EXHIBIT 10.19


 


WH HOLDINGS (CAYMAN ISLANDS) LTD.


 


INDEPENDENT DIRECTORS STOCK OPTION PLAN


 


 


1.
Purpose of Plan.


 


The
WH Holdings (Cayman Islands) Ltd. Independent Directors Stock Option Plan (the
“Plan”) is designed:


 


(a)
to promote the long term financial interests and growth of WH Holdings (Cayman
Islands) Ltd. (the “Company”) and its affiliates by attracting and retaining
independent directors with the training, experience and ability to enable them
to make a substantial contribution to the success of the business of the
Company and its affiliates;


 


(b)
to motivate independent directors by means of growth-related incentives to
achieve long range goals; and


 


(c)
to further the alignment of interests of participants with those of the
equityholders of the Company through opportunities for increased ownership in
the Company.


 


2.
Definitions.


 


As
used in the Plan, the following words will have the following meanings:


 


(a)
“Affiliate” means, with respect to the Company, any corporation  directly
or indirectly controlling, controlled by, or under common control with,  the
Company or any other entity designated by the Committee in which the Company  or
an Affiliate has an interest.


 


(b)
“Board” means the Board of Directors of the Company.


 


(c)
“Change of Control” means an Organic Transaction as defined in the  Amended
and Restated Memorandum and Articles of Association of the Company.


 


(d)
“Code” means the Internal Revenue Code of 1986, as amended.


 


(e)
“Committee” means one or more committees each comprised of not less  than
three members of the Board appointed by the Board to administer the Plan or  a
specified portion thereof; provided, however, that if, at any time, there


 


 

















 


 


will be
only one director serving on the Board, the Committee may be composed of  the
sole director. Unless otherwise determined by the Board, if the Common  Shares
become registered under Section 12 of the Exchange Act and if the  Committee
is authorized to grant Options subject to Section 16 of the Exchange  Act,
each member of the Committee will be a “non-employee director” within the  meaning
of applicable Rule 16b-3 under the Exchange Act.


 


(f)
“Common Shares” means the common shares, par value $0.001 per share, of  the
Company.


 


(g)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.


 


(h)
“Exercise Price” means the price at which a Participant may purchase a  Common
Share, as provided in the Option Agreement.


 


(i)
“Fair Market Value” means the fair market value of a Share as of a  particular
date. If at any such time such Shares are not listed or admitted for  trading
on any national securities exchange or quoted on NASDAQ or a similar  service,
the Fair Market Value for such Shares means the fair market value of  such
Shares at such time as determined in good faith by the Committee. However,  subsequent
to an Initial Public Offering, the Fair Market Value of a Common  Share
will be the average of high bid and low asked prices of Common Shares as  reported
on the exchange on which it is listed as of such date, or if no such  quotation
is made on such date, the immediately preceding day on which there  were
quotations as reported in The Wall Street Journal.


 


(j)
“Grant” means an award made to a Participant pursuant to the Plan and  described
in Paragraph 5.


 


(k)
“Incentive Stock Option” means an Option which satisfies all of the  applicable
requirements of Code Section 422.


 


(l)
“Independent Director” means an individual who neither is: (i) an  employee
of the Company or any of its Affiliates; or (ii) designated as a  Director
by the Affiliates of the Company or its distributors.


 


(m)
“Initial Public Offering” means the underwritten public offering by the  Company
of its Common Shares pursuant to a registration statement (other than a  registration
statement relating solely to an employee benefit plan or  transaction
covered by Rule 145 of the Securities Act) that has been filed under  the
Securities Act and declared effective by the Securities and Exchange


 


 


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Commission,
or any other Federal agency at the time administering the Securities Act.


 


(n)
“Non-Statutory Stock Option” means an Option which does not satisfy all  of
the applicable requirements of Code Section 422 or which by its terms is
not  intended to be treated as an Incentive Stock Option.


 


(o)
“Option” means an option to purchase Common Shares.


 


(p)
“Option Agreement” means an agreement between the Company and a  Participant
that sets forth the terms, conditions and limitations applicable to  a
Grant.


 


(q)
“Participant” means an Independent Director of the Company or one of  its
Affiliates, to whom one or more Grants have been made and such Grants have  not
all been forfeited or terminated under the Plan.


 


(r)
“Preferred Shares” means Preferred Shares as defined in the Amended and  Restated
Memorandum and Articles of Association of WH Holdings (Cayman Islands)  Ltd.
and known as the “12% Series A Cumulative Convertible Preferred Shares”.


 


(s)
“Securities Act” means the Securities Act of 1933, as amended. 


 


(t)
“Share” means a share of Common Shares.


 


(u)
“Shareholders’ Agreement” means the shareholders’ agreement, dated as  of
July 31, 2002, by and among WH Holdings (Cayman Islands) Ltd., Whitney V,  L.P.,
Whitney Strategic Partners V, L.P., and WH Investments Ltd., and CCG  Investments
(BVI), L.P., CCG Associates-QP, LLC, CCG Associates-AI, LLC, CCG GP  Fund
LLC, CCG Investment Fund-AI, LP, and CCG AV, LLC, and certain other persons  who
may, from time to time, become party to the agreement.


 


(v)
“Subsidiary” means any entity in an unbroken chain of entities  beginning
with the Company if each of the entities, or group of commonly  controlled
entities, other than the last entity in the unbroken chain then owns  50%
or more of the total combined voting power of the other entities in such  chain. 


 


(w)
“Total Exercise Cost” means an amount equal to the Exercise Price  multiplied
by the number of Shares being purchased pursuant to the Option.


 


 


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3.
Administration of Plan.


 


(a)
The Plan will be administered by the Committee. The Committee may adopt  its
own rules of procedure. Action of a majority of the members of the Committee  taken
at a meeting, or action taken without a meeting by unanimous written  consent,
will constitute action by the Committee. The Committee will have the  power
and authority to administer, construe and interpret the Plan, to make  rules
for carrying it out and to make changes to such rules.


 


(b)
The Committee may employ attorneys, consultants, accountants,  appraisers,
brokers or other persons. The Committee, the Company, and the  officers
of the Company will be entitled to rely upon the advice, opinions or  valuations
of any such persons. All actions taken and all interpretations and  determinations
made by the Committee in good faith will be final and binding  upon
all Participants, the Company and all other interested persons. No member  of
the Committee will be personally liable for any action, determination or  interpretation
made in good faith with respect to the Plan or the Grants, and  all
members of the Committee will be fully protected by the Company with respect  to
any such action, determination or interpretation.


 


4.
Eligibility.


 


Subject
to Paragraph 5(a), the Committee may from time to time make Grants  under
the Plan to such Independent Directors of the Company or any of its  Affiliates,
and in such form and having such terms, conditions and limitations  as
the Committee may determine. Prior to participation in the Plan, the  Committee
may require any Participant to execute a Release and Waiver to Rights  to
payments and benefits under certain plans of Herbalife International, Inc.  Grants
may be made singly, in combination or in tandem. The terms, conditions  and
limitations of each Grant under the Plan will be set forth in an Option  Agreement,
in a form or forms approved by the Committee; provided, however, that  such
Option Agreement will contain provisions dealing with the treatment of  Grants
in the event of the termination, death or disability of a Participant,  and
may also include provisions concerning the treatment of Grants in the event  of
a Change of Control of the Company.


 


5.
Grants.


 


(a)
The Plan provides for grants only to Independent Directors of  Non-Statutory
Stock Options.


 


(b)
At the time of the Grant, the Committee will determine, and will  include
in the Option Agreement or other Plan rules, the Option exercise price  and


 


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such other
conditions and restrictions on the grant or exercise of the Option as  the
Committee deems appropriate.


 


(c)
In addition to any other restrictions contained in the Plan, an Option  granted
under the Plan may not be exercised more than 10 years after the date it  is
granted.


 


(d)
Payment of the Option price will be made in cash or, if subsequent to  an
Initial Public Offering, through the delivery of irrevocable instructions to  a
broker to deliver promptly to the Company an amount equal to the Option price,  in
accordance with the terms of the Plan, the Option Agreement and of any  applicable
guidelines of the Committee in effect at the time, and subject to  increase
for any applicable withholding requirements.


 


6.
Limitations and Conditions.


 


(a)
The number of Shares available for Grants under the Plan will be 1,000,000,
subject to adjustment in accordance with Paragraphs 7 or 8 hereof.  If
an Option expires, is canceled, forfeited or otherwise terminated without  being
exercised or settled, the Shares allocable to the unexercised portion of  such
Option shall remain available for grant under the Plan.


 


(b)
No Grants will be made under the Plan more than 10 years after the date  the
Plan is adopted by the Board or is approved by the shareholders of the  Company,
whichever is earlier, but the terms of Grants made on or before the  expiration
of the Plan may extend beyond such expiration.


 


(c)
Nothing contained herein will affect the right of the Company to  terminate
any Participant’s employment or services at any time or for any  reason.


 


(d)
Other than as specifically provided with regard to the death of a  Participant
or as hereinafter provided, no benefit under the Plan will be  subject
in any manner to anticipation, alienation, sale, transfer, assignment,  pledge,
encumbrance, or charge, and any attempt to do so will be void. No such  benefit
will, prior to receipt thereof by the Participant, be in any manner  liable
for or subject to the debts, contracts, liabilities, engagements, or  torts
of the Participant. At the time a Grant is made or amended or the terms or  conditions
of a Grant are changed, the Committee may provide for limitations or  conditions
on such Grant. Notwithstanding the preceding, the Participant may  transfer
all or part of the Option by gift to either to any member of the  Participant’s
Immediate Family, to a trust or partnership or limited liability  company
solely for the benefit of the Participant or such Participant’s  Immediate
Family Members, jointly to the Participant and one or more of the  foregoing,
or to any combination thereof, if applicable law permits and the  Option
Agreement so provides. “Immediate Family” means the Participant’s spouse,  children
and grandchildren.


 


(e)
Participants will not be, and will not have any of the rights or  privileges
of, equityholders of the Company in respect of any Shares purchasable  in
connection with any Grant unless and until certificates representing any such


 


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Shares have
been issued by the Company to such Participants. Prior to an Initial  Public
Offering, each Participant will be required to enter into the  Shareholders’
Agreement with the Company, or execute a joinder to the  Shareholders’
Agreement in a form provided by the Company, upon the exercise of  any
Option under the Plan.


 


(f)
No election as to benefits or exercise of Options, or other rights may  be
made during a Participant’s lifetime by anyone other than the Participant  except
by a legal representative appointed for or by the Participant, unless  such
all or a part of such Option has been transferred either to any member of  the
Participant’s Immediate Family, to a trust or partnership or limited  liability
company solely for the benefit of the Participant or such  Participant’s
Immediate Family members, jointly to the Participant and one or  more
of the foregoing, or to any combination thereof, in which case it shall  only
be exercisable by such transferee.


 


(g)
Absent express provisions to the contrary, any Grant under the Plan will not be
deemed compensation for purposes of computing benefits or  contributions
under any retirement plan of the Company or its Subsidiaries and  will
not affect any benefits under any other benefit plan of any kind now or  subsequently
in effect under which the availability or amount of benefits is  related
to level of compensation. The Plan is not an “employee benefit plan”  under
Section 3(3) of the Employee Retirement Income Security Act of 1974, as  amended.


 


(h)
Unless the Committee determines otherwise, no benefit or promise under  the
Plan will be secured by any specific assets of the Company or any of its  Subsidiaries,
nor will any assets of the Company or any of its Subsidiaries be  designated
as attributable or allocated to the satisfaction of the Company’s  obligations
under the Plan.


 


7.
Adjustments.


 


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, or as required under any Option Agreement, the Committee may  adjust
appropriately the number or kind of Shares or securities subject to the  Plan
and available for or covered by Grants and Option prices related to  outstanding
Grants and make such other revisions to outstanding Grants as it  deems
are equitably required.


 


8.
Merger, Consolidation, Exchange, Acquisition, Liquidation or Dissolution.


 


In
its absolute discretion, and on such terms and conditions as it deems  appropriate,
coincident with or after the grant of any Option, the Committee may  provide,
with respect to the 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


 


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another
corporation, a Change of Control or the recapitalization,  reclassification,
liquidation or dissolution of the Company, either (a) that  such
Option cannot be exercised after such event, in which case the Committee  may
also provide (but will be under no obligation to provide), either by the  terms
of such Option or by a resolution adopted prior to the occurrence of such  event,
that for some period of time prior to such event, such Option will be  exercisable
as to all Shares subject thereto which are exercisable, or, by  virtue
of the event, become exercisable, notwithstanding anything to the  contrary
herein (but subject to the provisions of Paragraph 6(b)) or that the  Option
will be repurchased by the Company at a specific price and that, upon the  occurrence
of such event, such Option will terminate and be of no further force  or
effect, or (b) that even if the Option will remain exercisable after such  event,
from and after such event, any such Option will be exercisable only for  the
kind and amount of securities and/or other property, or the cash equivalent  thereof,
receivable as a result of such event by the holder of a number of  Shares
for which such Option could have been exercised immediately prior to such  event,
or that the Option will be repurchased by the Company at a specific  price.


 


In
addition, in the event of a Change of Control, the Committee may, in its  absolute
discretion and on such terms and conditions as it deems appropriate,  provide,
either by the terms of such Option or by a resolution adopted prior to  the
occurrence of the Change of Control, that such Option will be exercisable as  to
all or any portion of the Shares subject thereto, notwithstanding anything to  the
contrary herein (but subject to the provisions of Paragraph 6(b)).


 


9.
Securities Law Requirements.


 


Shares
shall not be issued under the Plan unless the issuance and delivery  of
the Shares comply with (or are exempt from) all applicable requirements of  law,
including (without limitation) the Securities Act, the rules and  regulations
promulgated thereunder, state securities laws and regulations and  the
regulations of any stock exchange or other securities markets on which the  Company’s
securities may then be traded.


 


10.
Amendment and Termination.


 


The
Board will have the authority to make such amendments to any terms and  conditions
applicable to outstanding Grants as are consistent with the Plan  provided
that, except for adjustments under Paragraph 7 or 8, no such action  will
modify such Grant in a manner adverse to the Participant without the  Participant’s
consent except as such modification is provided for or  contemplated
in the terms of the Grant.


 


The
Board may amend, suspend or terminate the Plan except that no such  action,
other than an action under Paragraph 7 or 8, may be taken which would,  without


 


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shareholder
approval (but only if such approval is necessary for exemption under  Section 16(b)
of the Exchange Act or to meet the applicable requirements of Code  Section 422),
increase the aggregate number of Shares available for Grants under  the
Plan, change the eligible class of individuals, decrease the price of  outstanding
Options, change the requirements relating to the Committee or extend  the
term of the Plan.


 


11.
Withholding Taxes.


 


The
Company will have the right to deduct from any cash payment made under  the
Plan any federal, state or local income or other taxes required by law to be  withheld
with respect to such payment. The Participant must pay to the Company  such
amount as may be requested by the Company for the purpose of satisfying any  liability
for such withholding taxes before the obligation of the Company to  deliver
certificates for the Shares upon the exercise of an Option arises. Any  Option
Agreement may provide that the Participant may elect, in accordance with  any
conditions set forth in such Option Agreement, to pay a portion or all of  such
withholding taxes in Shares.


 


12.
Governing Law.


 


The
Plan will be governed by and construed and enforced in accordance with  the
laws of the state of New York, without regard to the conflicts of laws  principles
thereof.


 


13.
Effective Date and Termination Date.


 


The
Plan will be effective on July 31, 2002 and will terminate on July 31,  2012,
subject to earlier termination pursuant to Paragraph 10.


 


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