Exhibit 10.61
HERBALIFE LTD.
INDEPENDENT DIRECTORS STOCK UNIT AWARD AGREEMENT
This Independent Directors Stock Unit Award Agreement (this “Agreement”) is
dated as of this ___ day of January, 2006 (the “Grant Date”), and is between
Herbalife Ltd. (the “Company”) and                      (“Participant”).
WHEREAS, the Company, by action of the Board and approval of its shareholders
established the Herbalife Ltd. 2005 Stock Incentive Plan (the “Plan”);
WHEREAS, the Company, by action of the Board established the Herbalife Ltd.
Independent Directors Deferred Compensation and Stock Unit Plan (the
“Independent Directors Plan”);
WHEREAS, the Board has determined that Participant is an independent director of
the Company and the Company desires to encourage Participant to own Common
Shares for the purposes stated in Section 1 of the Plan and the Independent
Directors Plan;
WHEREAS, Participant and the Company have entered into this Agreement to govern
the terms of the Stock Unit Award (as defined below) granted to Participant by
the Company.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions
Defined terms in the Plan and the Independent Directors Plan shall have the same
meaning in this Agreement, except where the context otherwise requires.
2. Grant of Stock Units
On the Grant Date, the Company hereby grants to Participant an Award of
                     Stock Units (the “Award”) in accordance with the
Independent Directors Plan and Section 9 of the Plan and subject to the
conditions set forth in this Agreement, the Independent Directors Plan and the
Plan (each as amended from time to time). Each Stock Unit represents the right
to receive one Common Share (as adjusted from time to time pursuant to
Section 12 of the Plan) subject to the fulfillment of the vesting and other
conditions set forth in this Agreement. By accepting the Award, Participant
irrevocably agrees on behalf of Participant and Participant’s successors and
permitted assigns to all of the terms and conditions of the Award as set forth
in or pursuant to this Agreement, the Independent Directors Plan and the Plan
(as each may be amended from time to time).
3. Vesting
Participant’s Stock Units and rights in and to the Common Shares shall not be
vested as of the Grant Date and shall be forfeitable unless and until otherwise
vested pursuant to the terms of this Agreement. Subject to Participant’s
continued service as a member of the Board, the Award shall become vested with
respect to 25% of the Stock Units awarded hereunder on each of April 15, 2006,
July 15, 2006, October 15, 2006 and January 15, 2007 (each such date a “Vesting
Date”). Stock Units awarded hereunder that have vested and are no longer subject
to forfeiture are referred to herein as “Vested Units.” Stock Units awarded
hereunder that are not vested and remain subject to forfeiture are referred to
herein as “Unvested Units.”
4. Deferred Payment
     (a) On the Grant Date the Stock Units granted hereunder shall be credited
to the Participant’s Deferral Account pursuant to Section 5 of the Independent
Directors Plan.

 

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     (b) Subject to Participant’s continuous service as a member of the Board,
on the third anniversary of the Grant Date, there shall be credited to
Participant’s Deferral Account one Common Share in exchange for each Vested Unit
then held in Participant’s Deferral Account.
     (c) In the event that Participant ceases to serve as a member of the Board
for any reason prior to the third anniversary of the Grant Date, the Company
shall, within thirty (30) days following such cessation, subject to Paragraph
12(e) hereof and Section 16 of the Plan, issue to Participant a number of Common
Shares equal to the number of Vested Units held in Participant’s Deferral
Account at the time of such cessation.
5. Status of Participant
Participant shall have no rights as a stockholder (including, without
limitation, any voting or dividend rights with respect to the Common Shares
subject to the Award) with respect to either the Stock Units granted hereunder
or the Common Shares underlying the Stock Units, unless and until such Common
Shares are issued pursuant to the terms of the Independent Directors Plan, and
then only to the extent of such issued Common Shares.
6. Effect of Termination of Employment; Change in Control
     (a) General. Except as provided in Paragraphs 6(b), (c) or (d), upon the
cessation of Participant’s service as a member of the Board for any reason, the
Unvested Units shall be forfeited by Participant and cancelled and surrendered
to the Company without payment of any consideration to Participant.
     (b) Death; Disability. Upon the cessation of Participant’s service as a
member of the Board by reason of Participant’s of death or disability (as such
term if defined in Section 22(e) of the Code), all Unvested Units shall vest as
of the date of such termination of employment.
     (c) Change in Control. Upon the occurrence of a Change in Control, the
vesting of the Award shall be accelerated such that 100% of the aggregate number
of Stock Units subject to the Award (as set forth in Paragraph 2 above) shall be
or become Vested Units as of immediately prior to the consummation of the Change
in Control.
7. Withholding and Disposition of Common Shares
     (a) Generally. Participant is liable and responsible for all taxes owed in
connection with the Award, regardless of any action the Company takes with
respect to any tax withholding obligations that arise in connection with the
Award. The Company does not make any representation or undertaking regarding the
treatment of any tax withholding in connection with the grant or vesting of the
Award or the subsequent sale of Common Shares issuable pursuant to the Award.
The Company does not commit and is under no obligation to structure the Award to
reduce or eliminate Participant’s tax liability.
     (b) Payment of Withholding Taxes. Prior to any event in connection with the
Award (e.g., vesting or payment in respect of the Award) that the Company
determines may result in any domestic or foreign tax withholding obligation,
whether national, federal, state or local, including any social tax obligation
(the “Tax Withholding Obligation”), Participant is required to

 

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arrange for the satisfaction of the amount of such Tax Withholding Obligation in
a manner acceptable to the Company.
          (i) By Withholding Common Shares. Unless Participant elects to satisfy
the Tax Withholding Obligation by an alternative means in accordance with
Paragraph 7(b)(ii), Participant’s acceptance of this Award constitutes
Participant’s instruction and authorization to the Company to withhold on
Participant’s behalf the number of Common Shares from those Common Shares
issuable to Participant at the time when the Award becomes vested as the Company
determines to be sufficient to satisfy the Tax Withholding Obligation.
          (ii) By Other Payment. At any time not less than five (5) business
days before any Tax Withholding Obligation arises (e.g., a distribution date).
Participant may notify the Company of Participant’s election to pay
Participant’s Tax Withholding Obligation by wire transfer, cashier’s check or
other means permitted by the Company. In such case, Participant shall satisfy
his or her tax withholding obligation by paying to the Company on such date as
it shall specify an amount that the Company determines is sufficient to satisfy
the expected Tax Withholding Obligation by (i) wire transfer to such account as
the Company may direct, (ii) delivery of a cashier’s check payable to the
Company, Attn: General Counsel, at the Company’s principal executive offices, or
such other address as the Company may from time to time direct, or (iii) such
other means as the Company may establish or permit. Participant agrees and
acknowledges that prior to the date the Tax Withholding Obligation arises, the
Company will be required to estimate the amount of the Tax Withholding
Obligation and accordingly may require the amount paid to the Company under this
Paragraph 7(b)(ii) to be more than the minimum amount that may actually be due
and that, if Participant has not delivered payment of a sufficient amount to the
Company to satisfy the Tax Withholding Obligation (regardless of whether as a
result of the Company underestimating the required payment or Participant
failing to timely make the required payment), the additional Tax Withholding
Obligation amounts shall be satisfied in the manner specified in
Paragraph 7(b)(i).
8. Plan Controls
The terms of this Agreement are governed by the terms of the Independent
Directors Plan and the Plan, as both exist on the Grant Date and as amended from
time to time. In the event of any conflict between the provisions of this
Agreement and the provisions of the Independent Directors Plan and/or the Plan,
the terms of the Independent Directors Plan or the Plan (as applicable) shall
control, except as expressly stated otherwise in this Agreement. The term
“Section” generally refers to provisions within the Independent Directors Plan
or the Plan; provided, however, the term “Paragraph” shall refer to a provision
of this Agreement.
9. Limitation on Rights; No Right to Future Grants; Extraordinary Item
By entering into this Agreement and accepting the Award, Participant
acknowledges that: (a) Participant’s participation in the Plan is voluntary and
(b) the grant of the Award will not be interpreted to form an employment
relationship with the Company or any Subsidiary. The Company shall be under no
obligation whatsoever to advise Participant of the existence, maturity or
termination of any of Participant’s rights hereunder and Participant shall be
responsible for familiarizing himself or herself with all matters contained
herein and in the Plan which may affect any of Participant’s rights or
privileges hereunder.

 

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10. Committee Authority
Any question concerning the interpretation of this Agreement or the Plan, any
adjustments required to be made under the Plan, and any controversy that may
arise under the Plan or this Agreement shall be determined by the Committee
(including any Subcommittee or other person(s) to whom the Committee has
delegated its authority) in its sole and absolute discretion. Such decision by
the Committee shall be final and binding.
11. Transfer Restrictions
     Any sale, transfer, assignment, encumbrance, pledge, hypothecation,
conveyance in trust, gift, transfer by bequest, devise or descent, or other
transfer or disposition of any kind, whether voluntary or by operation of law,
directly or indirectly, of (i) Unvested Units, (ii) Vested Units or (iii) Common
Shares subject to such Unvested Units or Vested Units shall be strictly
prohibited and void; provided, however, Participant may assign or transfer the
Award to the extent permitted under the Independent Directors Plan, provided
that the Award shall be subject to all the terms and condition of the
Independent Directors Plan, the Plan, this Agreement and any other terms
required by the Committee as a condition to such transfer.
12. General Provisions
     (a) No Waiver. No waiver of any provision of this Agreement will be valid
unless in writing and signed by the person against whom such waiver is sought to
be enforced, nor will failure to enforce any right hereunder constitute a
continuing waiver of the same or a waiver of any other right hereunder.
     (b) Undertaking. Participant hereby agrees to take whatever additional
action and execute whatever additional documents the Company may deem necessary
or advisable in order to carry out or effect one or more of the obligations or
restrictions imposed on either Participant or the Award pursuant to the express
provisions of this Agreement.
     (c) Entire Contract. This Agreement and the Plan constitute the entire
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and will in all
respects be construed in conformity with the express terms and provisions of the
Plan.
     (d) 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 Participant and Participant’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.
     (e) Securities Law Compliance. The Company may impose such restrictions,
conditions or limitations as it determines appropriate as to the timing and
manner of any resales by Participant or other subsequent transfers by
Participant of any Common Shares issued as a result of or under this Award,
including without limitation (i) restrictions under an insider trading 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 Award and/or the Common Shares underlying the Award and (iii) restrictions
as to the use of a specified brokerage firm or other

 

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agent for such resales or other transfers. Any sale of the Common Shares must
also comply with other applicable laws and regulations governing the sale of
such shares.
     (f) Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to any awards granted under the Plan by electronic
means or to request Participant’s consent to participate in the Plan by
electronic means. Participant hereby consents to receive such documents by
electronic delivery and, if requested, to agree to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company, and such consent shall
remain in effect throughout Participant’s term of service with the Company and
thereafter until withdrawn in writing by Participant.
[signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

              HERBALIFE LTD.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            PARTICIPANT
 
       
 
                  [Participant]