Document:

Exhibit 10.10 10Q 6.30.14

EXHIBIT 10.10

HERITAGE FINANCIAL CORPORATION
2014 Omnibus Equity Plan
Restricted Stock Unit Award Agreement
The Participant specified below has been granted a restricted stock unit award (the “Award”) by Heritage Financial Corporation, a Washington corporation (the “Company”), under the Heritage Financial Corporation 2014 Omnibus Equity Plan (the “Plan”).  The Award shall be subject to the terms of the Plan and the terms set forth in this Restricted Stock Unit Award Agreement (“Award Agreement”).
Section 1.Award.  The Company has granted to the Participant the Award of restricted stock units (each such unit, an “RSU”), where each RSU represents the right of the Participant to receive one Share in the future once the Restricted Period ends, subject to the terms of this Award Agreement and the Plan.
Section 2.Terms of Restricted Stock Unit Award.  The following words and phrases relating to the Award have the following meanings:
(a)The “Participant” is ______________________________.
(b)The “Grant Date” is ______________________________.
(c)The number of “RSUs” is ______________________________.
Except for words and phrases otherwise defined in this Award Agreement, any capitalized word or phrase in this Award Agreement has the meaning set forth in the Plan.
Section 3.Restricted Period.
(a)The “Restricted Period” for each installment of RSUs set forth in the table immediately below (each, an “Installment”) shall begin on the Grant Date and end as described in the schedule set forth in the table immediately below; provided that the Participant’s Termination of Service has not occurred prior thereto:
	
		
	Installment
	Restricted Period will end on:

	__% of RSUs
	Date/Event/Other Condition

(b)Notwithstanding the foregoing provisions of this Section 3, the Restricted Period for all the RSUs shall cease immediately and such RSUs shall become fully vested immediately upon the Participant’s Termination of Service due to the Participant’s Disability or the Participant’s death.
(c)Upon a Change in Control, the Award shall be treated in accordance with Section 4.1 of the Plan.
(d)Except as set forth in Section 3(b) and Section 3(c) above, if the Participant’s Termination of Service occurs prior to the expiration of one or more Restricted Periods, the Participant shall forfeit all right, title, and interest in and to any Installment(s) still subject to a Restricted Period as of such Termination of Service.
Section 4.Settlement of RSUs.  Delivery of Shares or other amounts under this Award Agreement and the Plan shall be subject to the following:
(a)Delivery of Shares.  The Company shall deliver to the Participant one Share free and clear of any restrictions in settlement of each of the vested and unrestricted RSUs within 30 days following the end of the respective Restricted Period.
(b)Compliance with Applicable Laws.  Notwithstanding any other term of this Award Agreement or the Plan, the Company shall have no obligation to deliver any Shares or make any other distribution of benefits under this Award Agreement or the Plan unless such delivery or distribution complies with all applicable laws and the applicable rules of any securities exchange or similar entity.
(c)Certificates Not Required.  To the extent that this Award Agreement and the Plan provide for the issuance of Shares, such issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any securities exchange or similar entity.
Section 5.Withholding.  All deliveries of Shares pursuant to the Award shall be subject to withholding of all applicable taxes.  The Company shall have the right to require the Participant (or if applicable, permitted assigns, heirs, and Designated Beneficiaries) to remit to the Company an amount sufficient to satisfy any tax requirements prior to the delivery date of any Shares in connection with the Award.  As permitted by the Committee from time to time, such withholding obligation may be satisfied at the election of the Participant (a) through cash payment by the 

Participant, (b) through the surrender of Shares that the Participant already owns, or (c) through the surrender of Shares to which the Participant is otherwise entitled under the Plan; provided, however, that except as otherwise specifically provided by the Committee, such Shares under clause (c) may not be used to satisfy more than the Company’s minimum statutory withholding obligation.
Section 6.Non-Transferability of Award.  The Award, or any portion thereof, is not transferable except as designated by the Participant by will or by the laws of descent and distribution or pursuant to a domestic relations order.  Except as provided in the immediately preceding sentence, the Award shall not be assigned, transferred, pledged, hypothecated, or otherwise disposed of by the Participant in any way whether by operation of law or otherwise, and shall not be subject to execution, attachment, or similar process.  Any attempt at assignment, transfer, pledge, hypothecation, or other disposition of the Award contrary to the provisions hereof, or the levy of any attachment or similar process upon the Award, shall be null and void and without effect.
Section 7.[Dividend Equivalents.  The Participant shall be entitled to receive a payment equal in value to any dividends and distributions paid with respect to the RSUs (other than dividends and distributions that may be issued with respect to Shares by virtue of any corporate transaction, to the extent adjustment is made pursuant to Section 3.4 of the Plan) during the Restricted Period (“Dividend Equivalents”); provided, however, that no Dividend Equivalents shall be payable to or for the benefit of the Participant with respect to record dates for such dividends or distributions occurring before the Grant Date or on or after the date, if any, on which the Participant has forfeited the RSUs.  Dividend Equivalents shall be provided at the time the respective dividends or distributions are paid and shall be subject to the same restrictions applicable to the underlying RSUs.]
Section 8.No Shareholder Rights.  The Participant shall not have any rights of a Shareholder with respect to the RSUs, including but not limited to, voting rights, prior to settlement of the RSUs pursuant to Section 4(a) above.
Section 9.Heirs and Successors.  This Award Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, and any person acquiring all or substantially all of the Company’s assets or business.  If any rights of the Participant or benefits distributable to the Participant under this Award Agreement have not been settled or distributed at the time of the Participant’s death, such rights shall be settled for and such benefits shall be distributed to the Designated Beneficiary in accordance with the provisions of this Award Agreement and the Plan.  The “Designated Beneficiary” shall be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form as the Committee may require.  The Participant’s designation of beneficiary may be amended or revoked by the Participant in accordance with any procedures established by the Committee.  If a Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any benefits that would have been provided to the Participant shall be provided to the legal representative of the estate of the Participant.  If a Participant designates a beneficiary and the Designated Beneficiary survives the Participant but dies before the provision of the Designated Beneficiary’s benefits under this Award Agreement, then any benefits that would have been provided to the Designated Beneficiary shall be provided to the legal representative of the estate of the Designated Beneficiary.
Section 10.Administration.  The authority to manage and control the operation and administration of this Award Agreement and the Plan shall be vested in the Committee, and the Committee shall have all powers with respect to this Award Agreement as it has with respect to the Plan.  Any interpretation of this Award Agreement or the Plan by the Committee and any decision made by the Committee with respect to this Award Agreement or the Plan shall be final and binding on all persons.
Section 11.Plan Governs.  Notwithstanding any provision of this Award Agreement to the contrary, this Award Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the Company.  This Award Agreement shall be subject to all interpretations, amendments, rules, and regulations promulgated by the Committee from time to time.  Notwithstanding any provision of this Award Agreement to the contrary, in the event of any discrepancy between the corporate records of the Company and this Award Agreement, the corporate records of the Company shall control.
Section 12.Not an Employment Contract.  Neither the Award nor this Award Agreement shall confer on the Participant any rights with respect to continuance of employment or other service with the Company or a Subsidiary, nor shall they interfere in any way with any right the Company or a Subsidiary may otherwise have to terminate or modify the terms of the Participant’s employment or other service at any time.
Section 13.Amendment.  Without limitation of Section 16 and Section 17 below, this Award Agreement may be amended in accordance with the provisions of the Plan, and may otherwise be amended in writing by the Participant and the Company without the consent of any other person.
Section 14.Governing Law.  This Award Agreement, the Plan, and all actions taken in connection herewith and therewith shall be governed by and construed in accordance with the laws of the State of Washington, without reference to principles of conflict of laws, except as superseded by applicable federal law.

Section 15.Validity.  If any provision of this Award Agreement is determined to be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Award Agreement shall be construed and enforced as if such illegal or invalid provision had never been included herein.
Section 16.Section 409A Amendment.  The Award is intended to be exempt from Code Section 409A and this Award Agreement shall be administered and interpreted in accordance with such intent.  The Committee reserves the right to unilaterally amend this Award Agreement without the consent of the Participant in order to maintain an exclusion from the application of, or to maintain compliance with, Code Section 409A; and the Participant hereby acknowledges and consents to such rights of the Committee.
Section 17.Clawback.  The Award and any amount or benefit received under the Plan shall be subject to potential cancellation, recoupment, rescission, payback, or other action in accordance with the terms of any applicable Company or Subsidiary clawback policy (the “Policy”) or any applicable law, as may be in effect from time to time.  The Participant hereby acknowledges and consents to the Company’s or a Subsidiary’s application, implementation, and enforcement of (a) the Policy and any similar policy established by the Company or a Subsidiary that may apply to the Participant together with all other similarly situated participants, whether adopted prior to or following the date of this Award Agreement and (b) any provision of applicable law relating to cancellation, rescission, payback, or recoupment of compensation, and agrees that the Company or a Subsidiary may take such actions as may be necessary to effectuate the Policy, any similar policy, and applicable law, without further consideration or action.
*    *    *    *    *
IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed in its name and on its behalf, and the Participant acknowledges understanding and acceptance of, and agrees to, the terms of this Award Agreement, all as of the Grant Date.
Heritage Financial Corporation
By:         
Print Name:     
Title:     
Participant
        
Print Name:Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of August 4, 2014 (the “Effective Date”), by and among General Nutrition Centers, Inc., a Delaware corporation (“GNCI”), GNC Holdings, Inc., a Delaware corporation (“GNC Holdings”) (generally both or, as applicable, either, referred to herein as the “Company”), and Michael Archbold (the “Executive”) (collectively, the “Parties”).

 

WHEREAS, the Company desires to employ the Executive on the terms and subject to the conditions set forth herein and the Executive has agreed to be so employed.

 

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, agree as follows:

 

1.                                      Employment of Executive; Duties.

 

1.1                               Title.  During the Employment Period (as defined in Section 2), the Executive shall serve as Chief Executive Officer of the Company.  The Executive shall report to the Board of Directors of GNC Holdings (the “Board”).

 

1.2                               Duties.  During the Employment Period, the Executive shall have the normal duties, responsibilities, authority, and such other powers and duties as may be assigned to the Executive from time to time by the Board, commensurate with the position of a Chief Executive Officer.  The Executive shall devote substantially all the Executive’s working time, attention, knowledge and skills faithfully, and to the best of the Executive’s ability, to the Executive’s duties and responsibilities under this Agreement and, except where the Company provides its written consent otherwise, shall perform his duties hereunder at the principal office of the Company in Pittsburgh, Pennsylvania (the “Company Headquarters”).  The Executive shall at all times be subject to, comply with, observe and carry out the Company’s rules, regulations, policies and codes of ethics and/or conduct applicable to its employees and senior executive officers as in effect from time to time.  Notwithstanding any of the foregoing, during the Employment Period, the Executive shall not be permitted to participate or invest in or manage any for-profit business activity or venture not arising in connection with the performance of his duties pursuant to this Agreement; provided, however, that it shall not be a violation of this Agreement for the Executive to (i) serve on the board of directors of each of The Talbot’s, Inc. and Express, Inc. and, with the prior written approval of the Board, serve on any other boards of directors of for-profit companies, and (ii) serve on civic or charitable boards or committees, deliver lectures, fulfill speaking engagements, or teach at educational institutions and manage personal investments, so long as, in the case of activities described in the preceding clauses (i) and (ii), (x) such activities do not interfere with the performance of the Executive’s responsibilities in accordance with this Agreement or otherwise create a conflict of interest or breach of this Agreement, and (y) the Executive complies with applicable provisions of the Company’s policies and procedures regarding such matters, if any.  During the Employment Period, the Executive will be nominated to serve as a member of the Board and as a member of the Board of Directors of GNCI (the “GNCI Board”).  To the extent the Executive is elected to the Board or GNCI Board, the Executive shall serve on each such board of directors without additional compensation in respect thereof.

 

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1.3                               Relocation.  Except where the Company provides its written consent otherwise, the Executive shall be required to (a) by no later than the end of calendar year 2014, establish a permanent residence for himself (and if applicable, his family) that is within 75 miles of the Company Headquarters (the “Initial Residence”) and (b) relocate his and his family’s principal residence from that in effect as of the Effective Date (the “Current Residence”) to the Initial Residence (or such other principal residence that is within 75 miles of the Company Headquarters, and either such residence, the “Principal Residence”) by no later than the third anniversary of the Effective Date (such three-year period, the “Relocation Period”), and to maintain such Principal Residence at all times thereafter during the Employment Period.  Notwithstanding the foregoing, if the Company provides notice to the Executive of its intent not to renew the Employment Period beyond the Initial Employment Period (as defined in Section 2) pursuant to Section 2, then upon the date of such notice, the Executive shall be released from all obligations under this Section 1.2, and Section 4.3(g)(ix) shall be of no further force and effect for purposes of the “Cause” definition as set forth in Section 4.3(g).

 

2.                                      Term of Employment.

 

The employment of the Executive under this Agreement shall commence on the Effective Date and shall continue until the third anniversary of the Effective Date (the “Initial Employment Period”), and shall automatically continue after the end of the Initial Employment Period for additional, consecutive one-year periods (each an “Extension Period”), unless (a) the Company notifies the Executive in writing not less than one (1) year prior to, or the Executive notifies the Company in writing not less than sixty (60) days prior to, the end of the Initial Employment Period or the end of the applicable Extension Period, as applicable, of its or the Executive’s election, in its or the Executive’s sole discretion, as applicable, not to extend the Executive’s employment hereunder or (b) terminated earlier in accordance with Section 4 (any such period of employment of the Executive with the Company, the “Employment Period”).

 

3.                                      Compensation and General Benefits.

 

3.1                               Base Salary.

 

(a)                                 During the Employment Period, the Company shall pay to the Executive an annual rate of base salary at least equal to $950,000 (such base salary, as may be adjusted from time to time pursuant to Section 3.1(b), is referred to herein as the “Base Salary”).  The Executive’s Base Salary, less amounts required to be withheld under applicable law, shall be payable in equal installments in accordance with the Company’s normal payroll practices and procedures in effect from time to time.

 

(b)                                 The Board or the Compensation Committee established by the Board (the “Compensation Committee”) shall review the Executive’s performance on an annual basis and, based on such review, may change, by upward adjustment only, the Base Salary, as it, acting in its sole discretion, shall determine to be reasonable and appropriate.

 

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3.2                               Bonuses.  With respect to the 2014 calendar year, the Executive shall receive an annual incentive bonus in the amount of $395,833 (the “2014 Annual Bonus”). The 2014 Annual Bonus shall be the only annual incentive bonus that the Executive will be eligible to earn in respect of the 2014 calendar year.  With respect to each subsequent calendar year that commences during the Employment Period, the Executive shall be eligible to earn an annual incentive bonus (the “Annual Bonus”), based on the achievement of performance objectives established by the Board or the Compensation Committee for the applicable year.  The Executive’s target Annual Bonus shall be 100% of the Base Salary and the Executive’s maximum Annual Bonus shall be 200% of the Base Salary, with the actual Annual Bonus amount earned determined by the actual level of achievement of the relevant performance objectives (in each case, prorated consistent with the Executive’s first day of employment).  The Executive must be an employee in good standing on the date when due to be paid in order to receive the 2014 Annual Bonus and any Annual Bonus, except as otherwise provided in Section 4.2, Section 4.3 or Section 4.4.  The 2014 Annual Bonus and any Annual Bonus earned shall be payable in full no later than March 15 of the year following the year such bonus is earned.  Notwithstanding anything herein to the contrary, the Executive agrees that the 2014 Annual Bonus, any Annual Bonus and any other incentive compensation payable to the Executive under this Agreement or otherwise shall be subject to any clawback policy adopted or implemented by the Company or GNC that is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or otherwise, from time to time.

 

3.3                               Expenses.

 

(a)                                 During the Employment Period, the Executive shall be entitled to receive reimbursement from the Company for all reasonable and necessary expenses incurred by the Executive in performing the Executive’s duties hereunder on behalf of the Company, subject to, and consistent with, the Company’s policies for expense payment and reimbursement, in effect from time to time, including, without limitation, the relocation policy applicable to senior executive officers of the Company in effect at the applicable time (which policy includes providing the Executive with temporary corporate housing for 60 days); provided, however, that the applicable expense payment and reimbursement provisions contained therein shall only apply to the Executive’s purchase of the Initial Residence, and not any subsequent residence.  In addition to the foregoing, promptly following the commencement of the Initial Employment Period, the Company shall pay to the Executive a cash signing bonus in the amount of $150,000 (the “Signing Bonus”).  The Executive and the Company each acknowledges that the Signing Bonus is being paid in lieu of the Company’s promising to cover the Executive’s costs of commuting between the Current Residence and the Company Headquarters during the Relocation Period.

 

(b)                                 Promptly following the commencement of the Initial Employment Period, the Company shall pay, or reimburse the Executive, for any legal fees and disbursements that the Executive may have incurred in the negotiation of this Agreement, up to (in the aggregate) $25,000.

 

3.4                               Benefits; Vacation.  The Executive shall be entitled to participate in any benefit plans, arrangements or policies made available by the Company to its executive officers generally, subject to and on a basis consistent with the terms, conditions and overall administration of each such plan, arrangement or policy.  In connection with the foregoing, the

 

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Executive shall be entitled to four (4) weeks paid vacation annually, to be taken at such time(s) as shall not, in the reasonable judgment of the Board, interfere with the Executive’s fulfillment of his duties hereunder and otherwise in accordance with the Company’s policies and procedures in effect from time to time, including the Company’s policies and procedures with respect to the payment for or carryover of accrued and unused vacation time.  The Executive shall be entitled to as many holidays, sick days and personal days as are provided by the Company from time to time to its employees in accordance with the Company’s policies as in effect from time to time.

 

3.5                               Equity Awards.  Subject to the approval of the Compensation Committee or other committee under the GNC Holdings, Inc. 2011 Stock and Incentive Plan (or any successor plan) (the “Plan”), the Executive shall be eligible to participate in and be granted awards under the Plan.  Specifically, except with respect to 2014, the Executive shall be eligible to receive a grant of awards under the Plan, commensurate with his position, at the same time as other senior executives of the Company are eligible to be granted awards under the Plan as part of the Company’s ordinary course review and establishment of annual compensation for such senior executives.  In addition, on the first date of the Initial Employment Period, the Executive shall be granted an option to purchase 175,000 shares of common stock of GNC under the Plan (the “Sign-on Grant”) with a per-share exercise price equal to the “fair market value” (as defined in the Plan) of GNC common stock on the date of grant.  The Sign-on Grant shall be granted pursuant to the form of non-qualified stock option agreement used on the Effective Date for grants under the Plan to senior executive officers of the Company, except that such grant shall vest 25% per year on each anniversary of the grant date, subject to the Executive remaining employed with the Company on each such anniversary subject to the provisions of Section 4.

 

4.                                      Termination.

 

4.1                               General.  The employment of the Executive under this Agreement (and the Employment Period) may be terminated in accordance with the provisions of this Section 4.

 

4.2                               Death or Disability of the Executive.

 

(a)                                 The employment of the Executive hereunder (and the Employment Period) shall terminate upon (x) the death of the Executive or (y) at the option of the Company, upon not less than 15 days’ prior written notice to the Executive or the Executive’s personal representative or guardian, if the Executive suffers a “Total Disability” (as defined in Section 4.2(c)).  Upon termination for death or Total Disability, subject to reduction by any benefits paid or payable to the Executive, or the Executive’s beneficiaries or estate under any Company-sponsored disability benefit plan program or policy for the period following such date of termination, the Company shall pay to the Executive, or the Executive’s guardian, personal representative or estate, as applicable, (i) the Accrued Obligations (as defined in Section 4.4(b)(i) and payable in accordance with the terms thereof), (ii) any unpaid 2014 Annual Bonus, or unpaid Annual Bonus with respect to the calendar year prior to the year in which the date of the Executive’s termination occurs, and (iii) a prorated share of the Annual Bonus pursuant to Section 3.2 (based on the period of actual employment) that the Executive would have been entitled to receive, had the Executive worked through the date of payment of such Annual Bonus based on the actual level of achievement of the performance objectives for the year of such termination, with any such Annual Bonuses payable at the time and in the manner annual bonuses are paid to employees, generally.

 

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(b)                                 Any payment under Section 4.2(a)(iii) shall be paid on the first regular payroll date following the 60th day after the Executive’s date of termination; and any vesting benefits under Section 4.2(d) shall occur on the 60th day after the Executive’s date of termination (or, with respect to the payment provided under Section 4.2(a)(iii), if later, the date provided in Section 3.2, if at the time of the Executive’s date of termination the level of achievement of the performance objectives referenced in Section 4.2(a)(iii) has not yet been established by the Board); provided that on or before such date Executive (or the Executive’s guardian, personal representative or estate, as applicable) executes a Release (as defined in Section 4.3(d)) and any period in which such Release may be revoked has expired without revocation.

 

(c)                                  Subject to the last sentence of this Section 4.2(c), for purposes of this Agreement, “Total Disability” shall mean (i) if the Executive is subject to a legal decree of incompetency (the date of such decree being deemed the date on which such disability occurred), (ii) a medically determinable disease, injury or other physical or mental disability, the Executive is unable substantially to perform, with or without reasonable accommodation, the material duties of the Executive required hereby, and that such disability has lasted for 90 consecutive days or any 120 days during the immediately 12-month period or is, as of the date of determination, reasonably expected to last six months or longer after the date of determination, in each case based upon medically available reliable information, or (iii) the Executive receives benefits under the Company’s long-term disability coverage, if any, and such qualification is not denied or contested by the disability plan’s administrator.  In conjunction with determining mental and/or physical disability for purposes of this Agreement, the Executive hereby consents to (A) any examinations that the Board or the Compensation Committee determines are relevant to a determination of whether the Executive is mentally and/or physically disabled or are required by the examining physician, (B) furnish such medical information as may be reasonably requested and (C) waive any applicable physician patient privilege that may arise because of such examination.  Notwithstanding anything to the contrary in this Section 4.2(c), Total Disability shall have the definition of “Disabled” contained in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”), in any instance in which amounts are paid under this Agreement as a result of Executive’s Total Disability and such amounts are treated as deferred compensation under Code Section 409A.

 

(d)                                 Notwithstanding anything contained in the Plan or any individual grant agreements issued thereunder applicable to the Executive (collectively, the “Equity Award Agreements”), all outstanding and unvested stock options (including the Sign-on Grant, if applicable) and other equity-based awards granted under Equity Award Agreements and held by the Executive as of the date of termination shall become vested as follows: (i) any such awards whose vesting conditions are based solely on the Executive’s continued employment with the Company over a period of time (the “Time-Vesting Awards”) shall become immediately vested (and, as applicable, exercisable for such post-termination period(s) as are already set forth in the Equity Award Agreements) on the date of termination; and (ii) any such awards whose vesting conditions are based both on the Executive’s continued employment with the Company

 

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over a period of time and the Company’s achievement of pre-established performance targets (the “Performance-Vesting Awards”) shall become vested (and, as applicable, exercisable for such post-termination period(s) as are already set forth in the Equity Award Agreements) as to a Prorated Target Amount of such award on the date of termination.  For purposes of this Section 4.2(d), the “Prorated Target Amount” of each Performance-Vesting Award that shall become vested (and, as applicable, exercisable for such post-termination period(s) as are already set forth in the Equity Award Agreements) hereunder shall be equal to the product of (x) a fraction, the numerator of which is equal to the number of days in the performance period applicable to such award during which the Executive was employed by the Company, and the denominator of which is the total number of days during such performance period (such fraction, the “Prorata Percentage”) and (y) the total number of shares of GNC common stock subject to such Performance-Vesting Award to which the Executive would have become entitled under such award, assuming achievement of the performance targets applicable to such award at the “target” level of performance as of the end of the performance period applicable to such award.

 

4.3                               Termination by the Company Without Cause or Resignation by the Executive For Good Reason.

 

(a)                                 The Company may terminate the Executive’s employment without “Cause” (as defined in Section 4.3(g)), and thereby terminate the Executive’s employment (and the Employment Period) under this Agreement at any time with no requirement for notice to the Executive.

 

(b)                                 The Executive may resign, and thereby terminate the Executive’s employment (and the Employment Period), at any time for “Good Reason” (as defined in Section 4.3(f)), upon not less than 30 days’ prior written notice to the Company specifying in reasonable detail the circumstances constituting the asserted Good Reason therefor; provided, however, that the Company shall have an opportunity to substantially cure any such Good Reason within 30 days after the Company’s receipt of such notice; and provided further that, if the Company is not seeking to cure, the Company shall not be obligated to allow the Executive to continue working during such period and may, in its sole discretion, accelerate such termination of employment (and the Employment Period) to any date during such period.

 

(i)                                     Executive may not terminate employment under this Agreement for Good Reason on account of any act or omission by the Company, the first occurrence of which the Executive had actual notice for 60 days or more prior to giving notice of termination for Good Reason.

 

(ii)                                  A resignation by the Executive for Good Reason requires the Executive to actually resign his employment within 30 days after the Company’s cure period has expired if the Company has failed to substantially cure the event constituting Good Reason.

 

(c)                                  In the event the Executive’s employment is terminated pursuant to this Section 4.3, and subject to Section 4.3(d), the following provisions shall apply:

 

(i)                                     The Company shall pay the Executive, as severance, an amount equal to two (2) times the Base Salary, such amount to be paid in accordance with the Company’s normal payroll practices and procedures over the twenty-four (24) month period beginning on the 60th day after the date of termination.

 

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(ii)                                  The Company shall pay to the Executive (A) any unpaid 2014 Annual Bonus or unpaid Annual Bonus with respect to the calendar year prior to the year in which the date of the Executive’s termination occurs, and (B) a prorated share of the 2014 Annual Bonus or Annual Bonus (as applicable) pursuant to Section 3.2 (based on the period of actual employment) that the Executive would have been entitled to receive had the Executive worked through the date of payment of such 2014 Annual Bonus or Annual Bonus (as applicable) based on the actual level of achievement of the performance objectives, for the year of such termination, and with any such Annual Bonuses payable at the time and in the manner annual bonuses are paid to employees, generally.

 

(iii)                               If the Executive elects continuation coverage (with respect to the Executive’s coverage and/or any eligible dependent coverage) under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA Continuation Coverage”) with respect to the Company’s group health insurance plan, the Company shall be responsible for payment of the monthly cost of COBRA Continuation Coverage, and the Executive shall make timely co-payments of the costs of such coverage as if the Executive was an employee of the Company, such payments for coverage to continue for the eighteen (18) month period following the date of termination (or until such earlier date, if any, on which the Executive obtains comparable health insurance coverage from another employer).

 

(iv)                              Notwithstanding anything contained in any Equity Award Agreements applicable to the Executive, all outstanding and unvested stock options (including the Sign-on Grant, if applicable) and other equity-based awards granted under Equity Award Agreements and held by the Executive as of the date of termination shall become vested as follows: (i) any such Time-Vesting Awards shall, to the extent such Time-Vesting Awards would have become vested in accordance with their terms within the twenty-four (24) month period following the date of termination if the Executive had remained employed with the Company through such period, become immediately vested (and, as applicable, exercisable for ninety (90) days following the date of termination (notwithstanding any shorter exercise period set forth in the Equity Award Agreements), but if any Equity Award Agreement provides for a longer exercise period, then such longer exercise period shall continue to apply) on the date of termination; and (ii) any such Performance-Vesting Awards shall become vested (and, as applicable, exercisable for ninety (90) days following the date of termination (notwithstanding any shorter exercise period set forth in the Equity Award Agreements), but if any Equity Award Agreement provides for a longer exercise period, then such longer exercise period shall continue to apply) as to a Prorated Actual Amount of such award as of the date the Compensation Committee (or other committee, or the Board) determines the Prorated Actual Amount.  For purposes of this Section 4.3(c)(iv),

 

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the “Prorated Actual Amount” of each Performance-Vesting Award that shall become vested (and, as applicable, exercisable for ninety (90) days following the date of termination (notwithstanding any shorter exercise period set forth in the Equity Award Agreements), but if any Equity Award Agreement provides for a longer exercise period, then such longer exercise period shall continue to apply) hereunder shall be determined following the expiration of the performance period applicable to each such award, and shall be equal to the product of (x) the Prorata Percentage of the applicable Performance-Vesting Award and (y) the total number of shares of GNC common stock subject to such Performance-Vesting Award (if any) to which the Executive would have been entitled thereunder, if the Executive had remained employed through such applicable performance period, based on the actual achievement of the performance targets applicable to such award, as determined by the Compensation Committee (or other committee) otherwise in accordance with the terms of the Plan and each such individual grant agreement.

 

(v)                                 Payments and reimbursements made to the Executive under this Section 4.3(c)(i), (ii)(B), and (iii)  shall be made or commence on the first regular payroll date following the 60th day after the date of termination (or, with respect to the payment provided under Section 4.3(c)(ii)(B), if later, the date provided in Section 3.2, if at the time of the Executive’s date of termination the level of achievement of the performance objectives referenced in Section 4.2(a)(iii) has not yet been established by the Board); and any vesting benefits under Section 4.3(c)(iv) shall occur on the 60th day after the Executive’s date of termination; provided that on or before such date the Release (as defined in Section 4.3(d)) has been executed and any period in which the Executive may revoke such Release has expired, without such Release having been revoked, and provided, further, that the payment of all the amounts otherwise due to be paid under Section 4.3(c)(i) shall be contingent on the Executive’s continued compliance with all post-termination restrictive covenants applicable to the Executive contained in Section 5.

 

(d)                                 As a condition precedent to the Executive’s right to receive the payments and benefits set forth in Section 4.3(c)(i), (ii)(B), (iii) and (iv), the Executive agrees to execute a release in the form annexed hereto as Exhibit A (the “Release”).  The Company shall, without regard to the Executive’s execution of the Release, pay the Executive the Accrued Obligations (as defined in Section 4.4(b)(i) and payable in accordance with the terms thereof) and the payment due pursuant to Section 4.3(c)(ii)(A), also payable in accordance with the terms thereof.

 

(e)                                  Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment, vesting, distribution or transfer by the Company or any successor, or any Affiliate of the foregoing or by any other Person or that any other event occurring with respect to the Executive and the Company for the Executive’s benefit, whether paid or payable or distributed or distributable under the terms of this Agreement or otherwise (including under any employee benefit plan) (a “Payment”) would be subject to or result in the imposition of the excise tax imposed by Section 4999 of the Code (and any regulations or guidance promulgated or issued thereunder, any successor provision, and any

 

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similar provision of state or local income tax law) (collectively, the “Excise Tax”), then (subject to the proviso at the end of this sentence) the amount of the Payment shall be reduced to the highest amount that may be paid by the Company or other entity without subjecting any such Payment to the Excise Tax (the “Payment Reduction”); provided, however, that the Payments shall only be reduced if the Accounting Firm (as defined in Section (4.3(e)(i) below) determines that the Executive would retain a greater Net After-Tax Payment (defined below) of the Payments, if the Payments were to be so reduced, than if the Payments were not so reduced.  To the extent necessary to effect the Payment Reduction, the Company shall reduce or eliminate the Payments by first reducing or eliminating the portion of the Payments which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the initial determination, subject to the confirmation of the Accounting Firm (as defined herein) with respect to the intended effect of such Payment Reduction.  For purposes of this Agreement, the term “Net After-Tax Payment” means the present value (as determined in accordance with Section 280G of the Code) of a Payment, net of all Excise Taxes imposed on the Executive with respect to that Payment.

 

(i)                                     Subject to the provisions of Section 4.3(e)(ii), all determinations required to be made under this Section 4.3(e), including whether and when a Payment is subject to Section 4999 of the Code and the assumptions to be utilized in arriving at such determination and in determining the amount of the Net After-Tax Payment and, if applicable, an appropriate Payment Reduction, shall be made by PricewaterhouseCoopers LLP, or any other nationally recognized accounting firm that shall be the Company’s outside auditors at the time of such determination (the “Accounting Firm”), which Accounting Firm shall provide detailed supporting calculations to the Executive and the Company within 15 business days of the receipt of notice from the Company or the Executive that there will be a Payment that the Person giving notice believes may be subject to the Excise Tax.  All fees and expenses of the Accounting Firm shall be borne by the Company.  Any determination by the Accounting Firm shall be binding upon the Company and the Executive in determining whether a Payment Reduction is required and the amount thereof (subject to Sections 4.3(e)(ii) and (iii)), in the absence of material mathematical or legal error.

 

(ii)                                  As a result of uncertainty in the application of Section 4999 of the Code that may exist at the time of the initial determination by the Accounting Firm, it may be possible that in making the calculations required to be made hereunder, the Accounting Firm shall determine that a Payment Reduction was not made that should be made (an “Overpayment”) or that a Payment Reduction was made that need not be made (an “Underpayment”).  If, within 75 days after the Accounting Firm’s initial determination under Section 4.3(e)(i), the Accounting Firm shall determine that an Overpayment was made, any such Overpayment shall be treated for all purposes, to the extent practicable and subject to applicable law, as a loan to the Executive with interest at the applicable Federal rate provided for in Section 1274(d) of the Code and shall be repaid by the Executive to the Company within 35 days after the Executive receives notice of the Accounting Firm’s determination; provided, however, that the amount to be repaid

 

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by the Executive to the Company either as a loan or otherwise as a lump sum payment (where a loan is not practicable or permitted by law) shall be reduced to the extent that any portion of the Overpayment to be repaid shall not be offset by a corresponding reduction in tax by reason of such repayment of the Overpayment.  If the Accounting Firm shall determine that an Underpayment was made, any such Underpayment shall be due and payable by the Company to the Executive within 35 days after the Company receives notice of the Accounting Firm’s determination.

 

(iii)                               The Executive shall give written notice to the Company of any claim by the Internal Revenue Service that, if successful, would require the payment by the Executive of an Excise Tax, such notice to be provided within 15 days after the Executive shall have received written notice of such claim.  The Executive shall cooperate with the Company in determining whether to contest or pay such claim and shall not pay such claim without the written consent of the Company, which shall not be unreasonably withheld, conditioned or delayed.

 

(iv)                              This Section 4.3(e) shall remain in full force and effect following the termination of the Executive’s employment for any reason until the expiration of the statute of limitations on the assessment of taxes applicable to the Executive for all periods in which the Executive may incur a liability for taxes (including Excise Taxes), interest or penalties arising out of the operation of this Agreement.

 

(f)                                   For purposes of this Agreement, the Executive is entitled to terminate the Executive’s employment for “Good Reason” if without the Executive’s prior written consent:

 

(i)                                     The Company intentionally or recklessly fails to comply with any material obligation imposed on it by this Agreement;

 

(ii)                                  a material reduction by the Company (including in the aggregate) of the Executive’s responsibilities, duties, status or authority (including, but not limited to any change in reporting obligation) as the Chief Executive Officer of the Company (other than temporarily during any period where the Executive is incapacitated due to physical or mental illness); or

 

(iii)                               other than by action of the Executive, removal of the Executive from the position of Chief Executive Officer of the Company, or failure to elect (or nominate) the Executive to, or removal of the Executive from, the Board or the GNCI Board; or

 

(iv)                              the Company effects a material reduction in the Executive’s Base Salary; or

 

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(v)                                 the Executive’s principal place of business for performing services to the Company moves to a new location that is more than 75 miles from the Company Headquarters.

 

(g)                                  For purposes of this Agreement, “Cause” means the occurrence of any one or more of the following events, and a determination of such occurrence shall be made by the Board reasonably and in good faith by a two-thirds vote of the Board (excluding the Executive as a member thereof) after a Board meeting to determine the existence of Cause:

 

(i)                                     any intentional or reckless failure by the Executive to comply with any material obligation under this Agreement;

 

(ii)                                  the Executive’s conviction of, or plea of nolo contendere to, (A) a misdemeanor that causes substantial actual harm to the Company or any of its Affiliates or (B) a crime constituting a felony;

 

(iii)                               theft, embezzlement or fraud by the Executive in connection with the performance of the Executive’s duties hereunder;

 

(iv)                              the Executive’s engaging in any activity that gives rise to a material conflict with the Company or any of its Affiliates;

 

(v)                                 the misappropriation by the Executive of any material business opportunity of the Company or any of its Affiliates;

 

(vi)                              any (A) willful or reckless, and (B) material, failure to comply with, observe or carry out the Company’s rules, regulations, policies and codes of ethics and/or conduct applicable to its employees and senior executive officers in effect from time to time, including (without limitation) those regarding conflicts, potential conflicts of interest or the appearance of a conflict of interest;

 

(vii)                           (A) the Executive’s substance abuse that (I) significantly or persistently impairs the Executive’s performance of the Executive’s duties hereunder or (II) causes or is likely to cause substantial harm to the Company or any of its Affiliates, or (B) the Executive’s use of illegal drugs that (x) impairs the Executive’s performance of the Executive’s duties hereunder or (y) causes or is likely to cause harm to the Company or any of its Affiliates; and

 

(viii)                        engagement in conduct that Executive knows or should know is materially injurious to the Company or any of its Affiliates; or

 

(ix)                              the Executive’s failure to satisfy the Executive’s obligations under Section 1.3 by the end of the Relocation Period, other than due to a force majeure or a delay of no more than thirty days resulting from the death or serious illness of a member of the Executive’s immediate family; and

 

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; provided, that no determination of “Cause” by the Board as provided under any of clauses (i), (iii), (iv), (v), (vi) or (vii)  hereunder shall occur if such act or conduct giving rise to a determination of “Cause” hereunder is, if curable in the reasonable, good faith determination of the Board, cured within fifteen (15) business days after delivery to the Executive by the Board of written notice of such act or conduct.  For the avoidance of doubt, a determination of Cause in accordance with this section shall not prevent the Executive from challenging the Board’s determination (on a de novo review) that Cause exists or that the Executive has failed to cure any act or conduct (or failure to act) that purportedly formed the basis for the Board’s determination.

 

(h)                                 For the avoidance of doubt, the election by either the Company or the Executive not to extend or further extend the Employment Period pursuant to Section 2 shall not be a termination without Cause or a resignation for Good Reason under Section 4.3.

 

4.4                               Termination For Cause, Voluntary Resignation Other Than For Good Reason or Election Not to Extend the Employment Period.

 

(a)                                 (i) The Company may, only upon action of the Board and written notice to the Executive specifying in reasonable detail the circumstances constituting the occurrence of conduct or an event giving rise to the Executive’s termination for Cause, terminate the employment of the Executive (and the Employment Period) at any time for “Cause,” (ii) the Executive may voluntarily resign other than for Good Reason and thereby terminate the Executive’s employment (and the Employment Period) under this Agreement at any time upon not less than 60-days’ prior written notice or (iii) either the Company or the Executive may elect not to extend or further extend the Employment Period pursuant to Section 2, provided that the Executive continues to provide services hereunder through the end of the Employment Period.

 

(b)                                 The following provisions shall apply upon termination by the Company for Cause, by the Executive as the result of resignation for other than for Good Reason, or by the Company or the Executive at the end of the Employment Period as the result of an election not to extend or further extend the Employment Period:

 

(i)                                     The Executive shall be entitled to receive all amounts of earned but unpaid Base Salary, accrued but unpaid vacation, and welfare and retirement benefits accrued and vested through the date of such termination (the “Accrued Obligations”).  Except as provided below, all other rights of the Executive (and all obligations of the Company) hereunder shall terminate as of the date of such termination.  The Accrued Obligations shall be paid in accordance with the Company’s general payroll practices and procedures and the terms and conditions of any applicable plan.

 

(ii)                                  The treatment of all outstanding stock options and other equity-based awards held by the Executive as of the date of termination pursuant to this Section 4.4 shall be governed by the terms of the Plan and the individual grant agreements applicable to the Executive.

 

(c)                                  The following provisions shall apply upon termination by the Company of the Executive’s employment hereunder as the result of its election not to extend, or further extend, the Employment Period beyond the end of the Initial Employment Period or the end of the applicable Extension Period, as applicable:

 

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(i)                                     The Executive shall be entitled to receive all Accrued Obligations.  The Accrued Obligations shall be paid in accordance with the Company’s general payroll practices and procedures and the terms and conditions of any applicable plan.

 

(ii)                                  The Company shall pay to the Executive any unpaid Annual Bonus with respect to the calendar year prior to the year of his termination by non-extension of the Employment Period as provided in Section 2, with any such unpaid Annual Bonuses payable at the time and in the manner annual bonuses are paid to employees, generally.

 

4.5                               Resignation from Officer Positions.  Upon the termination of the Executive’s employment for any reason (unless otherwise agreed in writing by the Company and the Executive), the Executive shall be deemed to have resigned, without any further action by the Executive, from any and all officer and/or director positions that the Executive, immediately prior to such termination, (a) held with the Company or any of its Affiliates and (b) held with any other entities at the direction of, or as a result of the Executive’s affiliation with, the Company or any of its Affiliates.  If for any reason this Section 4.5 is deemed to be insufficient to effectuate such resignations, then Executive shall, upon the Company’s request, execute any documents or instruments that the Company may deem necessary or desirable to effectuate such resignations.  In addition, the Executive hereby designates the Secretary or any Assistant Secretary of the Company and of any Affiliate to execute any such documents or instruments as the Executive’s attorney-in-fact to effectuate such resignations if execution by the Secretary or any Assistant Secretary of the Company or Affiliate is deemed by the Company or the Affiliate to be a more expedient means to effectuate such resignation or resignations.

 

5.                                      Confidentiality, Work Product and Non-Competition and Non-Solicitation.

 

5.1                               Confidentiality.

 

(a)                                 In connection with the Executive’s employment with the Company, the Company promises to provide the Executive with access to “Confidential Information” (as defined in Section 5.4(d)) in support of the Executive’s employment duties.  The Executive recognizes that the Company’s business interests require a confidential relationship between the Company and the Executive and the fullest practical protection and confidential treatment of all Confidential Information.  At all times, both during and after the Employment Period, the Executive shall not directly or indirectly:  (i) appropriate, download, print, copy, remove, use, disclose, divulge, communicate or otherwise “Misappropriate” (as defined in Section 5.4(e)) any Confidential Information, including, without limitation, originals or copies of any Confidential Information, in any media or format, except for the Company’s benefit within the course and scope of the Executive’s employment or with the prior written consent of the Chairman of the Board; or (ii) take or encourage any action that would circumvent, interfere with or otherwise diminish the value or benefit of the Confidential Information to any of the Company Parties (as defined in Section 5.4(b)).

 

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(b)                                 All Confidential Information, and all other information and property affecting or relating to the business of the Company Parties within the Executive’s possession, custody or control, regardless of form or format, shall remain, at all times, the property of the respective Company Parties, the appropriation, use and/or disclosure of which is governed and restricted by this Agreement.

 

(c)                                  The Executive acknowledges and agrees that:

 

(i)                                     the Executive occupies a unique position within the Company, and the Executive is and shall be intimately involved in the development and/or implementation of Confidential Information;

 

(ii)                                  in the event the Executive breaches this Section 5.1 with respect to any Confidential Information, such breach shall be deemed to be a Misappropriation of such Confidential Information; and

 

(iii)                               any Misappropriation of Confidential Information shall result in immediate and irreparable harm to the Company.

 

(d)                                 Upon receipt of any formal or informal request, by legal process or otherwise, seeking the Executive’s direct or indirect disclosure or production of any Confidential Information to any Person, the Executive shall promptly and timely notify the Company and provide a description and, if applicable, hand deliver a copy of such request to the Company.  The Executive irrevocably nominates and appoints the Company as the Executive’s true and lawful attorney-in-fact to act in the Executive’s name, place and stead to perform any act that the Executive might perform to defend and protect against any disclosure of Confidential Information.

 

(e)                                  At any time the Company may request, during or after the Employment Period, the Executive shall deliver to the Company all originals and copies of Confidential Information and all other information and property affecting or relating to the business of the Company Parties within the Executive’s possession, custody or control, regardless of form or format, including, without limitation any Confidential Information produced by the Executive.  Both during and after the Employment Period, the Company shall have the right of reasonable access to review, inspect, copy and/or confiscate any Confidential Information within the Executive’s possession, custody or control.

 

(f)                                   Upon termination or expiration of this Agreement, the Executive shall immediately return to the Company all Confidential Information, and all other information and property affecting or relating to the business of the Company Parties, within the Executive’s possession, custody or control, regardless of form or format, without the necessity of a prior Company request.

 

(g)                                  During the Employment Period and thereafter, the Executive represents and agrees that the Executive shall not use or disclose any confidential or proprietary information or trade secrets of others, including but not limited to former employers, and that the Executive shall not bring onto the premises of the Company or access such confidential or proprietary information or trade secrets of such others, unless consented to in writing by said others, and then only with the prior written authorization of the Company.

 

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5.2                               Work Product/Intellectual Property.

 

(a)                                 The Executive hereby assigns to the Company all right, title and interest to all “Work Product” (as defined in Section 5.4(h)) that (i) relates to any of the Company Parties’ actual or anticipated business, research and development or existing or future products or services, or (ii) is reduced to practice, developed or made using any equipment, supplies, facilities, assets, information or resources of any of the Company Parties (including, without limitation, any intellectual property rights).

 

(b)                                 The Executive shall promptly disclose Work Product to the Board and perform all actions reasonably requested by the Company (whether during or after the Employment Period) to establish and confirm the ownership and proprietary interest of any of the Company Parties in any Work Product (including, without limitation, the execution of assignments, consents, powers of attorney, applications and other instruments).  The Executive shall not file any patent or copyright applications related to any Work Product except with the written consent of the Chairman of the Board.

 

5.3                               Non-Competition and Non-Solicitation.

 

(a)                                 In consideration of the Confidential Information being provided to the Executive as stated in Section 5.1, and other good and valuable new consideration as stated in this Agreement, including, without limitation, the opportunity to earn an Annual Bonus, the opportunity to be awarded equity awards pursuant to Section 3.5, employment and/or continued employment with the Company, and the business relationships, Company goodwill, work experience, client, customer and/or vendor relationships and other fruits of employment that the Executive shall have the opportunity to obtain, use and develop under this Agreement, the Executive agrees to the restrictive covenants stated in this Section 5.3.  The rights and obligations of the Parties under this Section 5.3 shall be binding upon and inure to the benefit of the Parties hereto and their heirs, personal representatives, successors and permitted assigns.

 

(b)                                 During the Employment Period and until the end of the Restricted Period (as defined in Section 5.4(g)), the Executive agrees that the Executive shall not, directly or indirectly, on the Executive’s own behalf or on the behalf of any other Person, within the United States of America or in any other country or territory in which the businesses of the Company are conducted or from which the Executive could participate in a business that competes with the business of the Company:

 

(i)                                     engage in a Competing Business (as defined in Section 5.4(c)), including, without limitation, by owning, managing, operating, controlling, being employed by, providing services as a consultant or independent contractor to or participating in the ownership, management, operation or control of any Competing Business;

 

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(ii)                                  induce or attempt to induce any customer, vendor, supplier, licensor or other Person in a business relationship with any Company Party, for or with which the Executive or employees working under the Executive’s supervision had any direct or indirect responsibility or contact at any time during the two most recent years of Executive’s employment with the Company, (A) to do business with a Competing Business or (B) to cease, restrict, terminate or otherwise reduce business with the Company for the benefit of a Competing Business, regardless of whether the Executive initiates contact; or

 

(iii)                               (A) solicit, recruit, persuade, influence or induce, or attempt to solicit, recruit, persuade, influence or induce anyone employed or otherwise retained by any of the Company Parties (including any independent contractor or consultant) at any time during the two most recent years of Executive’s employment with the Company, to cease or leave their employment or contractual or consulting relationship with any Company Party, regardless of whether the Executive initiates contact for such purposes or (B) hire, employ or otherwise attempt to establish, for any Person, any employment, agency, consulting, independent contractor or other business relationship with any Person who is or was employed or otherwise retained by any of the Company Parties (including any independent contractor or consultant) at any time during the two most recent years of Executive’s employment with the Company, regardless of whether the Executive initiates contact for such purposes.

 

(c)                                  The Parties hereto acknowledge and agree that, notwithstanding anything in Section 5.3(b)(i), (i) the Executive may own or hold, solely as passive investments, securities of Persons engaged in any business that would otherwise be included in Section 5.3(b)(i), as long as with respect to each such investment the securities held by the Executive do not exceed two percent (2%) of the outstanding securities of such Person and such securities are publicly traded and registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (ii) the Executive may serve on the board of directors (or other comparable position) or as an officer of any entity at the request of the Board; provided, however, that in the case of investments otherwise permitted under clause (i) above, the Executive shall not be permitted to, directly or indirectly, participate in, or attempt to influence, the management, direction or policies of (other than through the exercise of any voting rights held by the Executive in connection with such securities), or lend the Executive’s name to, any such Person.

 

(d)                                 The Executive acknowledges and agrees that, for purposes of this Section 5.3, indirect acts by the Executive shall include, without limitation, an act by the Executive’s spouse, ancestor, lineal descendant, lineal descendant’s spouse, sibling or other member of the Executive’s immediate family, so long as such act was engaged in on behalf of, at the request of, with the assistance of, the Executive, and so long as the Executive was not otherwise complicit in such act.

 

(e)                                  The Executive acknowledges that (i) the restrictive covenants contained in this Section 5.3 are ancillary to and part of an otherwise enforceable agreement, such being the agreements concerning Confidential Information and other consideration as stated in this Agreement, (ii) at the time that these restrictive covenants are

 

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made, the limitations as to time, geographic scope and activity to be restrained, as described herein, are reasonable and do not impose a greater restraint than necessary to protect the goodwill and other legitimate business interests of the Company, including without limitation, Confidential Information (including trade secrets), client, customer and/or vendor relationships, client and/or customer goodwill and business productivity, (iii) in the event of termination of the Executive’s employment, the Executive’s experiences and capabilities are such that the Executive can obtain gainful employment without violating this Agreement and without the Executive incurring undue hardship, (iv) based on the relevant benefits and other new consideration provided for in this Agreement, including, without limitation, the disclosure and use of Confidential Information, the restrictive covenants of this Section 5.3, as applicable according to their terms, shall remain in full force and effect even in the event of the Executive’s involuntary termination from employment, with or without Cause and (v) the Executive has carefully read this Agreement and has given careful consideration to the restraints imposed upon the Executive by this Agreement and consents to the terms of the restrictive covenants in this Section 5.3, with the knowledge that this Agreement may be terminated at any time in accordance with the provisions hereof.

 

5.4                               Definitions.  For purposes of this Agreement, the following terms shall have the following meanings:

 

(a)                                 An “Affiliate” of any specified Person means any other Person, whether now or hereafter existing, directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person.  For purposes hereof, “control” or any other form thereof, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.

 

(b)                                 “Company Parties” means the Company, and its direct and indirect parents, subsidiaries and Affiliates, and their successors in interest.  Notwithstanding the foregoing, “Company Parties” shall not include Ares Corporate Opportunities Fund II, L.P. or Ontario Teachers’ Pension Plan Board or any other sponsor or their respective Affiliates other than the Company.

 

(c)                                  “Competing Business” means, during the Employment Period and, as applicable, on the date of any termination of the Executive’s employment hereunder, any business in which any of the Company Parties is engaged or has during the Employment Period been engaged, including, without limitation, any enterprise that engages in, owns or operates businesses that market, sell, distribute, manufacture or otherwise are involved in the nutritional supplements industry at the time of termination of the Executive’s employment; provided that the Executive may be employed by or provide services to (i) (A) an ultimate parent company that engages, directly or indirectly through a subsidiary, in a Competing Business, so long as such ultimate parent company does not derive (on a consolidated basis) more than 10% of its total gross revenues from such Competing Business or (B) a subsidiary of an ultimate parent company that owns another subsidiary which is engaged in a Competing Business, so long as such ultimate parent company does not derive (on a consolidated basis) more than 30% of its total gross revenues from the Competing Business of such other subsidiary; and (ii) the Executive demonstrates to the Company’s reasonable satisfaction (e.g. represents and warrants to

 

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the Company in writing and describes the nature of the Executive’s responsibilities at the parent company or the subsidiary, as applicable) that the Executive does not and will not, directly or indirectly, provide any services or advice to, have any responsibility for, or supervision of, any business activities that materially engage in a Competing Business.

 

(d)                                 Confidential Information.

 

(i)                                     Definition.  “Confidential Information” means any and all material, information, ideas, inventions, formulae, patterns, compilations, programs, devices, methods, techniques, processes, know how, plans (marketing, business, strategic, technical or otherwise), arrangements, pricing and other data of or relating to any of the Company Parties (as well as their customers and/or vendors) that is confidential, proprietary or trade secret (A) by its nature, (B) based on how it is reasonably treated or designated by a Company Party, (C) because the disclosure of which would have a material adverse effect on the business or planned business of any of the Company Parties and/or (D) as a matter of law.

 

(ii)                                  Exclusions.  Confidential Information does not include material, data, and/or information (A) that any Company Party has voluntarily placed in the public domain, (B) that has been lawfully and independently developed and publicly disclosed by third parties, (C) that constitutes the general non-specialized knowledge and skills gained by the Executive during the Employment Period or (D) that enters the public domain or is otherwise obtained through lawful means; provided, however, that the unauthorized appropriation, use or disclosure of Confidential Information by the Executive, directly or indirectly, shall not affect the protection and relief afforded by this Agreement regarding such information.

 

(iii)                               Inclusions.  Subject to the Exclusions (for the avoidance of doubt), Confidential Information includes, without limitation, the following information (including without limitation, compilations or collections of information) relating or belonging to any Company Party (as well as its clients, customers and/or vendors) and created, prepared, accessed, used or reviewed by the Executive during or after the Employment Period:  (1) product and manufacturing information, such as ingredients, combinations of ingredients and manufacturing processes; (2) scientific and technical information, such as research and development, tests and test results, formulae and formulations, studies and analysis; (3) financial and cost information, such as operating and production costs, costs of goods sold, costs of supplies and manufacturing materials, non-public financial statements and reports, profit and loss information, margin information and financial performance information; (4) customer related information, such as customer related contracts, engagement and scope of work letters, proposals and presentations, customer-related contacts, lists, identities and prospects, practices, plans, histories, requirements and needs, price information and formulae and information concerning client or customer products, services, businesses or equipment specifications; (5) vendor and supplier related information, such as the identities, practices, history or services of any vendors or suppliers and vendor or supplier contacts; (6) sales, marketing and price

 

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information, such as marketing and sales programs and related data, sales and marketing strategies and plans, sales and marketing procedures and processes, pricing methods, practices and techniques and pricing schedules and lists; (7) database, software and other computer related information, such as computer programs, data, compilations of information and records, software and computer files, presentation software and computer-stored or backed-up information including, but not limited to, e-mails, databases, word processed documents, spreadsheets, notes, schedules, task lists, images and video; (8) employee-related information, such as lists or directories identifying employees, representatives and contractors, and information regarding the competencies (knowledge, skill, experience), compensation and needs of employees, representatives and contractors and training methods; and (9) business- and operation-related information, such as operating methods, procedures, techniques, practices and processes, information about acquisitions, corporate or business opportunities, information about partners and potential investors, strategies, projections and related documents, contracts and licenses and business records, files, equipment, notebooks, documents, memoranda, reports, notes, sample books, correspondence, lists and other written and graphic business records.

 

(e)                                  “Misappropriate”, or any form thereof, means:

 

(i)                                     the acquisition of any Confidential Information by a Person who knows or has reason to know that the Confidential Information was acquired by theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy or espionage through electronic or other means (each, an “Improper Means”); or

 

(ii)                                  the disclosure or use of any Confidential Information without the express consent of the Company by a Person who (A) used Improper Means to acquire knowledge of the Confidential Information, (B) at the time of disclosure or use, knew or had reason to know that his or her knowledge of the Confidential Information was (x) derived from or through a Person who had utilized Improper Means to acquire it, (y) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use or (z) derived from or through a Person who owed a duty to the Company to maintain its secrecy or limit its use or (C) before a material change of his or her position, knew or had reason to know that it was Confidential Information and that knowledge of it had been acquired by accident or mistake.

 

(f)                                   “Person” means any individual, corporation, partnership, limited liability company, joint venture, association, business trust, joint-stock company, estate, trust, unincorporated organization, government or other agency or political subdivision thereof or any other legal or commercial entity.

 

(g)                                  “Restricted Period” means twenty-four (24) months after the date of termination of employment (the Executive’s last day of work for the Company) for any reason.

 

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(h)                                 “Work Product” means all patents and patent applications, all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, creative works, discoveries, software, computer programs, modifications, enhancements, know-how, formulations, concepts and ideas, and all similar or related information (in each case whether or not patentable), all copyrights and copyrightable works, all trade secrets, confidential information, and all other intellectual property and intellectual property rights that are reduced to practice, developed or made by the Executive either alone or with others in the course of employment with the Company.

 

5.5                               Remedies.

 

(a)                                 Because the Executive’s services are unique and because the Executive has access to Confidential Information, the Executive acknowledges and agrees that if the Executive breaches any of the provisions of this Section 5, the Company may suffer immediate and irreparable harm for which monetary damages alone will not be a sufficient remedy and the Company may seek injunctive relief.  The restrictive covenants stated in this Section 5 are without prejudice to the Company’s rights and causes of action at law.

 

(b)                                 In addition to the remedies provided in subsection (a), if the Executive violates any provision of this Section 5, the Company may, after (i) giving written notice to the Executive of the Board’s reasonable, good faith belief that Executive has or is materially violating any of the covenants contained in this Section 5 and (ii) to the extent that the Board determines reasonably and in good faith that such violation is curable, giving the Executive 15 business days in which to cease and cure such violation, and the Executive fails to cease and desist from such violation and/or does not, in the Board’s reasonable and good faith determination, cure such violation, immediately cease all payments that it may be providing to the Executive pursuant to Section 4.3(c)(i); provided, however, that the foregoing shall be in addition to such other remedies as may be available to the Company and shall not be deemed to permit the Executive to forego or waive such payments in order to avoid his or her obligations under this Section 5; provided, further, that any Release previously executed by the Executive shall continue in effect.

 

5.6                               Interpretation; Severability.

 

(a)                                 The Executive has carefully considered the possible effects on the Executive of the covenants not to compete, the confidentiality provisions and the other obligations contained in this Agreement, and the Executive recognizes that the Company has made every effort to limit the restrictions placed upon the Executive to those that are reasonable and necessary to protect the Company’s legitimate business interests.

 

(b)                                 The Executive acknowledges and agrees that the restrictive covenants set forth in this Agreement are reasonable and necessary in order to protect the Company’s valid business interests.  It is the intention of the Parties hereto that the covenants, provisions and agreements contained herein shall be enforceable to the fullest extent allowed by law.  If any covenant, provision or agreement contained herein is found by a court having jurisdiction to be unreasonable in duration, scope or character of restrictions, or otherwise to be unenforceable, such covenant, provision or agreement shall not be rendered unenforceable thereby, but rather the duration, scope or character of restrictions of such covenant, provision or

 

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agreement shall be deemed reduced or modified with retroactive effect to render such covenant, provision or agreement reasonable or otherwise enforceable (as the case may be), and such covenant, provision or agreement shall be enforced as modified.  If the court having jurisdiction shall not review the covenant, provision or agreement, the Parties hereto shall mutually agree to a revision having an effect as close as permitted by applicable law to the provision declared unenforceable.  The Parties hereto agree that if a court having jurisdiction determines, despite the express intent of the Parties hereto, that any portion of the covenants, provisions or agreements contained herein are not enforceable, the remaining covenants, provisions and agreements herein shall be valid and enforceable.  Moreover, to the extent that any provision is declared unenforceable, the Company shall have any and all rights under applicable statutes or common law to enforce its rights with respect to any and all Confidential Information or unfair competition by the Executive.

 

5.7                               Non-Waiver.  The failure or delay of the Company at any time to require performance by the Executive of any provision of this Section 5 or to seek redress against the Executive or any other employee for any specific breach or threatened breach of this Section 5, even if known, shall not by itself operate or be construed as a waiver by the Company of its rights to require performance of that provision or to exercise any right, power or remedy hereunder, and any waiver by the Company of any breach of any provision of this Section 5 shall not be construed as a waiver of the provision itself, or a waiver of any right, power or remedy under this Agreement.  No notice to or demand on the Executive in any case shall, of itself, entitle the Executive to any other or further notice or demand in similar or other circumstances.  This provision shall not be deemed to supersede the common law of laches; nor shall it bar the defense of laches to application for equitable remedies.

 

6.                                      Insurance and Indemnification.

 

6.1                               Insurance.  The Company shall use commercially reasonable efforts to obtain and maintain a policy or policies of directors’ and officers’ liability insurance customary for similarly situated companies in an amount not less than that maintained by similarly situated companies, with reputable insurance companies providing the Executive with coverage for losses and other potential liabilities.  In all policies of director and officer liability insurance, the Executive shall be named as an insured in such a manner as to provide the Executive substantially the same rights and benefits as are accorded to the Company’s directors and executive officers.

 

6.2                               Indemnification.  To the extent not covered by insurance, the Company shall provide indemnification and advancement of reasonable legal expenses to the Executive on terms and conditions and with rights and benefits substantially the same as is provided from time to time by the Company to its directors and executive officers.

 

7.                                      Miscellaneous.

 

7.1                               Public Statements.

 

(a)                                 Media Nondisclosure.  The Parties agree that during the Employment Period or at any time during the Restricted Period, except as may be authorized in writing by the other, the Parties shall not release or solicit another to release to the Media any

 

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information concerning or relating to any aspect of the Executive’s termination from employment with the Company, and/or any aspect of any dispute that may be the subject of this Agreement.  For the purposes of this Agreement, the term “Media” includes, without limitation, any news organization, station, publication, show, website, web log (blog), bulletin board, chat room and/or program (past, present and/or future), whether published through the means of print, radio, television and/or the Internet or otherwise, and any member, representative, agent and/or employee of the same.  Nothing in this Section 7.1(a) shall be construed to hinder any Party’s right to undertake actions reasonably appropriate seeking legal redress with regard to any dispute; nor shall this provision bar any release to the Media that responds to a broadly disseminated publication of allegations or opinions that are harmful to the responding Party’s reputation, or that is otherwise required by applicable law, the Securities and Exchange Commission or the applicable rules of any national exchange on which the securities of GNC Holdings or any Affiliate thereof is traded.

 

(b)                                 Non-Disparagement.  The Executive agrees that during the Employment Period and Restricted Period, the Executive shall not make any statements, comments or communications in any form, oral, written or electronic to any Media or any customer, client or supplier of the Company or any of its Affiliates, which would constitute libel, slander or disparagement of the Company or any of its Affiliates, including, without limitation, any such statements, comments or communications that criticize, ridicule or are derogatory to the Company or any of its Affiliates; provided, however, that the terms of this Section 7.1(b) shall not apply to communications between the Executive and, as applicable, the Executive’s attorneys or other persons with whom communications would be subject to a claim of privilege existing under common law, statute or rule of procedure.  The terms of this Section 7.1(b) shall also not apply to communications made by the Executive pursuant to a legal obligation of the Executive, that is or may be disparaging of the Company or its Affiliates; provided that the Executive shall use reasonable best efforts to notify the Company of such required disclosure in advance of being required to make such disclosure, in order to allow the Company the opportunity to prevent such disclosure.  The Executive further agrees that the Executive shall not in any way solicit any such disparaging statements, comments or communications from others.

 

(c)                                  The Company agrees and warrants that during the Employment Period and Restricted Period: (i) the Company and its subsidiaries shall not issue or publish any statements, comments or communications in written or electronic form to any Media or any customer, client or supplier of the Company or any of its Affiliates, (ii) the members of the Board and the executive officers of the Company, in each case in the scope of their agency as, or in their capacity as, representatives of the Company and its Affiliates, shall not make any statements, comments or communications in any form, oral, written or electronic to any Media or any customer, client or supplier of the Company or any of its Affiliates, which would constitute libel, slander or disparagement of the Executive; and (ii) the Company shall direct the members of all boards of directors, officers and employees of the Company and its Affiliates not to make any statements, comments or communications in any form, oral, written or electronic to any Media or any customer, client or supplier of the Company or any of its Affiliates, in any such case which would constitute libel, slander or disparagement of the Executive, including, without limitation, any such statements,  comments or communications that criticize, ridicule or are derogatory to the Executive; provided, however, that the terms of this Section 7.1(c) shall not apply to any documents required to be filed by the Company with the Securities and Exchange

 

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Commission, provided that such disclosure is limited to only that which is required in order to comply with the Company’s communications and is limited to only that which is required to be disclosed, or communications between the Company and, as applicable, the Company’s attorneys or other persons with whom communications would be subject to a claim of privilege existing under common law, statute or rule of procedure.  The terms of this Section 7.1(c) shall also not apply to communications made by the Company or any of its Affiliates pursuant to a legal obligation of the Company or any of its Affiliates, or that is otherwise required by the applicable rules of any national exchange on which the securities of GNC Holdings or any Affiliate thereof is traded, that is or may be disparaging of the Executive; provided that the Company shall use reasonable best efforts to notify the Executive of such required disclosure in advance of being required to make such disclosure, in order to allow the Executive the opportunity to prevent such disclosure.  The Company further agrees that the Executive shall not in any way solicit any such disparaging statements, comments or communications from others.

 

7.2                               ARBITRATION.  SUBJECT TO THE RIGHTS UNDER SECTION 7.3 TO SEEK INJUNCTIVE OR OTHER EQUITABLE RELIEF, BINDING ARBITRATION SHALL BE THE EXCLUSIVE REMEDY FOR ANY AND ALL DISPUTES, CLAIMS OR CONTROVERSIES, WHETHER STATUTORY, CONTRACTUAL OR OTHERWISE, BETWEEN THE PARTIES HERETO ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT BY OR TERMINATION FROM THE COMPANY (INCLUDING, BUT NOT LIMITED TO, THE AMOUNT OF DAMAGES, OR THE CALCULATION OF ANY BONUS OR OTHER AMOUNT OR BENEFIT DUE) (COLLECTIVELY, “DISPUTES”).  THE PARTIES EACH WAIVE THE RIGHT TO A JURY TRIAL AND WAIVE THE RIGHT TO ADJUDICATE THEIR DISPUTES UNDER THIS AGREEMENT OUTSIDE THE ARBITRATION FORUM PROVIDED FOR IN THIS AGREEMENT, EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT.

 

(a)                                 Mediation First.  In the event either Party provides a notice of arbitration of any Dispute to the other Party, the Parties shall promptly proceed to make a good-faith effort to settle the Dispute by agreement, in a full-day, non-binding mediation with a mediator selected from a panel of mediators of JAMS.  The mediation will be governed by JAMS mediation procedures in effect at the time of the mediation.  The Company shall bear the costs for mediation, including the mediator’s fees; provided, however, that the Parties shall each bear their own individual costs and attorneys’ fees.  If for any reason JAMS cannot serve as the mediation administrator, the Company may select an alternative mediation administrator, such as the American Arbitration Association (“AAA”), to serve under the terms of this Agreement.  The Executive may, but is not required to, be represented by counsel in mediation.  Any mediators proposed for the panel provided for in this Section 7.2(a) must be available to serve in the Agreed Venue (as defined in Section 7.2(e)).

 

(b)                                 Severability.  It is the intention of the Parties hereto that the terms of Section 7.2 of this Agreement and its subparts (the “Arbitration Provision”) shall be enforceable to the fullest extent allowed by law.  However, if any terms of the Arbitration Provision are adjudicated to be invalid, illegal or unenforceable, then the Parties hereby stipulate and agree that (i) the adjudicating authority may and hereby is requested to modify the effect and/or interpret such terms so that they become valid, legal and enforceable and are as like the

 

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original terms as possible; (ii) such terms will not affect any other terms of the Arbitration Provision or this Agreement; (iii) if for any reason the terms in question cannot be modified or interpreted in accordance with this subsection, then the Arbitration Provision will be reformed, construed and enforced as if such terms never had been contained herein and/or have been severed herefrom; (iv) such invalidity, illegality or unenforceability will not take effect in any other jurisdiction absent a separate adjudication to that effect; and (v) the remainder of this Agreement shall continue in full force and effect.

 

(c)                                  Procedure Generally.  In the event that the Parties fail to settle at the mediation required by this Agreement, the Parties agree to submit the Dispute to a single arbitrator selected from a panel of JAMS arbitrators.  The arbitration will be governed by the JAMS Comprehensive Arbitration Rules and Procedures in effect at the time the arbitration is commenced, subject to the terms and modifications of this Agreement.  If for any reason JAMS cannot serve as the arbitration administrator or cannot fulfill the panel requirements of the Arbitration Provision, the Company may select an alternative arbitration administrator, such as AAA, to serve under the terms of this Agreement.

 

(d)                                 Arbitration Selection.  To select the arbitrator, the Parties shall make their respective strikes from a panel of former federal court judges, to the extent available from JAMS (the “First Panel”).  If the Parties cannot agree upon an arbitrator from the First Panel or if such a panel is not available from JAMS, then the Parties will next make their respective strikes from a panel of former Pennsylvania state court trial and appellate judges, to the extent available from JAMS (the “Second Panel”).  Any arbitrators proposed for the First and Second Panels provided for in this Section 7.2(d) must be available to serve in the Agreed Venue.  If the Parties cannot agree upon an arbitrator from the Second Panel, or if such a panel is not available from JAMS, then the Parties will next make their respective strikes from the panel of all other JAMS arbitrators available to serve in the Agreed Venue.

 

(e)                                  VENUE.  THE PARTIES STIPULATE AND AGREE THAT THE EXCLUSIVE VENUE OF ANY SUCH ARBITRATION PROCEEDING (AND OF ANY OTHER PROCEEDING, INCLUDING ANY COURT PROCEEDING, UNDER THIS AGREEMENT) SHALL BE ALLEGHENY COUNTY, PENNSYLVANIA (THE “AGREED VENUE”).

 

(f)                                   Authority and Decision.  The arbitrator shall have the authority to award the same damages and other relief that a court could award.  The arbitrator shall issue a reasoned award explaining the decision and any damages awarded.  The arbitrator’s decision will be final and binding upon the Parties and enforceable by a court of competent jurisdiction.  The Parties will abide by and perform any award rendered by the arbitrator.  In rendering the award, the arbitrator shall state the reasons therefor, including (without limitation) any computations of actual damages or offsets, if applicable.

 

(g)                                  Fees and Costs.  In the event of arbitration under the terms of this Agreement, the fees charged by JAMS or other arbitration administrator and the arbitrator shall be borne by the Company, subject to subsequent reallocation in the determination of the arbitrator and to the extent permitted by law.  Otherwise, the Parties shall each bear their own costs, expenses and attorneys’ fees incurred in arbitration; provided, however, that the prevailing Party shall be entitled to recover and have awarded its attorneys’ fees, court costs, arbitration

 

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expenses, and its portion of the fees and costs charged by JAMS or other arbitration administrator, regardless of which Party initiated the proceedings, in addition to any other relief to which it may be entitled.  The Executive may, but is not required to, be represented by counsel in arbitration.

 

(h)                                 Limited Scope.  The following are excluded from binding arbitration under this Agreement:  claims for workers’ compensation benefits or unemployment benefits; replevin; and claims for which a binding arbitration agreement is invalid as a matter of law.

 

7.3                               Injunctive Relief.  The Parties hereto may seek injunctive relief in arbitration; provided, however, that as an exception to the arbitration agreement set forth in Section 7.2, the Parties, in addition to all other available remedies, shall each have the right to initiate an action in any court of competent jurisdiction in order to request injunctive or other equitable relief regarding the terms of Section 5 or 7.2.  The exclusive venue of any such proceeding shall be in the Agreed Venue.  The Parties agree (a) to submit to the jurisdiction of any competent court in the Agreed Venue and (b) to waive any and all defenses the Executive may have on the grounds of lack of jurisdiction of such court.  Evidence adduced in any such proceeding for an injunction may be used in arbitration as well.  The existence of this right shall not preclude or otherwise limit the applicability or exercise of any other rights and remedies that a Party hereto may have at law or in equity.

 

7.4                               Settlement of Existing Rights.  In exchange for the other terms of this Agreement, the Executive acknowledges and agrees that:  (a) the Executive’s entry into this Agreement is a condition of employment and/or continued employment with the Company, as applicable; (b) except as otherwise provided herein, this Agreement will replace any existing understandings, promises or agreements, whether oral or written, between the Parties and thereby act as a novation, if applicable; (c) the Executive is being provided with access to Confidential Information, including, without limitation, proprietary trade secrets of one or more Company Parties, to which the Executive has not previously had access; (d) all Company inventions and intellectual property developed by the Executive during any past employment with the Company are the exclusive property of the Company; and (e) all Confidential Information and/or specialized training accessed, created, received or utilized by the Executive during any past employment with Company, as applicable, will be subject to the restrictions on Confidential Information described in this Agreement, whether previously so agreed or not.

 

7.5                               Entire Agreement; Waiver.  This Agreement contains the entire agreement between the Executive and the Company with respect to the subject matter hereof, and supersedes any and all prior understandings or agreements, whether written or oral.  No modification or addition hereto or waiver or cancellation of any provision hereof shall be valid except by a writing signed by the Party to be charged therewith.  No delay on the part of any Party to this Agreement in exercising any right or privilege provided hereunder or by law shall impair, prejudice or constitute a waiver of such right or privilege.

 

7.6                               Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to principles of conflict of laws.

 

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7.7                               Successors and Assigns; Binding Agreement.  The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their heirs, personal representatives, successors and permitted assigns.  This Agreement is a personal contract, and, except as specifically set forth herein, the rights and interests of the Executive herein may not be sold, transferred, assigned, pledged or hypothecated by any Party without the prior written consent of the others.  As used herein, the term “successor” as it relates to the Company, shall include, but not be limited to, any successor by way of merger, consolidation or sale of all or substantially all of such Person’s assets or equity interests.

 

7.8                               Representation by Counsel; Independent Judgment; No Conflicts.  Each of the Parties hereto acknowledges that (a) it or the Executive has read this Agreement in its entirety and understands all of its terms and conditions, (b) it or the Executive has had the opportunity to consult with any individuals of its or the Executive’s choice regarding its or the Executive’s agreement to the provisions contained herein, including legal counsel of its or the Executive’s choice, and any decision not to was the Executive’s or its alone and (c) it or the Executive is entering into this Agreement of its or the Executive’s own free will, without coercion from any source, based upon its or the Executive’s own independent judgment. The Executive further represents that none of the entry by the Executive into this Agreement and the Executive’s performance of duties hereunder shall constitute a breach of any agreement to which the Executive may be subject with any prior employer.

 

7.9                               Interpretation.  The Parties and their respective legal counsel actively participated in the negotiation and drafting of this Agreement, and in the event of any ambiguity or mistake herein, or any dispute among the Parties with respect to the provisions hereto, no provision of this Agreement shall be construed unfavorably against any of the Parties on the ground that the Executive, it, or the Executive’s or its counsel was the drafter thereof.

 

7.10                        Survival.  The provisions of Sections 4.3(c), 4.3(e), 5 and 7 shall survive the termination of this Agreement.

 

7.11                        Notices.  All notices and communications hereunder shall be in writing and shall be deemed properly given and effective when received, if sent by facsimile or telecopy, or by postage prepaid by registered or certified mail, return receipt requested, or by other delivery service which provides evidence of delivery, as follows:

 

If to the Company, to:

 

General Nutrition Centers, Inc. 
 300 Sixth Avenue
 Pittsburgh, PA  15222
 Attention:  Chairman, Board of Directors

 

with a copy to the Chief Legal Officer of the Company, at the same address.

 

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If to the Executive, to:

 

the Executive, at the most recent address of the 
 Executive on file with the Company.

 

with copy to:

 

Gary Trachten, Esq.
 Kudman Trachten Aloe LLP
 350 Fifth Avenue — Suite 4400
 New York, NY  10118

 

or to such other address as one Party may provide in writing to the other Party from time to time.

 

7.12                        Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.  Facsimile or electronic transmission of any signed original document or retransmission of any signed facsimile or electronic transmission will be deemed the same as delivery of an original.  At the request of any Party, the Parties will confirm facsimile or electronic transmission by signing a duplicate original document.

 

7.13                        Captions.  Paragraph headings are for convenience only and shall not be considered a part of this Agreement.

 

7.14                        No Third Party Beneficiary Rights.  No entity or person not a Party hereto shall have any right to enforce any provision of this Agreement, even if indirectly benefited by it.

 

7.15                        Withholding.  Any payments provided for hereunder shall be paid net of any applicable withholding required under Federal, state or local law and any additional withholding to which Executive has agreed.

 

7.16                        Section 409A of the Code.

 

(a)                                 Although the Company does not guarantee to the Executive any particular tax treatment relating to the payments and benefits under this Agreement, it is intended that such payments and benefits be exempt from, or comply with, Code Section 409A, and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A.  The Parties mutually desire to avoid adverse tax consequences associated with the application of Code Section 409A to this Agreement and agree to cooperate fully and take appropriate reasonable actions to avoid any such consequences under Code Section 409A, including delaying payments and reforming the form of the Agreement (maintaining, to the maximum extent reasonably possible, the original intent and economic benefit to Executive and the Company of the applicable provisions) if such action would reduce or eliminate taxes and/or interest payable as a result of Code Section 409A.  In addition, Sections 7.16(b) through 7.16(d) shall take precedence over any contrary terms in this Agreement.

 

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(b)                                 A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following such termination of employment that are considered “nonqualified deferred compensation” under Code Section 409A unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment that is considered “nonqualified deferred compensation” under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (1) the expiration of the six-month period measured from the date of such “separation from service” of the Executive, and (2) the date of the Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 7.16(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum with interest at the prime rate as published in The Wall Street Journal on the first business day following the end of the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(c)                                  With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided, that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.

 

(d)                                 If under this Agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment.  In no event may Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement that is considered nonqualified deferred compensation.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement, intending it as a document under seal, to be effective for all purposes as of the Effective Date.

 

 

	
WITNESS/ATTEST:
    	
 
    	
GENERAL   NUTRITION CENTERS, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Richard T. Rocheleau
    	
 
    	
By:
    	
/s/   Richard J. Wallace
    
	
Name:
    	
Richard   T. Rocheleau
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
WITNESS/ATTEST:
    	
 
    	
GNC   HOLDINGS, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Richard T. Rocheleau
    	
 
    	
By:
    	
/s/   Richard J. Wallace
    
	
Name:
    	
Richard   T. Rocheleau
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
WITNESS/ATTEST:
    	
 
    	
EXECUTIVE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Laura Archbold
    	
 
    	
By:
    	
/s/   Michael Archbold
    
	
Name:
    	
Laura   Archbold
    	
 
    	
Title:
    	
Michael   Archbold
    

 

29

 

	
 
    	
EXHIBIT   A
    

 

GENERAL RELEASE AND COVENANT NOT TO SUE

 

Reference is made to that certain Employment Agreement, dated as of August 4, 2014  between General Nutrition Centers, Inc. and GNC Holdings, Inc. (the “Company,” and together with General Nutrition Centers, Inc., referred to herein as “GNC”) and me, Michael Archbold (referred to herein as “I”) (such Employment Agreement as may have been amended or otherwise modified from time to time in accordance with its terms, the “Employment Agreement”).  Capitalized terms used but not otherwise defined in this General Release and Covenant Not to Sue (this “Release”) shall have the meanings ascribed thereto in the Employment Agreement.

 

1.                                      Resignation. I, Michael Archbold, hereby resign, retroactive to the date of the termination of my employment, as an officer and director of the Company, Centers and any of their Affiliates and from any such positions held with any other entities at the direction of, or as a result of my affiliation with, GNC or any of its Affiliates.  I agree to promptly execute and deliver such other documents as GNC shall reasonably request to evidence such resignations.  In addition, I hereby agree and acknowledge that the date of the termination of my employment, as an officer and director of the Company, shall also be date of my termination from all other offices, positions, trusteeships, committee memberships and fiduciary capacities held with, or on behalf of, GNC or any of its Affiliates.

 

2.                                      Confirmation of Termination.  I acknowledge that, subject to the terms and conditions of the Employment Agreement, the date of the termination of my employment as an officer and director of the Company will serve as the termination date of my employment for purposes of participation in and coverage under all benefit plans and programs sponsored by or through GNC.  I acknowledge and agree that GNC shall not have any obligation to rehire me, nor shall GNC have any obligation to consider me for employment, after the date of the termination of my employment as an officer and director of the Company.

 

3.                                      General Release and Waiver.  I, Michael Archbold, on behalf of myself and my heirs, executors, administrators and assigns, in consideration of the Company’s agreement to pay me the severance and other payments and benefits as more fully described in the Employment Agreement in accordance with the terms and conditions of the Employment Agreement, do hereby (except as expressly stated herein) release and forever discharge and covenant not to sue (a) GNC and each of its Affiliates and their respective past, present and future subsidiaries, divisions, Affiliates and related business entities, directors, officers, executives, members, agents, fiduciaries, trustees, administrators, managers, supervisors, shareholders, investors, employees and representatives and each of their respective successors and assigns (both individually and in their official capacities) (collectively, the “Releasees”), from any and all actions, causes of action, covenants, contracts, claims, demands, suits, and liabilities whatsoever, which I ever had, now have or may have arising prior to or on the effective date of this Release by reason of my employment with or severance of my employment from the Company and/or its affiliates (“Claims”).

 

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By signing this Release, I am providing a complete waiver of all Claims that may have arisen, whether known or unknown, up until and including the effective date of this Release. This includes, but is not limited to, claims based on the Age Discrimination in Employment Act of 1967, as amended, the Americans with Disabilities Act of 1990, as amended, the Family and Medical Leave Act of 1993, as amended, the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, Section 1981 of the Civil Rights Act of 1866, as amended, the Equal Pay Act, as amended, the Immigration Reform and Control Act of 1986, as amended, the Employee Retirement Income Security Act of 1974, as amended (excluding claims for accrued, vested benefits under any employee benefit or pension plan of the Released Parties subject to the terms and conditions of such plan and applicable law), the Sarbanes-Oxley Act of 2002, as amended, the Pennsylvania Human Relations Act, as amended, the Pennsylvania Equal Pay Law, as amended, or any other Federal, state, or local law, any common law, public policy, contract (whether oral or written, express or implied) except as expressly excluded below, or tort law, and any other local, state or Federal law, regulation or ordinance having any bearing whatsoever on the terms and conditions of my employment and the cessation thereof, provided, however, that this Release shall not apply to (i) the Company’s obligations to provide me the severance and other payments and benefits to which I am entitled under the Employment Agreement in accordance with its terms and conditions, (ii) the Company’s and/or its insurers’ obligation(s) to provide me indemnification, defense, advancement or reimbursement of expenses to which I am or would be entitled under applicable public law, the Company’s bylaws as in effect as of the time of the underlying claim, or any contract of insurance, (iii) any vested, nonforfeitable benefits to which I may be entitled pursuant to any employee benefit plan maintained by the Company from time to time during my employment with the Company, or (iv) claims for compensation for injuries that are subject to and compensable solely under the Workers Compensation Law (collectively, “Excluded Claims”).  This Release is not intended to interfere with my right to file a charge with the Equal Employment Opportunity Commission (“EEOC”) in connection with any claim I believe I may have against any Releasee.  Notwithstanding the preceding sentence, by executing this Release, I hereby waive the right to recover in any proceeding I may bring before the EEOC or any state human rights commission on my behalf.  I further agree, promise and covenant that, to the maximum extent permitted by law neither, I, nor any person, organization, or other entity acting on my behalf has filed or will file, charged or will charge, claimed or will claim, sued or will sue, or caused or will cause or permitted or will permit to be filed, charged or claimed, any action for damages or other relief (including injunctive, declaratory, monetary or other relief) against the Releasees with respect to any Claims other than Excluded Claims.

 

4.                                      Knowing and Voluntary Waiver.   (a)  I have been afforded at least twenty-one (21) days to review this Release and the opportunity to consult with legal counsel, and I am signing this Release knowingly, voluntarily and with my own free will, and with full understanding of its terms and effects. (b) I have had answered to my satisfaction any questions I have asked with regard to the meaning and significance of all the terms and conditions of the provisions of this Release and have not relied on any statements or explanations made by any Releasee or their legal counsel.  (c)  I voluntarily accept the severance and other payments and benefits to which I am entitled under the Employment Agreement, for the purpose of making full and final settlement of all Claims referred to above and agreeing to abide by the terms and

 

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conditions contained in this Release.  (d) I also understand that I have seven (7) days after my execution of this Release to revoke this Release, and that this Release will not become effective if I exercise my right to revoke my signature within seven (7) days of my execution of this Release.  (e) I understand that such revocation must be delivered in writing to the chief legal officer of the Company at its headquarters at: 300 Sixth Avenue, Pittsburgh, PA 15222, on or prior to 5:00 p.m. Eastern Standard Time (or Eastern Daylight Time, as applicable) on the seventh (7th) day after I have signed this Release, in order for such revocation to be effective.

 

5.                                      Effective Time of Release.  This Release, once signed (and dated on the date signed) and returned to the Company by the date required under the Employment Agreement at its headquarters at: 300 Sixth Avenue, Pittsburgh, PA 15222, Attention:  Chairman of the Board, shall be effective on the eighth (8th) day after this Release is signed.

 

6.                                      Governing Law.  This Release will be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.  If any provision in this Release is held invalid or unenforceable for any reason, the remaining provisions shall be construed as if the invalid or unenforceable provision had not been included.

 

IN WITNESS WHEREOF, I have executed this Release on this        day of                           , 20      .

 

 

	
 
    	
 
    
	
Michael   Archbold
    	
 
    

 

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