Exhibit
10.38
Option
Number:
Optionee
Name:
KINETIC
CONCEPTS, INC.
2004
EQUITY 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 2004 Equity 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
25% of the Option Shares on the first anniversary of the Date of
Grant,
and as to an additional 25% of the Option Shares on each of the
three
succeeding anniversaries of Date of Grant, provided that the Optionee
has
been continuously employed by or providing services to the Company
or any
Subsidiary or affiliate through each such date.
|
|
(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 for at least six
months on the date of surrender 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, or (iv) any combination of the foregoing.
5. Effect
of Conduct
Constituting Cause; Termination of Employment or Service; or Change in
Control.
|
(a)
|
If
at any time (whether before or after termination of employment
or service)
the Administrator determines that the Optionee has engaged in conduct
that
would constitute Cause, the Administrator may provide for the immediate
forfeiture of the Option (including any securities, cash or other
property
issued upon exercise or other settlement of the Option), whether
or not
vested. Any such determination by the Administrator shall be
final, conclusive and binding on all persons.
|
|
(b)
|
If
the Optionee’s employment with or service to the Company, any Subsidiary
or affiliate thereof terminates for any reason other than for Cause,
death
or Disability, the Option, to the extent vested and exercisable
as of the
date of such termination, shall expire 30 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.
|
|
(c)
|
If
the Optionee’s employment with or service to the Company, any Subsidiary
or any affiliate thereof 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.
|
|
(d)
|
Notwithstanding
the foregoing, if the Optionee’s employment with or service to the
Company, any Subsidiary or affiliate thereof terminates for Cause,
the
Option, whether or not vested or exercisable, shall expire as of
the date
of such termination. The Option shall not be exercisable after
the Expiration Date.
|
|
(e)
|
Upon
the occurrence of a Change in Control, any portion of the Option
that is
outstanding at such time shall become fully and immediately vested
and
exercisable, unless the Option is either assumed or an equitable
substitution is made therefore. In addition, if the Optionee’s
employment with or service to the Company, any Subsidiary or affiliate
thereof is terminated other than for Cause 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.
|
6. Adjustments. The
Option and all rights and obligations under this Option Agreement are subject
to
Section 5 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.
|
|
Attn.:
Chief Financial Officer
|
If
to the
Optionee: [Name
of Optionee]
Either
party may change such party’s address for notices by duly giving notice pursuant
hereto.
9. Withholding
Requirements. Pursuant to Section 14 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 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 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.
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 Section 14 and 15(b) 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 has reviewed 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 not on any statement or representations
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:
|
|
|
Social
Security No.:
|
|
|
DATE
OF
GRANT
|
NUMBER
OF
SHARES
SUBJECT
TO
OPTION
|
OPTION
EXERCISE
PRICE
|
EXPIRATION
DATE
|
| |
|
|
|
