GNC 2008 Annual Report Download - page 137

Table of Contents
If the termination occurs in anticipation of or during the two-year period following a change in control, or within six months prior to or at any time
following the completion of an initial public offering of our Parent's common stock, the multiple of base salary and annualized perquisites and of
average annual bonus will increase from two times to three times. In addition we will pay the monthly cost of COBRA coverage to the same
extent we paid for such coverage prior to the termination date for the period permitted by COBRA or until Mr. Fortunato obtains other
employment offering substantially similar or improved group health benefits. Please see "— Employment and Separation Agreements with our
2007 Named Executive Officers — Chief Executive Officer" for more information regarding our employment agreement with our Chief Executive
Officer.
We will continue to determine appropriate employment agreement and severance packages for our Named Executive Officers in a manner
that we believe will attract and retain qualified executive officers.
Chief Executive Officer Compensation
Mr. Fortunato's annual compensation is weighted towards variable, performance-based compensation with the Company's financial
performance as the primary determinant of value. Approximately 85% of Mr. Fortunato's target annual compensation is considered "at-risk" and
approximately 15% is guaranteed. Approximately 28% is cash compensation and approximately 72% percent is in the form of equity-based or
other incentive compensation awards. For 2007, Mr. Fortunato's compensation consisted of:
• $787,500 base salary
• stock option awards with a grant date value of $4,091,722
• annual performance compensation under the 2007 Incentive Plan of $700,875
• other compensation, including fringe benefits equal to $73,987
• a one-time cash payment for cancelled options in connection with the Merger equal to $7,165,121
• a one-time discretionary payment made upon the vesting of certain options in connection with the terms of a November 2006 dividend
equal to $1,409,384
• a bonus based upon the success of the Merger equal to $500,000.
See the Summary Compensation Table for more information regarding Mr. Fortunato's compensation.
Accounting and Tax Considerations
As a general matter, the Compensation Committee reviews and considers the various tax and accounting implications of compensation
vehicles utilized by the Company.
Our parent company's stock option grant policies have been impacted by the implementation of SFAS No. 123 (Revised 2004) ("FAS
123R"), which it adopted in the first quarter of fiscal year 2006. Under this accounting pronouncement, we are required to value unvested stock
options granted prior to our adoption of FAS 123R under the fair value method and expense those amounts in our income statement over the
stock option's remaining vesting period. 133