EXHIBIT 10.3


 


HERBALIFE
INTERNATIONAL OF AMERICA, INC.


SENIOR
EXECUTIVE DEFERRED COMPENSATION PLAN


Effective
January 1, 1996


 


TABLE OF CONTENTS


 


	
  ARTICLE 1

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  Selection,
  Enrollment, Eligibility

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Selection by Committee

  	
   

  
	
  2.2

  	
   

  	
  Enrollment Requirements

  	
   

  
	
  2.3

  	
   

  	
  Eligibility;
  Commencement of Participation

  	
   

  
	
  2.4

  	
   

  	
  Termination
  of Participation and/or Deferrals

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  Deferral
  Commitments/Interest Crediting

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Minimum Deferral

  	
   

  
	
  3.2

  	
   

  	
  Maximum Deferral

  	
   

  
	
  3.3

  	
   

  	
  Election to
  Defer; Effect of Election Form

  	
   

  
	
  3.4

  	
   

  	
  Withholding of Deferral
  Amounts

  	
   

  
	
  3.5

  	
   

  	
  Company Matching
  Contribution

  	
   

  
	
  3.6

  	
   

  	
  Interest
  Crediting Prior to Distribution

  	
   

  
	
  3.7

  	
   

  	
  Interest
  Crediting for Installment Distributions

  	
   

  
	
  3.8

  	
   

  	
  FICA Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  Short-Term
  Payout; Unforeseeable Financial Emergencies; Withdrawal Election

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Short-Term Payout

  	
   

  
	
  4.2

  	
   

  	
  Withdrawal
  Payout/Suspensions for Unforeseeable Financial Emergencies

  	
   

  
	
  4.3

  	
   

  	
  Withdrawal Election

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  Retirement Benefit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Retirement Benefit

  	
   

  
	
  5.2

  	
   

  	
  Payment of Retirement
  Benefits

  	
   

  
	
  5.3

  	
   

  	
  Death
  Prior to Completion of Retirement Benefits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  Pre-Retirement Survivor
  Benefit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Pre-Retirement Survivor
  Benefit

  	
   

  
	
  6.2

  	
   

  	
  Payment of
  Pre-Retirement Survivor Benefits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  Termination Benefit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Termination Benefits

  	
   

  
	
  7.2

  	
   

  	
  Payment of Termination
  Benefit

  	
   

  
	
  7.3

  	
   

  	
  Death
  Prior to Completion of Termination Benefits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  Disability Waiver and
  Benefit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Disability Waiver

  	
   

  
	
  8.2

  	
   

  	
  Benefit Eligibility

  	
   

  



 


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  ARTICLE 9

  	
  Beneficiary Designation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Beneficiary

  	
   

  
	
  9.2

  	
   

  	
  Beneficiary
  Designation; Change; Spousal Consent

  	
   

  
	
  9.3

  	
   

  	
  Acknowledgment

  	
   

  
	
  9.4

  	
   

  	
  No Beneficiary Designation

  	
   

  
	
  9.5

  	
   

  	
  Doubt as to Beneficiary

  	
   

  
	
  9.6

  	
   

  	
  Discharge of Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  Leave of Absence

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Paid Leave of Absence

  	
   

  
	
  10.2

  	
   

  	
  Unpaid Leave of Absence

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  Termination,
  Amendment or Modification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Termination

  	
   

  
	
  11.2

  	
   

  	
  Amendment

  	
   

  
	
  11.3

  	
   

  	
  Effect
  of Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  Administration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  Committee Duties

  	
   

  
	
  12.2

  	
   

  	
  Agents

  	
   

  
	
  12.3

  	
   

  	
  Binding
  Effect of Decisions

  	
   

  
	
  12.4

  	
   

  	
  Indemnity of Committee

  	
   

  
	
  12.5

  	
   

  	
  Employer Information

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  Claims Procedures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Presentation of Claim

  	
   

  
	
  13.2

  	
   

  	
  Notification of Decision

  	
   

  
	
  13.3

  	
   

  	
  Review of a Denied Claim

  	
   

  
	
  13.4

  	
   

  	
  Decision
  on Review

  	
   

  
	
  13.5

  	
   

  	
  Legal Action

  	
   

  
	
  13.6

  	
   

  	
  Arbitration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
  Trust

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.1

  	
   

  	
  Establishment of Trust

  	
   

  
	
  14.2

  	
   

  	
  Interrelationship
  of the Plan and the Trust

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.1

  	
   

  	
  Unsecured
  General Creditor

  	
   

  
	
  15.2

  	
   

  	
  Employer’s Liability

  	
   

  
	
  15.3

  	
   

  	
  Nonassignability

  	
   

  
	
  15.4

  	
   

  	
  Coordination with Other
  Benefits

  	
   

  
	
  15.5

  	
   

  	
  Not a Contract of
  Employment

  	
   

  



 


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  15.6

  	
   

  	
  Furnishing Information

  	
   

  
	
  15.7

  	
   

  	
  Terms

  	
   

  
	
  15.8

  	
   

  	
  Captions

  	
   

  
	
  15.9

  	
   

  	
  Governing Law

  	
   

  
	
  15.10

  	
   

  	
  Notice

  	
   

  
	
  15.11

  	
   

  	
  Successors

  	
   

  
	
  15.12

  	
   

  	
  Spouse’s Interest

  	
   

  
	
  15.13

  	
   

  	
  Validity

  	
   

  
	
  15.14

  	
   

  	
  Incompetent

  	
   

  
	
  15.15

  	
   

  	
  Distribution in
  the Event of Taxation

  	
   

  
	
  15.16

  	
   

  	
  Legal
  Fees to Enforce Rights After Change in Control

  	
   

  



 


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PURPOSE


 


The purpose of this Plan is to provide
specified benefits to a select group of management or highly compensated
employees who contribute materially to the continued growth, development and
future business success of HERBALIFE INTERNATIONAL OF AMERICA, INC., a
California corporation, and its subsidiaries.


 


ARTICLE 1


DEFINITIONS


 


For purposes hereof, unless otherwise
clearly apparent from the context, the following phrases or terms shall have
the following indicated meanings:


 


1.1           “Account
Balance” shall mean, with respect to a Participant, the sum of (a) his or her
Elective Deferral Account plus (b) his or her Employer Matching Contribution
Account.  This account shall be a
bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to or in respect of a
Participant pursuant to the Plan.


 


1.2           “Annual
Bonus” shall mean any compensation, in addition to Base Annual Salary, paid
annually in respect of a Plan Year to a Participant as an employee under the
Company’s Management Incentive Plan.  An
annual Bonus for a Plan Year may, but need not, be paid during such Plan Year.


 


1.3           “Annual
Deferral Amount” shall mean that portion of a Participant’s Base Annual Salary
and/or Annual Bonus that a Participant elects to have and is deferred, in
accordance with Article 3, for any one Plan Year.


 


1.4           “Base
Annual Salary” shall mean the annual compensation (excluding bonuses,
commissions, overtime. incentive payments, non-monetary awards, Directors Fees
and other fees, stock options and grants, and car allowances) paid to a
Participant for services rendered to any Employer, before reduction for
compensation deferred pursuant to all qualified, non-qualified and Code
Section 125 plans (other than compensation deferred under individual
employment Contracts) of any Employer. 
The Committee may, in its discretion, with respect to any one or more
Participants establish for any Plan Year a limit on the amount of Base Annual
Salary to be taken into account under this


 


1
















 


Plan. 
Such limitation shall be reflected in the Participant’s Plan Agreement,
as it may be amended from time to time.


 


1.5           “Beneficiary”
shall mean one or more persons, trusts. estates or other entities, designated
in accordance with Article 9, that are entitled to receive benefits under
the Plan upon the death of a Participant.


 


1.6           “Beneficiary
Designation Form” shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee to
designate one or more Beneficiaries.


 


1.7           “Board”
shall mean the board of directors of the Company.


 


1.8           “Change in
Control” shall mean the first to occur of any of the following events:


 


(a)           Any
“person” (as that term is used in Section 13 and 14(d)(2) of the
Securities Exchange Act of 1934 (“Exchange Act”)), other than Mark Hughes, the
Hughes Family Trust or any entity with respect to which Mark Hughes has
investment or dispositive power or authority, after the date hereof becomes the
beneficial owner (as that term is used in Section 13(d) of the Exchange
Act), directly or indirectly, of 50 percent or more of the Company’s capital
stock entitled to vote in the election of directors;


 


(b)           During any
period of two consecutive years, individuals who at the beginning of such
period constitute the Board cease for any reason to constitute at least a
majority thereof. unless the election or the nomination for election by the
Company’s shareholders of each new director was approved by a vote of at least
three-quarters of the directors still in office who were directors at the
beginning of the period;


 


(c)           Any
consolidation or merger of the Company, other than a consolidation or merger of
the Company in which the holders of the common stock of the Company immediately
prior to the consolidation or merger hold more than 50 percent of the common
stock of the surviving corporation immediately after the consolidation or
merger;


 


(d)           The
shareholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; or


 


(e)           Substantially
all of the assets of the Company are sold or otherwise transferred to parties that
are not within a “controlled group of corporations” (as defined in
Section 1563 of the Code) in which the Company is a member.


 


1.9           “Claimant” shall have the meaning set
forth in Section 13.1.


 


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1.10         “Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


1.11         “Committee”
shall mean the administrative committee appointed to manage and administer the
Plan in accordance with its provisions pursuant to Article 12.


 


1.12         “Company”
shall mean HERBALIFE INTERNATIONAL OF AMERICA, INC., a California corporation.


 


1.13         “Company
Matching Contribution” shall mean any contribution made and credited to
Employer Matching Contribution Accounts by the Company in accordance with
Section 3.5 below.


 


1.14         “Crediting
Rate” shall mean, for each plan year, an interest rate equal to 120 percent of
the “Moody’s Corporate Bond Rate” in effect for September (and published
in the immediately following October) of the prior year.  The “Moody’s Corporate Bond Rate” is an arithmetic
average of yields of representative bonds, including industrials, public
utilities, Aaa, Aa, A and Baa bonds, published by Moody’s Investors Service,
Inc. or any successor to that service.


 


1.15         “Deduction
Limitation” shall mean the following described limitation on the annual benefit
that may be distributed pursuant to the provisions of this Plan.  The limitation shall be applied to
distributions under this Plan as expressly set forth in this Plan.  If the Company determines in good faith prior
to a Change in Control that there is a reasonable likelihood that any
compensation paid to a Participant for a taxable year of the Company would not
be deductible by the Company solely by reason of the limitation under Code
Section 162(m), then to the extent deemed necessary by the Company to
ensure that the entire amount of any distribution to the Participant pursuant
to this Plan prior to the Change in Control is deductible, the Company may
defer all or any portion of the distribution. 
Any amounts deferred pursuant to this limitation shall continue to be
credited with interest in accordance with Section 3.6 below.  The amounts so deferred and interest thereon
shall be distributed to the Participant or his or her Beneficiary (in the event
of the Participant’s death) at the earliest possible date, as determined by the
Company in good faith, on which the deductibility of compensation paid or
payable to the Participant for the taxable year of the Company during which the
distribution is made will not be limited by Section 162(m), or if earlier,
the effective date of a Change in Control.


 


1.16         “Deferral
Amount” shall mean the sum of all of a Participant’s Annual Deferral Amounts.


 


1.17         “Directors
Fees” shall mean the annual cash fees paid by any Employer, including retainer
fees and meetings fees, as compensation for serving on the board of directors
of an Employer.


 


3
















 


1.18         “Disability”
shall mean where, because of injury or sickness, a Participant cannot perform each
of the material duties of his or her regular occupation.


 


1.19         “Election
Form” shall mean the form established from time to time by the Committee that a
Participant completes, signs and returns to the Committee to make an election
under the Plan.


 


1.20         “Elective
Deferral Account” shall mean the sum of (a) a Participant’s Deferral Amount,
plus (b) interest thereon credited in accordance with all the applicable
interest crediting provisions of the Plan, net of all distributions from such
Account.  This account shall be a
bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to the Participant
pursuant to the Plan.


 


1.21         “Employer”
shall mean the Company and/or any of its subsidiaries that have been selected
by the Board to participate in the Plan.


 


1.22         “Employer
Matching Contribution Account” shall mean the sum of (a) Participant’s share of
Company Matching Contributions plus (b) interest thereon credited in accordance
with the applicable interest crediting provisions of the Plan, net of all
distributions from such Account. This Account shall be a bookkeeping entry only
and shall be utilized solely as a device for the measurement and determination
of the amounts to be paid to the Participant pursuant to the Plan.


 


1.23         “Participant”
shall mean any employee (a) who is selected to participate in the Plan, (b) who
elects to participate in the Plan, (c) who signs a Plan Agreement, an Election
Form and a Beneficiary Designation Form, (d) whose signed Plan Agreement,
Election Form and Beneficiary Designation Form are accepted by the Committee,
(e) who commences participation in the Plan, and (f) whose Plan Agreement has
not terminated.


 


1.24         “Plan”shall
mean the Company’s Senior Executive Deferred Compensation Plan. which shall be
evidenced by this instrument and, with respect to each Participant, by his or
her Plan Agreement, as each may be amended from time to time.


 


1.25         “Plan
Agreement” shall mean a written agreement. as may be amended from time to time,
which is entered into by and between one or more Employers and a
Participant.  Each Plan Agreement
executed by a Participant shall provide for the entire benefit to which such
Participant is entitled to under the Plan, and shall specify, the Employer or
Employers liable for the Participant’s benefits hereunder and the magnitude or
extent of such liability.  The Plan
Agreement bearing the latest date of acceptance by the Committee shall govern
such entitlement and each Employer’s liability. 
Upon the complete payment of a Participant’s Account Balance, each
individual’s Plan Agreement and his or her status as a Participant shall
terminate.


 


1.26         “Plan Year”
shall be the calendar year, starting, with 1996.


 


4
















 


1.27         “Pre-Retirement
Survivor Benefit” shall mean the benefit set forth in Article 6.


 


1.28         “Retirement,”
“Retire,” “Retires,” or “Retired” shall mean severance from employment or
service with all Employers for any reason other than a leave of absence on or
after the attainment of (a) age fifty (50) and the completion of ten (10) Years
of Service, (b) age fifty-five (55) and the completion of five (5) Years of
Service. (c) age sixty-five (65), whichever is earliest.


 


1.29         “Retirement
Benefit” shall mean the benefit set forth in Article 5.


 


l.30          “Short-Term
Payout” shall mean the payout set forth in Section 4. 1.


 


l.31          “Termination
Benefit” shall mean the benefit set forth in Article 7.


 


1.32         “Termination
of Employment” shall mean the ceasing of employment with all Employers,
voluntarily or involuntarily, for any reason other than Retirement. death or an
authorized leave of absence.


 


1.33         “Trust”
shall mean the trust established pursuant to that certain Trust Agreement.
dated as of January 1, 1996, between the Company and the trustee named
therein. as amended from time to time.


 


l.34          “Unforeseeable
Financial Emergency” shall mean an unanticipated emergency that is caused by an
event beyond the control of the Participant that would result in severe
financial hardship to the Participant resulting from (a) a sudden and
unexpected illness or accident of the Participant or a dependent of the
Participant, (b) a loss of the Participant’s property due to casualty, or (c)
such other extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant, all as determined in the sole and
absolute discretion of the Committee.


 


1.35         “Years of
Service” shall mean the total number of years in which a Participant has been
employed by or in the service of an Employer. 
For purposes of this definition only, a year of employment or service
shall be a 365 day period (or 366 day period in the case of a leap year) that,
for the first year of employment, commences on the Participant’s date of hire
(or engagement) and that, for any subsequent year, commences on an anniversary
of that hiring date.


 


ARTICLE 2


SELECTION, ENROLLMENT. ELIGIBILITY


 


2.1           SELECTION BY COMMITTEE. Participation
in the Plan shall be limited to employees of an Employer who are (a) part of a
select group of management or highly compensated employees and (b) at the rank
of Senior Vice President or higher.  From
the foregoing, the Committee shall select, in its sole and absolute discretion.
employees to participate in the Plan.


 


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2.2           ENROLLMENT REQUIREMENTS. As a
condition to participation. each selected employee shall complete, execute and
return to the Committee a Plan Agreement, an Election Form and a Beneficiary
Designation Form.  In addition, the
Committee shall establish from time to time such other enrollment requirements
as it determines in its sole and absolute discretion are necessary.


 


2.3           ELIGIBILITY: COMMENCEMENT OF
PARTICIPATION. An employee selected to participate herein may commence
participation upon the January 1 or July 1 immediately following or
coinciding with the date he or she has completed all enrollment requirements
set forth herein and required by the Committee, including returning all required
documents to the Committee and the Committee’s acceptance of all submitted
documents.


 


2.4           TERMINATION OF PARTICIPATION AND/OR
DEFERRALS. If the Committee determines in good faith that a Participant no
longer meets the requirement of Sections 2. 1 (a) and (b) hereof. the Committee
shall have the right, in its sole discretion, to (i) terminate any deferral
election the Participant has made for the Plan Year in which the Participant’s
membership status changes, (ii) prevent the Participant from making future
deferral elections and/or (iii) immediately distribute the Participant’s then
Account Balance as a Termination Benefit and terminate the Participant’s
participation in the Plan.  If the
Committee chooses not to terminate the Participant’s participation in the Plan,
the Committee may, it its sole discretion, reinstate the Participant to full
Plan participation at such time in the future as the Participant again meets
the requirements of Sections 2.1(a) and (b).


 


ARTICLE 3


DEFERRAL COMMITMENTS/INTEREST CREDITING.


 


3.1           MINIMUM DEFERRAL.


 


(a)           MINIMUM.
For each Plan Year, a Participant may elect to defer Base Annual Salary and/or
Annual Bonus paid in respect of such Plan Year in the following minimum amounts
for each deferral elected:


 




	
  Deferral

  	
   

  	
  Minimum

  Amount

  	
   

  
	
  Base
  Annual Salary

  	
   

  	
  $

  	
  2,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annual
  Bonus

  	
   

  	
  $

  	
  2,000

  	
   

  






 


If no election is made, the amount deferred
shall be zero.


 


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(b)           SHORT PLAN
YEAR. If a Participant first becomes a Participant after the first day of a
Plan Year, the minimum Base Annual Salary and/or Annual Bonus deferral shall be
an amount equal to the minimum set forth above, multiplied by a fraction, the
numerator of which is the number of complete months remaining in the Plan Year
and the denominator of which is 12.


 


3.2           MAXIMUM DEFERRAL. For each Plan Year,
a Participant may elect to defer Base Annual Salary and/or Annual Bonus up to
the following maximum amounts for each deferral elected:


 


	
  Deferral

  	
   

  	
  Maximum

  Amount

  	
   

  
	
  Base
  Annual Salary

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Annual
  Bonus

  	
   

  	
  100

  	
  %

  



 


3.3           ELECTION TO DEFER; EFFECT OF ELECTION
FORM.  In connection with a Participant’s
commencement of participation in the Plan, the Participant shall make a
deferral election by delivering to the Committee a completed and signed
Election Form, which election and form must be accepted by the Committee for a
valid election to exist.  For each
succeeding Plan Year, a new Election Form must be delivered to the Committee,
in accordance with its rules and procedures, before the end of the Plan Year
preceding the Plan Year for which the election is made. If no Election Form is
timely delivered for a Plan Year, no Annual Deferral Amount shall be withheld
for that Plan Year.


 


3.4           WITHHOLDING OF DEFERRAL AMOUNTS.  For each Plan Year, the Base Annual Salary
portion of the Annual Deferral Amount shall be withheld each payroll period in
equal amounts from the Participant’s Base Annual Salary.  The Annual Bonus portion of the Annual
Deferral Amount shall be withheld at the time the Annual Bonus is or otherwise
would be paid to the Participant.  The
Annual Deferral Amount shall be credited to the Participant’s Elective Deferral
Account.  A Participant shall at all times
have a fully vested and nonforfeitable interest in his or her Elective Deferral
Account.


 


3.5           COMPANY MATCHING CONTRIBUTION.  Each Plan Year, the Company shall make a
Company Matching Contribution on behalf of a Participant.  Such contribution shall be equal to 100
percent of the Participant’s Annual Deferral Amount that does not exceed 10
percent of the sum of the Participant’s Base Annual Salary.  These contributions shall be credited to the
Participant’s Employer Matching Contribution Account.  A Participant will at all times have a fully
vested and nonforfeitable interest in each year’s contribution (including
interest to be credited thereto).


 


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3.6           INTEREST CREDITING PRIOR TO
DISTRIBUTION.  Prior to any distributions
of benefits under Articles 4, 5, 6 or 7, interest shall be credited and
compounded annually on a Participant’s Account Balance as though the Annual
Deferral Amount and the Company Matching Contribution for that Plan Year was
withheld or contributed, as the case may be, at the beginning of the Plan Year
or, in the case of the first year of Plan participation, was withheld as
contributed, as the case may be, on the date that the Participant commenced
participation in the Plan; provided that interest shall be credited on the
portion of the Annual Deferral Amount attributable to the Annual Bonus as of
the last day of the pay period ending closest to the date the Annual Bonus is
actually paid. The rate of interest for crediting shall be the Crediting
Rate.  In the event of Retirement, death
or a Termination of Employment prior to the end of a Plan Year, the basis for
that year’s interest crediting will be a fraction of the full year’s interest,
based on the number of full months that the Participant was employed with the
Employer during the Plan Year prior to the occurrence of such event.  If a distribution is made under this Plan,
for purposes of crediting interest, the Account Balance shall be reduced as of
the first day of the month in which the distribution is made.


 


3.7           INTEREST CREDITING FOR INSTALLMENT
DISTRIBUTIONS.  In the event a benefit is
paid in installments under Article 5 or 6, interest shall be credited and
compounded on the undistributed portion of the Participant’s Account Balance
commencing on the first day of the month in which the Participant terminates
employment, using a fixed interest rate that is determined by using the average
of the Crediting Rates for the Plan Year in which installment payments commence
and the four preceding Plan Years.  If a
Participant has participated in the Plan for less than five Plan Years, this
average shall be determined using the Crediting Rates for the Plan Years during
which the Participant actually participated in the Plan.


 


3.8           FICA TAXES.  For each Plan Year in which an Annual
Deferral Amount is being withheld, the Participant’s Employer(s) shall ratably
withhold from that portion of the Participant’s Base Annual Salary and/or
Annual Bonus that is not being deferred, the Participant’s share of FICA taxes
on deferred amounts.  If necessary, the
Committee shall reduce the Annual Deferral Amount in order to comply with this
Section.


 


8
















 


ARTICLE 4


SHORT-TERM PAYOUT; UNFORESEEABLE
FINANCIAL EMERGENCIES;


WITHDRAWAL ELECTION


 


4.1           SHORT-TERM PAYOUT. Subject to the
Deduction Limitation, in connection with each election to defer an Annual
Deferral Amount, a Participant may elect to receive a future “Short-Term
Payout” from the Plan with respect to that Annual Deferral Amount.  The Short-Term Payout shall be a lump sum
payment in an amount that is equal to the Annual Deferral Amount plus interest
credited at the Crediting Rate on that amount. Subject to the other terms and
conditions of this Plan, each Short-Term payout elected shall be paid within 60
days of the first day of the Plan Year that is five or more years after the
first day of the Plan Year in which the Annual Deferral Amount is actually
deferred.  Notwithstanding the foregoing,
should an event occur that triggers a benefit under Article 5, 6. or 7,
any Annual Deferral Amount, plus interest thereon, that is subject to a
Short-Term Payout election under this Section 4.1 shall not be paid in
accordance with Section 4.1, but shall be paid in accordance with the
other applicable Article.


 


4.2           WITHDRAWAL PAYOUT/SUSPENSIONS FOR
UNFORESEEABLE FINANCIAL EMERGENCIES. If the Participant experiences an
Unforeseeable Financial Emergency, the Participant may petition the Committee
to (a) suspend any deferrals required to be made by a Participant and/or (b)
receive partial or full payout from the Plan. 
The payout shall not exceed the lesser of the Participant’s Account
Balance, calculated as if such Participant were receiving a Termination
Benefit, or the amount reasonably needed to satisfy the Unforeseeable Financial
Emergency. If, subject to the sole and absolute discretion of the Committee,
the petition for a suspension and/or payout is approved, suspension shall take
effect upon the date of approval and any payout shall be made within 60 days of
the date of approval.


 


4.3           WITHDRAWAL ELECTION.  A Participant may elect, at any time, to
withdraw all of his or her Account Balance, calculated as if such Participant
were receiving a Termination Benefit, less a 10 percent withdrawal penalty (the
net amount shall be referred to as the “Withdrawal Amount”). No partial
withdrawals of that balance shall be allowed. 
The Participant shall make this election by giving the Committee advance
written notice of the election in a form determined from time to time by the
Committee.  The penalty shall be equal to
10 percent of the Participant’s Account Balance determined immediately prior to
the date of his or her election.  Once
the Withdrawal Amount is paid, the Participant shall be suspended permanently
from further participation in the Plan.


 


9
















 


ARTICLE 5


RETIREMENT BENEFIT


 


5.1           RETIREMENT BENEFIT.  Subject to the Deduction Limitation, a
Participant who retires shall receive, as a Retirement Benefit, his or her
Account Balance.


 


5.2           PAYMENT OF RETIREMENT BENEFITS.  A Participant, in connection with his or her
commencement of participation in the Plan, shall elect on an Election Form to
receive the Retirement Benefit in a lump sum or in equal monthly payments over
a period of 60 months.  The Participant
may change this election to an allowable alternative payout period by
submitting a new Election Form to the Committee, provided that any such
Election Form is submitted at least three years prior to the Participant’s
Retirement.  The Election Form most
recently accepted by the Committee shall govern the payout of the Retirement
Benefit.  The lump sum payment shall be
made, or installment payments shall commence, no later than 60 days from the
date the Participant Retires.


 


5.3           DEATH PRIOR TO COMPLETION OF RETIREMENT
BENEFITS.  If a Participant dies after
Retirement but before the Retirement Benefit is paid in full, the Participant’s
unpaid Retirement Benefit payments shall continue and shall be paid to the
Participant’s Beneficiary (a) over the remaining number of months and in the
same amounts as that benefit would have been paid to the Participant had the
Participant survived, or (b) in a lump sum. if requested by the beneficiary and
allowed at the sole and absolute discretion of the Committee.  The lump sum payment will be the
Participant’s Account Balance at the time of his or her death.


 


ARTICLE 6


PRE-RETIREMENT SURVIVOR BENEFIT


 


6.1           PRE-RETIREMENT SURVIVOR BENEFIT.  Subject to the Deduction Limitation, if a
Participant dies before he or she Retires, the Participant’s Beneficiary shall
receive a Pre-Retirement Survivor Benefit equal to the Participant’s Account
Balance.


 


6.2           PAYMENT OF PRE-RETIREMENT SURVIVOR
BENEFITS.  The Pre-Retirement Survivor
Benefit shall be paid in the payment period previously elected by the
Participant for the payment of the Retirement Benefit, or, if no election was
made, monthly for 5 Years.  However, the
Pre-Retirement Survivor Benefit payment may be made as a lump sum at the
request of the Beneficiary and at the sole and absolute discretion of the
Committee. The first (or only payment, if made in lump sum) shall be made
within 60 days of the Committee’s receiving proof of the Participant’s death.


 


10
















 


ARTICLE 7


TERMINATION BENEFIT


 


7.1           TERMINATION BENEFITS.  Subject to the Deduction Limitation, if a
Participant experiences a Termination of Employment prior to his or her
Retirement. the Participant shall receive a Termination Benefit, which shall be
equal to the Participant’s Account Balance, with interest credited in the
manner provided in Section 3.6 hereof.


 


7.2           PAYMENT OF TERMINATION BENEFIT.  A Participant’s Termination Benefit shall be
paid in a lump sum no later than 60 days following the date of the
Participant’s Termination of Employment.


 


7.3           DEATH PRIOR TO COMPLETION OF
TERMINATION BENEFITS.  If a Participant
dies after Termination of Employment, but before the Termination Benefit is
paid, the Participant’s unpaid Termination Benefit shall be paid to the
Participant’s Beneficiary.


 


ARTICLE 8


DISABILITY WAIVER AND BENEFIT


 


8.1           DISABILITY WAIVER.


 


(a)           ELIGIBILITY.  By participating in the Plan, all
Participants are eligible for this waiver.


 


(b)           WAIVER OF
DEFERRAL: CREDIT FOR PLAN YEAR OF DISABILITY. A Participant who is determined
by the Committee to be suffering from a Disability shall be excused from
fulfilling that portion of the Annual Deferral Amount commitment that would
otherwise have been withheld from a Participant’s Base Annual Salary and/or
Annual Bonus for the Plan Year during which the Participant first suffers a
Disability.  During the period of
Disability, the Participant shall not be allowed to make any additional
deferral elections.


 


(c)           RETURN TO
WORK.  If a Participant returns to
employment or service as a director with an Employer after a Disability ceases,
the Participant may elect to defer an Annual Deferral Amount for the Plan Year
following his or her return to employment or service and for every Plan Year
thereafter while a Participant in the Plan; provided such deferral elections
are otherwise allowed and an Election Form is delivered to and accepted by the
Committee for each such election in accordance with Section 3.3 above.


 


11
















 


8.2           BENEFIT ELIGIBILITY.  A Participant suffering a Disability shall,
for benefit purposes under this Plan but subject to Section 8. 1, above,
continue to be considered to be employed and shall be eligible for the benefits
provided for in Articles 4, 5, 6 and 7 in accordance with the provisions of
those Articles.  Employee shall be
considered an active employee for purposes of Section l.35 hereof during a
Disability. Notwithstanding the above, the Committee shall have the right, in
its sole and absolute discretion and for purposes of this Plan only, to
terminate a Participant’s employment at any time after such Participant is
determined to be permanently and totally disabled under the Participant’s
Employer’s long-term disability plan or would have been determined to be
permanently and totally disabled had he or she participated in such plan.


 


ARTICLE 9


BENEFICIARY DESIGNATION


 


9.1           BENEFICIARY.  Each Participant shall have the right, at any
time, to designate his or her Beneficiary (both primary as well as contingent)
to receive any benefits payable under the Plan to a Beneficiary upon the death
of a Participant.  The Beneficiary
designated under this Plan may be the same as or different from the Beneficiary
designation under any other plan of an Employer in which the Participant participates.


 


9.2           BENEFICIARY DESIGNATION; CHANGE;
SPOUSAL CONSENT.  A Participant shall
designate his or her Beneficiary by completing and signing the Beneficiary
Designation Form, and returning it to the Committee or its designated agent.  A Participant shall have the right to change
a Beneficiary by completing, signing and otherwise complying with the terms of
the Beneficiary Designation Form and the Committee’s rules and procedures, as
in effect from time to time.  Where
required by law or by the Committee, in its sole and absolute discretion, if
the Participant names someone other than his or her spouse as a Beneficiary, a
spousal consent, in the form designated by the Committee. must be signed by
that Participant’s spouse and returned to the Committee.  Upon the acceptance by the Committee of a new
Beneficiary Designation Form, all Beneficiary designations previously filed
shall be canceled.  The Committee shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Committee prior to his or her death.


 


9.3           ACKNOWLEDGMENT.  No designation or change in designation of a
Beneficiary shall be effective until received, accepted and acknowledged in
writing by the Committee or its designated agent.


 


12
















 


9.4           NO BENEFICIARY DESIGNATION.  If a Participant fails to designate a
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above, or, if all
designated Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant’s benefits, then the Participant’s designated Beneficiary
shall be his or her surviving spouse.  If
the Participant has no surviving spouse, the benefits remaining under the Plan
shall be paid to the Participant’s issue upon the principle of representation
and if there is no such issue, to the Participant’s estate.


 


9.5           DOUBT AS TO BENEFICIARY.  If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the Committee
shall have the right, exercisable in its sole and absolute discretion, to cause
the Participant’s Employer to withhold such payments until this matter is
resolved to the Committee’s satisfaction.


 


9.6           DISCHARGE OF OBLIGATIONS.  The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and that Participant’s Plan Agreement shall terminate upon such
full payment of benefits.


 


ARTICLE 10


LEAVE OF ABSENCE


 


10.1         PAID LEAVE OF ABSENCE.  If a Participant is authorized by the
Participant’s Employer for any reason to take a paid leave of absence from the
employment of the Employer, the Participant shall continue to be considered
actively employed by the Employer for purposes of Section 1.35 hereof and
the Annual Deferral Amount shall continue to be withheld during such paid leave
of absence in accordance with Section 3.3


 


10.2         UNPAID LEAVE OF ABSENCE.  If a Participant is authorized by the Participant’s
Employer for any reason to take an unpaid leave of absence from the employment
of the Employer, the Participant shall continue to be considered actively
employed by the Employer for purposes of Section l.35 hereof, but the
Participant shall be excused from making deferrals until the earlier of the
date the leave of absence expires or the date the Participant returns to paid
employment status.  Upon such expiration
or return, deferrals shall resume for the remaining portion of the Plan Year in
which the expiration or return occurs, based on the deferral election, if any,
made for that Plan Year.  If no election
was made for that Plan Year, no deferral shall be withheld.


 


13
















 


ARTICLE 11


TERMINATION, AMENDMENT OR
MODIFICATION


 


11.1         TERMINATION.  Any Employer reserves the right to terminate
the Plan at any time with respect to Participants employed by the
Employer.  Upon the termination of the
Plan, the Participant’s Account Balance shall be paid out as though the
Participant had experienced a Termination of Employment on the date of Plan
termination, or. if Plan termination occurs after the date upon which the
Participant was eligible to Retire, the Participant had Retired on the date of
Plan termination, or, if Plan termination occurs after the Participant Retired
and commenced (but not completed) distribution hereunder, benefits shall
continue to the Participant pursuant to the terms hereof without regard to the
termination.  Prior to a Change in Control,
an Employer shall have the right, in its sole and absolute discretion, and
notwithstanding any elections made by the Participant to pay all such benefits
in a lump sum.


 


11.2         AMENDMENT.  Any Employer may, at any time, amend or
modify the Plan in whole or in part with respect to that Employer; provided,
however, that no amendment or modification shall be effective to decrease a
Participant’s Account Balance, calculated as though the Participant had
experienced a Termination of Employment as of the effective date of the
amendment or modification, or, if the amendment or modification occurs after
the date upon which the Participant was eligible to Retire, the Participant had
Retired as of the effective date of the amendment or modification.  In addition, no amendment or modification of
the Plan shall affect the right of any Participant or Beneficiary who was
eligible to or did Retire on or before the effective date of such amendment or
modification to receive benefits in the manner he or she elected.


 


11.3         EFFECT OF PAYMENT.  The full payment of the applicable benefit
under Articles 4, 5, 6, or 7 of the Plan shall completely discharge all
obligations to a Participant under this Plan and the Participant’s Plan
Agreement shall terminate.


 


ARTICLE 12


ADMINISTRATION


 


12.1         COMMITTEE DUTIES.  This Plan shall be administered by a
Committee, to be known as the Herbalife Deferred Compensation Plan Committee.
which shall consist of individuals approved by the Board.  Members of the Committee may be Participants
under this Plan.  The Committee shall
also have the discretion and authority to make, amend, interpret, and enforce
all appropriate rules and regulations for the administration of this Plan and
decide or resolve any and all questions including interpretations of this Plan,
as may arise in connection with the Plan. 
Any Committee member must recuse himself or herself on any matter of
personal interest to such member that comes before the Committee.


 


14
















 


12.2         AGENTS.  In the administration of this Plan, the
Committee may, from time to time, employ agents and delegate to them such
administrative duties as it sees fit and may from time to time consult with
counsel who may be counsel to any Employer.


 


12.3         BINDING EFFECT OF DECISIONS.  The decision or action of the Committee with
respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Plan.


 


12.4         INDEMNITY OF COMMITTEE.  All Employers shall indemnify and hold
harmless the members of the Committee against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act with
respect to this Plan, except in the case of willful misconduct by the Committee
or any of its members.


 


12.5         EMPLOYER INFORMATION.  To enable the Committee to perform its
functions, each Employer shall supply full and timely information to the
Committee on all matters relating to the compensation of its Participants, the
date and circumstances of the Retirement. 
Disability, death or Termination of Employment of its Participants, and
such other pertinent information as the Committee may reasonably require.


 


ARTICLE 13


CLAIMS PROCEDURE


 


13.1         PRESENTATION OF CLAIM.  Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
“Claimant”) may deliver to the Committee a written claim for a determination
with respect to the amounts distributable to such Claimant from the Plan.  If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within 60 days after
such notice was received by the Claimant. 
All other claims must be made within 180 days of the date on which the
event that caused the claim to arise occurred. 
The claim must state with particularity the determination desired by the
Claimant.


 


13.2         NOTIFICATION OF DECISION.  The Committee shall consider a Claimant’s
claim within 60 days of the making of the claim, and shall notify the Claimant
in writing:


 


(a)           that the
Claimant’s requested determination has been made, and that the claim has been
allowed in full; or


 


(b)           that the
Committee has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:


 


(i)            the
specific reason(s) for the denial of the claim. or any part of it:


 


15
















 


(ii)           specific
reference(s) to pertinent provisions of the Plan upon which such denial was
based;


 


(iii)          a
description of any additional material or information necessary for the Claimant
to perfect the claim, and an explanation of why such material or information is
necessary; and


 


(iv)          an
explanation of the claim review procedure set forth in Section 13.3 below.


 


13.3         REVIEW OF A DENIED CLAIM.  Within 60 days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a Claimant (or
the Claimant’s duly authorized representative) may file with the Committee a
written request for a review of the denial of the claim.  Thereafter, but not later than 30 days after
the review procedure begins, the Claimant (or the Claimant’s duly authorized
representative):


 


(a)           may review
pertinent Documents;


 


(b)           may submit
written comments or other Documents; and/or


 


(c)           may request
a hearing, which the Committee, in its sole discretion, may grant.


 


13.4         DECISION ON REVIEW.  The Committee shall render its decision on
review promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other special circumstances
require additional time, in which case the Committee’s decision must be
rendered within 120 days after such date. Such decision must be written in a
manner calculated to be understood by the Claimant, and it must contain:


 


(a)           specific
reasons for the decision;


 


(b)           specific
reference(s) to the pertinent Plan provisions upon which the decision was
based; and


 


(c)           such other
matters as the Committee deems relevant.


 


13.5         LEGAL ACTION.  A Claimant’s compliance with the foregoing
provisions of this Article 13 is a mandatory prerequisite to a Claimant’s
right to commence any arbitration under Section 13.6 with respect to any
claim for benefits under this Plan.


 


13.6         ARBITRATION.  If, after the review process, a claimant
seeks further redress, the subject of the dispute shall be submitted to
arbitration in accordance with the procedures hereinafter provided in this
Section 13.6 (the “Procedures”), which arbitration shall be the exclusive
remedy, of the parties hereto.  The
resulting arbitration award shall be


 


16
















 


deemed a final order of a court having
jurisdiction over the subject matter and shall not be appealable.


 


(a)           Should any
controversy arise between the parties as to which the parties are unable to
effect a satisfactory resolution, upon demand of any party, such controversy
shall be submitted to arbitration in Los Angeles County, California, in
accordance with the terms and provisions of these Procedures and the rules then
prevailing of the American Arbitration Association (or any successor
organization) to the extent that such rules are not inconsistent with the
provisions of these Procedures.


 


(b)           A party
desiring to submit to arbitration any such controversy shall furnish its demand
for arbitration in writing to the other party, which demand shall contain a
brief statement of the matter in controversy, as well as a list containing the
names of three (3) suggested arbitrators from which list, or from other
sources, the parties shall choose one (1) mutually acceptable arbitrator. If
the parties are unable to agree upon the identity of a single arbitrator within
ten (10) days from the receipt of such demand, then any party, on behalf of and
upon notice to the other party, may request appointment of a single arbitrator
by the American Arbitration Association (or any organization successor thereto)
in accordance with its rules then prevailing. 
If the American Arbitration Association (or any organization successor thereto)
should fail to appoint the arbitrator within fifteen (15) days after such
request is made, then any party, may apply upon notice to the other party, to
the court as provided in California Code of Civil Procedure Section 1281.6
or any successor provision for the appointment of such arbitrator.  The arbitrator chosen or appointed pursuant
to these Procedures (“Arbitrator”) shall not be a past or present officer,
director or employee of any party to the dispute or any of its affiliates.


 


(c)           The parties
shall be entitled to conduct discovery as permitted under Section 1283.05
of the California Code of Civil Procedure.


 


(d)           Each party
shall furnish the Arbitrator and the other party with a written statement of
matters it deems to be in controversy for purposes of the arbitration
procedures.  Such statement shall also
include all arguments, contentions and authorities which it contends
substantiate its position.  Each party
shall also submit a proposed award to the Arbitrator and the other party.


 


(e)           Such
Arbitrator shall render this decision as soon as possible but not later than
thirty (30) days after conclusion of hearings before such Arbitrator.  The decision shall be in writing, and
counterpart copies thereof shall be delivered to each of the parties.  The decision shall adopt, unchanged and in
its entirety, the award proposed by, one of the parties.


 


17
















 


ARTICLE 14


TRUST


 


14.1         ESTABLISHMENT OF TRUST.  The Company shall establish the Trust, and
the Employers shall transfer over to the Trust such assets. if any, as the
Committee determines, from time to time and in its sole discretion, are
appropriate.


 


14.2         INTERRELATIONSHIP OF THE PLAN AND THE
TRUST.  The provisions of the Plan shall
govern the rights of a Participant to receive distributions pursuant to the
Plan.  The provisions of the Trust shall
govern the rights of the Participant and the creditors of the Employers to the
assets transferred to the Trust.  The
Employers shall at all times remain liable to carry out their obligations under
the Plan.  The Employers’ obligations
under the Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust.


 


ARTICLE 15


MISCELLANEOUS


 


15.1         UNSECURED GENERAL CREDITOR.  Participants and their Beneficiaries, heirs,
successors and assigns shall have no legal or equitable right, interest or
claim in any property or assets of an Employer. 
Any and all of an Employer’s assets shall be, and remain, the general,
unpledged and unrestricted assets of the Employer.  An Employer’s obligation under the Plan shall
be merely that of an unfunded and unsecured promise to pay money in the future.


 


15.2         EMPLOYER’S LIABILITY.  An Employer’s liability for the payment of
benefits shall be defined only by the Plan. 
An Employer shall have no obligation to a Participant under the Plan
except as expressly provided in the Plan.


 


15.3         NONASSIGNABILITY.  Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage, or otherwise encumber, transfer, hypothecate or convey in advance of
actual receipt, the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to be unassignable
and non-transferable.  No part of the
amounts payable shall, prior to actual payments be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person. nor be transferable by
operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency.


 


15.4         COORDINATION WITH OTHER
BENEFITS.  The benefits provided for a
Participant and Participant’s Beneficiary under the Plan are in addition to any
other benefits available to such Participant under any other plan or program
for employees of the Participant’s Employer. 
The Plan shall supplement and shall not supersede, modify, or amend any
other such plan or program except as may otherwise be expressly provided.


 


18
















 


15.5         NOT A CONTRACT OF EMPLOYMENT.  The terms and conditions of this Plan shall
not be deemed to constitute a Contract of employment between any Employer and
the Participant.  Such employment is
hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, with or without cause, unless expressly
provided in a written employment agreement. 
Nothing in this Plan shall be deemed to give a Participant the right to
be retained in the service of any Employer, either as an employee or a
director, or to interfere with the right of any Employer to discipline or
discharge the Participant at any time.


 


15.6         FURNISHING INFORMATION.  A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information requested by
the Committee and take such other actions as may be requested in order to
facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as
the Committee may deem necessary.


 


15.7         TERMS.  Whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were used in
the plural or the singular, as the case may be, in all cases where they would so
apply.  The masculine pronoun shall be
deemed to include the feminine and VICE VERSA, unless the context clearly
indicates otherwise.


 


15.8         CAPTIONS.  The captions of the articles. sections and
paragraphs of this Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.


 


15.9         GOVERNING LAW.  Subject to ERISA, the provisions of this Plan
shall be construed and interpreted according to the laws of the State of
California.


 


15.10       NOTICE.  Any notice or filing required or permitted to
be given to the Committee under this Plan shall be sufficient if in writing and
hand- delivered, or sent by registered or certified mail. to:


 


	
   

  	
  Mr. Brian Kane

  
	
   

  	
  Senior Vice President of Human Resources

  
	
   

  	
  HERBALIFE INTERNATIONAL OF AMERICA, INC.

  
	
   

  	
  Post Office Box 80210

  
	
   

  	
  Los Angeles, CA 90080-0210

  



 


Such notice shall be deemed given as of the
date of delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.


 


Any notice or filing required or permitted
to be given to a Participant under this Plan shall be sufficient if in writing
and hand-delivered, or sent by, mail, to the last known address of the
Participant.


 


19
















 


15.11       SUCCESSORS.  The provisions of this Plan shall bind and
inure to the benefit of the Participant’s Employer and its successors and
assigns and the Participant, the Participant’s Beneficiaries, and their
permitted successors and assigns.


 


15.12       SPOUSE’S INTEREST.  The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse’s will, nor shall such
interest pass under the laws of intestate succession.


 


15.13       VALIDITY.  In case any provision of this Plan shall be
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been inserted
herein.


 


15.14       INCOMPETENT.  If the Committee determines in its discretion
that a benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of that
person’s property, the Committee may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. 
The Committee may require proof of minority, incompetency, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit.  Any payment of a benefit shall
be a payment for the account of the Participant and the Participant’s
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Plan for such payment amount.


 


15.15       DISTRIBUTION IN THE EVENT OF
TAXATION.  If, for any reason, all or any
portion of a Participant’s benefit under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the Committee for a
distribution of assets sufficient to meet the Participant’s tax liability
(including additions to tax, penalties and interest).  Upon the grant of such a petition, which
grant shall not be unreasonably withheld, a Participant’s Employer shall
distribute to the Participant immediately available funds in an amount equal to
that Participant’s federal, state and local tax liability associated with such
taxation (which amount shall not exceed the Participant’s vested Account
Balance), which liability shall be measured by using that Participant’s then
current highest federal, state and local marginal tax rate, plus the rates or
amounts for the applicable additions to tax, penalties and interest.  If the petition is granted, the tax liability
distribution shall be made within 90 days of the date when the Participant’s
petition is granted.  Such a distribution
shall reduce the benefits to be paid under this Plan.


 


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15.16       LEGAL FEES TO ENFORCE RIGHTS AFTER
CHANGE IN CONTROL. The Company is aware that upon the occurrence of a Change in
Control, the Board (which might then be composed of new members) or a shareholder
of the Company, or of any successor corporation might then cause or attempt to
cause the Company or such successor to refuse to comply with its obligations
under the Plan and might cause or attempt to cause the Company to institute, or
may institute, arbitration or litigation seeking to deny Participants the
benefits intended under the Plan.  In
these circumstances, the purpose of the Plan could be frustrated.  Accordingly, if, following a Change in
Control, it should appear to any Participant that the Company or the Committee
has failed to comply with any of its obligations under the Plan or any
agreement thereunder or, if the Company or any other person takes any action to
declare the Plan void or unenforceable or institutes any arbitration, litigation
or other legal action designed to deny, diminish or to recover from any
Participant or Beneficiary the benefits intended to be provided, then the
Company irrevocably authorizes such person to retain counsel of his or her
choice at the expense of the Company to represent such person in connection
with the initiation or defense of any arbitration, litigation or other legal
action, whether by or against the Company, the Committee, or any director,
officer, shareholder or other person affiliated with the Company or any
successor thereto in any jurisdiction.


 


IN WITNESS WHEREOF, the Company has signed
this Plan Document as of 12/29, 1995.


 


	
   

  	
  HERBALIFE INTERNATIONAL OF AMERICA,

  
	
   

  	
  INC.

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ illegible

  	
   

  
	
   

  	
  Its:

  	
  /s/ Senior Vice President

  	
   

  



 


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