Herbalife Ltd. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Share-Based Compensation (Tables)

Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Weighted Average Assumptions Use in Calculation of Fair Value for Service and Performance Conditions Awards

The following table summarizes the weighted average assumptions used in the calculation of the fair value for service condition awards for the years ended December 31, 2014, 2013, and 2012:


	SARs									Independent Director’s SARs
	Year Ended December 31,									Year Ended December 31,
	2014			2013			2012			2013			2012
Expected volatility		51.5	%		50.8	%		48.4	%		45.2	%		52.1	%
Dividends yield		1.3	%		1.7	%		2.7	%		1.5	%		2.7	%
Expected term		5.6 years			5.5 years			5.3 years			3.6 years			3.8 years
Risk-free interest rate		1.7	%		1.5	%		0.7	%		0.7	%		0.4	%


	SARs
	Year Ended December 31,
	2014			2013
Expected volatility		52.0	%		50.9	%
Dividends yield		1.3	%		1.5	%
Expected term		5.6 years			5.5 years
Risk-free interest rate		1.7	%		1.6	%

Summary of Activity Under Share-Based Compensation Plans

The following tables summarize the activity under all share-based compensation plans, which includes all stock awards, for the year ended December 31, 2014:


Stock Options & SARs	Awards			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value(1)
	(In thousands)							(In millions)
Outstanding at December 31, 2013(2) (3) (4)		12,143		$	33.24		5.3 years	$	552.9
Granted		1,642		$	59.19
Exercised		(1,604	)	$	14.80
Forfeited(6)		(1,012	)	$	58.08

Outstanding at December 31, 2014(3) (4)		11,169		$	37.46		5.4 years	$	110.6

Exercisable at December 31, 2014(3) (5)		7,463		$	27.37		3.8 years	$	108.6

(1)	The intrinsic value is the amount by which the current market value of the underlying stock exceeds the exercise price of the stock award.

(2)	Includes 0.9 million SARs with market and performance conditions.

(3)	Includes 1.5 million SARs with market conditions.

(4)	Includes 0.4 million and 1.0 million performance condition SARs as of December 31, 2013 and December 31, 2014, respectively.

(5)	Includes 0.1 million performance condition SARs.

(6)

Includes 0.9 million SARs with market and performance conditions which are no longer outstanding nor did they ever become exercisable due to the market condition not ultimately being met. The share-based compensation expense related to these market and performance condition SARs were not reversed as a result of the market condition not being met since the performance and service conditions were met.


Incentive Plan and Independent Directors Stock Units	Shares			Weighted Average Grant Date Fair Value
	(In thousands)
Outstanding and nonvested at December 31, 2013		145		$	14.36
Granted		28		$	59.98
Vested		(136	)	$	10.95
Forfeited		(4	)	$	38.58

Outstanding and nonvested at December 31, 2014		33		$	63.67

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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