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EXHIBIT 99.1
HERBALIFE INTERNATIONAL OF AMERICA, INC.
EXECUTIVE OFFICER DEFERRED COMPENSATION PLAN
EFFECTIVE JANUARY 1, 1998
RECITALS
X. Xxxxxxx Xxxxx ("Participant") is the Executive Vice President and
Chief Executive of Corporate Marketing and Corporate Development of Herbalife
International, Inc., a Nevada corporation ("Parent").
B. Participant and Parent entered into a Deferred Compensation Agreement
as of August 9, 1994 ("Prior Deferred Compensation Agreement"), providing for
the payment of deferred compensation to Participant.
C. Participant is not yet entitled to receive payment of any deferred
compensation under the Prior Deferred Compensation Agreement
D. Participant, Herbalife International of America, Inc., a California
corporation ("Company") and Parent wish to convert the benefits payable under
the Prior Deferred Compensation Agreement into benefits payable under this Plan
of the Company.
E. The purpose of this Plan is to provide specified benefits to the
Participant.
F. The Company maintains the "Trust," as hereafter defined.
ARTICLE I.
DEFINITIONS
For purposes hereof, unless otherwise clearly apparent from the context,
the following phrases or terms shall have the following indicated meanings:
1.1 "Additional Deferral Amounts" means the amounts credited to
Participant's Account Balance pursuant to Section 2.2.
1.2 "Account Balance" has the meaning set forth in Section 3.1.
1.3 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 4, that are entitled to
receive benefits under the Plan upon the death of the Participant.
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1.4 "Beneficiary Designation Form" shall mean the form established from time
to time by the Committee that a Participant completes, signs and returns
to the Committee to designate one or more Beneficiaries.
1.5 "Board" shall mean the board of directors of the Company.
1.6 "Cause" means Participant's deliberate and intentional refusal to
perform his duties to the Company after demand for such performance by
the Company's Chief Executive Officer or Board of Directors that
specifically identifies the manner in which the Company alleges that
Participant has not performed his duties; embezzlement or fraud (other
than any acts or omissions of Participant pursuant to the directions of
the Company's Chief Executive Officer or Board of Directors) in the
preparation of any materially false or misleading report, registration
statement or other filing with the Securities Exchange Commission; gross
negligence or reckless behavior by Participant which results in
demonstrable material harm to the Company and/or any of its affiliates;
or Participant's conviction for any crime or act involving moral
turpitude.
1.7 "Change in Control" shall mean the first to occur of any of the
following events:
(1) Any "person" (as that term is used in Section 13 and 14(d)(2) of
the Securities Exchange Act of 1934 ("Exchange Act")), other
than Xxxx Xxxxxx, the Xxxxxx Family Trust or any entity with
respect to which Xxxx Xxxxxx has investment or dispositive power
or authority, after the date hereof becomes the beneficial owner
(as that term is used in Section 13(d) of the Exchange Act),
directly or indirectly, of 50 percent or more of the Company's
capital stock entitled to vote in the election of directors;
(2) During, any period of two consecutive years, individuals who at
the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at
least three-quarters of the directors still in office who were
directors at the beginning of the period;
(3) Any consolidation or merger of the Company, other than a
consolidation or merger of the Company in which the holders of
the common stock of the Company immediately prior to the
consolidation or merger
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hold more than 50 percent of the common stock of the surviving
corporation immediately after the consolidation or merger;
(4) The shareholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company; or
(5) Substantially all of the assets of the Company are sold or
otherwise transferred to parties that are not within a
"controlled group of corporations" (as defined in Section 1563
of the Code) in which the Company is a member.
1.8 "Claimant" shall have the meaning set forth in Section 7.1.
1.9 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.10 "Committee" shall mean the administrative committee appointed to manage
and administer the Plan in accordance with its provisions pursuant to
Article 6.
1.11 "Company" shall mean HERBALIFE INTERNATIONAL OF AMERICA, INC., a
California corporation.
1.12 "Crediting Rate" shall mean, for each Plan Year, an interest rate equal
to the current general account crediting rate on SunLife of Canada's
corporate universal life product in effect on January 1 of such Plan
Year.
1.13 "Employer" shall mean Parent, the Company and/or any of its subsidiaries
that have been selected by the Board to participate in the Plan.
1.14 "Parent" means Herbalife International, Inc., a Nevada corporation.
1.15 "Participant" shall mean Xxxxxxx Xxxxx.
1.16 "Plan" shall mean the Company's Executive Officer Deferred Compensation
Plan, which shall be evidenced by this instrument, as it may be amended
from time to time.
1.17 "Plan Year" shall be the calendar year, starting with 1998.
1.18 "Prior Deferred Compensation Agreement" means that certain Deferred
Compensation Agreement dated as of August 9, 1994 by and between Parent
and Participant.
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1.19 "Termination of Employment" shall mean the ceasing of employment of
Participant with all Employers, voluntarily or involuntarily, for any
reason (including, without limitation, death, disability, retirement or
involuntary discharge).
1.20 "Trust" shall mean the Herbalife Master Trust Agreement For Deferred
Compensation Plans established pursuant to that certain Master Trust
Agreement dated as of January 1, 1996, between the Company and the
trustee named therein, as amended from time to time.
ARTICLE II.
PARTICIPANT'S ACCOUNT BALANCE;
CREDITING OF ADDITIONAL DEFERRAL AMOUNTS
2.1 At any time, the Participant's "Account Balance" shall mean the sum of
(a) $1,225,000, (b) the Additional Deferral Amounts credited to
Participant pursuant to Section 2.2, plus (c) interest on (a) and (b)
credited in accordance with all the applicable interest crediting
provisions of the Plan, reduced by (d) all distributions or payments
from such Account. This account shall be a bookkeeping entry only and
shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to the Participant pursuant to
the Plan.
2.2 On each of August 9, 1998 and August 9, 1999 (each, an "Anniversary
Date") Participant shall be credited an Additional Deferral Amount of
$600,000, if, on such date, Participant has been continuously employed
by any Employer since the date of this Plan. If Participant's Employment
is Terminated prior to an Anniversary Date, Participant shall not be
entitled to Additional Deferral Amounts with respect to such Anniversary
Date or any subsequent Anniversary Date; provided, however, if
Participant's Employment is Terminated by an Employer without Cause (and
Participant is not immediately employed by another Employer) prior to an
Anniversary Date, Participant shall be credited, as of the date of
Termination of Employment, with a prorated Additional Deferral Amount,
based on an annual amount of $600,000 pro-rated based on the number of
days between (i) if the Termination of Employment occurs before August
9, 1998, August 9, 1997 (provided, however, that the amount of
$1,225,000 set forth in clause (a) of Section 2.1 includes an annual
amount of $600,000 pro-rated based on the number of days between August
9, 1997 and December 31, 1997, which shall not be duplicated in any
proration based on the number of days between August 9, 1997 and the
date of Termination of Employment), or, if the Termination of Employment
occurs on or after August 9,
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1998, August 9, 1998, and (ii) the date of Termination of Employment.
2.3 No Additional Deferral Amounts shall be credited after August 9, 1999.
2.4 INTEREST CREDITING PRIOR TO DISTRIBUTION. Interest shall be credited and
compounded monthly on a Participant's Account Balance based on the
Participant's Account Balance on the first day of each calendar month
during the Plan Year. The rate of interest for crediting shall be the
Crediting Rate. For purposes of crediting interest, (a) if an Additional
Deferral Amount is credited to the Account Balance, such Account Balance
shall be deemed to be increased on the last day of the month before the
month in which such Additional Deferral Amount is credited, and (b) if a
distribution is made under this Plan, the Account Balance shall be
deemed to be reduced as of the last day of the month before the month in
which the distribution is made.
2.5 WITHHOLDING TAXES. For each Plan Year in which an Additional Deferral
Amount is being withheld, the Parent shall ratably withhold from that
portion of the Participant's other compensation that is not being
deferred, the Participant's share of FICA, FUTA, or other withholding
taxes required to be withheld at the time of deferral on the deferred
amounts. There shall be deducted from each payment to the Participant or
a Beneficiary under the Plan all FICA or other taxes which are required
to be withheld by the Employer from such payment. If any taxes,
including FICA or other employment taxes with respect to the Account
Balance, are required to be withheld before the time of payment, the
Employer may withhold such amounts from the Participant's other
compensation that is not being deferred. If necessary, the Committee
shall reduce the Account Balance in order to comply with this Section
2.5.
ARTICLE III.
PAYMENT OF ACCOUNT BALANCE
3.1 PAYMENT OF ACCOUNT BALANCE. The Account Balance shall be paid in cash to
Participant under this Article III only when, if and to the extent that
the payment thereof would not subject Parent to a limitation on the
deductibility of Participant's compensation pursuant to the provisions
of Section 162(m) of the Code as in effect on the date of payment. The
extent to which payment of Account Balance shall be made pursuant to
this Article III shall be determined by the Committee in its sole
discretion, based on its good faith estimate and determination of
Participant's total annual compensation
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for each applicable year (including, but not limited to, the value of
any restricted stock scheduled to vest during such year), whether
Participant may be a covered executive under Section 162(m) for such
year and other pertinent factors.
3.2 FORM OF DISTRIBUTION. Participant may elect, on a form prescribed by the
Committee, to receive distributions (subject to the limitations of
Section 3.1) in one lump sum, or in substantially equal monthly
installments over a period of 60 months, or over 120 months. Participant
may change his election by submitting a new election form to the
Committee, provided that any such election form is submitted at least
three years before distributions first become payable under this Article
III (the "Commencement Date"). The election form most recently accepted
by the Committee at least three years before the Commencement Date shall
govern the form of distribution. If Participant never submits an
election form, or the Committee has not accepted an election form at
least three years before the Commencement Date, Participant shall be
deemed to have elected to receive distributions in the form of a lump
sum. A lump sum payment or the first installment payment shall be made
within 60 days after the Commencement Date.
3.3 WITHDRAWAL ELECTION. If Participant has begun to receive distributions
in installments under Section 3.2, Participant may elect, at any time,
but subject to the limitations of Section 3.1, to withdraw all but not
less than all of his remaining Account Balance in one lump sum, less a
10 percent withdrawal penalty (the net amount is referred to as the
"Withdrawal Amount"). Participant shall make this election by giving the
Committee written notice on a form prescribed by the Committee. The
withdrawal penalty shall be 10 percent of Participant's Account Balance
immediately before the date on which Participant gives such notice. The
Withdrawal Amount shall be paid within 60 days after the date on which
Participant gives such notice. Upon payment of the Withdrawal Amount,
Participant shall permanently forfeit the 10 percent withdrawal penalty.
3.4 PRE-RETIREMENT SURVIVOR BENEFIT. Subject to the limitations of Section
3.1, if Participant dies before he begins to receive distributions under
this Article III, his Beneficiary shall receive a Pre-Retirement
Survivor Benefit equal to the Participant's Account Balance. The
Pre-Retirement Survivor Benefit shall be paid in the form elected by
Participant under Section 3.2, or, if no election has been made and
accepted by the Committee within three years before Participant's death,
monthly for 10 years. However, the Pre-Retirement Survivor
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Benefit payment may be made as a lump sum at the request of the
Beneficiary and at the sole and absolute discretion of the Committee.
The first (or only payment, if made in lump sum) shall be made within 60
days of the Committee's receiving proof of the Participant's death.
3.5 DEATH BEFORE COMPLETION OF DISTRIBUTIONS. If Participant dies after
beginning to receive installment distributions but before all
installments are paid in full, Participant's unpaid installments
payments shall (subject to the limitations of Section 3.1) continue and
shall be paid to Participant's Beneficiary (a) over the remaining number
of months and in the same amounts as the installment distributions would
have been paid to Participant had Participant survived, or (b) in a lump
sum if requested by the Beneficiary and allowed at the sole and absolute
discretion of the Committee. The lump sum payment will be the
Participant's Account Balance at the time of such lump sum payment.
ARTICLE IV.
BENEFICIARY DESIGNATION
4.1 BENEFICIARY. Participant shall have the right, at any time, to designate
his Beneficiary (both primary as well as contingent) to receive any
benefits payable under the Plan to a Beneficiary upon the death of
Participant. The Beneficiary designated under this Plan may be the same
as or different from the Beneficiary designation under any other plan of
an Employer in which Participant participates.
4.2 BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT. Participant shall
designate his Beneficiary by completing and signing the Beneficiary
Designation Form, and returning it to the Committee or its designated
agent. Participant shall have the right to change a Beneficiary by
completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Committee's rules and procedures,
as in effect from time to time. Where required by law or by the
Committee, in its sole and absolute discretion, if Participant names
someone other than his spouse as a Beneficiary, a spousal consent, in
the form designated by the Committee, must be signed by Participant's
spouse and returned to the Committee. Upon the acceptance by the
Committee of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be canceled. The Committee shall be
entitled to rely on the last Beneficiary Designation Form filed by
Participant and accepted by the Committee prior to his death.
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4.3 ACKNOWLEDGMENT. No designation or change in designation of a Beneficiary
shall be effective until received, accepted and acknowledged in writing
by the Committee or its designated agent.
4.4 NO BENEFICIARY DESIGNATION. If Participant fails to designate a
Beneficiary as provided in Sections 4.1, 4.2 and 4.3 above, or, if all
designated Beneficiaries predecease Participant or die prior to complete
distribution of Participant's benefits, then Participant's designated
Beneficiary shall be his surviving spouse. If Participant has no
surviving spouse, the benefits remaining under the Plan shall be paid to
Participant's issue upon the principle of representation, and if there
is no such issue, to Participant's estate.
4.5 DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the proper
Beneficiary to receive payments pursuant to this Plan, the Committee
shall have the right, exercisable in its sole and absolute discretion,
to cause Participant's Employer to withhold such payments until this
matter is resolved to the Committee's satisfaction.
4.6 DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to
Participant, and Participant's rights under this Plan shall terminate
upon such full payment of benefits.
ARTICLE V.
TERMINATION, AMENDMENT OR MODIFICATION
5.1 TERMINATION. Parent reserves the right to terminate the Plan at any
time. Upon the termination of the Plan, Participant's Account Balance
shall be paid out in full to Participant.
5.2 AMENDMENT. The Plan may be amended by agreement of the Company and
Participant.
5.3 EFFECT OF PAYMENT. The full payment of the applicable benefit under
Articles 2 and 3 of the Plan shall completely discharge all obligations
to Participant under this Plan and the Plan shall terminate.
ARTICLE VI.
ADMINISTRATION
6.1 COMMITTEE DUTIES. This Plan shall be administered by a Committee, to be
known as the Herbalife Deferred Compensation Plan Committee, which shall
consist of
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individuals approved by the Board. The Participant may be a members of
the Committee, but must recuse himself on any matter of personal
interest that comes before the Committee. The Committee shall also have
the discretion and authority to make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Plan
and decide or resolve any and all questions including interpretations of
this Plan, as may arise in connection with the Plan.
6.2 AGENTS. In the administration of this Plan, the Committee may, from time
to time, employ agents and delegate to them such administrative duties
as it sees fit and may from time to time consult with counsel who may be
counsel to any Employer.
6.3 BINDING EFFECT OF DECISIONS. The decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules
and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Plan.
6.4 INDEMNITY OF COMMITTEE. All Employers shall indemnify and hold harmless
the members of the Committee against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to
act with respect to this Plan, except in the case of willful misconduct
by the Committee or any of its members.
6.5 EMPLOYER INFORMATION. To enable the Committee to perform its functions,
each Employer shall supply full and timely information to the Committee
on all matters relating to the compensation of the Participant and such
other pertinent information as the Committee may reasonably require.
ARTICLE VII.
CLAIMS PROCEDURE
7.1 PRESENTATION OF CLAIM. Participant or a Beneficiary (such Participant or
Beneficiary being referred to below as a "Claimant") may deliver to the
Committee a written claim for a determination with respect to the
amounts distributable to such Claimant from the Plan. If such a claim
relates to the contents of a notice received by the Claimant, the claim
must be made within 60 days after such notice was received by the
Claimant. All other claims must be made within 180 days of the date on
which the event that caused the claim to arise occurred. The claim must
state with particularity the determination desired by the Claimant.
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7.2 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
claim within 60 days of the making of the claim, and shall notify the
Claimant in writing:
(1) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(2) that the Committee has reached a conclusion contrary, in whole
or in part, to the Claimant's requested determination, and such
notice must set forth in a manner calculated to be understood by
the Claimant:
(a) the specific reason(s) for the denial of the claim, or
any part of it;
(b) specific reference(s) to pertinent provisions of the
Plan upon which such denial was based;
(c) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is
necessary; and
(d) an explanation of the claim review procedure set forth
in Section 7.3 below.
7.3 REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file
with the Committee a written request for a review of the denial of the
claim. Thereafter, but not later than 30 days after the review procedure
begins. the Claimant (or the Claimant's duly authorized representative):
(1) may review pertinent documents;
(2) may submit written comments or other documents; and/or
(3) may request a hearing, which the Committee, in its sole
discretion, may grant.
7.4 DECISION ON REVIEW. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written
request for review of the denial. unless a hearing is held or other
special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a
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manner calculated to be understood by the Claimant, and it must contain:
(1) specific reasons for the decision;
(2) specific reference(s) to the pertinent Plan provisions upon
which the decision was based; and
(3) such other matters as the Committee deems relevant.
7.5 LEGAL ACTION. A Claimant's compliance with the foregoing provisions of
this Article VII is a mandatory prerequisite to a Claimant's right to
commence any arbitration under Section 7.6 with respect to any claim for
benefits under this Plan.
7.6 ARBITRATION. If, after the review process, a claimant seeks further
redress, the subject of the dispute shall be submitted to arbitration in
accordance with the procedures hereinafter provided in this Section 7.6
(the "Procedures"), which arbitration shall be the exclusive remedy of
the parties hereto. The resulting arbitration award shall be deemed a
final order of a court having jurisdiction over the subject matter and
shall not be appealable.
(1) Should any controversy arise between the parties as to which the
parties are unable to effect a satisfactory resolution, upon
demand of any party, such controversy shall be submitted to
arbitration before a single arbitrator in Los Angeles County,
California, in accordance with the terms and provisions of these
Procedures and the then most- applicable rules of the American
Arbitration Association (or any successor organization) to the
extent that such rules are not inconsistent with the provisions
of these Procedures. The remedial authority of the arbitrator
shall be the same as, but no greater than, would be the remedial
power of a court having jurisdiction over the parties and their
dispute.
(2) A party desiring to submit to arbitration any such controversy
shall furnish its demand for arbitration in writing to the other
party, which demand shall contain a brief statement of the
matter in controversy. In the event the parties are unable to
agree upon an arbitrator, the parties shall select a single
arbitrator from a list of nine arbitrators drawn by the parties
at random from the "Independent" (or "Gold Card") list of
retired judges. If the parties are unable to agree upon an
arbitrator from the list so drawn, then the parties
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shall each strike names alternately from the list, with the
first to strike being determined by lot. After each party has
used four strikes, the remaining name on the list shall be the
arbitrator.
(3) The parties shall be entitled to conduct discovery as permitted
under Section 1283.05 of the California Code of Civil Procedure.
(4) Each party shall furnish the Arbitrator and the other party with
a written statement of matters it deems to be in controversy for
purposes of the arbitration procedures. Such statement shall
also include all arguments, contentions and authorities which it
contends substantiate its position.
(5) Such Arbitrator shall render this decision as soon as possible
but not later than sixty (60) days after conclusion of hearings
before such Arbitrator. The decision shall be in writing and
counterpart copies thereof shall be delivered to each of the
parties.
(6) Any filing or administrative fees shall be borne initially by
the party requesting administration by the American Arbitration
Association. If both parties request such administration, the
fees shall be borne initially by the party incurring such fees
as provided by the rules of the American Arbitration
Association. The initial fees and costs of the arbitrator shall
be borne equally between the parties. The prevailing party in
such arbitration, as determined by the arbitrator, and in any
enforcement or other court proceedings, shall be entitled to the
extent permitted by law, to reimbursement from the other party
for all of the prevailing party's costs (including but not
limited to the arbitrator's compensation), expenses, and
attorneys' fees.
ARTICLE VIII.
TRUST
8.1 PAYMENTS TO TRUST. The Employer shall transfer over to the Trust, as
soon as practicable after the execution of this Plan, the sum of
$1,225,000, and the Additional Deferral Amount as soon as practicable
after it is credited to Participant's Account under Section 2.2. All
amounts paid to the Trust under this Section 8.1, and any income, gains,
and losses thereon, shall be held in a subtrust which shall be separate
from the other assets of the Trust but which shall otherwise be subject
to all of the terms and provisions of the Trust.
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8.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the Plan
shall govern the rights of a Participant to receive distributions
pursuant to the Plan. The provisions of the Trust shall govern the
rights of the Participant and the creditors of the Employers to the
assets transferred to the Trust. The Employers shall at all times remain
liable to carry out their obligations under the Plan. The Employers'
obligations under the Plan may be satisfied with Trust assets
distributed pursuant to the terms of the Trust.
ARTICLE IX.
MISCELLANEOUS
9.1 UNSECURED GENERAL CREDITOR. Participant and his Beneficiaries, heirs,
successors and assigns shall have no legal or equitable right, interest
or claim in any property or assets of an Employer. Any and all of an
Employer's assets shall be, and remain, the general, unpledged and
unrestricted assets of the Employer. The Employer shall not be obligated
to make or acquire any particular investment (including, but not limited
to, an investment in SunLife of Canada's corporate universal life
product), or to maintain any investment which it does make. An
Employer's obligation under the Plan shall be merely that of an unfunded
and unsecured promise to pay money in the future.
9.2 EMPLOYER'S LIABILITY. An Employer's liability for the payment of
benefits shall be defined only by the Plan. An Employer shall have no
obligation to Participant under the Plan except as expressly provided in
the Plan.
9.3 NONASSIGNABILITY. Neither Participant nor any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage, or otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt, the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are expressly
declared to be unassignable and non-transferable. No part of the amounts
payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by the Participant or any other person, nor be
transferable by operation of law in the event of Participant's or any
other person's bankruptcy or insolvency.
9.4 COORDINATION WITH OTHER BENEFITS. The benefits provided for Participant
and Participant's Beneficiary under the Plan are in addition to any
other benefits available to such Participant under any other plan or
program for employees of Participant's Employer. The Plan shall
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supplement and shall not supersede, modify or amend any other such plan
or program except as may otherwise be expressly provided; provided,
however, that the Plan supersedes and replaces the Prior Deferred
Compensation Agreement.
9.5 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between any
Employer and Participant. Such employment is hereby acknowledged to be
an "at will" employment relationship that can be terminated at any time
for any reason, with or without cause, unless expressly provided in a
written employment agreement. Nothing in this Plan shall be deemed to
give Participant the right to be retained in the service of any
Employer, either as an employee or a director, or to interfere with the
right of any Employer to discipline or discharge Participant at any
time.
9.6 FURNISHING INFORMATION. Participant or his Beneficiary will cooperate
with the Committee by furnishing any and all information requested by
the Committee and take such other actions as may be requested in order
to facilitate the administration of the Plan and the payments of
benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.
9.7 TERMS. Whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural
or the singular, as the case may be, in all cases where they would so
apply. The masculine pronoun shall be deemed to include the feminine and
VICE VERSA, unless the context clearly indicates otherwise.
9.8 CAPTIONS. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
9.9 GOVERNING LAW. Subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended, the provisions of this Plan
shall be construed and interpreted according to the laws of the State of
California.
9.10 NOTICE. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to:
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Mr. Xxxx Xxxxx
Senior Vice President of Worldwide Administration
HERBALIFE INTERNATIONAL OF AMERICA, INC.
Post Office Box 80210
Los Angeles, CA 90080-0210
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.
Any notice or filing required or permitted to be given to Participant
under this Plan shall be sufficient if in writing and hand-delivered, or sent by
mail, to the last known address of Participant.
9.11 SUCCESSORS. The provisions of this Plan shall bind and inure to the
benefit of Participant's Employer and its successors and assigns and
Participant, Participant's Beneficiaries, and their permitted successors
and assigns.
9.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse of
Participant who has predeceased Participant shall automatically pass to
Participant and shall not be transferable by such spouse in any manner,
including but not limited to such spouse's will, nor shall such interest
pass under the laws of intestate succession.
9.13 VALIDATION. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been inserted
herein.
9.14 INCOMPETENT. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of that
person's property, the Committee may direct payment of such benefit to
the guardian, legal representative or person having the care and custody
of such minor, incompetent or incapable person. The Committee may
require proof of minority, incompetency, incapacity or Guardianship. as
it may deem appropriate prior to distribution of the benefit. Any
payment of a benefit shall be a payment for the account of Participant
and Participant's Beneficiary, as the case may be, and shall be a
complete discharge of any liability under the Plan for such payment
amount.
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9.15 DISTRIBUTION IN THE EVENT OF TAXATION. If, for any reason, all or any
portion of Participant's benefit under this Plan becomes taxable to
Participant prior to receipt, Participant may petition the Committee for
a distribution of assets sufficient to meet Participant's tax liability
(including additions to tax, penalties and interest). Upon the grant of
such a petition, which grant shall not be unreasonably withheld,
Participant's Employer shall distribute to Participant immediately
available funds in an amount equal to Participant's federal, state and
local tax liability associated with such taxation (which amount shall
not exceed Participant's vested Account Balance), which liability shall
be measured by using Participant's then current highest federal, state
and local marginal tax rate, plus the rates or amounts for the
applicable additions to tax, penalties and interest. If the petition is
granted, the tax liability distribution shall be made within 90 days of
the date when Participant's petition is granted. Such a distribution
shall reduce the benefits to be paid under this Plan.
9.16 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. The Company is
aware that upon the occurrence of a Change in Control, the Board (which
might then be composed of new members) or a shareholder of the Company,
or of any successor corporation might then cause or attempt to cause the
Company or such successor to refuse to comply with its obligations under
the Plan and might cause or attempt to cause the Company to institute,
or may institute, arbitration or litigation seeking to deny Participants
the benefits intended under the Plan. In these circumstances, the
purpose of the Plan could be frustrated. Accordingly, if, following a
Change in Control, it should appear to Participant that the Company or
the Committee has failed to comply with any of its obligations under the
Plan or any agreement thereunder or, if the Company or any other person
takes any action to declare the Plan void or unenforceable or institutes
any arbitration, litigation or other legal action designed to deny,
diminish or to recover from Participant or any Beneficiary the benefits
intended to be provided, then the Company irrevocably authorizes such
person to retain counsel of his or her choice at the expense of the
Company to represent such person in connection with the initiation or
defense of any arbitration, litigation or other legal action, whether by
or against the Company, the Committee, or any director, officer,
shareholder or other person affiliated with the Company or any successor
thereto in any jurisdiction.
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IN WITNESS WHEREOF, the Company has signed this Plan document on
_____________, 1998, to be effective as of January 1, 1998.
HERBALIFE INTERNATIONAL OF AMERICA, INC.,
a California corporation
By:_____________________________________
Its:____________________________________
AGREED AND ACKNOWLEDGED
HERBALIFE INTERNATIONAL, INC.
By:____________________________
Its:___________________________
XXXXXXX XXXXX
_______________________________
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