HERBALIFE LTD. 2004 STOCK INCENTIVE PLAN NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
Exhibit 10.27
HERBALIFE LTD.
2004 STOCK INCENTIVE PLAN
2004 STOCK INCENTIVE PLAN
NON-EMPLOYEE DIRECTOR
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (this “Agreement”) dated as of
(the “Grant Date”) between HERBALIFE LTD. (formerly known as WH Holdings (Cayman Islands)
Ltd.) (the “Company”), and
(the “Optionee”).
WHEREAS, pursuant to the Herbalife Ltd. 2004 Stock Incentive Plan (the “Plan”), the
Committee designated under the Plan desires to grant to the Optionee an option to acquire Common
Shares, par value $0.002 per share, of the Company; and
WHEREAS, the Optionee 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 Optionee, intending to be legally bound, hereby agree as
follows:
1. Grant.
(a) The Company hereby grants to the Optionee an option (the “Option”) to purchase,
subject to the terms and conditions set forth herein and in the Plan, all or any part of
Common Shares, par value $.002 per share, of the Company (subject to adjustment as set
forth in Section 10 of the Plan) at a price of
$
per share (subject to adjustment as set
forth in Section 10 of the Plan).
(b) The Option is not intended to qualify as an “incentive stock option” under Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”).
(c) Except as otherwise defined herein, capitalized terms used herein shall have the meanings
set forth in the Plan.
2. Time for Exercise.
(a) Subject to the provisions of this Agreement and the Plan, the Option shall vest and become
exercisable (i) with respect to one-twelfth (1/12) of the aggregate number of Common Shares set
forth in Paragraph 1 hereof on the last day of the first calendar quarter beginning on or after the
Grant Date, and (ii) with respect to an additional one-twelfth (1/12) of the aggregate number of
Common Shares set forth in Paragraph 1 hereof on the last day of each calendar quarter thereafter
until the Option becomes fully vested and exercisable on the last day of the first calendar quarter
beginning on or after the third anniversary of the Grant Date.
(b) In the event of a Change in Control, the Committee as constituted immediately before such
Change in Control may, in its sole discretion, accelerate the vesting and exercisability of this
Option upon such Change in Control or take such other actions as provided in Section 11 of the
Plan.
3. Expiration. The Option shall expire on the tenth (10th) anniversary of the date hereof;
provided, however, that under certain circumstances, the Option may earlier terminate in connection
with a Change in Control, as provided in Section 11 of the Plan.
4. Method of Exercise. The Option may be exercised by delivery to the Company (attention:
Secretary) of a written notice of exercise specifying the number of shares being purchased,
accompanied by payment therefor as follows:
(a) in cash or by check, bank draft or money order payable to the order of the Company;
(b) through the delivery (either actually or by attestation) of unencumbered Common Shares of
the Company held by the Optionee for at least six months having a total Fair Market Value on the
date of delivery equal to the purchase price,
(c) through a combination of cash and shares as provided in clauses (a) and (b) of this
Paragraph 4; or
(d) on such other terms and conditions as may be acceptable to the Committee in its sole
discretion.
5. Fractional Shares. No fractional shares may be purchased upon any exercise.
6. Compliance With Legal Requirements.
(a) The Option shall not be exercisable and no Common Shares shall be issued or transferred
pursuant to this Agreement or the Plan unless and until all tax withholding, if any, and legal
requirements applicable to such issuance or transfer have, in the opinion of counsel to the
Company, been satisfied. Such legal requirements may include, but are not limited to, (i)
registering or qualifying such Common Shares under any state or federal law or under the rules of
any stock exchange or trading system, (ii) satisfying any applicable law or rule relating to the
transfer of unregistered securities or demonstrating the availability of an exemption from
applicable laws, (iii) placing a restricted legend on the Common Shares issued pursuant to the
exercise of the Option, or (iv) obtaining the consent or approval of any governmental regulatory
body.
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(b) The Optionee understands that the Company is under no obligation to register for resale
the Common Shares issued upon exercise of the Option. The Company may impose such restrictions,
conditions or limitations as it determines appropriate as to the timing and manner of any exercise
of the Option and/or any resales by the Optionee
or other subsequent transfers by the Optionee of any Common Shares issued as a result of the
exercise of the Option, including without limitation (i) restrictions under an xxxxxxx xxxxxxx
policy, (ii) restrictions that may be necessary in the absence of an effective registration
statement under the Securities Act of 1933,
as amended, covering the Option and/or the Common Shares underlying the Option and (iii)
restrictions as to the use of a specified brokerage firm or other agent for exercising the Option
and/or for such resales or other transfers. The sale of the shares underlying the Option must also
comply with other applicable laws and regulations governing the sale of such shares.
7. Shareholder Rights. The Optionee shall not be deemed a shareholder of the Company with
respect to any of the Common Shares subject to the Option, except to the extent that such shares
shall have been purchased and transferred to the Optionee.
8. Assignment or Transfer Prohibited. The Option may not be assigned or transferred
otherwise than by will or by the laws of descent and distribution, and may be exercised during the
life of the Optionee only by the Optionee or the Optionee’s guardian or legal representative.
Neither the Option nor any right hereunder shall be subject to attachment, execution or other
similar process. In the event of any attempt by the Optionee to alienate, assign, pledge,
hypothecate or otherwise dispose of the Option or any right hereunder, except as provided for
herein, or in the event of the levy or any attachment, execution or similar process upon the rights
or interests hereby conferred, the Company may terminate the Option by notice to the Optionee, and
the Option shall thereupon become null and void.
9. Committee Authority. Any question concerning the interpretation of this Agreement or
the Plan, any adjustments required to be made under this Agreement or the Plan, and any controversy
that may arise under this Agreement or the Plan shall be determined by the Committee in its sole
and absolute discretion. All decisions by the Committee shall be final and binding.
10. Application of the Plan. The terms of this Agreement are governed by the terms of the
Plan, as it exists on the date of hereof and as the Plan is amended from time to time. In the
event of any conflict between the provisions of this Agreement and the provisions of the Plan, the
terms of the Plan shall control, except as expressly stated otherwise herein. As used herein, the
term “Section” generally refers to provisions within the Plan, and the term “Paragraph” refers to
provisions of this Agreement.
11. No Right to Continued Board Service. Nothing in the Plan, in this Agreement or any
other instrument executed pursuant thereto or hereto shall confer upon the Optionee any right to
continue to serve as a director of the Company.
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12. Further Assurances. Each party hereto shall cooperate with each other party, shall do
and perform or cause to be done and performed all further acts and things, and shall execute and
deliver all other agreements, certificates, instruments, and documents as any
other party hereto reasonably may request in order to carry out the intent and accomplish the
purposes of this Agreement and the Plan.
13. Entire Agreement. This Agreement and the Plan together set forth the entire agreement
and understanding between the parties as to the subject matter hereof and supersede all prior oral
and written and all contemporaneous or subsequent oral discussions, agreements and understandings
of any kind or nature.
14. Successors and Assigns. The provisions of this Agreement will inure to the benefit of,
and be binding on, the Company and its successors and assigns and the Optionee and Optionee’s legal
representatives, heirs, legatees, distributees, assigns and transferees by operation of law,
whether or not any such person will have become a party to this Agreement and agreed in writing to
join herein and be bound by the terms and conditions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| HERBALIFE LTD. | ||||||||
| By: | ||||||||
Optionee
|
Name: | |||||||
| Title: | ||||||||
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