Exhibit 10.1

SEPARATION AGREEMENT
AND GENERAL RELEASE

     This Separation Agreement and General Release (“Agreement”) is entered into
as of this 10th day of March, 2005, by and between David R. Heilman
(“Executive”), General Nutrition Centers, Inc., a Delaware corporation, (the
“Company”), and GNC Corporation, a Delaware corporation (“GNC” and, together
with Executive and the Company, the “Parties”).

RECITALS

     WHEREAS, Executive has been employed by the Company as Executive Vice
President and Chief Administrative Officer of the Company pursuant to the
Employment Agreement, dated December 15, 2004 (the “Employment Agreement”); and

     WHEREAS, Executive has tendered, and the Company has accepted, Executive’s
resignation from employment with the Company effective March 8, 2005, and, in
connection with such resignation, the Parties have agreed to settle any and all
related agreements between the Parties and their affiliates in the manner set
forth herein.

     NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are expressly acknowledged, the Parties agree and promise
as follows:

     1.     RESIGNATION. Pursuant to this Agreement, Executive resigns from his
employment with the Company, effective as of March 8, 2005 (the “Separation
Date”). To the extent not already effected, Executive hereby resigns all of his
director, officer and other positions with the Company and each of its
affiliates, effective as of the Separation Date.

     2.     PAYMENT OF ACCRUED BUT UNPAID BENEFITS.

            (a)     On or before March 31, 2005, the Company shall pay to
Executive an amount equal to the sum of (i) Executive’s accrued but unpaid
salary through the Separation Date, (ii) Executive’s accrued but unpaid vacation
pay determined as of the Separation Date, and (iii) any unpaid expense
reimbursements due to Executive (subject, however, to Executive’s obligation to
provide adequate documentation of such expenses in the normal course).

            (b)     With respect to any benefits or rights that Executive has
accrued or earned under any of the Company’s employee benefit plans, Executive
shall be entitled to such benefits pursuant to the terms of such plans, if any.

     3.     SETTLEMENT OF OPTIONS.

            (a)     Executive acknowledges (i) he was issued 295,333 options of
which 73,833 are vested as of the Separation Date, and (ii) that any such
options, whether vested or unvested, shall immediately expire and be forfeited
as of the Separation Date.

            (b)     The Executive acknowledges that GNC and Executive entered
into a Stock Subscription Agreement, dated December 5, 2003, pursuant to which
Executive purchased 62,500 shares of GNC’s common stock (the “Purchased Shares”)
and that pursuant to Section 4.3(c)(vi) of the Employment Agreement, for the one
hundred eighty (180)-day period following the Separation Date, the Company (or
its designee) has the right to purchase from Executive and Executive has agreed
to sell to

 

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the Company (or its designee) any or all of such Purchased Shares for an amount
equal to the product of (x) the per share current fair market value of a share
of GNC common stock (as determined by the Board of Directors of the Company (the
“Board”) in good faith) and (y) the number of shares so purchased (the “Share
Repurchase Option”).

            (c)     By this Agreement, GNC (as the Company’s designee) hereby
exercises its Share Repurchase Option with respect to all of the Purchased
Shares at a repurchase price equal to $6.00 per share effective as of the first
day following the Separation Date, which amount totals $375,000 and shall be
payable on or before March 31, 2005. Executive hereby waives his right to
request that the Board obtain a fairness opinion regarding the value of the
Purchased Shares.

     4.     TERMINATION BENEFITS.

            (a)     In consideration of Executive’s release of claims and
Executive’s other covenants and agreements contained herein and provided that
Executive has not exercised any revocation rights as provided in Section 6
below,

                   (i)     the Company shall pay Executive an amount equal to
$350,000, which represents Executive’s base salary for the period March 8, 2005
through March 7, 2006, which amount shall be payable in accordance with the
Company’s payroll system in the same manner and at the same time as though
Executive remained employed by the Company (the “Salary Continuation”) and

                   (ii)     the Company shall provide Executive the appropriate
notice under COBRA. Provided that Executive elects COBRA continuation coverage
for health, dental and prescription coverage for Executive and his eligible
dependents, from March 8, 2005 through March 7, 2006 (the “COBRA Reimbursed
Period”), the Company shall reimburse Executive for any monthly COBRA costs that
exceed $433.33. Executive shall be responsible for $433.33 per month of the cost
of coverage under COBRA during the COBRA Reimbursed Period. Executive shall be
solely responsible for the cost of continuing any coverage after the COBRA
Reimbursed Period.

              The Salary Continuation and the Benefits Continuation are herein
collectively referred to as the “Separation Benefits”.

              (b)     Except as set forth in this Agreement and with respect to
any vested benefits or rights under any of the Company’s “employee benefit
plans” within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), Executive acknowledges and agrees
that he is not entitled to receive any other compensation or benefits of any
sort including, without limitation, salary, vacation, bonuses, annual
incentives, stock options, short-term or long-term disability benefits, or
health care coverage (except as provided under applicable state or federal law)
from the Company, its affiliates, or their respective partners, principals,
officers, directors, stockholders, managers, employees, agents, representatives,
or insurance companies, or their respective predecessors, successors or assigns
at any time.

              (c)     The Company shall pay Executive $10,000 in lieu of a
retirement plan provided he does not elect deferred compensation (“Retirement
Compensation”) and subject to legally required deductions. The Retirement
Compensation shall be paid in equal installments over a twelve month period in
the same checks as the Salary Continuation.

              (d)     While the Executive is receiving Salary Continuation, the
Company shall permit Executive to utilize Ayco Financial Services for financial
planning and tax services at the Company’s expense provided that the amount of
services used does not exceed $8,000.

 

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     5.     COMPLETE MUTUAL RELEASES.

            (a)     Executive irrevocably and unconditionally releases, waives
and discharges all Claims (as defined in Section 5(b) below) that Executive may
now have against any of the Released Parties (as defined herein) as of the date
hereof, except that Executive is not releasing (i) any Claim that relates to
Executive’s right to enforce this Agreement, or (ii) any Claim for
indemnification as an officer, director or employee of the Company pursuant to
the Company’s Articles of Incorporation, By-laws or applicable state law. For
purposes of this Agreement, the “Released Parties” are the Company and all
related and affiliated entities (including corporations, limited liability
companies, partnerships, and joint ventures) and, with respect to each of the
Company and its affiliated entities, each of their respective predecessors and
successors, past, present and future employees, officers, directors,
stockholders, owners, partners, members, representatives, assigns, attorneys,
agents, insurers, employee benefit programs (and the trustees, administrators,
fiduciaries, and insurers of such programs), and any other persons acting by,
through, under, or in concert with any of the foregoing identified Released
Parties.

            (b)     Subject only to the exceptions noted in Section 5(a) above,
Executive is voluntarily releasing all claims, promises, causes of action, or
similar rights of any type , whether known or unknown, unforeseen,
unanticipated, unsuspected or latent (“Claims”), that Executive may have with
respect to any Released Party. This release specifically extends to, without
limitation, claims or causes of action for wrongful termination, failure by the
Company to provide notice of termination pursuant to the Employment Agreement,
impairment of ability to compete in the open labor market, breach of an express
or implied contract, breach of any collective bargaining agreement, breach of
the covenant of good faith and fair dealing, breach of fiduciary duty, fraud,
misrepresentation, defamation, slander, infliction of emotional distress,
disability, loss of future earnings, and claims under the Pennsylvania
constitution, the United States Constitution, and applicable state and federal
fair employment laws, federal equal employment opportunity laws, and federal and
state labor statutes and regulations, including, but not limited to, the Civil
Rights Act of 1964, as amended, the Fair Labor Standards Act, as amended, the
National Labor Relations Act, as amended, the Labor-Management Relations Act, as
amended, the Worker Retraining and Notification Act of 1988, as amended, the
Americans with Disabilities Act of 1990, as amended, the Rehabilitation Act of
1973, as amended, ERISA, and the Age Discrimination in Employment Act of 1967,
as amended.

            (c)     Executive understands that Executive is releasing Claims of
which Executive may not be aware. This is Executive’s knowing and voluntary
intent, even though Executive recognizes that someday Executive might learn that
some or all of the facts that Executive currently believes to be true are untrue
and even though Executive might then regret having signed this Agreement.
Nevertheless, Executive is assuming that risk and Executive agrees that this
Agreement shall remain effective in all respects in any such case. It is further
understood and agreed that Executive is waiving all rights under any statute or
common law principle which otherwise limits application of a general release to
claims which the releasing party does not know or suspect to exist in his favor
at the time of signing the release which, if known by him, would have materially
affected his settlement with the party being released/releasee. Executive
understands the significance of doing so.

            (d)     Neither Executive nor his heirs, agents, representatives or
attorneys have filed or caused to be filed any lawsuit, complaint, or charge
with respect to any Claim that Executive is releasing in this Agreement. Except
as prohibited by law or public policy, Executive promises never (i) to file or
prosecute a lawsuit or complaint based on the Claims released by Executive in
this Agreement, or (ii) to seek any damages, remedies, or other relief for
Executive personally (any right to which Executive hereby waives) by filing or
prosecuting a claim or charge with any administrative, judicial, or other
governmental body, or in any arbitration proceeding with respect to any Claim
released by Executive in this Agreement.

 

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Executive promises to request any governmental body or arbitration tribunal
assuming jurisdiction of any such lawsuit, complaint, or charge to withdraw from
the matter or dismiss the matter against any and all Released Parties with
prejudice against Executive. Executive has not assigned or transferred any Claim
that Executive is releasing, nor has Executive purported to do so.

            (e)     It is the intent of the parties to this Agreement that the
payments to be made hereunder to Executive not be subject to the rules of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) by
reason of a good faith interpretation of the provisions of Code Section 409A and
the guidance contained in IRS Notice 2005-1 by providing that all payments to
Executive hereunder will be made no later than March 15, 2006 and Executive is
not a “specified employee” as defined therein. However, Executive acknowledges
that he has consulted with his own tax counsel regarding the application of
Section 409A to this Agreement, including specifically the provisions of Code
Section 409A(a)(2)(B) and the penalties that could be imposed on Executive as a
result of not complying with the requirements of Code Section 409A, and hereby
agrees to release and hold harmless the the Released Parties from any and all
liability, costs or expenses associated with any penalty and/or interest
assessed against Executive under Code Section 409A.

            (f)     Each of the Company and GNC, on its own behalf and on behalf
of all of the Released Parties, as defined in Section 5(a), irrevocably and
unconditionally releases, waives and discharges all Claims (as defined in
Section 5(b)) that any of them may now have against Executive as of the date
hereof provided, however, in the event the Company subsequently determines that
Executive’s employment could have been terminated pursuant to Section 4.4(a) of
the Employment Agreement, the Company, without limiting any other recourse it
may pursue, shall have the right to terminate its obligations to make further
payments pursuant to this Agreement. In the event that the Company determines
that Executive’s employment could have been terminated pursuant to Section
4.4(a) of the Employment Agreement and discontinues payments under this
Agreement, Executive retains the right to challenge such determination pursuant
to the arbitration provisions contained in Section 13 of this Agreement.

     6.     REVIEW AND REVOCATION PERIOD. Executive acknowledges that: (i) the
consideration provided pursuant to this Agreement is in addition to any
consideration that he would otherwise be entitled to receive; (ii) he has been
provided a full and ample opportunity to review this Agreement, including a
period of at least twenty-one (21) days within which to consider it; (iii) to
the extent that Executive takes less than twenty-one (21) days to consider this
Agreement prior to execution, he acknowledges that he had sufficient time to
consider this Agreement with counsel and that he expressly, voluntarily and
knowingly waives any additional time; and (iv) Executive is aware of his right
to revoke this Agreement at any time within the seven (7) day period following
the date on which he signs the Agreement and that the Agreement shall not become
effective or enforceable until the seven (7) day revocation period expires (the
“Revocation Expiration Date”). Any such revocation must be in writing, must
specifically revoke this Agreement, and must be received by the Chairman of the
Board of Directors of GNC no later than 5:00 p.m. Eastern Standard Time on the
Revocation Expiration Date. Executive further understands that he shall
relinquish any right he has to the benefits set forth in this Agreement if he
exercises his right to revoke it.

     7.     RETURN OF THE COMPANY’S DOCUMENTS AND PROPERTY. Executive agrees to
return all records, documents, proposals, notes, lists, files, and any and all
other materials including, without limitation, computerized and/or electronic
information that refers, relates or otherwise pertains to the Company, its
affiliates, and/or their respective partners, principals, officers, directors,
stockholders, managers, employees, agents, representatives, or insurance
companies, or their respective predecessors, successors or assigns at any time.
In addition, Executive shall return to the Company all property or equipment
that he has been issued during the course of his employment or which he
otherwise currently

 

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possesses. At Executive’s expense, Executive shall deliver to the Company at its
main offices on or before the date hereof all of the Company’s records,
documents, proposals, notes, lists, files and materials and property and
equipment that are in his possession. Executive is not authorized to retain any
copies of any such records, documents, proposals, notes, lists, files or
materials. Nor is he authorized to retain any other of the Company’s or its
affiliates’ property or equipment.

     8.     CONFIDENTIALITY/INTELLECTUAL PROPERTY. Executive acknowledges and
agrees that he is subject to the terms and conditions of the
Confidentiality/Intellectual Property provisions set forth in Section 5.1 of the
Employment Agreement and agrees to continue to be bound by those terms and
conditions in accordance therewith.

     9.     NONCOMPETITION; NONSOLICITATION. Executive acknowledges and agrees
that that through March 7, 2006, he is subject to the terms and conditions of
the Noncompetition and Nonsolicitation provisions contained in Sections 5.2, 5.3
and 5.4 of the Employment Agreement and agrees to continue to be bound by those
terms and conditions in accordance therewith. Provided that Executive remains in
compliance with Sections 5.2, 5.3 and 5.4 of the Employment Agreement, Executive
shall be permitted to contact those corporations, partnerships, limited
liability companies or persons that are not covered by Section 5.2 of the
Employment Agreement without Executive or any of such entity’s breaching any
agreement with the Company and GNC.

     10.     COOPERATION BY EXECUTIVE. For the period commencing on the
Separation Date and ending on March 7, 2006, Executive will cooperate in all
reasonable respects with the Company and its affiliates in connection with any
and all existing or future litigation, actions or proceedings (whether civil,
criminal, administrative, regulatory or otherwise) brought by or against the
Company or any of its affiliates, to the extent the Company reasonably deems
Executive’s cooperation necessary. Executive shall be reimbursed for all
reasonable out-of-pocket expenses incurred by him as a result of such
cooperation.

     11.     NON-ADMISSION OF LIABILITY. Nothing in this Agreement shall be
construed as an admission of liability by Executive or the Released Parties;
rather, Executive and the Released Parties are resolving all matters arising out
of their employer-employee relationship and all other relationships between
Executive and the Released Parties, as to which the Released Parties and
Executive each deny any liability.

     12.     NON-DISPARAGEMENT. Except as otherwise required by law, Executive
will not make, publish or disseminate any derogatory statements or comments
about any of the Company or GNC or their respective officers and directors; or
take any action which a reasonable person would expect would impair the good
will, business reputation or good name of any of them; and the officers and
directors of the Released Parties will not make, publish or disseminate any
derogatory statements or comments about the Executive; or take any action which
a reasonable person would expect would impair his good will, business reputation
or good name.

     13.     ARBITRATION. Except as is necessary for any of the Released Parties
or Executive to enforce its or his rights under this Agreement through
injunctive relief or specific performance, the Parties agree that any disputes
based upon, relating to, or arising out of this Agreement, and/or Executive’s
employment relationship with the Company and the termination of that
relationship, shall be submitted to binding arbitration pursuant to the terms of
Section 6.1 of the Employment Agreement, except that any such arbitration will
be held in Pittsburgh, Pennsylvania.

     14.     BINDING EFFECT. This Agreement shall be binding and inure to the
benefit of the Parties and their respective heirs, administrators,
representatives, executors, successors and assigns.

 

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     15.     SEVERABILITY. While the provisions contained in this Agreement are
considered by the Parties to be reasonable in all circumstances, it is
recognized that some provisions may fail for technical reasons. Accordingly, it
is hereby agreed and declared that if any one or more of such provisions shall,
either by itself or themselves or taken with others, be adjudged to be invalid
as exceeding what is reasonable in all circumstances for the protection of the
interests of the Company, but would be valid if any particular restrictions or
provisions were deleted or restricted or limited in a particular manner, then
said provisions shall apply with any such deletions, restrictions, limitations,
reductions, curtailments, or modifications as may be necessary to make them
valid and effective, and the remaining provisions shall be unaffected thereby.

     16.     ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the
entire understanding among the Parties with respect to the matters set forth
herein, except that Executive acknowledges that he has continuing obligations to
the Company under in Sections 5.1, 5.2, 5.3, 5.4, and 6.1 of the Employment
Agreement (and as provided in Sections 8, 9, and 13 of this Agreement) and may
not be modified without the express written consent of the Parties. Except as
specified herein, this Agreement supersedes all prior written and/or oral and
all contemporaneous oral agreements, understandings and negotiations regarding
the subject matter hereof.

     17.     INTERPRETATION; GOVERNING LAW. This Agreement shall be construed as
a whole according to its fair meaning and shall not be construed strictly for or
against either Party. Any uncertainty or ambiguity shall not be construed
against the drafter. Captions are intended solely for convenience of reference
and shall not be used in the interpretation of this Agreement. This Agreement
shall be governed by and construed and enforced pursuant to the laws of the
State of New York applicable to contracts made and entirely to be performed
therein without regard to rules relating to conflicts of law.

     18.     VOLUNTARY AGREEMENT; NO INDUCEMENTS. Each Party to this Agreement
acknowledges and represents that he or it (a) has fully and carefully read this
Agreement prior to signing it, (b) has been, or has had the opportunity to be,
advised by independent legal counsel of his or its own choice as to the legal
effect and meaning of each of the terms and conditions of this Agreement, and
(c) is signing and entering into this Agreement as a free and voluntary act
without duress or undue pressure or influence of any kind or nature whatsoever
and has not relied on any promises, representations or warranties regarding the
subject matter hereof other than as set forth in this Agreement.

     19.     WITHHOLDING. Any payments provided for under this Agreement shall
be paid net of any applicable withholding required under federal, state or local
law and any additional withholding to which the Executive has agreed.

 

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     IN WITNESS WHEREOF, the Parties have set their hand as of the date first
written above.

EXECUTIVE

  /s/ David R. Heilman

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David R. Heilman  

 

     
GENERAL NUTRITION CENTERS, INC.
  GNC CORPORATION    
By: /s/ Robert J. DiNicola          
  By: /s/ Robert J. DiNicola                    
Its: Interim CEO                           
  Its: Interim CEO