Exhibit 10.35
FORM OF INDEPENDENT DIRECTORS STOCK OPTION AGREEMENT
AGREEMENT (this "Agreement") entered into as of the _____ day of ___, ___
by and between WH Holdings (Cayman Islands) Ltd., a Cayman Islands company (the
"Company"), and the undersigned independent director (the "Participant") of the
Company or its Subsidiaries.
WHEREAS, pursuant to the WH Holdings (Cayman Islands) Ltd. Independent
Directors Stock Option Plan (the "Plan"), the Committee designated under the
Plan desires to grant to the Participant an option to acquire Common Shares,
par value $0.001 per share, of the Company; and
WHEREAS, the Participant desires to accept such option subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the Company and the Participant,
intending to be legally bound, hereby agree as follows:
1. Grant of Option. On the terms and conditions hereinafter set forth,
the Company hereby grants to the Participant an option to purchase all (or any
part) of ________ Shares (the "Option"). This Option is granted on _________
(the "Grant Date"). The Option is a Non-Statutory Stock Option. This Option is
granted pursuant to the Plan, and is governed by the terms and conditions of
the Plan. All defined terms used herein, unless specifically defined in this
Agreement, have the meanings assigned to them in the Plan.
2. Exercise Price. The exercise price (the "Exercise Price") for the
Shares covered by the Option will be ________ per share.
3. Time of Exercise of Option.
(a) The Option will become exercisable in quarterly 5% increments
beginning on the last day of the calendar quarter during which the Grant Date
occurs and each subsequent last day of each following calendar quarter until
the Option becomes fully exercisable on the last day of the calendar quarter
immediately preceding the fifth anniversary of the Grant Date.
(b) Notwithstanding any provision in this Agreement or the Plan to the
contrary, unless otherwise approved by a written resolution of the Committee
prior to or contemporaneously with the closing of any such transaction, any
portion of the Option (whether vested or unvested and whether or not then
exercisable) which has not been
exercised prior to or in connection with any merger or consolidation of the
Company into another corporation, the exchange of all or substantially all of
the assets of the Company for the securities of another corporation, a Change
of Control or the recapitalization, reclassification, liquidation or
dissolution of the Company of any other fundamental corporate transaction
involving the Company or any of its Subsidiaries with the same or a similar
purpose or effect (as determined by the Committee in its sole discretion) shall
expire and be cancelled and of no further force and effect effective upon the
closing of any such transaction.
4. Term of Options and Repurchase Rights.
(a) The Option will expire 10 years from the date hereof, but will be
subject to earlier termination as provided below.
(b) Upon termination:
(i) the unexercisable portion of the Option hereby granted will
terminate on the date of such termination.
(ii) the exercisable portion of the Option hereby granted will be
treated as follows:
(A) Subject in each case to the repurchase rights described in
clause (c) below and the Shareholders' Agreement, if the Participant is
terminated for any reason except for Cause, the exercisable portion of the
Option hereby granted will be exercisable for thirty days following the
termination, unless the Participant terminates employment on account of a
disability as defined in Code Section 22(e) or if the Participant dies, in
which case, such Participant, or such Participant's personal representative,
respectively, may exercise the exercisable portion of the Option hereby granted
for 90 days following the termination of employment on account of disability or
the Participant's death.
(B) If the Participant is terminated for Cause, the exercisable
portion of the Option hereby granted will terminate on the date of such
termination.
(c) The Company has the right to repurchase the Shares acquired upon the
exercise of Options for a period of 90 days after the Independent Director
ceases to be a director or 90 days after the Shares for which the Option is
exercised are acquired, whichever is later. Notwithstanding anything to the
contrary in the Shareholders' Agreement, the purchase price per Share payable
under Section 6(a) or (b) of the
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Shareholder's Agreement where such Termination (as defined in the Shareholders'
Agreement):
(i) was due to resignation or for Cause shall be the amount equal to the
lesser of: (A) the Fair Market Value at the time of such termination; or (B) the
Exercise Price;
(ii) was without Cause or because of death, retirement or disability shall
be the amount equal to the greater of: (A) the Fair Market Value at the time of
such termination; or (B) the Exercise Price.
(d) For purposes of this Agreement, the Company shall have "Cause" to
terminate the Independent Director's services as a member of the Board in the
event of any of the following acts or circumstances: (i) commission of a felony,
a crime of moral turpitude, dishonesty, breach of trust or unethical business
conduct, or any crime involving the Company or any of its Subsidiaries; (ii)
willful misconduct, willful or gross neglect, fraud, misappropriation or
embezzlement; (iii) performance of the Independent Director's duties in a manner
that is detrimental to the Company or any of its Subsidiaries, including, but
not limited to that which results in, the severe deterioration of the financial
performance of the Company or any of its Subsidiaries; (iv) failure to adhere to
the directions of the Chief Executive Officer or the Board of Directors, to
adhere to the Company's or any of its Subsidiary's, policies or practices as
they apply to Independent Directors; (v) breach of any provision of any
agreement between the Company or any of its Subsidiaries, on the one hand, and
the Independent Director which covers confidentiality or proprietary
information, nonsolicitation or non-competition provisions; or (vi) breach in
any material respect of agreement between the Company or any of its
Subsidiaries, on the other hand, and the Independent Director.
5. Manner of Exercise of Option. The Option may be exercised by delivery,
via first class mail, interoffice mail, fax or electronic mail of a Notice of
Option Exercise and related forms to the Company stating the number of Shares
with respect to which the Option is being exercised and accompanied by payment
of the Total Exercise Cost in cash or by check, bank draft or money order
payable to the order of the Company or, subsequent to an Initial Public
Offering, through the delivery to the Company of an Authorization for Exercise
of Options "Cashless" Exercise Form with irrevocable instructions to a broker to
deliver promptly to the Company an amount equal to the Total Exercise Cost,
subject to such limitations as the Committee may adopt from time to time or by
any combination of the above methods of payment.
6. Non-Transferability.
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(a) The right of the Participant to exercise the Option (as and when
exercisable) may not be assigned or transferred by the Participant other than
by will or the laws of descent and distribution. The Option may be exercised
and the Shares may be purchased during the lifetime of the Participant only by
the Participant (or the Participant's legal representative in the event that
the Participant's employment is terminated due to "Disability" within the
meaning of Code Section 22(e)). Any attempted assignment or transfer, except as
hereinabove provided, including without limitation any purported assignment,
whether voluntary or by operation of law, pledge, hypothecation or other
disposition contrary to the provisions hereof, of any levy or execution,
attachment, trustee process or similar process, whether legal or equitable,
upon the Option, will in each instance by null and void.
7. Representation Letter and Investment Legend.
(a) In the event that for any reason the issuance of the Shares to be
issued upon exercise of the exercisable Option will not be effectively
registered under the 1933 Act, upon any date on which the Option is exercised,
the Participant (or the person exercising the Option pursuant to Paragraph 6)
will give a written representation to the Company in the form attached hereto as
Exhibit A, and the Company will place the legend described in Exhibit A, upon
any certificate for the Shares issued by reason of such exercise.
(b) The Company will be under no obligation to qualify Shares or to cause
a registration statement or a post-effective amendment to any registration
statement to be prepared for the purpose of covering the issuance of Shares.
8. Adjustments of Shares and Options. Subject to Paragraph 7 of the Plan,
in the event of any change in the outstanding Shares by reason of an
acquisition, spin-off or reclassification, recapitalization or merger,
combination or exchange of Shares or other corporate exchange, Change of
Control or similar event, the Committee may adjust appropriately the number or
kind of Shares or securities subject to the Option and exercise prices related
thereto and make such other revisions to the Option as it deems are equitably
required.
9. No Special Employment Rights. Nothing contained in this Agreement will
be construed or deemed by any person under any circumstances to bind the
Company or any of its Subsidiaries to continue the services of the Independent
Director for the period within which this Option may vest or for any other
period.
10. Rights as a Shareholder. The Participant will have no right as a
shareholder with respect to any Shares which may be purchased upon the exercise
of this Option unless and until a certificate or certificates representing such
Shares are duly
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issued and delivered to the Participant. If at any time during the term of the
Option, the Company is advised by its counsel that the Shares are required to
be registered under the Securities Act or under applicable state securities
laws, or that delivery of the Shares must be accompanied or preceded by a
prospectus meeting the requirements of such laws, delivery of Shares by the
Company may be deferred until a registration is effective or a prospectus is
available or an appropriate exemption from registration is secured.
11. Withholding Taxes. The Participant hereby agrees, as a condition to
any exercise of the Option, to provide to the Company an amount sufficient to
satisfy its obligation to withhold certain federal, state and local taxes
arising by reason of such exercise (the "Withholding Amount"), if any, by (a)
authorizing the Company to withhold the Withholding Amount from the Employee's
cash compensation, or (b) remitting the Withholding Amount to the Company in
cash; provided that, to the extent that the Withholding Amount is not provided
by one or a combination of such methods, the Company may at its election
withhold from the Shares delivered upon exercise of the Option that number of
Shares having a Fair Market Value as of the date immediately prior to the
issuance of such Shares equal to the Withholding Amount.
12. Execution of Shareholders' Agreement and of Release and Waiver of
Rights. The Participant acknowledges that, in connection with his or her
prior or future purchase of Shares of the Company, he or she will execute and
deliver the Shareholders' Agreement or a joinder or counterpart signature page
thereto. The Participant further agrees that all Shares acquired by such
Participant upon exercise of the Option will be subject to the terms and
conditions of the Shareholders' Agreement as modified hereby. Prior to
participation in the Plan, if the Committee requires, the Participant will
execute a Release and Waiver to Rights to payments and benefits under certain
plans of Herbalife International, Inc.
13. Lock-Up Agreements. The Participant agrees that notwithstanding
anything to the contrary contained in this Agreement, in the event of an
Initial Public Offering or any other offering of securities of the Company,
except to the extent that: (a) the Participant sells his or her Shares obtained
upon the exercise of the Option to the underwriters of the Company's securities
in connection with such offering or (b) the underwriters do not request the
following restrictions, such Participant shall not (i) offer, hedge, pledge,
sell or contract to sell any such Shares, (ii) sell any option or contract to
purchase any Shares, (iii) purchase any option or contract to sell any Shares;
(iv) grant any option, right or warrant for the sale of any Shares, or (v) lend
or otherwise dispose of or transfer any Shares during the longer of (A) any
black-out period requested by the underwriters conducting any such offering of
securities on behalf of the Company and (B) during the seven days prior to and
during the 180 day period beginning on the effective date of such initial public
offering or other offering of securities; provided, however, that such Employee
shall, in any event, be entitled to sell his or her Shares
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commencing on the expiration of the black-out period described in the
aforementioned clause (A) of (B).
14. Delivery of Certificates. The Participant will have no interest in
the Shares unless and until certificates for the Shares are issued following
exercise of the Option.
*********
[Signatures on Following Page]
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OPTION AGREEMENT
Counterpart Signature Page
--------------------------
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed,
but its officer thereunto duly authorized, and the Participant has executed this
Agreement, all as of the day and year first above written.
WH HOLDINGS PARTICIPANT
(CAYMAN ISLANDS) LTD.
By: ______________________ _____________________
Title:
__________________________ Address:
(print name)
Facsimile Number:
______________________
Social Security Number
Email Address:
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EXHIBIT A
TO: WH HOLDINGS (CAYMAN ISLANDS) LTD.
The undersigned hereby irrevocably exercises the right to purchase
____________ of the shares of Common Shares, par value $0.001 per share ("Common
Shares") of WH Holdings (Cayman Islands) Ltd., a Cayman Islands company (the
"Company"), evidenced by the attached Option, and herewith makes payment of the
Exercise Price with respect to such shares in full, all in accordance with the
conditions and provisions of said Option.
1. The undersigned hereby represents and warrants to and agrees with the
Company as follows:
(a) The undersigned understands and acknowledges that an investment in the
Common Shares issuable upon exercise of this Option involves a high degree of
risk and that there are limitations on the liquidity of the Common Shares
issuable upon exercise of this Option. The undersigned is able to bear the
economic risk of an investment in the Common Shares issuable upon exercise of
this Option. The undersigned has adequate means of providing for the
undersigned's current needs and contingencies; is able to afford to hold the
Common Shares issuable upon exercise of this Option for an indefinite period;
and has such knowledge and experience in financial and business matters such
that the undersigned is capable of evaluating the merits and risks of the
investment in the Common Shares issuable upon exercise of this Option;
(b) The undersigned is acquiring the Common Shares issuable upon exercise
of this Option for its own account for investment and not as a nominee and not
with a present view to the distribution thereof in violation of the Securities
Act of 1933, as amended (the "1933 Act"). The undersigned understands that the
undersigned must bear the economic risk of this investment indefinitely unless
such shares are registered pursuant to the 1933 Act and any applicable state
securities laws, or an exemption from such registration is available. The
undersigned has no plan or intention to sell the Common Shares issuable upon
exercise of this Option at any predetermined time, and has made no predetermined
arrangements to sell such shares;
(c) The undersigned will not make any sale, transfer or other disposition
of the shares of Common Shares issuable upon exercise of this Option in
violation of (1) the 1933 Act, the Securities Exchange Act of 1934, as amended,
any other applicable Federal or state securities laws or the rules and
regulations of the Securities and Exchange Commission or of any state securities
commissions or similar state authorities promulgated under any of the foregoing,
or (2) any applicable securities laws of jurisdictions outside the United States
and the rules and regulations thereunder.
2. The undersigned agrees not to offer, sell, transfer or otherwise dispose
of any of the Common Shares obtained on exercise of the Option, except in
accordance with the provisions of the Option, and consents that the following
legend may be affixed to the stock certificates for the Common Shares hereby
subscribed for, if such legend is applicable:
"THE SALE, TRANSFER OR ENCUMBRANCE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A SHAREHOLDERS'
AGREEMENT, DATED AS OF JULY 31, 2002 AMONG WH HOLDINGS (CAYMAN ISLANDS)
LTD. AND CERTAIN HOLDERS OF ITS OUTSTANDING SHARE CAPITAL, AS SUCH
AGREEMENT MAY BE AMENDED. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
THE SECRETARY OF WH HOLDINGS (CAYMAN ISLANDS) LTD.
IN ADDITION, THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY
PROVINCIAL OR STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION
STATEMENT UNDER THE 1933 ACT AND APPLICABLE PROVINCIAL OR STATE SECURITIES
LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR AN EXEMPTION FROM
REGISTRATION UNDER THE 1933 ACT OR APPLICABLE PROVINCIAL OR STATE
SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR
TRANSFER."
3. The undersigned requests that stock certificates for such shares be
issued, and a new option agreement representing any unexercised portion hereof
be issued in the name of the registered holder and delivered to the undersigned
at the address set forth below:
[Signature on the Following Page]
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Dated:
_________________________________
Signature of Registered Holder
_________________________________
Name of Registered Holder (Print)
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