<PAGE>
As filed with the Securities and Exchange
Commission on November 15, 1996 Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
HERBALIFE INTERNATIONAL, INC.
NEVADA 22-2695420
(State of Incorporation or Organization) (I.R.S. Employer Identification Number)
1800 Century Park East
Los Angeles, California 90067
(310) 410-9600
(Address of principal executive offices)
HERBALIFE SENIOR EXECUTIVE DEFERRED COMPENSATION PLAN
HERBALIFE MANAGEMENT DEFERRED COMPENSATION PLAN
HERBALIFE MASTER TRUST AGREEMENT FOR DEFERRED COMPENSATION PLANS
AMENDED AND RESTATED 1991 STOCK OPTION PLAN OF HERBALIFE INTERNATIONAL, INC.
HERBALIFE INTERNATIONAL, INC. 1992 AMENDED AND RESTATED EXECUTIVE INCENTIVE
COMPENSATION PLAN
HERBALIFE INTERNATIONAL, INC. AMENDED AND RESTATED 1994
PERFORMANCE-BASED ANNUAL INCENTIVE COMPENSATION PLAN
(Full title of the plans)
-----------------------
DAVID R. ADDIS, ESQ.
HERBALIFE INTERNATIONAL, INC.
1800 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(310) 410-9600
(Agent for service)
---------------------
IT IS REQUESTED THAT COPIES OF COMMUNICATIONS BE SENT TO:
ANTHONY T. ILER, ESQ.
IRELL & MANELLA LLP
333 S. HOPE ST., SUITE 3300
LOS ANGELES, CALIFORNIA 90071
(213) 620-1555
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Securities Amount to be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
to be registered registered (1) Price Per Share Offering Price(2) Registration Fee
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.01 par value) 5,000,000 shares $21.56 $107,800,000 $37,172.41
Deferred Compensation Obligations(3) $9,000,000 100% $9,000,000 $3,103.45
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A total of 3,354,000 shares were registered on: (i) the Form S-8
Registration Statement filed on August 9, 1993, at which time payment of
the registration fee of $16,906.00 for 3,254,000 shares was made and (ii)
the Form S-8 Registration Statement filed on September 6, 1994, at which
time payment of the registration fee of $728.45 for 100,000 shares was made
(collectively, the "Prior Registrations"). The shares registered pursuant
to this Form S-8 are in addition to the shares previously registered under
the Prior Registrations.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933 based upon the
average of the high and low sale prices of the Common Stock on the Nasdaq
National Market System on November 8, 1996.
(3) The Deferred Compensation Obligations are unsecured obligations of
Herbalife International, Inc. to pay deferred compensation in the future in
accordance with the terms and conditions of the Herbalife Senior Executive
Deferred Compensation Plan, the Herbalife Management Deferred Compensation
Plan and the Herbalife Master Trust Agreement for Deferred Compensation
Plans.
<PAGE>
EXPLANATORY NOTE
On August 9, 1993, Herbalife International, Inc. (the "Company"), filed a
Registration Statement on Form S-8 containing a prospectus meeting the
requirements of Part I of Form S-3 relating to reofferings by certain persons of
3,254,000 shares of common stock, $0.01 par value per share ("Common Stock")
which have been or may be acquired pursuant to the Herbalife International, Inc.
1991 Stock Option Plan (the "1991 Plan") and certain employment agreements with
executive officers. On September 6, 1994, the Company filed a Registration
Statement on Form S-8 which registered an additional 100,000 shares of the
Company's Common Stock acquired by an officer of the Company pursuant to a
restricted stock agreement with the Company and contained a revised reoffer
prospectus reflecting the additional shares registered thereby as well as
certain additional disclosures.
Pursuant to General Instruction E of Form S-8, this Registration Statement
on Form S-8 (the "Registration Statement") registers an additional 1,900,000
shares of the Company's Common Stock which may be acquired pursuant to the 1991
Plan, and contains a revised reoffer prospectus reflecting the additional shares
registered hereby as well as certain additional disclosures.
This Registration Statement (including the reoffer prospectus included
herein) also registers shares which have been or may be acquired pursuant to the
Herbalife International, Inc. Amended and Restated 1994 Performance-Based Annual
Incentive Compensation Plan (the "1994 Plan"). The total number of shares of
Company Stock that may be issued under the 1994 Plan in any fiscal year of the
Company, and the number of shares of Common Stock that may be issued under the
1994 Plan in any fiscal year of the Company to any single participant, may not
exceed five percent (5%) of the number of issued and outstanding shares of
Common Stock at the beginning of the prior fiscal year. In addition, this Form
S-8 registers shares which have been or may be acquired pursuant to the
Herbalife International, Inc. 1992 Amended and Restated Executive Incentive
Compensation Plan (the "1992 Plan"). The total number of shares of Company
Stock that may be issued under the 1992 Plan in any fiscal year of the Company,
and the number of shares of Common Stock that may be issued under the 1992 Plan
in any fiscal year of the Company to any single participant, shall not exceed
the excess of (a) five percent (5%) of the number of issued and outstanding
shares of Common Stock at the beginning of the prior fiscal year over (b) the
number of shares of Common Stock issued during the prior fiscal year under the
1994 Plan. This Form S-8 registers an aggregate of 3,100,000 shares of Company
Stock issuable under the 1994 Plan and the 1992 Plan.
This Form S-8 also registers $9,000,000 in unsecured obligations of the
Company to pay deferred compensation in the future in accordance with the terms
and conditions of the Herbalife Senior Executive Deferred Compensation Plan, the
Herbalife Management Deferred Compensation Plan and the Herbalife Master Trust
Agreement for Deferred Compensation Plans (the "Deferred Compensation
Obligations").
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Pursuant to the requirements of the Note to Part I of Form S-8 and Rule
428(b)(1) of the Rules under the Securities Act of 1933, as amended, the
information required by Part I of Form S-8 is incorporated by reference in the
Reoffer Prospectus which follows. The Reoffer Prospectus, together with the
documents incorporated by reference pursuant to Item 3 of Part II of this
Registration Statement, constitutes the Section 10(a) Prospectus.
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<PAGE>
REOFFER PROSPECTUS
The material which follows, up to but not including the pages beginning
Part II of this Registration Statement, constitutes a prospectus prepared in
accordance with the applicable requirements of Part I of Form S-3 and General
Instruction C to Form S-8, to be used in connection with resales of securities
acquired under the Registrant's 1991 Stock Option Plan, the Registrant's Amended
and Restated 1994 Performance Based Annual Incentive Compensation Plan and the
Registrant's 1992 Amended and Restated Executive Incentive Compensation Plan.
HERBALIFE INTERNATIONAL, INC.
COMMON STOCK
($.01 PAR VALUE)
5,000,000 SHARES
______________
This Prospectus relates to 5,000,000 shares of common stock, $0.01 par
value per share ("Common Stock"), of Herbalife International, Inc., a Nevada
corporation (the "Company"), which may be offered from time to time by one or
all of the selling stockholders named herein (the "Selling Stockholders") or,
pursuant to General Instruction C to Form S-8, in a supplement to this
Prospectus. The Company will receive no part of the proceeds of such sales.
The Company has agreed to pay certain costs and expenses incurred in connection
with the registration of the shares of Common Stock offered hereby, except that
the Selling Stockholders shall be responsible for all selling commissions,
transfer taxes and related charges in connection with the offer and sale of such
shares. See "Plan of Distribution."
The Selling Stockholders may sell all or a portion of the shares offered
hereby from time to time on the National Market System of the National
Association of Securities Dealers Automated Quotation System (the "NASDAQ-NMS")
at prevailing prices at the time of such sales, at prices related to such
prevailing prices or at negotiated prices. The Selling Stockholders may effect
such transactions by selling to or through one or more broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders. The Selling
Stockholders and any broker-dealers that participate in the distribution may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any commissions received by such
broker-dealers and any profits realized on the resale of shares by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Selling Stockholders may agree to indemnify such broker-dealers against
certain liabilities, including liabilities under the Securities Act. To the
extent required, the specified shares to be sold, the public offering price, the
names of any such broker-dealers, and any applicable commission or discount with
respect to any particular offer will be set forth in a supplement to this
Prospectus. See "Plan of Distribution."
The Common Stock of the Company is traded on the NASDAQ-NMS. On November
8, 1996, the closing sale price of the Company's Common Stock was $21.13 per
share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FOR INFORMATION CONCERNING CERTAIN FACTORS RELATING TO THIS OFFERING,
SEE "RISK FACTORS."
The date of this Prospectus is November 15, 1996.
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<PAGE>
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION............................................. iii
DOCUMENTS INCORPORATED BY REFERENCE............................... iv
THE COMPANY....................................................... v
RISK FACTORS...................................................... v
USE OF PROCEEDS................................................... x
SELLING STOCKHOLDERS.............................................. x
PLAN OF DISTRIBUTION.............................................. xii
LEGAL MATTERS..................................................... xii
EXPERTS........................................................... xii
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY UNDERWRITER. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Seven World Trade Center, New York, New York 10048
and Northwestern Atrium Center, 500 W. Madison Street, 14th Floor, Chicago,
Illinois 60661. Copies may be obtained at the prescribed rates from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549.
The Company has filed with the Commission a registration statement on Form
S-8 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act, with respect to the shares of Common Stock
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits thereto, as permitted by
the rules and regulations
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<PAGE>
of the Commission. For further information with respect to the Company and the
shares of Common Stock offered hereby, reference is hereby made to the
Registration Statement, including the exhibits filed or incorporated as a part
thereof. Statements contained herein concerning the provisions of any document
are not necessarily complete and in each instance reference is made to the copy
of the document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by reference to the copy of the
applicable documents filed with the Commission.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company under the Exchange
Act with the Commission are incorporated herein by reference: (1) the Company's
Annual Report on Form 10-K for the year ended December 31, 1995; (2) the
Company's Quarterly Report on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996; and (3) the description of the Company's
Common Stock as set forth in the registration statement filed by the Company on
Form 8-A pursuant to Section 12(g) of the Exchange Act, and any amendments
thereto filed with the Commission for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock made hereby shall be deemed to
be incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of such documents, except as to any portion of any future Annual
or Quarterly Report to the Company's stockholders that is not deemed to be filed
under said provisions. Any statement incorporated herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document that also
is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide, without charge, to each person to whom a copy of
this Prospectus has been delivered, on the request of such person, a copy of any
and all of the information that has been or may be incorporated by reference in
this Prospectus, other than exhibits thereto. Written or oral requests for such
copies should be directed to Herbalife International, Inc. at 1800 Century Park
East, Los Angeles, California 90067, Attention: Chief Counsel. The telephone
number is (310) 410-9600.
-iv-
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THE COMPANY
The Company markets weight control products, food and dietary supplements
and a new line of personal care products worldwide through a network marketing
system. The Company currently conducts business in 33 countries located in The
Americas, Europe and Asia/Pacific Rim. Retail sales derived from North America,
Europe and Asia/Pacific Rim represented 28%, 35% and 37%, respectively, of the
Company's total retail sales for the third quarter of 1996.
Herbalife International, Inc. operates through 37 wholly-owned domestic and
foreign subsidiaries. Except as the context otherwise requires, references to
the "Company" include Herbalife International, Inc. and its operating
subsidiaries. The Company's executive offices are located at 1800 Century Park
East, Los Angeles, California 90067. The Company's telephone number is (310)
410-9600.
The Company began operations in February 1980 as a California limited
partnership and operated in that form through December 1985, with the exception
of an interim period from October 1981 through August 1983 when the business was
operated through a California corporation. In January 1986, the Company's
business was transferred from the California limited partnership to its
corporate general partner, Herbalife International of America, Inc. ("Herbalife
of America"). In November 1986, Herbalife of America was acquired in a
stock-for-stock reorganization by Sage Court Ventures, Inc. ("Sage Court"). As
a result of the acquisition, Herbalife of America became a wholly-owned
subsidiary of Sage Court and the former stockholders of Herbalife of America
acquired a controlling interest in Sage Court. Sage Court's name was formally
changed to Herbalife International, Inc. in December 1986.
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CONSIDER
CAREFULLY THE INFORMATION SET FORTH BELOW, AS WELL AS THE OTHER INFORMATION
CONTAINED IN THIS PROSPECTUS, IN DETERMINING WHETHER TO PURCHASE SHARES OF
COMMON STOCK OFFERED HEREBY.
DEPENDENCE ON DISTRIBUTORS
The Company's success depends in significant part upon its ability to
attract, maintain and motivate a large base of distributors. In its efforts to
attract and retain distributors, the Company competes with other network
marketing organizations, including those in the food and dietary supplements
industry. In addition, as a result of the Company's network marketing system
and its international sponsorship program, the distributor organizations headed
by a relatively small number of key distributors are responsible for a
significant percentage of total retail sales (in many cases, including retail
sales in several different countries). The Company does not believe that the
loss of any key distributor would necessarily result in the loss of a
significant number of that distributor's downline organization members because
of the Company's generally good relations with its distributors and because of
the significant incomes that many distributors would forego by ceasing to
distribute the Company's products. However, the loss of a key distributor
together with a significant number of downline distributors, or the loss of a
significant number of distributors for any reason, could adversely affect sales
of the Company's products and could impair the Company's ability to attract new
distributors.
The Company's ability to attract and retain distributors has been and could
again be negatively affected by adverse publicity relating to the Company, its
products or its operations, including its network marketing system. In the
mid-1980s, the Company's products and marketing system became the subject of
regulatory scrutiny in the United States, resulting in large part from claims
and representations made
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about the Company's products (including impermissible therapeutic claims), that
caused a rapid, substantial loss of distributors in the United States and a
corresponding reduction in sales beginning in 1985. See "Sales and Earnings
Volatility." There can be no assurance that the Company's distributor base or
sales will not again be negatively affected by adverse publicity or regulatory
action.
REGULATION
In both its United States and foreign markets, the Company is or may be
subject to or affected by extensive governmental regulations, including, among
other things, regulations pertaining to (i) product formulation, labeling and
packaging, (ii) product claims and advertising, whether made by the Company or
its distributors, (iii) the Company's network marketing system, and
(iv) transfer pricing and similar regulations that affect the level of foreign
taxable income and customs duties.
The Company could be found not to be in compliance with existing
regulations as a result, among other things, of the ambiguous nature of certain
of the regulations, the considerable interpretive and enforcement discretion
given to regulators or misconduct by distributors, who are generally independent
contractors over whom the Company has limited control. Any assertion or
determination that the Company or its distributors are not in compliance with
existing regulations could have a material adverse effect on the Company. The
Company's business has been materially, adversely affected in the past as a
result of regulatory activities. See "Sales and Earnings Volatility."
In addition, the adoption of new regulations in the United States or
elsewhere, or changes in the interpretation of existing regulations, could have
a material adverse effect on the Company. For example, in June 1993 the United
States Food and Drug Administration (the "FDA"), among other things, gave
advance notice of proposed rulemaking outlining the options being considered by
the FDA for establishing a comprehensive regulatory scheme for various forms of
dietary supplements, including those containing herbal ingredients. Currently,
in order for the Company to market its products, such products must be "safe"
within the meaning of United States laws and regulations, including the Food,
Drug and Cosmetic Act, as amended. The Company believes that all of its
products are safe within that meaning. In particular, the Company believes that
Thermojetics-TM-, which includes a Chinese herb known as "Ma Huang" that
contains naturally-occurring ephedrine in small quantities, is safe based upon
the common use of Ma Huang in foods for many years. Under the applicable laws
and regulations, the general recognition of a substance's safety can be based
upon experience obtained through its common use in foods. However, the Company
cannot determine the effect that future FDA action or other future governmental
regulations or administrative orders may have on the Company's business. Such
regulations and orders could require the reformulation of certain products to
meet new standards, the recall or discontinuance of certain products not capable
of reformulation, expanded documentation of the properties of certain products
or scientific substantiation regarding product ingredients, safety or
usefulness. Furthermore, Ma Huang has recently been the subject of adverse
publicity in the United States and other countries. Thermojetics-TM-
contributed approximately 3% to sales in both 1995 and the nine months ended
September 30, 1996. Following the introduction of Thermojetics-TM- into Canada
in February 1993, the Company received informal notice that the Canadian
Department of Health and Welfare was investigating the existence of ephedrine in
food products. As a result, the Company suspended shipment of Thermojetics-TM-
into Canada in March 1993. The Company then reformulated the product to reduce
its ephedrine level and, upon obtaining notice that the reformulated product was
acceptable to Canadian authorities, renewed sales of Thermojetics-TM- in June
1993. Certain states have recently restricted, limited or prohibited the sale
of the Ma Huang herb. The Company does not ship product containing Ma Huang to
those states which limit the sale of this product. There is a risk that Ma
Huang may be subject to further regulation in the United States in the future,
as a result of FDA action or otherwise, which could require the reformulation of
the Thermojetics-TM- tablet with reduced ephedrine levels or with an acceptable
substitute for Ma Huang. While the Company believes the product could be
reformulated if required, there can be no assurance in this regard, and any
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inability to reformulate the product could have an adverse effect on the
Company. The foregoing risks associated with Ma Huang are examples only; it is
possible that an ingredient in any of the Company's products could be the
subject of adverse publicity or regulation.
Governmental regulations in countries where the Company plans to commence
or expand operations may prevent or delay entry into the market or prevent or
delay the introduction or require the reformulation of certain of the Company's
products, such as Thermojetics-TM-. Regulatory action, whether or not it
results in a final determination adverse to the Company, could create negative
publicity, with detrimental effects on the motivation and recruitment of
distributors and, consequently, on sales.
DEPENDENCE ON KEY PERSONNEL
The business of the Company, in particular the operation of its distributor
network, is substantially dependent upon the active participation of Mark
Hughes, the Company's principal stockholder, Chairman of the Board, Chief
Executive Officer and President. The loss of Mr. Hughes' services would
adversely affect the business of the Company.
SALES AND EARNINGS VOLATILITY
The Company's sales and earnings have been subject to significant
volatility in the past. In the mid-1980s, the Company's products and network
marketing system became the subject of regulatory scrutiny in the United States
resulting in large part from claims and representations made about the Company's
products, including impermissible therapeutic claims. Although the Company
responded by instituting certain regulatory compliance measures, as a result of
the adverse publicity generated by the regulatory activities the Company
experienced, beginning in 1985, a rapid, substantial loss of distributors in the
United States and a corresponding reduction in sales. In addition, the
Company's sales in the United States were adversely affected by competition from
other weight control products. As a consequence, from 1987 (the Company's first
full year as a public company) through 1990, the Company's operations resulted
either in net losses ($2.4 million in 1990 and $6.3 million in 1988) or modest
net income ($1.0 million in 1989 and $1.1 million in 1987). While the Company's
financial performance significantly improved from 1991 through the nine months
ended September 30, 1996 as a result of new business strategies, there can be no
assurance that the Company will not again be adversely affected by regulatory
actions, negative publicity or competition.
The Company's sales and earnings continue to be subject to significant
potential volatility based upon, among other things, the adverse effect of
distributors' or the Company's failure, and allegations of their failure, to
comply with applicable regulations, which have in the past and could again in
the future result in the removal of certain products from sale in certain
countries, either temporarily or permanently; the negative impact of changes in
or interpretations of regulations that may limit or restrict the sale of certain
of the Company's products, the operation of its network marketing system, the
expansion of its operations into new markets, the introduction of its products
into each market and the recruitment and retention of distributors; the
inability of the Company to introduce new products or the introduction of new
products by the Company's competitors; general conditions in the food and
dietary supplements industry or the network marketing industry; and consumer
perceptions of the Company's products and operations. In particular, because
the Company's products are ingested by consumers or applied to their bodies, the
Company is highly dependent upon consumers' perception of the safety and quality
of its products. As a result, substantial negative publicity concerning one or
more of the Company's products, such as Thermojetics-TM-, or other food and
dietary supplements similar to the Company's products could adversely affect the
Company's sales and earnings.
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<PAGE>
UNCERTAINTIES ASSOCIATED WITH BUSINESS EXPANSION
EXISTING MARKETS; DECLINES IN RATE OF GROWTH AND SALES. Since 1989, after
entering a country the Company has generally experienced an initial period of
rapid growth in sales as new distributors were recruited and the Company's
principal weight control products were introduced. Following this initial
growth period, the Company has generally experienced a decline in the rate of
growth and, in certain cases, a decline in sales. The Company believes that a
significant factor affecting these markets has been the opening of other new
markets within the same geographic region or with the same or similar language
or cultural bases and the corresponding tendency of some key distributors to
focus their attention on business opportunities provided by new markets instead
of preexisting markets. The continuation of growth, the maintenance of sales
and the retention of distributors in existing markets depend significantly on
the Company's ability to introduce additional products. The Company seeks to
introduce one or two additional products each year in its existing markets
beginning approximately in the first or second year after commencement of
operations in each market, subject to obtaining necessary regulatory approvals.
There can be no assurance that the Company's efforts to obtain required
regulatory approvals of its products will be successful or that such additional
products, if introduced, will have the desired positive impact on sales or
retention of distributors.
UNCERTAIN ABILITY TO ENTER NEW MARKETS. The Company's continued growth is
dependent in significant part upon its ability to expand its operations into new
markets. As compared to new market openings in the past, the Company may have
greater difficulty opening new markets in the future due to greater regulatory
barriers, the necessity of adapting to entirely new regulatory systems and
problems related to entering new markets with different cultural bases and
political systems from those encountered in the past.
RELIANCE ON OUTSIDE MANUFACTURERS
All of the Company's products are manufactured by outside companies. Raven
Industries, Inc. ("Raven") manufactures the Company's powder products, and D & F
Industries, Inc. ("D & F") supplies the Company's tablet products, including
Activated Fiber[tm], one of the Company's tablet products pursuant to a
licensing agreement from Dynamic Products, Inc., a California corporation
("Dynamic"). In addition, in May 1993, the Company entered into requirements
contracts with each of Raven and Dynamic, pursuant to which the Company has
agreed to purchase all of its requirements of powder products from Raven and all
of its requirements of tablet, capsule, liquid, cream and lotion products from
Dynamic or D & F to the extent each such manufacturer is capable or becomes
capable of manufacturing such products. The Company does not maintain its own
product research, development and formulation staff and relies on Raven and
D & F for such services. These services provided by Raven and D & F are very
important to the Company. The Company's ability to enter new markets and
sustain satisfactory levels of sales in each market is dependent in significant
part upon the ability of Raven and D & F to reformulate existing products for
introduction into the Company's markets. The development of additional new
products in the future will likewise be dependent in significant part on the
services of Raven and D & F.
OWNERSHIP OF PROPRIETARY RIGHTS
The Company does not own the proprietary rights to its weight management
products and its food and dietary supplements. However, the developer and
supplier of all these products has granted the Company the exclusive right to
market any product which the Company purchases from the suppliers thereby
granting the Company the practical equivalent of ownership of the formulations
of these products during the term of the supply agreements. The Company has
obtained or has applications pending for trademark registration of certain of
its tradenames in certain jurisdictions. However, there can be
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<PAGE>
no assurance that another company will not replicate one of the Company's
products. In addition, Raven and D & F own certain product formulations and
manufacturing processes relating to the Company's products. Two individuals
(not affiliates of the Company) are principal stockholders of each of D & F,
Raven and Dynamic Products, Inc.
Mark Hughes owns a one-third ownership interest in Raven and a one-fifth
ownership interest in Dynamic.
ABSENCE OF CLINICAL STUDIES AND SCIENTIFIC REVIEW; FAILURE TO CONSUME AS
SUGGESTED
In general, the Company's products consist of weight control products, food
and dietary supplements and personal care products about which the Company makes
no therapeutic claims and which the Company believes do not require approvals
from the FDA or, in the United States market, other regulatory agencies prior to
sale. Accordingly, the Company does not conduct clinical studies of its
products or otherwise subject them to scientific review. In addition, the
Company's products consist of herbs, vitamins, minerals and other ingredients
that the Company regards as safe when taken as suggested by the Company.
However, because the Company is highly dependent upon consumers' perception of
the safety and quality of its products as well as similar products distributed
by other companies, the Company could be adversely affected in the event any of
the Company's products or any similar products distributed by other companies
should prove or be asserted to be harmful to consumers. In addition, because of
the Company's dependence upon consumer perceptions, adverse publicity associated
with illness or other adverse effects resulting from consumers' failure to
consume the Company's products as suggested by the Company or other misuse or
abuse of the Company's products or any similar products distributed by other
companies could have a material adverse impact on the Company.
COMPETITION
The Company is subject to significant competition from other network
marketing organizations, including those that market food and dietary
supplements as well as other products, for the recruitment of distributors.
Some of the Company's competitors are substantially larger and have available
considerably greater financial resources than the Company. The Company's
ability to remain competitive depends, in significant part, on the Company's
success in recruiting and retaining distributors through an attractive
compensation plan and other incentives.
In addition, the business of marketing food and dietary supplements, in
particular weight control products, is highly competitive. This market segment
includes numerous manufacturers, distributors and marketers that actively
compete for the business of consumers both in the United States and abroad. The
market is highly sensitive to the introduction of new products or weight control
plans that may rapidly capture a significant share of the market.
DEPENDENCE UPON MATERIAL FOREIGN OPERATIONS AND POTENTIAL REGULATORY CHANGES
Approximately 64% and 75% of the Company's total retail sales for 1995 and
the nine months ended September 30, 1996, respectively, were generated outside
the United States. Such reliance on foreign markets exposes the Company to the
risks associated with foreign operations, including, among other things, changes
in or interpretations of foreign regulations that may limit the Company's
ability to sell certain products, conduct a network marketing system or
repatriate profits to the United States, exposure to currency fluctuations, and
the potential imposition of trade or foreign exchange restrictions or
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<PAGE>
increased tariffs. As the Company continues to expand its international
operations, these and other risks associated with international operations are
likely to increase.
PRODUCT LIABILITY CLAIMS
As a marketer of food and dietary supplements and other products that are
ingested by consumers or applied to their bodies, the Company may be subjected
to various product liability claims, including, among other things, that its
products contain contaminants or include inadequate instructions as to use or
inadequate warnings concerning side effects and interactions with other
substances. While such claims to date have not been material to the Company and
the Company maintains product liability insurance, it is possible that
widespread product liability claims and the resultant adverse publicity could
adversely affect the Company.
CONCENTRATION OF STOCK OWNERSHIP
Mr. Hughes currently owns approximately 56.61% of the outstanding shares of
Common Stock of the Company. Accordingly, Mr. Hughes currently has and will
retain the power to elect the entire Board of Directors of the Company and
determine the outcome of all matters submitted to the Company's stockholders for
approval.
SHARES AVAILABLE FOR FUTURE PUBLIC SALE
In addition to shares already publicly held, as of October 31, 1996, up to
17,180,619 shares held by current directors and executive officers (excluding
shares issuable upon exercise of stock options) are currently available for
sale pursuant to Rule 144 under the Securities Act.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock offered hereby.
SELLING STOCKHOLDERS
The shares of Common Stock covered by this Prospectus are being registered
for reoffers and resales by Selling Stockholders of the Company who have or may
acquire such shares pursuant to the exercise of options that may be granted
under the Company's 1991 Stock Option Plan (the "Plan") or that have been
granted pursuant to or may be acquired upon exercise of options granted under
certain employment and restricted stock agreements with executive officers. The
Selling Stockholders named below may resell all, a portion, or none of the
shares that they have acquired or may acquire pursuant to the exercise of
options.
Key employees deemed to be "affiliates" of the Company who acquire
registered Common Stock under the Plan may be added to the Selling Stockholders
listed below from time to time, either by means of a post-effective amendment
hereto or by use of a prospectus filed pursuant to Rule 424 under the Securities
Act. An "affiliate" is defined in Rule 405 under the Securities Act as a
"person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with," the Company.
The following table shows the names of the Selling Stockholders, their
positions with the Company, the number of shares of Common Stock known by the
Company to be beneficially owned by
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<PAGE>
them as of October 31, 1996, the number of shares covered by this Prospectus and
the number of shares of Common Stock to be owned by each Selling Stockholder if
such Selling Stockholder were to sell all of his shares of Common Stock covered
by this Prospectus.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENTAGE OF
NUMBER OF SHARES NUMBER OF CLASS TO BE
SHARES COVERED BY SHARES TO BE BENEFICIALLY
POSITION BENEFICIALLY THIS HELD AFTER OWNED AFTER
SELLING STOCKHOLDER WITH THE COMPANY OWNED PROSPECTUS(1) OFFERING(1)(2) OFFERING(1)(2)
- ------------------- ---------------- ----- ------------- -------------- --------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mark Hughes Chairman, 16,891,438 (1) 16,891,438 56.61%
President and Chief
Executive Officer
- ------------------------------------------------------------------------------------------------------------------------
Dr. David B. Katzin Executive Vice 34,681 (1) 34,681 (3)
President, Chief
Medical Affairs
Officer and
Chairman of the
Herbalife Scientific
Board
- ------------------------------------------------------------------------------------------------------------------------
Christopher Pair Executive Vice -- (1) -- (3)
President --
International and
Corporate
Administration,
Secretary and
Director
- ------------------------------------------------------------------------------------------------------------------------
Michael Rosen Executive Vice 100,000 (1) 100,000 (3)
President --
Corporate
Marketing and
Director
- ------------------------------------------------------------------------------------------------------------------------
Timothy Gerrity Executive Vice 17,500 (1) 17,500 (3)
President and Chief
Financial Officer
- ------------------------------------------------------------------------------------------------------------------------
David R. Addis Chief Counsel 137,000 (1) 137,000 (3)
- ------------------------------------------------------------------------------------------------------------------------
Edward J. Hall Director -- (1) -- --
- ------------------------------------------------------------------------------------------------------------------------
Alan Liker Director -- (1) -- --
- ------------------------------------------------------------------------------------------------------------------------
Christopher M. Miner Director -- (1) -- --
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes an indeterminate number of shares which may have been or may be
issued under the Company's 1991 Plan, 1992 Plan and 1994 Plan, up to an
aggregate number of shares equal to the shares covered by this Reoffer
Prospectus. See "Explanatory Note."
(2) Assumes that no additional shares are purchased and sold by any Selling
Stockholder.
(3) Less than one percent of outstanding shares.
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<PAGE>
PLAN OF DISTRIBUTION
The sale of all or a portion of the shares of Common Stock offered hereby
by the Selling Stockholders may be effected from time to time on the NASDAQ-NMS
at prevailing prices at the time of such sales, at prices related to such
prevailing prices or at negotiated prices. The Selling Stockholders may effect
such transactions by selling to or through one or more broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders. The Selling
Stockholders and any broker-dealers that participate in the distribution may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by such broker-dealers and any profits realized on the
resale of shares by them may be deemed to be underwriting discounts and
commissions under the Securities Act. The Selling Stockholders may agree to
indemnify such broker-dealers against certain liabilities, including liabilities
under the Securities Act.
To the extent required under the Securities Act, a supplement to this
Prospectus will be filed disclosing (a) the name of any such broker-dealers, (b)
the number of shares involved, (c) the price at which such shares are to be
sold, (d) the commissions paid or discounts or concessions allowed to such
broker-dealers, where applicable, (e) that such broker-dealers did not conduct
any investigation to verify the information set out or incorporated by reference
in this Prospectus, as supplemented, and (f) other facts material to the
transaction.
There is no assurance that any of the Selling Stockholders will sell any or
all of the shares of Common Stock offered hereby.
The Company has agreed to pay certain costs and expenses incurred in
connection with the registration of the shares of Common Stock offered hereby,
except that the Selling Stockholders shall be responsible for all selling
commissions, transfer taxes and related charges in connection with the offer and
sale of such shares.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by the law firm of Irell & Manella LLP, Los Angeles, California.
EXPERTS
The consolidated financial statements as of December 31, 1995 and 1994 and
for each of the three years in the period ended December 31, 1995 incorporated
in this Prospectus by reference from the Company's Annual Report on Form 10-K
for the year ended December 31, 1995, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by the Company are
incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995;
(2) the Company's Quarterly Report on Form 10-Q for the fiscal
quarters ended March 31, 1996, June 30, 1996 and September 30, 1996;
and
(3) the description of the Common Stock contained in the Form
8-A Registration Statement registering the Common Stock pursuant to
Section 12(g) of the Exchange Act, and any amendments thereto filed
with the Commission for the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date this Registration Statement is
filed with the Commission, and prior to the filing of a post-effective amendment
which indicates that all securities offered by this Registration Statement have
been sold or which deregisters all such securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such prior statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement, except as indicated herein.
ITEM 4. DESCRIPTION OF SECURITIES.
The Company maintains two deferred compensation plans for select groups of
management or highly compensated employees: the Herbalife Management Deferred
Compensation Plan, effective January 1, 1996 (the "Management Plan", applicable
to eligible employees below the rank of Senior Vice President) and the Herbalife
Senior Executive Compensation Plan, effective January 1, 1996 (the "Senior
Executive Plan, applicable to eligible employees at the rank of Senior Vice
President and higher) (collectively with the Management Plan and the Herbalife
Master Trust Agreement for Deferred Compensation Plans, effective January 1,
1996, the "Deferred Compensation Plans"). The Deferred Compensation Plans allow
eligible employees, who are selected by the administrative committee that
manages and administers the plans (the "Deferred Compensation Committee"), to
elect to defer up to fifty percent (50%) of their base annual salary and up to
one hundred percent (100%) of their annual bonus for each calendar year (the
"Annual Deferral Amount"). The Company makes matching contributions on behalf
of each participant in the Senior Executive Plan ("Company Matching
Contributions") of one hundred percent (100%) of the amount deferred by each
such participant up to ten percent (10%) of the participant's base annual
salary. Each participant in either Deferred Compensation Plan has at all times
a fully vested and nonforfeitable interest in each year's contribution,
including interest credited thereto, and in any Company Matching Contributions,
if applicable. In connection with a participant's election
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<PAGE>
to defer an Annual Deferral Amount, the participant may also elect to receive a
short-term payout, equal to the Annual Deferral Amount plus interest and payable
five or more years from the first day of the year in which the Annual Deferral
Amount is actually deferred. Subject to the short term payout provision and
certain execptions for unforeseeable financial emergencies, a participant may
not withdraw, without incurring a ten percent (10%) withdrawal penalty, all or
any portion of his or her account under the Deferred Compensation Plans prior to
the date that such participant either (a) is determined by the Deferred
Compensation Committee to have incurred permanent and total disability or (b)
terminates employment with the Company. The obligations of the Company under
the Deferred Compensation Plans are unfunded and unsecured general obligations
of the Company to pay the deferred compensation in the future in accordance with
the terms of the Deferred Compensation Plans.
A participant's right or the right of any other person to the Obligations
cannot be assigned, alienated, sold, garnished, transferred, pledged or
encumbered except by a written designation of a beneficiary under the Deferred
Compensation Plans, or, if no beneficiary designation has been made, to the
participant's surviving spouse. If the participant has no surviving spouse, the
benefits remaining under the Deferred Compensation Plans 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.
The Company reserves the right to amend or terminate the Deferred
Compensation Plans at any time, except that no such amendment or termination
shall adversely affect the right of each Participant to the balance of his or
her deferred account as of the date of such amendment or termination.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.751 of the General Corporation Law of Nevada ("GCL") empowers a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, except an action by or
in the right of the corporation, by reason of the fact that he or she is or was
a director, officer, employee or agent of the corporation or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding if the person indemnified
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. In the case of any action by or in the right of the
corporation, no indemnification may be made in respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation or for amounts paid in settlement to the corporation unless and only
to the extent that the court in which such action or suit was brought or other
court of competent jurisdiction determines that in view of all the circumstances
of the case such person is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper. Section 78.751 further provides that
to the extent a director or officer of a corporation has been successful in the
defense of any action, suit or proceeding referred to above or in the defense of
any claim, issue or matter therein, he or she shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him or
her in connection therewith.
-xiv-
<PAGE>
The Articles of Incorporation, as amended (the "Articles"), and Restated
By-Laws of the Company provide, in effect, that to the extent and under the
circumstances permitted by Section 78.751 of the GCL and subject to certain
conditions, the Company shall indemnify any person who was or is a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding of the type described above by reason of the fact that he or she is
or was a director or officer of the Company or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation.
The Company has also entered into indemnification agreements with each of
its directors and executive officers providing, among other things, that the
director or officer shall be indemnified to the fullest extent permitted by
applicable law against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement in any action, suit or proceeding of the
type described above by reason of the fact that he or she is or was a director
or officer of the Company or is or was serving at the request of the Company as
a director, officer, employee or agent of another corporation. In furtherance
of such indemnification agreements, the Company has established a $1,000,000
trust fund from which payments owing under the indemnification agreements may be
made. The initial term of the trust is ten years.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
None.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4 Form of Common Stock Certificate(1)
5 Legal Opinion of Irell & Manella LLP(2)
23.1 Consent of Independent Auditors - Deloitte & Touche LLP(2)
23.2 Consent of Irell & Manella LLP (included in legal opinion
filed as Exhibit 5)
24 Power of Attorney (included on the signature pages filed
herewith)
99.1 Herbalife Senior Executive Deferred Compensation Plan,
effective January 1, 1996(3)
99.2 Herbalife Management Deferred Compensation Plan, effective
January 1, 1996(3)
99.3 Herbalife Master Trust Agreement for Deferred Compensation
Plans, effective January 1, 1996(3)
99.4 Amended and Restated 1991 Stock Option Plan of Herbalife
International, Inc.(4)
99.5 Herbalife International, Inc. 1992 Amended and Restated
Executive Incentive Compensation Plan(4)
99.6 Herbalife International, Inc. Amended and Restated 1994
Performance-Based Annual Incentive Compensation Plan(4)
____________________________
(1) Incorporated by reference to the Company's Registration
Statement on Form S-1 (No. 33-66576) declared effective by
the Securities and Exchange Commission on October 8, 1993.
(2) Filed herewith.
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<PAGE>
(3) Incorporated by reference to the Company's Annual report on
Form 10-K for the year ended December 31, 1995.
(4) Incorporated by reference to the Company's Definitive Proxy
Statement relating to its 1996 Annual Meeting of
Stockholders.
ITEM 9. UNDERTAKINGS.
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or
the most recent post-effective amendment hereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(a)(i) and (1)(a)(ii) will not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
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<PAGE>
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on this 15th day of
November, 1996.
HERBALIFE INTERNATIONAL, INC.
(a Nevada corporation)
Registrant
By: /s/ CHRISTOPHER PAIR
____________________________________________
Christopher Pair
Executive Vice President -- International and
Corporate Administration, Secretary and Director
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<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Herbalife International,
Inc., a Nevada corporation, do hereby constitute and appoint Mark Hughes,
Chairman, President and Chief Executive Officer, the lawful attorney-in-fact and
agent, with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorney and agent determines to be
necessary or advisable or required to enable said corporation to comply with the
Securities Act of 1933, as amended, and any rules or regulation or requirements
of the Commission in connection with this Registration Statement. Without
limiting the generality of the foregoing power and authority, the powers granted
include the power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this Registration Statement,
to any and all amendments, both pre-effective and post-effective, and
supplements to this Registration Statement and to any and all instruments or
documents filed as part of or in connection with this Registration Statement or
amendments or supplements thereof, and each of the undersigned hereby ratifies
and confirms all that said attorney and agent shall do or cause to be done by
virtue hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of November 15, 1996.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated on November 15, 1996.
Signature Title
--------- -----
/s/ MARK HUGHES
_______________________________ Chairman, President and Chief
Mark Hughes Executive Officer of Herbalife
International, Inc. (Principal Executive
Officer)
/s/ CHRISTOPHER PAIR
_______________________________ Director, Executive Vice President
Christopher Pair -- International and Corporate
Administration and Secretary
/s/ TIMOTHY GERRITY
_______________________________ Executive Vice President and Chief
Timothy Gerrity Financial Officer of Herbalife
International, Inc. (Principal Financial
and Accounting Officer)
/s/ MICHAEL ROSEN
_______________________________ Director and Executive Vice
Michael Rosen President -- Corporate Marketing
-xix-
<PAGE>
/s/ EDWARD J. HALL
_______________________________ Director
Edward J. Hall
/s/ ALAN LIKER
_______________________________ Director
Alan Liker
/s/ CHRISTOPHER M. MINER
_______________________________ Director
Christopher M. Miner
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<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
HERBALIFE INTERNATIONAL, INC.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4 Form of Common Stock Certificate(1)
5 Legal Opinion of Irell & Manella LLP(2)
23.1 Consent of Independent Auditors - Deloitte & Touche LLP(2)
23.2 Consent of Irell & Manella LLP (included in legal opinion filed
as Exhibit 5)
24 Power of Attorney (included on the signature pages filed
herewith)
99.1 Herbalife Senior Executive Deferred Compensation Plan(3)
99.2 Herbalife Management Deferred Compensation Plan(3)
99.3 Herbalife Master Trust Agreement for Deferred Compensation
Plans(3)
99.4 Amended and Restated 1991 Stock Option Plan of Herbalife
International, Inc.(4)
99.5 Herbalife International, Inc. 1992 Amended and Restated Executive
Incentive Compensation Plan(4)
99.6 Herbalife International, Inc. Amended and Restated 1994
Performance-Based Annual Incentive Compensation Plan(4)
____________________________
(1) Incorporated by reference to the Company's Registration Statement on
Form S-1 (No. 33-66576) declared effective by the Securities and
Exchange Commission on October 8, 1993.
(2) Filed herewith.
(3) Incorporated by reference to the Company's Annual report on Form 10-K
for the year ended December 31, 1995.
(4) Incorporated by reference to the Company's Definitive Proxy Statement
relating to its 1996 Annual Meeting of Stockholders.
-xxi-
<PAGE>
EXHIBIT 5
LEGAL OPINION OF IRELL & MANELLA LLP
[LETTERHEAD OF IRELL & MANELLA LLP]
November 15, 1996
Herbalife International, Inc.
1800 Century Park East
Los Angeles, California 90067
Ladies and Gentlemen:
We have acted as counsel for Herbalife International, Inc., a Nevada
corporation (the "Company"), in connection with the proposed filing with the
Securities and Exchange Commission expected to be made on or about November 15,
1996 under the Securities Act of 1933, as amended, of a Registration Statement
on Form S-8 (the "Registration Statement") for the purpose of registering (i)
5,000,000 shares of the Company's Common Stock, par value $.01 per share (the
"Shares") and (ii) $9,000,000 in Deferred Compensation Obligations which
represent unsecured obligations of the Company to pay compensation in the future
in accordance with the terms and conditions of the Herbalife Senior Executive
Deferred Compensation Plan, the Herbalife Management Deferred Compensation Plan
and the Herbalife Master Trust Agreement for Deferred Compensation Plans (the
"Deferred Compensation Plans"). As your counsel in connection with this
transaction, we have examined such matters and documents as we have deemed
necessary or relevant as a basis for this opinion.
Based on these examinations, it is our opinion that (i) the Shares, when
issued and paid for in the manner referred to in the Registration Statement,
will be legally and validly issued, fully-paid and non-assessable and (ii) the
Deferred Compensation Obligations, when issued in accordance with the provisions
of the Deferred Compensation Plans, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws of general
applicability relating to or affecting enforcement of creditors' rights or by
general equity principles.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the reference to this firm under the caption
"Legal Matters" in the Reoffer Prospectus forming a part of this Registration
Statement.
Very Truly Yours,
/s/ IRELL & MANELLA LLP
-----------------------
Irell & Manella LLP
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<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS -- DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this Registration Statement
of Herbalife International, Inc. on Form S-8 of our report dated February 12,
1996, appearing in the Annual Report on Form 10-K of Herbalife International,
Inc. for the year ended December 31, 1996 and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
DELOTITE & TOUCHE LLP
Los Angeles, CA
November 14, 1996
-xxiii-
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
Reference is made to the signature pages of this Registration Statement.
-xiv-
