Document:

Exhibit 10.27

Exhibit 10.27

HERBALIFE LTD.

2004 STOCK INCENTIVE PLAN

NON-EMPLOYEE DIRECTOR

STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT (this “Agreement”) dated as of
               
               
(the “Grant Date”) between HERBALIFE LTD. (formerly known as WH Holdings (Cayman Islands)
Ltd.) (the “Company”), and
               
(the “Optionee”).

WHEREAS, pursuant to the Herbalife Ltd. 2004 Stock Incentive Plan (the “Plan”), the
Committee designated under the Plan desires to grant to the Optionee an option to acquire Common
Shares, par value $0.002 per share, of the Company; and

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

1. Grant.

(a) The Company hereby grants to the Optionee an option (the “Option”) to purchase,
subject to the terms and conditions set forth herein and in the Plan, all or any part of
               
Common Shares, par value $.002 per share, of the Company (subject to adjustment as set
forth in Section 10 of the Plan) at a price of
$          
per share (subject to adjustment as set
forth in Section 10 of the Plan).

(b) The Option is not intended to qualify as an “incentive stock option” under Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”).

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

2. Time for Exercise.

(a) Subject to the provisions of this Agreement and the Plan, the Option shall vest and become
exercisable (i) with respect to one-twelfth (1/12) of the aggregate number of Common Shares set
forth in Paragraph 1 hereof on the last day of the first calendar quarter beginning on or after the
Grant Date, and (ii) with respect to an additional one-twelfth (1/12) of the aggregate number of
Common Shares set forth in Paragraph 1 hereof on the last day of each calendar quarter thereafter
until the Option becomes fully vested and exercisable on the last day of the first calendar quarter
beginning on or after the third anniversary of the Grant Date.

 

 

 

(b) In the event of a Change in Control, the Committee as constituted immediately before such
Change in Control may, in its sole discretion, accelerate the vesting and exercisability of this
Option upon such Change in Control or take such other actions as provided in Section 11 of the
Plan.

3. Expiration. The Option shall expire on the tenth (10th) anniversary of the date hereof;
provided, however, that under certain circumstances, the Option may earlier terminate in connection
with a Change in Control, as provided in Section 11 of the Plan.

4. Method of Exercise. The Option may be exercised by delivery to the Company (attention:
Secretary) of a written notice of exercise specifying the number of shares being purchased,
accompanied by payment therefor as follows:

(a) in cash or by check, bank draft or money order payable to the order of the Company;

(b) through the delivery (either actually or by attestation) of unencumbered Common Shares of
the Company held by the Optionee for at least six months having a total Fair Market Value on the
date of delivery equal to the purchase price,

(c) through a combination of cash and shares as provided in clauses (a) and (b) of this
Paragraph 4; or

(d) on such other terms and conditions as may be acceptable to the Committee in its sole
discretion.

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

6. Compliance With Legal Requirements.

(a) The Option shall not be exercisable and no Common Shares shall be issued or transferred
pursuant to this Agreement or the Plan unless and until all tax withholding, if any, and 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 Option, or (iv) obtaining the consent or approval of any governmental regulatory
body.

 

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(b) The Optionee understands that the Company is under no obligation to register for resale
the Common Shares issued upon exercise of the Option. The Company may impose such restrictions,
conditions or limitations as it determines appropriate as to the timing and manner of any exercise
of the Option and/or any resales by the Optionee
or other subsequent transfers by the Optionee of any Common Shares issued as a result of the
exercise of the Option, 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 Option and/or the Common Shares underlying the Option and (iii)
restrictions as to the use of a specified brokerage firm or other agent for exercising the Option
and/or for such resales or other transfers. The sale of the shares underlying the Option must also
comply with other applicable laws and regulations governing the sale of such shares.

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

8. Assignment or Transfer Prohibited. The Option 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 the Optionee only by the Optionee or the Optionee’s guardian or legal representative.
Neither the Option nor any right hereunder shall be subject to attachment, execution or other
similar process. In the event of any attempt by the Optionee to alienate, assign, pledge,
hypothecate or otherwise dispose of the Option 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 Option by notice to the Optionee, and
the Option shall thereupon become null and void.

9. 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.

10. Application of the Plan. The terms of this Agreement are governed by the terms of the
Plan, as it exists on the date of hereof and as the Plan is amended from time to time. In the
event of any conflict between the provisions of this Agreement and the provisions of the Plan, the
terms of the Plan shall control, except as expressly stated otherwise herein. As used herein, the
term “Section” generally refers to provisions within the Plan, and the term “Paragraph” refers to
provisions of this Agreement.

11. No Right to Continued Board Service. Nothing in the Plan, in this Agreement or any
other instrument executed pursuant thereto or hereto shall confer upon the Optionee any right to
continue to serve as a director of the Company.

 

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12. Further Assurances. Each party hereto shall cooperate with each other party, shall do
and perform or cause to be done and performed all further acts and things, and shall execute and
deliver all other agreements, certificates, instruments, and documents as any
other party hereto reasonably may request in order to carry out the intent and accomplish the
purposes of this Agreement and the Plan.

13. Entire Agreement. This Agreement and the Plan together set forth the entire agreement
and understanding between the parties as to the subject matter hereof and supersede all prior oral
and written and all contemporaneous or subsequent oral discussions, agreements and understandings
of any kind or nature.

14. 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 the Optionee and Optionee’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.

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

	 	 	 	 	 	 	 	 	 
	 	 	HERBALIFE LTD.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Optionee

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

 

4Exhibit 10.67

Exhibit 10.67

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.

 

	 	 	 
	1	 	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.

(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.

 

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(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.

(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.

 

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(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.

(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.

 

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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 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).

(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.

 

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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 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.

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.

 

-8-

 

(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.

(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).

 

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(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.

(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

 

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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) 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.

 

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(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.

(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.

 

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