GNC 2011 Annual Report Download - page 142

Table of Contents
the date of termination. If the executive officer is terminated for cause or resigns without good reason (as such terms are defined in the call agreements), the
purchase price per share will be the lesser of the cost of our Parent's Class A common stock or Series A preferred stock, as applicable, and the fair market
value on the date of termination. In all other cases, the purchase price per share will be the fair market value on the date of termination.
Chief Executive Officer Compensation
Mr. Fortunato's annual compensation is weighted towards variable, performance-based compensation, with our financial performance as the primary
determinant of value. For 2010, Mr. Fortunato's compensation consisted of:
$886,000 base salary,
no stock option awards,
annual performance compensation under the 2010 Incentive Plan of $1,107,500,
a discretionary bonus of $100,000 for 2010 performance (as described below), and
other compensation, including fringe benefits, equal to $140,919.
During the first quarter of 2010, the Compensation Committee determined that, following the conclusion of fiscal year 2010, it would evaluate
Mr. Fortunato's performance for fiscal year 2010 and determine whether any discretionary bonus was warranted. On February 3, 2011, the Compensation
Committee awarded Mr. Fortunato a discretionary bonus of $100,000 based on his leading contribution to our financial performance in 2010. This
discretionary bonus was contemplated at the beginning of 2010 in accordance with Mr. Fortunato's employment agreement but, unlike previous discretionary
bonuses paid to Mr. Fortunato, was not otherwise paid pursuant to a previously established plan with pre-determined objectives. The Compensation
Committee expects to determine performance goals for 2011 prior to March 31, 2011.
In addition, effective January 1, 2011, the Compensation Committee granted Mr. Fortunato a merit-based increase in his annual base salary to $912,580.
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 we
utilize.
Our stock option grant policies have been impacted by the implementation of Financial Accounting Standards Board Accounting Standards
Codification Topic 718 ("FASB ASC 718") (formerly known as 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 FASB ASC 718 under the fair value method and expense
those amounts in our income statement over the stock option's remaining vesting period.
Section 162(m) of the Internal Revenue Code generally disallows public companies a tax deduction for compensation in excess of $1,000,000 paid to
their chief executive officers and the four other most highly compensated executive officers unless certain performance and other requirements are met. Our
intent generally is to design and administer executive compensation programs in a manner that will preserve the deductibility of compensation paid to our
executive officers, and we believe that a substantial portion of our current executive compensation program (including the stock options and other awards that
may be granted to our Named Executive Officers
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