Document:

hlf-ex1025_360.htm

 

Exhibit 10.25

HERBALIFE LTD.
AMENDED AND RESTATED
NON-MANAGEMENT DIRECTORS COMPENSATION PLAN

	
1.
	
Establishment of Plan; Purpose

The Herbalife Ltd. (the “Company”)  Non-Management Directors Compensation Plan (the “Directors Plan”) was initially adopted on January 15, 2006.  The Directors Plan is hereby amended and restated in its entirety effective as of May 6, 2010 (the “Restatement Effective Date”).  Prior to January 1, 2009, the  Directors Plan provided for the award of Stock Units under Section 9 of the Herbalife Ltd. 2005 Stock Incentive Plan (the “Plan”).  From January 1, 2009 until May 6, 2010, the Directors Plan provides for the award of Stock Appreciation Rights under Section 8 of the Plan.  From and after May 6, 2010, the Directors Plan provides for the award of either Stock Units under Section 9 of the Plan or Stock Appreciation Rights under Section 8 of the Plan, in the sole discretion of the Committee.  The Directors Plan is intended to be a part of the Plan and the terms of the Plan are incorporated herein by reference.

The purpose of the Plan is to facilitate equity ownership in the Company by its Nonemployee Directors through the award of equity-based compensation awards under the Plan.  

	
2.
	
Definitions

Unless otherwise specifically provided for herein, all capitalized terms used herein shall have the same meanings as the meanings ascribed to such terms in the Plan.  In addition, the following words have the following meanings unless a different meaning plainly is required by the context:

(a)“Deferral Account” means the accounting entry made with respect to each Participant for the purpose of maintaining a record of each Participant’s benefit under the  Directors Plan.

(b)“Effective Date” means January 15, 2006.

(c)“Grant Date” means a date on which Stock Units or Stock Appreciation Rights are granted pursuant this Directors Plan.

(d)“Independent Director” means a member of the Board who, at all relevant times, has been determined by the Board to be independent.

(e)“Nonemployee Director” means a member of the Board who, at all relevant times, is not an employee and/or officer of the Company or any of its subsidiaries.

(f)“Participant” means a Nonemployee Director who has received an award hereunder.

 

 

 

(g) “Plan Year” means January 15 of each calendar year to January 14 of the next following calendar year.  The first Plan Year shall commence on the Effective Date and end on January 14, 2007.

	
3.
	
Administration.

The  Directors Plan shall be administered the Committee.  Consistent with Section 18 of the Plan, any question concerning the interpretation of the  Directors Plan, any adjustments required to be made under the  Directors Plan, and any controversy that may arise under the  Directors Plan or any award agreement issued hereunder shall be determined by the Committee in its sole and absolute discretion.  All such decisions by the Committee shall be final and binding.

	
4.
	
Eligibility and Participation.

Prior to the Restatement Effective Date, participation in the Directors Plan was limited to Independent Directors.  From and after the Restatement Effective Date, all Nonemployee Directors shall be eligible to participate in this  Directors Plan and receive awards hereunder from time to time.

	
5.
	
Stock Unit Awards.

(a)First Plan Year Grant.  On the Effective Date of the Directors Plan, the Committee shall grant to each Independent Director, pursuant to Section 9 of the Plan, a number of Stock Units equal to the quotient of One Hundred Thousand Dollars ($100,000) divided by the Fair Market Value of one Common Share on such date, rounded to the nearest whole number.  

(b)Grants Upon Initial Election to Board.  Unless otherwise determined by the Committee, with respect to each Independent Director who commences service on the Board after the Effective Date, upon such Independent Director’s commencement of service as a member of the Board the Committee shall grant to such Independent Director, pursuant to Section 9 of the Plan, a number of Stock Units equal to (i) the quotient of One Hundred Thousand Dollars ($100,000) divided by the Fair Market Value of one Common Share on such date, rounded to the nearest whole number, multiplied by (ii) a fraction, the numerator of which equals (A) 365 minus (B) the number of days during the Plan Year that have elapsed prior to the date on which the Independent Director commenced service as a member of the Board and the denominator of which equals 365.

(c)Annual Grants.  Unless otherwise determined by the Committee, on January 15 of each Plan Year beginning after Effective Date of the  Directors Plan, the Committee shall grant, pursuant to Section 9 of the Plan, to each Independent Director who is serving as a member of the Board as of the Grant Date, a number of Stock Units equal to the quotient of One Hundred Thousand Dollars ($100,000) divided by the Fair Market Value of one Common Share on such date, rounded to the nearest whole number.

(d)Award Agreement.  Each award of Stock Units shall be evidenced by an award agreement entered into between the Company and the applicable Participant and shall be subject to all of the terms and conditions set forth herein and in the Plan.

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(e)Terms and Conditions of Stock Units.  Stock Unit awards made pursuant to this Section 5 shall be subject to the following terms and conditions:

(i)Unless otherwise determined by the Committee at the time of grant the value of each Stock Unit shall be equal to one Common Share (as adjusted pursuant to Section 12 of the Plan).  

(ii)Subject to the provisions of this Directors Plan, neither Stock Units awarded pursuant to this Directors Plan nor the Common Shares subject thereto may be sold, assigned, transferred, pledged, or otherwise encumbered prior to the date on which such Common Shares are delivered to the Participant or the Participant’s beneficiary designated pursuant to Section 6(c)(iii) of this  Directors Plan.  

(iii)Unless otherwise provided in an award agreement, the recipient of an award under this Section 5 shall not be entitled to receive dividends or dividend equivalents with respect to the number of Common Shares represented by the Stock Unit award until such time as the Common Shares subject to the award have been issued pursuant to the terms of this Directors Plan.

(iv)Unless determined otherwise by the Committee at the time of grant and set forth in an award agreement, subject to the applicable Participant’s continuous service as a member of the Board, awards of Stock Units pursuant to Section 5(a) or Section 5(c) shall become vested with respect to twenty-five percent (25%) of the number of Stock Units subject to the award on each of April 15, July 15 and October 15 of the calendar year in which the award is granted and January 15 of the calendar year following the year in which the award is granted (each such date is referred to herein as a “Vesting Date”).

(v)Unless determined otherwise by the Committee at the time of grant and set forth in an award agreement, subject to the applicable Participant’s continuous service as a member of the Board, awards of Stock Units pursuant to Section 5(b) shall become vested in equal installments on each of the Vesting Dates that occur after the Grant Date and on or prior to the next following January 15th.1  

(vi)In the event that a Participant ceases to serve as a member of the Board for any reason, all Stock Units held by such Participant at the time of such cessation that have not yet become vested shall be immediately forfeited; provided, however, that in the event of the Participant’s disability (as such term if defined in Section 22(e) of the Code) or death, the Committee may, in its sole discretion, accelerate the vesting of any unvested Stock Units then held by such Participant.

(vii)Notwithstanding anything herein to the contrary, in the event of a Change of Control all unvested Stock Units shall be deemed fully vested immediately prior to the consummation of the Change of Control.

 

	
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For example: with respect to an award of Stock Units pursuant to Section 5(b) on April 22, 2006, the award would become vested with respect to 33 1/3% of the Stock Units subject thereto on each of July 15, 2006, October 15, 2006 and January 15, 2007.

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(f)Payment/Deferral of Stock Unit Awards.

(i)On each Grant Date the Stock Units awarded to a Participant pursuant to this Section 5 shall be credited to the Participant’s Deferral Account.

(ii)Subject to the applicable Participant’s continuous service as a member of the Board, on the second anniversary of the final Vesting Date of an award of Stock Units pursuant to this Section 5, there shall be credited to Participant’s Deferral Account one Common Share in exchange for each such Stock Unit then held in Participant’s Deferral Account.

(iii)In the event that a Participant ceases to serve as a member of the Board for any reason prior to the second anniversary of the final Vesting Date of an award of Stock Units pursuant to this Section 5, the Company shall, within thirty (30) days following such cessation, subject to Section 16 of the Plan, issue to the Participant a number of Common Shares equal to the number of vested Stock Units subject to each such award held in the Participant’s Deferral Account at the time of such cessation.

(g)Notwithstanding anything herein to the contrary, no Stock Units shall be awarded under Section 5 of this Directors Plan on or after January 1, 2009.

5A.Stock Appreciation Right Awards.

(a)2009 Plan Year Grant.  On February 27, 2009, the Committee shall grant to each Independent Director, pursuant to Section 8 of the Plan, a number of Stock Appreciation Rights equal to the quotient of One Hundred Thousand Dollars ($100,000) divided by the “fair value” (as determined by the Company in accordance with Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment or such revised standard as then applicable (“FAS 123R”)) of one Stock Appreciation Right on such date, rounded to the nearest whole number.  

(b)Grants Upon Initial Election to Board.  Unless otherwise determined by the Committee, with respect to each Nonemployee Director who commences service on the Board after January 1, 2010, upon such Nonemployee Director’s commencement of service as a member of the Board the Committee shall grant to such Nonemployee Director, pursuant to Section 8 of the Plan, a number of Stock Appreciation Rights equal to (i) the quotient of One Hundred Thousand Dollars ($100,000) divided by the “fair value” (as determined by the Company in accordance with FAS 123R) of one Stock Appreciation Right on such date, rounded to the nearest whole number, multiplied by (ii) a fraction, the numerator of which equals (A) 365 minus (B) the number of days that have elapsed since the most recent Annual General Meeting of Shareholders the prior to the date on which the Nonemployee Director commenced service as a member of the Board, and the denominator of which equals 365.

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(c)Annual Grants.  Unless otherwise determined by the Committee, for each Plan Year beginning after January 1, 2010, on the date whereupon annual equity awards are made to Company employees, the Committee shall grant, pursuant to Section 8 of the Plan, to each Nonemployee Director who is serving as a member of the Board as of the Grant Date, a number of Stock Appreciation Rights equal to the quotient of One Hundred Thousand Dollars ($100,000) divided by the “fair value” (as determined by the Company in accordance with FAS 123R) of one Stock Appreciation Right on such date, rounded to the nearest whole number.

(d)Base Price.  The Base Price for each award of Stock Appreciation Rights shall be the closing price of the Common Shares on the Grant Date.

(e)Award Agreement.  Each award of Stock Appreciation Rights shall be evidenced by an award agreement entered into between the Company and the applicable Nonemployee Director and shall be subject to all of the terms and conditions set forth herein and in the Plan.

(f)Terms and Conditions of Stock Appreciation Rights.  Stock Appreciation Right awards made pursuant to this Section 5A shall be subject to the following terms and conditions:

(i)Each Stock Appreciation Right shall represent the right to receive, upon exercise of the Stock Appreciation Right, a payment, paid in Common Shares, equal to (i) the excess of the Fair Market Value, on the date of exercise, of one Common Share (as adjusted pursuant to Section 12 of the Plan) over the Base Price of the Stock Appreciation Right, divided by (ii) the Fair Market Value, on the date of exercise, of one Common Share.

(ii)Unless determined otherwise by the Committee at the time of grant and set forth in an award agreement, subject to the applicable Nonemployee Director’s continuous service as a member of the Board, awards of Stock Appreciation Rights pursuant to Section 5A(a) or Section 5A(c) shall become vested with respect to twenty-five percent (25%) of the number of Stock Appreciation Rights subject to the award on each of July 15 and October 15 of the calendar year in which the award is granted and January 15 and April 15 of the calendar year following the year in which the award is granted (each such date is referred to herein as a “Vesting Date”); provided, however, that no Stock Appreciation Right, whether vested or unvested, may be exercised prior to the date specified in Section 5A(g) of this  Directors Plan.

(iii)Unless determined otherwise by the Committee at the time of grant and set forth in an award agreement, subject to the applicable Nonemployee Director’s continuous service as a member of the Board, awards of Stock Appreciation Rights pursuant to Section 5A(b) shall become vested in equal installments on each of the Vesting Dates that occur after the Grant Date and on or prior to the next following January 15th; provided, however, that no Stock Appreciation Right, whether vested or unvested, may be exercised prior to the date specified in Section 5A(g) of this  Directors Plan.

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(iv)In the event that an Nonemployee Director ceases to serve as a member of the Board for any reason, all Stock Appreciation Rights held by such Nonemployee Director at the time of such cessation that have not yet become vested shall be immediately forfeited; provided, however, that in the event of the Nonemployee Director’s disability (as such term if defined in Section 22(e) of the Code) or death, the Committee may, in its sole discretion, accelerate the vesting of any unvested Stock Appreciation Rights then held by such Nonemployee Director.

(v)Notwithstanding anything herein to the contrary, in the event of a Change of Control all unvested Stock Appreciation Rights shall be deemed fully vested and exercisable immediately prior to the consummation of the Change of Control.

(g)Exercisability of Stock Appreciation Right Awards.

(i)Subject to the applicable Nonemployee Director’s continuous service as a member of the Board, Stock Appreciation Rights granted under this Section 5A that become vested pursuant to this Section 5A hereof shall be exercisable by the Nonemployee Director on and after the second anniversary of the final Vesting Date of the award pursuant to this Section 5A and shall remain exercisable until the seventh (7th) anniversary of the Grant Date.

(ii)In the event that an Nonemployee Director ceases to serve as a member of the Board for any reason prior to the second anniversary of the final Vesting Date of an award of Stock Appreciation Rights pursuant to this Section 5A, Stock Appreciation Rights previously granted that vested on or prior to such cessation of service shall be exercisable by the Nonemployee Director on and after the date of such cessation of service and shall remain exercisable until the seventh (7th) anniversary of the Grant Date. 

(iii)Notwithstanding anything herein to the contrary, all Stock Appreciation Rights granted under this Section 5A on and after January 1, 2010 that become vested pursuant to this Section 5A hereof shall, subject to the applicable Nonemployee Director’s continuous service as a member of the Board, be exercisable by the Nonemployee Director to the extent vested from and after the applicable Vesting Date of the award pursuant to this Section 5A and shall remain exercisable until the seventh (7th) anniversary of the Grant Date.

(h)Notwithstanding anything herein to the contrary, no Stock Appreciation Rights shall be awarded under Section 5A of this Directors Plan on or after January 1, 2009.

5B.Equity Awards.  

(a)Form of Equity Awards.  Notwithstanding anything herein to the contrary, from and after May 6, 2010, the Committee shall have the discretion to grant equity awards to Nonemployee Directors (including both annual grants and grants upon initial election to the Board) in the form of either Stock Units and/or Stock Appreciation Rights.  

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(b)Grants Upon Initial Election to Board.  Unless otherwise determined by the Committee, with respect to each Nonemployee Director who commences service on the Board after January 1, 2010, upon such Nonemployee Director’s commencement of service as a member of the Board the Committee shall grant to such Nonemployee Director an equity award, in the form of Stock Appreciation Rights granted under Section 8 of the Plan, Stock Units granted under Section 9 of the Plan or a combination thereof, having a “fair value” (as determined by the Company in accordance with FAS 123R) on the Grant Date equal to One Hundred Thousand Dollars ($100,000) multiplied by a fraction, the numerator of which equals (i) 365 minus (ii) the number of days that have elapsed since the most recent Annual General Meeting of Shareholders the prior to the date on which the Nonemployee Director commenced service as a member of the Board, and the denominator of which equals 365.

(c)Annual Grants.  Unless otherwise determined by the Committee, for each Plan Year beginning after January 1, 2010, on the date whereupon annual equity awards are made to Company employees, the Committee shall grant to each Nonemployee Director who is serving as a member of the Board as of the Grant Date an equity award, in the form of Stock Appreciation Rights granted under Section 8 of the Plan, Stock Units granted under Section 9 of the Plan or a combination thereof, having a “fair value” (as determined by the Company in accordance with FAS 123R) on the Grant Date equal to One Hundred Thousand Dollars ($100,000).

(d)Base Price.  To the extent the annual or initial equity awards are granted in the form of Stock Appreciation Rights, the Base Price for each award of Stock Appreciation Rights shall be the closing price of the Common Shares on the Grant Date.

(e)Award Agreement.  Each award of equity award granted hereunder shall be evidenced by an award agreement entered into between the Company and the applicable Nonemployee Director and shall be subject to all of the terms and conditions set forth herein and in the Plan.

(f)Terms and Conditions of Equity Awards.  Awards made pursuant to this Section 5B shall be subject to the following terms and conditions:

(i)Each Stock Appreciation Right awarded under this Section 5B, if any, shall represent the right to receive, upon exercise of the Stock Appreciation Right, a payment, paid in Common Shares, equal to (i) the excess of the Fair Market Value, on the date of exercise, of one Common Share (as adjusted pursuant to Section 12 of the Plan) over the Base Price of the Stock Appreciation Right, divided by (ii) the Fair Market Value, on the date of exercise, of one Common Share.

(ii)Unless otherwise determined by the Committee at the time of grant, the value of each Stock Unit awarded under this Section 5B, if any, shall be equal to one Common Share (as adjusted pursuant to Section 12 of the Plan).  

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(iii)Unless determined otherwise by the Committee at the time of grant and set forth in an award agreement, subject to the applicable Nonemployee Director’s continuous service as a member of the Board, awards of Stock Appreciation Rights and/or Stock Units pursuant to Section 5B(c) shall become vested with respect to twenty-five percent (25%) of the number of Stock Appreciation Rights and/or Stock Units, as applicable, subject to the award on each of July 15 and October 15 of the calendar year in which the award is granted and January 15 and April 15 of the calendar year following the year in which the award is granted (each such date is referred to herein as a “Vesting Date”).

(iii)Unless determined otherwise by the Committee at the time of grant and set forth in an award agreement, subject to the applicable Nonemployee Director’s continuous service as a member of the Board, awards of Stock Appreciation Rights and/or Stock Units pursuant to Section 5A(b) shall become vested in equal installments on each of the Vesting Dates that occur after the Grant Date and on or prior to the next following April 15th.

(iv)In the event that an Nonemployee Director ceases to serve as a member of the Board for any reason, all Stock Appreciation Rights and/or Stock Units held by such Nonemployee Director at the time of such cessation that have not yet become vested shall be immediately forfeited; provided, however, that in the event of the Nonemployee Director’s disability (as such term if defined in Section 22(e) of the Code) or death, the Committee may, in its sole discretion, accelerate the vesting of any unvested Stock Appreciation Rights and/or Stock Units then held by such Nonemployee Director.

(v)Notwithstanding anything herein to the contrary, in the event of a Change of Control all unvested Stock Appreciation Rights and/or Stock Units shall be deemed fully vested and exercisable immediately prior to the consummation of the Change of Control.

(g)Exercisability of Stock Appreciation Right Awards.  Subject to the applicable Nonemployee Director’s continuous service as a member of the Board, any Stock Appreciation Rights granted under this Section 5B that become vested pursuant to this Section 5B hereof shall be exercisable by the Nonemployee Director on the applicable Vesting Date of the award pursuant to this Section 5B and shall remain exercisable until the seventh (7th) anniversary of the Grant Date.

(h)Settlement of Stock Unit Awards.  Each vested Stock Unit granted under this Section 5B will be settled by the delivery of one Common Share (subject to adjustment under Section 12 of the Plan) to the applicable Nonemployee Director or, in the event of the Nonemployee Director’s death, to the Nonemployee Director’s estate, heir or beneficiary, within thirty (30) days following the applicable Vesting Date.  

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6.
	
Deferred Compensation

(a)Contributions to Deferral Accounts.  

(i)Subject to Sections 6(a)(ii) and 6(a)(iii) of this  Directors Plan, an Independent Director may elect to defer and have credited to his or her Deferral Account for any calendar year up to one hundred percent (100%) of his or her Director’s Compensation (as defined below).  In addition, pursuant to Section 5(f)(i) of this  Directors Plan, on each Grant Date the Stock Units awarded to an Independent Director pursuant to Section 5 of this  Directors Plan shall be automatically credited to the applicable Nonemployee Director’s Deferral Account.  For purposes of this  Directors Plan, the term “Director’s Compensation” means the amounts payable in cash to an Independent Director for a calendar year for the Independent Director’s service on the Board for such calendar year including, without limitation, annual retainer and meeting fees.  Notwithstanding anything herein to the contrary, no deferrals shall be made pursuant to this  Directors Plan from and after January 1, 2009.

(ii)Independent Directors shall make their elections to defer all or a portion of their Director’s Compensation for a calendar year by December 1, but no later than December 31, immediately prior to the beginning of the calendar year in which the Director’s Compensation is to be earned, or within thirty (30) calendar days of eligibility to participate for a partial calendar year (with respect to Director’s Compensation not yet earned).  Any election pursuant to Section 6(a)(i) of this  Directors Plan shall be made by the Independent Director by completing and delivering to the Company an election form provided by the Company (a “Deferral Election Form”) for such calendar year no later than the last day of the next preceding calendar year, except with respect to a person who first becomes eligible to participate in this  Directors Plan during a calendar year, which Independent Director may make such elections within 30 days after first becoming eligible to participate in this  Directors Plan, and which elections shall apply only to amounts of Director’s Compensation paid for services to be performed after the date of such election.  

(iii)All deferral elections shall be irrevocable for the calendar year in which they are in effect.  Once made, an Independent Director’s deferral election shall remain in effect for all subsequent calendar years for which the Independent Director is an Independent Director unless and until the Independent Director increases, decreases, or terminates such election by submitting a new Deferral Election Form to the Company.  Deferral election changes must be submitted to the Company no later than the last day of the calendar year next preceding the calendar year for which the change is to be effective.

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(b)Distributions.

(i)Distribution Elections.  Other than with respect to Stock Units awarded on the Effective Date, no later than the December 31 of each calendar year, each Independent Director who is then eligible to receive an award of Stock Units pursuant to Section 5 of this  Directors Plan shall be required to complete and submit to the Committee an election on a form provided by the Company (a “Distribution Election Form”) as to the timing and form of distributions from his or her Deferral Account with respect to amounts attributable to (i) the Stock Units awarded on the next following Grant Date and (ii) any Director’s Compensation deferred pursuant to Section 6(a) of this  Directors Plan with respect to the next following calendar year.  If no valid distribution election is made with respect to an award of Stock Units, the portion of the Participant’s Deferral Account that is attributable to such award shall be distributed, subject to Section 5(e)(iii) of this  Directors Plan, in the form of a lump sum payment on the second anniversary of the final Vesting Date of such award.  If no valid distribution election is made with respect to Director’s Compensation deferred pursuant to Section 6(a) of this  Directors Plan, the portion of the Participant’s Deferral Account that is attributable to such amounts shall be distributed in the form of a lump sum payment upon termination of the Independent Director’s service as a member of the Board.  

(ii)Scheduled In-Service Distributions.  

(1)Lump Sum or Installment Payments.  A Participant may elect on a Distribution Election Form to receive distributions from the vested portion of his or her Deferral Account while he or she is still a member of the Board (an “In-Service Distribution”) in (A) a single lump sum payment, or (B) annual installment payments over a period of five (5) or ten (10) years, with the amount of each payment determined as set forth in Section 6(b)(viii) of this  Directors Plan.  If the amount a Participant elects to receive pursuant to an In-Service Distribution is less than $100,000, payment shall be made in a single lump sum.  If a Participant elects to receive installment payments under (B) above, the amount of each installment payment shall be equal to the balance remaining in the portion of the Participant’s Deferral Account that is subject to such installment election (as determined immediately prior to each such payment), multiplied by a fraction, the numerator of which is one (1), and the denominator of which is the total number of remaining installment payments.  The installment amount shall be adjusted annually to reflect gains and losses, if any, allocated to such Participant’s Deferral Account pursuant to Section 6(c)(ii).  

(2)Time of Distributions.  A Participant’s election under this Section 6(b)(ii) must specify the future year in which the payment of the deferred amounts shall commence, provided that the year in which an In-Service Distribution of amounts attributable to an award of Stock Units is to commence must be at least two (2) years after the final Vesting Date of such award.  

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(3)Separate Annual Elections.  Any desired In-Service Distribution must be separately elected for each Stock Unit award and for any Director’s Compensation deferred in any one calendar year.  Thus, to elect a scheduled In-Service Distribution with respect to a specific year’s Stock Units and Director’s Compensation, a new Distribution Election Form must be submitted during the applicable election period.  Once the applicable election period has passed, an In-Service Distribution may not be elected for that the portion of the Participant’s Deferral Account attributable to Stock Units awarded and Director’s Compensation earned in that year.

(4)Amendment of Election.  A Participant may delay the commencement of an In-Service Distribution or amend his or her election as to the form of the distribution at any time provided that (A) such amendment must be made in the manner specified by the Committee at least one (1) calendar year prior to the date the distribution would otherwise commence, (B) the amendment will not take effect until at least one (1) calendar year after the amendment is submitted, and (C) the amendment provides for the deferral of the date of payments commence for a minimum of five (5) additional years.  For purposes of the limitation set forth clause (C) of the preceding sentence, distributions that are to be paid in installments (as opposed to in a lump sum) shall be treated as a single payment payable on the date the installments are due to commence.  Any change in the form or timing of payment may not accelerate distributions to the Participant, except to the extent permitted under Section 409A of the Code without the imposition of the additional tax set forth in Section 409A(a)(1)(B) of the Code.  

(5)Termination of Board Service Prior to Completion of In-Service Distribution.  If a Participant’s Board service with the Company terminates for any reason prior to receiving full payment of an In-Service Distribution or while he or she is receiving scheduled installment payments pursuant to this Section 6(b)(ii), the unpaid portion of the Participant’s elected distribution shall be paid in accordance with Section 6(b)(iii) below.

(iii)Distributions upon Termination of Board Service for Reasons Other Than Death.  

(1)Lump Sum or Installment Payments.  As an alternative to electing an In-Service Distribution under Section 6(b)(ii) of this  Directors Plan, a Participant may elect on a Distribution Election Form to receive the vested balance credited to his or her Deferral Account following termination of Board service for any reason other than death in (A) a single lump sum payment, or (B) annual installment payments over a period of five (5) or ten (10) years, with the amount of each payment determined as set forth in Section 6(b)(viii) of this  Directors Plan.  If the amount a Participant elects to receive pursuant to an In-Service Distribution is less than $100,000, payment shall be made in a single lump sum.  If a Participant elects to receive installment payments under (B) above, the amount of each installment payment shall be equal to the balance remaining in the portion of the Participant’s Deferral Account that is subject to such installment election (as determined immediately prior to each such payment), multiplied by a fraction, the numerator of which is one (1), and the denominator of which is the total number of remaining installment payments.  The installment amount shall be adjusted annually to reflect gains and losses, if any, allocated to such Participant’s Deferral Account pursuant to Section 6(c)(ii).  

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(2)Death of Participant.  If a Participant dies prior to receiving full payment his or her Deferral Account as elected under this Section 6(b)(iii), the balance of the vested portion of such Participant’s Deferral Account shall be paid to the Participant’s designated beneficiary in the form of a lump sum as soon as administratively practicable following the Participant’s death.  The amount of any such lump sum payment shall be determined as set forth in Section 6(b)(viii).

(iv)Stock Units Awarded on Effective Date.  Notwithstanding anything herein to the contrary, that portion of a Participant’s Deferral Account that is attributable the award of Stock Units pursuant to Section 5 of this  Directors Plan on the Effective Date shall be distributed, subject to Section 5(e)(iii) of this  Directors Plan, in the form of a lump sum payment on the third anniversary of the Effective Date.

(v)Form of Distribution.  That portion of a Participant’s Deferral Account that remains notionally invested, at the time of distribution, in Stock Units and/or Common Shares shall be distributed in the form of Common Shares.  That portion of a Participant’s Deferral Account that is notionally invested, at the time of distribution, in any investment alternative other than Stock Units or Common Shares shall be distributed in cash.

(vi)Financial Hardship.  The Committee shall have the authority to alter the timing or manner of payment of amounts credited to a Participant’s Deferral Account in the event that the Participant establishes, to the satisfaction of the Committee, “severe financial hardship” (as defined herein).  For purposes of this Section 6(b)(vi), “severe financial hardship” shall mean any financial hardship resulting from the illness or injury of a Participant or dependent (as determined by the Committee), the casualty loss of a Participant’s real or personal property, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  In any event, payment under this Section 6(b)(vi) may not be made to the extent such emergency is or may be relieved: (A) through reimbursement or compensation by insurance or otherwise; or (B) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship.  Withdrawals of amounts because of a severe financial hardship may only be permitted to the extent reasonably necessary to satisfy the hardship, plus to pay taxes on the withdrawal.  The Participant’s Deferral Account will be credited with earnings in accordance with this Section 6 up to the date of distribution.

(vii)Incompetence of Distributee.  In the event that it shall be found that a person entitled to receive payment under the Plan (including a designated beneficiary) is a minor or is physically or mentally incapable of personally receiving and giving a valid receipt for any payment due (unless prior claim therefor shall have been made by a duly qualified committee or other legal representative), such payment may be made to any person whom the Committee in its sole discretion determines is entitled to receive it, and any such payment shall fully discharge the Company, the Company, the Committee and the Plan from any further liability to the person otherwise entitled to payment hereunder, to the extent of such payment.  

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(viii)Value of Stock Units on Distribution.  In the event of a distribution hereunder, the amount payable to the Participant receiving such distribution shall be as follows:  

(A)In the event Participant has selected an investment other than Stock Units or Common Shares, and such Participant has elected to take payment of the Deferral Account in a lump sum payout, or a lump sum payout is otherwise required hereunder, the Company shall pay the Participant an amount in cash equal to the balance in such Participant’s Deferral Account as of the date elected by the Participant, or as of the date of the event requiring such lump sum payout, as the case may be.

(B)In the event Participant has selected investment an investment other than Stock Units or Common Shares, and such Participant has elected to take payment of the Deferral Account in installments, the Company shall pay the Participant annually installment payments, with each payment equal to the balance of the Deferral Account on the applicable anniversary date selected by Participant, divided by the number of installments remaining.

(C)In the event Participant has selected investment in Stock Units and/or Common Shares, and such Participant has elected to take payment of the Deferral Account in a lump sum payout, or a lump sum payout is otherwise required hereunder, the Company shall, subject to Section 16 of the Plan, issue to the Participant a number of Common Shares equal to the number of Stock Units and Common Shares in such Participant’s Deferral Account.

(D)If Participant has selected investment in Stock Units and/or Common Shares, and such Participant has elected to take payment of the Deferral Account in installment payouts, such Participant shall receive on each installment payment date, subject to Section 16 of the Plan, a number of Common Shares equal to the total number of Stock Units and Common Shares in such Participant’s Deferral Account, divided by the number of installments elected.

(E)Any distributions due by the Company under this Section 6 shall be made as soon as administratively feasible, but, subject to Section 16 of the Plan, in no event later than the thirtieth (30th) day after the day the amount of such payment is determined pursuant to this Section 6(b)(viii).

(ix)Section 457A.  Notwithstanding anything herein to the contrary, to the extent necessary for this  Directors Plan to comply with Section 457A of the Code, all amounts deferred pursuant to this  Directors Plan and not distributed in accordance with the terms hereof before December 31, 2017 shall be distributed in lump sum to the applicable Participant on December 31, 2017.

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(c)Deferral Accounts.

(i)Participants’ Accounts.  The Company shall establish and maintain an individual bookkeeping Deferral Account for each Participant.  Each Deferral Account shall be credited with Stock Units in accordance with Section 6(a) of this  Directors Plan, generally within five (5) business days of the applicable Grant Date, and as provided in Section 6(c)(ii).  Each Deferral Account shall be credited with the value of any Director’s Compensation deferred in accordance with Section 6(a) of this  Directors Plan, generally within five (5) business days of the date on which such amounts would have otherwise been paid to the applicable Independent Director, and as provided in Section 6(c)(ii).  Except as set forth in Section 5(e), each Participant shall be fully vested in his or her Deferral Account at all times.

(ii)Earnings on Deferred Amounts.  

(1)A Participant’s Deferral Account shall be credited with earnings (or losses) based on a deemed investment of the Participant’s Deferral Account, as directed by each Participant, which deemed investment shall be Stock Units/Common Shares or one or more hypothetical investment alternatives made available by the Committee from time to time; provided, however, that amounts credited to a Participant’s Deferral Account in respect of an award Stock Units under this  Directors Plan must remain invested Stock Units and/or Common Shares.  A Participant shall have no voting rights or any other rights as a holder of Common Shares with respect to any Stock Units or Common Shares allocated to his or her Deferral Account; provided, however, that notwithstanding the foregoing, to the extent a Participant has had Common Shares credited to such Participant’s Deferral Account and the Company pays cash dividends with respect to the Common Shares, such Participant’s Deferral Account will be credited with an additional number of Common Shares equal to (A) the dividend per Common Share multiplied by (B) the number of Common Shares in such Participant’s Deferral Account divided by (C) the Fair Market Value of one Common Share on the date such dividend is paid to the holders of Common Shares.  

(2)Deemed earnings (and losses) on a Participant’s Deferral Account shall be credited to a Participant’s Deferral Account on a daily basis.  Any portion of a Participant’s Deferral Account which is subject to distribution in installments shall continue to be credited with deemed earnings (or losses) until fully paid out to the Participant.

(3)The Committee reserves the right to change the options available for deemed investments under the Plan from time to time, or to eliminate any such option at any time.  A Participant may specify a separate investment allocation with respect any portion of his or her Deferral Account, subject to limitations imposed by the Committee.  Participants may modify their deemed investment instructions each business day with respect to any portion (whole percentages only) of their Deferral Account; provided they notify the Committee or its designee within the time and in the manner specified by the Committee.  Elections and amendments thereto pursuant to this Section 6(c)(ii) shall be made in the manner prescribed by the Committee.

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(iii)Designation of Beneficiary.  Each Participant may designate a beneficiary or beneficiaries (each a “Beneficiary”) who, upon the Participant’s death, or physical or mental incapacity will receive the amounts that otherwise would have been paid to the Participant under this  Directors Plan.  All designations shall be signed by the Participant, and shall be in such form as prescribed by the Committee.  Each designation shall be effective as of the date delivered to the Committee or its designee by the Participant.  Participants may change their beneficiary designations on such form as prescribed by the Committee.  The payment of amounts credited to a Participant’s Deferral Account shall be in accordance with the last unrevoked written beneficiary designation that has been signed by the Participant and delivered to the Committee or its designee prior to the Participant’s death.  In the event that all the beneficiaries named by a Participant pursuant to this Section 6(c)(iii) predecease the Participant, the deferred amounts that would have been paid to the Participant or the Participant’s beneficiaries shall be paid to the Participant’s estate.  In the event a Participant does not designate a beneficiary, or for any reason such designation is ineffective, in whole or in part, the amounts that otherwise would have been paid to the Participant or the Participant’s beneficiaries under the Plan shall be paid to the Participant’s estate.

(d)Trust.  Nothing contained in this  Directors Plan shall create a trust of any kind or a fiduciary relationship between the Company and any Participant.  Nevertheless, the Company may establish one or more trusts, with such trustee(s) as the Committee may approve, for the purpose of providing for the payment of deferred amounts and earnings thereon.  Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Company’s general creditors upon the bankruptcy or insolvency of the Company.  

(e)Nontransferability.  Participants’ rights to deferred amounts and earnings credited thereon under the  Directors Plan may not be sold, transferred, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, or pursuant to a domestic relations order, nor shall the Company make any payment under the  Directors Plan to any assignee or creditor of a Participant.

	
7.
	
Rights of Participants.  

(a)Contractual Obligation.  The  Directors Plan shall create an unfunded, unsecured contractual obligation on the part of the Company to make payments due under Stock Unit awards, and to make payments from the Participants’ Deferral Accounts when due.  Payments under the  Directors Plan shall be made out of the general assets of the Company or from the trust or trusts referred to in Section 6(d) above.

(b)Unsecured Interest.  No Participant or party claiming an interest in benefits of a Participant hereunder shall have any interest whatsoever in any specific asset of the Company. To the extent that any party acquires a right to receive payments under the  Directors Plan, such right shall be equivalent to that of an unsecured general creditor of the Company.  Each Participant, by participating hereunder, agrees to waive any priority creditor status with respect to any amounts due hereunder.  The Company shall have no duty to set aside or invest any amounts credited to Participants’ Deferral Accounts or Stock Unit awards under this  Directors Plan.  Accounts established hereunder are solely for bookkeeping purposes and the Company shall not be required to segregate any funds based on such accounts.

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8.
	
Miscellaneous.  

(a)Notice.  Any notice or filing required or permitted to be given to the Company under the  Directors Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail to the Committee, and if mailed, shall be addressed to the principal executive offices of the Company.  Notice mailed to a Participant shall be at such address as is given in the records of the Company.  Notices to the Company shall be deemed given as of the date of delivery.  Notice to a Participant or beneficiary shall be deemed given as of the date of hand delivery, or if delivery is made by mail, three (3) days following the postmark date.

(b)Costs of the  Directors Plan.  All costs of implementing and administering the  Directors Plan shall be borne by the Company.

	
9.
	
Amendments and Termination

The Company reserves the right to amend, modify, or terminate the  Directors Plan (in whole or in part) at any time by action of the Board or the Committee, with or without prior notice.  Except as described below in this Section 9, no such amendment or termination shall in any material manner adversely affect any Participant’s rights to any amounts already deferred or credited hereunder or deemed earnings thereon, up to the point of amendment or termination, without the consent of the Participant.  Termination of the  Directors Plan shall not be a permitted distribution event, except to the extent permitted under Section 409A of the Code without the imposition of any additional taxes or other penalties under Section 409A of the Code.  If payout is commenced pursuant to the operation of this Section 9, the payment of deferred amounts and earnings thereon shall be made in the manner selected by each Participant under Section 6(b)(iii) herein (other than the commencement date).

Subject to the above provisions, the Board shall have broad authority to amend the  Directors Plan to take in to account changes in applicable securities and tax laws and accounting rules.

	
10.
	
General Provisions

(a)Additional Compensation Arrangements.  Nothing contained in this  Directors Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required, and such arrangements may be either generally applicable or applicable only in specific cases.  

(b)No Right to Continued Service.  Neither the adoption of the  Directors Plan nor the award of Stock Units hereunder shall confer upon any individual any right to continued service as a member of the Board, nor shall it interfere in any way with the right of the Company to terminate the service of an individual at any time.

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(c)Arbitration.  Any individual making a claim for benefits under this  Directors Plan may contest the Committee’s decision to deny such claim or appeal therefrom only by submitting the matter to binding arbitration before a single arbitrator.  Any arbitration shall be held in Los Angeles, California, unless otherwise agreed to by the Committee.  The arbitration shall be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association.  The arbitrator’s authority shall be limited to the affirmation or reversal of the Committee’s denial of the claim or appeal, based solely on whether or not the Committee’s decision was arbitrary or capricious, and the arbitrator shall have no power to alter, add to, or subtract from any provision of this  Directors Plan.  Except as otherwise required by applicable law, the arbitrator’s decision shall be final and binding on all parties, if warranted on the record and reasonably based on applicable law and the provisions of this  Directors Plan.  The arbitrator shall have no power to award any punitive, exemplary, consequential or special damages, and under no circumstances shall an award contain any amount that in any way reflects any of such types of damages.  Each party shall bear its own attorney’s fees and costs of arbitration.  Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  

	
11.
	
Governing Law.

The  Directors Plan and all awards made and actions taken thereunder shall be governed by and construed in accordance with the internal laws of the State of California.

-17-hlf-ex1026_361.htm

 

Exhibit 10.26

HERBALIFE LTD.
2005 STOCK INCENTIVE PLAN

INDEPENDENT DIRECTORS STOCK APPRECIATION RIGHT AGREEMENT

This Independent Directors Stock Appreciation Right Agreement (this “Agreement”) dated as of January __, 20__ (the “Grant Date”) between Herbalife Ltd., an entity organized under the laws of the Cayman Islands (the “Company”), and [DIRECTOR] (“Participant”).

WHEREAS, the Company, by action of the Board established the Herbalife Ltd. Amended and Restated Independent Directors Deferred Compensation and Stock Appreciation Right 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 Appreciation Right Award (as defined below) granted to Participant by the Company.  

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the Company and Participant, intending to be legally bound, hereby agree as follows:

1.Grant.

(a)The Company hereby grants to the Participant an Award of ____________ Stock Appreciation Rights (the “Award”) in accordance with Section 8 of the Plan and subject to the terms and conditions set forth herein and in the Plan (each as amended from time to time).  Each Stock Appreciation Right represents the right to receive, upon exercise of the Stock Appreciation Right pursuant to this Agreement, from the Company, a payment, paid in Common Shares, par value $.002 per share, of the Company (the “Common Shares”), equal to (i) the excess of the Fair Market Value, on the date of exercise, of one Common Share (as adjusted from time to time pursuant to Section 12 of the Plan) over the Base Price (as defined below) of the Stock Appreciation Right, divided by (ii) the Fair Market Value, on the date of exercise, of one Common Share, subject to terms and conditions set forth herein, in the Independent Directors Plan and in the Plan (each as amended from time to time).

(b)The “Base Price” for the Stock Appreciation Right shall be $_________ per share (subject to adjustment as set forth in Section 12 of the Plan).

(c)Except as otherwise defined herein, capitalized terms used herein shall have the meanings set forth in the Plan or the Independent Directors Plan, as applicable.  

1

 

2.Vesting.  

(a)Participant’s Stock Appreciation Rights 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 Appreciation Rights awarded hereunder on each of April 15, 200__, July 15, 200__, October 15, 200__ and January 15, 200__ (each such date a “Vesting Date”).  Stock Appreciation Rights awarded hereunder that have vested and are no longer subject to forfeiture are referred to herein as “Vested SARs.”  Stock Appreciation Rights awarded hereunder that are not vested and remain subject to forfeiture are referred to herein as “Unvested SARs.”  

(b)Notwithstanding anything herein or in the Plan to the contrary, 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 SARs shall vest as of the date of such termination of employment.

(c)Notwithstanding anything herein or in the Plan to the contrary, upon the occurrence of a Change of Control, the Award shall become immediately and fully vested and exercisable as of the date of the Change of Control.

3.Time for Exercise.

(a)Except as set forth in Paragraph 2(c) or Section 13 of the Plan, the Award (including both Vested SARs and Unvested SARs) shall not be exercisable on or before the dates specified in this Paragraph 3.

(b)Subject to Participant’s continued service as a member of the Board, all then Vested SARs shall become exercisable on the second anniversary of the final Vesting Date.

(c)Notwithstanding anything herein to the contrary, in the event Participant ceases to be a member of the Board for any reason prior to the date specified in Paragraph 3(b), all then Vested SARs shall become exercisable on the date of such cessation of service.

4.Expiration.  The Award shall expire on the seventh (7th) anniversary of the Grant Date; provided, however, that the Award may earlier terminate as provided in Section 13 of the Plan.  

5.Method of Exercise.  The Award may be exercised by delivery to the Company (attention: Secretary) of a notice of exercise in the form specified by the Company specifying the number of shares with respect to which the Award is being exercised.

6.Fractional Shares.  No fractional shares may be purchased upon any exercise.  

2

 

7.Adjustments of Shares and Awards.  Subject to Section 12(a) of the Plan, 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 Common 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 Award and Base Prices related thereto and make such other revisions to the Award as it deems are equitably required.  Any adjustments made pursuant to this Paragraph 7 shall be implemented in accordance with Section 409A of the Internal Revenue Code of 1986, as amended.

8.Compliance With Legal Requirements.  The Award shall not be exercisable and no Common Shares shall be issued or transferred pursuant to this Agreement or the Plan unless and until all legal requirements applicable to such issuance or transfer have, in the opinion of counsel to the Company, been satisfied.  Such legal requirements may include, but are not limited to, (i) registering or qualifying such Common Shares under any state or federal law or under the rules of any stock exchange or trading system, (ii) satisfying any applicable law or rule relating to the transfer of unregistered securities or demonstrating the availability of an exemption from applicable laws, (iii) placing a restricted legend on the Common Shares issued pursuant to the exercise of the Award, or (iv) obtaining the consent or approval of any governmental regulatory body.

9.Shareholder Rights.  Participant shall not be deemed a shareholder of the Company with respect to any of the Common Shares subject to the Award, except to the extent that such shares shall have been purchased and transferred to Participant.  

10.Taxes.  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, vesting or settlement 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.  

11.Assignment or Transfer Prohibited.  The Award may not be assigned or transferred otherwise than by will or by the laws of descent and distribution, and may be exercised during the life of Participant only by Participant or Participant’s guardian or legal representative; 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.  Neither the Award nor any right hereunder shall be subject to attachment, execution or other similar process.  In the event of any attempt by Participant to alienate, assign, pledge, hypothecate or otherwise dispose of the Award or any right hereunder, except as provided for herein, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Award by notice to Participant, and the Award shall thereupon become null and void.

3

 

12.Committee Authority.  Any question concerning the interpretation of this Agreement or the Plan, any adjustments required to be made under this Agreement or the Plan, and any controversy that may arise under this Agreement or the Plan shall be determined by the Committee in its sole and absolute discretion.  All decisions by the Committee shall be final and binding.

13.Application of the Plan.  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.  

14.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, the Independent Directors Plan 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 Independent Directors Plan and the Plan and will in all respects be construed in conformity with the express terms and provisions of the Independent Directors Plan and 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.

4

 

(e)Securities Law Compliance.  Participant understands that the Company is under no obligation to register for resale the Common Shares issued upon exercise of the Award.  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 Independent Directors Plan and the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Independent Directors Plan and 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.  

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

 

	
 
	
 
	
HERBALIFE LTD.

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 

	
[DIRECTOR]
	
 
	
 
	
Name:

	
 
	
 
	
 
	
Title:

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

 

5

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