AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
EXHIBIT 10.1
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (“Amendment”) is made and entered into as
of April 4, 2008, by and between XXXXXXX X. XXXXXXX (the “Executive”) and HERBALIFE
INTERNATIONAL OF AMERICA, INC., a Nevada corporation (the “Company”).
WHEREAS, the Executive and the Company are parties to that certain Employment Agreement dated
as of October 10, 2006 (the “Employment Agreement”); and
WHEREAS, the Company and Executive wish to amend the Employment Agreement as provided for
herein.
NOW, THEREFORE, in consideration of the foregoing, the Employment Agreement is amended as
follows, effective as of the date hereof:
1. Section 3(a) of the Employment Agreement is hereby amended and restated in its entirety to
read as follows:
(a) Salary. Executive shall receive a salary at the per annum rate
of Nine Hundred Sixty Thousand Dollars ($960,000), payable in accordance
with the Company’s payroll practices for Senior Executives (as defined in
Section 3(b) below). Executive’s Salary shall be subject to an annual
review and adjustment in the discretion of the Chief Executive Officer,
subject to approval by the Board’s Compensation Committee. Executive’s
Salary shall be subject to a reduction of not more than ten percent in the
event that the Company adopts an across-the-board reduction for Senior
Executives and the Chief Executive Officer, in which event such percentage
reduction shall not exceed the smallest percentage reduction imposed on any
Senior Executive or the Chief Executive Officer.
2. Section 3(c) of the Employment Agreement is hereby amended and restated in its entirety to
read as follows:
(c) Bonus. If the Company shall achieve the applicable bonus target
set annually by the Board’s Compensation Committee (the “Performance
Target”), then the Company shall pay Executive a cash bonus in an amount
equal to one hundred percent (100%) of Executive’s Target Bonus (as defined
below) calculated in accordance with the Company’s then current bonus plan
in effect for its Senior Executives. The Performance Target utilized for
calculating Executive’s bonus shall be the same as that utilized in
calculating the primary bonus (and not the APT bonus) for its Chief
Executive Officer. Executive’s “Target Bonus” shall be an amount
equal to one hundred twenty five percent (125%) of Executive’s annual salary
for the year with respect to which the bonus is to be paid, and the maximum
bonus payable to Executive shall be an amount equal to two
hundred fifty percent (250%) of Executive’s annual salary for the year with
respect to which the bonus is to be paid. Any bonus will be paid in the
calendar year following the completion of the relevant calendar year at such
time bonuses are paid to the Company’s other Senior Executives.
3. Concurrent with the execution of this Amendment, Executive shall receive the following
equity awards in accordance with the terms and conditions of the Herbalife Ltd. 2005 Stock
Incentive Plan:
(a) 290,740 stock appreciation rights with respect to the common shares of Herbalife
Ltd. (the “Common Shares”) (A) with a per share base price equal to the fair market
value of a Common Share on the date of grant, (B) with a seven (7) year term and (C) to
become vested based on the achievement of specified levels of compound annual growth rate of
the Common Shares, subject to Executive’s continued employment with the Company for four
years from the date of grant, except as otherwise provided in the applicable award agreement
(attached hereto as Exhibits A and B); and
(b) a restricted stock unit award with respect to 81,550 Common Shares to become vested
at a rate of 30% per year on each of the first three anniversaries of the date hereof and
10% on the fourth anniversary of the date hereof, subject to Executive’s continued
employment with the Company through each applicable vesting date, except as otherwise
provided in the applicable award agreement (attached hereto as Exhibit C).
4. In consideration for the awards described in Paragraph 3 above, Section 3(d) of the
Employment Agreement is hereby amended and restated in its entirety to read as follows:
(d) Long-Term Incentives. Executive shall be eligible to
participate in the Company’s long-term incentive plan for Senior Executives,
if any. The size, form, and timing of grants, if any, shall be consistent
with competitive practice, internal position responsibilities and
performance, and shall be subject to the joint approval of the Chief
Executive Officer and the Board’s Compensation Committee.
5. 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 Amendment in an amount not to exceed Ten Thousand Dollars ($10,000).
6. Except as expressly provided herein, the provisions of the Employment Agreement shall
remain in full force and effect and are hereby ratified and confirmed.
[Signature Page Follows]
2
IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as of the date
first written above.
| HERBALIFE INTERNATIONAL OF AMERICA, INC. | ||||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Title: General Counsel | ||||||
| EXECUTIVE | ||||||
| /s/ Xxxxxxx X. Xxxxxxx | ||||||
| Xxxxxxx X. Xxxxxxx | ||||||
[Signature Page to Amendment No. 1 to Employment Agreement]
