GNC 2010 Annual Report Download - page 145

Table of Contents
The Compensation Committee sets the EBITDA target at a level it believes is both challenging and achievable. By establishing a target
that is challenging, the Compensation Committee believes that performance of its employees, and therefore the Company, is maximized. By
setting a target that is also achievable, the Compensation Committee believes that employees remain motivated to perform at the high level
required to achieve the target. While the Company has experienced success in meeting the established EBIDTA targets, the Compensation
Committee may determine in a particular year that based upon other factors than financial performance the awarding of full or partial bonuses is
appropriate. In 2007, 2008, and 2009 the Company successfully met established EBITDA targets and bonus payments were made.
The Compensation Committee may, in its discretion, amend the foregoing levels on an individual basis if it determines that competitive
considerations and/or circumstances require the Company to make exceptions to the foregoing levels to retain qualified executives.
Based on our financial performance in 2009, 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 2010 each of our Named Executive Officers was paid an amount above the target, but
less than the maximum possible annual incentive compensation under the 2009 Incentive Plan. Management believes that achieving 100%, or
more, of the goal of meeting or exceeding 100% of budgeted EBITDA set in the 2010 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. 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 have a term of ten years. 139