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, 2012

Weighted Average Assumptions Used in Calculation of Fair Value for Service Condition 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, 2012, 2011, and 2010:


	SARs									Independent Director’s SARs
	Year Ended December 31,									Year Ended December 31,
	2012			2011			2010			2012			2011			2010
Expected volatility		48.4	%		46.6	%		48.3	%		52.1	%		49.4	%		48.2	%
Dividends yield		2.7	%		1.5	%		1.8	%		2.7	%		1.5	%		1.7	%
Expected term		5.3 years			6.2 years			6.4 years			3.8 years			3.8 years			3.8 years
Risk-free interest rate		0.7	%		1.9	%		2.4	%		0.4	%		1.0	%		1.3	%


	SARs
	Year Ended December 31, 2011
Expected volatility		44.0	%
Dividends yield		1.4	%
Expected term		5.2 years
Risk-free interest rate		1.2	%

Summary of Activity Under all 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, 2012:


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, 2011(2) (3)		11,169		$	22.54		5.5 years	$	332.8
Granted		2,109		$	45.10
Exercised		(1,862	)	$	10.23
Forfeited		(83	)	$	41.54

Outstanding at December 31, 2012(2) (3)		11,333		$	28.62		5.9 years	$	119.1

Exercisable at December 31, 2012(3)		5,751		$	18.29		3.9 years	$	89.8

(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.


Incentive Plan and Independent Directors Stock Units	Shares			Weighted Average Grant Date Fair Value
	(In thousands)
Outstanding and nonvested at December 31, 2011		717.6		$	12.25
Granted		—		$	—
Vested		(395.7	)	$	12.71
Forfeited		(0.3	)	$	6.82

Outstanding and nonvested at December 31, 2012		321.6		$	11.70

- 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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