EXHIBIT 10.42
EXECUTION COPY
EMPLOYMENT AGREEMENT
This Employment Agreement (the "AGREEMENT"), dated as of April 3, 2003
(the "EFFECTIVE DATE"), is made and entered into by and among Xxxxxxx X. Xxxxxxx
("EXECUTIVE"), HERBALIFE INTERNATIONAL, INC., a Nevada corporation ("PARENT"),
and HERBALIFE INTERNATIONAL OF AMERICA, INC., a California corporation
("OPERATING COMPANY") (collectively, Parent and Operating Company are referred
to herein as the "COMPANY").
RECITALS
A. The Company is engaged primarily in the distribution of weight
management, nutritional and personal care products through a
"multi-level" marketing system.
B. The Company desires to be assured of the services of Executive
by employing Executive in the capacity and on the terms set
forth below.
C. Executive desires to commit himself to serve the Company on
the terms herein provided.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:
1. Employment Period. The Company shall employ Executive and Executive
shall continue in the employ of the Company for the period commencing
on the Effective Date and ending as provided in Section 4 hereof (the
"TERM"). Except for any covenants or agreements contained herein which
by their terms are to be performed or observed following the
termination of the Term, upon the termination of the Term, this
Agreement and all of its provisions shall terminate and shall cease to
have any force or effect.
2. Duties.
(a) During the Term, Executive shall serve as the Chief Executive
Officer of the Company, with all of the authority, duties and
responsibilities commensurate with such position and such
other duties commensurate with his position as are assigned to
Executive from time to time by the Board of Directors of
Parent (the "BOARD"). During the Term, Executive shall report
to the Board. With respect to all elections of directors to
the Board during the Term, Parent shall nominate, and use its
best efforts to elect, Executive to serve as a member of both
the Board and as a non-voting member of the Executive
Committee of the Board. Executive will work principally in the
Los Angeles, California offices of the Company, but will also
conduct such business travel as is reasonably required to
fulfill his duties hereunder.
(b) During the Term, Executive shall devote substantially all his
working time, attention, skill and efforts to the business and
affairs of the Company, and shall
not commence employment with or serve as a consultant to, any
other company; provided, however, the foregoing shall not
preclude Executive from devoting a reasonable amount of time
to managing Executive's investments and personal affairs and
to charitable and civic activities (including serving on the
boards of directors of not-for-profit organizations) and, with
the consent of the Executive Committee of the Board and so
long as such activities do not materially interfere with
Executive's performance of his duties hereunder, serving on
the boards of directors of for-profit entities.
3. Compensation and Related Matters.
(a) Salary. During the Term, Executive shall receive a salary at
the per annum rate of Eight Hundred Fifty Thousand Dollars
($850,000), payable semi-monthly or otherwise in accordance
with the Company's payroll practices for senior executives.
Executive's annual base salary shall be subject to review from
time to time for possible increases by the Board. Executive's
base salary may be increased (but not decreased) and, as
increased from time to time, shall be referred to as the "BASE
SALARY."
(b) Expenses. The Company shall reimburse Executive for all
reasonable travel and other reasonable out-of-pocket business
expenses (including all such expenses related to Executive's
maintenance of his home office, including all such expenses
related to the procurement and/or maintenance of a personal
computer, internet connection, fax and telephone (including
wireless) service) incurred by Executive in the performance of
his duties under this Agreement upon evidence of payment and
otherwise in accordance with the Company's policies and
procedures in effect from time to time. In addition, the
Company will pay all reasonable out-of-pocket attorneys' fees
and financial representation costs incurred by Executive in
connection with the evaluation and negotiation of this
Agreement in an amount not to exceed $50,000.
(c) Employee Benefits. During the Term, Executive shall be
entitled to participate in or receive benefits under each
benefit plan or arrangement made available by the Company to
its senior executives (including, without limitation, those
relating to group medical, dental, vision, long-term
disability and life insurance) on terms no less favorable in
the aggregate than those applicable to any other senior
executive of the Company, subject to and on a basis consistent
with the terms, conditions and overall administration of such
plans and subject to the Company's right to modify, amend or
terminate any such plan or arrangement.
(d) Life Insurance. During the Term, the Company will pay all
premiums for a ten-year fixed premium term life insurance
policy on Executive's life in the amount of $10 million issued
by an insurance carrier reasonably acceptable to Executive, so
long as and to the extent that Executive is insurable.
Executive shall have the right to designate both the owner and
the beneficiary of such term life insurance
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policy. Executive agrees to undergo any and all reasonable
physical examinations that are necessary for the issuance
and/or renewal of said term life insurance policy. After the
expiration of the Term, so long as permitted by such insurance
policy terms, Executive may elect to continue coverage under
such policy at his own cost.
(e) Bonus. In addition to the Base Salary, Executive will have the
opportunity to earn an annual target bonus in such amounts,
and based upon such targets, established annually by the
Board. The annual target bonus amounts and the target
determination procedures are set forth on Annex A attached
hereto. Any bonus earned during the Term will be deemed to
have been earned as of the last day of the relevant calendar
year, but will be paid following the completion of the
relevant calendar year at such time bonuses are paid to the
Company's other senior executives.
(f) Vacation. Executive shall be entitled to five (5) weeks paid
vacation during each year of the Term. Unused vacation in any
year shall carry over to subsequent years without limitation,
unless otherwise provided in a vacation pay policy that is
generally applicable to the senior executives of the Company.
(g) Deductions and Withholdings. All amounts payable or which
become payable hereunder shall be subject to all deductions
and withholdings required by law.
4. Termination. Executive's services for the Company and the Term of this
Agreement may be terminated under the following circumstances:
(a) Death. Executive's services hereunder shall terminate upon his
death. In the case of Executive's death, the Company shall pay
(in accordance with Section 4(h) hereof) to Executive's
beneficiaries or estate, as appropriate, (i) his then current
accrued and unpaid Base Salary through his date of death as
well as 100% of any accrued and unpaid bonus for any years
preceding the year of termination (it being expressly agreed
that Executive shall have no rights to receive a bonus in
respect of the year in which his death occurs), and (ii) other
benefits and payments to which Executive is then entitled
hereunder or pursuant to Section 4(k).
(b) Disability. If a Disability (as defined below) of Executive
occurs during the Term, the Board may give Executive written
notice of its intention to terminate his employment while
Executive continues to be subject to such Disability. In such
event, Executive's services with the Company shall terminate
as of the date specified in such notice. In the case of a
termination as a result of a Disability, the Company shall pay
(in accordance with Section 4(h) hereof) to Executive (i) his
then current accrued and unpaid Base Salary through the
effective date of his termination as well as 100% of any
accrued and unpaid bonus for any years preceding the year of
termination (it being expressly agreed that Executive shall
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have no rights to receive a bonus in respect of the year in
which termination occurs), and (ii) other benefits and
payments to which Executive is then entitled hereunder or
pursuant to Section 4(k). For the purpose of this Section
4(b), "DISABILITY" shall mean Executive's inability to perform
his duties for the Company on a full-time basis for 180 days
(whether or not consecutive) in any twelve (12) month period.
During any period of time in which Executive is prevented from
performing his duties for the Company as a result of any
physical or mental incapacitation, but prior to termination of
the Term on account of Executive's Disability, Executive shall
receive his full compensation hereunder as if actively at
work.
(c) Termination by the Company for Cause. The Board may terminate
Executive's services hereunder for Cause (as defined below) at
any time upon written notice to Executive. In such event,
Executive's services shall terminate as of the date specified
in such notice. In the case of Executive's termination for
Cause, the Company shall pay (in accordance with Section 4(h)
hereof) to Executive (i) his then current accrued and unpaid
Base Salary through the effective date of his termination as
well as 100% of any accrued and unpaid bonus for any years
preceding the year of termination (it being expressly agreed
that Executive shall have no rights to receive a bonus in
respect of the year in which termination occurs) and (ii)
other benefits and payments to which Executive is then
entitled hereunder or pursuant to Section 4(k). For purposes
of this Agreement, the Board shall have "CAUSE" to terminate
Executive's services hereunder in the event of any of the
following acts or circumstances: (i) Executive's conviction of
a felony or entering a plea of guilty or nolo contendere to
any crime constituting a felony (other than a traffic
violation or by reason of vicarious liability); (ii)
Executive's substantial and repeated failure to attempt to
perform Executive's lawful duties as contemplated in Section 2
of this Agreement, except during periods of physical or mental
incapacity; (iii) Executive's gross negligence or willful
misconduct with respect to any material aspect of the business
of the Company or any of its affiliates, which negligence or
misconduct has a material and demonstrable adverse effect on
the Company; or (iv) any material breach of this Agreement or
any material breach of any other written agreement between
Executive and the Company's affiliates governing Executive's
equity compensation arrangements (i.e., any agreement with
respect to Executive's stock and/or stock options of any of
the Company's affiliates); provided, however, that Executive
shall not be deemed to have been terminated for Cause in the
case of clause (iv) above, unless any such breach is not fully
corrected prior to the expiration of the fifteen (15) calendar
day period following delivery to Executive of the Company's
written notice of its intention to terminate his employment
for Cause describing the basis therefor in reasonable detail.
(d) Termination by Executive for Good Reason. Executive may
terminate his services hereunder for Good Reason (as defined
below); provided that Executive first gives the Company a
written notice of his intent to terminate for Good
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Reason at least thirty (30) calendar days prior to the
effective date of any such termination, and, if Executive has
Good Reason to terminate his services hereunder, Executive's
services shall terminate upon such 30th calendar date. In the
event Executive terminates his employment for Good Reason, the
Company shall pay to Executive (i) in accordance with Section
4(h) hereof, his then current accrued and unpaid Base Salary
through the effective date of his termination as well as 100%
of any accrued and unpaid bonus for any years preceding the
year of termination (it being expressly agreed that except as
hereinafter provided, Executive shall have no rights to
receive a bonus in respect of the year in which termination
occurs), (ii) in 24 equal monthly installments (with the last
such installment to occur on the second anniversary of such
termination), an additional amount equal to two years' of Base
Salary and Executive's bonus for the year of termination (it
being agreed that Executive's bonus for the year of
termination to be paid under this Section 4(d) shall be deemed
to be equal to two years' of Base Salary), and (iii) other
benefits and payments to which Executive is then entitled
hereunder or pursuant to Section 4(k). "GOOD REASON" shall
mean, without the Executive's consent, the occurrence of any
of the following circumstances unless such circumstances are
fully corrected prior to the expiration of the fifteen (15)
calendar day period following delivery to the Company of
Executive's notice of intention to terminate his employment
for Good Reason describing such circumstances in reasonable
detail: (A) an adverse change in Executive's title as CEO of
the Company, Executive's involuntary removal from the Board or
as a non-voting member of the Executive Committee of the
Board, or failure of Executive to be elected to the Board or
as a non-voting member of the Executive Committee of the Board
at any time during the Term; (B) a substantial diminution in
Executive's duties, responsibilities or authority for the
Company, taken as a whole (except during periods when
Executive is unable to perform all or substantially all of
Executive's duties or responsibilities as a result of
Executive's illness (either physical or mental) or other
incapacity); (C) a change in location of the Company's chief
executive office to a location more than 50 miles from its
current location; or (D) any other material breach of this
Agreement. Executive shall be deemed to have waived his rights
to terminate his services hereunder for circumstances
constituting Good Reason if he shall not have provided to the
Company a notice of termination within sixty (60) calendar
days immediately following his knowledge of the circumstances
constituting Good Reason.
(e) Termination by Executive Without Good Reason. Executive may
terminate his employment hereunder without Good Reason;
provided that Executive first gives the Company a written
notice of termination at least fifteen (15) calendar days
prior to the effective date of any such termination. In the
event Executive terminates his employment without Good Reason,
the Company shall pay to Executive (in accordance with Section
4(h) hereof) (i) his current accrued and unpaid Base Salary
through the effective date of his termination as well as 100%
of any accrued and unpaid bonus for any year preceding the
year of termination (it
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being expressly agreed that Executive shall have no rights to
receive a bonus in respect of the year in which termination
occurs) and (ii) other benefits and payments to which
Executive is then entitled hereunder or pursuant to Section
4(k).
(f) Termination by the Company Without Cause. The Board may
terminate Executive's services hereunder without Cause at any
time upon written notice to Executive. In such event,
Executive's services shall terminate as of the date specified
in such notice. In the event Executive's services hereunder
are terminated by the Company without Cause, the Company shall
pay (in accordance with Section 4(h) hereof) to Executive (i)
his then current accrued and unpaid Base Salary through the
effective date of his termination as well as 100% of any
accrued and unpaid bonus for any years preceding the year of
termination (it being expressly agreed that except as
hereinafter provided, Executive shall have no rights to
receive a bonus in respect of the year in which termination
occurs), (ii) an additional amount equal to two years' of Base
Salary and Executive's bonus for the year of termination (it
being agreed that Executive's bonus for the year of
termination to be paid under this Section 4(f) shall be deemed
to be equal to two years' of Base Salary), and (iii) other
benefits and payments to which Executive is then entitled
hereunder or pursuant to Section 4(k).
(g) Termination in Connection with Certain Organic Transactions.
If (i) any transaction described in clause (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) (such transaction a "Sale Event") is consummated
pursuant to which Executive's stock options granted pursuant
to the Stock Option Agreement are treated in accordance with
clause (i) or (iii) of the first sentence of Section 7(b) of
the Stock Option Agreement, and (ii) either (x) during the
period beginning 90 days prior thereto and ending 90 days
thereafter, Executive's employment terminates pursuant to
Section 4(d) or Section 4(f) hereof and he retains stock
options granted pursuant to the Stock Option Agreement, or (y)
Executive delivers a written notice of resignation to the
Company concurrent with the consummation of, or during the 90
day period immediately following, such Sale event, then the
Company shall pay (in accordance with Section 4(h) hereof) to
Executive (A) his then current accrued and unpaid Base Salary
through the effective date of his termination as well as 100%
of any accrued and unpaid bonus for any years preceding the
year of termination (it being expressly agreed that Executive
shall have no rights to receive a bonus in respect of the year
in which termination occurs), (B) an additional amount equal
to the product of (x) one year of Base Salary multiplied by
(y) the total number of Out-of-the-Money Tranches (as defined
below), and (C) other benefits and payments to which Executive
is then entitled hereunder or pursuant to Section 4(k). For
purposes of this Section 4(g), an "Out-of-the-Money Tranche"
shall be any one of the five tranches included in the stock
option granted to Executive as of the Effective Date pursuant
to the Stock Option Agreement which do not result in any
proceeds paid
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or payable to Executive in connection with such Sale Event.
"Stock Option Agreement" means that certain Non-Statutory
Stock Option Agreement between WH Holdings (Cayman Islands)
Ltd. and Executive of even date herewith. The severance
benefit set forth in this Section 4(g) shall be in addition to
the severance benefit set forth in Section 4(d) or Section
4(f) hereof, as applicable, if such severance benefit would be
payable to Executive in accordance with the terms of Section
4(d) or Section 4(f) hereof.
(h) Payments to Executive; No Duty to Mitigate. Any amounts
payable to Executive upon his termination of employment under
this Section 4 shall be paid at such times as such amounts
would have otherwise been payable to Executive had Executive's
employment not been terminated. Executive shall have no duty
to seek to mitigate the above severance benefits set forth in
this Section 4, and any compensation derived by Executive from
alternative employment or otherwise shall not reduce the
Company's obligations hereunder.
(i) Resignation of Offices. Promptly following any termination of
Executive's employment with the Company (other than by reason
of Executive's death), Executive shall promptly deliver to the
Company reasonably satisfactory written evidence of
Executive's resignation as a member of the board of directors,
any committee thereof and/or any office (e.g., office of Chief
Executive Officer) with the Company or any of its affiliates.
The Company shall be entitled to withhold payment of any
amounts otherwise due pursuant to this Section 4 until
Executive has complied with the provisions of this Section
4(i).
(j) Release. As a precondition to the Company's obligations to
make any of the payments specified in Sections 4(d), 4(f) or
4(g) of this Agreement, Executive or his guardian, estate or
heirs, as appropriate, shall execute and deliver to the
Company a fully effective (i.e., there shall be no further
unsatisfied conditions to the effectiveness thereof) general
release in the form attached hereto as Annex B.
(k) Employee Benefit Plan Rights. Following any termination of
Executive's employment with the Company, any rights that may
exist in Executive's favor to payment of any amount under any
employee benefit plan or arrangement of the Company other than
those set forth in this Agreement shall be made in accordance
with the terms and conditions of any such employee benefit
plan or arrangement.
5. Confidential and Proprietary Information.
(a) The parties agree and acknowledge that during the course of
Executive's employment, Executive will be given and will have
access to and be exposed to trade secrets and confidential
information in written, oral, electronic and other forms
regarding the Company and its affiliates (which includes but
is not limited to all of its business units, divisions and
affiliates) and their business, equipment,
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products and employees, including, without limitation: the
identities of the Company's and its affiliates' distributors
and customers and potential distributors and customers
(hereinafter referred to collectively as "DISTRIBUTORS"),
including, without limitation, the identity of Distributors
that Executive cultivates or maintains while providing
services at the Company or any of its affiliates using the
Company's or any of its affiliates' products, name and
infrastructure, and the identities of contact persons with
respect to those Distributors; the particular preferences,
likes, dislikes and needs of those Distributors and contact
persons with respect to product types, pricing, sales calls,
timing, sales terms, rental terms, lease terms, service plans,
and other marketing terms and techniques; the Company's and
its affiliates' business methods, practices, strategies,
forecasts, pricing, and marketing techniques; the identities
of the Company's and its affiliates' licensors, vendors and
other suppliers and the identities of the Company's and its
affiliates' contact persons at such licensors, vendors and
other suppliers; the identities of the Company's and its
affiliates' key sales representatives and personnel and other
employees; advertising and sales materials; research, computer
software and related materials; and other facts and financial
and other business information concerning or relating to the
Company or any of its affiliates and their business,
operations, financial condition, results of operations and
prospects. Executive expressly agrees to use such trade
secrets and confidential information only for purposes of
carrying out his duties for the Company and its affiliates as
he deems appropriate in his good faith judgment, and not for
any other purpose, including, without limitation, not in any
way or for any purpose detrimental to the Company or any of
its affiliates. Executive shall not at any time, either during
the course of his employment hereunder or after the
termination of such employment, use for himself or others,
directly or indirectly, any such trade secrets or confidential
information, and, except as required by law, Executive shall
not disclose such trade secrets or confidential information,
directly or indirectly, to any other person or entity. Trade
secret and confidential information hereunder shall not
include any information which (i) is already in or
subsequently enters the public domain, other than as a result
of any direct or indirect disclosure by Executive, (ii)
becomes available to Executive on a non-confidential basis
from a source other than the Company or any of its affiliates,
provided that Executive has no knowledge that such source is
subject to a confidentiality agreement or other obligation of
secrecy or confidentiality (whether pursuant to a contract,
legal or fiduciary obligation or duty or otherwise) to the
Company or any of its affiliates or any other person or entity
or (iii) is approved for release by the board of directors of
the Company or any of its affiliates or which the board of
directors of the Company or any of its affiliates makes
available to third parties without an obligation of
confidentiality.
(b) All physical property and all notes, memoranda, files,
records, writings, documents and other materials of any and
every nature, written or electronic, which Executive shall
prepare or receive in the course of his employment with the
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Company and which relate to or are useful in any manner to the
business now or hereafter conducted by the Company or any of
its affiliates are and shall remain the sole and exclusive
property of the Company and its affiliates, as applicable.
Executive shall not remove from the Company's premises any
such physical property, the original or any reproduction of
any such materials nor the information contained therein
except for the purposes of carrying out his duties to the
Company or any of its affiliates and all such property (except
for any items of personal property not owned by the Company or
any of its affiliates), materials and information in his
possession or under his custody or control upon the
termination of his employment (other than such materials
received by Executive solely in his capacity as a shareholder)
shall be immediately turned over to the Company and its
affiliates, as applicable.
(c) All inventions, improvements, trade secrets, reports, manuals,
computer programs, tapes and other ideas and materials
developed or invented by Executive during the period of his
employment, either solely or in collaboration with others,
which relate to the actual or anticipated business or research
of the Company or any of its affiliates which result from or
are suggested by any work Executive may do for the Company or
any of its affiliates or which result from use of the
Company's or any of its affiliates' premises or property
(collectively, the "DEVELOPMENTS") shall be the sole and
exclusive property the Company and its affiliates, as
applicable. Executive assigns and transfers to the Company his
entire right and interest in any such Development, and
Executive shall execute and deliver any and all documents and
shall do and perform any and all other acts and things
necessary or desirable in connection therewith that the
Company or any of its affiliates may reasonably request, it
being agreed that the preparation of any such documents shall
be at the Company's expense.
(d) Following the termination of the Term, Executive will
reasonably cooperate with the Company (at the Company's
expense, if Executive reasonably incurs any out-of-pocket
costs with respect thereto) in any defense of any legal,
administrative or other action in which the Company or any of
its affiliates or any of their distributors or other business
relations are a party or are otherwise involved, so long as
any such matter was related to Executive's duties and
activities conducted on behalf of the Company or its
Subsidiaries.
(e) The provisions of this Section 5 and Section 6 shall survive
any termination of this Agreement and termination of
Executive's employment with the Company.
6. Non-Solicitation.
(a) Executive acknowledges that in the course of his employment
for the Company he will become familiar with the Company's and
its affiliates' trade secrets and other confidential
information concerning the Company and its affiliates.
Accordingly, Executive agrees that, during the Term and for a
period of twenty-four (24)
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months immediately thereafter (the "NONSOLICITATION PERIOD"),
he will not directly or indirectly through another entity (i)
induce or attempt to induce any employee or Distributor of the
Company or any of its affiliates to leave the employment of,
or cease to maintain its distributor relationship with, the
Company or such affiliate, or in any way interfere with the
relationship between the Company or any such affiliate and any
employee or Distributor thereof, (ii) hire any person who was
an employee of the Company or any of its affiliates at any
time during the Nonsolicitation Period or enter into a
distributor relationship with any person or entity who was a
Distributor of the Company or any of its affiliates at any
time during the Nonsolicitation Period, (iii) induce or
attempt to induce any Distributor, supplier, licensor,
licensee or other business relation of the Company or any of
its affiliates to cease doing business with the Company or
such affiliate, or in any way interfere with the relationship
between such Distributor, supplier, licensor, licensee or
business relation and the Company or any of its affiliates or
(iv) use any trade secrets or other confidential information
of the Company or any of its affiliates to directly or
indirectly participate in any means or manner in any
Competitive Business, wherever located. "COMPETITIVE BUSINESS"
means the development, marketing, distribution or sale of
weight management products, nutritional supplements or
personal care products through multi-level marketing or other
direct selling channels. "PARTICIPATE" includes any direct or
indirect interest in any enterprise, whether as an officer,
director, employee, partner, sole proprietor, agent,
representative, independent contractor, executive, franchisor,
franchisee, creditor, owner, distributor or otherwise;
provided that the foregoing activities shall not include the
passive ownership (i.e., Executive does not directly or
indirectly participate in the business or management of the
applicable entity) of less than 5% of the stock of a
publicly-held corporation whose stock is traded on a national
securities exchange and which is not primarily engaged in a
Competitive Business.
(b) Except as otherwise provided in Section 2(b), as long as
Executive is employed by the Company, Executive agrees that he
will not, except with the express written consent of the
Board, become engaged in, render services for, or permit his
name to be used in connection with any business other than the
business of the Company and its affiliates.
(c) Executive has agreed to be bound by the covenants contained in
this Section 6 for the purpose of preserving for the Company's
and its affiliates' benefit the goodwill, confidential and
proprietary information and going concern value of the Company
and its affiliates and their respective business
opportunities, and to protect the value of the capital stock
of the Company acquired by WH Holdings (Cayman Islands) Ltd.
pursuant to that certain Agreement and Plan of Merger dated
April 10, 2002, by and among WH Holdings (Cayman Islands)
Ltd., Parent and WH Acquisition Corp. WH Holdings (Cayman
Islands) Ltd. and each of its
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affiliates are intended third party beneficiaries of the
provisions of Sections 5 and 6 of this Agreement.
7. Injunctive Relief. Executive and the Company (a) intend that the
provisions of Sections 5 and 6 be and become valid and enforceable, (b)
acknowledge and agree that the provisions of Sections 5 and 6 are
reasonable and necessary to protect the legitimate interests of the
business of the Company and its affiliates and (c) agree that any
violation of Section 5 or 6 will result in irreparable injury to the
Company and its affiliates, the exact amount of which will be difficult
to ascertain and the remedies at law for which will not be reasonable
or adequate compensation to the Company and its affiliates for such a
violation. Accordingly, Executive agrees that if Executive violates or
threatens to violate the provisions of Section 5 or 6, in addition to
any other remedy which may be available at law or in equity, the
Company shall be entitled to specific performance and injunctive
relief, without posting bond or other security, and without the
necessity of proving actual damages. In addition, in the event of a
violation or threatened violation by Executive of Section 5 or 6 of
this Agreement, the Nonsolicitation Period will be tolled until such
violation or threatened violation has been duly cured. If, at the time
of enforcement of Sections 5 or 6 of this Agreement, a court holds that
the restrictions stated therein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum period, scope
or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area.
8. Assignment; Successors and Assigns. Executive agrees that he shall not
assign, sell, transfer, delegate or otherwise dispose of, whether
voluntarily or involuntarily, any rights or obligations under this
Agreement, nor shall Executive's rights hereunder be subject to
encumbrance of the claims of creditors. This Agreement may be assigned
by the Company without the consent of Executive to (a) any entity
succeeding to all or substantially all of the assets or business of the
Company, whether by merger, consolidation, acquisition or otherwise
(upon which entity the Agreement shall be binding), or (b) any
affiliate; provided, however, that in neither case shall the Company be
released from its obligations hereunder, nor shall any assignment to an
affiliate lessen the Executive's rights with respect to his position,
duties, responsibilities or authority with respect to the Company. In
the case of an assignment other than by operation of law, the Company
shall promptly deliver to Executive a written assumption of the
Agreement and the obligations hereunder by such entity. Any purported
assignment, transfer, delegation, disposition or encumbrance in
violation of this Section 8 shall be null and void and of no force or
effect. Subject to the foregoing, this Agreement shall be binding upon
and shall inure to the benefit of the parties and their respective
heirs, legal representatives, successors, and permitted assigns, and,
except as expressly provided herein, no other person or entity shall
have any right, benefit or obligation under this Agreement as a third
party beneficiary or otherwise. Notwithstanding the foregoing, in the
event of Executive's death, his beneficiaries or estate, as
appropriate, shall be entitled to all amounts Executive would have
otherwise received hereunder. In the event the Company transfers all or
any substantial portion (i.e., more than 50% of the fair market value
thereof, as determined by the Board in good faith) of its assets to any
of its
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affiliates, the Company shall cause such affiliate to sign a
counterpart copy of this Agreement as a primary obligor hereunder, it
being agreed that no such assignment shall release the Company from any
of its obligations hereunder.
9. Governing Law; Jurisdiction and Venue. This Agreement shall be
governed, construed, interpreted and enforced in accordance with the
substantive laws of the State of California without regard to the
conflicts of law principles thereof. Suit to enforce this Agreement or
any provision or portion thereof may be brought in the federal or state
courts located in Los Angeles, California.
10. Severability of Provisions. In the event that any provision or any
portion thereof should ever be adjudicated by a court of competent
jurisdiction to exceed the time or other limitations permitted by
applicable law, as determined by such court in such action, then such
provisions shall be deemed reformed to the maximum time or other
limitations permitted by applicable law, the parties hereby
acknowledging their desire that in such event such action be taken. In
addition to the above, the provisions of this Agreement are severable,
and the invalidity or unenforceability of any provision or provisions
of this Agreement or portions thereof shall not affect the validity or
enforceability of any other provision, or portion of this Agreement,
which shall remain in full force and effect as if executed with the
unenforceable or invalid provision or portion thereof eliminated.
Notwithstanding the foregoing, the parties hereto affirmatively
represent, acknowledge and agree that it is their intention that this
Agreement and each of its provisions are enforceable in accordance with
their terms and expressly agree not to challenge the validity or
enforceability of this Agreement or any of its provisions, or portions
or aspects thereof, in the future. The parties hereto are expressly
relying upon this representation, acknowledgement and agreement in
determining to enter into this Agreement.
11. Warranty. As an inducement to the Company to enter into this Agreement,
Executive represents and warrants that he is not a party to any other
agreement or obligation for personal services, and that there exists no
impediment or restraint, contractual or otherwise, on his power, right
or ability to enter into this Agreement and to perform his duties and
obligations hereunder. As an inducement to Executive to enter into this
Agreement, the Company represents and warrants that the person signing
this Agreement for the Company has been duly authorized to do so by all
necessary corporate action and has the corporate power and authority to
execute this Agreement on the Company's behalf. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated have been duly and effectively authorized by all necessary
corporate action of the Company.
12. Notices. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing
and shall be deemed to have been duly given when received if personally
delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method upon receipt of telephonic or electronic
confirmation; the day after it is sent, if sent for next day delivery
to a domestic address by recognized overnight delivery service (e.g.,
Federal Express); and upon
12
receipt, if sent by certified or registered mail, return receipt
requested. In each case notice will be sent to:
(a) If to the Company:
Herbalife International, Inc.
Herbalife International of America, Inc.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Members of the Compensation Committee of the Board
of Directors
Telecopy: (000) 000-0000
(b) with a copy to:
Herbalife International, Inc.
Herbalife International of America, Inc.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
(c) if to Executive, to:
his home address on record with the Company
(d) with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or to such other place and with other copies as either party may
designate as to itself or himself by written notice to the others.
13. Cumulative Remedies. All rights and remedies of either party hereto are
cumulative of each other and of every other right or remedy such party
may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.
14. Counterparts. This Agreement may be executed in several counterparts,
each of which will be deemed to be an original, but all of which
together shall constitute one and the same Agreement.
13
15. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to
the subject matter hereof and this Agreement supersedes (and may not be
contradicted by, modified or supplemented by) any prior or
contemporaneous agreement, written or oral, with respect thereto. The
parties further intend that this Agreement shall constitute the
complete and exclusive statement of its terms and that no extrinsic
evidence whatsoever may be introduced in any judicial, administrative
or other legal proceeding to vary the terms of this Agreement.
16. Amendments; Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, approved by the Board
and signed by Executive and a member of the Board other than Executive.
As an exception to the foregoing, the parties acknowledge and agree
that the Company shall have the right, in its sole discretion, to
reduce the scope of any covenant or obligation of Executive set forth
in Sections 5 or 6 of this Agreement or any portion thereof, effective
immediately upon receipt by Executive of written notice thereof from
the Company. No waiver of any of the provisions of this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be
deemed to be construed as a further, continuing or subsequent waiver of
any such provision or as a waiver of any other provision of this
Agreement. No failure to exercise and no delay in exercising any right,
remedy or power hereunder shall preclude any other or further exercise
of any other right, remedy or power provided herein or by law or in
equity.
17. Representation of Counsel; Mutual Negotiation. Each party has had the
opportunity to be represented by counsel of its choice in negotiating
this Agreement. This Agreement shall therefore be deemed to have been
negotiated and prepared at the joint request, direction and
construction of the parties, at arm's-length, with the advice and
participation of counsel, and shall be interpreted in accordance with
its terms without favor to any party.
18. Indemnification. The Company hereby covenants and agrees to indemnify
Executive and hold him harmless to the fullest extent permitted by
applicable laws and under the By-laws of the Company against and in
respect to any and all actions, suits, proceedings, claims, demands,
judgments, losses, damages and reasonable out-of-pocket costs and
expenses (including reasonable out-of-pocket attorney's fees and
expenses) resulting from Executive's good faith performance of his
duties and obligations with the Company or any of its affiliates or as
the fiduciary of any benefit plan of the Company or its affiliates. To
the extent permitted by applicable laws, the Company, within 30 days of
presentation of invoices, shall reimburse Executive for all reasonable
out-of-pocket legal fees and disbursements reasonably incurred by
Executive in connection with any such indemnifiable matter; provided,
however, that Executive shall consult with the Company prior to
selecting his counsel and shall obtain the Company's approval, which
approval shall not be unreasonably withheld, of such counsel. In
addition, the Company shall cover Executive under its directors and
officers liability insurance policy both during the term of this
Agreement and during the six-year period thereafter in the same amount
and to the same extent, if any, as the Company covers its other
officers and directors during any such period of time.
14
19. Arbitration. Except in any instance where equitable relief is
specifically authorized hereunder, any dispute arising under or in
connection with this Agreement shall be resolved by binding arbitration
conducted before one (1) arbitrator sitting in Los Angeles, California
or such other location agreed by the parties hereto, in accordance with
the rules and regulations of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. At the discretion of the
arbitrator, the prevailing party in such arbitration may be ordered to
pay the reasonable out-of-pocket costs and legal fees and disbursements
incurred by the non-prevailing party in such arbitration and
preparation therefor, provided that such costs do not exceed $100,000.
20. Joint and Several Liability. Each of Parent and the Operating Company
shall be jointly and severally liable for the obligations of the other
under this Agreement.
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
EXECUTIVE
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Xxxxxxx X. Xxxxxxx
HERBALIFE INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXX
-----------------
Name: Xxxxx X. Xxxx
Title: Co-President
HERBALIFE INTERNATIONAL OF AMERICA, INC.
By: /s/ XXXXX X. XXXX
-----------------
Name: Xxxxx X. Xxxx
Title: Co-President
ANNEX A
BONUS TARGETS AND TARGET BONUS AMOUNTS
DECEMBER 31, 2003:
For the year ended December 31, 2003, Executive shall be entitled to a bonus in
an amount equal to the greater of (i) $850,000 and (ii) an amount equal to the
2003 EBITDA Bonus. The 2003 EBITDA Bonus shall be equal to (A) if 2003 EBITDA is
greater than or equal to 114.6% of the 2003 Plan EBITDA, $1,700,000; (B) if 2003
EBITDA is greater than or equal to 107.3% and less than 114.6% of 2003 Plan
EBITDA, $1,487,500; (C) if 2003 EBITDA is greater than or equal to 100% and less
than 107.3% of 2003 Plan EBITDA, $1,275,000; (D) if 2003 EBITDA is greater than
or equal to 95% and less than 100% of 2003 Plan EBITDA, $956,250; (E) if 2003
EBITDA is greater than or equal to 90% and less than 95% of 2003 Plan EBITDA,
$637,500; (F) if 2003 EBITDA is greater than or equal to 85% and less than 90%
of 2003 Plan EBITDA, $478,550; (G) if 2003 EBITDA is greater than or equal to
80% and less than 85% of 2003 Plan EBITDA, $318,750; and (H) if 2003 EBITDA is
less than 80% of 2003 Plan EBITDA, $0.
Executive's 2003 bonus shall not be prorated as a result of Executive's
employment for less than 12 months during calendar 2003.
For purposes of computing EBITDA, such amount includes the impact of the
management bonus plan, and excludes all equity sponsor monitoring fees and
expenses.
2004 AND BEYOND:
For the year ended December 31, 2004 and each subsequent year during the Term,
Executive shall be entitled to a bonus, if earned, in an amount equal to the sum
of (i) the EBITDA Bonus, if any and (ii) the Alternative Performance Bonus (as
set forth on the table below), if any. Executive shall have earned a bonus based
upon the achievement by WH Intermediate Holdings Ltd. and each of its
consolidated subsidiaries of EBITDA and the actual performance in the
Alternative Performance Target(s) (as defined below), as determined based on the
audited financial statements for the relevant year, in the percentages set forth
in the table on the following page. "Alternative Performance Target(s)" means
one or more alternative metrics (i.e., other than EBITDA) set annually by the
Board (such as growth in net sales, for example) after consultation with
Executive, and determined by reference to the Board-approved Plan (the "Plan")
for the relevant year. The Board shall deliver written notice to Executive of
the Alternative Performance Target(s) no later than January 31st of the relevant
calendar year.
A-1
-------------------------------------------------------------------------------------------------------------------
...Executive shall be If the Company ...Executive shall be
awarded an EBITDA achieves this awarded an
If the Company Bonus equal to the percentage of the Alternative
achieves this product of Alternative Performance Bonus
percentage of Executive's Base Performance Target as equal to the product
EBITDA as set forth Salary and this determined by of Executive's Base
in the Plan... factor: reference to the Plan... Salary and this factor:
-------------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.5 Greater than or equal to 0.5
114.6% 114.6%
-------------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.3125 Greater than or equal to 0.4375
107.3% and less than 114.6% 107.3% and less than 114.6%
-------------------------------------------------------------------------------------------------------------------
Greater than or equal to 100% 1.125 Greater than or equal to 0.375
and less than 107.3% 100% and less than 107.3%
-------------------------------------------------------------------------------------------------------------------
Greater than or equal to 95% 0.84375 Greater than or equal to 95% 0.28125
and less than 100% and less than 100%
-------------------------------------------------------------------------------------------------------------------
Greater than or equal to 90% 0.5625 Greater than or equal to 90% 0.1875
and less than 95% and less than 95%
-------------------------------------------------------------------------------------------------------------------
Greater than or equal to 85% 0.42225 Greater than or equal to 85% 0.14075
and less than 90% and less than 90%
-------------------------------------------------------------------------------------------------------------------
Greater than or equal to 80% 0.28125 Greater than or equal to 80% 0.09375
and less than 85% and less than 85%
-------------------------------------------------------------------------------------------------------------------
Less than 80% 0 Less than 80% 0
-------------------------------------------------------------------------------------------------------------------
Notwithstanding any provision in this Agreement to the contrary, (a) in no event
shall the bonus earned by Executive for any calendar year (including 2003) be
greater than 200% of Executive's Base Salary, and (b) seventy-five percent (75%)
of the Executive's overall annual bonus potential shall be attributable to the
EBITDA Bonus, and twenty-five percent (25%) of the Executive's overall annual
bonus potential shall be attributable to the Alternative Performance Bonus.
A-2
ANNEX B
AGREEMENT AND GENERAL RELEASE
Agreement and General Release ("AGREEMENT"), by and among
Xxxxxxx X. Xxxxxxx ("EXECUTIVE" and referred to herein as "you"), HERBALIFE
INTERNATIONAL, INC., a Nevada corporation ("PARENT"), and HERBALIFE
INTERNATIONAL OF AMERICA, INC., a California corporation ("OPERATING COMPANY")
(collectively, Parent and Operating Company are referred to herein as the
"COMPANY").
1. In exchange for your waiver of claims against the Company
Entities (as defined below) and compliance with other terms and conditions of
this Agreement, upon the effectiveness of this Agreement, the Company agrees to
provide you with the payments and benefits provided in Section 4 of your
employment agreement with the Company, dated ___________, 2003 (the "EMPLOYMENT
AGREEMENT") in accordance with the terms and conditions of Section 4 of the
Employment Agreement.
2. (a) In consideration for the payments and benefits to be
provided to you pursuant to paragraph 1 above, you, for yourself and for your
heirs, executors, administrators, trustees, legal representatives and assigns
(hereinafter referred to collectively as "RELEASORS"), forever release and
discharge the Company and its past, present and future parent entities,
subsidiaries, divisions, affiliates and related business entities, successors
and assigns, assets, employee benefit plans or funds (including, without
limitation, each of Whitney & Co., L.L.C., Golden Gate Private Equity, Inc., any
investment fund managed by either of them and any affiliate of any of the
aforementioned persons or entities), and any of its or their respective past,
present and/or future directors, officers, fiduciaries, agents, trustees,
administrators, employees and assigns, whether acting on behalf of the Company
or in their individual capacities (collectively the "COMPANY ENTITIES") from any
and all claims, suits, demands, causes of action, covenants, obligations, debts,
costs, expenses, fees and liabilities of any kind whatsoever in law or equity,
by statute or otherwise, whether known or unknown, vested or contingent,
suspected or unsuspected and whether or not concealed or hidden (collectively,
the "CLAIMS"), which you ever had, now have, or may have against any of the
Company Entities by reason of any act, omission, transaction, practice, plan,
policy, procedure, conduct, occurrence, or other matter related in any way to
your employment by (including, but not limited to, termination thereof) the
Company Entities up to and including the date on which you sign this Agreement,
except as provided in subsection (c) below.
(b) Without limiting the generality of the foregoing,
this Agreement is intended to and shall release the Company Entities from any
and all claims, whether known or unknown, which Releasors ever had, now have, or
may have against the Companies Entities arising out of your employment or
termination thereof, including, but not limited to: (i) any claim under the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Employee Retirement Income Security Act of
1974 (excluding claims for accrued, vested benefits under any employee benefit
or pension plan of the Company Entities subject to the terms and conditions of
such plan and applicable law), the Family and Medical Leave Act, the Worker
Adjustment and Retraining Notification Act of 1988, or the Fair Labor Standards
Act of 1938, in each case as amended; (ii) any claim under the
B-1
California Fair Employment and Housing Act, the California Labor Code, the
California Family Rights Act, or the California Pregnancy Disability Leave Law;
(iii) any other claim (whether based on federal, state, or local law (statutory
or decisional), rule, regulation or ordinance) relating to or arising out of
your employment, the terms and conditions of such employment, the termination of
such employment, including, but not limited to, breach of contract (express or
implied), wrongful discharge, detrimental reliance, defamation, emotional
distress or compensatory or punitive damages; and (iv) any claim for attorneys'
fees, costs, disbursements and/or the like.
(c) Notwithstanding the foregoing, nothing in this
Agreement shall be a waiver of claims: (1) that may arise after the date on
which you sign this Agreement; (2) with respect to your right to enforce your
rights that survive termination under the Employment Agreement or any other
written agreement entered into between you and the Company (including, without
limitation, any equity grants or agreements); (3) regarding rights of
indemnification, receipt of legal fees and directors and officers liability
insurance to which you are entitled under the Employment Agreement, the
Company's Certificate of Incorporation or By-laws, pursuant to any separate
writing between you and the Company or pursuant to applicable law; (4) relating
to any claims for accrued, vested benefits under any employee benefit plan or
pension plan of the Company Entities subject to the terms and conditions of such
plan and applicable law; or (5) as a stockholder or optionholder of the Company.
(d) In signing this Agreement, you acknowledge that you
intend that this Agreement shall be effective as a bar to each and every one of
the Claims hereinabove mentioned or implied. You expressly consent that this
Agreement shall be given full force and effect according to each and all of its
express terms and provisions, including those relating to unknown, unsuspected
or unanticipated Claims (notwithstanding any state statute that expressly limits
the effectiveness of a general release of unknown, unsuspected or unanticipated
Claims), if any, as well as those relating to any other Claims hereinabove
mentioned or implied. You acknowledge and agree that this waiver is an essential
and material term of this Agreement, and the Company is entering into this
Agreement in reliance on such waiver. You further agree that if you bring your
own Claim in which you seek damages against any Company Entity, or if you seek
to recover against any Company Entity in any Claim brought by a governmental
agency on your behalf, the releases set forth in this Agreement shall serve as a
complete defense to such Claims, and you shall reimburse each Company Entity for
any attorneys' fees or expenses or other fees and expenses incurred in defending
any such Claim; provided, however, if a class action claim or governmental claim
is brought on your behalf, your obligations will be limited to (i) opting out of
such action or claim at the first available opportunity and (ii) turning over
any and all damage awards or other proceeds received in connection therewith to
the Company, it being agreed that you shall not be liable to the Company for any
attorneys' fees or expenses or other fees or expenses in the case of any such
class action claim or governmental claim.
(e) Without limiting the generality of the foregoing, you
waive all rights under California Civil Code Section 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE WHICH, IF KNOWN BY HIM,
B-2
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
3. (a) This Agreement is not intended, and shall not be
construed, as an admission that any of the Company Entities has violated any
federal, state or local law (statutory or decisional), ordinance or regulation,
breached any contract or committed any wrong whatsoever against you.
(b) Should any provision of this Agreement require
interpretation or construction, it is agreed by the parties that the entity
interpreting or constructing this Agreement shall not apply a presumption
against one party by reason of the rule of construction that a document is to be
construed more strictly against the party who prepared the document.
4. For two years from and after the date of your employment
termination, each of the undersigned agrees not to make any derogatory, negative
or disparaging public statement about the other party hereto (or, as applicable,
any other Company Entity, or members of your family) or to make any public
statement (or any statement likely to become public) that could reasonably be
expected to adversely affect or disparage the reputation, or, to the extent
applicable, business or goodwill of any of the undersigned (i.e., the Company or
any other Company Entity, on the one hand, or you or your family, on the other
hand), it being agreed and understood that nothing herein shall prohibit any
party (a) from disclosing that you are no longer employed by the Company, (b)
from responding truthfully to any governmental investigation or inquiry related
thereto, whether by the Securities and Exchange Commission or other governmental
entity or any other law, subpoena, court order or other compulsory legal process
or any disclosure requirement of the Securities and Exchange Commission, or (c)
from making traditional competitive statements in the course of promoting a
competing business, so long as any statements made by you described in this
clause (c) are not based on confidential information obtained during the course
of your employment with the Company.
5. This Agreement is binding upon, and shall inure to the benefit
of, the parties and their respective heirs, executors, administrators,
successors and assigns.
6. This Agreement shall be construed and enforced in accordance
with the laws of the State of California applicable to agreements made and to be
performed entirely within such State.
7. You acknowledge that your obligations pursuant to Sections 4,
5, 6 and 7 of the Employment Agreement survive the termination of your
employment in accordance with the terms thereof.
8. You acknowledge that you: (a) have carefully read this
Agreement in its entirety; (b) have had an opportunity to consider for at least
twenty-one (21) days the terms of this Agreement; (c) are hereby advised by the
Company in writing to consult with an attorney of your choice in connection with
this Agreement; (d) fully understand the significance of all of the terms and
conditions of this Agreement and have discussed them with your independent legal
counsel, or have had a reasonable opportunity to do so; (e) have had answered to
your satisfaction by your independent legal counsel any questions you have asked
with regard to the
B-3
meaning and significance of any of the provisions of this Agreement; and (f) are
signing this Agreement voluntarily and of your own free will and agree to abide
by all the terms and conditions contained herein.
9. You understand that you will have at least twenty-one (21)
days from the date of receipt of this Agreement to consider the terms and
conditions of this Agreement. You may accept this Agreement by signing it and
returning it to Parent's General Counsel at the address specified pursuant to
Section 12 of the Employment Agreement on or before _________. After executing
this Agreement, you shall have seven (7) days (the "REVOCATION PERIOD") to
revoke this Agreement by indicating your desire to do so in writing delivered to
the General Counsel at the address above by no later than 5:00 p.m. on the
seventh (7th) day after the date you sign this Agreement. The effective date of
this Agreement shall be the eighth (8th) day after you sign the Agreement (the
"AGREEMENT EFFECTIVE DATE"). If the last day of the Revocation Period falls on a
Saturday, Sunday or holiday, the last day of the Revocation Period will be
deemed to be the next business day. In the event you do not accept this
Agreement as set forth above, or in the event you revoke this Agreement during
the Revocation Period, this Agreement, including but not limited to the
obligation of the Company to provide the payments and benefits provided in
paragraph 1 above, shall be deemed automatically null and void.
EXECUTIVE
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Xxxxxxx X. Xxxxxxx
HERBALIFE INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXX
-----------------
Name: Xxxxx X. Xxxx
Title: Co-President
HERBALIFE INTERNATIONAL OF AMERICA, INC.
By: /s/ XXXXX X. XXXX
-----------------
Name: Xxxxx X. Xxxx
Title: Co-President
B-4
