GNC 2008 Annual Report Download - page 164

Table of Contents
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
Management Services Agreement
Upon completion of the Merger, we entered into a management services agreement with our Parent. Under the agreement, our Parent
agreed to provide us and our subsidiaries with certain services in exchange for an annual fee of $1.5 million, as well as customary fees for
services rendered in connection with certain major financial transactions, plus reimbursement of expenses and a tax gross-up relating to a non-
tax deductible portion of the fee. Under the terms of the management services agreement, we have agreed to provide customary
indemnification to our Parent and its affiliates and those providing services on its behalf. In addition, upon completion of the Merger, we
incurred an aggregate fee of $10.0 million, plus reimbursement of expenses, payable to our Parent for services rendered in connection with the
Merger.
Stockholders' Agreement
Upon completion of the Merger, our Parent entered into a stockholders agreement with each of its stockholders, which includes certain of
our directors, employees, and members of our management and our principal stockholders. The stockholders agreement was amended and
restated as of February 12, 2008. Through a voting agreement, the amended and restated stockholders agreement gives each of Ares
Corporate Opportunities Fund II, L.P. ("Ares Fund II") and Ontario Teachers' Pension Plan Board, our Parent's principal stockholders, the right
to designate four members of our Parent's board of directors (or, at the sole option of each, five members of the board of directors, one of which
shall be independent) for so long as they or their respective affiliates each own at least 10% of the outstanding common stock of our Parent.
The voting agreement also provides for election of our Parent's then-current chief executive officer to our Parent's board of directors. Under the
terms of the amended and restated stockholders agreement, certain significant corporate actions require the approval of a majority of directors
on the board of directors, including a majority of the directors designated by Ares Fund II and a majority of the directors designated by Ontario
Teachers'. The amended and restated stockholders agreement also contains significant transfer restrictions and certain rights of first offer, tag-
along, and drag-along rights. In addition, the amended and restated stockholders agreement contains registration rights that require our Parent
to register common stock held by the stockholders who are parties to the stockholders agreement in the event our Parent registers for sale,
either for its own account or for the account of others, shares of its common stock.
Apollo Management and Advisory Services
Immediately prior to the completion of the Numico acquisition, we, together with GNC Corporation, entered into a management services
agreement with Apollo Management V, L.P., which controlled the principal stockholder of GNC Parent Corporation until the consummation of
the Merger. Under this management services agreement, Apollo Management V agreed to provide to GNC Corporation and us investment
banking, management, consulting, and financial planning services on an ongoing basis and financial advisory and investment banking services
in connection with major financial transactions that may be undertaken by us or our subsidiaries in exchange for a fee of $1.5 million per year,
plus reimbursement of expenses. Under the management services agreement, GNC Corporation and us agreed to provide customary
indemnification. 160