Paragraph shall continue to apply, in accordance with its terms, following termination of the Optionee's employment or service (for any reason).  The Optionee's employment with or service to the Parent, the Company or any of its Affiliates shall be deemed to be terminated for Cause under this Paragraph if, within twelve (12) months after the Optionee's employment or service has terminated, facts and circumstances are discovered that would have justified a termination for Cause.

 

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. Withholding Requirements.  Pursuant to Section 13(d) of the Plan, the Company (or Subsidiary or affiliate, as the case may be) has the right to require the Optionee to remit to the Company (or Subsidiary or affiliate, as the case may be) in cash an amount sufficient to satisfy any federal, state and local tax withholding requirements related to the exercise of the Option.  With the approval of the Administrator, the Optionee may satisfy the foregoing requirement by electing to have the Company withhold from delivery Shares or by delivering Shares, in each case, having a value equal to the aggregate required minimum tax withholding to be collected by the Company or any Subsidiary or affiliate thereof.  Such Shares shall be valued at their Fair Market Value on the date on which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash.

 

10. 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.

 

11. 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.

 

12. 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.

 

13. 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.  Any action or proceeding arising out of or in connection with the Plan or this Option Agreement shall be brought only in the courts in the County of Bexar,  State of Texas, including the Federal Courts located therein, should Federal jurisdiction requirements exist, and the Optionee shall consent to submit to the exclusive jurisdiction of such courts for purposes of any action or proceeding arising out of or in connection with the Plan or this Option Agreement.

 

14. 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.

 

15. 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.

 

16. 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.

 

17. Agreement Not a Contract of Employment.  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 be employed by, or to provide services as a director, consultant or advisor to, the Company, any Subsidiary or affiliate thereof for any period of time or at any specific rate of compensation.

 

18. 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.

 

19. 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.

 

20. 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.

 

21. 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

	  	  	  	  

	
 

SEE APPENDIX A FOR VESTING SCHEDULE.

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