Document:

EXHIBIT
10.28

 

EXECUTION COPY

 

NON-STATUTORY
STOCK OPTION AGREEMENT

 

AGREEMENT (this “Agreement”)
entered into as of April 3, 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) 1,182,369 Shares at an exercise price of $0.44 per share
(the “44 Cent Tranche”), (ii) 1,182,369 Shares at an exercise price of $1.76
per share (the “$1.76 Tranche”), (iii) 1,182,369 Shares at an exercise price of
$5.28 per share (the “$5.28 Tranche”), (iv) 1,182,369 Shares at an exercise
price of $8.80 per share (the “$8.80 Tranche”), and (v) 1,182,369 Shares at an
exercise price of $12.32 per share (the “$12.32 Tranche”, and together with the
44 Cent Tranche, the $1.76 Tranche, the $5.28 Tranche and the $8.80 Tranche,
the “Option”). This Option is granted as of the date hereof. The Option is a
Non-Statutory Stock Option. This Option is granted pursuant to the Plan, and
except as otherwise set forth in this Agreement, is governed by each of 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. The 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. The numbers of Shares reflected in clauses (i), (ii),
(iii), (iv) and (v) above are based on 112,325,066 Shares, which was the number
of Shares of the Company that were outstanding on fully diluted basis as of
March 31, 2003.

 

2.             Time of Exercise of Option.

 

(a)           The 44 Cent Tranche of the Option
will become vested and exercisable in 50% increments on the first and second
anniversaries of the “Effective Date”, as such term is defined in that certain
Employment Agreement dated as of the date hereof, by and among the Employee,
Herbalife International, Inc. and Herbalife International of America, Inc. (as
amended or modified from time to time, the “Employment Agreement”).

 

(b)           The $1.76 Tranche, the $5.28 Tranche,
the $8.80 Tranche and the $12.32 Tranche are collectively referred to herein as
the “Long-Term Tranche”. Twenty percent (20%) of the Long-Term Tranche of the
Option will become vested and exercisable (pro rata according to the number of
Shares exercisable at the relevant exercise prices specified above for each of
the individual tranches within the Long-Term Tranche) on the first anniversary
of the Effective Date, and the remainder of the Long-Term Tranche of the Option
will become vested and exercisable (pro rata according to the number of Shares
exercisable at the relevant exercise prices specified above for each of the
individual tranches within the Long-Term Tranche) in quarterly 5% increments

 

1

 

commencing
September 30, 2004 and on each subsequent last day of each following
calendar quarter until the Long-Term Tranche of the Option becomes fully vested
and exercisable as of June 30, 2008.

 

(c)           Notwithstanding the preceding or any
other provision in this Agreement or the Plan to the contrary, (i)
simultaneously with the consummation of any Change of Control, 50% of the
Shares granted pursuant to the Option (pro rata according to the number of
Shares exercisable at the relevant exercise prices specified above for each of
the individual tranches within the Option) will become immediately vested and
exercisable (including any previously vested and exercisable Shares), (ii) if,
following the consummation of any Change of Control, all or any portion of the
Option described in this Agreement remains outstanding and the Employee’s
employment with the Company and its Subsidiaries (or their respective
successors-in-interest) is terminated (other than by reason of the Employee’s
resignation without Good Reason or termination for Cause) at any time following
the consummation of such Change of Control, 100% of the Shares granted pursuant
to the Option will immediately vest and become exercisable, and (iii) in the
event the Employee’s employment with the Company and its Subsidiaries is
terminated by reason of the Employee’s death or Disability or during the 90 day
period immediately preceding the consummation of any Change of Control (other
than by reason of Employee’s resignation without Good Reason or termination for
Cause), 100% of the Shares granted pursuant to the Option will immediately vest
and become exercisable. For purposes hereof, the terms “Cause”, “Disability”
and “Good Reason” shall have the meanings ascribed thereto in the Employment
Agreement.

 

(d)           In the event Employee exercises all
or any portion of the Option prior to the consummation of an Initial Public
Offering, the Committee shall make a determination of the Fair Market Value (as
defined in the Plan) of the Shares acquired pursuant to such exercise of the
Option.

 

3.             Term of Options and Repurchase Rights.

 

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

 

(b)           Upon the Employee’s termination of
employment with the Company or any of its Subsidiaries for whatever reason (x)
the unexercisable portion of the Option hereby granted will terminate on the
date of such termination and (y) the exercisable portion of the Option hereby
granted will be treated as set forth in this Section 3(b). Subject to the
repurchase rights described in (c) below and the Shareholders’ Agreement, in
the event of a termination of the Employee’s employment:

 

(i)            by reason of death or Disability,
the exercisable portion of the Option hereby granted will be exercisable for
180 days following any such termination;

 

(ii)           without Cause or due to the Employee’s
resignation for Good Reason, the exercisable portion of the Option hereby
granted will be exercisable until the first to occur of (A) six months
following the expiration of any lock-up period following the consummation of an
Initial Public Offering and (B) the second anniversary of Employee’s
termination of employment with the Company and its Subsidiaries, but in the
case of either (A) or (B) above, no earlier than the expiration of the Standard
Exercise Period (as defined below);

 

(iii)          by reason of Employee’s resignation
without Good Reason, the exercisable portion of the Option hereby granted will
be exercisable until the expiration of the Standard Exercise Period; and

 

(iv)          for Cause, the exercisable portion of
the Option hereby granted will terminate on the date of such termination.

 

The “Standard Exercise
Period” shall be the 30 day period immediately following Employee’s termination
of employment with the Company and its Subsidiaries for any reason, but if at
the time of such termination the Company is in a “black-out” period or subject
to a lock-up period other than the lock-up period resulting from an Initial
Public Offering, or the Employee is

 

2

 

otherwise prohibited from
selling his stock due to material non-public information or applicable
regulation, then in either such case, the Standard Exercise Period shall be the
period that expires 30 days immediately following the expiration of any such
restriction. For purposes of this Section 3 (including, without
limitation, Section 3(c)), if the Employee continues to provide services
as a director or consultant to the Company or its Subsidiaries after the
Employee’s termination of employment, such employment termination shall not be
deemed to have occurred until the Employee’s termination of service in all
capacities.

 

(c)           The Company has the right to
repurchase the Shares acquired upon the exercise of Options for a period of 181
days after the Employee terminates employment or 181 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 the Employee’s
resignation without Good Reason 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; provided, however, that after the
earlier to occur of the fifth anniversary of the Effective Date or the
consummation of a Change of Control, Section 3(c)(ii) shall apply in lieu
of this Section 3(c)(i); and

 

(ii)           was without Cause, because of death
or Disability, due to the Employee’s resignation for Good Reason or as provided
in the proviso of Section 3(c)(i), shall be the amount equal to the Fair
MarketValue at the time of such termination.

 

(d)           The Company’s repurchase option set
forth in Section 3(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. To the extent permitted by law and
applicable stock exchange regulations, the Employee may pay the exercise price
of the options using stock of the Company held by the Employee for at least six
months and with a Fair Market Value equal to the portion of the exercise price
which Employee elects to pay through delivery of such stock. Prior to the
consummation of the Company’s Initial Public Offering and to the extent
permitted by law and applicable stock exchange regulations, (a) subject to the
following sentence, during the 20 business day period immediately prior to the
expiration of the exercise period set forth in Section 3(b) above or any
extension thereof pursuant to this Section 4, the Employee may elect (on
not less than ten business days’ prior written notice to the Company) to have
the number of shares issued upon exercise of the options reduced (such reduction
equal to a number of Shares with a Fair Market Value equal to the required tax
withholding) to cover minimum required tax withholding (i.e., the minimum
federal and state statutory tax withholding amount, including payroll taxes)
and (b) subject to the following sentence, during the 20 business day period
immediately prior to the expiration of the exercise period set forth in
Section 3(b) above or any extension thereof pursuant to this
Section 4, the Employee may elect (on not less than ten business days’
prior written notice to the Company) to pay the exercise price of the Shares
subject to the Option by reduction (such reduction equal to a number of Shares
with a Fair Market Value equal to the portion of the exercise price to be
satisfied by such cashless exercise) of the number of Shares otherwise issuable
upon such exercise of the Option. Upon receipt of Employee’s written notice to
the Company pursuant to clause (a) or clause (b) of the preceding sentence, the
Committee may, in its sole discretion, elect to extend the period of time
during which the exercisable portion of the Option may be exercised for one or
more Extension Periods (as defined below), in which case Employee’s election to
exercise all or any portion of such Options pursuant to clause (a) or clause
(b) of the preceding sentence shall be rescinded and of no further force and
effect, subject to subsequent revesting of

 

3

 

Employee’s right to make
either such election during the 20 business day period immediately prior to the
expiration of any Extension Period (and subject to the Committee’s right, in
its sole discretion, to grant one or more additional Extension Periods). For
purposes hereof, “Extension Period” means the 30 day period (or such longer
period as the Committee may determine in its sole discretion) immediately
following the expiration of the relevant exercise period specified in
Section 3(b) above (or, in the case of any prior Extension Period,
immediately following the expiration thereof).

 

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) 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 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 5) 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)           Except as set forth in any separate
written agreement between the Company and Employee, 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 the Option shall be immediately and fully
vested immediately prior to the consummation of any such Qualifying Event, and
provided further that nothing in this Section 7(b) shall prohibit the
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

 

4

 

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 Option (including both
the exercisable and unexercisable portions thereof) will be cancelled in its
entirety and repurchased by the Company at a specific price equal to the
excess, if any, of the Fair Market Value of the relevant underlying Shares 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 or inconsistency 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. The Committee’s election pursuant to this Section 7(b) will
be applied in the same manner to all other holders of the Company’s stock
options. The Committee may only elect the alternatives specified in clauses (i)
or (iii) of the first sentence of this Section 7(b) in connection with any
Qualifying Event described in clauses (w) or (x) of the definition of “Organic
Transaction” (as such term is defined in the Company’s Articles of Association
as of the date hereof).

 

8.             No Special Employment Rights. Nothing contained in this
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 prior or future purchase
of Shares of the Company, unless such Shareholders’ Agreement is no longer in
effect, he 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 or pursuant to any separate written agreement between the
Company and Employee.

 

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 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 any black-out period
requested by underwriters conducting any such public offering of securities on
behalf of the Company; provided, however, that such Employee shall, in any
event, be entitled to sell his Shares commencing on the expiration of the
black-out period described above and provided, further, that such time period
shall not be longer for the

 

Employee than for Whitney
& Co., L.L.C., Golden Gate Private Equity, Inc. or any investment fund
managed by either of them.

 

5

 

*********

 

{Signatures on
Following Page}

 

6

 

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

   (CAYMAN ISLANDS)
  LTD.

  	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ JESSE ROGERS

  	
   

  	
   

  	
  /s/ MICHAEL O. JOHNSON

  	
   

  
	
   

  	
  Title: Director

  	
   

  	
  MICHAEL O. JOHNSON

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jesse Rogers

  	
   

  	
   

  	
  Address:

  	
   

  
	
  (print name)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o Herbalife International, Inc.

  1800 Century Park East

  Los Angeles, CA 90067

  Facsimile Number: (310) 557-3906

  
							

 

7

 

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 SUCH AGREEMENT 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.”

 

8

 

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)

  

 

9EXHIBIT 10.29

 

EXECUTION COPY

 

SIDE LETTER AGREEMENT

 

AGREEMENT
(this “Agreement”) entered into as of the 3rd day of  April, 2003, by and among WH Holdings (Cayman
Islands) Ltd., a Cayman Islands  company (the “Company”), Michael O. Johnson (“Johnson”)
and certain of the  shareholders of
the Company listed on the signature pages hereto (each an  “Institutional Shareholder”
and collectively, the “Institutional Shareholders”).

 

Reference
is made to that certain Shareholders’ Agreement  dated as of July 31, 2002, by and among
the Company and certain of its  shareholders (as the same may be amended from
time to time, the “Shareholders’  Agreement”). Capitalized terms used in this
Agreement without definition shall  have the meanings ascribed thereto in the
Shareholders’ Agreement.

 

Concurrently
with the execution of this Agreement, Johnson is  entering into (i) that certain Non-Statutory
Stock Option Agreement (as the same  may be amended or modified from time to time,
the “Stock Option Agreement”) of  even date herewith, with the Company and (ii)
that certain Employment Agreement  (as amended or modified from time to time, the
“Employment Agreement”), of even  date herewith, with Herbalife International,
Inc. and Herbalife International of  America, Inc., which are direct or indirect
wholly owned subsidiaries of the  Company.

 

Whereas,
(i) Section 11 of the Stock Option Agreement requires  Johnson to become a party to
the Shareholders’ Agreement in the instances  specified therein and (ii) Johnson and/or the
trustee of his 401(k) trust will  be required to become a party to the
Shareholders’ Agreement if Johnson and/or  his 401(k) trust purchase Preferred Shares of
the Company.

 

Each
of the undersigned desires to make certain modifications  to the Shareholders’
Agreement and set forth their agreement with respect to  registration rights to be
granted to Johnson.

 

Accordingly,
each of the undersigned agrees:

 

1.             Repurchase Period. The fourth
sentence of Section 6(a) of the Shareholders’ Agreement is amended and
restated in its entirety,  with respect to any Shares acquired by Johnson or his 401(k) trust, as
follows:

 

“Upon
such Termination by Johnson, the Company and/or the  Institutional Shareholders, as the case may
be, may exercise  such right at
any time within one hundred eighty one (181)  days of the Termination Date (the “REPURCHASE
PERIOD”).”

 

2.             Repurchase Price. Section 6(d)
and 6(e) of the  Shareholders’
Agreement are amended and restated in their entirety, with respect  to any Shares acquired by
Johnson or his 401(k) trust, as follows:

 

“(d)
The purchase price per Share payable under Section 6(a)  where such Termination was
due to Johnson’s resignation  without  Good Reason (as
defined in the Employment Agreement) or for  Cause (as defined in the Employment Agreement)
shall be an  amount equal to
(x) in respect of Preferred Shares, the lesser  of (i) the Formula Price or (ii) Cost or (y)
in respect of  Common Shares,
the lesser of (i) Current Market Price or (ii)  Cost; provided, however, that after the
earlier to occur of  the fifth
anniversary of the Effective Date (as defined in the  Employment Agreement) or the consummation of a
Change of  Control (as
defined in the Stock Option Agreement), Section 6(e) shall apply in lieu
of this Section 6(d); and

 

(e)
The purchase price per Share payable under Section 6(a)  where such Termination was
without Cause, because of death or

 

1

 

Disability
(as defined in the Employment Agreement), due to  Johnson’s resignation for Good Reason or as
provided in the  proviso of
Section 6(d), shall be an amount equal to (x) in  respect of Preferred Shares,
the greater of (i) Formula Price  or (ii) Cost or (y) in respect of Common
Shares, the greater  of (i) Current
Market Price or (ii) Cost.”

 

3.             Section 6(f) of Shareholders
Agreement. The terms andconditions of Section 6(f) of the Shareholders Agreement shall not
apply to  Johnson, his
401(k) trust or any Shares acquired by either of them.

 

4.             Registration Rights. Reference is
made to that  certain
Registration Rights Agreement, dated as of July 31, 2002, by and among  the Company and certain of
its shareholders, including the Institutional  Shareholders (as the same may be amended from
time to time, the “Registration  Agreement”). Johnson and/or his 401(k) trust
will become a party to the  Registration Agreement in connection with any purchase of Preferred
Shares. In  addition,
Johnson has requested that he be granted registration rights with  respect to his Common Shares
acquired pursuant to any exercise of his stock  options (as well as any then vested and
exercisable portion of the stock option  granted pursuant to the Stock Option
Agreement). However, Section 8 of the  Registration Agreement requires the approval
of the Distributor Directors (as  defined therein) to amend the Registration
Agreement. Accordingly, the Company  and the Institutional Shareholders agree to
use commercially reasonable efforts  to obtain the approval of the Distributor
Directors to amend the Registration  Agreement as soon as practical following the
date hereof, such that the defined  term “Other Shareholder Shares” will include
any Common Shares acquired by  Johnson pursuant to any exercise of his stock options (as well as any
then  vested and
exercisable portion of the stock option granted pursuant to the Stock  Option Agreement), it being
agreed that each of the Company and the  Institutional Shareholders hereby consent to
such amendment of the Registration  Agreement.

 

5.             Tag-Along Rights. For the avoidance
of doubt, Common  Shares issuable
with respect to any vested and exercisable portion of the stock  option granted pursuant to
the Stock Option Agreement shall be considered  “Shares” for the purposes of Section 4 of
the Shareholders’ Agreement.

 

6.             401(k) Trust. If and when Johnson’s
401(k) trust  purchases
Preferred Shares of the Company, such trust will become an intended  third-party beneficiary of
this Agreement and shall have all the same rights and  obligations as Johnson
hereunder with respect to any such purchased shares.

 

7.             Amendments. No term, condition or
provision of this  Agreement may be
waived, modified or amended without the prior written consent  of each of the undersigned.

 

8.             Governing Law; Jurisdiction. The
Governing Law  (Section 14)
and Jurisdiction (Section 16) provisions of the Shareholders’  Agreement are incorporated by
reference herein as if fully set forth herein.

 

9.             Counterparts. This Agreement may be
executed in  several
counterparts, each of which will be deemed to be an original, but all ofwhich
together shall constitute one and the same agreement.

 

*       *       *      
*       *       *       *      
*       *       *

 

{Signatures on Following Pages}

 

2

 

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

 

	
   

  	
  /s/ Michael O. Johnson

  	
   

  
	
   

  	
  Michael O. Johnson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WH HOLDINGS (CAYMAN ISLANDS) LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Rodgers

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Steven Rodgers

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WH INVESTMENTS LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Rodgers

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Steven Rodgers

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WHITNEY V, L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: Whitney Equity Partners V, LLC

  Its: General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. O’Brien

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. O’Brien

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WHITNEY STRATEGIC PARTNERS V, L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: Whitney Equity Partners V, LLC

  Its: General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. O’Brien

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. O’Brien

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CCG INVESTMENTS (BVI), L.P.

  CCG ASSOCIATES — QP, LLC

  CCG ASSOCIATES — AI, LLC

  CCG INVESTMENT FUND — AI, L.P.

  CCG AV, LLC - SERIES C

  CCG AV, LLC - SERIES E

  CCG CI, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: Golden Gate Capital Management, L.L.C.

  Its: Authorized Representative

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jesse Rogers

  	
   

  
											

 

3

 

	
   

  	
  Name:

  	
  Jesse Rogers

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
					

 

4

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