EXHIBIT 10.2
HERBALIFE LTD.
2005 STOCK INCENTIVE PLAN
STOCK UNIT AWARD AGREEMENT
     This Stock Unit Award Agreement (this “Agreement”) is dated as of this 4th
day of April, 2008 (the “Grant Date”), and is between Herbalife Ltd., an entity
organized under the laws of the Cayman Islands (the “Company”), and Gregory L.
Probert (“Participant”).
     WHEREAS, the Company, by action of the Board and approval of its
shareholders established the Herbalife Ltd. 2005 Stock Incentive Plan (the
“Plan”);
     WHEREAS, Participant is employed by the Company or one or more of its
Subsidiaries and the Company desires to encourage Participant to own Common
Shares for the purposes stated in Section 1 of the Plan;
     WHEREAS, Participant and the Company have entered into this Agreement to
govern the terms of the Stock Unit Award (as defined below) granted to
Participant by the Company.
     NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree
as follows:

1.   Grant.

     (a) The Company hereby grants to Participant an Award of 81,550 Stock Units
(the “Award”) in accordance with Section 9 of the Plan and subject to the
conditions set forth in this Agreement and the Plan (as amended from time to
time). Each Stock Unit represents the right to receive one Common Share (as
adjusted from time to time pursuant to Section 12 of the Plan) subject to the
fulfillment of the vesting and other conditions set forth in this Agreement. By
accepting the Award, Participant irrevocably agrees on behalf of Participant and
Participant’s successors and permitted assigns to all of the terms and
conditions of the Award as set forth in or pursuant to this Agreement and the
Plan (as such Plan may be amended from time to time).
     (b) Except as otherwise defined herein, capitalized terms used herein shall
have the meanings set forth in the Plan.

2.   Vesting.

     (a) Participant’s Stock Units and rights in and to the Common Shares
subject to the Stock Units shall not be vested as of the Grant Date and shall be
forfeitable unless and until otherwise vested pursuant to the terms of this
Agreement. Subject to Participant’s continued employment with the Company and/or
its subsidiaries or affiliates the Award shall become vested in accordance with
the following schedule: (i) thirty percent (30%) of the Stock Units subject to
the Award shall vest on the first anniversary of the Grant Date, (ii) thirty
percent (30%) of the Stock Units subject to the Award shall vest on the second
anniversary of the Grant Date, (iii) thirty percent (30%) of the Stock Units
subject to the Award shall vest on the third anniversary of the Grant Date, and
(iv) the remaining ten percent (10%) of the Stock Units subject to the Award
shall vest on the fourth anniversary of the Grant Date (each such date a

 

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“Vesting Date”). Stock Units that have vested and are no longer subject to
forfeiture are referred to herein as “Vested Units.” Stock Units that are not
vested and remain subject to forfeiture are referred to herein as “Unvested
Units.”
     (b) Notwithstanding anything herein or in the Plan to the contrary, upon
the occurrence of a Section 409A Change of Control (as defined below), any
Unvested Units shall become fully vested as of immediately prior to the
consummation of the Section 409A Change of Control. In the event of a Change of
Control that is not a Section 409A Change of Control, in no event shall the
Committee take the actions described in Section 13(d) of the Plan.
     (c) Notwithstanding anything herein or in the Plan to the contrary, in the
event of Participant’s termination of employment as a result of Participant’s
death or disability (as defined under Section 409A of the Code), all Unvested
Units shall vest as of the date of such termination of employment.
     (d) Notwithstanding anything herein or in the Plan to the contrary, but
subject to Section 2(b) hereof, in the event of Participant’s termination of
employment by the Company without “Cause” or by Participant for “Good Reason”
(each as defined below, and the date of such event being referred to in this
Section 2(d) as the “Termination Date”), the Unvested Units shall vest as
follows:
          (i) the portion of the Unvested Units that would have become vested on
the applicable Vesting Date pursuant to Section 2(a) above next following the
Termination Date shall become vested as of the Termination Date on a pro rata
basis, calculated by multiplying such portion of the Unvested Units by a
fraction, the numerator of which is equal to the number of months elapsed from
the Vesting Date that immediately preceded the Termination Date through and
including the month of the Termination Date, and the denominator of which is
twelve;
          (ii) in addition to the Unvested Units described in clause (i) above,
in the event the Termination Date is on or prior to the second anniversary of
the Grant Date, then an additional number of Unvested Units shall become vested
as of the Termination Date equal to fifty percent (50%) of the then-remaining
Unvested Units (determined after applying clause (i) above);
          (iii) in addition to the Unvested Units described in clause (i) above,
in the event the Termination Date is after the second anniversary of the Grant
Date but on or prior to the third anniversary of the Grant Date, then an
additional number of Unvested Units shall become vested as of the Termination
Date equal to seventy-five percent (75%) of the then-remaining Unvested Units
(determined after applying clause (i) above); and
          (iv) in addition to the Unvested Units described in clause (i) above,
in the event the Termination Date is after the third anniversary of the Grant
Date, all Unvested Units shall become vested as of the Termination Date.
     (e) For purposes hereof, the terms “Cause” and “Good Reason” shall have the
meaning set forth in the employment agreement by and between the Company and the
Participant dated as of October 10, 2006, as amended.

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     (f) For purposes hereof, the term “Section 409A Change in Control” shall
mean the consummation of (i) a “change in the ownership” of the Company, (ii) a
“change in the effective control” of the Company or (iii) a “change in the
ownership of a substantial portion of the assets” of the Company (each as
defined under Section 409A of the Internal Revenue Code of 1986, as amended).

3.   Settlement of Stock Units.

     (a) Subject to any deferral pursuant to Paragraph 3(b), each Vested Unit
will be settled by the delivery of one Common Share (subject to adjustment under
Section 12 of the Plan) to Participant or, in the event of Participant’s death,
to Participant’s estate, heir or beneficiary, within thirty (30) days following
the applicable Vesting Date; provided that the Participant has satisfied all of
the tax withholding obligations described in Paragraph 8, and that Participant
has completed, signed and returned any documents and taken any additional action
that the Company deems appropriate to enable it to accomplish the delivery of
the Common Shares.
     (b) Subject to the satisfaction all of the tax withholding obligations
described in Paragraph 8, Participant may elect to defer the receipt of any
Common Shares issuable pursuant to Vested Units by submitting to the Company an
election to defer receipt in the forms attached hereto as Exhibit A. In the
event Participant intends to defer the receipt of any Common Shares, Participant
must submit to the Company a deferral election form within thirty (30) days
following the Grant Date. Participant hereby represents that Participant
understands the effect of any such deferral under relevant federal, state and
local tax laws.
     (c) The date upon which Common Shares are to be issued under either
Paragraph 3(a) or 3(b) above is referred to as the “Settlement Date.” The
issuance of the Common Shares hereunder may be effected by the issuance of a
stock certificate, recording shares on the stock records of the Company or by
crediting shares in an account established on Participant’s behalf with a
brokerage firm or other custodian, in each case as determined by the Company.
Fractional shares will not be issued pursuant to the Award.
     (d) Notwithstanding the above, (i) for administrative or other reasons, the
Company may from time to time temporarily suspend the issuance of Common Shares
in respect of Vested Units, (ii) the Company shall not be obligated to deliver
any Common Shares during any period when the Company determines that the
delivery of shares hereunder would violate any federal, state or other
applicable laws, (iii) the Company may issue Common Shares hereunder subject to
any restrictive legends that, as determined by the Company’s counsel, are
necessary to comply with securities or other regulatory requirements and
(iv) the date on which shares are issued hereunder may include a delay in order
to provide the Company such time as it determines appropriate to address tax
withholding and other administrative matters.
4. Shareholder Rights. Prior to any issuance of Common Shares in settlement of
the Award, no Common Shares will be reserved or earmarked for Participant or
Participant’s account nor shall Participant have any of the rights of a
stockholder with respect to such Common Shares. Except as set forth in
Paragraph 5, the Participant will not be entitled to any privileges of ownership
of the Common Shares (including, without limitation, any voting rights)
underlying Vested Units and/or Unvested Units unless and until Common Shares are
actually delivered to Participant hereunder.

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5. Dividend Equivalent Rights. From and after the Grant Date and unless and
until the Award is forfeited or otherwise transferred back to the Company,
Participant will be credited with additional Stock Units having a value equal to
dividends declared by the Company, if any, with record dates that occur prior to
the settlement of the Award as if the Common Shares underlying the Award had
been issued and outstanding, based on the Fair Market Value of a Common Share on
the applicable dividend payment date. Any such additional Stock Units shall be
considered part of the Award and shall also be credited with additional Stock
Units as dividends, if any, are declared, and shall be subject to the same
restrictions and conditions as the Stock Units subject to the Award with respect
to which they were credited (including, but not limited to, the forfeiture
provisions set forth in Paragraph 6). Notwithstanding the foregoing, no such
additional Stock Units will be credited with respect to any dividend declared by
the Company in connection with which the Award is adjusted pursuant to
Section 12 of the Plan.
6. Effect of Termination of Employment. Notwithstanding anything to the contrary
in the Plan, and except as provided in Sections 2(b), 2(c) and 2(d) hereof, upon
a termination of Participant’s employment with the Company for any reason, the
Unvested Units shall be forfeited by Participant and cancelled and surrendered
to the Company without payment of any consideration to Participant.
7. Adjustments of Common Shares and Awards. Subject to Section 12(a) of the
Plan, in the event of any change in the outstanding Common Shares by reason of
an acquisition, spin-off or reclassification, recapitalization or merger,
combination or exchange of Common Shares or other corporate exchange, Change of
Control or similar event, the Committee shall adjust appropriately the number or
kind of shares or securities subject to the Award and make such other revisions
to the Award as it deems are equitably required.

8.   Withholding Taxes.

     (a) Participant is liable and responsible for all taxes owed in connection
with the Award, regardless of any action the Company takes with respect to any
tax withholding obligations that arise in connection with the Award. The Company
does not make any representation or undertaking regarding the treatment of any
tax withholding in connection with the grant, vesting or settlement of the Award
or the subsequent sale of Common Shares issuable pursuant to the Award. The
Company does not commit and is under no obligation to structure the Award to
reduce or eliminate Participant’s tax liability.
     (b) Prior to any event in connection with the Award (e.g., vesting or
payment in respect of the Award) that the Company determines may result in any
domestic or foreign tax withholding obligation, whether national, federal, state
or local, including any social tax obligation (the “Tax Withholding
Obligation”), Participant is required to arrange for the satisfaction of the
amount of such Tax Withholding Obligation in a manner acceptable to the Company.

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     (c) Unless the Committee provides otherwise, at any time not less than five
(5) business days before any Tax Withholding Obligation arises (e.g., a
Settlement Date), Participant shall notify the Company of Participant’s election
to pay Participant’s Tax Withholding Obligation by wire transfer, cashier’s
check or by authorizing the Company to withhold a portion of the Common Shares
that would otherwise be issued to Participant as a result of the settlement of
the Stock Units or by tendering Common Shares (either actually or by
attestation) previously acquired, or other means permitted by the Company. In
such case, Participant shall satisfy his or her tax withholding obligation by
paying to the Company on such date as it shall specify an amount that the
Company determines is sufficient to satisfy the expected Tax Withholding
Obligation by (i) wire transfer to such account as the Company may direct,
(ii) delivery of a cashier’s check payable to the Company, Attn: General
Counsel, at the Company’s principal executive offices, or such other address as
the Company may from time to time direct, (iii) authorizing the Company to
withhold a portion of the Common Shares that would otherwise be issued to
Participant as a result of the settlement of the Stock Units or by tendering
Common Shares (either actually or by attestation) previously acquired, or
(iv) such other means as the Company may establish or permit (including by means
of a “same day sale” program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company and applicable
law). Participant agrees and acknowledges that prior to the date the Tax
Withholding Obligation arises, the Company will be required to estimate the
amount of the Tax Withholding Obligation and accordingly may require the amount
paid to the Company under this Paragraph 8(c) to be more than the minimum amount
that may actually be due and that, if Participant has not delivered or otherwise
provided payment of a sufficient amount to the Company to satisfy the Tax
Withholding Obligation (regardless of whether as a result of the Company
underestimating the required payment or Participant failing to timely make the
required payment), the additional Tax Withholding Obligation amounts shall be
satisfied by such other means as the Committee deems appropriate.
9. Securities Law Compliance. Participant understands that the Company is under
no obligation to register for resale the Common Shares issued upon settlement of
the Award. The Company may impose such restrictions, conditions or limitations
as it determines appropriate as to the timing and manner of any resales by
Participant or other subsequent transfers by Participant of any Common Shares
issued as a result of or under this Award, including without limitation
(i) restrictions under an insider trading policy, (ii) restrictions that may be
necessary in the absence of an effective registration statement under the
Securities Act of 1933, as amended, covering the Award and/or the Common Shares
underlying the Award and (iii) restrictions as to the use of a specified
brokerage firm or other agent for such resales or other transfers. Any sale of
the Common Shares must also comply with other applicable laws and regulations
governing the sale of such shares.
10. Assignment or Transfer Prohibited. The Award (whether or not vested) may not
be assigned or transferred otherwise than by will or by the laws of descent and
distribution; provided, however, Participant may assign or transfer the Award to
the extent permitted under the Plan, provided that the Award shall be subject to
all the terms and condition of the Plan, this Agreement and any other terms
required by the Committee as a condition to such transfer. Neither the Award nor
any right hereunder shall be subject to attachment, execution or other similar
process. In the event of any attempt by Participant to alienate, assign, pledge,
hypothecate or otherwise dispose of the Award or any right hereunder, except as
provided for

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herein, or in the event of the levy or any attachment, execution or similar
process upon the rights or interests hereby conferred, the Company may terminate
the Award by notice to Participant, and the Award shall thereupon become null
and void.
11. Committee Authority. Any question concerning the interpretation of this
Agreement or the Plan, any adjustments required to be made under this Agreement
or the Plan, and any controversy that may arise under this Agreement or the Plan
shall be determined by the Committee in its sole and absolute discretion. All
decisions by the Committee shall be final and binding.
12. Application of the Plan. The terms of this Agreement are governed by the
terms of the Plan, as it exists on the date of hereof and as the Plan is amended
from time to time. In the event of any conflict between the provisions of this
Agreement and the provisions of the Plan, the terms of the Plan shall control,
except as expressly stated otherwise herein. As used herein, the term “Section”
generally refers to provisions within the Plan, and the term “Paragraph” refers
to provisions of this Agreement.
13. No Right to Continued Employment. Nothing in the Plan, in this Agreement or
any other instrument executed pursuant thereto or hereto shall confer upon
Participant any right to continued employment with the Company or any of its
Subsidiaries or affiliates.
14. Further Assurances. Each party hereto shall cooperate with each other party,
shall do and perform or cause to be done and performed all further acts and
things, and shall execute and deliver all other agreements, certificates,
instruments, and documents as any other party hereto reasonably may request in
order to carry out the intent and accomplish the purposes of this Agreement and
the Plan.
15. Entire Agreement. This Agreement and the Plan together set forth the entire
agreement and understanding between the parties as to the subject matter hereof
and supersede all prior oral and written and all contemporaneous or subsequent
oral discussions, agreements and understandings of any kind or nature.
16. Successors and Assigns. The provisions of this Agreement will inure to the
benefit of, and be binding on, the Company and its successors and assigns and
Participant and Participant’s legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law, whether or not any
such person will have become a party to this Agreement and agreed in writing to
join herein and be bound by the terms and conditions hereof.
[signature page follows]

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

                  HERBALIFE LTD.    
 /s/ Gregory L. Probert
           
 
Gregory L. Probert
  By:    /s/ Brett R. Chapman    
 
     
 
     Name: Brett R. Chapman    
 
           Title: General Counsel    

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HERBALIFE LTD.
2005 STOCK INCENTIVE PLAN
STOCK UNIT AWARD AGREEMENT
DEFERRAL ELECTION FORM
     Effective as of
                                                            , the undersigned
hereby irrevocably elects (the “Election”) to defer receipt of certain common
shares (the “Common Shares”) of Herbalife Ltd. (the “Company”) related to the
Stock Units (the “Award”) awarded under and pursuant to the Stock Unit Award
Agreement dated April                     , 2008 (the “Award Agreement”) and the
Herbalife Ltd. 2005 Stock Incentive Plan, as amended from time to time (the
“Plan”). This deferral shall be made in accordance with the terms and provisions
outlined in this Election in the manner and amount set forth below.
In making this election, the following rules apply:

  •   You may elect to defer the settlement of all or a portion of your Award.
Your deferral must be expressed as a percentage of the Stock Units subject to
the Award, and will apply with respect to that percentage of the Stock Units
that vest on each Vesting Date (other than any Vesting Date that occurs prior to
the date that is 12 months following the date on which this Election is received
by the Company).     •   If you elect to defer the settlement of all or a
portion of your Award, you will receive the Common Shares subject to your Vested
Units (as such term is defined in the Award Agreement) upon the first to occur
of (a) a date specified in this Election or (b) a termination of your employment
with the Company for any reason.

Manner of Transfer
In general, all deferrals pursuant to this election will be paid out in Common
Shares. Subject to the terms and conditions of the Award Agreement and the Plan
and additional delays described in Paragraph 4 below under Terms and Conditions,
all of the Common Shares you are entitled to receive on the Settlement Date
specified in this Election will be transferred to you on the applicable
Settlement Date.
Amount of the Deferral

o   I hereby irrevocably elect to defer settlement of
                                        % of the Stock Units subject to the
Award.

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Duration of the Deferral
Settlement of that portion of the Award specified above shall be deferred until
[by checking the appropriate box below and, if applicable, filling in the
distribution date]:

o                                                               , 20     
                 [Note: this date must be after the final vesting date of the
Award], but in no event later than a termination of my employment with the
Company; or   o   termination of my employment with the Company.

Change in Control

o   I hereby acknowledge that unless I elect hereunder not to receive payment in
respect of that portion of the Award deferred hereunder upon a Section 409A
Change in Control Event (as defined herein), I will automatically receive
payment in respect of that portion of the Award deferred hereunder upon the
consummation of either (i) a “change in the ownership” of the Company, (ii) a
“change in the effective control” of the Company or (iii) a “change in the
ownership of a substantial portion of the assets” of the Company (each as
defined under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and collectively referred to herein as a “Section 409A Change in
Control Event”).

[You must indicate your election not to receive payment upon a Section 409A
Change in Control Event by checking the box and initialing to the left]

Terms and Conditions
By signing this form, you acknowledge your understanding and acceptance of the
following:

  1.   Submission of Election to the Company. You understand that the Election
must be submitted to the Company within 30 days following the date the Award was
granted.     2.   Tax Withholding Obligation. No Common Shares will be issued to
you unless on the Settlement Date unless the Tax Withholding Obligation set
forth in Paragraph 9 of the Agreement is satisfied.     3.   Cash Dividends. You
will be credited with additional Stock Units (the settlement of which shall be
deferred hereunder) having a value equal to any cash dividends declared by the
Company with record dates that occur prior to the settlement of the Award as if
the Common Shares underlying that portion of the Award that is deferred
hereunder had been issued and outstanding, based on the fair market value of a
Common Share on the applicable dividend payment date. Any such additional Stock
Units shall be considered part of the Award and shall also be credited with
additional Stock Units as dividends, if any, are declared, and shall be subject
to all of the terms and conditions set forth herein.

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  4.   Automatic Delay for Specified Employees. If the Company determines that
as of the Settlement Date you are a “specified employee” (as such term is
defined under Section 409A of the Code, any Common Shares to be issued to you on
a Settlement Date that occurs by reason of your termination of employment with
the Company other by reason of your death or disability (as such term is defined
under Section 409A of the Code) will not be issued to you until the date that is
six months following the Settlement Date (or such earlier time permitted under
Section 409A of the Code without the imposition of any accelerated or additional
taxes under Section 409A of the Code).     5.   ERISA Status. This Election
comprises a portion of a plan is intended to be an unfunded plan that is
maintained primarily to provide deferred compensation to a select group of
“management or highly compensated employees” within the meaning of Sections 201,
301, and 401 of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and therefore to be exempt from the provisions of Parts 2, 3, and 4
of Title I of ERISA.     6.   Administration. This Election is administered and
interpreted by the Committee (as such term is defined in the Plan). The
Committee has full and exclusive discretion to interpret and administer this
Election. All actions, interpretations and decisions of the Committee are
conclusive and binding on all persons, and will be given the maximum possible
deference allowed by law.     7.   Claims Procedure. Any person who believes he
or she is entitled to any payment under this Election may submit a claim in
writing to the Company. If the claim is denied (either in full or in part), the
claimant will be provided a written notice explaining the specific reasons for
the denial and referring to the provisions of the Agreement or the Plan on which
the denial is based. The notice will describe any additional information needed
to support the claim. The denial notice will be provided within ninety (90) days
after the claim is received. If special circumstances require an extension of
time (up to 90 days), written notice of the extension will be given within the
initial ninety-day period.     8.   Appeals Procedure. If a claimant’s claim is
denied, the claimant (or his or her authorized representative) may apply in
writing to the Company for a review of the decision denying the claim. The
claimant (or representative) then has the right to review pertinent documents
and to submit issues and comments in writing. The Company will provide written
notice of its decision on review within sixty (60) days after it receives a
review request. If additional time (up to sixty (60) days) is needed to review
the request, the claimant will be given written notice of the reason for the
delay. Any claims for benefits under this Election brought in a court of law
must be filed in such court before the earlier of ninety (90) days after any
appeal pursuant to this Paragraph 8 or one (1) year from the date the claim
arose.

[signature page follows]

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Submitted by:
  Accepted by:    
 
           
 
  HERBALIFE LTD.    
 
           
Gregory L. Probert
  By:        
 
     
 
     Name:    
 
           Title:    

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