GNC 2008 Annual Report Download - page 130

Table of Contents
Officers, except our Chief Executive Officer, that their employment agreements would not be renewed and would expire on December 31, 2007.
Each such Named Executive Officer that remained employed with us following December 31, 2007 did so without a written contract and we
have continued to provide each such Named Executive Officer with all of the components of his or her compensation as in effect prior to such
date, except that no such Named Executive Officer is currently entitled to any severance payments or benefits. In 2008 we intend to enter into
new employment agreements with most, if not all, of our executive officers who do not currently have a written employment agreement.
Generally, annual compensation for our Named Executive Officers consists of the following components:
• Base salary. The Compensation Committee uses base salary to attract and retain a strong motivated leadership team at levels that are
commensurate with other specialty retailers of comparable size to us.
• Annual incentive compensation. Annual incentive compensation is used to reward our Named Executive Officers for our growth and
financial performance based on achievement of criteria approved by the Compensation Committee or the compensation committee of
the board of directors of our Parent (the "Parent Compensation Committee"). The Compensation Committee receives input from our
Human Resources Department and our Chief Executive Officer. As additional cash compensation that is contingent on our annual
financial performance, it augments the base salary component while being tied directly to financial performance. Annual incentive
compensation is documented in an annual plan, which is adopted by the Compensation Committee prior to or during the beginning of
the applicable year.
• Stock options. Stock options, which are discussed in more detail under "—Stock Awards," are granted to recognize and incentivize
performance. Stock options provide a non-cash compensation component to drive performance, but with a long-term horizon, since
value to the Named Executive Officer is dependent on continued employment and appreciation in our overall value.
• Benefits and perquisites. Our Named Executive Officers participate in employee benefits generally available to all employees, as well
as any benefits generally made available to our executive officers. In addition, the Named Executive Officers may receive certain
perquisites, which are primarily based on level of position. Such perquisites may include insurance and parking, or additional cash
compensation to meet specific goals, such as car allowance and professional assistance. We believe such perquisites are a necessary
component for a competitive compensation package. Although our Named Executive Officers, other than our Chief Executive Officer,
are no longer covered by written employment agreements, effective January 1, 2008, we have generally continued these benefits in
2008. In addition, we maintain a non-qualified deferred compensation plan in which certain of our Named Executive Officers are
eligible to participate.
• Severance compensation. Effective January 1, 2008, our Named Executive Officers who are not covered by written employment
agreements are no longer entitled to severance compensation. Our Chief Executive Officer is, and under employment agreements in
effect prior to January 1, 2008, our other Named Executive Officers were, entitled to severance compensation, including:
• a payment based on the Named Executive Officers' base salary upon termination because of death or disability, termination by
us without cause, or termination by the Named Executive Officer for good reason;
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