EXHIBIT 10.34


 


WEIGHT WATCHERS INTERNATIONAL, INC.


TERM SHEET FOR


EMPLOYEE STOCK AWARDS


 


FOR GOOD AND VALUABLE CONSIDERATION, Weight Watchers International, Inc., a Virginia corporation (the “Company”), hereby grants to the employee of the Company or its Affiliates as identified below (the “Employee”) (i) an Option to purchase the aggregate number of shares of Common Stock of the Company specified below (the “Option Award”) at the purchase price per share specified below (the “Exercise Price”), and/or (ii) the aggregate number of Restricted Stock Units specified below which are ultimately payable in shares of Common Stock of the Company (the “RSU Award”). The Option Award and the RSU Award are each granted upon the terms, and subject to the conditions, set forth in this Term Sheet, the Company’s stock incentive plan specified below (the “Plan”), and the Terms and Conditions for Employee Stock Awards promulgated under such Plan and as attached hereto (the “Terms and Conditions”), each hereby incorporated herein by this reference and each as amended from time to time (capitalized terms not otherwise defined herein shall have the same meanings ascribed to them in the Terms and Conditions or the Plan).
 


	Key Terms and Conditions

	Name of Employee:
	 
	 

	Grant Date:
	 
	 

	Plan:
	 
	Weight Watchers International, Inc.

2004 Stock Incentive Plan

	Aggregate Number of Shares subject to

Option:
	 
	 

	Exercise Price per Share of an Option:
	 
	US$

	Aggregate Number of Restricted Stock Units:
	 
	 

	 
	 
	 

	Vesting Schedule for Option

(subject to continued employment)
	 
	Vesting Schedule for Restricted Stock Units

(subject to continued employment)

	Date
	 
	# of Shares subject to Option
	 
	Date
	 
	# of Restricted Stock Units

	 
	 
	 
	 
	 
	 
	 

	Option Expiration Date:
	 
	 




 
By accepting this Term Sheet, the Employee acknowledges that he or she has received and read, and agrees that the Option and/or the Restricted Stock Units granted herein are awarded pursuant to the Plan, are subject to and qualified in their entirety by this Term Sheet, the Plan, and the Terms and Conditions, and shall be subject to the terms and conditions of this Term Sheet, the Plan and the Terms and Conditions attached hereto.
 


	
  WEIGHT WATCHERS INTERNATIONAL, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Employee Signature

  
	
  Title:

  	
  Secretary

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
						



 

















 


WEIGHT
WATCHERS INTERNATIONAL, INC.


TERMS
AND CONDITIONS FOR


EMPLOYEE STOCK AWARDS


 


Weight Watchers International, Inc., a
Virginia corporation (the “Company”), grants to the Employee who is identified
on the Term Sheet for Employee Stock Awards provided to the Employee herewith
(the “Term Sheet”) the Options and/or the Restricted Stock Units specified in
the Term Sheet, upon the terms and subject to the conditions set forth in (i) the
Term Sheet, (ii) the Company stock incentive plan specified in the Term Sheet
(the “Plan”) and (iii) these Terms and Conditions for Employee Stock
Awards promulgated under such Plan (these “Terms and Conditions”), each hereby
incorporated herein by this reference and each as amended from time to time.


 


ARTICLE I


 


DEFINITIONS


 


Capitalized terms not otherwise defined
herein shall have the same meanings ascribed to them in the Term Sheet or the
Plan.


 


Section 1.1 – Cause


 


“Cause” shall mean (i) the Employee’s
willful and continued failure to perform his or her material duties with
respect to the Company or its Affiliates which continues beyond 10 days after a
written demand for substantial performance is delivered to the Employee by the
Company or its Affiliates, (ii) willful misconduct by the Employee
involving dishonesty or breach of trust in connection with the Employee’s
employment which results in a demonstrable injury (which is other than de
minimis) to the Company or its Affiliates, (iii) conviction for any felony
or any misdemeanor involving moral turpitude, or (iv) any material breach
of the Employee’s restrictive covenants set forth in Section 7.10 below.


 


Section 1.2 – Code


 


“Code” shall mean the Internal Revenue Code
of 1986, as amended.


 


Section 1.3 - Committee


 


“Committee” shall mean the Compensation
Committee of the Board of Directors of the Company.


 


Section 1.4 – Common Stock


 


“Common Stock” shall mean the common stock,
no par value per share, of the Company.


 


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Section 1.5 – Company


 


“Company” shall mean Weight Watchers
International, Inc.


 


Section 1.6 – Expiration Date


 


“Expiration Date” shall mean, with respect to
Options, the expiration date specified on the Term Sheet.


 


Section 1.7 - Grant Date


 


“Grant Date” shall mean the date specified on
the Term Sheet on which the Option Award and/or the RSU Award were granted.


 


Section 1.8 - Options


 


“Option” or “Options” shall each mean the
non-qualified stock option to purchase shares of Common Stock as granted under
the Term Sheet and these Terms and Conditions in accordance with the Plan.


 


Section 1.9 - Permanent Disability


 


The Employee shall be deemed to have a “Permanent
Disability” if the Employee is unable to engage in the activities required by
the Employee’s job by reason of any medically determined physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months (in each case, as
determined in good faith by a majority of the Committee, which determination
shall be conclusive).


 


Section 1.10 - Plan


 


“Plan” shall mean the Company’s stock
incentive plan specified on the Term Sheet.


 


Section 1.11 - Restricted Stock Units 


 


A “Restricted Stock Unit” represents the
right to receive, upon satisfaction of the vesting conditions set forth herein,
one share of Common Stock.


 


Section 1.12 - Retirement


 


“Retirement” shall mean retirement at age 60
or over after having been employed by the Company or its Affiliates for at
least five years (or such lesser age or period of employment as may be
approved by the Committee).


 


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Section 1.13 - Secretary


 


“Secretary” shall mean the Secretary of the
Company.


 


ARTICLE II


 


GRANT OF
OPTIONS AND RSU AWARD


 


Section 2.1 - Grant of Options and Restricted Stock Units


 


On and as of the Grant Date, the Company
irrevocably grants to the Employee an Option to purchase the number of shares
of its Common Stock specified on the Term Sheet and grants to the Employee the
number of Restricted Stock Units specified on the Term Sheet, each upon the
terms and conditions set forth in the Term Sheet and these Terms and Conditions.
The Options and the Restricted Stock Units shall vest and become
non-forfeitable in accordance with Article III hereof.


 


Section 2.2 - Exercise Price for Options


 


Subject to Section 2.4 below, the
exercise price of a share of Common Stock covered by an Option shall be the
Exercise Price per share specified
on the Term Sheet, without commission or other charge.


 


Section 2.3 - Consideration to the Company


 


In consideration of the granting of the
Option Award and the RSU Award by the Company, the Employee agrees to render
faithful and efficient services to the Company or its Affiliates with such
duties and responsibilities as the Company or its Affiliates shall from time to
time prescribe. Nothing in the Term Sheet, in these Terms and Conditions or in
the Plan shall confer upon the Employee any right to continue in the employment
of the Company or its Affiliates, or shall interfere with or restrict in any
way the rights of the Company or its Affiliates, which are hereby expressly
reserved, to terminate the employment of the Employee at any time for any
reason whatsoever, with or without Cause. Employee hereby acknowledges and
agrees that neither the Company or its Affiliates nor any other Person has made
any representations or promises whatsoever to the Employee concerning the
Employee’s employment or continued employment by the Company or its Affiliates.


 


Section 2.4 - Adjustments


 


Subject to the provisions of the Plan, in the
event that the outstanding shares of the Common Stock subject to an Option
Award or an RSU Award are, from time to time, changed into or exchanged for a
different number or kind of shares of the Company or other securities of the
Company by reason of a merger, consolidation, recapitalization, change of
control, reclassification, stock split, spin-off, stock dividend, combination
of shares, or otherwise, the Committee shall make an appropriate and


 


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equitable adjustment in the number and kind of shares or other
consideration as to which such Option Award and RSU Award, including, in the
case of an Option Award, the portions thereof then unexercised that shall be
exercisable. Any such adjustment made by the Committee in its sole discretion
and in accordance with the provisions of the Plan shall be final and binding
upon the Employee, the Company and all other interested persons.


 


ARTICLE III


 


VESTING AND
EXERCISABILITY


 


Section 3.1 - Commencement of Vesting and Exercisability


 


(a)                                  Option Award. Unless
otherwise provided in the Term Sheet, these Terms and Conditions or the Plan,
so long as the Employee continues to be employed by the Company or its
Affiliates, the shares subject to the Options shall vest and become exercisable
on the dates specified on, and to the extent provided by, the Option vesting schedule set
forth on the Term Sheet; provided, the shares subject to the Options
shall immediately vest and become exercisable as to one hundred percent (100%)
of the shares of Common Stock subject to such Option immediately prior to a
Change of Control (as such term is defined in the Plan) but only to the extent
that the Options have not otherwise terminated or become vested.


 


(b)                                 RSU Award. Unless
otherwise provided in the Term Sheet or these Terms and Conditions, so long as
the Employee continues to be employed by the Company or its Affiliates, the
Restricted Stock Units shall vest on the dates specified on, and to the extent
provided by, the vesting schedule set forth on the Term Sheet; provided,
the Restricted Stock Units shall immediately vest prior to the dates specified
on the Term Sheet with respect to one hundred percent (100%) of the unvested
Restricted Stock Units on the first to
occur of (i) the occurrence of a Change of Control, (ii) the date of
the Employee’s termination of employment due to the Employee’s death, and (iii) the
date the Company (or any of its Affiliates, as applicable) terminates the
Employee’s employment due to the Employee’s Permanent Disability (any of
the foregoing including the dates specified on the Term Sheet, an “RSU Vesting
Date”).


 


Section 3.2 - Expiration of Options and Restricted Stock Units


 


(a)                                  Option Award. The
Options shall remain outstanding unless earlier exercised or terminated until
the Expiration Date. The Employee shall cease any additional vesting in his or
her Options upon any termination of his employment and the unvested portion of
the Options shall be canceled without payment therefor upon any termination of
his employment. Except as otherwise provided herein, the Options may not
be exercised to any extent by Employee after the first to occur of the
following events:


 


(i)                                     The
Expiration Date;


 


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(ii)                                  The first anniversary
of the date of the Employee’s termination of employment by reason of death or
Permanent Disability;


 


(iii)                               The first business day
which is ninety calendar days after 
termination of employment of the Employee for any reason other than for
Cause, death or Permanent Disability, or Retirement; or


 


(iv)                              The date of an Employee’s
termination of employment by the Company or its Affiliates for Cause; and


 


(v)                                 If the Committee so
determines pursuant to the provisions of the Plan, in the event of certain
business combinations. At least ten (10) days prior to the effective date
of such business combination, the Committee shall give the Employee notice of
such event if the Options have then neither been fully exercised nor become
unexercisable under this Section 3.2.


 


(b)                                 RSU Award. If
the Employee’s employment with the Company or its Affiliates is terminated for
any reason by the Company or its Affiliates (other than due to a Permanent
Disability) or by the Employee (other than due to death) prior to any RSU
Vesting Date, the RSU Award shall, to the extent not then vested, be forfeited
by the Employee without consideration therefor.


 


(c)                                  Termination of
Options and unvested Restricted Stock Units upon Certain Events. If (i) the
Company or its Affiliates terminates the employment of the Employee for Cause, (ii) the
beneficiaries of an Employee’s Trust shall include any person or entity other
than the Employee, his or her spouse or his or her lineal descendants, or (iii) the
Employee shall effect a transfer of any of the Options or the Restricted Stock
Units other than as permitted in these Terms and Conditions or the Plan (each,
an “Event”), all Options held by the Employee or an Employee’s Trust, as the
case may be, whether or not exercisable prior to such Event, and any
unvested Restricted Stock Units will terminate immediately without payment
therefor.


 


ARTICLE IV


 


EXERCISE OF
OPTIONS AND STOCKHOLDER RIGHTS


 


Section 4.1 - Person Eligible to Exercise


 


During the lifetime of the Employee, only he
or the Trustee of an Employee’s Trust may exercise the Options or any
portion thereof. After the death of the Employee, any exercisable portion of
the Options may, prior to the time when an Option becomes unexercisable under Section 3.2,
be exercised by his personal representative or by any person empowered to do so
under the Employee’s will or under the then applicable laws of descent and
distribution.


 


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Section 4.2 -
Partial Exercise


 


Any exercisable portion of the Options or the
entire Options, if then wholly exercisable, may be exercised in whole or
in part at any time prior to the time when the Options or portion thereof
becomes unexercisable under Section 3.2; provided, however, that any
partial exercise shall be for whole shares of Common Stock only.


 


Section 4.3 - Manner of Exercise


 


The Options, or any exercisable portion
thereof, may be exercised solely by delivering to the Secretary or his
office all of the following prior to the time when the Options or such portion
become unexercisable under Section 3.2:


 


(a)                                  Notice
in writing signed by the Employee or the other person then entitled to exercise
the Options or portion thereof, stating that the Options or portion thereof are
thereby exercised, such notice complying with all applicable rules established
by the Committee;


 


(b)                                 Full
payment (in cash, by check or by a combination thereof) for the shares with
respect to which such Options or portion thereof are exercised;


 


(c)                                  If
requested by the Committee, a bona fide written representation and agreement,
in a form satisfactory to the Committee, signed by the Employee or other
person then entitled to exercise such Options or portion thereof, stating that
the shares of stock are being acquired for his own account, for investment and
without any present intention of distributing or reselling said shares or any
of them except as may be permitted under the Securities Act of 1933, as
amended (the “1933 Act”), and then applicable rules and regulations thereunder,
and that the Employee or other person then entitled to exercise such Options or
portion thereof will indemnify the Company and its Affiliates against and hold
it free and harmless from any loss, damage, expense or liability resulting to
the Company or its Affiliates if any sale or distribution of the shares by such
person is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its absolute discretion, take
whatever additional actions it deems appropriate to ensure the observance and
performance of such representation and agreement and to effect compliance with
the 1933 Act and any other federal or state securities laws or regulations;


 


(d)                                 Full
payment to the Company of all amounts which, under federal, state or local law,
it is required to withhold upon exercise of the Options; and


 


(e)                                  In
the event the Options or portion thereof shall be exercised pursuant to Section 4.1
by any person or persons other than the Employee, appropriate proof of the
right of such person or persons to exercise the Options.


 


Without limiting the generality of the foregoing, the Committee may require
an opinion of counsel acceptable to it to the effect that any subsequent
transfer of shares acquired on


 


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exercise of the Options does not violate the 1933 Act, and may issue
stop-transfer orders covering such shares. Share certificates evidencing stock
issued on exercise of the Options may bear an appropriate legend referring
to the provisions of subsection (c) above and the agreements herein. The
written representation and agreement referred to in subsection (c) above
shall, however, not be required if the shares to be issued pursuant to such
exercise have been registered under the 1933 Act, and such registration is then
effective in respect of such shares.


 


Section 4.4 - Conditions to Issuance of Stock Certificates


 


The shares of Common Stock deliverable upon
the exercise of the Options, or any portion thereof, and the vesting of the
Restricted Stock Units, shall be fully paid and nonassessable. The Company
shall not be required to deliver any certificate or certificates for shares of
stock purchased upon the exercise of the Options, or any portion thereof, or
the vesting of any Restricted Stock Units prior to fulfillment of all of the
following conditions:


 


(a)                                  The
obtaining of approval or other clearance from any state or federal governmental
agency which the Committee shall, in its absolute discretion, determine to be
necessary or advisable; and


 


(b)                                 The
lapse of such reasonable period of time following the exercise of the Options
or the vesting of the Restricted Stock Units, as applicable, as the Committee may from
time to time establish for reasons of administrative convenience.


 


Section 4.5 - Rights as Stockholder


 


(a)                                  RSU Rights. Unless
otherwise set forth herein, the Employee shall receive, as soon as practicable
after the applicable RSU Vesting Date (but in no event later than ten (10) business
days following the RSU Vesting Date), one share of Common Stock for each vested
Restricted Stock Unit that the Employee holds hereunder. Certificates for the
Common Stock shall be delivered to the Employee or to the Employee’s legal
guardian or representative (or if such Common Stock is evidenced by
uncertificated securities registered or recorded in records maintained by or on
behalf of the Company in the name of a clearing agency, the Company will cause
the Common Stock to be entered in the records of such clearing agency as owned
by the Employee). It shall be a condition of the obligation of the Company upon
delivery of Common Stock to the Employee pursuant this Section 4.5 that
the Employee pay to the Company such amount as may be requested by the
Company for the purpose of satisfying any liability for any federal, state or
local income or other taxes required by law to be withheld with respect to such
Common Stock. The Company shall be authorized to take such action as may be
necessary, in the opinion of the Company’s counsel (including, without
limitation, withholding Common Stock otherwise deliverable to the Employee
hereunder and/or withholding amounts from any compensation or other amount
owing from the Company to the Employee), to satisfy the obligations for payment
of the minimum amount of any such taxes. In addition, if the Company’s
accountants determine that there


 


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would be no adverse accounting implications to the Company, the
Employee may be permitted to elect to use Common Stock otherwise
deliverable to the Employee hereunder to satisfy any such obligations, subject
to such procedures as the Company’s accountants may require. Until the
applicable RSU Vesting Date, a holder of a Restricted Stock Unit shall not be,
nor have any of the rights or privileges of, a stockholder of the Company.


 


(b)                                 Dividend
Equivalents for RSU Award. With respect to each cash dividend or
distribution (if any) paid with respect to Common Stock to holders of record on
and after the Grant Date but before the applicable RSU Vesting Date, the
Company shall maintain a notional account (the “Account”) for the benefit of
the Employee, in which the Company shall record the amount of each such cash
dividend or distribution (if any) to which the Employee would have been
entitled if the Employee had held the same number of shares of Common Stock
equal to the number of Restricted Stock Units granted pursuant to the Term
Sheet and these Terms and Conditions. As soon as practicable after the RSU
Vesting Date (but in no event later than ten (10) business days following
the RSU Vesting Date), the Employee shall, in the discretion of the Company, be
paid an amount equal to the balance of the Account in (a) cash or (b) a
number of shares of Common Stock equal to the quotient of (i) the balance
of the Account, divided by (ii) the Fair Market Value, on the RSU Vesting
Date, of one share of Common Stock. In the event the Account balance is paid in
shares of Common Stock, if the calculation set forth in the preceding sentence
results in fractional shares, the Company shall round such number of shares to
the nearest whole number; provided, that if such number is rounded down,
the Company shall pay to the Employee an amount in cash equal to the fractional
shares based on the Fair Market Value thereof. In the event the Employee’s
employment is terminated for any reason (other than due to death or Permanent
Disability) prior to any RSU Vesting Date, the Employee shall forfeit all
amounts maintained in the Account without consideration therefor.


 


(c)                                  Limitation on
Obligations. The Company’s obligation with respect to the Restricted Stock
Units granted hereunder is limited solely to the delivery to the Employee of
shares of Common Stock on the date when such shares are due to be delivered
hereunder, and in no way shall the Company become obligated to pay cash in
respect of such obligation. This RSU Award shall not be secured by any specific
assets of the Company or any of its Affiliates, nor shall any assets of the
Company or any of its Affiliates be designated as attributable or allocated to
the satisfaction of the Company’s obligations under the Term Sheet or these
Terms and Conditions.


 


(d)                                 Optionholder Rights.
The holder of the Options shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares
purchasable upon the exercise of the Options or any portion thereof unless and
until certificates representing such shares shall have been issued to such
holder as provided under this Article IV. As soon as practicable following
the date that the Employee becomes entitled to receive the shares of Common
Stock pursuant to this Article IV, certificates for the Common Stock shall
be delivered to the Employee or to the Employee’s legal guardian or
representative (or if such Common Stock is evidenced by uncertificated
securities registered or recorded in records maintained by or on behalf


 


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of the Company in the name of a clearing agency, the Company will cause
the Common Stock to be entered in the records of such clearing agency as owned
by the Employee).


 


(e)                                  Tax Advice. The
Employee is hereby advised to seek his
or her own tax counsel regarding the
taxation of an award of an Option and/or Restricted Stock Units made hereunder.


 


ARTICLE V


 


TRANSFERS


 


Section 5.1
– Representations, Warranties and Agreements


 


The Employee agrees and acknowledges that he or she
will not, directly or indirectly, offer, transfer, sell, assign, pledge,
hypothecate or otherwise dispose of any shares of Common Stock issuable upon
exercise of the Options (or any portion thereof) or the vesting of a Restricted
Stock Unit unless such transfer, sale, assignment, pledge, hypothecation or
other disposition is permitted pursuant to the Term Sheet and these Terms and
Conditions and (i) the transfer, sale, assignment, pledge, hypothecation
or other disposition is pursuant to an effective registration statement under
the 1933 Act, or (ii) counsel for the Employee (which counsel shall be
acceptable to the Company) shall have furnished the Company with an opinion,
satisfactory in form and substance to the Company, that no such
registration is required because of the availability of an exemption from
registration under the 1933 Act and (iii) if the Employee is a citizen or
resident of any country other than the United States, or the Employee desires
to effect any such transaction in any such country, counsel for the Employee
(which counsel shall be acceptable to the Company) shall have furnished the
Company with an opinion or other advice, satisfactory in form and
substance to the Company, that such transaction will not violate the laws of
such country.


 


Section 5.2 - Acknowledgement by the Company


 


Notwithstanding the foregoing, the Company
acknowledges and agrees that any of the following transfers are deemed to be in
compliance with the 1933 Act and the Term Sheet and these Terms and Conditions
and no opinion of counsel is required in connection therewith: (w) a transfer
made pursuant to Article III hereof, (x) a transfer upon the death of the
Employee to his or her executors, administrators, testamentary trustees,
legatees or beneficiaries, provided that such transfer is made expressly
subject to the Term Sheet and these Terms and Conditions and that such
transferee shall execute a Joinder (in the form attached hereto as Exhibit A),
agreeing to be bound by the provisions of the Term Sheet and these Terms and
Conditions and (y) a transfer made after the Grant Date in compliance with the
federal securities laws to a trust or custodianship the beneficiaries of which may include
only the Employee, his or her spouse or his or her lineal descendants (an “Employee’s
Trust”), provided that such transfer is made expressly subject to the Term Sheet
and these Terms and Conditions and that such transferee shall execute a Joinder
(in the form attached hereto as Exhibit A), agreeing to be bound by
the 


 


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provisions of the Term Sheet and these Terms and Conditions. Immediately
prior to any transfer to an Employee’s Trust, the Employee shall provide the
Company with a copy of the instruments creating an Employee’s Trust and with
the identity of the beneficiaries of such Employee’s Trust. The Employee shall
notify the Company immediately prior to any change in the identity of any
beneficiary of a Employee’s Trust.


 


Section 5.3 - Transfer Restrictions


 


(a)                                  Except as otherwise
provided herein, neither the Options, the Restricted Stock Units nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Employee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect;
provided, however, that this Section 5.3 shall not prevent transfers by
will or by the applicable laws of descent and distribution.


 


(b)                                 (i) If the
Employee is a Senior Employee (and the Committee has not otherwise provided
that this Section 5.3 does not apply to him or her), or (ii) in the
case of an Employee who is not a Senior Employee if requested by the Committee,
the Employee agrees that if shares of capital stock of the Company or any other
securities of the Company that are convertible into or exchangeable or
exercisable for capital stock of the Company (collectively, “Securities”) are
registered pursuant to a registration statement filed with the U.S. Securities
and Exchange Commission (the “SEC”) (other than a registration statement on Form S-8),
the Employee will not sell or otherwise transfer any Securities of the Company
from the date of filing such registration statement (or in the case of “shelf”
registration statement, from the earlier of (x) the date of the initial
preliminary prospectus and (y) the date of the final prospectus), until up to
90 days after the public offering date set forth in the final prospectus. For
purposes of this Section 5.3, a “Senior Employee” shall mean any chief
executive officer, president, chief financial officer, general counsel,
corporate secretary, chief operating officer, senior vice president, vice
president or their equivalents of the Company or any of its Affiliates, or any
officer or employee of the Company or any of its Affiliates so designated by
the Committee as a Senior Employee.


 


ARTICLE VI


 


THE COMPANY’S REPRESENTATIONS AND WARRANTIES


 


Section 6.1 - Authorization


 


The Company represents and warrants to the
Employee that (i) the Term Sheet and these Terms and Conditions has been
duly authorized, executed and delivered by the Company, and (ii) upon
exercise of the Options (or any portion thereof) or upon the vesting of
Restricted Stock Units, the Common Stock, when issued and delivered in


 


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accordance with the terms hereof, will be duly and validly issued,
fully paid and nonassessable.


 


Section 6.2 - Registration


 


The Company shall use reasonable efforts to
register the Common Stock and the Options on a Form S-8 Registration
Statement or any successor to Form S-8 to the extent that such
registration is then available with respect to such Common Stock and Options,
and (ii) the Company will file the reports required to be filed by it
under the 1933 Act and the Securities Exchange Act of 1934, as amended (the “Act”),
and the rules and regulations adopted by the SEC thereunder, to the extent
required from time to time to enable the Employee to sell his or her shares of
Stock without registration under the 1933 Act within the limitations of the
exemptions provided by (A) Rule 144 under the 1933 Act, as such rule may be
amended from time to time, or (B) any similar rule or regulation
hereafter adopted by the SEC. Notwithstanding anything contained in this Section 6.2,
the Company may deregister under Section 12 of the Act if it is then
permitted to do so pursuant to the Act and the rules and regulations
thereunder. Nothing in this Section 6.2 shall be deemed to limit in any
manner the restrictions on sales of Common Stock contained in the Term Sheet
and these Terms and Conditions.


 


ARTICLE VII


 


MISCELLANEOUS


 


Section 7.1 - Administration


 


The Committee shall have the power to
interpret the Plan, the Term Sheet and these Terms and Conditions and to adopt
such rules for the administration, interpretation and application of the
Plan as are consistent therewith and to interpret or revoke any such rules. All
actions taken and all interpretations and determinations made by the Committee
shall be final and binding upon the Employee, the Company and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Options or the Restricted Stock Units. In its absolute discretion, the
Board of Directors of the Company may at any time and from time to time
exercise any and all rights and duties of the Committee under the Plan, the
Term Sheet and these Terms and Conditions.


 


Section 7.2 - Shares to Be Reserved


 


The Company shall at all times during the term
of the Option Award and the RSU Award reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of the
Term Sheet and these Terms and Conditions.


 


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Section 7.3 -
Recapitalizations, etc.


 


The provisions of the Term Sheet and these
Terms and Conditions shall apply, to the full extent set forth herein with
respect to the Option Award and the RSU Award, to any and all shares of capital
stock of the Company or any capital stock, partnership units or any other
security evidencing ownership interests in any successor or assign of the
Company or its Affiliates (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or
substitution of the Option Award or the RSU Award, by reason of any stock
dividend, split, reverse split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.


 


Section 7.4 - State Securities Laws


 


The Company hereby agrees to use its best
efforts to comply with all state securities or “blue sky” laws which might be
applicable to the issuance of the shares underlying the Options or Restricted
Stock Units to the Employee.


 


Section 7.5 - Binding Effect


 


The provisions of the Term Sheet and these
Terms and Conditions shall be binding upon and accrue to the benefit of the
parties hereto and their respective heirs, legal representatives, successors
and assigns. In the case of a transferee permitted under the Term Sheet and
these Terms and Conditions, such transferee shall be deemed the Employee
hereunder; provided, however, that no transferee shall derive any rights under
the Term Sheet and these Terms and Conditions unless and until such transferee
has delivered to the Company a Joinder (in the form attached hereto as Exhibit A)
and becomes bound by the terms of the Term Sheet and these Terms and
Conditions.


 


Section 7.6 - Miscellaneous


 


In the Term Sheet and these Terms and
Conditions, (i) all references to “dollars” or “$” are to United States
dollars and (ii) the word “or” is not exclusive. If any provision of the
Term Sheet and these Terms and Conditions shall be declared illegal, void or
unenforceable by any court of competent jurisdiction, the other provisions
shall not be affected, but shall remain in full force and effect.


 


Section 7.7 - Notices


 


Any notice to be given under the terms of the
Term Sheet and these Terms and Conditions to the Company shall be addressed to
the Company in care of its Secretary, and any notice to be given to the
Employee shall be addressed to him at the address given on the Term Sheet. By a
notice given pursuant to this Section 7.7, either party may hereafter
designate a different address for notices to be given to him. Any notice which
is required to be given to the Employee shall, if the Employee is then
deceased, be given to the Employee’s personal representative if such
representative has


 


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previously informed the Company of his status and address by written
notice under this Section 7.7. Any notice shall have been deemed duly
given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.


 


Section 7.8 - Titles


 


Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Term Sheet and these Terms and Conditions.


 


Section 7.9 - Applicability of Plan 


 


The Common Stock issued to the Employee upon
exercise of the Options or the vesting of the Restricted Stock Units shall be
subject to all of the terms and provisions of the Plan, to the extent
applicable to the Option and any shares of Common Stock issuing upon the
exercise of the Options (or any portion thereof) or the vesting of the
Restricted Stock Units. In the event of any conflict between the Term Sheet and
these Terms and Conditions, these Terms and Conditions shall control. In the
event of any conflict between the Term Sheet or these Terms and Conditions and
the Plan, the terms of the Plan shall control.


 


Section 7.10
- Covenant Not to Compete; Confidential Information; No Raid; Specific
Performance


 


(a)                                  In consideration of
the Company entering into the Term Sheet and these Terms and Conditions with
the Employee, the Employee hereby agrees effective as of the Grant Date, for so
long as the Employee is employed by the Company or one of its Affilates and for
a period of one year thereafter (the “Noncompete Period”), the Employee shall
not, without the Company’s prior written consent, directly or indirectly,
engage in, be employed by, act as a consultant for or have a financial interest
(other than an ownership position of less than 1% in any company whose shares
are publicly traded or any non-voting, non-convertible debt securities in any
company) in any business engaged in Company Business, or work for or provide
services to any Competitor of the Company or its Affiliates, within the United
States or within any foreign country in which the Company or its Affiliates (i) has
an office, (ii) is or has engaged in Company Business or (iii) proposes
to engage in Company Business, as of the date of the termination of the
Employee’s association with the Company. For the purposes of these provisions, (A) the
term “Company Business” shall mean any business related to weight loss or
weight management programs, products, services and/or other similar activities;
and (B) the term “Competitor” means any natural person, corporation,
limited liability company, firm, organization, trust, partnership, association,
joint venture, government agency or other entity (including, but not limited
to, the websites and other electronic or digital media of such entities) that
engages, or proposes to engage, in Company Business, including, but not limited
to, (x) entities which are directly engaged in Company Business; and (y)
entities which have a primary focus in broader topic areas, but who


 


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nevertheless engage in Company Business such as Unilever (Slimfast)
(provided, however, only the part of such entities that are engaged in or
oversee Company Business shall be deemed a “Competitor” for purposes of these
provisions).


 


(b)                                 The Employee will not
disclose or use at any time, any Confidential Information (as defined below) of
which the Employee is or becomes aware, whether or not such information is
developed by him or her, except (i) to the extent that such disclosure or
use is directly related to and required by the Employee performance of duties,
if any, assigned to the Employee by the Company or its Affiliates or (ii) pursuant
to the order of any court or administrative agency. As used herein, the term “Confidential
Information” means information that is not generally known to the public and
that is used, developed or obtained by the Company or its Affiliates in
connection with its business, including but not limited to (i) products or
services, (ii) fees, costs and pricing structures, (iii) business and
financial results, plans, budgets, and projections, (iv) designs, content
and other creative elements associated with products and services or marketing
and promotional campaigns and programs, (v) computer software, including
operating systems, applications and program listings, (vi) flow charts,
manuals and documentation, (vii) data bases, (viii) accounting and
business methods, (ix) inventions, devices, new developments, methods and
processes, whether patentable or unpatentable and whether or not reduced to
practice, (x) customers and clients and customer or client lists, (xi) other
copyrightable works, (xii) all technology and trade secrets, and (xiii) all
similar and related information in whatever form. Confidential Information will
not include any information that has been published in a form generally
available to the public by a person or entity other than the Employee prior to
the date the Employee proposes to disclose or use such information. The
Employee acknowledges and agrees that all copyrights, works, inventions,
innovations, improvements, developments, patents, trademarks and all similar or
related information which relate to the actual or anticipated business of the
Company and its subsidiaries (including its predecessors) and conceived,
developed or made by the Employee while employed by the Company or its
Affiliates belong to the Company. The Employee will perform all actions
reasonably requested by the Company (whether during or after the Noncompete
Period) to establish and confirm such ownership at the Company’s expense
(including without limitation assignments, consents, powers of attorney and
other instruments).


 


(c)                                  The Employee shall
disclose promptly in writing and assign immediately, and hereby assigns to the
Company, all of the Employee’s right, title and interest in and to, any
original works of authorship, formulas, processes, programs, benchmarking,
solutions, tools, content, databases, techniques, know-how, data, developments,
innovations, inventions, improvements, trademarks, patents, copyrights or
discoveries, whether or not copyrightable, patentable or otherwise legally
protectible, and whether or not they exist in electronic form, print form or
other tangible or intangible form of medium (hereinafter referred to
collectively as “Work Product”), which the Employee makes or conceives, or
first reduces to practice or learns, either solely or jointly with others,
during his or her employment period with the Company or its Affiliates, through
the Employee’s work with the Company or its Affiliates, or with any other
person or entity pursuant to an assignment by the Company or its Affiliates. The


 


14

















 


Employee acknowledges the special interest the Company and its
Affiliates hold in its processes, techniques and technologies and agrees that
such processes, techniques and technologies shall not be directly or indirectly
used or distributed by the Employee for the interests of any person or entity
besides the Company or its Affiliates.


 


(i)                                     All disclosures
and assignments made pursuant to these Terms and Conditions are made without
royalty or any additional consideration to the Employee other than the regular
compensation paid to the Employee by the Company or its Affiliates.


 


(ii)                                  The Employee shall
execute, acknowledge and deliver to the Company or its Affiliates all necessary
documents, and shall take such other action as may be necessary to assist
the Company in obtaining by statute, copyrights, patents, trademarks or other
statutory or common law protections for the Work Product covered by these Terms
and Conditions, vesting title and right in such copyrights, patents, trademarks
and other protections in the Company and its designees. The Employee hereby
agrees that the Work Product constitutes a “work made for hire” in accordance
with the definition of that term under the U.S. copyright laws. The Employee
shall further assist the Company or its Affiliates in every proper and
reasonable way to enforce such copyrights, patents, trademarks and other
protections as the Company may desire. The Employee’s obligation to
deliver documents and assist the Company or its Affiliates under these Terms
and Conditions applies both during and subsequent to the term of his/her
employment.


 


(iii)                               Any Work Product which
the Employee may disclose to anyone within six (6) months after the
termination of his/her employment, or for which the Company or its Affiliates may file
an application for copyright, patent, trademark or other statutory or common
law protection within twelve (12) months after the termination of said
employment, shall be presumed to have been made, conceived, first reduced to
practice or learned during the term of the Employee’s employment and fully
subject to the terms and conditions set forth herein; provided that if the
Employee in fact, conceived any such Work Product subsequent to the termination
of the employment and such Work Product is not based upon or derived from Confidential
Information of the Company or its Affiliates or does not relate to the scope of
work performed by the Employee pursuant to his/her employment duties with the
Company or its Affiliates, then such Work Product shall belong to the Employee
and shall be the Employee’s sole property. The Employee assumes the
responsibility of establishing by competent legal evidence that such Work
Product is not based on such Confidential Information and that the Employee
conceived any such Work Product after the termination of his/her employment.


 


(iv)                              The Employee represents
that the Work Product does not infringe any copyright, patent or other
proprietary right of any person or entity.


 


(v)                                 Attached to and made
as part of these Terms and Conditions as Exhibit B is a complete list
of all Work Product, whether or not copyrighted, which has been made or
conceived or first reduced to practice by the


 


15

















 


Employee alone or jointly prior to the date of his employment with the
Company or its Affiliates. Such Work Product shall be excluded from the
operation of these Terms and Conditions. If there is no such list on Exhibit B,
the Employee represents that no such Work Product exists at the time of
execution of these Terms and Conditions.


 


(d)                                 Without the Company’s
prior written consent, the Employee will not, during the Noncompete Period,
directly or indirectly, solicit or offer employment to any person who has been
employed by the Company or its Affiliates at any time during the twelve months
immediately preceding such solicitation.


 


(e)                                  Notwithstanding
clauses (a), (b), (c)  and (d) above, if at any time a court holds
that the restrictions stated in such clauses (a), (b), (c) and (d) are
unreasonable or otherwise unenforceable under circumstances then existing, the
parties hereto agree that the maximum period, scope or geographic area
determined to be reasonable under such circumstances by such court will be
substituted for the stated period, scope or area. Because the Employee’s services
are unique and because the Employee has had access to Confidential Information,
the parties hereto agree that money damages will be an inadequate remedy for
any breach of these Terms and Conditions. In the event of a breach or
threatened breach of these Terms and Conditions, the Company or its Affiliates
or their successors or assigns may, in addition to other rights and remedies
existing in their favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce, or prevent
any violations of, the provisions hereof (without the posting of a bond or
other security).


 


Section 7.11 - Amendment


 


The Term Sheet and these Terms and Conditions
may be amended only by a writing executed by the parties hereto which
specifically states that it is amending the Term Sheet or these Terms and
Conditions, as applicable.


 


Section 7.12 - Governing Law


 


The Term Sheet and these Terms and Conditions
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.


 


Section 7.13 – Jurisdiction


 


The parties to the Term Sheet and these Terms
and Conditions agree that jurisdiction and venue in any action brought by any
party hereto pursuant to the Term Sheet and these Terms and Conditions shall
properly lie and shall be brought in any federal or state court located in the
Borough of Manhattan, City and State of New York. By execution and delivery of
Term Sheet and these Terms and Conditions, each party hereto irrevocably
submits to the jurisdiction of such courts for itself, himself or herself and
in respect of its, his or her property with respect to such action. The parties
hereto irrevocably agree that venue would be proper in such court, and hereby
irrevocably waive


 


16

















 


any objection that such court is an improper or inconvenient forum for
the resolution of such action.


 


Section 7.14 - Pronouns


 


The masculine pronoun shall include the
feminine and neuter, and the singular the plural, where the context so
indicates.


 


Section 7.15 – Counterparts


 


The Term Sheet and these Terms and Conditions
may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which together shall constitute one and the
same instrument.


 


Section 7.16
– Code Section 409A


 


If any payment of money, delivery of shares
of Common Stock or other benefits due to the Employee hereunder could cause the
application of an accelerated or additional tax under Section 409A of the
Code, such payment, delivery of shares of Common Stock or other benefits shall
be deferred if deferral will make such payment, delivery of shares of Common
Stock or other benefits compliant under Section 409A of the Code,
otherwise such payment, delivery of shares of Common Stock or other benefits
shall be restructured, to the extent possible, in a manner, determined by the
Company and reasonably acceptable to the Employee, that does not cause such an
accelerated or additional tax.


 


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