Exhibit 10.4


 


HERBALIFE
INTERNATIONAL OF AMERICA, INC.


MANAGEMENT
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

  	
  Interest
  Crediting Prior to Distribution

  	
   

  
	
   

  	
  3.6

  	
  Interest
  Crediting for Installment Distributions

  	
   

  
	
   

  	
  3.7

  	
  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

  	
   

  



 


i
















 


	
  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

  	
   

  
	
   

  	
  15.6

  	
  Furnishing Information

  	
   

  



 


ii
















 


	
   

  	
  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

  	
   

  



 


iii
















 


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, his or her Elective
Deferral Account.


 


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


 


1
















 


 


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.


 


2
















 


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                           “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.


 


1.14                           “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 3.5
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.


 


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


 


1.16                           “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.


 


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


 


3
















 


1.18                           “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.


 


1.19                           “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.


 


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


 


1.21                           “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.


 


1.22         “Plan” shall mean the Company’s
Management 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.


 


1.23                           “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.


 


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


 


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


 


1.26                           “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 (1O) 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.


 


4
















 


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


 


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


 


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


 


1.30                           “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.


 


1.31                           “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.


 


1.32                           “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.


 


1.33                           “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 either Vice
President or Director. From the foregoing, the Committee shall select, in its
sole and absolute discretion, employees to participate in the Plan.


 


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.


 


5
















 


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 requirements 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, in 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.


 


(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.


 


6
















 


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                                 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 for that Plan Year was
withheld at the beginning of the Plan Year or, in the case of the first year of
Plan participation, was withheld 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.


 


7
















 


3.6                                 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.


 


3.7                                 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.


 


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.


 


8
















 


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.


 


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.


 


9
















 


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.


 


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 3.5 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.


 


10
















 


(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.


 


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 1.33 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.


 


11
















 


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.


 


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 1.33 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 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.


 


12
















 


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.


 


13
















 


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


 


14
















 


(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;


 


(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.


 


15
















 


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 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.


 


16
















 


(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.


 


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.


 


17
















 


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 payment, 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.


 


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.


 


18
















 


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.


 


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                     VALIDATION.
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 pavement 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.


 


19
















 


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.


 


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/ 

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  



 


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