exv10w78






Exhibit 10.78




HERBALIFE LTD.

AMENDED AND RESTATED

INDEPENDENT DIRECTORS DEFERRED COMPENSATION AND STOCK UNIT PLAN




AMENDMENT




     Pursuant to Section 9 of the Herbalife Ltd. Amended and Restated Independent Directors
Deferred Compensation and Stock Unit Plan (the “Independent Directors Plan”), the
Independent Directors Plan is hereby amended as follows, effective as
of January 27, 2009:



     1. Section 1 of the Independent Directors Plan is hereby amended by deleting the third
sentence of the first paragraph thereof in its entirety and replacing it with the following:




“Prior to January 1, 2009, the Independent Directors Plan provided for the award of Stock
Units under Section 9 of the Herbalife Ltd. 2005 Stock Incentive Plan (the “Plan”). From
and after January 1, 2009, the Independent Directors Plan provides for the award of Stock
Appreciation Rights under Section 8 of the Plan.”



     2. Section 1 of the Independent Directors Plan is hereby amended by deleting the second
paragraph thereof in its entirety and replacing it with the following:




     “The purpose of the Plan is to facilitate equity ownership in the Company by its
Independent Directors through the award of equity-based compensation awards under the Plan.
“



     3. Section 2(c) of the Independent Directors Plan is hereby deleted in its entirety and
replaced with the following:




     “(c) ‘Grant Date’ means a date on which Stock Units or Stock Appreciation
Rights are granted pursuant this Independent Directors Plan.”



     4. Section 4 of the Independent Directors Plan is hereby deleted in its entirety and replaced
with the following:



     “4. Eligibility and Participation.




     All Independent Directors shall be eligible to participate in this Independent
Directors Plan and receive awards of Stock Units or Stock Appreciation Rights, as
applicable, hereunder from time to time.”



     5. Section 5 of the Independent Directors Plan is hereby amended to add the following new
subsection (g) to the end thereof:




     “(g) Notwithstanding anything herein to the contrary, no Stock Units shall be awarded
under this Independent Directors Plan on or after January 1, 2009.”



 









 





     6. The Independent Directors Plan is hereby amended to add the following new Section 5A
immediately following the existing Section 5 thereof:



     “5A. Stock Appreciation Right Awards.




     (a)
2009 Plan Year Grant. On February 27, 2009, the Committee shall grant to each
Independent Director, pursuant to Section 8 of the Plan, a number of Stock Appreciation
Rights equal to the quotient of One Hundred Thousand Dollars ($100,000) divided by the “fair
value” (as determined by the Company in accordance with Financial Accounting Standards
Board’s Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based
Payment or such revised standard as then applicable (“FAS 123R”)) of one Stock
Appreciation Right on such date, rounded to the nearest whole number.




     (b) Grants Upon Initial Election to Board. Unless otherwise determined by the
Committee, with respect to each Independent Director who commences service on the Board
after February 27, 2009, upon such Independent Director’s commencement of service as a
member of the Board the Committee shall grant to such Independent Director, pursuant to
Section 8 of the Plan, a number of Stock Appreciation Rights equal to (i) the quotient of
One Hundred Thousand Dollars ($100,000) divided by the “fair value” (as determined by the
Company in accordance with FAS 123R) of one Stock Appreciation Right on such date, rounded
to the nearest whole number, multiplied by (ii) a fraction, the numerator of which equals
(A) 365 minus (B) the number of days during the year that
have elapsed from February 27 through such date and the
denominator of which equals 365.




     (c) Annual Grants. Unless otherwise determined by the Committee, on February 27 of each
twelve month period beginning with and after February 27, 2009 (or the business day, if different, whereupon annual
equity awards are made to Company employees), the Committee shall grant, pursuant to Section 8
of the Plan, to each Independent Director who is serving as a member
of the Board as of such date, a number of Stock Appreciation Rights equal to the quotient of One Hundred
Thousand Dollars ($100,000) divided by the “fair value” (as determined by the Company in
accordance with FAS 123R) of one Stock Appreciation Right on such date, rounded to the
nearest whole number.




     (d) Base Price. The Base Price for each award of Stock Appreciation Rights shall be
the closing price of the Common Shares on the date of grant.




     (e) Award Agreement. Each award of Stock Appreciation Rights shall be evidenced by an
award agreement entered into between the Company and the applicable Independent Director and
shall be subject to all of the terms and conditions set forth herein and in the Plan.




     (f) Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Right awards
made pursuant to this Section 5A shall be subject to the following terms and conditions:




          (i) Each Stock Appreciation Right shall represent the right to receive, upon exercise
of the Stock Appreciation Right, a payment, paid in Common Shares, equal



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to (i) the excess of the Fair Market Value, on the date of exercise, of one Common
Share (as adjusted pursuant to Section 12 of the Plan) over the Base Price of the Stock
Appreciation Right, divided by (ii) the Fair Market Value, on the date of exercise, of one
Common Share.




          (iii) Unless determined otherwise by the Committee at the time of grant and set forth
in an award agreement, subject to the applicable Independent Director’s continuous service
as a member of the Board, awards of Stock Appreciation Rights pursuant to Section 5A(a) or
Section 5A(c) shall become vested with respect to twenty-five percent (25%) of the number of
Stock Appreciation Rights subject to the award on each of
May 27, August 27 and November 27
of the calendar year in which the award is granted and February 27 of the calendar year
following the year in which the award is granted (each such date is referred to herein as a
“Vesting Date”); provided, however, that no Stock Appreciation Right, whether vested
or unvested, may be exercised prior to the date specified in Section 5A(g) of this
Independent Directors Plan.




          (iv) Unless determined otherwise by the Committee at the time of grant and set forth in
an award agreement, subject to the applicable Independent Director’s continuous service as a
member of the Board, awards of Stock Appreciation Rights pursuant to Section 5A(b) shall
become vested in equal installments on each of the Vesting Dates that occur after the Grant
Date and on or prior to the next following February 27th; provided, however, that no Stock
Appreciation Right, whether vested or unvested, may be exercised prior to the date specified
in Section 5A(g) of this Independent Directors Plan.




          (v) In the event that an Independent Director ceases to serve as a member of the Board
for any reason, all Stock Appreciation Rights held by such Independent Director at the time
of such cessation that have not yet become vested shall be immediately forfeited; provided,
however, that in the event of the Independent Director’s disability (as such term if defined
in Section 22(e) of the Code) or death, the Committee may, in its sole discretion,
accelerate the vesting of any unvested Stock Appreciation Rights then held by such
Independent Director.




          (vi) Notwithstanding anything herein to the contrary, in the event of a Change of
Control all unvested Stock Appreciation Rights shall be deemed fully vested and exercisable
immediately prior to the consummation of the Change of Control.




     (g) Exercisability of Stock Appreciation Right Awards.




          (i) Subject to the applicable Independent Director’s continuous service as a member of
the Board, Stock Appreciation Rights granted under this Section 5A that become vested
pursuant to this Section 5A hereof shall be exercisable by the Independent Director on and
after the second anniversary of the final Vesting Date of the award pursuant to this Section
5A and shall remain exercisable until the seventh (7th) anniversary of the Grant
Date.



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          (ii) In the event that an Independent Director ceases to serve as a member of the Board
for any reason prior to the second anniversary of the final Vesting Date of an award of
Stock Appreciation Rights pursuant to this Section 5A, Stock Appreciation Rights previously
granted that vested on or prior to such cessation of service shall be exercisable by the
Independent Director on and after the date of such cessation of service and shall remain
exercisable until the seventh (7th) anniversary of the Grant Date.”



     7. Section 6(a)(i) of the Independent Directors Plan is hereby amended to add the following
sentence to the end thereof:




     “Notwithstanding anything herein to the contrary, no deferrals shall be made pursuant
to this Independent Directors Plan from and after January 1, 2009.”



     8. Section 6(b) of the Independent Directors Plan is hereby amended to add the following new
subsection (ix) to the end thereof:




     “(ix) Section 457A. Notwithstanding anything herein to the contrary, to the
extent necessary for this Independent Directors Plan to comply with Section 457A of the
Code, all amounts deferred pursuant to this Independent Directors Plan and not distributed
in accordance with the terms hereof before December 31, 2017 shall be distributed in lump
sum to the applicable Participant on December 31, 2017.”



     Except as modified by this Amendment, the Independent Directors Plan shall remain unchanged
and shall remain in full force and effect.





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