Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”), dated as of October 10, 2006 is made
and entered into by BRETT R. CHAPMAN (“Executive”) and HERBALIFE INTERNATIONAL
OF AMERICA, INC., a Nevada corporation (“Company”). The parties to this
Agreement agree as follows:
1. Employment At-Will. The Company and Executive acknowledge and agree that each
can terminate the employment relationship at any time upon written notice to the
other, with or without prior notice, for any reason or for no reason. Executive
has received no promise of continued employment or employment for any specific
period of time, and no employee of the Company, including without limitation the
Company’s officers, has the authority to alter the at-will nature of the
employment relationship except in a written employment contract signed by an
authorized Company executive and by Executive.
2. Duties. Executive shall serve in the Los Angeles, California area as General
Counsel of the Company, with all of the authority, duties, and responsibilities
commensurate with such position. Executive shall report only to the Chief
Executive Officer or Chairman of the Company. Executive’s service on any outside
board of directors, including any non-profit board, shall be subject to joint
approval by the Chief Executive Officer and the Company’s Board of Directors
(the “Board”); provided, however, the board set forth in Schedule A attached
hereto is deemed approved.
3. Compensation and Related Matters.
(a) Salary. Executive shall receive a salary at the per annum rate of Five
Hundred Thousand Dollars ($500,000), 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. In the event that the Chief Executive Officer’s salary
is increased, then Executive’s salary shall be increased the same percentage;
provided, however, that if Executive accepts a higher percentage increase in
base salary than the Chief Executive Officer in any period, then from that day
forward, increases in Executive’s salary will no longer be tied to increases in
the Chief Executive Officer’s salary. 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.
(b) Employee Benefits. Executive and Executive’s qualified dependents shall be
entitled to participate in or receive benefits under each benefit plan or
arrangement made available by the Company to its most senior executives
(including its President and Chief Operating Officer but specifically excluding
its Chief Executive Officer (“Senior

 

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Executives”)) including, without limitation, those relating to group medical,
dental, vision, long-term disability, D&O, accidental death and dismemberment,
and life insurance, 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 with or without
prior notice. Executive shall be eligible to participate in the Company’s 401K
program and the Company’s Deferred Compensation program. Executive shall be
entitled to reimbursement of reasonable business expenses in accordance with the
Company’s practices and procedures. Executive shall be entitled to paid vacation
in accordance with Company policy.
(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
in an amount no less than fifty percent of Executive’s annual salary for the
year with respect to which the bonus is to be paid. Any bonus will be paid
following the completion of the relevant calendar year at such time bonuses are
paid to the Company’s other Senior Executives.
(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 subject to the joint approval
of the Chief Executive Officer and the Board’s Compensation Committee.
4. Severance.
(a) Although nothing in this Section 4 shall be construed to alter the at-will
nature of employment as set forth in Section 1 above, if Executive is terminated
by the Company without Cause or resigns for Good Reason, Executive will be paid
a lump sum amount equal to two times Executive’s then-current annual salary (the
“Salary Severance”), in addition to all other accrued entitlements such as
unpaid salary and accrued vacation, if any. If Executive is terminated by the
Company without Cause or resigns for Good Reason, the Company will also provide
Executive with outplacement services for up to six months by a provider selected
and paid for by the Company in an amount not to exceed $20,000; Executive shall
not be entitled to cash in lieu of outplacement services. If Executive is
terminated by the Company without Cause, resigns for Good Reason, retires, dies,
or resigns as a result of a disability, Executive will be entitled to receive a
pro rata bonus payment, at such time bonuses are paid to the Company’s other
Senior Executives, based on the number of months worked in the applicable fiscal
year of the Company (the “Bonus Severance”). Executive will have no duty to
mitigate. As a precondition to the Company’s obligation to pay Executive
severance of two years of salary and a pro rata bonus, Executive agrees to
execute and deliver to the Company a fully effective general release in the form
attached to this Agreement as Attachment A.

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Company shall pay Executive the Salary Severance on the date which is the later
of ten days after the date on which it receives the signed release or six months
after the date of separation from service, and the Company shall pay the Bonus
Severance on the date which is the later of ten days after the date on which it
receives the signed release, the date on which Company pays bonuses to Company’s
Senior Executives for the applicable year, or the date that is six months after
the date of separation from service. Executive understands and agrees that
Executive shall not be entitled to any other severance benefit not set forth in
this Section 4, and accordingly Executive expressly acknowledges that the
Company will not be obligated to make 401(k) contributions following the
termination of Executive’s employment.
(b) In the event that Executive is qualified for and elects COBRA coverage under
the Company’s health plans after a termination without Cause or a resignation
for Good Reason, the Company will continue to pay its share of the cost of
premiums under such plans until Executive is reemployed, or for a period of two
years, whichever occurs first. Upon a termination for Cause and upon a
resignation without Good Reason (other than due to death, disability or
retirement), except as set forth in Section 4(a) above and/or one or more
separate written agreements between Company and Executive, all unearned
compensation, benefits and unvested options shall be forfeited.
(c) If Executive is terminated by the Company without Cause or resigns for Good
Reason, and on the effective date of such termination Executive is subject to a
“trading blackout” or “quiet period” with respect to the Company’s common shares
or if the Company determines, upon the advice of legal counsel, that on the
effective date of such termination Executive may not to trade in the Company’s
common shares due to Executive’s possession of material non-public information,
in each case, which restriction or prohibition continues for a period of at
least twenty consecutive calendar days, Executive will be paid an additional
lump sum amount equal to $100,000 (the “Blackout Period Severance”). Company
shall pay Executive the Blackout Period Severance on the same date that the
Salary Severance is paid.
(d) For purposes of this Agreement, the Company shall have “Cause” to terminate
the Executive’s services 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 gross negligence or willful misconduct has a
material and demonstrable adverse effect on the Company; (iv) Executive’s
material violation of a Company policy resulting in a material and demonstrable
adverse effect to the Company or an affiliate, including but not limited to a
violation of the Company’s Code of Business Conduct and Ethics; or (v) 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);

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provided, however, that Executive shall not be deemed to have been terminated
for Cause in the case of clause (ii), (iii), (iv) or (v) above, unless any such
breach is not fully corrected prior to the expiration of the thirty
(30) 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 therefore in reasonable detail.
(e) Executive will be deemed to have a “Good Reason” if Executive terminates his
employment because of (i) a material diminution of Executive’s duties as General
Counsel, (ii) the failure by any successor of the Company to assume in writing
the Company’s obligations under this Agreement, (iii) the breach by the Company
in any respect of any of its obligations under this Agreement, and, in any such
case (but only if correction or cure is possible), the failure by the Company to
correct or cure the circumstance or breach on which such resignation is based
within 30 days after receiving notice from Executive describing such
circumstance or breach in reasonable detail, (iv) the relocation of Executive’s
primary office location of more than 50 miles that places the primary office
farther from Executive’s residence than it was before, or (v) the imposition by
the Company of a requirement that Executive report to a person other than the
Chief Executive Officer of the Company or the Chairman of the Board. Executive
shall not have a Good Reason to resign if the Company suspends Executive due to
an indictment of Executive on felony charges, provided that the Company
continues to pay Executive’s salary and benefits.
5. Adjustment to Payments Triggering Excise Tax. In the event that any amount or
benefit that may be paid or otherwise provided to or in respect of the Executive
by the Company or any affiliated company, whether pursuant to this Agreement or
otherwise (collectively, “Covered Payments”), is or may become subject to the
tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended
(or any successor provision) (“Excise Tax”), the Company shall pay to the
Executive a “Reimbursement Amount,” defined as an amount, which when added to
the Covered Payments and after taking into account any federal, state or local
tax resulting from the Covered Payment and the Reimbursement Amount will provide
Executive with after tax net income equal to the amount Executive would have
earned had no Excise Tax been imposed on the Covered Payments.
6. 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, 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

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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
that could reasonably be foreseen to be detrimental to the Company or any of its
affiliates; provided, Executive shall be permitted to disclose such trade
secrets and confidential information to third parties in the course of
performing his duties for the Company and its affiliates as he deems appropriate
in his good faith judgment provided that prior to such disclosure Executive
causes the intended recipient of such information to sign a confidentiality
agreement. 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 or as permitted
hereunder, 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 unauthorized 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
Chief Executive Officer or the board of directors of the Company or any of its
affiliates or which the Chief Executive Officer or the board of directors of the
Company or any of its affiliates makes available or authorizes Executive to make
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 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

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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) or at
any other time upon request by the Company 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 of
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. Nothing in this paragraph applies to an invention which
qualifies fully under the provisions of California Labor Code Section 2870.
(d) Following the termination of Executive’s employment, Executive will
reasonably cooperate with the Company (at the Company’s expense, if Executive
reasonably incurs any out-of-pocket costs with respect thereto, including, but
not limited to, lost salary or the value of vacation benefits used in connection
therewith) 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 6 and Section 7 shall survive any termination
of this Agreement and termination of Executive’s employment with the Company.
7. Non-Solicitation. 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 Executive’s employment
and for a period of twenty-four (24) months immediately thereafter (the
“Nonsolicitation Period”), he will not directly or indirectly through another
entity unlawfully (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 unless such person’s employment was terminated by the
Company or such affiliate 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

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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 business which is a direct competitor
of the Company.
8. Non-Disparagement. During Executive’s employment and thereafter, Executive
agrees not to make any derogatory, negative or disparaging public statement
about the Company, its officers, its employees, or members of its Board, 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 the Company, it being agreed and
understood that nothing herein shall prohibit Executive (a) from disclosing that
Executive is 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 Executive described in this clause
(c) are not based on confidential information obtained during the course of
Executive’s employment with the Company. The Company agrees that it will not
make any derogatory, negative or disparaging public statements about Executive
that are untruthful in any authorized Company statement (whether written or
oral), including, but not limited to, any press release or public announcement.
9. Injunctive Relief. Executive and the Company (a) intend that the provisions
of Sections 6 and 7 be and become valid and enforceable, (b) acknowledge and
agree that the provisions of Sections 6 and 7 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 6 or 7 might result in
irreparable injury to the Company and its affiliates, the exact amount of which
would be difficult to ascertain and the remedies at law for which may 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 6 or 7, in addition to any other remedy
which may be available at law or in equity, the Company shall be entitled to
seek specific performance and injunctive relief, and without the necessity of
proving actual damages. In addition, in the event of a violation or threatened
violation by Executive of Section 6 or 7 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 6 or 7 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.
10. Indemnification. The Company shall indemnify Executive to the fullest extent
permitted by applicable law as more fully described in the Indemnification
Agreement between the Company and the Executive; in the event that California
law is deemed to apply and to permit the Company to provide more indemnification
to Executive for the matters described in the

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Indemnification Agreement, the Company agrees to provide such indemnification to
the fullest extent permitted under California law.
11. 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.
12. 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.
13. Severability of Provisions. In the event that any provision of this
Agreement should ever be adjudicated by a court of competent jurisdiction to be
unenforceable, then such provision shall be deemed reformed to the maximum
extent permitted by applicable law, and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of any other
provision of this Agreement.
14 Warranty. As an inducement to the other party to enter into this Agreement,
subject to the termination of Executive’s Employment Agreement as set forth in
paragraph 17 below, each party represents and warrants to the other that it/he
has the power and authority to enter into this Agreement and is not a party to
any other agreement or obligation, and that there exists no impediment or
restraint, contractual or otherwise, on its/his power, right or ability to enter
into this Agreement and to perform its/his duties and obligations hereunder.
15. 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 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 of America, Inc.
1800 Century Park East
Los Angeles, California 90067

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Attention: Members of the Compensation Committee of the Board of Directors
Telecopy: (310) 557-3906
with a copy to:
Herbalife International of America, Inc.
1800 Century Park East
Los Angeles, California 90067
Attention: Chief Executive Officer
Telecopy: (310) 557-3906

  (b)   if to Executive, to:

Brett R. Chapman
5054 Royal Vista Court
Thousand Oaks, California 91362
with a copy to:
Cathy J. Frankel, Esq.
Moses & Singer LLP
1301 Avenue of the Americas
New York, New York 10019-6076
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.
16. 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.
17. 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, including but not limited to the Employment Agreement
between the parties dated October 6, 2003 (which Employment Agreement shall be
deemed terminated as of the date of this Agreement), but with the exception of
the Non-Statutory Stock Option Agreement dated October 6, 2003, as amended
effective as of December 30, 2003, Non-Statutory Stock Option Agreement dated
September 1, 2004, Stock Option Agreement dated December 1, 2004, Stock Option
Agreement dated April 27, 2005, Stock Appreciation Right Award Agreement dated
March 23, 2006, Stock Unit Award Agreement dated March 23, 2006, Stock Unit
Award Agreement dated October 10, 2006, Shareholders’ Agreement dated July 31,
2002, and the Indemnification Agreement. 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.

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18. Amendments: Waivers. This Agreement may not be modified or amended except by
an instrument in writing, signed by Executive and a duly authorized
representative of 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.
19. 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.
20. Surviving Terms. The provisions of Sections 4(a), 4 (b), 5, 6, 7, 8 and 10
shall survive the termination or expiration of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.

         
 
  EXECUTIVE    
 
       
 
  /s/ Brett R. Chapman    
 
 
 
By: Brett R. Chapman    
 
       
 
  HERBALIFE INTERNATIONAL OF AMERICA, INC.    
 
       
 
  /s/ Michael O. Johnson    
 
 
 
By: Michael O. Johnson    
 
  Title: Chief Executive Officer    

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SCHEDULE A
Constitutional Rights Foundation

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ATTACHMENT A
Agreement and General Release
Agreement and General Release (“AGREEMENT”), by and among BRETT R. CHAPMAN
(“EXECUTIVE” and referred to herein as “you”) and HERBALIFE INTERNATIONAL OF
AMERICA, INC., a Nevada corporation (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.
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., LLC, 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 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)

 

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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
agreements granting you any stock units, stock appreciation rights, stock
options or any other equity grants or equivalents); (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 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 release 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 expense or other fees and expense incurred in defending 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
other proceedings received in connection therewith to the Company, it being
agreed that you shall not be liable to the Company for any attorneys’ fees or
expense 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 OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

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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, you
agree not to make any derogatory, negative or disparaging public statement about
any Company Entity, 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 Company Entity, it being agreed and understood that nothing herein shall
prohibit you (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. The Company agrees that
it will not make any derogatory, negative or disparaging public statement about
you in an authorized press release or authorized public announcement.
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 6, 7 and 8 of the
Employment Agreement survive the termination of your employment in accordance
with the terms thereof. The Company acknowledges that its obligations under
Sections 4(a), 4(b), 5, 8 and 10 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 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.

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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 the
Company’s Chief Executive Officer at the address specified pursuant to
Section 15 of the Employment Agreement. 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 Chief Executive
Officer 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:             Brett R. Chapman    
 
                HERBALIFE INTERNATIONAL OF AMERICA, INC.    
 
           
 
  By:        
 
     
 
   
 
  Name:        
 
     
 
   
 
  Title:        
 
     
 
   

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