Document:

exv10w61

 

Exhibit 10.61

HERBALIFE LTD.

INDEPENDENT DIRECTORS STOCK UNIT AWARD AGREEMENT

This Independent Directors Stock Unit Award Agreement (this “Agreement”) is dated as of
this ___ day of January, 2006 (the “Grant Date”), and is between Herbalife Ltd. (the
“Company”) and
                    
(“Participant”).

WHEREAS, the Company, by action of the Board and approval of its shareholders established the
Herbalife Ltd. 2005 Stock Incentive Plan (the
“Plan”);

WHEREAS, the Company, by action of the Board established the Herbalife Ltd. Independent Directors
Deferred Compensation and Stock Unit Plan (the “Independent
Directors Plan”);

WHEREAS, the Board has determined that Participant is an independent director of the Company and
the Company desires to encourage Participant to own Common Shares for the purposes stated in
Section 1 of the Plan and the Independent Directors Plan;

WHEREAS, Participant and the Company have entered into this Agreement to govern the terms of the
Stock Unit Award (as defined below) granted to Participant by the
Company.

NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree as follows:

1. Definitions

Defined terms in the Plan and the Independent Directors Plan shall have the same meaning in this
Agreement, except where the context otherwise requires.

2. Grant of Stock Units

On the Grant Date, the Company hereby grants to Participant an Award of                      Stock Units
(the “Award”) in accordance with the Independent Directors Plan and Section 9 of the Plan
and subject to the conditions set forth in this Agreement, the Independent Directors Plan and the
Plan (each as amended from time to time). Each Stock Unit represents the right to receive one
Common Share (as adjusted from time to time pursuant to Section 12 of the Plan) subject to the
fulfillment of the vesting and other conditions set forth in this Agreement. By accepting the
Award, Participant irrevocably agrees on behalf of Participant and Participant’s successors and
permitted assigns to all of the terms and conditions of the Award as set forth in or pursuant to
this Agreement, the Independent Directors Plan and the Plan (as each may be amended from time to
time).

3. Vesting

Participant’s Stock Units and rights in and to the Common Shares shall not be vested as of the
Grant Date and shall be forfeitable unless and until otherwise vested pursuant to the terms of this
Agreement. Subject to Participant’s continued service as a member of the Board, the Award shall
become vested with respect to 25% of the Stock Units awarded hereunder on each of April 15, 2006,
July 15, 2006, October 15, 2006 and January 15, 2007 (each such date a “Vesting Date”).
Stock Units awarded hereunder that have vested and are no longer subject to forfeiture are referred
to herein as “Vested Units.” Stock Units awarded hereunder that are not vested and remain
subject to forfeiture are referred to herein as “Unvested Units.”

4. Deferred Payment

     (a) On the Grant Date the Stock Units granted hereunder shall be credited to the Participant’s
Deferral Account pursuant to Section 5 of the Independent Directors Plan.

 

 

     (b) Subject to Participant’s continuous service as a member of the Board, on the third
anniversary of the Grant Date, there shall be credited to Participant’s Deferral Account one Common
Share in exchange for each Vested Unit then held in Participant’s Deferral Account.

     (c) In the event that Participant ceases to serve as a member of the Board for any reason
prior to the third anniversary of the Grant Date, the Company shall, within thirty (30) days
following such cessation, subject to Paragraph 12(e) hereof and Section 16 of the Plan, issue to
Participant a number of Common Shares equal to the number of Vested Units held in Participant’s
Deferral Account at the time of such cessation.

5. Status of Participant

Participant shall have no rights as a stockholder (including, without limitation, any voting or
dividend rights with respect to the Common Shares subject to the Award) with respect to either the
Stock Units granted hereunder or the Common Shares underlying the Stock Units, unless and until
such Common Shares are issued pursuant to the terms of the Independent Directors Plan, and then
only to the extent of such issued Common Shares.

6. Effect of Termination of Employment; Change in Control

     (a) General. Except as provided in Paragraphs 6(b), (c) or (d), upon the cessation of
Participant’s service as a member of the Board for any reason, the Unvested Units shall be
forfeited by Participant and cancelled and surrendered to the Company without payment of any
consideration to Participant.

     (b) Death; Disability. Upon the cessation of Participant’s service as a member of the
Board by reason of Participant’s of death or disability (as such term if defined in Section 22(e)
of the Code), all Unvested Units shall vest as of the date of such termination of employment.

     (c) Change in Control. Upon the occurrence of a Change in Control, the vesting of the
Award shall be accelerated such that 100% of the aggregate number of Stock Units subject to the
Award (as set forth in Paragraph 2 above) shall be or become Vested Units as of immediately prior
to the consummation of the Change in Control.

7. Withholding and Disposition of Common Shares

     (a) Generally. Participant is liable and responsible for all taxes owed in connection
with the Award, regardless of any action the Company takes with respect to any tax withholding
obligations that arise in connection with the Award. The Company does not make any representation
or undertaking regarding the treatment of any tax withholding in connection with the grant or
vesting of the Award or the subsequent sale of Common Shares issuable pursuant to the Award. The
Company does not commit and is under no obligation to structure the Award to reduce or eliminate
Participant’s tax liability.

     (b) Payment of Withholding Taxes. Prior to any event in connection with the Award
(e.g., vesting or payment in respect of the Award) that the Company determines may result in any
domestic or foreign tax withholding obligation, whether national, federal, state or local,
including any social tax obligation (the “Tax Withholding Obligation”), Participant is
required to

 

 

arrange for the satisfaction of the amount of such Tax Withholding Obligation in a manner
acceptable to the Company.

          (i) By Withholding Common Shares. Unless Participant elects to satisfy the Tax
Withholding Obligation by an alternative means in accordance with Paragraph 7(b)(ii), Participant’s
acceptance of this Award constitutes Participant’s instruction and authorization to the Company to
withhold on Participant’s behalf the number of Common Shares from those Common Shares issuable to
Participant at the time when the Award becomes vested as the Company determines to be sufficient to
satisfy the Tax Withholding Obligation.

          (ii) By Other Payment. At any time not less than five (5) business days before any
Tax Withholding Obligation arises (e.g., a distribution date). Participant may notify the Company
of Participant’s election to pay Participant’s Tax Withholding Obligation by wire transfer,
cashier’s check or other means permitted by the Company. In such case, Participant shall satisfy
his or her tax withholding obligation by paying to the Company on such date as it shall specify an
amount that the Company determines is sufficient to satisfy the expected Tax Withholding Obligation
by (i) wire transfer to such account as the Company may direct, (ii) delivery of a cashier’s check
payable to the Company, Attn: General Counsel, at the Company’s principal executive offices, or
such other address as the Company may from time to time direct, or (iii) such other means as the
Company may establish or permit. Participant agrees and acknowledges that prior to the date the
Tax Withholding Obligation arises, the Company will be required to estimate the amount of the Tax
Withholding Obligation and accordingly may require the amount paid to the Company under this
Paragraph 7(b)(ii) to be more than the minimum amount that may actually be due and that, if
Participant has not delivered payment of a sufficient amount to the Company to satisfy the Tax
Withholding Obligation (regardless of whether as a result of the Company underestimating the
required payment or Participant failing to timely make the required payment), the additional Tax
Withholding Obligation amounts shall be satisfied in the manner specified in Paragraph 7(b)(i).

8. Plan Controls

The terms of this Agreement are governed by the terms of the Independent Directors Plan and the
Plan, as both exist on the Grant Date and as amended from time to time. In the event of any
conflict between the provisions of this Agreement and the provisions of the Independent Directors
Plan and/or the Plan, the terms of the Independent Directors Plan or the Plan (as applicable) shall
control, except as expressly stated otherwise in this Agreement. The term “Section” generally
refers to provisions within the Independent Directors Plan or the Plan; provided, however, the term
“Paragraph” shall refer to a provision of this Agreement.

9. Limitation on Rights; No Right to Future Grants; Extraordinary Item

By entering into this Agreement and accepting the Award, Participant acknowledges that: (a)
Participant’s participation in the Plan is voluntary and (b) the grant of the Award will not be
interpreted to form an employment relationship with the Company or any Subsidiary. The Company
shall be under no obligation whatsoever to advise Participant of the existence, maturity or
termination of any of Participant’s rights hereunder and Participant shall be responsible for
familiarizing himself or herself with all matters contained herein and in the Plan which may affect
any of Participant’s rights or privileges hereunder.

 

 

10. Committee Authority

Any question concerning the interpretation of this Agreement or the Plan, any adjustments required
to be made under the Plan, and any controversy that may arise under the Plan or this Agreement
shall be determined by the Committee (including any Subcommittee or other person(s) to whom the
Committee has delegated its authority) in its sole and absolute discretion. Such decision by the
Committee shall be final and binding.

11. Transfer Restrictions

     Any sale, transfer, assignment, encumbrance, pledge, hypothecation, conveyance in trust, gift,
transfer by bequest, devise or descent, or other transfer or disposition of any kind, whether
voluntary or by operation of law, directly or indirectly, of (i) Unvested Units, (ii) Vested Units
or (iii) Common Shares subject to such Unvested Units or Vested Units shall be strictly prohibited
and void; provided, however, Participant may assign or transfer the Award to the extent permitted
under the Independent Directors Plan, provided that the Award shall be subject to all the terms and
condition of the Independent Directors Plan, the Plan, this Agreement and any other terms required
by the Committee as a condition to such transfer.

12. General Provisions

     (a) No Waiver. No waiver of any provision of this Agreement will be valid unless in
writing and signed by the person against whom such waiver is sought to be enforced, nor will
failure to enforce any right hereunder constitute a continuing waiver of the same or a waiver of
any other right hereunder.

     (b) Undertaking. Participant hereby agrees to take whatever additional action and
execute whatever additional documents the Company may deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions imposed on either Participant or the
Award pursuant to the express provisions of this Agreement.

     (c) Entire Contract. This Agreement and the Plan constitute the entire contract
between the parties hereto with regard to the subject matter hereof. This Agreement is made
pursuant to the provisions of the Plan and will in all respects be construed in conformity with the
express terms and provisions of the Plan.

     (d) Successors and Assigns. The provisions of this Agreement will inure to the
benefit of, and be binding on, the Company and its successors and assigns and Participant and
Participant’s legal representatives, heirs, legatees, distributees, assigns and transferees by
operation of law, whether or not any such person will have become a party to this Agreement and
agreed in writing to join herein and be bound by the terms and conditions hereof.

     (e) Securities Law Compliance. The Company may impose such restrictions, conditions
or limitations as it determines appropriate as to the timing and manner of any resales by
Participant or other subsequent transfers by Participant of any Common Shares issued as a result of
or under this Award, including without limitation (i) restrictions under an insider trading policy,
(ii) restrictions that may be necessary in the absence of an effective registration statement under
the Securities Act of 1933, as amended, covering the Award and/or the Common Shares underlying the
Award and (iii) restrictions as to the use of a specified brokerage firm or other

 

 

agent for such resales or other transfers. Any sale of the Common Shares must also comply
with other applicable laws and regulations governing the sale of such shares.

     (f) Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to any awards granted under the Plan by electronic means or to request
Participant’s consent to participate in the Plan by electronic means. Participant hereby consents
to receive such documents by electronic delivery and, if requested, to agree to participate in the
Plan through an on-line or electronic system established and maintained by the Company or another
third party designated by the Company, and such consent shall remain in effect throughout
Participant’s term of service with the Company and thereafter until withdrawn in writing by
Participant.

[signature page follows]

 

 

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

	 	 	 	 	 
	 	 	HERBALIFE LTD.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	PARTICIPANT
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	[Participant]EX-4(E) SECURITY

 

Exhibit No. 4(E)

(FACE OF SECURITY)

Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”) to the Issuer or its agent for registration of transfer,
exchange or payment, and such certificate is registered in the name of Cede & Co., or in such other
name as requested by an authorized representative of DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner hereof,
Cede & Co., has an interest herein.

	 	 	 
	REGISTERED
	 	REGISTERED
	NO. R-001
	 	$100,000,000

CUSIP No. 743315 AH 6

SEE REVERSE FOR CERTAIN DEFINITIONS

THE PROGRESSIVE CORPORATION

7.30% NOTE DUE 2006

     THE PROGRESSIVE CORPORATION, an Ohio corporation (the “Issuer”), for value received, hereby
promises to pay to CEDE & Co., c/o The Depository Trust Company, 55 Water Street, New York, New
York 10041 or registered assigns, at the office or agency of the Issuer at the office of the
Trustee in Boston, Massachusetts, the principal sum of ONE HUNDRED MILLION DOLLARS ($100,000,000)
on June 1, 2006, in such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay interest semiannually
on June 1 and December 1 of each year, commencing on December 1, 1996, on said principal sum at
said office or agency, in like coin or currency, at the rate per annum specified in the title of
this Note, from the June 1 or the December 1, as the case may be, next preceding the date of this
Note to which interest has been paid, unless the date hereof is a date to which interest has been
paid, in which case from the date of this Note, or unless no interest has been paid on the Notes,
in which case from May 28, 1996, until payment of said principal sum has been made or duly provided
for; provided, that payment of interest may be made at the option of the Issuer by check mailed to
the address of the person entitled thereto as such address shall appear on the Security Register.
Notwithstanding the foregoing, if the date hereof is after the fifteenth day of May or November, as
the case may be, and before the following June 1 or December 1, this Note shall bear interest from
such June 1 or December 1; provided, that if the Issuer shall default in the payment of interest
due on such June 1 or December 1, then this Note shall bear interest from the next preceding June 1
or December 1, to which interest has been paid or, if no interest has been paid on this Note, from
May 28, 1996. The interest so payable on any June 1 or December 1 will, subject to certain
exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in
whose name this Note

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is registered at the close of business on May 15 or November 15, as the case
may be, next preceding such June 1 or December 1.

     Reference is made to the further provisions of this Note set forth on the reverse hereof. Such
further provisions shall for all purposes have the same effect as though fully set forth at this
place.

     This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the Indenture referred to on the
reverse hereof.

     IN WITNESS WHEREOF, The Progressive Corporation has caused this instrument to be signed by its
duly authorized officers and has caused its corporate seal to be affixed hereto or imprinted
hereon.

THE PROGRESSIVE CORPORATION

[CORPORATE SEAL]

	 	 	 
	 

	 	By: /s/ Charles B. Chokel
	 

	 	Charles B. Chokel
	 

	 	Treasurer

	 	 	 
	Attest: /s/ David M. Schneider
	           David M. Schneider

	           Secretary
	 	 
	 
	 	 
	Dated: May 28, 1996

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities, of the series designated herein, referred to in the within-mentioned
Indenture.

STATE STREET BANK AND TRUST COMPANY

	 	 	 	 	 	 	 
	 

	 	 	 	as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Authorized Signatory	 	 

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(BACK OF SECURITY)

THE PROGRESSIVE CORPORATION

7.30% NOTE DUE 2006

     This Note is one of a duly authorized issue of debentures, notes, bonds or other evidences of
indebtedness of the Issuer (hereinafter called the “Securities”) of the series hereinafter
specified, all issued or to be issued under and pursuant to an indenture dated as of September 15,
1993, as heretofore supplemented and amended (herein called the “Indenture”), between the Issuer
and State Street Bank and Trust Company, as Trustee (herein called the “Trustee”), to which
Indenture and all indentures supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the
Issuer and the Holders of the Securities. The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may mature at different
times, may bear interest (if any) at different rates, may be subject to different redemption
provisions (if any), may be subject to different sinking, purchase or analogous funds (if any) and
may otherwise vary as in the Indenture provided. This Note is one of a series designated as the
7.30% Notes Due 2006 of the Issuer, limited in aggregate principal amount to $100,000,000.

     In case an Event of Default, as defined in the Indenture, with respect to the 7.30% Notes Due
2006 shall have occurred and be continuing, the principal hereof may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.

     The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of
the Holders of not less than 66-2/3% in aggregate principal amount of the Securities at the time
Outstanding (as defined in the Indenture) of all series to be affected (voting as one class),
evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of the Securities of
each such series; provided, however, that no such supplemental indenture shall (i) extend the final
maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the
time of payment of any interest thereon, or impair or affect the rights of any Holder to institute
suit for the payment thereof, without the consent of the Holder of each Security so affected or
(ii) reduce the aforesaid percentage of Securities, the Holders of which are required to consent to
any such supplemental indenture, without the consent of the Holder of each Security so affected. It
is also provided in the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, prior to any declaration accelerating the maturity of such
Securities, the Holders of a majority in aggregate principal amount Outstanding of the Securities
of such series may on behalf of the Holders of all the Securities of such series waive any such
past default or Event of Default and its consequences. The preceding sentence shall not, however,
apply to a default in the payment of the principal of or premium, if any, or interest on any of the

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Securities. Any such consent or waiver by the Holder of this Note (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and any Note which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon
this Note or such other Note.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note in the manner, at the respective times, at the rate and in
the coin or currency herein prescribed.

     The Notes are issuable in registered form without coupons in denominations of $1,000 and any
integral multiple of $1,000 at the office or agency of the Issuer at the office of the Trustee in
Boston, Massachusetts, and in the manner and subject to the limitations provided in the Indenture,
but without the payment of any service charge. Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.

     The Notes are not subject to redemption at the option of the Issuer or through the operation
of a sinking fund.

     Upon due presentment for registration of transfer of this Note at the office or agency of the
Issuer at the office of the Trustee in Boston, Massachusetts, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.

     The Issuer, the Trustee and any authorized agent of the Issuer or the Trustee may deem and
treat the registered Holder hereof as the absolute owner of this Note (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and, subject to the
provisions on the face hereof, interest hereon, and for all other purposes, and neither the Issuer
nor the Trustee nor any authorized agent of the Issuer or the Trustee shall be affected by notice
to the contrary.

     No recourse under or upon any obligation, covenant or agreement of the Issuer in the Indenture
or any indenture supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator, shareholder, officer or
director, as such, of the Issuer or of any successor corporation, either directly or through the
Issuer or any successor corporation, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.

     Terms used herein which are defined in the Indenture shall have the respective meanings
assigned thereto in the Indenture.

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ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:

TEN COM — as tenants in common

TEN ENT — as tenants by the entireties

CUST — Custodian

JT TEN — as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT — Uniform Gifts to Minors Act

______________

(State)

Additional abbreviations may also be used though not in the above list.

 

FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE-

 

Please print or typewrite name and address including postal zip code of assignee

 

the within Note and all rights thereunder, hereby irrevocably constituting and appointing

 

attorney to transfer said Note on the books of the Issuer, with full power of substitution in the
premises.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 

NOTICE: The signature to this assignment must correspond with the name as written upon the face
of the within instrument in every particular, without alteration or enlargement or any change
whatever.

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