Document:

exhibit10_26.htm

    
      Exhibit
        10.26

      

      

      EXECUTIVE
        RETENTION AGREEMENT

      

                This
        Executive Retention Agreement (the "Agreement") is effective as of February
        21,
        2007 (the "Effective Date"), by and between Todd M. Fruchterman (the
        "Executive"), and Kinetic Concepts, Inc. ("KCI" or the "Company") (together
        the
        "Parties").

      

      RECITALS

      

                        WHEREAS,
        the Executive is presently employed by the Company as Sr. V.P. Research &
Development 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.

      

      

      

      

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                        IN
        WITNESS WHEREOF, each of
        the Parties has executed this Agreement, in the case of the Company by its
        duly
        authorized officer, as of the day and year first above written.

      

      
        	
                COMPANY

              	
                KINETIC
                  CONCEPTS,
                  INC.

                 

                
                

                By:               /s/
                  Catherine M.
                  Burzik                                      

                                    Catherine
                  M. Burzik,                        

                                    President
                  and Chief Executive Officer

                
                

              
	
                EXECUTIVE

              	
                               

                                     /s/
                  Todd M.
                  Fruchterman            
                                                      

                                  
                   Todd. M. Fruchterman   

                                    

                
                

                Address:   
                   To the
                  address as last set forth in the

                        
                             Company's
                  employment records    

                 

                
                

                
                

                SSN:        
                    On
                  Fileexhibit10_32.htm

    Exhibit
      10.32

    
 

    PRIVATE
      & CONFIDENTIAL

    

    

    16  November
      2007

    

    Mr
      TLV
      Kumar

    104
      Cedar
      Drive

    Redhill
      Peninsula

    18
      Pak
      Pat Sham Road

    Hong
      Kong

    

    RE:           
      CONTRACT OF EMPLOYMENT

    

    Dear
      TLV:

    

    Further
      to our recent discussions, we are very pleased to be able to confirm our offer
      of employment as President, EMEA with KCI UK Holdings Limited
      (‘’KCI’’).

    

    
      	
              1.  

            	
              Your
                start date will be December 3, 2007, and your continuous employment
                will
                also begin on this date.

            

    

    

    
      	
              2.  

            	
              Your
                basic salary at the commencement of your employment will be $350,000
                per
                annum. As of your start date, this sum will be converted into pounds
                sterling based on the then-prevailing currency rates as published
                in the
                Wall Street Journal. You will be eligible for a salary review in
                April
                2008. On a regular basis, and at least annually, the Company will
                review
                any changes to the dollar/sterling currency rates and will determine,
                at
                its sole discretion, whether any changes to your underlying base
                salary
                are appropriate in light of such currency
                changes.

            

    

    

    Salaries
      are paid monthly direct into employees’ bank accounts by the 25th
      of the
      month, and are computed from the 16th
      to the
      15th
      of the month as regards any unusual payments etc.   Your salary
      will be paid net of deductions that KCI are legally required to
      make.

    

    The
      company reserves the right to pay salaries by cheque on the last day of the
      month in unusual circumstances.

    

    
      	
              3.  

            	
              In
                this position you are entitled to receive a car allowance of 1,000
                pounds
                per month (or as mutually agreed) in accordance with our vehicle
                user
                policy.

            

    

     

    
      	
              4.  

            	
              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.

            

    

     

    
      	
              5.  

            	
              As
                part of your employment, you will be expected to travel regularly
                to the
                Netherlands, the United States and other countries in which KCI
                operates.  As a result, your employment in the UK will be based
                out of your personal residence in the
                UK.

            

    

    

    
      	
              6.  

            	
              Working
                Time Directive

            

    

    

    In
      order
      for KCI to provide excellent customer service, there may be occasions when
      you
      will be required to exceed the 48 hour weekly limit imposed by the Working
      Time
      Regulations 1998.

    

    We
      are
      therefore asking you to agree that for the purposes of the Working Time
      Regulations 1998 (and any amendment or re-enactment thereof) any legislative
      provisions imposing a maximum number of average weekly working hours shall
      not
      apply to your employment.  A copy of such an agreement is annexed at
      the end of this written statement.

    

    However,
      you may revoke your agreement to this at any time by giving the Company not
      less
      than 3 months’ written notice of your intention to do so.  If you do
      revoke your agreement as above, then the standard reference period for
      calculating weekly working hours will be successive individual blocks of 17
      weeks, calculated as from 1 January being the beginning of the first
      block

    

    
      	
              7.  

            	
              Upon
                starting, you will become eligible to join KCI's pension scheme and
                life
                assurance program (details of which are available on request from
                the
                Human Resource Manager).

            

    

    

    
      	
              8.  

            	
              Your
                position is eligible for participation in the Kinetic Concepts, Inc.
                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 units (60% of the value will be in
                options
                and 40% in restricted stock units);  the specific number of
                shares and units  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 stock units 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 KCI Equity Plan Document (the “Equity Plan”), which is subject to
                change.

            

    

    

    
      	
              9.  

            	
              To
                assist with your relocation from Hong Kong to London, the Company
                will
                provide you with an executive relocation package (details of which
                will be
                provided to you separately).  In the event you voluntarily
                resign your position within 12 months of your start date, you agree
                to
                reimburse the Company for any relocation expenses provided to
                you.  Your relocation package will include use of a
                Company-leased townhome.

            

    

    

    
      	
              10.  

            	
                You
                will be provided with a cost-of-living allowance of $4,000 per month
                (this
                amount will be grossed up for tax purposes).  This dollar amount
                will be converted into pounds sterling at your start date and subject
                to
                review as outlined in Item 2 above.

            

    

    

    
      	
              11.  

            	
              You
                will be asked to sign an 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).

            

    

    

    
      	
              12.  

            	
              You
                will be provided with private health care coverage for you and your
                wife.  Details of this coverage will be provided to you
                separately.

            

    

    

    
      	
              13.  

            	
              Your
                paid holiday entitlement, in
                addition to all bank and public holidays, will be 25 days per calendar
                year worked and will be in accordance with and governed by Company
                holiday
                policies.

            

    

    

    
      	
              14.  

            	
              The
                notice period required by either you or by KCI to terminate the employment
                will be one month on either side.

            

    

    

    
      	
              15.  

            	
              Please
                note that it is not permitted for unauthorised software to be used
                on
                company computers, and that all computer diskettes etc. must be checked
                as
                virus-free before use on company computers.  Violation of these
                guidelines would be regarded as gross
                misconduct.

            

    

    

    
      	
              16.  

            	
              During
                your induction we will give you guidelines as to the procedure to
                follow
                if you are unexpectedly absent from work.  These are contained
                in KCI’s Sickness Absence Policy.

            

    

    

    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.

     

    TLV,
      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.

     

    We
      hope
      you decide to accept this offer of employment, in which case would you kindly
      sign the enclosed copy of this letter and return it to me within 7 days of
      receipt.

    
 

     

    Yours
      sincerely

     

     

    /s/
      R. James
      Cravens

     

    R.
      James Cravens

    Senior
      Vice President, Human Resources

    On
      behalf of KCI UK Holdings Limited

    

    

    

    
      	
               

            	
              ACKNOWLEDGMENT
                BY EMPLOYEE 

            

    

    

    I
      accept
      your offer of employment in your letter dated 19 November 2007.  I
      have read the terms and conditions contained in this letter (“Written
      Statement”), the Terms of Employment and the associated Policies referred to in
      it.  I understand that this Written Statement, the Terms of Employment
      and the associated Policies together contain the terms that form the basis
      of my
      contract of employment with KCI.  I acknowledge receipt of an
      identical copy of this Written Statement (of which this document is the
      original) and the Terms of Employment.

    

    

    

    
      	
              SIGNED
                by:

            	
               /s/ 
TLV
                Kumar 

               

              TLV
                Kumar

            	
              Date:

            	
               
                20 Nov. 2007   

            

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               

            	
              KCI
                POLICIES 

            

    

    

    The
      following policies are accessible from your Office Manager.

    

    Adoption
      Leave

    Alcohol,
      Drugs & Smoking

    Data
      Protection

    Disciplinary
      & Capability

    Email
      & Internet

    Equal
      Opportunities

    Eye
      Test

    Flexible
      Working

    Grievance

    Maternity

    Parental
      Leave

    Paternity

    Recruitment,
      Selection & Promotion

    Sickness
      Absence

    Stress
      Management

    Theft
      Prevention

    Time
      off
      Work

    Training

    Vehicle
      User

    Whistle
      Blowing

    

    CIRP

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    THE
      WORKING TIME REGULATIONS 1998

    

    (Statutory
      Instrument 1998 No 1833)

    

    (“The
      Regulations”)

    

    Agreement
      under Regulation 5 (1) to exclude the maximum weekly working time provisions
      as
      set out in Regulation 4(1) of the Regulations.

    

    
      	
              Name
                of worker

            	
              TLV
                Kumar

              
              

              (the
                “Employee”)

            

    

    

    
      	
              Date
                this Agreement is effective from

            	
              December
                3, 2007

            

    

    

    
      	
              1

            	
              The
                Employee agrees that the limit on maximum weekly working time specified
                in
                Regulation 4(1) of the Regulations shall not apply to the Employee.
                

            

    

    

    
      	
              2

            	
              The
                Employee may withdraw his/her agreement given in paragraph 1 above
                by
                giving the Company not less than 3 months’ written notice.  This
                Agreement shall terminate on the expiry of the notice period and
                the
                Employee’s maximum weekly working time shall then become subject to the
                limit specified in Regulation 4(1).

            

    

    

    

    
      	
              Employee’s
                signature

            	  
              /s/  TLV Kumar  

    

    
      

    

    

    
      	
               

            	
              Explanatory
                notes for Employee 

            

    

    

    
      	
              1

            	
              The
                Working Time Regulations limit the number of hours you are permitted
                to
                work each week to 48 hours averaged over a period of 17 weeks (or,
                if
                applicable, 26 weeks). 

            

    

    

    
      	
              2

            	
              It
                is unlawful for the Company to allow you to work more than 48 hours
                a week
                averaged over a period of 17 weeks (or, if applicable, 26 weeks).
                

            

    

    

    
      	
              3

            	
              The
                Regulations allow you to ‘opt-out’ of the 48 hour limit so that you can
                work more than the averaged 48 hours a week.  To ‘opt out’ you
                must sign a written agreement with the Company stating that the limit
                will
                not apply to you. 

            

    

    

    
      	
              4

            	
              You
                can exercise your right to ‘opt out’ (so that you can work more than the
                averaged 48 hour week) by signing this form.

            

    

    

    
      	
              5

            	
              If
                you exercise your right to ‘opt out’ by signing this form and later change
                your mind, you can give the Company 3 months written notice that
                you wish
                the limit on maximum weekly working hours to apply to you.

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