Exhibit 10.41
AGREEMENT FOR RETENTION OF LEGAL SERVICES
This AGREEMENT FOR RETENTION OF LEGAL SERVICES (the "Agreement") is
entered into as of May 20, 2002 by and between Herbalife International of
America, Inc./Herbalife International, Inc. ("Herbalife") and Xxxxxx X. Xxxxxxx
("Xxxxxxx"). Herbalife and Sandler will sometimes be referred to herein as the
"Parties."
RECITALS
X. Xxxxxxx was employed by Herbalife as General Counsel, Corporate
Secretary and Executive Vice President.
B. The Parties wish to enter into this Agreement for purposes of Sandler
providing, and Herbalife obtaining from Sandler legal advice and services on an
as needed basis.
C. Simultaneously with the execution of this Agreement, Herbalife and
Sandler are also entering into a Separation Agreement and General Release.
Sandler's execution of the Separation Agreement and General Release is a
condition precedent to any obligation of Herbalife under this Agreement.
NOW, THEREFORE, Herbalife and Sandler incorporate the foregoing recitals
as part of this Agreement and further agree as follows:
1. Retention as Attorney. Herbalife hereby retains Sandler as an
independent contractor for a thirty-six (36) month period beginning May 20, 2002
provided that the Agreement may be terminated prior to the end of such period as
provided in Section 6, below. It is understood and agreed that as of May 19,
2002 (the "Termination Date"), Sandler will no longer be an employee of
Herbalife for any purpose or on any basis. After the Termination Date, Sandler
is to be compensated only according to the terms of this Agreement and is not
eligible for, and will not receive or accrue, any employment benefits, such as
sick pay, vacation pay, holidays, health, life, dental, or accident insurance,
retirement benefits, or any other benefit which is now, or may become available
to employees of Herbalife. Herbalife is not responsible for, and will not
withhold, any federal, state, or local taxes, workers' compensation
contributions, unemployment insurance contributions, or other payroll deductions
from Sandler's compensation as provided hereunder. Sandler is solely responsible
for such matters. Sandler is not entitled to any rights, benefits, or
protections conferred by Herbalife's personnel practices or procedures on its
employees.
2. Legal Services. Sandler shall provide Herbalife with legal advice and
perform such legal services as Herbalife may from time to time request. Sandler
shall be available to perform legal services on behalf of Herbalife for a
maximum of fifty (50) hours per month ("maximum hours"). Sandler shall not be
entitled to any fees for any time spent performing legal services in excess of
the maximum hours, without prior written consent by Herbalife, nor shall Sandler
be required to spend time in excess of the maximum hours performing legal
services, without prior written consent by Sandler. Sandler shall be required to
maintain records of the time he spends performing legal services for Herbalife.
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3. Performance of Legal Services. The nature of the legal services to be
performed shall be at the discretion of Herbalife, and the time and place of
performance of such services shall be as mutually agreed by Herbalife and
Sandler. In the performance of legal services for Herbalife, Sandler shall owe
Herbalife all duties and obligations of an attorney to his client, including
fiduciary duties, a duty to maintain the attorney-client privilege, and a duty
to act only in the best interests of Herbalife.
4. Consideration. In consideration of the legal services to be provided
by Sandler hereunder, Herbalife agrees to pay Sandler a consulting fee of One
Million, Eight Thousand Dollars ($1,008,000.00) payable in equal monthly
installments of Twenty Eight Thousand Dollars ($28,000.00) on the 15th day of
each of thirty-six (36) months following Sandler's Termination Date, with the
first such payment to be made on June 15, 2002.
5. Expenses. Sandler's reasonable, documented expenses incurred in
connection with the performance of legal services hereunder will be paid by
Herbalife, provided that Sandler must first obtain from Herbalife written
approval of such expenses. Herbalife shall not be liable for payment or
reimbursement of expenses for which Sandler does not obtain preapproval.
6. Termination. This Agreement shall be subject to termination as
follows:
(a) Sandler may terminate this Agreement at any time upon thirty (30)
days' written notice to Herbalife;
(b) Herbalife may terminate this Agreement at any time, with or
without cause and with or without advance notice; provided that in the event
Sandler is not terminated for cause (as defined below), Herbalife shall pay
Sandler the amounts provided for in Section 8. Herbalife's right to terminate
this Agreement shall be governed solely by the terms of this Agreement and may
not be modified by any other express or implied practices, policies or
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agreements. "Cause," for purposes of this Agreement, shall mean (i) the willful
and continued failure by Sandler to substantially perform his duties with
Herbalife (other than any such failure resulting from his incapacity due to
death or physical or mental illness), after a written demand for substantial
performance is delivered to Sandler that specifically identifies the manner in
which Herbalife believes that Sandler has not substantially performed his duties
and Sandler's failure to substantially cure such failure to perform within
thirty (30) days of such notice, (ii) the willful engaging by Sandler in
misconduct which is injurious to Herbalife, monetarily or otherwise, including,
but not limited to, Sandler's failure to abide by his obligations as an attorney
acting on behalf of his client, Herbalife or, (iii) Sandler's final conviction
for fraud or of any felony involving moral turpitude;
7. Rights Upon Sandler's Death or Disability, or Termination of the
Agreement by Sandler or the Company for Cause. Upon termination of this
Agreement by reason of (a) Sandler's termination of the Agreement, (b) Sandler's
death or disability, or (c) for cause, Sandler shall be entitled to receive only
the amount of any accrued but unpaid monthly fees under this Agreement as of the
date of the termination of this Agreement and Herbalife shall have no further
obligation to Sandler.
8. Rights Upon Termination by Company other than for Cause. In the event
Herbalife terminates this Agreement both (a) prior to the date thirty-six (36)
months after the Termination Date, and (b) other than for cause, disability or
death, Sandler shall receive a sum equal to the amount he would have otherwise
been entitled to receive under Section 4 of this Agreement from the date of such
termination of this Agreement to the date thirty-six (36) months after the
Termination Date. Such amount shall be paid to Sandler in one lump sum within
thirty (30) days of termination of this Agreement pursuant to this paragraph 8.
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9. Confidentiality. Sandler agrees not to disclose or misappropriate any
and all trade secrets or confidential or proprietary information of Herbalife
(collectively "Protected Information"). Protected Information means all
information pertaining in any manner to the business of Herbalife and its
employees, distributors, suppliers, vendors, customers, manufacturers, sales
representatives, consultants, lawyers, accountants, and business associates.
This definition includes, but is not limited to: (i) information about costs,
profits, markets, sales, financial and marketing data and bids; (ii) plans for
business, marketing, future development and new product concepts; (iii) employee
personnel files and information about employee compensation and benefits; (iv)
identity of and other business information relating to Herbalife's customers
and/or distributors, past, present or future, together with each such customer's
or distributor's habits or needs; (v) identity of and other business information
relating to Herbalife's past, present or future vendors, manufacturers and
suppliers; and (vi) design drawings and computer programs.
10. Ethical Obligations. Because Sandler will be providing legal advice
and services to Herbalife, and in that capacity will be privy to highly
confidential and privileged information, and because during the period of this
Agreement Sandler will owe all duties of an attorney to a client with regard to
the work conducted by Sandler on behalf of Herbalife, during the period of this
Agreement, Sandler shall not engage in any activity competitive with Herbalife,
or in any other manner act to the detriment of Herbalife or Herbalife's business
interests, management or owner(s).
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11. Additional Instruments. The parties hereto shall execute any further
or additional instruments and they will perform any acts which may be reasonably
necessary or appropriate in order to effectuate and carry out the purposes of
this Agreement.
12. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which may be executed by one or more of the parties
hereto, with the same force and effect as though all the parties who executed
such counterparts had executed but one instrument, and each counterpart shall be
deemed a duplicate original.
13. Modification and Amendments. No provision of this Agreement may be
modified or amended except by a writing executed by the party sought to be
charged with such modification or amendment.
14. Notices. All notices and communications pursuant to this Agreement
shall be in writing and shall be delivered in person or mailed by certified
mail, return receipt requested, postage prepaid:
To Herbalife: Herbalife International of America, Inc.
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
To Sandler: Xxxxxx X. Xxxxxxx
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
With Copies to: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
or to such other address as any party may, from time to time, designate by
written notice hereunder. If delivered in person, such notice shall be effective
immediately; if mailed, such
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notice shall be effective seventy-two (72) hours after deposit, postage prepaid,
in the United States Postal Service mail.
15. Entire Agreement. This Agreement constitutes and embodies the full
and complete understanding and agreement of the parties hereto relating to the
subject matter hereof and supersedes any and all prior understandings or
agreements, whether oral or in writing, between the parties hereto or their
predecessors.
16. Severability.
16.1 Severable. The provisions of this Agreement are severable and,
in the event that any provision hereof shall be found by any court to be
unenforceable, in whole or in part, the remainder of this Agreement shall
nonetheless remain enforceable and binding upon Herbalife and Sandler.
16.2 Enforcement. To the extent that any provision hereof is deemed
unenforceable by virtue of its scope in terms of area, business activity
prohibited and/or length of time, but could be enforceable by reducing the scope
of area, business activity prohibited or length of time, Sandler and Herbalife
agree that same shall be enforced to the fullest extent permissible under the
laws and public policies applied in the jurisdiction in which enforcement is
sought, and that Herbalife shall have the right, in its sole discretion, to
modify such invalid or unenforceable provision to the extent required to be
valid and enforceable. Sandler agrees to be bound by any promise or covenant
imposing the maximum duty permitted by law which is subsumed within the terms of
any provision hereof, as though it were separately articulated in and made a
part of this Agreement, that may result from striking or modifying any of the
provisions hereof.
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17. Assignment. This Agreement shall inure to the benefit of Sandler and
Herbalife and their respective successors and heirs. Neither party may assign
any rights or obligations hereunder without the prior written consent of the
other party. Any attempted assignment in contravention of this Section shall be
null and void and of no effect.
IN WITNESS WHEREOF, the parties have executed this Agreement the date
first written above.
HERBALIFE INTERNATIONAL OF AMERICA,
INC./HERBALIFE INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
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