GNC 2009 Annual Report Download - page 137

Table of Contents
2009 Incentive Plan 2008 Incentive Plan 2007 Incentive Plan
Thresholds Budgeted EBITDA Budgeted EBITDA Budgeted EBITDA
First threshold—33% of target 95% 95% 95%
Second threshold—66% of target — 97% 97%
Target 100% 100% 100%
Maximum 106.5% 108% 108%
As in 2008, for the 2009 Incentive Plan, the payment amount will be pro rated for budgeted EBITDA achieved between the Target and
Maximum levels.
We do not disclose our internal budget for results of operations, including budgeted EBITDA (as determined by the Company Board). This
amount constitutes confidential financial information, and we believe that disclosure of this amount, whether with respect to historical periods or
future periods, would cause us competitive harm by disclosing to competitors a key element of our internal projections.
Based on our financial performance in 2008, we achieved a goal that exceeded target, but was less than the maximum threshold as
described in the table above. As a result, in February 2009 each of our Named Executive Officers was paid an amount above the target, but
less than the maximum possible annual incentive compensation under the 2008 Incentive Plan. Management believes that achieving 100%, or
more, of the goal of meeting or exceeding 100% of budgeted EBITDA set in the 2009 Incentive Plan, while possible to achieve for our Named
Executive Officers, will present a significant challenge.
Generally, an annual performance bonus is payable only if the Named Executive Officer is employed by us on the date payment is made.
Stock Options. We believe that equity-based awards are an important factor in aligning the long-term financial interest of our Named
Executive Officers and stockholders. The Parent Compensation Committee continually evaluates the use of equity-based awards and intends to
continue to use such awards in the future as part of designing and administering the Company's compensation program. See "— Stock
Awards" above for more information regarding our stock option grants.
We follow a practice of granting equity incentives in the form of stock options in order to grant awards that contain both substantial incentive
and retention characteristics. These awards are designed to provide emphasis on providing significant incentives for continuing growth in
stockholder value. Stock options are generally granted on an annual basis, except for new employees on the commencement of their
employment and to existing employees following a significant change in job responsibilities or to recognize special performance.
The Parent Compensation Committee determines stock option grant awards in accordance with the Named Executive Officer's performance
and level of position. Stock options generally are subject to vesting in annual installments on the first five anniversaries of the date of grant and
have a term of ten years. However, stock options granted to our Chief Executive Officer and President are subject to vesting in annual
installments on the first four anniversaries of the date of grant and has a term of ten years.
Benefits and Perquisites. We provide a fringe benefit package for our Named Executive Officers. Generally, our Named Executive Officers
are entitled to participate in, and to receive benefits under, any benefit plans, arrangements, or policies available to employees generally or to
our executive officers generally. The fringe benefits for our Chief Executive Officer and President were negotiated in connection with their
employment agreements and in some respects were set at a higher level as a matter of policy based on the position. The basic fringe benefits
package for our Named Executive Officers who are senior vice presidents generally consists of the following items:
• health insurance in accordance with our health insurance plan or program in effect from time to time;
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