EXHIBIT
10.23


 


NON-STATUTORY STOCK OPTION AGREEMENT


 


AGREEMENT
(this “Agreement”) entered into as of the 10th day of  March, 2003, by and between
WH Holdings (Cayman Islands) Ltd., a Cayman Islands  company (the “Company”), and the undersigned
employee (the “Employee”) of the  Company or its Subsidiaries.


 


WHEREAS,
pursuant to the WH Holdings (Cayman Islands) Ltd. Stock  Option Plan (the “Plan”), the
Committee designated under the Plan desires to  grant to the Employee an option to acquire
Common Shares, par value $0.001 per  share, of the Company; and


 


WHEREAS,
the Employee 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 Employee,  intending to be legally
bound, hereby agree as follows:


 


1.
Grant of Option. On the terms and conditions hereinafter set  forth, the Company hereby
grants to the Employee an option to purchase all (or  any part) of (i) 1,207,583 Shares at an
exercise price of $0.44 per share and  (ii) 603,792 Shares at an exercise price of
$1.76 per share (the aforementioned  clauses (i) and (ii) collectively, the “Option”).
This Option is granted as of  the date hereof (the “Grant Date”). The Option is a Non-Statutory Stock
Option.  This Option is
granted pursuant to the Plan, and is governed by the terms and  conditions of the Plan. All
defined terms used herein, unless specifically  defined in this Agreement, have the meanings
assigned to them in the Plan.  Employee has previously been provided with a copy of that certain
Private  Placement
Memorandum dated July 15, 2002 regarding the offering of the Company’s  12% Series A Cumulative
Convertible Preferred Shares, as supplemented by  Supplements Nos. 1, 2 and 3 thereto
(collectively, the “PPM”). To the Company’s  knowledge, the disclosure of the Company’s
share ownership set forth in the PPM  beneath the caption “Share Ownership” therein
accurately sets forth, in all  material respects, the share ownership of the Company as of the dates
indicated  therein.


 


2.
Time of Exercise of Option.


 


(a) The
Option will become vested and exercisable (pro rata according to  the number of Shares
exercisable at the relevant exercise prices specified  above) fifteen percent (15%)
as of the date hereof, and thereafter, in quarterly  5% increments (pro rata according to the
number of Shares exercisable at the  relevant exercise prices specified  above) commencing on
June 30, 2003 and on each subsequent last day of each  following calendar quarter
until the Option becomes fully vested and exercisable  as of June 30, 2007.


 


(b)
Notwithstanding the preceding or any other provision in this  Agreement or the Plan to the
contrary, in the event that the Sponsors sell, for  cash, 100% of their investments in the debt
and equity securities of the Company  and each of its Subsidiaries (whether by sale
to an independent third party  (i.e., excluding either Sponsor, the Company or any of their respective  affiliates) or in connection
with a liquidating distribution in connection with  a sale of all or substantially all of the
assets of the Company) in connection  with either: (i) a Change in Control or (ii)
an Initial Public Offering, the  previously unexercisable portion of the Option
will immediately become 100%  vested and exercisable immediately prior to the closing of any such
transaction.  In such event,
Employee shall have the right, by giving notice five days before  such closing, to exercise the
Option, in whole or in part, effective as of and  conditioned upon such closing. For purposes of
the Plan and this Agreement,  “Sponsors” means Whitney & Co., LLC, Golden Gate Private Equity,
Inc. and the  respective
investment funds managed by each of them.


 


3.
Term of Options and Repurchase Rights.


 


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(a)
The Option will expire 10 years from the date hereof, butwill be subject to
earlier termination as provided below.


 


(b)
Upon Employee’s termination of employment with the Company or  any of its Subsidiaries for
whatever reason:


 


(i)
the unexercisable portion of the Option hereby granted  will terminate on the date of
such termination.


 


(ii)
the exercisable portion of the Option hereby granted  will be treated as follows:


 


(A)
Subject to the repurchase rights described in  (c) below and the Shareholders’ Agreement, if
the Employee is terminated for any  reason except for Cause, the exercisable
portion of the Option hereby granted  will be exercisable for 30 days following the
termination, unless the Employee  terminates employment on account of a “disability”
as defined in Code Section 22(e) or if the Employee dies, in which case,
such Employee or such Employee’s  personal representative, respectively, may
exercise the exercisable portion of  the Option hereby granted for 90 days
following the termination of employment on  account of such disability or the Employee’s
death.


 


(B)
If the Employee is terminated for Cause, the  exercisable portion of the Option hereby
granted will terminate on the date of  such termination.


 


(c)
The Company has the right to repurchase the Shares acquired  upon the exercise of Options
for a period of 90 days after the Employee  terminates employment or 90 days after the
Shares for which the Option is  exercised are acquired, whichever is later
(the “Repurchase Period”).  Notwithstanding anything to the contrary in the Shareholders’ Agreement,
the  purchase price
per Share payable under Section 6(a) or (b) of the Shareholder’s  Agreement where such
Termination (as defined in the Shareholders’ Agreement):


 


(i)
was due to resignation or for Cause shall be the  amount equal to the lesser of: (A) the Fair
Market Value at the time of such  termination; or (B) the relevant exercise
price for such Shares;


 


(ii)
was without Cause or because of death, disability or  Retirement (as defined below) shall be the
amount equal to the greater of: (A)  the Fair Market Value at the time of such
termination; or (B) the relevant  exercise price for such Shares.


 


(d)
For purposes of this Agreement, (i) “Cause” shall have the  meaning ascribed to such term
in any written employment agreement between  Employee and the Company or one or more of its
Subsidiaries, as the same may be  amended or modified from time to time and (ii)
“Retirement” shall meanEmployee’s resignation from the service of the Company or its
Subsidiaries, so  long as Employee
does not engage in any employment or consulting activities with  any third party which require
in excess of 10 hours per week during the  Repurchase Period.


 


(e)
The Company’s repurchase option set forth in Section 4(c)  above shall terminate upon
the consummation of an Initial Public Offering.


 


4.
Manner of Exercise of Option. The Option may be exercised by  delivery, via first class
mail, fax or electronic mail of a Notice of Option  Exercise and related forms to the Company
stating the number of Shares with  respect to which the Option is being exercised
and accompanied by payment of the  Total Exercise Cost in cash or by check, bank
draft or money order payable to  the order of the Company. The Company will
cooperate in any reasonable manner(including cooperating with Employee’s
broker) to allow Employee to exercise the  Option in any expedient manner, so long as
such cooperation does not violate  applicable law or could not result in any
adverse consequences to the Company.


 


5.
Non-Transferability. The right of the Employee to exercise the  Option (as and when
exercisable) may not be assigned or transferred by the  Employee other than (i) by
will or the laws of descent and distribution or (ii)


 


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with
the prior written approval of the Committee (not to be unreasonably  withheld), for estate
planning purposes. The Option may be exercised and the  Shares may be purchased
during the lifetime of the Employee only by the Employee  (or the Employee’s legal
representative in the event that the Employee’s  employment is terminated due to “disability”
as defined in Code Section 22(e) or  any other permitted transferee of the Option).
Any attempted assignment or  transfer, except as hereinabove provided, including without limitation
any  purported
assignment, whether voluntary or by operation of law, pledge,  hypothecation or other
disposition contrary to the provisions hereof, or any  levy of execution,
attachment, trustee process or similar process, whether legal  or equitable, upon the
Option, will in each instance be null and void.


 


6.
Representation Letter and Investment Legend.


 


(a)
In the event that for any reason the issuance of the Shares  to be issued upon exercise of
an exercisable Option will not be effectively  registered under the Securities Act upon any
date on which the Option is  exercised, the Employee (or the person exercising the Option pursuant to  Paragraph 6) will give a
written representation to the Company in the form of  paragraph 1 of Exhibit A attached hereto, and
the Company will place the  Securities Act legend described in paragraph 2 of Exhibit A upon any
certificate  for the Shares
issued by reason of such exercise.


 


(b)
The Company will be under no obligation to qualify Shares or  to cause a registration
statement or a post-effective amendment to any  registration statement to be prepared for the
purpose of covering the issuance  of Shares.


 


7.
Adjustments of Shares and Options.


 


(a)
In the event of any change in the outstanding Shares by  reason of an acquisition,
spin-off or reclassification, recapitalization or  merger, combination or exchange of Shares or
other corporate exchange, Change of  Control or similar event, the Committee shall
adjust appropriately the number or  kind of Shares or securities subject to the
Option and exercise prices related  thereto and make such other revisions to the
Option as it deems are equitably  required.


 


(b)
With respect to any merger or consolidation of the Company  into another corporation, the
sale or exchange of all or substantially all of  the assets of the Company, a Change of Control
or the recapitalization,reclassification, liquidation or dissolution of the Company or any other
similar  fundamental
transaction involving the Company or any of its Subsidiaries (any of  the foregoing, a “Qualifying
Event”), the  Committee shall
provide either: (i) that the Option cannot be exercised after  such Qualifying Event,
provided that nothing in this Section 7(b) shall prohibit  Employee from exercising any
then exercisable portion of the Option (including  any portion thereof which will become
exercisable by virtue of such Qualifying  Event) prior to, or simultaneously with, the
occurrence of such Qualifying Event  and that, upon the occurrence of such
Qualifying Event, the Option will  terminate and be of no further force or effect
and no longer be outstanding;  (ii) that the Option will remain outstanding after such Qualifying
Event, and  from and after
the consummation of such Qualifying Event, the Option will be  exercisable for the kind and
amount of securities and/or other property  receivable as a result of such Qualifying
Event by the holder of a number of  Shares for which the Option could have been
exercised immediately prior to such  Qualifying Event; or (iii) the then
exercisable portion of the Option (including  any portion thereof which will become
exercisable by virtue of such Qualifying  Event) will be repurchased by the Company at a
specific price (it being agreed  that, with respect to each Share for which all
or any portion of the Option is  then exercisable, such specific price shall be
equal to the Fair Market Value of  such Share less the applicable Exercise Price)
and that, upon the occurrence of  such Qualifying Event, the Option will
terminate and be of no further force or  effect and no longer be outstanding. In the
event of any conflict orinconsistency between the terms and conditions of this Section 7(b)
and the  terms and
conditions of Section 8 of the Plan, the terms and condition of this  Section 7(b) shall
control.


 


8.
No Special Employment Rights. Nothing contained in this


 


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Agreement
will be construed or deemed by any person under any circumstances to  bind the Company or any of
its Subsidiaries to continue the employment of the  Employee for the period within which this
Option may vest or for any other  period.


 


9.
Rights as a Shareholder. The Employee will have no rights as a  shareholder with respect to
any Shares which may be purchased upon the exercise  of this Option unless and until a certificate
or certificates representing such  Shares are duly issued and delivered to the Employee.


 


10.
Withholding Taxes. The Employee hereby agrees, as a condition  to any exercise of the
Option, to provide to the Company an amount sufficient to  satisfy its obligation to
withhold certain federal, state and local taxes  arising by reason of such exercise (the “Withholding
Amount”), if any, by (a)authorizing the Company to withhold the Withholding Amount from the
Employee’s  cash
compensation, or (b) remitting the Withholding Amount to the Company in  cash; provided that, to the
extent that the Withholding Amount is not provided  by one or a combination of such methods, the
Company may at its election  withhold from the Shares delivered upon exercise of the Option that
number of  Shares having a
Fair Market Value as of the date immediately prior to the  issuance of such Shares equal
to the Withholding Amount.


 


11.
Execution of Shareholders’ Agreement. The Employee  acknowledges that, in connection with his or
her prior or future purchase of  Shares of the Company, unless such
Shareholders’ Agreement is no longer in  effect, he or she will execute and deliver the
Shareholders’ Agreement or a  joinder or counterpart signature page thereto. The Employee further
agrees that  all Shares
acquired by such Employee upon exercise of the Option will be subject  to the terms and conditions
of the Shareholders’ Agreement, if then in effect,  as modified hereby.


 


12.
Lock-Up Agreements. The Employee agrees that notwithstanding  anything to the contrary
contained in this Agreement, in the event of an Initial  Public Offering or any other
public offering of securities of the Company,  except to the extent that: (a) the Employee
sells his or her Shares obtained  upon the exercise of the Option to the
underwriters of the Company’s securities  in connection with such offering or (b) the
underwriters do not require the  following restrictions of all of the Company’s
directors and officers, such  Employee shall not (i) offer, hedge, pledge, sell or contract to sell
any such  Shares, (ii)
sell any option or contract to purchase any Shares, (iii) purchase  any option or contract to
sell any Shares, (iv) grant any option, right or  warrant for the sale of any Shares, or (v)
lend or otherwise dispose of or  transfer any Shares during the longer of (A)
any black-out period requested by  underwriters conducting any such public
offering of securities on behalf of the  Company and (B) during the seven days prior to
and during the 180 day period  beginning on the effective date of such initial public offering or other
public  offering of
securities; provided, however, that such Employee shall, in any  event, be entitled to sell
his or her Shares commencing on the expiration of the  black-out period described in
the aforementioned clause (A) or (B).


 


*********


 


{Signatures on Following Page}


 


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OPTION AGREEMENT


 


Counterpart Signature Page


 


IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed, by its
officer thereunto duly authorized, and the Employee has executed this
Agreement, all as of the day and year first above written.


 


	
  WH HOLDINGS

  	
  EMPLOYEE

  
	
  (CAYMAN ISLANDS) LTD.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ STEPHAN KALUZNY

  	
   

  	
  /s/ BRIAN KANE

  	
   

  
	
   

  	
  Title: Director

  	
  BRIAN KANE

  
	
   

  	
   

  
	
  Stephan Kaluzny

  	
   

  	
  Address:

  
	
  (print name)

  	
   

  
	
   

  	
   

  
	
   

  	
  c/o Herbalife International, Inc.

  
	
   

  	
  1800 Century Park East

  
	
   

  	
  Los Angeles, CA 90067

  
	
   

  	
  Facsimile Number: (310) 557-3906

  



 


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  EXHIBIT A

  



 


TO:  WH HOLDINGS (CAYMAN ISLANDS) LTD.


 


The
undersigned hereby irrevocably exercises the right to  purchase
                            
of the Common Shares, par value $0.001 per share  (“Common Shares”) of WH Holdings (Cayman
Islands) Ltd., a Cayman Islands company  (the “Company”), evidenced by the attached
Option, and herewith makes payment of  the relevant exercise price with respect to
such shares in full, all in  accordance with the conditions and provisions of said Option.


 


1. The undersigned hereby
represents and warrants to and agrees with the Company as follows:


 


(a)
The undersigned understands and acknowledges that an  investment in the Common Shares issuable upon
exercise of this Option involves a  high degree of risk and that there are
limitations on the liquidity of the  Common Shares issuable upon exercise of this
Option. The undersigned is able to  bear the economic risk of an investment in the
Common Shares issuable upon  exercise of this Option. The undersigned has adequate means of providing
for the  undersigned’s
current needs and contingencies; is able to afford to hold the  Common Shares issuable upon
exercise of this Option for an indefinite period;  and has such knowledge and experience in
financial and business matters such  that the undersigned is capable of evaluating
the merits and risks of the  investment in the Common Shares issuable upon exercise of this Option;


 


(b)
The undersigned is acquiring the Common Shares issuable upon  exercise of this Option for its
own account for investment and not as a nominee  and not with a present view to the
distribution thereof in violation of the  Securities Act of 1933, as amended (the “1933
Act”). The undersigned understands  that the undersigned must bear the economic
risk of this investment indefinitely  unless such shares are registered pursuant to
the 1933 Act and any applicable  state securities laws, or an exemption from
such registration is available. The  undersigned has no plan or intention to sell
the Common Shares issuable upon  exercise of this Option at any predetermined
time, and has made no predetermined  arrangements to sell such shares;


 


(c)
The undersigned will not make any sale, transfer or other  disposition of the Common
Shares issuable upon exercise of this Option in  violation of (1) the 1933 Act, the Securities
Exchange Act of 1934, as amended,  any other applicable Federal or state
securities laws or the rules and  regulations of the Securities and Exchange
Commission or of any state securities  commissions or similar state authorities
promulgated under any of the foregoing,  or (2) any applicable securities laws of
jurisdictions outside the United States  and the rules and regulations thereunder.


 


2.
The undersigned agrees not to offer, sell, transfer or  otherwise dispose of any of
the Common Shares obtained on exercise of the  Option, except in accordance with the
provisions of the Option, and consents  that the following legend may be affixed to
the stock certificates for the  Common Shares hereby subscribed for, if such
legend is applicable:


 


“THE
SALE, TRANSFER OR ENCUMBRANCE OF THE SECURITIES REPRESENTED BY THIS  CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF A SHAREHOLDERS’  AGREEMENT, DATED AS OF JULY 31, 2002
AMONG WH HOLDINGS (CAYMAN ISLANDS)  LTD. AND CERTAIN HOLDERS OF ITS OUTSTANDING
SHARE CAPITAL, AS SUCHAGREEMENT MAY BE AMENDED. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO  COST BY WRITTEN REQUEST MADE
BY THE HOLDER OF RECORD OF THIS CERTIFICATE  TO THE SECRETARY OF WH HOLDINGS (CAYMAN
ISLANDS) LTD.  The securities
represented hereby have not been registered under the  Securities Act of 1933, as
amended (the “1933 Act”), or any provincial  or state securities law, and may not be sold,
transferred, pledged,hypothecated or otherwise disposed of until a registration statement  under the 1933 Act and
applicable provincial or state securities laws  shall have become effective with regard
thereto, or an exemption from  registration under the 1933 Act or applicable provincial or state  securities laws is available
in connection with such offer, sale or  transfer.”


 


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3.
The undersigned requests that stock certificates for such  shares be issued, and a new
option agreement representing any unexercised  portion hereof be issued in the name of the
registered holder and delivered to  the undersigned at the address set forth
below:


 


Dated:


 


 


	
   

  	
   

  
	
  Signature of Registered Holder

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name of Registered Holder (Print)

  	
   

  



 


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