GNC 2010 Annual Report Download - page 173

Table of Contents
Lease Agreements
General Nutrition Centres Company, a wholly owned subsidiary of the Company, is party to 21 lease agreements, as lessee, with
Cadillac Fairview Corporation, as lessor, with respect to properties located in Canada. Cadillac Fairview Corporation is a direct, wholly owned
subsidiary of OTPP, one of the principal stockholders of our parent. See Item 12, "—Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters". The aggregate value of the leases is approximately $12.4 million, together with certain future
landlord related costs, of which $2.4 million was paid during the 2009 fiscal year. Each lease was negotiated in the ordinary course of business
on an arm's length basis.
Product Purchases
During our 2009 fiscal year, we purchased certain fish oil and probiotics products manufactured by Lifelong Nutrition, Inc. ("Lifelong") for
resale under our proprietary brand name WELLbeING. Carmen Fortino, who serves as one of our directors, is the Managing Director, a
member of the Board of Directors and a stockholder of Lifelong. The aggregate value of the products we purchased from Lifelong was
$3.3 million for the 2009 fiscal year.
Stock Purchase
During the third and fourth quarters of 2008, Axcel Partners III, LLC purchased 273,215 shares of Common Stock of our parent at a price
of $6.82 per share, for an aggregate purchase price of $1.9 million, and 45,478 shares of Common Stock of our parent at a price of $7.08 per
share, for an aggregate purchase price of $0.3 million, respectively, and 110,151 and 18,710 shares of Preferred Stock of our parent at a price
of $5.00 per share plus accrued and unpaid dividends through the dates of purchase, for an aggregate purchase price of $0.6 million and
$0.1 million, respectively. Ms. Kaplan, who serves as a director and as our President and Chief Merchandising and Marketing Officer, is a
member of Axcel Managers LLC, the managing member of Axcel Partners III LLC, and of SK Limited Partnership, a member of Axcel Partners
III LLC.
Stock Purchase Agreement
In February 2010, Holdings, GNC and Guru Ramanathan, Senior Vice President, Chief Innovation Officer of GNC, entered into a Stock
Purchase Agreement in connection with Mr. Ramanathan's previous purchase, in July 2008, of 14,885 shares of Common Stock of Holdings at
a price of $6.93 per share, for an aggregate purchase price of $103,153, and 4,961 shares of Preferred Stock of Holdings at a price of $5.6637
per share, for an aggregate purchase price of $28,097.62.
Director Independence
Through a voting agreement, our Parent's stockholders agreement gives each of our Parent's principal stockholders, the right to
designate three members of our Parent's board of directors (or, at the sole option of each, four 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. Our
Parent's board of directors intends for our board of directors and the board of directors of GNC Corporation to have the same composition,
which was put into place effective March 16, 2007 following the closing of the Merger. Each member of the current board of directors is either
an affiliate of one of our Parent's principal stockholders or one of our executive officers.
Our board of directors has historically had an audit committee and a compensation committee, which have had the same members as the
audit committee and compensation committee of our direct and ultimate parent companies. In connection with the Merger, our board of
directors appointed members to the audit committee and the compensation committee, which are the same members as the audit committee
and compensation committee of our direct and ultimate parent companies.
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