EXHIBIT 10.22


 


EMPLOYMENT AGREEMENT


 


This
Employment Agreement (the “AGREEMENT”), dated as of March 10, 2003 (the “EFFECTIVE
DATE”), is made and entered by and between Carol Hannah (the “EXECUTIVE”) and
HERBALIFE INTERNATIONAL, INC., a Nevada corporation (“PARENT”), and HERBALIFE
INTERNATIONAL OF AMERICA, INC., a California corporation (“OPERATING COMPANY”)
(collectively, Parent and Operating Company are referred to herein as the “COMPANY”).
This Agreement amends, restates and replaces in its entirety that certain
Employment Agreement among the parties hereto dated as of August 20, 2000,
as the same may have been amended or modified.


 


RECITALS


 


A.                                   The Company is
engaged primarily in the distribution of weight management, nutritional and
personal care products through a “multi-level” marketing system.


 


B.                                     The Company
desires to be assured of the services of Executive by employing Executive in
the capacity and on the terms set forth below.


 


C.                                     Executive
desires to commit himself or herself to serve the Company on the terms herein
provided.


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of the foregoing and of the respective covenants
and agreements set forth below, the parties hereto agree as follows:


 


1.                                       Employment
Period. The Company shall continue to employ Executive and Executive shall
continue in the employ of the Company for the period commencing on the
Effective Date and ending on the date that is three (3) years thereafter,
unless sooner terminated in accordance with the provisions of this Agreement
(the “TERM”). After the Term, the parties may (but shall be under no obligation
to), by written agreement, renew or extend the term of the Agreement for an
additional period or periods. The term of each renewal period of this Agreement
is referred to herein as a “RENEWAL PERIOD”; and references to the “TERM” shall
mean the period beginning on the Effective Date and ending on the date of
termination of Executive’s services for the Company, whether at the end of the
Term or a Renewal Term or otherwise in accordance with the provisions of this
Agreement. Upon expiration of the Term, except as expressly set forth herein
(including in Section 5 and Section 6), this Agreement and all of its
provisions shall terminate and shall cease to have any force or effect.


 


2.                                       Duties.


 


(a)                                  During the Term,
Executive shall serve as a Co-President of the Company, with such authority and
duties as are assigned to Executive from time to time by the Board of Directors
of Parent (the “BOARD”) or the Chief Executive Officer of Parent (“CEO”) that
are substantially similar to the authority and duties currently vested in
Executive by the Board. Each of the undersigned acknowledges and agrees that
the Company may, subsequent to the Effective Date, hire a CEO, and that any
such CEO hiring may result in a readjustment of Executive’s title, authority,
duties and responsibilities for the Company; provided that in no event shall
Executive’s title, authority, duties and responsibilities for the Company be
reduced, in the aggregate, below the level of such title, authority, duties and
responsibilities vested in Executive in his or her capacity as


 


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the
Executive Vice President of Sales of the Company prior to his or her promotion
to Co-President. Executive will work principally in the Los Angeles, California
offices of the Company, but will also conduct such business travel as is
reasonably required to fulfill his or her duties hereunder.  During the Term, Executive shall report to
the Board and/or the CEO.


 


(b)                                 During the Term,
Executive shall devote substantially all his  or her working time, attention, skill and
efforts to the  business and
affairs of the Company, will use his or her best  efforts to promote the success of the Company’s
business, and  shall not enter
the employ of or serve as a consultant to, any  other company; provided, however, the
foregoing shall not  preclude
Executive from devoting a reasonable amount of time  to managing Executive’s investments and
personal affairs and  to charitable
and civic activities.


 


3.                                       Compensation and
Related Matters.


 


(a)                                  Salary. During
the Term, Executive shall receive a salary at  the per annum rate of Seven Hundred Twelve
Thousand Five  Hundred Dollars
($712,500), payable semi-monthly or otherwise  in accordance with the Company’s payroll
practices for senior  executives.
Executive’s annual base salary shall be subject to  review from time to time for possible
increases by the Board.Executive’s base salary, as increased from time to time, shall  be referred to as the “BASE
SALARY.”


 


(b)                                 Expenses. The
Company shall reimburse Executive for all  reasonable travel and other reasonable
out-of-pocket businessexpenses incurred by Executive in the performance of his or  her duties under this
Agreement upon evidence of payment and  otherwise in accordance with the Company’s
policies and  procedures in
effect from time to time.


 


(c)                                  Employee
Benefits. During the Term, Executive shall be  entitled to participate in or receive benefits
under each  benefit plan or
arrangement made available by the Company to  its senior executives (including, without
limitation, those  relating to
group medical, dental, vision, long-term  disability and life insurance) on terms no


 


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less
favorable than those generally applicable to senior  executives of the Company, subject to and on a
basis  consistent with
the terms, conditions and overall  administration of such plans and subject to
the Company’s  right to modify,
amend or terminate any such plan or  arrangement. Executive’s individual
participation levels inthe Company’s and its affiliates’ equity compensation  arrangements (including stock
option plans) will be determined  by the Board in its sole discretion. In the
event the Company  or its
affiliates decide to grant Executive any stock options  or other equity compensation,
any such stock options or equity  compensation will be made pursuant to separate
written  agreements
between Executive and the Company or its  affiliates.


 


(d)                                 Bonus.
Notwithstanding any provision in this Agreement to the  contrary, Executive agrees
that he or she shall cease to be a  participant of and shall not be entitled to
any additional compensation or payments under the 1994 Performance-Based  Annual Incentive Compensation
Plan (the “1994 PLAN”) for any  period after June 30, 2002 and that the
termination of  participation in
the 1994 Plan will not cause any additional  benefit to be payable to Executive as a result
of such  termination.
Executive and the Board have separately  established Executive’s bonus opportunity and
bonus objectives  for the calendar
year ended December 31, 2003. For all  calendar years during the Term following the
calendar year  ended
December 31, 2003, Executive’s bonus opportunity will be  not less than the amount of
Executive’s bonus opportunity for  the calendar year ended December 31,
2003, it being agreedthat Executive’s individual bonus objectives will be  established on an annual
basis by the Board in its good faith  discretion.


 


(e)                                  Vacation.
Executive shall be entitled to five (5) weeks paid  vacation during each year of the Term. Unused
vacation in any  year shall carry
over to subsequent years without limitation,  unless otherwise provided in a vacation pay
policy that is  generally
applicable to the senior executives of the Company.


 


(f)                                    Deductions and
Withholdings. All amounts payable or which  become payable hereunder shall be subject to
all deductions  and withholding
required by law.


 


4.                                       Termination.
Executive’s services for the Company and the Term of this  Agreement may be terminated
under the following circumstances:


 


(a)                                  Death. Executive’s
services hereunder shall terminate upon his  or her death. In the case of Executive’s
death, the Company  shall pay (in
accordance with Section 4(f) hereof) to  Executive’s beneficiaries or estate, as
appropriate, (i) his  or her then
current accrued and unpaid Base Salary through his  or her date of death as well as 100% of any
accrued and unpaid  bonus for any
years preceding the year of termination (it  being expressly agreed that except as
hereinafter provided,


 


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Executive
shall have no rights to receive a bonus in respect  of the year in which termination occurs), (ii)
an additional  amount equal to
one year of Base Salary and Executive’s bonus  for the year of termination (it being agreed
that Executive’s  bonus for the
year of termination to be paid under this  Section 4(a) shall be deemed to be equal
to one year of Base  Salary), and
(iii) other benefits and payments (including,  without limitation, reimbursement of expenses
incurred  conducting
Company business pursuant to Section 3(b)) to which  Executive is then entitled
hereunder. Executive, his  beneficiaries or his estate, as appropriate, shall be entitled  to no other compensation
under this Agreement following, or as  a result of, a termination under these
circumstances.


 


(b)                                 Disability.


 


(i)                                     If a Disability
(as defined below) of Executive  occurs during the Term, the Board may give
Executive  written notice
of its intention to terminate his or  her employment. In such event, Executive’s
services  with the Company
shall terminate as of the date of  such notice. In the case of a termination as a
result of a Disability, the Company shall pay (in accordance  with Section 4(f)
hereof) to Executive (i) his or her  then current accrued and unpaid Base Salary
through  the effective
date of his or her termination as well  as 100% of any accrued and unpaid bonus for
any years  preceding the
year of termination (it being expressly  agreed that except as hereinafter provided,
Executive  shall have no
rights to receive a bonus in respect of  the year in which termination occurs), (ii) an
additional amount equal to one year of Base Salary  and Executive’s bonus for the year of
termination (it  being agreed
that Executive’s bonus for the year of  termination to be paid under this
Section 4(b) shallbe deemed to be equal to one year of Base Salary),  and (iii) other benefits and
payments (including,  without
limitation, reimbursement of expenses  incurred conducting Company business pursuant
to  Section 3(b))
to which Executive is then entitled  hereunder. Executive and his or her
beneficiaries, as  appropriate, shall
be entitled to no othercompensation under this Agreement following, or as a  result of, a termination
under these circumstances.


 


(ii)                                  For the purpose
of this Section 4(b), “DISABILITY”  shall mean Executive’s inability to perform
his or  her duties for the
Company on a full-time basis for  120 consecutive days or a total of 180 days in
any  twelve (12)
month period as reasonably determined by  the Board.


 


(c)                                  Termination by
the Company for Cause. The Board may terminate  Executive’s services hereunder for Cause (as
defined below) at  any time upon
written notice to Executive. In such event,  Executive’s services shall terminate as of the
date of


 


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such
notice. In the case of Executive’s termination for Cause,  the Company shall pay (in
accordance with Section 4(f) hereof)  to Executive (i) his or her then current
accrued and unpaid  Base Salary
through the effective date of his or her  termination as well as 100% of any accrued and
unpaid bonus  for any years
preceding the year of termination (it being  expressly agreed that Executive shall have no
rights to  receive a bonus
in respect of the year in which termination  occurs) and (ii) other benefits and payments
(including,  without
limitation, reimbursement of expenses incurred  conducting Company business pursuant to
Section 3(b)) to which  Executive is then entitled hereunder. Executive and his or her  beneficiaries, as
appropriate, shall be entitled to no other  compensation under this Agreement following,
or as a result  of, a
termination under these circumstances. For purposes of  this Agreement, the Board
shall have “CAUSE” to terminate  Executive’s services hereunder in the event of
any of the  following acts
or circumstances: (i) Executive’s commission of  a felony or any other act or omission
involving dishonesty,disloyalty or fraud with respect to the Company or any of its  affiliates or any of their
distributors, suppliers or other  material business relations; (ii) conduct by
Executive which  could reasonably
be expected to bring the Company or any of  its affiliates into substantial public
disgrace or disrepute;(iii) Executive’s substantial and repeated failure to perform Executive’s
lawful duties as contemplated in Section 2 of this  Agreement; (iv) Executive’s
gross negligence or willful  misconduct with respect to any material aspect of the business  of the Company or any of its
affiliates; (v) Executive’s  failure to comply in any material respect (including, without  limitation, the making of any
certifications requiredthereunder) with applicable laws, including, without  limitation, the Securities
Act of 1933, as amended, the  Securities Exchange Act of 1934, as amended, the  Sarbanes-Oxley Act of 2002,
as amended, or any of the rules  and regulations promulgated under any of the
foregoing laws;  or (vi) any
material breach of this Agreement or any material  breach of any other written agreement between
Executive and  the Company’s
affiliates governing Executive’s equity  compensation arrangements (i.e., any agreement
with respect to  Executive’s
stock and/or stock options of any of the Company’s  affiliates).


 


(d)                                 Termination by
Executive. Executive may terminate his or her  employment hereunder for any reason or no
reason, provided  that Executive
first gives the Company a written notice of  termination at least fifteen (15) calendar
days prior to the  effective date
of any such termination. In the event Executive  terminates his or her employment, the Company
shall pay (in  accordance with
Section 4(f) hereof) to Executive (i) his or  her current accrued and unpaid Base Salary
through the  effective date
of his or her termination as well as 100% of  any accrued and unpaid bonus for any year
preceding the year  of termination
(it being expressly agreed that Executive shall  have no rights to receive a bonus in respect
of the year in  which termination
occurs) and (ii) other benefits and payments  (including,


 


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without
limitation, reimbursement of expenses incurred  conducting Company business pursuant to
Section 3(b)) to which  Executive is then entitled hereunder. Executive and his or her  beneficiaries, as applicable,
shall be entitled to no other  compensation under this Agreement following, or as a result  of, a termination under these
circumstances.


 


(e)                                  Termination by
the Company Without Cause. The Board may  terminate Executive’s services hereunder
without Cause at any  time upon
written notice to Executive. In such event,  Executive’s services shall terminate as of the
date of such  notice. In the
event Executive’s services hereunder are  terminated by the Company without Cause, and
subject to  Executive’s
compliance with the terms of Section 5 and Section 6 herein, the
Company shall pay (in accordance with Section 4(f) hereof) to Executive
(i) his or her then current accrued  and unpaid Base Salary through the effective
date of his  termination as
well as 100% of any accrued and unpaid bonus  for any years preceding the year of
termination (it beingexpressly agreed that except as hereinafter provided,  Executive shall have no
rights to receive a bonus in respect  of the year in which termination occurs), (ii)
an additional  amount equal to
one year of Base Salary and Executive’s bonus  for the year of termination (it being agreed
that Executive’s  bonus for the
year of termination to be paid under this  Section 4(e) shall be deemed to be equal
to one year of Base  Salary), and
(iii) other benefits and payments (including, without limitation, reimbursement
of expenses incurred  conducting
Company business pursuant to Section 3(b)) to which  Executive is then entitled
hereunder. In addition, during the  one (1) year period immediately following the
date of  termination, the
Company shall continue to afford to Executive  the group medical, dental, vision, long-term
disability and  life insurance
specified in Section 3(c) above. Executive and  his or her beneficiaries, as applicable, shall
be entitled to  no other
compensation under this Agreement following, or as a  result of, a termination under these
circumstances. Executiveshall have no duty to seek to mitigate the above severance  benefits in the event of
termination hereunder without Cause,  and, subject to Executive’s compliance with
Section 5 and  Section 6
herein, any compensation derived by Executive from  alternative employment or otherwise shall not
reduce the  Company’s
obligations hereunder.


 


(f)                                    Payments to Executive.
Subject to Executive’s continuing  compliance with the provisions of
Section 5 and Section 6  herein, any amounts payable to Executive upon
his or her  termination of
employment under this Section 4 shall be paid  at such times as such amounts would have
otherwise been  payable to
Executive had Executive’s employment not been  terminated.


 


(g)                                 Resignation of
Offices. Promptly following any termination of  Executive’s employment with the Company (other
than by reason  of Executive’s
death),


 


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Executive
shall promptly deliver to the Company reasonably  satisfactory written evidence of Executive’s
resignation as a  member of the
board of directors and/or any office (e.g.,  office of Co-President) with the Company or
any of its  affiliates. The
Company shall be entitled to withhold payment  of any amounts otherwise due pursuant to this
Section 4 until  Executive has
complied with the provisions of this Section 4(g).


 


(h)                                 Release. As a
precondition to the Company’s obligations to  make any of the payments specified in Sections
4(a), 4(b) or  4(e) of this
Agreement, Executive or his or her guardian,  estate or heirs, as appropriate, shall execute
and deliver to  the Company an
enforceable and fully effective (i.e., there  shall be no further unsatisfied conditions to the  effectiveness thereof)
general release in form and substance  reasonably satisfactory to the Company.


 


(i)                                     Employee Benefit
Plan Rights. Following any termination of  Executive’s employment with the Company, any
rights that may  exist in
Executive’s favor to payment of any amount under any  employee benefit plan or arrangement of the
Company other than  those set forth
in this Agreement shall be made in accordance  with the terms and conditions of any such
employee benefit  plan or
arrangement.


 


5.                                       Confidential and
Proprietary Information.


 


(a)                                  The parties
agree and acknowledge that during the course of  Executive’s employment, Executive has been
given and will have  access to and be
exposed to trade secrets and confidential information in written, oral,
electronic and other forms  regarding the Company and its affiliates (which includes but  is not limited to all of its
business units, divisions and  affiliates) and their business, equipment, products and  employees, including, without
limitation: the identities of  the Company’s and its affiliates’ distributors and customers  and potential distributors
and customers (hereinafter referred  to collectively as “DISTRIBUTORS”), including,
without  limitation, the
identity of Distributors that Executive  cultivates or maintains while providing
services at the  Company or any
of its affiliates using the Company’s or any of  its affiliates’ products, name and
infrastructure, and theidentities of contact persons with respect to those  Distributors; the particular
preferences, likes, dislikes and  needs of those Distributors and contact
persons with respect  to product
types, pricing, sales calls, timing, sales terms,  rental terms, lease terms, service plans, and
other marketing  terms and
techniques; the Company’s and its affiliates’  business methods, practices, strategies,
forecasts, pricing,  and marketing
techniques; the identities of the Company’s and  its affiliates’ licensors, vendors and other
suppliers and the  identities of
the Company’s and its affiliates’ contact  persons at such licensors, vendors and other


 


7
















 


 


suppliers;
the identities of the Company’s and its affiliates’  key sales representatives and personnel and
other employees;  advertising and
sales materials; research, computer software  and related materials; and other facts and
financial and other  business
information concerning or relating to the Company or  any of its affiliates and their business,
operations,  financial
condition, results of operations and prospects.  Executive expressly agrees to use such trade
secrets and  confidential
information only for purposes of carrying out his  duties for the Company and its affiliates, and
not for any  other purpose,
including, without limitation, not in any way  or for any purpose detrimental to the Company
or any of its  affiliates.
Executive shall not at any time, either during the  course of his or her employment hereunder or
after the  termination of
such employment, use for himself or herself or  others, directly or indirectly, any such trade
secrets or  confidential
information, and, except as required by law,  Executive shall not disclose such trade
secrets or  confidential
information, directly or indirectly, to any other  person or entity. Trade secret and
confidential informationhereunder shall not include any information which (i) is  already in or subsequently
enters the public domain, other  than as a result of any direct or indirect
disclosure by  Executive, (ii)
becomes available to Executive on a  non-confidential basis from a source other
than the Company or  any of its
affiliates, provided that such source is not  subject to a confidentiality agreement or
other obligation of  secrecy or
confidentiality (whether pursuant to a contract,  legal or fiduciary obligation or duty or
otherwise) to the  Company or any
of its affiliates or any other person or entity  or (iii) is approved for release by the board
of directors of  the Company or
any of its affiliates or which the board of  directors of the Company or any of its
affiliates makes  available to
third parties without an obligation of  confidentiality.


 


(b)                                 All physical
property and all notes, memoranda, files,  records, writings, documents and other
materials of any and  every nature,
written or electronic, which Executive shall  prepare or receive in the course of his or her
employment with  the Company and
which relate to or are useful in any manner to  the business now or hereafter conducted by the
Company or any  of its
affiliates are and shall remain the sole and exclusive  property of the Company and
its affiliates, as applicable.  Executive shall not remove from the Company’s
premises any  such physical
property, the original or any reproduction of  any such materials nor the information
contained therein  except for the
purposes of carrying out his or her duties to  the Company or any of its affiliates and all
such property  (except for any
items of personal property not owned by the  Company or any of its affiliates), materials
and information  in his or her
possession or under his or her custody or  control upon the termination of his or her
employment shall be  immediately
turned over to the Company and its affiliates, as  applicable.


 


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(c)                                  All inventions,
improvements, trade secrets, reports, manuals,  computer programs, tapes and other ideas and
materials  developed or
invented by Executive during the period of his or  her employment, either solely or in
collaboration with others,  which relate to the actual or anticipated business or research  of the Company or any of its
affiliates which result from or  are suggested by any work Executive may do for
the Company or  any of its
affiliates or which result from use of the  Company’s or any of its affiliates’ premises
or property  (collectively,
the “DEVELOPMENTS”) shall be the sole and  exclusive property the Company and its
affiliates, as  applicable. Executive
assigns and transfers to the Company his  or her entire right and interest in any such
Development, and  Executive shall
execute and deliver any and all documents and  shall do and perform any and all other acts
and things  necessary or
desirable in connection therewith that the  Company or any of its affiliates may
reasonably request.


 


(d)                                 The provisions
of this Section 5 and Section 6 shall survive  any termination of this
Agreement and termination of  Executive’s employment with the Company.


 


6.                                       Non-Solicitation.


 


(a)                                  Executive
acknowledges that in the course of his employment  for the Company he or she has become and will
continue to  become familiar
with the Company’s and its affiliates’ trade  secrets and other confidential information
concerning the  Company and its
affiliates. Accordingly, Executive agrees  that, during the Term and for a period of
twelve (12) months  immediately
thereafter (the “NONSOLICITATION PERIOD”), he or  she will not directly or indirectly through
another entity (i)  induce or
attempt to induce any employee or Distributor of the  Company or any of its affiliates to leave the
employment of,  or cease to
maintain its distributor relationship with, the  Company or such affiliate, or in any way
interfere with the  relationship
between the Company or any such affiliate and any  employee or Distributor thereof, (ii) hire any
person who was  an employee of
the Company or any of its affiliates at any  time during the Nonsolicitation Period or
enter into a distributor relationship with any person or entity who was a  Distributor of the Company or
any of its affiliates at any  time during the Nonsolicitation Period, (iii) induce or  attempt to induce any
Distributor, supplier, licensor,  licensee or other business relation of the
Company or any of  its affiliates
to cease doing business with the Company or  such affiliate, or in any way interfere with
the relationship  between such
Distributor, supplier, licensor, licensee or  business relation and the Company or any of
its affiliates  (including,
without limitation, making any negative statements  or communications about the Company or any of
its affiliates)  or (iv) use any
trade secrets or other confidential  information of the Company or any of its
affiliates to  directly or
indirectly participate in any means or manner in  any Competitive Business, wherever


 


9
















 


 


located.
“COMPETITIVE BUSINESS” means the development,  marketing, distribution or sale of weight
management products,  nutritional
supplements or personal care products through  multi-level marketing or other direct selling
channels.  “PARTICIPATE”
includes any direct or indirect interest in any  enterprise, whether as an officer, director,
employee,  partner, sole
proprietor, agent, representative, independent  contractor, executive, franchisor, franchisee,
creditor,  owner,
distributor or otherwise; provided that the foregoing  activities shall not include
the passive ownership (i.e.,  Executive does not directly or indirectly participate in the  business or management of the
applicable entity) of less than  2% of the stock of a publicly-held corporation
whose stock is  traded on a
national securities exchange and which is not  primarily engaged in a Competitive Business.


 


(b)                                 As long as
Executive is employed by the Company, Executive  agrees that he or she will not, except with
the express  written consent
of the Board, become engaged in, render  services for, or permit his or her name to be
used in  connection with
any business other than the business of the  Company and its affiliates.


 


(c)                                  Executive has
agreed to be bound by the covenants contained in  this Section 6 for the purpose of
preserving for the Company’s  and its affiliates’ benefit the goodwill, confidential and  proprietary information and
going concern value of the Company  and its affiliates and their respective
business  opportunities,
and to protect the value of the capital stock  of the Company acquired by WH Holdings (Cayman
Islands) Ltd.  pursuant to that
certain Agreement and Plan of Merger dated  April 10, 2002, by and among WH Holdings
(Cayman Islands)  Ltd., Herbalife
International, Inc. and WH Acquisition Corp.  WH Holdings (Cayman Islands) Ltd. and each of
its affiliates  are intended
third party beneficiaries of the provisions of  Sections 5 and 6 of this Agreement.


 


7.                                       Injunctive
Relief. Executive and the Company (a) intend that the  provisions of Sections 5 and
6 be and become valid and enforceable, (b)  acknowledge and agree that the provisions of
Sections 5 and 6 are  reasonable and
necessary to protect the legitimate interests of the  business of the Company and its affiliates and
(c) agree that any  violation of
Section 5 or 6 will result in irreparable injury to the  Company and its affiliates,
the exact amount of which will be difficult to ascertain and the remedies at
law for which will not be reasonable  or adequate compensation to the Company and
its affiliates for such a  violation. Accordingly, Executive agrees that if Executive violates or  threatens to violate the
provisions of Section 5 or 6, in addition to  any other remedy which may be available at law
or in equity, the  Company shall be
entitled to specific performance and injunctive  relief, without posting bond or other
security, and without the  necessity of proving actual damages. In addition, in the event of a  violation or threatened
violation by Executive of Section 5 or 6 of  this Agreement, the Nonsolicitation Period
will be tolled


 


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until
such violation or threatened violation has been duly cured. If,  at the time of enforcement of
Sections 5 or 6 of this Agreement, a  court holds that the restrictions stated
therein are unreasonable under  circumstances then existing, the parties
hereto agree that the maximum  period, scope or geographical area reasonable under such circumstances  shall be substituted for the
stated period, scope or area.


 


8.                                       Assignment;
Successors and Assigns. Executive agrees that he or she  shall not assign, sell,
transfer, delegate or otherwise dispose of,  whether voluntarily or involuntarily, any
rights or obligations under  this Agreement, nor shall Executive’s rights hereunder be subject to  encumbrance of the claims of
creditors. Any purported assignment,  transfer, delegation, disposition or
encumbrance in violation of this  Section 8 shall be null and void and of
no force or effect. Nothing in  this Agreement shall prevent the consolidation
or merger of the Companywith or into any other entity, or the sale by the Company of all or any  portion of its properties or
assets, or the assignment by the Company  of this Agreement and the performance of its
obligations hereunder toany successor in interest or any affiliated entity, and Executive  hereby consents to any and
all such assignments. Subject to the  foregoing, this Agreement shall be binding
upon and shall inure to the  benefit of the parties and their respective heirs, legal  representatives, successors,
and permitted assigns, and, except as  expressly provided herein, no other person or
entity shall have anyright, benefit or obligation under this Agreement as a third party  beneficiary or otherwise.


 


9.                                       Governing Law;
Jurisdiction and Venue. This Agreement shall be  governed, construed, interpreted and enforced
in accordance with thesubstantive laws of the State of California without regard to the  conflicts of law principles
thereof. Suit to enforce this Agreement or  any provision or portion thereof may be
brought in the federal or state  courts located in Los Angeles, California.


 


10.                                 Severability of
Provisions. In the event that any provision or any  portion thereof should ever be adjudicated by
a court of competent  jurisdiction to
exceed the time or other limitations permitted by  applicable law, as determined by such court in
such action, then suchprovisions shall be deemed reformed to the maximum time or other  limitations permitted by
applicable law, the parties hereby  acknowledging their desire that in such event
such action be taken. Inaddition to the above, the provisions of this Agreement are severable,  and the invalidity or
unenforceability of any provision or provisions  of this Agreement or portions thereof shall
not affect the validity or  enforceability of any other provision, or portion of this Agreement,  which shall remain in full
force and effect as if executed with the  unenforceable or invalid provision or portion
thereof eliminated.  Notwithstanding
the foregoing, the parties hereto affirmatively  represent, acknowledge and agree that it is
their intention that this Agreement and each of its provisions are enforceable
in accordance with  their terms and
expressly agree not to challenge the validity or  enforceability of this Agreement or any of its
provisions, or portionsor aspects


 


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thereof,
in the future. The parties hereto are expressly relying upon  this representation,
acknowledgement and agreement in determining to  enter into this Agreement.


 


11.                                 Warranty. As an
inducement to the Company to enter into this Agreement,  Executive represents and
warrants that he or she is not a party to any  other agreement or obligation for personal
services, and that thereexists no impediment or restraint, contractual or otherwise, on his or  her power, right or ability
to enter into this Agreement and to perform  his or her duties and obligations hereunder.
As an inducement to  Executive to
enter into this Agreement, Company represents and warrants  that the person signing this
Agreement for the Company has been duly  authorized to do so by all necessary corporate
action and has the  corporate power
and authority to execute this Agreement on the  Company’s behalf. The execution and delivery
of this Agreement and the  consummation of the transactions contemplated have been duly and  effectively authorized by all
necessary corporate action of the  Company.


 


12.                                 Notices. All
notices, requests, demands and other communications which  are required or may be given
under this Agreement shall be in writing  and shall be deemed to have been duly given
when received if personally  delivered; when transmitted if transmitted by telecopy, electronic or  digital transmission method
upon receipt of telephonic or electronic  confirmation; the day after it is sent, if sent
for next day deliveryto a domestic address by recognized overnight delivery service (e.g.,  Federal Express); and upon
receipt, if sent by certified or registered  mail, return receipt requested. In each case
notice will be sent to:


 


(a)                                  If to the
Company:


 


Herbalife
International, Inc.


Herbalife
International of America, Inc.


1800
Century Park East


Los
Angeles, California 90067


Attention:
Board of Directors


Telecopy:
(310) 557-3906


 


(b)                                 with a copy to:


 


Herbalife
International, Inc.


Herbalife
International of America, Inc.


1800
Century Park East


Los
Angeles, California 90067


Attention:
General Counsel


 


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Telecopy:
(310) 557-3906


 


(c)                                  if to Executive,
to:


 


c/o
Herbalife International, Inc.


1800
Century Park East


Los
Angeles, California 90067


Telecopy:
(310) 557-3906


 


(d)                                 with a copy to:


 


Troy
& Gould Professional Corporation


1801
Century Park East, 16th Floor


Los
Angeles, California 90067


Attention:
Dale E. Short


Telecopy:
(310) 201-4746


 


or
to such other place and with other copies as either party may designate as to
itself, himself or herself by written notice to the others.


 


13.                                 Cumulative
Remedies. All rights and remedies of either party hereto are  cumulative of each other and
of every other right or remedy such party  may otherwise have at law or in equity, and
the exercise of one or more  rights or remedies shall not prejudice or impair the concurrent or  subsequent exercise of other
rights or remedies.


 


14.                                 Counterparts.
This Agreement may be executed in several counterparts,  each of which will be deemed
to be an original, but all of which  together shall constitute one and the same
Agreement.


 


15.                                 Entire
Agreement. The terms of this Agreement are intended by the  parties to be the final
expression of their agreement with respect to  the subject matter hereof and supersedes (and
may not be contradictedby, modified or supplemented by) any prior or contemporaneous  agreement, written or oral,
with respect thereto. The parties further  intend that this Agreement shall constitute
the complete and exclusive  statements of its terms and that no extrinsic evidence whatsoever may  be introduced in any
judicial, administrative or other legal proceeding  to vary the terms of this Agreement. Executive
further acknowledges  that this
Agreement supersedes any prior agreement with respect to the  subject matter hereof
(including without limitation, Executive’s  employment agreement with the Company dated
August 20, 2000, as the  same may have been amended). Further, Executive acknowledges that he or  she has been paid his benefit
under the Herbalife International, Inc.  Senior Executive Change in Control Plan and
that, upon such payment to  Executive, such plan was terminated in accordance with its terms.


 


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16.                                 Amendments;
Waivers. This Agreement may not be modified, amended, or  terminated except by an
instrument in writing, approved by the Board  and signed by Executive and a member of the
Board other than Executive.  As an exception to the foregoing, the parties acknowledge and agree  that the Company shall have
the right, in its sole discretion, to  reduce the scope of any covenant or obligation
of Executive set forthin Sections 5 or 6 of this Agreement or any portion thereof, effective  immediately upon receipt by
Executive of written notice thereof from  the Company. No waiver of any of the
provisions of this Agreement,  whether by conduct or otherwise, in any one or more instances, shall be  deemed to be construed as a
further, continuing or subsequent waiver of  any such provision or as a waiver of any other
provision of this  Agreement. No
failure to exercise and no delay in exercising any right,  remedy or power hereunder
shall preclude any other or further exercise  of any other right, remedy or power provided
herein or by law or inequity.


 


17.                                 Representation
of Counsel; Mutual Negotiation. Each party has had the opportunity to be
represented by counsel of its choice in negotiating  this Agreement. This Agreement shall therefore
be deemed to have beennegotiated and prepared at the joint request, direction and  construction of the parties,
at arm’s-length, with the advice and  participation of counsel, and shall be
interpreted in accordance with  its terms without favor to any party.


 


18.                                 Indemnification.
Executive shall be indemnified by the Company to the  maximum extent permissible from time to time
under the Nevada GeneralCorporation Law, including with respect to advancement of expenses.


 


19.                                 Suit to Enforce.
In any action or proceeding to enforce any provision of this Agreement, the
prevailing party shall be entitled, in addition  to other remedies, to recover its, his or her
attorney’s fees and costs  of suit.


 


14
















 


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


 


	
   

  	
  HERBALIFE INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Brian Kane

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   Brian Kane

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   Co-President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE INTERNATIONAL OF AMERICA, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Brian Kane

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   Brian Kane

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   Co-President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Carol Hannah

  	
   

  
	
   

  	
   

  	
    Carol Hannah

  	
   

  
									



 


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