##### Table of Contents



---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A

|           |  |                                                                                        
|---------- |  | ---------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                        
|           |  |                                                                                        
|[X]        |  | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934         
|           |  |                                                                                        
|           |  | For the fiscal year ended December 31, 2001                                            
|           |  |                                                                                        
|[   ]      |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
|           |  |                                                                                        
|           |  | For the transition period from ________ to ________.                                   

Commission file number 0-15712

HERBALIFE INTERNATIONAL, INC.(Exact name of Registrant as specified in its charter)

|                                                                                         |  |                                                   
|---------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Nevada
(State or other jurisdiction of
incorporation or organization)                    |  | 22-2695420
(I.R.S. Employer
Identification Number)
|                                                                                         |  |                                                   
|1800 Century Park East, Los Angeles, California
(Address of principal executive offices) |  | 90067
(Zip Code)                                  

(310) 410-9600
(Registrants telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Class A Common Stock, $.01 Par Value
Class B Common Stock, $.01 Par Value

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No
[  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of the Registrants knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes [X]

The aggregate market value of the Registrants Class A and Class B Common Stock on March 8, 2002 held by
nonaffiliates was approximately $248 million. (Determination of stock ownership by non-affiliates was made
solely for the purpose of responding to the requirements of this Form and the Registrant is not bound by
this determination for any other purpose.)

The number of shares outstanding of the registrant as of March 8, 2002 was:

11,318,498 Shares of Class A Common Stock
20,748,662 Shares of Class B Common Stock

DOCUMENTS INCORPORATED BY REFERENCE



---

---





---

TABLE OF CONTENTS



|           |                                                                         |  |  |  |  |  |  | 
|---------- | ----------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART III  
|           | Item 10. Directors and Executive Officers of the Registrant            
|           | Item 11. Executive Compensation                                        
|           | Item 12. Security Ownership of Certain Beneficial Owners and Management
|           | Item 13. Certain Relationships and Related Transactions                
|SIGNATURES



---



##### Table of Contents






Explanatory Note: This Form 10-K/A of Herbalife International, Inc. amends the
Annual Report on Form 10-K of the registrant for the registrants fiscal year
ended December 31, 2001. Specifically, this Form 10-K/A adds Item 10.
Directors and Executive Officers of Registrant, Item 11. Executive
Compensation, Item 12. Security Ownership of Certain Beneficial Owners and
Management and Item 13. Certain Relationships and Related Transactions.

PART III




Item 10.Directors and Executive Officers of the Registrant

Biographical information follows for each person that presently serves as
a director and for the current executive officers of the Company. The table
sets forth certain information regarding these individuals (ages are as of
April 26, 2002).

|                              |  |     |    |                           |  |                                                                                         
|----------------------------- |  | --- | -- | ------------------------- |  | ----------------------------------------------------------------------------------------
|Name                          |  | Age |    | Position with the Company
|                              |  |     |    |                          
|Francis X. Tirelli(2)(3)      |  |     | 48 |                           |  | Director, President and Chief Executive Officer                                         
|Conrad Lee Klein (3)          |  |     | 73 |                           |  | Director, Executive Vice President, Chief
Business Affairs Officer                      
|John Reynolds(2)              |  |     | 68 |                           |  | Chairman of the Board of Directors, Executive
Vice President, Executive Business Advisor
|Edward J. Hall(1)(3)          |  |     | 55 |                           |  | Director                                                                                
|Christopher M. Miner(1)(2)(3) |  |     | 50 |                           |  | Director                                                                                
|Jeffrey L. Glassman(1)(3)     |  |     | 55 |                           |  | Director                                                                                
|Robert A. Sandler             |  |     | 58 |                           |  | Executive Vice President, General Counsel and
Secretary                                 
|Douglas G. Sages              |  |     | 51 |                           |  | Executive Vice President, Chief Administrative
Officer, and Chief Financial Officer     
|Brian Kane                    |  |     | 56 |                           |  | Executive Vice President, Chief Operating Officer                                       
|Carol Hannah                  |  |     | 53 |                           |  | Executive Vice President, Sales                                                         



---

|(1) |  | Member of the Compensation Committee and the Audit Committee.
|--- |  | -------------------------------------------------------------
|    |  |                                                              
|(2) |  | Member of the Internet/Telecommunication Committee.          
|    |  |                                                              
|(3) |  | Member of the Finance Committee.                             

Francis X. Tirelliwas appointed a director in July 2000 and joined the
Company in November 2001 as President and Chief Executive Officer. From
October 1999 to October 2001, Mr. Tirelli was the Chief Operating Officer of
myCFO, an Internet-based financial services firm. Prior to that, Mr. Tirelli
was with Deloitte & Touche LLP from September 1978 to October 1999. From
September 1997 to October 1999, Mr. Tirelli was regional managing partner for
Deloittes western region. Mr. Tirelli served on the management committee and
board of directors for Deloitte & Touche prior to his departure. He is a
member of several accounting societies, including the American Institute of
Certified Public Accountants, the Connecticut Society of Certified Public
Accountants, and the California Society of Certified Public Accountants.

Conrad Lee Kleinserved as outside counsel to the Company starting in 1983
until 1994, when he joined the Company in his present capacity as Executive
Vice President/Chief Business Affairs Officer. His duties involve major
business matters and contracts. Mr. Klein also provides assistance to the
Legal Department in transactional and litigation matters. Mr. Klein was
appointed a director in May 2000, and is a Co-Trustee of the Mark Hughes Family
Trust. Mr. Kleins former professional activities involved serving as a
Captain in the Air Force (Res.) JAG Department, Counsel to Californias State
Labor Commissioner, California Deputy Attorney General, General Counsel for the
California Horse Racing Board and Counsel to the California State Medical
Board. Mr. Klein received a B.S. and a J.D. from New York University and an
L.L.M. from the University of Southern California.

1



---



##### Table of Contents



John Reynoldsjoined the Company in June 2000. He currently serves as
Executive Vice President/Executive Business Advisor as well as Chairman of the
Board of the Herbalife Family Foundation. Mr. Reynolds has been Chairman of
the Board of Harris Steel & Copper Incorporated since 1996, and a director of
Tatum Petroleum Corporation since 1986. Mr. Reynolds founded Keyline Sales
Incorporated in 1974, a sales and marketing agency in the plumbing industry.
Mr. Reynolds was President and CEO of Keyline from its inception to his
departure in 1997. Mr. Reynolds is the father of the late Mark Hughes, founder
and former CEO of the Company, and is a Co-Trustee of the Mark Hughes Family
Trust.

Edward J. Hall, a certified public accountant, is an independent investor.
From April 1995 through November 1998, he served as the Chief Financial
Officer of Roth Capital Partners, LLC, an investment banking firm. He served
in a similar capacity for H.J. Meyers & Co., Inc., an investment banking firm
based in Beverly Hills, California, from March 1991 through March 1995. From
1988 through 1990, Mr. Hall was an Executive Vice President of Angeles
Corporation, an investment management firm. Prior to joining Angeles
Corporation, Mr. Hall was with Deloitte & Touche LLP, where he had been an
audit partner since 1980. He received his BA and MBA from the University of
California at Los Angeles. Mr. Hall is a member of the American Institute of
Certified Public Accountants and the California Society of Certified Public
Accountants. Mr. Hall was elected a director of the Company in March 1992.

Christopher M. Mineris a partner in the business and financial advisory
firm of Tech West Ventures, LLC, acting as principals and advisors for
companies in the Internet and service provider sectors of the communications
and software markets. From 1996 to 2001, Mr. Miner has acted as principal and
maintained operating and director responsibilities in companies in the
Internet, Communications and Healthcare areas. These companies included
OhGolly.com, a web hosting and business services company, from August 2000 to
February 2001, Wow! Laboratories, Inc., an oral health care company, from July
1996 to December 1998 where he served as Chief Financial Officer and Redfish
Telemetrix, Inc., a telecommunications company, where from May 1997 to December
1999 he served as CEO and CFO. Mr. Miner co-founded Vis-a-Vis Communications,
Inc. (formerly Workstation Technologies, Inc.) in 1989, a developer of
interactive communications software and hardware products. From 1989 to 1996
he served as CEO of Vis-a-Vis. Mr. Miner received his MBA from California
State University in 1976 and his BA from the State University of New York in
1973. He was elected a director of the Company in March 1996.

Jeffrey L. Glassmanjoined Bel Air Investment Advisors LLC as Vice
President in January 2002. From 1984 to 2002, Mr. Glassman was a principal in
the law firm of Riordan & McKinzie, where he practiced law in the areas of tax
planning and probate and trust administration. He represented numerous
charitable organizations and a diverse group of corporate clients, whose
activities include manufacturing, real estate development and farming. Mr.
Glassman serves on the Board of Directors of several charitable organizations,
such as Wallis Foundation, University of Judaism, Big Brothers of Greater Los
Angeles, and the Martin Luther King Legacy Association. He is on the Board of
Governors of the UCLA Foundation, the Childrens Museum of Los Angeles, Venice
Family Clinic, and Tel Aviv University. His involvement with civic
organizations includes serving on the Board of Directors of Los Angeles Area
Chamber of Commerce and Los Angeles Sports & Entertainment Commission. Mr.
Glassman holds a Bachelor of Arts degree from the University of California at
Los Angeles and a Juris Doctor degree, magna cum laude, from Loyola University
of Los Angeles.

Robert A. Sandlerjoined the Company in January 1997 as Executive Vice
President and General Counsel. In June 2000, he became Corporate Secretary.
From 1985 to 1994, Mr. Sandler served in various capacities with various
companies within the Siemens family of companies. He received his A.B. degree
from the University of California, Los Angeles and his J.D. degree from the
University of Southern California.

Douglas G. Sagesjoined the Company in December of 2001 as Executive Vice
President, Chief Administrative Officer and Chief Financial Officer. Mr.
Sages, a certified public accountant, has an MBA in Information Technology
from Iona College. He has senior management experience with consumer marketing,
technology and Internet companies. From 1985 to 1998, Mr. Sages
was Executive Vice President and CFO for the World Wrestling
Federation Entertainment Co., from 1998 to 1999 he was Executive Vice
President and CFO for SEMX, and from 2000 to 2001, he was Executive
Vice President and CFO at Bla-Bla.com, an Internet aggregator.
Previously Mr. Sages held various financial and operational positions with CBS Inc.
and KPMG.

2



---



##### Table of Contents



Brian L. Kanejoined the Company in May 1993 as Vice President of European
Operations. In 1995, Dr. Kane became a Senior Vice President-Worldwide
Distribution and served in that position until June 2000, when he was appointed
as Executive Vice President, Chief Operating Officer. Dr. Kane has a B.Sc. and
a Ph.D. in Chemistry from Birmingham University in England, and is a Fellow of
the Institute of Marketing (UK). Dr. Kane began his career with Proctor &
Gamble and subsequently held senior management positions in health care and
consumer products with Richardson-Vicks, Hobson plc and Bristol-Myers Squibb.

Carol Hannahjoined the Company in November 1984 and currently holds the
position of Executive Vice President, Sales. Ms. Hannah has served in various
positions, with primary responsibilities in providing sales and training
support for the Companys independent distributors. In May 1996, she was
promoted to Executive Vice President, Sales Operations and Distributor
Services, holding that position until July 2000, when she was appointed to her
current position. Prior to joining Herbalife, Ms. Hannah held management
positions in the retail apparel and catalog industry.




Item 11.Executive Compensation

Director Compensation

Each director who is not an officer or consultant of the Company receives
$45,000 per year for his services as a director, plus (1) $5,000 per year for
each committee of the Board on which he serves or (2) $10,000 if he serves as
chairman of a committee. Each outside director serving on the board of
directors of any of the foreign subsidiaries of the Company is paid fees of
$2,500 annually for each foreign subsidiary board on which he serves.
Directors who also are officers receive no separate compensation for their
services as directors.

Each of the Directors is entitled to reimbursement for his individual
medical and dental insurance plans and to participate in the Executive Life
Insurance Plan.

In addition to their normal director fees, each of Messrs. Hall and Miner
received $23,333 for special services performed for the Board during 2001. In
addition to his normal director fee as the Chairman of the
Internet/Telecommunication Committee, Mr. Miner received $35,000 in January
2001 for special services performed for such Committee during 2001.

Executive Compensation

Summary Compensation Table. The following table sets forth the annual and
long-term compensation of the Companys Chief Executive Officer,
Douglas G. Sages, and each of the
four other most highly compensated executive officers of the Company
(collectively, the Named Executive Officers) for the fiscal years
ended December 31, 1999, 2000 and 2001.

3



---



##### Table of Contents



|                                            |                                                                                    |      |      |           |  |             |                     |           |  |             |         |           |            |            |              |         |            |  |                        |   |         |  |              |         |  |  |   |   |  |   |           |         | 
|------------------------------------------- | ---------------------------------------------------------------------------------- | ---- | ---- | --------- |  | ----------- | ------------------- | --------- |  | ----------- | ------- | --------- | ---------- | ---------- | ------------ | ------- | ---------- |  | ---------------------- | - | ------- |  | ------------ | ------- |  |  | - | - |  | - | --------- | ------- | 
|                                            |                                                                                    |      |      |           |  |             |                     |           |  |             |         |           |            |            |              |         |            |  | Long-Term Compensation |   |         |  |             
|                                            |                                                                                    |      |      |           |  |             |                     |           |  |             |         |           |            |            |              |         |            |  |                        |   |         |  |             
|                                            |                                                                                    |      |      |           |  |             |                     |           |  |             |         |           |            |            |              |         |            |  | Awards                 |   |         |  |              |         |  |  |  
|                                            |                                                                                    |      |      |           |  |             | Annual Compensation |           |  |             |         |           |            |            |              |         |           
|                                            |                                                                                    |      |      |           |  |             |                     |           |  |             |         |           | Securities |            |              |         |            |  |                        |   |        
|                                            |                                                                                    |      |      |           |  |             |                     |           |  |             |         |           |            |            | Other Annual |         | Restricted |  | Underlying             |   | Payouts |  | All Other   
|                                            |                                                                                    |      |      |           |  |             |                     |           |  |             |         |           |            |            | Compensation |         | Stock      |  | Options/               |   | LTIP    |  | Compensation
|Name and Principal Position                 |                                                                                    | Year |      | Salary($) |  | Bonus($)(1) |                     | ($)(2)    |  | Award(s)($) |         | SARs(#)   |            | Payouts($) |              | ($)(3) 
|                                            |                                                                                    |      |      |           |  |             |                     |           |  |             |         |           |            |            |              |        
|Francis X. Tirelli (joined November 2001)   |                                                                                    |      | 2001 |           |  | $           | 151,384             |           |  | $           | 150,000 |           |            | $          | 10,000       |         |            |  |                       |   |         |  | 500,000      |         |  |  |   |   |  | $ | 1,477     | (4)    
|                                            | President and Chief Executive Officer                                              |      |      |           |  |             |                     |           |  |             |         |           |            |            |              |         |            |  |                        |   |         |  |              |         |  |  |   |   |  |   |           |         | 
|                                           
|Christopher Pair(5) (resigned October 2001) |                                                                                    |      | 2001 |           |  | $           | 825,253             |           |  | $           | 300,000 |           |            | $          | 150,000      |         |            |  |                       |   |         |  |             |         |  |  |  |   |  | $ | 4,831,226 | (6)    
|                                            | Former President and Chief Executive                                               |      |      | 2000      |  |             |                     | 1,000,000 |  |             |         | 1,588,600 |            |            |              | 180,000 |            |  |                        |  |         |  |              |        |  |  |   |  |  |   |           | 517,859 | 
|                                            | Officer                                                                            |      |      | 1999      |  |             |                     | 1,000,000 |  |             |         | 1,838,000 |            |            |              | 115,000 |            |  |                        |  |         |  |              | 129,439 |  |  |   |  |  |   |           | 406,295 | 
|                                           
|Robert A. Sandler                           |                                                                                    |      | 2001 |           |  | $           | 860,000             |           |  | $           | 792,000 |           |            | $          | 60,000       |         |            |  |                       |   |         |  |             |         |  |  |  |   |  | $ | 259,654   | (7)    
|                                            | Executive Vice President                                                           |      |      | 2000      |  |             |                     | 860,000   |  |             |         | 531,000   |            |            |              | 60,000  |            |  |                        |  |         |  |              |        |  |  |   |  |  |   |           | 192,440 | 
|                                            | And General Counsel                                                                |      |      | 1999      |  |             |                     | 800,000   |  |             |         | 643,998   |            |            |              | 60,000  |            |  |                        |  |         |  |              |        |  |  |   |  |  |   |           | 140,875 | 
|                                           
|Douglas G. Sages (joined December 2001)     |                                                                                    |      | 2001 |           |  | $           | 30,769              |           |  |             |        |           |            |            |             |         |            |  |                       |   |         |  |             |         |  |  |  |   |  |   |          |        
|                                            | Executive Vice President,
Chief Administrative Officer
And Chief Financial Officer |      |      |           |  |             |                     |           |  |             |         |           |            |            |              |         |            |  |                        |   |         |  |              |         |  |  |   |   |  |   |           |         | 
|                                           
|Timothy Gerrity(8) (resigned December 2001) |                                                                                    |      | 2001 |           |  | $           | 752,500             |           |  |             |        |           |            | $          | 60,000       |         |            |  |                       |   |         |  |             |         |  |  |   |   |  | $ | 3,341,102 | (9)    
|                                            | Former Executive Vice President                                                    |      |      | 2000      |  |             |                     | 752,500   |  |             |         | 531,000   |            |            |              | 60,000  |            |  |                        |  |         |  |              |        |  |  |   |   |  |   |           | 152,856 | 
|                                            | And Chief Financial Officer                                                        |      |      | 1999      |  |             |                     | 700,000   |  |             |         | 966,000   |            |            |              | 60,000  |            |  |                        |  |         |  |              |        |  |  |   |   |  |   |           | 148,210 | 
|                                           
|Brian Kane                                  |                                                                                    |      | 2001 |           |  | $           | 700,000             |           |  | $           | 792,000 |           |            | $          | 60,000       |         |            |  |                       |   |         |  |             |         |  |  |  |   |  | $ | 393,155   | (10)   
|                                            | Executive Vice President,                                                          |      |      | 2000      |  |             |                     | 546,875   |  |             |         | 289,686   |            |            |              | 60,000  |            |  |                        |  |         |  |              |        |  |  |   |  |  |   |           | 148,092 | 
|                                            | Chief Operating Officer                                                            |      |      | 1999      |  |             |                     | 450,000   |  |             |         | 100,000   |            |            |              | 60,000  |            |  |                        |  |         |  |              |        |  |  |   |  |  |   |           | 74,290  | 
|                                           
|Carol Hannah                                |                                                                                    |      | 2001 |           |  | $           | 752,500             |           |  | $           | 792,000 |           |            | $          | 60,000       |         |            |  |                       |   |         |  |             |         |  |  |  |   |  | $ | 476,305   | (11)   
|                                            | Executive Vice President  Sales                                                   |      |      | 2000      |  |             |                     | 752,500   |  |             |         | 568,625   |            |            |              | 60,000  |            |  |                        |  |         |  |              |        |  |  |   |  |  |   |           | 135,294 | 
|                                            |                                                                                    |      | 1999 |           |  |             | 700,000             |           |  |             | 450,000 |           |            |            | 60,000       |         |            |  |                       |   |         |  |             |         |  |  |  |   |  |   | 117,567   |        



---

|(1) |  | The 2001, 2000 and 1999 amounts include bonuses earned under the 1994
Plan with the exception of the 2001 sign-on bonus for Francis X. Tirelli.
See  Description of Benefit Plans  1994 Performance-Based Annual
Incentive Compensation Plan.                                                                                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Amounts shown represent payments for non-accountable expense
reimbursement allowances and the aggregate of other payments or benefits
that do not individually exceed 25% of the total perquisite or personal
benefits for Messrs. Tirelli, Pair, Sandler, Gerrity , Kane and Ms.
Hannah. For 2001, the amounts with respect to the non-accountable expense
reimbursement allowances were $10,000, $150,000, $60,000, $60,000, $60,000
and $60,000 for Messrs. Tirelli, Pair, Sandler, Gerrity and Kane and Ms.
Hannah, respectively.
|   
|   
|   
|   
|(3) |  | For 2001, these amounts represent payments under the Executive Long Term
Disability Plan, Executive Life Insurance Plan, the Supplemental Executive
Retirement Plan, the Herbalife International Employees 401(k) Profit
Sharing Plan and Trust, the Executive Medical Plan, the Deferred
Compensation Plan, interest earned on the Deferred Compensation Plan in
excess of 120% of the Federal long term rate, private use of a
Company-owned car, housing allowance, vacation pay-out and separation
payments.                     
|   
|   
|   
|   
|(4) |  | Mr. Tirellis amount represents $247 from the Executive Long Term
Disability Plan and $1,230 from the Executive Medical Plan.                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|   
|   
|   
|(5) |  | For additional information regarding amounts paid to Mr. Pair under a
separation and general release agreement between the Company and Mr. Pair,
see  Employment Contracts, Termination of Employment and Change in
Control Arrangements.                                                                                                                                                                                                                                                                                         
|   
|   
|   
|   
|(6) |  | Mr. Pairs amount includes $2,960 from the Executive Long Term Disability
Plan, $205,318 from the Executive Life Insurance Plan, $1,152,957 from the
Supplemental Executive Retirement Plan, $5,100 from the 401(k)
Tax-Sheltered Savings Plan, $42,468 from the Executive Medical Plan,
$169,231 from the Deferred Compensation Plan, $30,964 from interest earned
on the Deferred Compensation Plan in excess of 120% of the federal long
term rate, $543,945 from vacation pay-out, and $2,678,283 from a
separation payment.     
|   
|   
|   
|   
|(7) |  | Mr. Sandlers amount includes $2,960 from the Executive Long Term
Disability Plan, $5,783 from the Executive Life Insurance Plan, $5,100
from the 401(k) Tax-Sheltered Savings Plan, $10,551 from the Executive
Medical Plan, $129,000 from the Deferred Compensation Plan, $61,110 from
interest earned on the Deferred Compensation Plan in excess of 120% of the
federal long term rate, and $45,150 from vacation pay-out.                                                                                                       
|   
|   
|   
|   
|(8) |  | For additional information regarding amounts paid to Mr. Gerrity under a
separation and general release agreement between the Company and Mr.
Gerrity, see  Employment Contracts, Termination of Employment and Change
in Control Arrangements.                                                                                                                                                                                                                                                                                   
|   
|   
|   
|   
|(9) |  | Mr. Gerritys amount includes $2,960 from the Executive Long Term
Disability Plan, $7,314 from the Executive Life Insurance Plan, $1,010,219
from the Supplemental Executive Retirement Plan, $5,100 from the 401(k)
Tax-Sheltered Savings Plan, $16,907 from the Executive Medical Plan,
$112,875 from the Deferred Compensation Plan, $124,453 from interest
earned on the Deferred Compensation Plan in excess of 120% of the federal
long term rate, $444,221 from vacation pay-out, and $1,617,053 from a
separation payment.   

4



---



##### Table of Contents



|(10) |  | Mr. Kanes amount includes $2,960 from the Executive Long Term Disability
Plan, $5,100 from the 401(k) Tax-Sheltered Savings Plan, $10,551 from the
Executive Medical Plan, $109,038 from the Deferred Compensation Plan,
$58,431 from interest earned on the Deferred Compensation Plan in excess
of 120% of the federal long term rate, and $60,109 from vacation pay-out.
Mr. Kanes private use of a Company owned car and housing allowance in the
amounts of $26,966 and $120,000, respectively, are also included in this
figure.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|(11) |  | Ms. Hannahs amount includes $2,960 from the Executive Long Term
Disability Plan, $4,930 from the Executive Life Insurance Plan, $5,100
from the 401(k) Tax-Sheltered Savings Plan, $10,551 from the Executive
Medical Plan, $112,875 from the Deferred Compensation Plan, $102,229 from
interest earned on the Deferred Compensation Plan in excess of 120% of the
federal long term rate, and $237,660 from vacation pay-out.                                                                                                         

Option Grants in Last Fiscal Year.No stock appreciation rights (SARs)
or options to purchase shares of Class A Common Stock (Class A Stock Options)
were granted during the fiscal year ended December 31, 2001 to the Named
Executive Officers. The following table contains information concerning
options to purchase shares of Class B Common Stock (Class B Stock Options)
granted in 2001 to each of the Named Executive Officers. The per share
exercise price of all options described below represents the fair market value
of the Companys Common Stock on the grant date.

|                   |         |         |                   |             |               |           |           |      |            |        |       |       |         |  |       |           |  |  |   |           | 
|------------------ | ------- | ------- | ----------------- | ----------- | ------------- | --------- | --------- | ---- | ---------- | ------ | ----- | ----- | ------- |  | ----- | --------- |  |  | - | --------- | 
|                   |         |         | Individual Grants |             |               |           |          
|                   |         |         |                   |             |               |           |          
|                   |         |         | Number of         |             | Percent of    |           |           |      |            |        |       |       |         |  | Grant
|                   |         |         | Securities        |             | Total Options |           |           |      |            |        |       |       |         |  | Date 
|                   |         |         | Underlying        |             | Granted to    |           | Exercise  |      |            |        |       |       | Present
|                   |         |         | Options           |             | Employees in  |           | Price Per |      | Expiration |        | Value
|Name               |         | Granted |                   | Fiscal Year |               | Share (1) |           | Date |            | ($)(2)
|                   |         |         |                   |             |               |           |           |      |            |       
|Francis X. Tirelli |         |         |                   |             |               |           |           |      |            |        |       |       |         |  |       |           |  |  |   |          
|                   | Class A |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|                   | Class B |         |                   | 500,000     |               |           |           | 100  | %          |        | $     | 11.30 |         |  |       | 11/1/2011 |  |  | $ | 1,570,041 | 
|Christopher Pair   |         |         |                   |             |               |           |           |      |            |        |       |       |         |  |       |           |  |  |   |          
|                   | Class A |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|                   | Class B |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|Robert A. Sandler  |         |         |                   |             |               |           |           |      |            |        |       |       |         |  |       |           |  |  |   |          
|                   | Class A |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|                   | Class B |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|Douglas G. Sages   |         |         |                   |             |               |           |           |      |            |        |       |       |         |  |       |           |  |  |   |          
|                   | Class A |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|                   | Class B |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|Timothy Gerrity    |         |         |                   |             |               |           |           |      |            |        |       |       |         |  |       |           |  |  |   |          
|                   | Class A |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|                   | Class B |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|Brian L. Kane      |         |         |                   |             |               |           |           |      |            |        |       |       |         |  |       |           |  |  |   |          
|                   | Class A |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|                   | Class B |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|Carol Hannah       |         |         |                   |             |               |           |           |      |            |        |       |       |         |  |       |           |  |  |   |          
|                   | Class A |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 
|                   | Class B |         |                   |            |               |           |           |     |            |        |       |      |         |  |       |          |  |  |   |          | 



---

|(1) |  | Represents the closing price of the Common Stock on the Nasdaq National
Market on the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | In accordance with the rules
of the Securities and Exchange Commission, we
used the Black Scholes option pricing model to estimate the grant date
present value of the options set forth in this table. We cannot predict
or estimate the future price of our Common Stock, and no option pricing
model, including the Black Scholes model, can accurately determine the
value of an option. Accordingly, we cannot assure you that the value
realized by an officer, if any, will be at or near the value estimated in
accordance with the Black Scholes model. The assumptions that we used for
the valuation include: 56.67% price volatility; 2.92% risk free rate of
return; 6.5% dividend yield and options exercise averaging 3.0 year term.
We did not make any adjustment for non-transferability or risk of
forfeiture.

5



---



##### Table of Contents



Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values.The following table sets forth information with respect to: (1) shares
of Common Stock acquired upon exercise of Class A Stock Options and Class B
Stock Options in 2001 and (2) unexercised options to purchase shares of Class A
Common Stock or Class B Common Stock that were granted in prior years.

|                   |         |             |             |              |       |             |   |               |                    |             |                        |               |                      |  |  |         |  |  |   |           |  |  |   |         | 
|------------------ | ------- | ----------- | ----------- | ------------ | ----- | ----------- | - | ------------- | ------------------ | ----------- | ---------------------- | ------------- | -------------------- |  |  | ------- |  |  | - | --------- |  |  | - | ------- | 
|                   |         |             |             |              |       |             |   |               |                    |             | Securities             |               |                      |  |  |         |  |  |  
|                   |         |             |             |              |       |             |   |               |                    |             | Underlying             |               | Value of Unexercised
|                   |         |             |             |              |       |             |   |               |                    |             | Unexercised            |               | In-the-Money        
|                   |         |             |             |              |       |             |   |               |                    |             | Options at             |               | Options at          
|                   |         |             | Shares      |              |       |             |   |               | Fiscal Year-End(#) |             | Fiscal Year-End ($)(1)
|                   |         |             | Acquired on |              | Value |             |   |               |                   
|Name               |         | Exercise(#) |             | Realized ($) |       | Exercisable |   | Unexercisable |                    | Exercisable |                        | Unexercisable
|                   |         |             |             |              |       |             |   |               |                    |             |                        |              
|Francis X. Tirelli |         |             |             |              |       |             |   |               |                    |             |                        |               |                      |  |  |         |  |  |   |           |  |  |   |        
|                   | Class A |             |             |             |       |             |   |              |                    |             |                        |              |                      |  |  |        |  |  |   |          |  |  |   |        | 
|                   | Class B |             |             |             |       |             |   |              |                    |             |                        | 13,889        |                      |  |  | 486,111 |  |  | $ | 26,250    |  |  | $ | 918,750 | 
|Christopher Pair   |         |             |             |              |       |             |   |               |                    |             |                        |               |                      |  |  |         |  |  |   |           |  |  |   |        
|                   | Class A |             |             | 84,857       |       |             | $ | 468,835       |                    |             |                        |              |                      |  |  |        |  |  |   |          |  |  |   |        | 
|                   | Class B |             |             | 25,000       |       |             | $ | 150,000       |                    |             |                        | 365,492       |                      |  |  | 79,624  |  |  | $ | 2,140,577 |  |  | $ | 522,732 | 
|Robert A. Sandler  |         |             |             |              |       |             |   |               |                    |             |                        |               |                      |  |  |         |  |  |   |           |  |  |   |        
|                   | Class A |             |             |             |       |             |   |              |                    |             |                        | 57,771        |                      |  |  | 5,875   |  |  | $ | 359,336   |  |  | $ | 36,543  | 
|                   | Class B |             |             |             |       |             |   |              |                    |             |                        | 133,166       |                      |  |  | 23,501  |  |  | $ | 874,235   |  |  | $ | 154,284 | 
|Douglas G. Sages   |         |             |             |              |       |             |   |               |                    |             |                        |               |                      |  |  |         |  |  |   |           |  |  |   |        
|                   | Class A |             |             |             |       |             |   |              |                    |             |                        |              |                      |  |  |        |  |  |   |          |  |  |   |        | 
|                   | Class B |             |             |             |       |             |   |              |                    |             |                        |              |                      |  |  |        |  |  |   |          |  |  |   |        | 
|Timothy Gerrity    |         |             |             |              |       |             |   |               |                    |             |                        |               |                      |  |  |         |  |  |   |           |  |  |   |        
|                   | Class A |             |             |             |       |             |   |              |                    |             |                        | 81,666        |                      |  |  | 3,334   |  |  | $ | 516,556   |  |  | $ | 20,737  | 
|                   | Class B |             |             |             |       |             |   |              |                    |             |                        | 223,333       |                      |  |  | 46,667  |  |  | $ | 1,466,181 |  |  | $ | 306,369 | 
|Brian Kane         |         |             |             |              |       |             |   |               |                    |             |                        |               |                      |  |  |         |  |  |   |           |  |  |   |        
|                   | Class A |             |             |             |       |             |   |              |                    |             |                        | 31,250        |                      |  |  | 1,667   |  |  | $ | 202,709   |  |  | $ | 10,369  | 
|                   | Class B |             |             |             |       |             |   |              |                    |             |                        | 68,000        |                      |  |  | 3,334   |  |  | $ | 446,420   |  |  | $ | 21,888  | 
|Carol Hannah       |         |             |             |              |       |             |   |               |                    |             |                        |               |                      |  |  |         |  |  |   |           |  |  |   |        
|                   | Class A |             |             | 11,667       |       |             | $ | 116,087       |                    |             |                        | 82,300        |                      |  |  | 3,334   |  |  | $ | 516,729   |  |  | $ | 20,737  | 
|                   | Class B |             |             | 23,333       |       |             | $ | 216,764       |                    |             |                        | 216,999       |                      |  |  | 46,667  |  |  | $ | 1,424,598 |  |  | $ | 306,369 | 



---

|(1) |  | Represents the difference between the market price of Common Stock on
December 31, 2001 and the exercise price of the options.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------

Description of
Benefit Plans.

1994 Performance-Based Annual Incentive Compensation Plan.The purpose of
the 1994 Plan is to provide additional compensation as an incentive to certain
key executives and consultants to attain specified performance objectives of
the Company and its subsidiary and affiliated corporations and to ensure the
continued availability of their full-time or part-time services to the Company.
Specifically, the individuals entitled to participate in the 1994 Plan are
those executive officers and consultants of the Company determined by the
committee administering the 1994 Plan.

The 1994 Plan was adopted in 1994 and amended and restated in 1996 and
1997; each such amendment was approved by the Companys stockholders. The 1994
Plan was further amended by the Board in 1999. The Plan was amended, restated
and approved in 2001.

The 1994 Plan is administered by the Compensation Committee of the Board
of Directors (the Compensation Committee), which consists of two or more
Board members who are outside directors under Section 162(m) of the Code and
non-employee directors within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended.

The amount of an available award to a participant or the aggregate amount
of available awards to all participants for each award period is determined
based upon an objective computation (the Formula) of the actual performance
of the Company relative to pre-established performance goals. The performance
goal or goals included in the Formula for each award period are selected by the
Compensation Committee from among the following performance measures: level of
retail sales (in the aggregate or for a particular category or categories of
retail sales); net cash flow; net income; operating income; earnings per share;
return on sales; reduction in expenditure levels for a particular category or
categories of expenses versus a

6



---



##### Table of Contents



prior period; return on total capital; return on equity; and increase in
the Common Stock price over a specified time period.

The Compensation Committee determines the performance measure or measures,
the performance goal or goals and all computations included within each
Formula, each of which may be different for different award periods or for
different participants within a single award period. The Compensation
Committee does not have the discretion to increase any award to an amount in
excess of that determined in accordance with the 1994 Plan and the Formula
applicable to a particular award period. However, the Compensation Committee,
may, in its discretion, (a) designate in advance a maximum dollar award for any
award period with respect to any participant, and/or (b) designate in advance
that certain other incentive award payments (under the 1994 Plan or otherwise)
made to a participant will be deducted from award amounts otherwise earned
under the 1994 Plan and/or (c) decrease any award under the 1994 Plan.
Notwithstanding anything in the 1994 Plan to the contrary, no participant is
entitled to earn in excess of $10 million under the 1994 Plan with respect to
any single calendar year.

Award periods under the 1994 Plan may be quarters, calendar years or such
other periods as the Compensation Committee may designate. The Compensation
Committee designates all award periods, performance measures, performance goals
and other aspects of each Formula. The Compensation Committee must designate
all performance measures, performance goals and other aspects of each Formula
not later than the date on which 25% of the award period has elapsed. In no
case, however, can the Compensation Committee make such a designation later
than 90 days after the beginning of an award period.

To be entitled to receive a full award with respect to an award period, a
participant must generally continue to be employed by the Company or rendering
services to the Company on the last day of the award period. If a
participants employment with the Company terminates during an award period, he
will generally receive a prorated award based upon satisfaction of performance
goals for the entire award period, with the proration formula to be set by the
Compensation Committee in its discretion when it sets the performance goals for
the performance period. The proration formula may provide, however, that if a
participant dies or becomes disabled during an award period, he or his
designated beneficiaries will receive the entire amount of the award he would
have received if he had continued in employment until the end of the award
period and the performance goals had been satisfied.

No award can be paid (except in the case of a participants death or
disability) unless the Compensation Committee certifies that the objective
performance goal or goals for the award have been satisfied and that the amount
of the award is no greater than that dictated by the Formula for the applicable
award period. The Compensation Committee makes such determinations by means of
written resolutions of the Compensation Committee that are maintained in the
records of the Company.

Awards pursuant to the 1994 Plan may be made, at the discretion of the
Compensation Committee, in cash, through the issuance of shares of Class A
Common Stock or Class B Common Stock, or through a combination of any of the
foregoing methods. The total number of shares of Common Stock that may be
issued under the 1994 Plan in any fiscal year of the Company, and the total
number of shares of Common Stock that may be issued under the 1994 Plan in any
fiscal year of the Company to any single participant, may not exceed 5% of the
number of issued and outstanding shares of Common Stock at the beginning of the
prior fiscal year.

Awards under the 1994 Plan are subject to withholding for applicable
employment and income taxes. The Compensation Committee may, in its discretion
and subject to the consent of each affected participant, approve the advance of
all or a portion of a target cash award to a participant prior to the
conclusion of an award period. Each such advance, if made, is a full recourse
obligation of the participant and bears interest from the date of the advance
until repaid or deemed earned at the applicable Federal rate (as specified in
the 1994 Plan) for loans of comparable term. Each such advance is evidenced by
a promissory note executed by the participant and delivered to the Company.

7



---



##### Table of Contents



The 1994 Plan will continue in place until terminated by the Board of
Directors. The Board of Directors may from time to time amend, suspend or
terminate, in whole or in part, any or all of the provisions of the 1994 Plan;
provided, however, that no such action will adversely affect the right of any
participant with respect to (a) any award to which he or she may have become
entitled under the 1994 Plan prior to the effective date of such amendment,
suspension or termination, or (b) any award period that commenced prior to the
taking of such action by the Board.

1991 Option Plan.The purpose of the Amended and Restated 1991 Stock
Option Plan (the Option Plan) is to secure for the Company and its
stockholders the benefits arising from stock ownership by key employees,
directors, consultants and other persons selected by the Compensation
Committee, which administers the Option Plan. As of December 31, 2001,
approximately 150 persons were eligible to participate in the Option Plan.

The Option Plan was amended and restated in 1996. The amendment and
restatement of the Option Plan was approved by the Companys shareholders at
the Companys 1996 Annual Meeting. This Plan expires on March 8, 2006.

Options granted under the Option Plan may be designated as (1) incentive
stock options for federal income tax purposes or (2) options that are not
qualified for this treatment, or non-qualified stock options. All options
granted under the Option Plan are non-transferable (except that limited estate
planning and similar transfers of non-qualified stock options are permitted)
and are exercisable in installments determined by the Compensation Committee,
except that each option is to be exercisable in minimum annual installments of
20% commencing with the first anniversary of the options grant date. Each
option granted has a term specified in the option agreement, but all options
expire no later than ten years from the date of grant. Incentive stock options
granted to a person holding more than 10% of the total voting power of capital
stock must expire within five years from the date of grant.

In the case of incentive stock options, the exercise price must be at
least equal to 100% of the fair market value of the Companys Common Stock on
the date the option is granted. The exercise price for incentive stock option
grants to a person holding more than 10% of the total voting power of capital
stock must equal 110% of the fair market value of the Companys Common Stock.
The exercise price of a non-qualified option need not be equal to the fair
market value of the Companys Common Stock at the date of grant, but may be
granted with any exercise price that is not less than 85% of fair market value
at the time the option is granted, as the Compensation Committee may determine.

Deferred Compensation Plans.The Company maintains two deferred
compensation plans for select groups of management or highly compensated
employees: (1) the Herbalife Management Deferred Compensation Plan, effective
January 1, 1996 (the Management Plan), which is applicable to directors and
vice presidents; and (2) the Herbalife Senior Executive Compensation Plan,
effective January 1, 1996 (the Senior Executive Plan), which is applicable to
eligible employees at the rank of Senior Vice President and higher. The
Management Plan and the Senior Executive Plan are referred to as the Deferred
Compensation Plans. The Deferred Compensation Plans were amended and restated
effective January 1, 2001.

The Deferred Compensation Plans are unfunded and their benefits are paid
from general assets of the Company, except that the Company has contributed
amounts to a rabbi trust whose assets will be used to pay benefits if the
Company remains solvent, but can be reached by creditors of the Company if the
Company becomes insolvent. The Deferred Compensation Plans allow eligible
employees, who are selected by the administrative committee that manages and
administers the plans (the Deferred Compensation Committee), to elect
annually to defer up to 50% of their annual base salary and up to 100% of their
annual bonus for each calendar year (the Annual Deferral Amount). The
Company makes matching contributions on behalf of each participant in the
Senior Executive Plan (Herbalife Matching Contributions). Before January 1,
2002, the Herbalife Matching Contributions were 100% of the amount deferred by
each participant from the participants annual base salary, up to (1) 15% of
the participants annual base salary in the case of a participant who was an
Executive Vice President, (2) 12.5% of the participants annual base salary in
the case of a participant who was a Senior Vice President, and (3) 10% (or such
greater percentage, not to exceed 15%, that the Deferred Compensation Committee
may have
8Table of Contents

determined in the case of any particular participant) of the participants
annual base salary in the case of any other participant. Furthermore, the
Compensation Committee could designate any participant to receive an Herbalife
Matching Contribution of 20% of his or her annual base salary if the Annual
Deferral Amount of such designated participant equaled or exceeded 10% of such
designated participants annual base salary. The Compensation Committee
designated Mr. Pair to receive the enhanced Herbalife Matching Contributions.
In connection with a separation and general release agreement between Mr. Pair
and the Company, Mr. Pair received a payment under the Deferred Compensation
Plan and, as a result, is not entitled to any further payments under this plan.
For more information regarding payments made to Mr. Pair under this separation
and general release agreement, see  Employment Contracts, Termination of
Employment and Change in Control Arrangements. Effective January 1, 2002, the
Senior Executive Plan was amended to provide that the amount of the Herbalife
Matching Contributions is to be determined by the Company in its discretion.

Each participant in a Deferred Compensation Plan may determine how his or
her Annual Deferral Amount and Herbalife Matching Contributions (if any) will
be deemed to be invested by choosing among several investment funds or indices
designated by the Deferred Compensation Committee. The Deferred Compensation
Plans, however, do not require the Company to actually acquire or hold any
investment fund or other assets to fund the Deferred Compensation Plans. The
entire interest of each participant in a Deferred Compensation Plan is always
fully vested and nonforfeitable. In connection with a participants election
to defer an Annual Deferral Amount, the participant may also elect to receive a
short-term payout, equal to the Annual Deferral Amount and the Herbalife
Matching Contributions attributable thereto plus earnings and payable two or
more years from the first day of the year in which the Annual Deferral Amount
is actually deferred. Subject to the short term payout provision and specified
exceptions for unforeseeable financial emergencies, a participant may not
withdraw, without incurring a ten percent (10%) withdrawal penalty, all or any
portion of his or her account under the Deferred Compensation Plans prior to
the date that such participant either (1) is determined by the Deferred
Compensation Committee to have incurred permanent and total disability or (2)
dies or otherwise terminates employment with the Company.

Retirement Plan.The Company adopted, effective September 1997, a
Supplemental Executive Retirement Plan (the Retirement Plan) providing
retirement benefits for a select group of management and highly compensated
employees. The Retirement Plan was amended in October 2000. The Retirement
Plan is unfunded and its benefits are paid from general assets of the Company,
except that the Company has contributed amounts to a rabbi trust whose assets
will be used to pay benefits if the Company remains solvent, but can be reached
by creditors of the Company if the Company becomes insolvent. The normal
retirement benefit under the Retirement Plan is 60 quarterly installment
payments commencing at age 65, each of which equals one-quarter of 2.00% of
compensation times the number of years of service, up to 20 years. The term
compensation for this purpose means the average yearly base compensation of
the five calendar years within the last 10 years of employment that would yield
the highest average. A participant may elect at any time to receive a lump sum
equal to 90% of the actuarial equivalent of his or her vested benefits under
the Retirement Plan, in which case the participant will forfeit his or her
remaining benefits under such plan and cease to participate in such plan.

A participant who reaches the early retirement date may choose to retire
and to receive an early retirement benefit equal to the normal retirement
benefit. A participant who becomes disabled will receive a benefit equal to
his normal retirement benefit. A participant generally reaches his or her
early retirement date when he or she completes 10 years participation in the
plan and reaches age 55. Under the Retirement Plan, the Company may, in its
discretion, credit a participant with additional years of service as of a
participants date of hire or date of participation in the Retirement Plan. An
employee whose employment with the Company terminates before he or she reaches
his or her early retirement date will receive the actuarial equivalent of his
or her vested benefits paid in a lump sum within 90 days of the termination. A
participant becomes fully vested in his or her interest in the Retirement Plan
on his or her normal or early retirement date, death, or disability. If a
participants employment is terminated for cause, the Company has the
discretion to reduce his or her vested benefit to zero. In all other cases,
the Company determines a participants vested interest as follows:

9



---



##### Table of Contents



|                               |   |            |        |     | 
|------------------------------ | - | ---------- | ------ | --- | 
|                               |   |            | Vested
|Years of Participation in Plan |   | Percentage
|                               |   |           
|less than 5                    |   |            | 0      | %  
|                               | 5 |            |        | 20  | 
|                               | 6 |            |        | 40  | 
|                               | 7 |            |        | 60  | 
|                               | 8 |            |        | 80  | 
|                               | 9 |            |        | 100 | 

The administrator of the Retirement Plan has the discretion to credit a
participant with additional years of service as of his or her commencement of
participation in the Retirement Plan.

For illustration purposes only, the following table provides examples of
the annual benefit payable under the Retirement Plan beginning at age 65.

|             |           |    |  |                  |         |    |  |    |         |    |  |   |         |  |  |   |         |  |  |   |         | 
|------------ | --------- | -- |  | ---------------- | ------- | -- |  | -- | ------- | -- |  | - | ------- |  |  | - | ------- |  |  | - | ------- | 
|             |           |    |  | Years of Service
|             |           |    |  |                 
|Compensation |           | 15 |  | 20               |         | 25 |  | 30 |         | 35
|             |           |    |  |                  |         |    |  |    |         |   
|$            | 125,000   |    |  | $                | 37,500  |    |  | $  | 50,000  |    |  | $ | 50,000  |  |  | $ | 50,000  |  |  | $ | 50,000  | 
|             | 150,000   |    |  |                  | 45,000  |    |  |    | 60,000  |    |  |   | 60,000  |  |  |   | 60,000  |  |  |   | 60,000  | 
|             | 175,000   |    |  |                  | 52,500  |    |  |    | 70,000  |    |  |   | 70,000  |  |  |   | 70,000  |  |  |   | 70,000  | 
|             | 200,000   |    |  |                  | 60,000  |    |  |    | 80,000  |    |  |   | 80,000  |  |  |   | 80,000  |  |  |   | 80,000  | 
|             | 225,000   |    |  |                  | 67,500  |    |  |    | 90,000  |    |  |   | 90,000  |  |  |   | 90,000  |  |  |   | 90,000  | 
|             | 250,000   |    |  |                  | 75,000  |    |  |    | 100,000 |    |  |   | 100,000 |  |  |   | 100,000 |  |  |   | 100,000 | 
|             | 275,000   |    |  |                  | 82,500  |    |  |    | 110,000 |    |  |   | 110,000 |  |  |   | 110,000 |  |  |   | 110,000 | 
|             | 300,000   |    |  |                  | 90,000  |    |  |    | 120,000 |    |  |   | 120,000 |  |  |   | 120,000 |  |  |   | 120,000 | 
|             | 400,000   |    |  |                  | 120,000 |    |  |    | 160,000 |    |  |   | 160,000 |  |  |   | 160,000 |  |  |   | 160,000 | 
|             | 500,000   |    |  |                  | 150,000 |    |  |    | 200,000 |    |  |   | 200,000 |  |  |   | 200,000 |  |  |   | 200,000 | 
|             | 600,000   |    |  |                  | 180,000 |    |  |    | 240,000 |    |  |   | 240,000 |  |  |   | 240,000 |  |  |   | 240,000 | 
|             | 700,000   |    |  |                  | 210,000 |    |  |    | 280,000 |    |  |   | 280,000 |  |  |   | 280,000 |  |  |   | 280,000 | 
|             | 800,000   |    |  |                  | 240,000 |    |  |    | 320,000 |    |  |   | 320,000 |  |  |   | 320,000 |  |  |   | 320,000 | 
|             | 900,000   |    |  |                  | 270,000 |    |  |    | 360,000 |    |  |   | 360,000 |  |  |   | 360,000 |  |  |   | 360,000 | 
|             | 1,000,000 |    |  |                  | 300,000 |    |  |    | 400,000 |    |  |   | 400,000 |  |  |   | 400,000 |  |  |   | 400,000 | 
|             | 1,100,000 |    |  |                  | 330,000 |    |  |    | 440,000 |    |  |   | 440,000 |  |  |   | 440,000 |  |  |   | 440,000 | 
|             | 1,200,000 |    |  |                  | 360,000 |    |  |    | 480,000 |    |  |   | 480,000 |  |  |   | 480,000 |  |  |   | 480,000 | 

Messrs. Tirelli, Sages, Sandler, Kane and Ms. Hannah have 0, 0, 5, 8, and
17 years of participation, respectively. Compensation covered by the
Retirement Plan is equal to the amounts set forth in Summary Compensation
Table under the heading Salary. In connection with separation and general
release agreements between the Company and Messrs. Pair and Gerrity, Messrs.
Pair and Gerrity each received a payment under the Retirement Plan and, as a
result, are not entitled to any further payments under this plan. For more
information regarding payments made to Messrs. Pair and Gerrity under these
separation and general release agreements, see  Employment Contracts,
Termination of Employment and Change in Control Arrangements.

401(k) Profit Sharing Plan.The Company maintains a tax-qualified profit
sharing plan pursuant to Sections 401(a) and 401(k) of the Code (the 401(k)
Plan). The 401(k) Plan allows any eligible employee, including specified
common-law employees, to contribute each pay period from 2% to 17% of the
employees earnings (but not in excess of $11,000 per year, as adjusted after
2002) or $12,000 in the case of those participants over 50 years of age for
investment in mutual funds held by the 401(k) Plans trust. The Company makes
contributions to the 401(k) Plan in an amount equal to 3% of the earnings of
each employee who elects to defer 2% or more of his or her earnings. The
401(k) Plan also imposes restrictions on the aggregate amount that may be
contributed by higher-paid employees in relation to the amount contributed by
the remaining employees. A participating employee is fully vested at all times
in his or her contributions and in the trust funds earnings attributable to
his or her contributions. The employee has no vested interest in the Companys
contributions and earnings of the trust fund attributable to the Companys
contributions until he or she completes three years of service with the Company, and the employee is not fully vested in the Companys contributions and
earnings of the trust fund attributable to the Companys

10



---



##### Table of Contents



contributions until he or she has completed five years of service with the
Company. To comply with changes in the law, the Plan will be amended,
effective January 1, 2002, to provide that an employee is 20% vested after two
years of service, and 40% vested after three years of service. However, an
employee becomes fully vested in the Companys contributions and earnings of
the trust fund attributable to the Companys contributions (1) upon the
employees death, (2) upon the employees disability, or (3) upon the employee
reaching the 401(k) Plans normal retirement age, which is the latter of age 65
and the completion of five years of service with the Company. An employee may
not withdraw all or any portion of his or her account prior to the date that
the employee either (1) incurs a hardship or (2) terminates employment with the
Company.

Executive Medical Plan.The Executive Medical Plan is an insured hospital
and medical reimbursement plan covering executives and key employees and their
dependents during the executive or employees employment by the Company. The
Executive Medical Plan provides coverage of medical expenses incurred beyond
the Companys basic plan. For the fiscal year ended December 31, 2001, the
Executive Medical Plans cost to the Company was approximately $92,258.

Executive Long-Term Disability Plan.The Executive Long-Term Disability
Plan is an insured disability plan covering executives and key employees. It
provides for extended disability insurance for its participants with premiums
paid by the Company. For the fiscal year ended December 31, 2001, the
Executive Long-Term Disability Plans cost to the Company was approximately
$15,047.

Executive Life Insurance Plan.The Executive Life Insurance Plan covers
executives and key employees and provides for life insurance benefits in excess
of those available under the Companys basic plan. Premiums are paid by the
Company. For the fiscal year ended December 31, 2001, the Executive Life
Insurance Plans cost to the Company was approximately $223,346.

Employment Contracts, Termination of Employment and Change in Control Arrangements.

Effective as of June 29, 2000, the Company adopted the Herbalife
International, Inc. Senior Executive Change in Control Plan (the Change in
Control Plan). Eligible employees (each an Eligible Employee and,
collectively, the Eligible Employees) are senior executives designated by the
Board of Directors. The Named Executive Officers who are currently Eligible
Employees are Messrs. Sandler and Kane and Ms. Hannah.

Under the Change in Control Plan, in the event of a Change in Control (as
defined in the Change of Control Plan), each Eligible Employee is entitled to
receive a severance payment (a Change in Control Payment) equal to three
times such Eligible Employees compensation. Compensation is defined as the
Eligible Employees annual base salary in effect immediately prior to the
Change in Control plus an amount equal to his or her cash bonus received in the
last full fiscal year prior to the Change in Control. The Change in Control
Payment will be reduced to the extent the Company is required to make severance
payments to the Eligible Employee under Worker Adjustment and Retraining
Notification Act, 29 U.S.C. § 2101 et seq. or other severance arrangements
between the Eligible Employee and the Company. The Change in Control Payment
will also be reduced to the extent necessary to preserve the Companys
deduction for the Change in Control Payment under Section 280G of the Code, and
to prevent the Eligible Employee from being subject to an excise tax on the
Change in Control Payment under Section 4999 of the Code. Each Eligible
Employee is also entitled to receive health benefits coverage for a period up
to three years following his or her termination of employment.

In consideration of the Change in Control Payment, each Eligible Employee
is required to agree (1) to enter into a Separation and General Release
Agreement with the Company, (2) not to use or disclose Confidential Information
of the Company (as defined in the Change in Control Plan), and (3) not to
solicit employees and distributors of the Company for a two-year period.

Executive Retention Plan.Effective as of March 15, 2001, the Company
adopted the Herbalife 2001 Executive Retention Plan (the Executive Retention
Plan). The purpose of the Executive Retention Plan is to provide financial
incentives for a select group of management and highly compensated employees of
the Company and its subsidiaries to continue to provide services to the Company
and its subsidiaries during the

11



---



##### Table of Contents



critical period immediately before and immediately after certain Change in
Control events. The participants in the Executive Retention Plan are a select
group of management and highly compensated employees who are designated by the
administrative committee of the Executive Retention Plan (the Administrative
Committee). The Administrative Committee is appointed by the Companys Board.
At present, the Committee has designated Messrs. Sandler, Kane, Klein and Ms.
Hannah and seven other senior executives to participate in the Executive
Retention Plan.

A participant becomes eligible to receive a benefit under the Executive
Retention Plan if he or she is employed by the Company or its subsidiaries 90
days before a Change in Control occurs, and either (a) stays employed by the
Company or its subsidiaries during the period beginning 90 days before the
Change in Control occurs and ending six months after the Change in Control
occurs, or (b) dies, retires, becomes disabled or has his or her employment
involuntarily terminated, during the period beginning 90 days before the Change
in Control occurs and ending six months after the Change in Control occurs.
For purposes of the Executive Retention Plan, a Change in Control includes
(i) the acquisition by any person or group (excluding the Estate of Mark
Hughes, the Mark Hughes Family Trust, or any persons or entities who receive
distributions of securities of the Company from such estate or trust) of more
than 50% of the combined voting power of the Company, (ii) the ceasing of the
existing directors as of the Companys 2000 annual shareholders meeting to
constitute more than 50% of the number of authorized directors of the Company,
except to the extent that new directors were approved by a vote of at least 50%
of the existing directors, (iii) a merger, consolidation, or reorganization of
the Company, or a sale or other disposition of all or substantially all of the
Companys assets, if, as a result of such a transaction, the persons who were
shareholders of the Company immediately before the transaction do not own at
least 50% of the combined voting power of the entities surviving or resulting
from such transaction, or of the purchaser of such assets, (iv) the filing of a
bankruptcy petition by or against the Company, the making by the Company of a
general assignment for the benefit of creditors, or the appointment on behalf
of the Company of a receiver, liquidator, trustee, or similar person. A
transaction described in clauses (i), (ii), or (iii) of the preceding sentence,
however, shall not constitute a Change in Control if, in connection with the
transaction, the Companys Board of Directors terminates the Companys Share
Purchase Rights Plan, amends the Share Purchase Rights Plan to exempt the
transaction from the application of the Share Purchase Rights Plan, or redeems
the rights issued under the Share Purchase Rights Plan. As a result, any
Change of Control transaction described in clauses (i)  (iii) above that is
negotiated with or approved by the Board will generally not result in the
payment of any benefits pursuant to the Executive Retention Plan. On April 10,
2002, the Companys Board of Directors amended the Share Purchase Rights Plan
so that the proposed merger transaction by and among the Company, WH Holdings
(Cayman Islands) Ltd. and WH Acquisition Corp. shall not be deemed to be a
Change in Control under the Executive Retention Plan. Thus, the proposed
merger, if consummated, will not result in the payment of any benefits pursuant
to the Executive Retention Plan.

The Company has established the Herbalife 2001 Executive Retention Trust
to provide benefits under the Executive Retention Plan. The Executive
Retention Trust is an irrevocable trust established with an institutional
trustee. The Administrative Committee of the Executive Retention Plan will
establish an individual account in the Executive Retention Trust for each
participant in the Executive Retention Plan. Until the occurrence of a Change
in Control, the Administrative Committee will control the investment of the
assets in the Executive Retention Trust, and will determine the allocation of
the assets of the Executive Retention Trust to the individual accounts of
participants. Each participant who qualifies for a benefit under the Executive
Retention Plan will receive a lump sum benefit equal to the dollar amount in
his or her individual account in the Executive Retention Trust. The benefit
shall be paid within 90 days after the participant qualifies for the benefit.
If a participants employment with the Company or its subsidiaries terminates
before the participant qualifies for a benefit under the Executive Retention
Plan, the participants account in the Executive Retention Trust will revert to
the Company. A participants benefit under the Executive Retention Plan will
be reduced, however, if the reduction is necessary to maximize the amount that
the participant would retain after payment of federal and state income taxes
and excise taxes under Section 4999 of the Code. As of March 31, 2002, the
value of the assets in the Executive Retention Trust was $7,165,000.

12



---



##### Table of Contents



Employment Contracts.The Company has entered into executive employment
agreements (each, an Employment Agreement) with each of the following Named
Executive Officers: Francis X. Tirelli, Robert A. Sandler, Brian L. Kane and
Carol Hannah (the Executive Officers). The Employment Agreements with
Messrs. Sandler and Kane and Ms. Hannah became effective as of August 20, 2000.
The Employment Agreement with Mr. Tirelli became effective November 1, 2001.
The Employment Agreements for each of Messrs. Kane and Sandler and Ms. Hannah
are for a three year term. The Employment Agreement for Mr. Tirelli is for a
one year term.

Under the terms of each Employment Agreement, in addition to his or her
annual salary, each Executive Officer is entitled to participate in incentive
compensation plans on the same basis as other comparable level executives.
Each Executive Officer is also entitled to certain other benefits paid for by
the Company, including, among other things, an automobile allowance (beginning
January 1, 2002, the automobile allowance became part of each Executive
Officers base pay) and participation in various benefit plans.

Under the terms of each Employment Agreement, if, at any time during the
term of the Employment Agreement, (1) the Company terminates the executives
employment without Cause (as defined in such agreement) or (2) the executive
terminates his or her employment for Good Reason (as defined in such
agreement), the Company must pay the executive (in addition to all accrued base
salary, bonus, benefits and other amounts the executive is entitled to) base
salary and target bonus for the balance of the Term (as defined in the
Agreement) plus one additional year of base salary and target bonus. The
executive is also entitled to receive all other benefits for a period of two
years following the termination. If the executive (1) dies or (2) becomes
disabled at any time during the term of the Employment Agreement, upon the
Death or Disability of the executive (as defined in such agreement), the
Company must pay the executive or his or her beneficiaries or estate (in
addition to all accrued base salary, bonus, benefits and other amounts the
executive is entitled to) executives base salary and target bonus for the
balance of the year plus one additional year of base salary and target bonus.

In the event the executives employment is terminated by the Company
without Cause, all stock option entitlements and agreements shall continue in
full force and effect and stock options shall vest pursuant to the executives
vesting schedules as if the executives employment had not been terminated. In
the event of the executives termination for any other reason, all unvested
options will terminate upon the effective date of such termination.

Mr. Tirelli is engaged as President and Chief Executive Officer of the
Company. For his services, Mr. Tirelli is entitled to receive an annual salary
of $900,000. Mr. Sandler is engaged as Executive Vice President, General
Counsel and Secretary of the Company. For his services, Mr. Sandler is
entitled to receive an annual salary of $860,000. Mr. Kane is engaged as
Executive Vice President and Chief Operating Officer of the Company. For his
services, Mr. Kane is entitled to receive an annual salary of $700,000. Ms.
Hannah is engaged as Executive Vice President  Sales of the Company. For her
services, Ms. Hannah is entitled to receive an annual salary of $752,500.

The Company also entered into an at-will employment agreement with Douglas
G. Sages on December 5, 2001 (the Sages Employment Agreement). Under the
terms of this agreement, the Company agreed to pay certain moving and
relocation expenses. In addition, under the terms of the Sages Employment
Agreement, if the Company terminates Mr. Sages without Cause, the Company must
pay Mr. Sages (in addition to all accrued base salary, bonus, benefits and
other amounts he is entitled to) one additional year of base salary and target
bonus. Mr. Sages is also entitled to receive all other benefits for a period
of one year following the termination, as well as the use of senior executive
outplacement services until a mutually acceptable replacement position is
obtained for him. Under the terms of the Sages Employment Agreement, Mr. Sages
is also entitled to participate in incentive compensation plans and receive
certain other benefits.

Mr. Sages is engaged as Executive Vice President, Chief Administrative
Officer and Chief Financial Officer of the Company. For his services, Mr.
Sages is entitled to receive an annual salary of $500,000.

13



---



##### Table of Contents



Termination of Employment.The Company has entered into Separation and
General Release Agreements with each of Christopher Pair and Timothy Gerrity.
The Separation and General Release Agreement with Mr. Pair (the Pair
Separation Agreement) became effective on October 19, 2001 and the Separation
and General Release Agreement with Mr. Gerrity (the Gerrity Separation
Agreement) became effective on December 31, 2001.

Under the Pair Separation Agreement, Mr. Pair is entitled to (1) a payment
of $547,975, which was paid to him on October 22, 2001, (2) a payment of
$1,140,000, which was paid to him on October 22, 2001, (3) eight separate
quarterly payments, each in the amount of $201,500, which commenced on
November 1, 2001, and (4) a final payment of $248,000, to be paid
simultaneously with the last quarterly payment of $201,500. In addition, under
this agreement, the Company paid Mr. Pair the $1,152,957 he was entitled to
under the Companys Senior Executive Retirement Plan, as well as the $1,639,645
he was entitled to under the Companys Senior Executive Deferred Compensation
Plan. All payments made to Mr. Pair under this agreement are to be made less
applicable withholding requirements. The Pair Separation Agreement further
provides that Mr. Pair is entitled to exercise his vested stock options for 90 days
following the date of such agreement and that his unvested options will
continue to be outstanding until September 1, 2002 and will accelerate under
certain circumstances. Under this agreement, Mr. Pair transferred all of his
interests in Herbalife of Japan K.K. (Herbalife of Japan) to the Company.

Under the Gerrity Separation Agreement, Mr. Gerrity is entitled to (1) a
payment of $381,443, which was paid to him on January 2, 2002 and (2) four
separate quarterly payments, each in the amount of $400,000,
commencing on June 30, 2002. In addition, under this agreement, the Company paid Mr. Gerrity the
$1,010,219 he was entitled to under the Companys Senior Executive Retirement
Plan, as well as the $3,052,169 he was entitled to under the Companys
Senior Executive Deferred Compensation Plan. All payments made to Mr. Gerrity
under this agreement are to be made less applicable withholding requirements.
The Gerrity Separation Agreement further provides that Mr. Gerrity is entitled to
exercise his vested stock options for 90 days following the date of such
agreement and that his unvested options will continue to be outstanding until
December 31, 2002 and will accelerate under certain circumstances. Under this
agreement, Mr. Gerrity transferred all of his interests in Herbalife of Japan
to the Company.

Compensation Committee Interlocks and Insider Participation.During 2001,
the Compensation Committee consisted of Messrs. Edward Hall, Christopher Miner,
Jeffrey Glassman and Frank Tirelli. On November 20, 2001, Mr. Tirelli resigned
from the Compensation Committee.

Performance Graph

The graph set forth below shows the value of an investment of $100 on
December 31, 1996 in each of (1) the Class A Common Stock, (2) the Nasdaq
Composite Index and (3) a designated peer group (the Peer Group). All values
assume the reinvestment of any dividends and are calculated as of December 31st
of each year.

The Peer Group is comprised of publicly traded companies possessing the
following characteristics similar to those of the Company:



| |  |  | Size, as measured by net sales;                                                                                                                                                       
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Similarity in selling methodology;                                                                                                                                                    
|
| |  |  | Distribution of comparable products, including the distribution of
weight control products, health and nutritional supplements, and skin,
hair or other personal care products; and/or
|
| |  |  | Relatively high insider ownership.                                                                                                                                                    

14



---



##### Table of Contents



Companies included in the Peer Group are: Mannatech, Inc.; Market America,
Inc.; Natures SunshineProducts, Inc.; Nu Skin Enterprises, Inc.; Reliv
International, Inc. and Usana Health Sciences, Inc.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
THE COMPANY, THE NASDAQ COMPOSITE INDEX AND THE PEER GROUP*

(COMPARISON GRAPH)

|         |  |                     |        |                        |  |            |        |  |  |  |        | 
|-------- |  | ------------------- | ------ | ---------------------- |  | ---------- | ------ |  |  |  | ------ | 
|         |  | Herbalife - Class A |        |                        |  |            |        |  |  | 
|         |  | Common Stock        |        | Nasdaq Composite Index |  | Peer Group
|         |  |                     |        |                        |  |           
|12/31/96 |  |                     | 100.00 |                        |  |            | 100.00 |  |  |  | 100.00 | 
|12/31/97 |  |                     | 66.27  |                        |  |            | 122.48 |  |  |  | 70.76  | 
|12/31/98 |  |                     | 46.46  |                        |  |            | 172.68 |  |  |  | 77.38  | 
|12/31/99 |  |                     | 49.20  |                        |  |            | 320.89 |  |  |  | 40.84  | 
|12/31/00 |  |                     | 27.65  |                        |  |            | 193.01 |  |  |  | 23.10  | 
|12/31/01 |  |                     | 55.01  |                        |  |            | 153.15 |  |  |  | 41.89  | 



---

|* |  | The stock price performance shown in the performance graph for the Class
A Common Stock is historical and is not necessarily indicative of future
stock price performance.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Item 12.Security Ownership of Certain Beneficial Owners and Management

The following table lists, as of March 8, 2002, information as to the
beneficial ownership of Class A Common Stock and Class B Common Stock by (i)
each of the Companys directors, (ii) the Companys Chief Executive Officer and
each of the other executive officers named in the Summary Compensation Table
under Compensation of Directors and Executive Officers  Executive
Compensation below, (iii) all directors and executive officers as a group, and
(iv) each person or entity believed by the Company to beneficially own more
than five percent (5%) of the Common Stock outstanding. In each instance,
information as to the number of shares owned and the nature of ownership has
been provided by the individuals identified or described and is not within the
direct knowledge of the Company.

15



---



##### Table of Contents



|                                                                    |                                                        |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|------------------------------------------------------------------- | ------------------------------------------------------ | ------------ | --------- | ------------ | ---------- | ------------ | --------- | ------------ | ---------- | ------------ | --------- |  |  |  | ---- | - |  |  | ---- | - | 
|                                                                    |                                                        |              | Number of |              |            |              |           |              | Number of  |              |           |  |  |  |     
|                                                                    |                                                        |              | Shares of |              | Percent of |              | Shares of |              | Percent of |              |          
|Name and Address of                                                 |                                                        | Class A      |           | Class A      |            | Class B      |           | Class B      |            | Percent of  
|Beneficial Owner (1)                                                |                                                        | Common Stock |           | Common Stock |            | Common Stock |           | Common Stock |            | Common Stock
|                                                                    |                                                        |              |           |              |            |              |           |              |            |             
|Mark Hughes Family Trust(2)                                         |                                                        |              | 6,271,001 |              |            |              | 55.4      | %            |            |              | 6,792,001 |  |  |  | 32.7 | % |  |  | 40.7 | %
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Francis X. Tirelli(3)                                               |                                                        |              | 0         |              |            |              | 0         |              |            |              | 83,334    |  |  |  | 0.4  | % |  |  | 0.3  | %
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Conrad Lee Klein(4)(5)                                              |                                                        |              | 97,916    |              |            |              | 0.9       | %            |            |              | 195,834   |  |  |  | 0.9  | % |  |  | 0.9  | %
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|John Reynolds(4)                                                    |                                                        |              | 66,696    |              |            |              | 0.6       | %            |            |              | 195,592   |  |  |  | 0.9  | % |  |  | 0.8  | %
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Robert A. Sandler(5)                                                |                                                        |              | 59,729    |              |            |              | 0.5       | %            |            |              | 137,083   |  |  |  | 0.7  | % |  |  | 0.6  | %
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Brian Kane (5)                                                      |                                                        |              | 32,917    |              |            |              | 0.3       | %            |            |              | 71,334    |  |  |  | 0.3  | % |  |  | 0.3  | %
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Carol Hannah(10)                                                    |                                                        |              | 97,301    |              |            |              | 0.9       | %            |            |              | 246,999   |  |  |  | 1.2  | % |  |  | 1.1  | %
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Douglas G. Sages (7)                                                |                                                        |              | 0         |              |            |              | 0         |              |            |              | 0         |  |  |  | 0    |   |  |  | 0    |  
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Christopher Pair(4)(6)                                              |                                                        |              | 0         |              |            |              | 0         |              |            |              | 0         |  |  |  | 0    |   |  |  | 0    |  
|                                                                    | 9903 Santa Monica Blvd.
Beverly Hills, CA 90012        |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Timothy Gerrity(8)                                                  |                                                        |              | 25,966    |              |            |              | 0.2       | %            |            |              | 223,333   |  |  |  | 1.1  | % |  |  | 0.8  | %
|                                                                    | 6601 Center Drive West
Suite 350
Los Angeles, CA 90045 |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Edward J. Hall(9)                                                   |                                                        |              | 27,667    |              |            |              | 0.2       | %            |            |              | 85,333    |  |  |  | 0.4  | % |  |  | 0.4  | %
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Christopher M. Miner(5)                                             |                                                        |              | 22,533    |              |            |              | 0.2       | %            |            |              | 76,667    |  |  |  | 0.4  | % |  |  | 0.3  | %
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Jeffrey L. Glassman                                                 |                                                        |              | 0         |              |            |              | 0         |              |            |              | 0         |  |  |  | 0    |   |  |  | 0    |  
|                                                                    | 1800 Century Park East
Los Angeles, CA 90067           |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|Fidelity Management & Research Company(11)                          |                                                        |              | 1,270,000 |              |            |              | 11.2      | %            |            |              | 2,411,000 |  |  |  | 11.6 | % |  |  | 11.5 | %
|                                                                    | 82 Devonshire Street
Boston, MA 02109                  |              |           |              |            |              |           |              |            |              |           |  |  |  |      |   |  |  |      |   | 
|All executive officers and directors as a group
   (11 persons)(12) |                                                        |              | 6,701,726 |              |            |              | 57.4      | %            |            |              | 8,107,510 |  |  |  | 37.1 | % |  |  | 44.2 | %



|(1) |  | To the Companys knowledge, the persons in this table have sole voting,
investment, and dispositive power, either directly or through one or more
entities controlled by such person, with respect to all shares of the
Common Stock shown as beneficially owned by them, subject to community
property laws, where applicable.                                                              
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Excludes 183,333 shares of Class A Common Stock and 366,666 shares of
Class B Common Stock owned by the Herbalife Family Foundation. Includes
875,001 shares of Class A Common Stock and 999,999 shares of Class B
Common Stock owned by the Estate of Mark Hughes.                                                                                                                          
|   
|   
|   
|   
|(3) |  | Mr. Tirelli became President and Chief Executive Officer effective
November 1, 2001. Consists of shares issuable upon exercise of stock
options that are exercisable presently or within 60 days.                                                                                                                                                                                            
|   
|   
|   
|   
|(4) |  | The Mark Hughes Family Trust (the Trust) has three co-trustees (each of
who shall be referred to as a Co-Trustee and collectively as the
Co-Trustees): Messrs. Pair, Klein and Reynolds. The Trust is a trust
organized under the laws of the State of California.                                                                                                                     
|   
|   
|   
|   
|    |  | As a result of the death of Mark Hughes on May 21, 2000, the Trust became
irrevocable, Mark Hughes ceased to be sole trustee thereof, and the
Co-Trustees acquired voting and dispositive power over all of the Herbalife
shares formerly beneficially owned or controlled by Mr. Hughes. At the
present time, all decisions of the Trust are made by a majority of the three
Co-Trustees and

16



---



##### Table of Contents



|     |  | no single Co-Trustee has the right, by himself, to take action on behalf of
the Trust, unless authorized to do so by a majority of the three
Co-Trustees. Two of the Co-Trustees, Conrad Lee Klein and John Reynolds,
also act as directors of the Herbalife Family Foundation, but have no
pecuniary interest in the shares owned by the Herbalife Family Foundation.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|     |  | As set forth in this table, each of the Co-Trustees owns certain securities
of the Company in which the Trust has no interest.                                                                                                                                                                                                                                        
|    
|    
|    
|    
|(5)  |  | Consists of shares issuable upon exercise of stock options that are
exercisable presently or within 60 days.                                                                                                                                                                                                                                                          
|    
|    
|    
|    
|(6)  |  | Mr. Pairs employment with the Company terminated on October 19, 2001.                                                                                                                                                                                                                                                                                                
|    
|    
|    
|    
|(7)  |  | Mr. Sages became Executive Vice President, Chief Administrative Officer
and Chief Financial Officer effective December 10, 2001.                                                                                                                                                                                                                                      
|    
|    
|    
|    
|(8)  |  | Mr. Gerritys employment with the Company terminated on December 31,
2001.                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(9)  |  | Includes 25,334 shares of Class A Common Stock and 80,667 shares of Class
B Common Stock issuable upon exercise of stock options which are
exercisable presently or within 60 days.                                                                                                                                                                                   
|    
|    
|    
|    
|(10) |  | Includes 85,634 shares of Class A Common Stock and 223,666 shares of
Class B Common Stock issuable upon exercise of stock options which are
exercisable presently or within 60 days.                                                                                                                                                                                  
|    
|    
|    
|    
|(11) |  | Information based on Bloomberg service report, as of April 2, 2002.                                                                                                                                                                                                                                                                                                   
|    
|    
|    
|    
|(12) |  | Includes an aggregate of 350,029 shares of Class A Common Stock and
1,091,918 shares of Class B Common Stock issuable upon exercise of stock
options which are exercisable presently or within 60 days.                                                                                                                                                               




Item 13.Certain Relationships and Related Transactions

In 1996, the Company began to seek regulatory approvals to make an initial
public offering of shares of Herbalife of Japan K.K. in Japan. On December 30,
1996, in preparation for the possible offering, the Company sold shares of
Herbalife of Japan K.K. to some of its directors and executive officers, as
well as to resident managers of Herbalife of Japan K.K., as an incentive for
increased efforts to facilitate the operation of the Herbalife of Japan K.K.
business and the success of the offering. The following table lists the
purchasers of the shares, the percentage of Herbalife of Japan K.K.s
outstanding shares represented thereby, and the purchase price paid by each
individual as of the date of the sale:

|                 |       |        |               |          |           |   |           |           | 
|---------------- | ----- | ------ | ------------- | -------- | --------- | - | --------- | --------- | 
|                 |       |        | Percentage of |          |           |   |          
|                 |       |        | Herbalife of  |          |           |   |          
|                 |       |        | Japan K.K.    |          | Aggregate
|Name             |       | Shares |               | Price(1)
|                 |       |        |               |         
|Mark Hughes (2)  |       |        | 5.000         | %        |           | $ | 3,300,000 |          
|Christopher Pair |       |        | 0.575         |          |           |   | 379,500   |          
|Timothy Gerrity  |       |        | 0.575         |          |           |   | 379,500   |          
|Other            |       |        | 0.850         |          |           |   | 561,000   |          
|                 |       |        |               |          |           |   |           |          
|                 | Total |        |               | 7.000    | %         |   | $         | 4,620,000 | 
|                 |       |        |               |          |           |   |           |          



---

|(1) |  | The purchase price for shares of Herbalife of Japan was denominated in
Japanese yen. The dollar amounts reflect conversion at the yen-to-dollar
exchange rate in effect on the date of purchase of the shares.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Mr. Hughes died on May 21, 2000. The shares of Herbalife of Japan, K.K.
formerly owned by Mr. Hughes are held by the Estate of Mark Hughes.                                                                   

The purchase price for the shares was determined, in part, based upon a
formula prescribed by a Japanese regulatory authority responsible for some
aspects of public offerings of securities in that country, as applied to
Herbalife of Japan, K.K.s 1995 results of operations. The Board of Directors
separately sought and obtained a valuation of the shares from an independent
investment banking firm, Houlihan, Lokey, Howard & Zukin, Inc., which rendered
an opinion to the effect that the fair market value of the capital stock of
Herbalife of Japan was $66 million. This amount was in excess of the formula
prescribed by the Japanese regulatory authority. Consequently, the purchase
price per share was increased to the fair market value of the shares, as
indicated in the Houlihan, Lokey, Howard & Zukin opinion. The Board of
Directors, based in part on the Houlihan, Lokey, Howard & Zukin opinion and the
determination of price
17Table of Contents

derived under the formula (which is utilized generally in Japan in
connection with public offerings), and taking into account the uncertainty of
completion of the offering in Japan and other pertinent factors, has determined
that the purchase price reflects the fair market value of the shares.

For each of the foregoing individuals, the purchase price for the shares
was paid approximately 30% in cash and approximately 70% in the form of a full
recourse promissory note bearing interest at 6.31% per annum in the case of Mr.
Hughes (loan denominated in U.S. dollars) and 2.125% per annum in the case of
each individual other than Mr. Hughes (loans denominated in Japanese yen), with
principal and accrued interest payments due over five years ending December 31,
2001. As of December 31, 2001, there was no outstanding principal and accrued
obligations on the promissory notes.

In 2001, Messrs. Pair and Gerrity each received dividends on their
respective shares in the amounts of $77,181. During this same time, an
aggregate amount of $671,141 of dividends have been declared and paid on the
Herbalife of Japan shares held by the Mark Hughes Family Trust. Under the
terms of the Pair Separation Agreement and the Gerrity Separation Agreement,
each of Messrs. Pair and Gerrity transferred their respective interests in
Herbalife of Japan to the Company.

The boards of directors of Herbalife of Japan and the Company have
initiated steps in Japan that are expected to result in the repurchase of the
minority interest in Herbalife of Japan for cash. At the conclusion of these
steps, Herbalife of Japan will again be a wholly owned subsidiary of the
Company. The valuation of Herbalife of Japan for purposes of the repurchase
will be based upon a valuation methodology identical to that used when the
minority interest was issued, and will be supported by a valuation opinion
issued by an independent third party valuation firm. The repurchase remains
subject to various Japanese judicial and regulatory approvals.

In accordance with the 1994 Plan, the Company made advances of targeted
performance bonus amounts during 2001 and 1999 to Mr. Sandler, during 2001 to
Mr. Kane, and during 1999 and 2000 to Mr. Pair. As of December 31, 2001, the
remaining outstanding principal and accrued interest obligations for Mr.
Sandler and Mr. Kane were $165,509 each and for Mr. Pair was $0. During 2001,
the highest outstanding principal and accrued interest obligations were
$165,509 each in the case of Mr. Sandler and Mr. Kane and $1,079,019 in the case of
Mr. Pair. Each advance is a full recourse obligation of the executive with a
maturity date not exceeding two years following the date of the advance. In
addition, the advances bear interest at the applicable federal rate (AFR) for
two-year notes at the time of advances. The interest rates for any outstanding
advances during 2001 ranged from 4.25% to 6.45%.

The Company made additional advances to Mr. Kane. As of January 1, 2001,
the advance balance was $83,650 including interest at a rate of 6.15%. The
balance plus interest was fully paid by September 14, 2001.

On May 21, 2001, the estate of Mark Hughes (the Estate) exercised 1.9
million stock options. A short-term full-recourse loan in the amount of
$13,625,000 was issued to the Estate to finance the exercise. The loan balance
as of June 30, 2001 was $13,732,000 including interest at a rate of 7% per
annum. The receivable balance plus interest was fully paid on July 3, 2001.

Mr. Sandler and a Senior Executive of the Company are minority
shareholders in B.L.I. Holdings, Inc., a holding company for two of the
Companys suppliers of personal care products. Total purchases from B.L.I.
Holdings, Inc. and its subsidiaries were $495,000 for 2001.

For information regarding separation and general release agreements we
have entered into with Messrs. Pair and Gerrity, please see Compensation of
Directors and Executive Officers  Executive Compensation  Employment
Contracts, Termination of Employment and Change in Control Arrangements.

18



---



##### Table of Contents



Subsequent Events

On April 10, 2002, the Company announced it had entered into an Agreement
and Plan of Merger (the Merger Agreement), under which WH Holdings (Cayman
Islands), Ltd., a Cayman Islands corporation (Parent) will acquire the
Company in a cash-for-stock transaction, with an aggregate purchase price of
approximately $685 million.

The Merger Agreement sets forth the terms and conditions of the merger of
a wholly owned subsidiary of Parent with and into the Company. Upon
consummation of the proposed merger, the Company will become a wholly-owned
indirect subsidiary of Parent. In the merger, holders of the Companys Class A
and Class B Common Stock will have the right to receive $19.50 per share in
cash.

Consummation of the merger is subject to a number of customary conditions,
including the approval of the merger by the stockholders of the Company and
receipt of all necessary regulatory approvals. The merger is anticipated to
close in the late second quarter or early third quarter 2002.

19



---



##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date: April 30, 2002

HERBALIFE INTERNATIONAL, INC.
(Registrant)

| |     |                      | 
| | --- | -------------------- | 
| | By: | /s/ DOUGLAS G. SAGES | 

Douglas G. Sages
Executive Vice President, Chief Administration Officer &
Chief Financial Officer


20