Document:

EX-10.1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of April 21, 2008 (the
“Effective Date”), by and between General Nutrition Centers, Inc., a Delaware corporation
(the “Company”) an indirect wholly owned subsidiary of GNC Acquisition Holdings Inc., a
Delaware corporation (“GNC”), and Thomas Dowd (the “Executive”).

     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 hereof), the
Executive shall serve as Executive Vice President, Store Operations and Development of the Company
and of GNC. The Executive shall have the normal duties, responsibilities and authority
commensurate with such positions.

          1.2 Duties. During the Employment Period, the Executive shall do and perform all
services and acts necessary or advisable to fulfill the duties and responsibilities of the
Executive’s positions and shall render such services on the terms set forth herein. In addition,
the Executive shall have such other executive and managerial powers and duties as may reasonably be
assigned to the Executive, commensurate with the Executive serving as Executive Vice President.
The Company may adjust the duties and responsibilities of the Executive as Executive Vice
President, notwithstanding the specific title set forth in Section 1.1 hereof, based upon the
Company’s needs from time to time. Except for sick leave, reasonable vacations and excused leaves
of absence, the Executive shall, throughout the Employment Period, devote substantially all the
Executive’s working time, attention, knowledge and skills faithfully, and to the best of the
Executive’s ability, to the duties and responsibilities of the Executive’s positions in furtherance
of the business affairs and activities of the Company and its subsidiaries and Affiliates (as
defined in Section 5.4(a) hereof) and, except where the Company provides its written consent
otherwise, shall maintain the Executive’s principal residence within 75 miles of the principal
office of the Company as of the Effective Date. The Executive shall at all times be subject to,
comply with, observe and carry out (a) the Company’s rules, regulations, policies and codes of
ethics and/or conduct applicable to its employees generally and in effect from time to time and (b)
such rules, regulations, policies, codes of ethics and/or conduct, directions and restrictions as
the Board of Directors of the Company (the “Board”) may from time to time reasonably
establish or approve for senior executive officers of the Company.

     2. Term of Employment.

          2.1 Employment Period. The employment of the Executive hereunder shall continue until
two years from the above date (the “Initial Employment Period”), unless terminated earlier
in accordance with the provisions of Section 4 of this Agreement.

 

 

          2.2 Extension. Unless terminated earlier in accordance with the provisions of Section
4 of this Agreement, the employment of the Executive hereunder shall continue after the end of the
Initial Employment Period for additional one (1)-year periods (each an “Extension Period”
and, together with the Initial Employment Period, the “Employment Period”), unless the
Company or the Executive notifies the other in writing not less than thirty (30) days prior to the
end of the Initial Employment Period, or the end of the applicable Extension Period, of its or the
Executive’s election, in its or the Executive’s sole discretion, not to extend the Employment
Period.

     3. Compensation and General Benefits.

          3.1 Base Salary.

               (a) During the Employment Period, the Company agrees to pay to the Executive an annual base
salary in an amount equal to Three Hundred Twenty Thousand ($320,000) (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 for the payment of salaries to officers of the
Company, but in no event less frequently than monthly.

               (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 the Base Salary, as it, acting in its sole discretion, shall determine to be
reasonable and appropriate.

          3.2 Bonus. With respect to the 2008 calendar year and with respect to each calendar
year that commences during the Employment Period, the Executive shall be eligible to receive from
the Company an annual performance bonus (the “Annual Bonus”) on a basis and in an amount to
be determined by the Board or the Compensation Committee in the exercise of its sole discretion for
the applicable year. For 2008, the Executive’s target Annual Bonus shall be forty five percent
(45%) of the Base Salary with a maximum of one hundred percent (100%) of the Base Salary (prorated
consistent with the Executive’s first day of employment) if the Company exceeds the annual goals
determined by the Board or the Compensation Committee for 2008. Any Annual Bonus earned shall be
payable in full as soon as reasonably practicable following the determination thereof, but in no
event later than May 15 of the following year, and in accordance with the Company’s normal payroll
practices and procedures. Except as otherwise expressly provided in Section 4 hereof, any Annual
Bonus (or portion thereof) payable under this Section 3.2 shall not be payable unless the Executive
is employed by the Company on the last day of the period to which such Annual Bonus relates.

          3.3 Expenses. During the Employment Period, in addition to any amounts to which the
Executive may be entitled pursuant to the other provisions of this Section 3 or elsewhere herein,
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.

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          3.4 Fringe Benefits. During the Employment Period, in addition to any amounts to
which the Executive may be entitled pursuant to the other provisions of this Section 3 or elsewhere
herein, the Executive shall be entitled to participate in, and to receive benefits under generally
any benefit plans, arrangements or policies made available by the Company to its executives and key
management employees generally, subject to and on a basis consistent with the terms, conditions and
overall administration of each such plan, arrangement or policy.

     4. Termination.

          4.1 General. The employment of the Executive hereunder (and the Employment Period)
shall terminate as provided in Section 2 hereof, unless earlier 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
(i) the death of the Executive and (ii) at the option of the Company, upon not less than fifteen
(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(b) hereof).
Upon termination for death or Total Disability, subject to reduction by any benefits paid or
payable to the Executive, the Executive’s beneficiaries or estate under any Company-sponsored
disability benefit plan program or policy for the period following such date of termination, (A)
the Company shall pay to the Executive, guardian or personal representative, as the case may be,
the Executive’s current Base Salary for the remainder of the Employment Period in effect
immediately prior to the date of termination and (B) subject further to the sole discretion of the
Board or the Compensation Committee, the Company may also pay to the Executive, guardian or
personal representative, as the case may be, a prorated share of the Annual Bonus pursuant to
Section 3.2 hereof (based on the period of actual employment) that the Executive would have been
entitled to had the Executive worked the full year during which the termination occurred, provided
that bonus targets are met for the year of such termination. Any bonus shall be payable as soon as
reasonably practicable following the determination thereof, but in no event later than May 15 of
the following year, and in accordance with the Company’s normal payroll practices and procedures.

               (b) Subject to the last sentence of this Section 4.2(b), 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) the written determination by a physician selected by the Company that, because of 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 ninety (90) consecutive days or
any one hundred twenty (120) days during the immediately preceding twelve (12)-month period or is,
as of the date of determination, reasonably expected to last six (6) months or longer after the
date of determination, in each case based upon medically available reliable information or (iii)
Executive’s qualifying for benefits under the Company’s long-term disability coverage, if any. In
conjunction with determining mental and/or physical disability for purposes of this Agreement, the
Executive hereby consents to (x) any examinations that the Board or the Compensation Committee
determines

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are relevant to a determination of whether the Executive is mentally and/or physically
disabled or are required by the Company physician, (y) furnish such medical information as may be
reasonably requested and (z) waive any applicable physician patient privilege that may arise
because of such examination. Notwithstanding anything to the contrary in this Section 4.2(b),
Total Disability shall have the definition of “Disabled” contained in Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), 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 Section 409A of the Code.

               (c) With respect to outstanding stock options and other equity-based awards held by the
Executive as of the date of termination pursuant to this Section 4.2, (i) any such options that are
not vested or exercisable as of such date of termination shall immediately expire and any such
equity-based awards that are not vested as of such date of termination shall immediately be
forfeited and (ii) any such options that are vested and exercisable as of such date of termination
shall expire immediately following the expiration of the one hundred eighty (180)-day period
following such date of termination.

               (d) With respect to any shares of Common Stock held by the Executive that are vested as of the
date of termination pursuant to this Section 4.2 (or issued pursuant to the exercise of options
following such date of termination pursuant to Section 4.2(c) hereof), for the two hundred seventy
(270)-day period following such date of termination, the Company (or its designee) shall have the
right to purchase from the Executive or the Executive’s beneficiary, as applicable, and the
Executive or the Executive’s beneficiary hereby agrees to sell any or all such shares to the
Company (or the Company’s designee) for an amount equal to the product of (i) the per share current
fair market value of a share of Common Stock (as determined by the Board in good faith) and (ii)
the number of shares so purchased.

          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) hereof), upon not
less than sixty (60) days’ prior written notice to the Company specifying in reasonable detail the
reason therefore; provided, however, that the Company shall have a reasonable
opportunity to cure any such Good Reason (to the extent possible) within sixty (60) 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.

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     (i) Executive may not terminate employment under this Agreement for Good Reason
regarding any of the Company’s acts or omissions of which Executive had actual notice for sixty (60) days or more prior to giving
notice of termination for Good Reason.

     (ii) A determination of whether the Executive legitimately has Good Reason for
termination of the Executive’s employment under this Agreement, and of whether the
Company has effectively cured and thus eliminated the grounds for such Good Reason,
shall be made only by the Chief Executive Officer of the Company (the “Chief
Executive Officer”), within the Chief Executive Officer’s sole judgment and
discretion, acting in good faith after having met with the Company’s Vice President
of Human Resources.

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

     (i) The Company shall continue to pay the Executive the Base Salary to which the
Executive would have been entitled pursuant to Section 3.1 hereof (at the Base Salary
rate during the year of termination) had the Executive remained in the employ of the
Company until the expiration of the Employment Period in effect immediately prior to
the date of termination, with all such amounts payable in accordance with the
Company’s normal payroll practices and procedures in the same manner and at the same
time as though the Executive remained employed by the Company; provided,
however, that if the date of termination is during the Initial Employment
Period, the Company shall continue to pay the Executive such Base Salary for the
greater of (A) the period set forth above in this Section 4.3(c)(i) or (B) a six (6)
month period following such date of termination. Notwithstanding any other provision
of this Agreement, the Company shall continue to pay the Executive the Base Salary to
which the Executive would have been entitled pursuant to Section 3.1 hereof (at the
Base Salary rate during the year of termination) had the Executive remained in the
employ of the Company for a minimum of six (6) months following the date of
termination.

     (ii) If such termination occurs upon or within six (6) months following a Change
of Control (as defined in Exhibit A attached hereto), the Company shall continue to
pay the Executive the Base Salary to which the Executive would have been entitled
pursuant to Section 3.1 hereof (at the Base Salary rate during the year of
termination) for the greater of (A) the period set forth in Section 4.3(c)(i) hereof
or (B) a two (2)-year period following such date of termination, with all such
amounts payable in accordance with the Company’s normal payroll practices and
procedures in the same manner and at the same time as though the Executive remained
employed by the Company.

     (iii) In the event the Executive’s employment is terminated pursuant to this
Section 4.3 without Cause, and if the Company has previously effected reductions in
the Executive’s Base Salary and the base salary of all executives at the same level
as the Executive, which reductions were substantially similar, then the Base Salary
rate for purposes of Section 4.3(c)(i) or (ii) hereof shall be the Base Salary rate
in effect immediately prior to such reductions.

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     (iv) Subject to the sole discretion of the Board or the Compensation Committee,
the Company may pay to the Executive a prorated share of the Annual Bonus pursuant to
Section 3.2 hereof (based on the period of actual employment) that the Executive
would have been entitled to had the Executive worked the full year during which the
termination occurred, provided that bonus targets are met for the year of such
termination. The bonus shall be payable as soon as reasonably practicable following
the determination thereof, but in no event later than May 15 of the following year,
and in accordance with the Company’s normal payroll practices and procedures.

     (v) 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 Executive shall be
responsible for payment of the monthly cost of COBRA Continuation Coverage. Unless
prohibited by law, the Company shall reimburse the Executive for any portion of the
monthly cost of COBRA Continuation Coverage that exceeds the amount of the monthly
health insurance premium (with respect to the Executive’s coverage and/or any
eligible dependent coverage) payable by the Executive immediately prior to the date
of Executive’s termination, such reimbursements to continue (A) through the
expiration of the Employment Period in effect immediately prior to the date of
termination or (B) in the event that Executive’s Base Salary is being paid pursuant
to Section 4.3(c)(ii), for the period set forth therein. The Company shall pay the
reimbursements on a monthly basis in accordance with the Company’s normal payroll
practices and procedures.

     (vi) With respect to outstanding options and other equity-based awards held by
the Executive as of the date of termination pursuant to this Section 4.3, (A) any
such options that are not vested or exercisable as of such date of termination shall
immediately expire and any such equity-based awards that are not vested as of such
date of termination shall immediately be forfeited and (B) any such options that are
vested and exercisable as of such date of termination shall expire immediately
following the expiration of the ninety (90)-day period following such date of
termination.

     (vii) With respect to any shares of Common Stock held by the Executive that are
vested as of the date of termination pursuant to this Section 4.3 (or issued pursuant
to the exercise of options following such date of termination pursuant to Section
4.3(c)(vi) hereof), for the one hundred eighty (180)-day period following such date
of termination, the Company (or its designee) shall have the right to purchase from
the Executive, and the Executive hereby agrees to sell any or all such shares to the
Company (or the Company’s designee), for an amount equal to the product of (A) the
per share current fair market value of a share of Common Stock (as determined by the
Board in good faith) and (B) the number of shares so purchased.

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               (d) As a condition precedent to the Executive’s right to receive the benefits set forth in
Section 4.3(c) hereof, the Executive agrees to execute a release of the Company
and its respective Affiliates, officers, directors, stockholders, employees, agents, insurers,
representatives and successors from and against any and all claims that the Executive may have
against any such Person (as defined in Section 5.4(f) hereof) relating to the Executive’s
employment by the Company and the termination thereof, such release to be in form and substance
reasonably satisfactory to the Company.

               (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 similar provision of state or local income tax law)
(collectively, the “Excise Tax”), then 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”). The Executive shall have the right to
designate those payments or benefits that shall be reduced or eliminated under the Payment
Reduction to avoid the imposition of the Excise Tax, subject to the confirmation of the Accounting
Firm (as defined herein) with respect to the intended effect thereof.

     (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 and the assumptions to be utilized in arriving at such determination
and in determining 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 fifteen (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 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 need not be made that
properly should be made (an “Overpayment”) or that a Payment Reduction not
properly needed to be made should be made (an “Underpayment”). If, within
seventy-five (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

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Federal rate provided for in Section 1274(d) of the Code and shall be repaid by
the Executive to the Company within thirty-five (35) days after the Executive
receives notice of the Accounting Firm’s determination; provided,
however, that the amount to be repaid 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 will 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 thirty-five (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 fifteen (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 would be entitled to terminate the
Executive’s employment for “Good Reason” if without the Executive’s prior written consent:

     (i) the Company fails to comply with any material obligation imposed by this
Agreement;

     (ii) the Company changes the Executive’s position from that of Executive Vice
President; provided, however, that (A) a change in the Executive’s
duties or responsibilities without a change in the Executive’s position as Executive
Vice President shall not constitute Good Reason and (B) nothing herein shall prohibit
the Company from changing the Executive’s specific title as Executive Vice President,
notwithstanding the specific title set forth in Section 1.1 hereof, based upon the
Company’s needs from time to time; or

     (iii) the Company effects a reduction in the Executive’s Base Salary, unless all
executives at the same level as the Executive receive a substantially similar
reduction in base salary.

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               (g) For purposes of this Agreement, “Cause” means the occurrence of any one or more of
the following events, and the Company shall have the sole discretion to determine the existence of
Cause:

     (i) a failure by the Executive to comply with any obligation under this
Agreement;

     (ii) the Executive’s being indicted for (A) any felony or (B) any misdemeanor
that causes or is likely to cause harm or embarrassment to the Company or any of its
Affiliates, in the reasonable judgment of the Board;

     (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 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
generally and 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) any failure to comply with, observe or carry out the rules, regulations,
policies, directions, codes of ethics and/or conduct and restrictions established or
approved by the Board from time to time for senior executive officers of the Company,
including (without limitation) those regarding conflicts, potential conflicts of
interest or the appearance of a conflict of interest;

     (viii) substance abuse or use of illegal drugs that, in the reasonable judgment
of the Board, (A) impairs the Executive’s performance of the Executive’s duties
hereunder or (B) causes or is likely to cause harm or embarrassment to the Company or
any of its Affiliates; and

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

          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, upon action of the Board, 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 thirty (30)-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 2.2 hereof.

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               (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 and benefits accrued through the date of such termination. 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.

     (ii) With respect to outstanding options and other equity-based awards held by
the Executive as of the date of termination pursuant to this Section 4.4, (A) any
such options that are not vested or exercisable as of such date of termination shall
immediately expire and any such equity-based awards that are not vested as of such
date of termination shall immediately be forfeited and (B) any such options that are
vested and exercisable as of such date of termination shall expire immediately
following the expiration of the ninety (90)-day period following such date of
termination.

     (iii) With respect to any shares of Common Stock held by the Executive that are
vested as of the date of termination pursuant to this Section 4.4 (or issued pursuant
to the exercise of options following such date of termination pursuant to Section
4.4(b)(ii) hereof), for the one hundred eighty (180)-day period following such date
of termination, the Company (or its designee) shall have the right to purchase from
the Executive and the Executive hereby agrees to sell any or all such shares to the
Company (or the Company’s designee) for an amount equal to the product of (A) the per
share current fair market value of a share of Common Stock (as determined by the
Board in good faith) and (B) the number of shares so purchased.

          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 will 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 will, 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.

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          4.6 Section 409A of the Code. Notwithstanding anything to the contrary in this
Agreement, the parties mutually desire to avoid adverse tax consequences associated with the
application of Section 409A of the Code to this Agreement and agree to cooperate fully and take
appropriate reasonable actions to avoid any such consequences under Section 409A of the Code,
including delaying payments and reforming the form of the Agreement if such action would reduce or
eliminate taxes and/or interest payable as a result of Section 409A of the Code. In this regard,
notwithstanding anything to the contrary in this Section 4, to the extent necessary to comply with
Section 409A of the Code, any payment required under this Section 4 shall be deferred for a period
of six (6) months, regardless of the circumstances giving rise to or the basis for such payment.

     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)
hereof) 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) hereof) 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 Chief Executive Officer; 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) hereof).

               (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 will 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 will result in immediate
and irreparable harm to the Company.

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               (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, the Executive represents and agrees that the Executive will
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 will 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.

          5.2 Work Product/Intellectual Property.

               (a) Assignment. The Executive hereby assigns to the Company all right, title and
interest to all “Work Product” (as defined in Section 5.4(h) hereof) 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 conceived, 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) Disclosure. The Executive shall promptly disclose Work Product to the Chief
Executive Officer 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 Chief Executive Officer.

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          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 hereof, and other good and valuable new consideration as stated in this Agreement,
including, without limitation, 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 will have the opportunity to
obtain, use and develop under this Agreement, the Executive agrees to the restrictive covenants
stated in this Section 5.3.

               (b) During the Employment Period and until the end of the Restricted Period (as defined in
Section 5.4(g) hereof), the Executive agrees that the Executive will 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:

     (i) engage in a Competing Business (as defined in Section 5.4(c) hereof),
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;

     (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 during the Employment Period, (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),
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).

               (c) The parties hereto acknowledge and agree that, notwithstanding anything in Section
5.3(b)(i) hereof, (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 five
percent (5%) 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

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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.

               (e) The Executive acknowledges that (i) the restrictive covenants contained in this Section
5.3 hereof 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 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 good will 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.

               (c) “Competing Business” means any business that competes with any of the Company
Parties, 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.

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               (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 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
otherwise enters the public domain 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. 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 their 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 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

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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 the longer of (i) twelve (12) months after the date of
termination of employment (the Executive’s last day of work for the Company) or (ii) the period
during which the Executive is receiving payments from the Company pursuant to Section 4 hereof.

               (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,

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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
conceived, reduced to practice, developed or made by the Executive either alone or with others in
the course of employment with the Company (including employment prior to the date of this
Agreement).

          5.5 Remedies. 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 Section 5 hereof, the Company may suffer immediate and
irreparable harm for which monetary damages alone will not be a sufficient remedy. The restrictive
covenants stated in Section 5 hereof are without prejudice to the Company’s rights and causes of
action at law.

          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 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 will 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.

     6. Miscellaneous.

          6.1 Public Statements.

               (a) Media Nondisclosure. The Executive agrees that during the Employment Period or at
any time thereafter, except as may be authorized in writing by the

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Company, the Executive will not directly or indirectly disclose or release to the Media any
information concerning or relating to any aspect of the Executive’s employment or termination from
employment with the Company and/or any aspect of any dispute that is 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.

               (b) Non-Disparagement. The Executive agrees that during the Employment Period or at
any time thereafter, the Executive will 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 6.1(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 Executive further agrees that the Executive will not in any way
solicit any such statements, comments or communications from others.

          6.2 ARBITRATION. SUBJECT TO THE RIGHTS UNDER SECTION 6.3 HEREOF TO SEEK INJUNCTIVE OR
OTHER EQUITABLE RELIEF, AND SUBJECT FURTHER TO THE RIGHT OF THE COMPANY TO OPT OUT OF ARBITRATION
AS STATED IN SECTION 6.2(b) HEREOF, 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 parties shall equally 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 for mediation. 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 6.2(a) must be available to serve in the Agreed
Venue.

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               (b) Company Opt-Out.

     (i) In the event that the parties fail to settle the Dispute at the mediation
required by Section 6.2(a) of this Agreement, the Company shall have thirty (30) days
after the conclusion of the full-day mediation to opt out of arbitration. The
Company may do so only by written notice provided to the Executive and JAMS.
Providing such notice within the time requirements of this Agreement will render
Section 6.2 of this Agreement and its subparts (the “Arbitration Provision”)
otherwise inapplicable and of no effect as to all parties to this Agreement, but only
with regard to the Dispute raised in the notice of arbitration sent pursuant to
Section 6.2(a) above.

     (ii) It is the intention of the parties hereto that the terms of the Arbitration
Provision shall be enforceable to the fullest extent allowed by law. However, if any
terms of the Arbitration Provision (including, without limitation, the terms of the
Section 6.2(b)(i) Company Opt-Out) are adjudicated to be invalid, illegal or
unenforceable, then the parties hereby stipulate and agree that (A) 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 original
terms as possible; (B) such terms will not affect any other terms of the Arbitration
Provision or this Agreement; (C) 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; (D) such invalidity, illegality
or unenforceability will not take effect in any other jurisdiction absent a separate
adjudication to that effect; and (E) 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, and the Company does not exercise its right to opt out of
arbitration as provided in Section 6.2(b) above, 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) Arbitrator Selection. To select the arbitrator, the parties shall make their
respective strikes from a panel of former federal court judges and magistrates, 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 6.2(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.

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               (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 parties as determined by the arbitrator, except for any initial registration fee, which the
parties shall bear equally. 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
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.

          6.3 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 6.2 hereof, 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 Sections 5 or 6.2 hereof. 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, (b) to waive any and all defenses the
Executive may have on the grounds of lack of jurisdiction of such court and (c) that neither party
shall be required to post any bond, undertaking or other financial deposit or guarantee in seeking
or obtaining such equitable relief. 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.

          6.4 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 employment agreement 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,

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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 and all goodwill developed with the Company’s
clients, customers and other business contacts by the Executive during any past employment with
Company, as applicable, is 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.

          6.5 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.

          6.6 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.

          6.7 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.

          6.8 Representation by Counsel; Independent Judgment. 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.

          6.9 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.

          6.10 Survival. The provisions of Sections 4.3(e), 5 and 6 hereof shall survive the
termination of this Agreement.

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          6.11 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: Chief Legal Officer

If to the Executive, to:

Thomas Dowd

at the most recent address of the

Executive on file with the Company

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

          6.12 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 transmission of any signed original document or retransmission of any signed
facsimile transmission will be deemed the same as delivery of an original. At the request of any
party, the parties will confirm facsimile transmission by signing a duplicate original document.

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

          6.14 No Third Party Beneficiary Rights. Except as otherwise provided in this
Agreement, no entity shall have any right to enforce any provision of this Agreement, even if
indirectly benefited by it.

          6.15 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.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

-22-

 

     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.
	 
	 	 	 	 
	 
	 	 	 	 
	/s/ Tommi Kiggins

	 	By:	 	/s/ Gerald J. Stubenhofer, Jr.
	 

	 	 	 	 
	 

	 	Name:	 	Gerald J. Stubenhofer, Jr.
	 

	 	 	 	 
	 

	 	Title:	 	Senior Vice President, Chief Legal Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	EXECUTIVE
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	/s/ Thomas Dowd
	 	 	 
	 

	 	Name:
	 	Thomas Dowd
	 

	 	 	 	 

-23-

 

EXHIBIT A

Definition of Change of Control

     For purposes of this Agreement, a “Change of Control” means, and shall be deemed to
have occurred upon the occurrence of, any one of the following events:

     (i) the acquisition (including any acquisition through purchase, reorganization, merger,
consolidation or similar transaction) in one or more transactions by any individual, entity
(including any employee benefit plan or any trust for an employee benefit plan) or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (for purposes of this definition
only, a “Person”), other than any acquisition by any Permitted Holder or any of its Related
Parties or a Permitted Group, of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of shares or other securities (as defined in Section 3(a)(10) of the
Exchange Act) representing 50% or more of either (1) the Common Stock or (2) the combined voting
power of the securities of GNC entitled to vote generally in the election of directors of the GNC
Board (the “GNC Voting Securities”), in each case calculated on a fully diluted basis after
giving effect to such acquisition; provided, however, that none of the following
acquisitions shall constitute a Change of Control as defined in this clause (i): (A) any
acquisition by any Person or group of Persons consisting solely of stockholders of GNC on the
Effective Date, (B) any acquisition so long as such acquisition does not result in any Person
(other than any stockholder or stockholders of GNC on the Effective Date), beneficially owning
shares or securities representing 50% or more of either the Common Stock or GNC Voting Securities,
(C) any acquisition, after which the Permitted Holders or their Related Parties have the right or
ability by voting power, contract or otherwise to elect or designate for election a majority of the
GNC Board; or

     (ii) any election has occurred of Persons to the GNC Board that causes two-thirds of the GNC
Board to consist of Persons other than (A) Persons who were members of the GNC Board on the
Effective Date and (B) Persons who were nominated for elections as members of the GNC Board at a
time when two-thirds of the GNC Board consisted of Persons who were members of the GNC Board on the
Effective Date; provided, however, that any Person nominated for election by a GNC
Board at least two-thirds of whom constituted Persons described in clauses (A) or (B) or by Persons
who were themselves nominated by such GNC Board shall, for this purpose, be deemed to have been
nominated by a GNC Board composed of Persons described in clause (A); or

     (iii) approval by the stockholders of GNC of (A) a complete liquidation or dissolution of GNC
or the Company or (B) the sale or other disposition (other than a merger or consolidation) of all
or substantially all of the assets of GNC and its subsidiaries, taken as a whole, to any Person
other than a Permitted Holder or a Related Party of a Permitted Holder; or

     (iv) the Company ceases to be a direct or indirect wholly owned subsidiary of GNC.

     For purposes of this definition, the following terms shall have the following meanings:

          (1) “Ares” means Ares Corporate Opportunities Fund II, L.P.

EXHIBIT A - 1

 

          (2) “GNC Board” means the Board of Directors of GNC.

          (3) “OTPP” means Ontario Teachers’ Pension Plan Board.

          (4) “Permitted Group” means any group of investors that is deemed to be a “person” (as
that term is used in Section 13(d) of the Exchange Act) at any time prior to GNC’ initial public
offering of common stock, solely by virtue of the Stockholders Agreement by and among GNC, Ares,
OTPP, the Executive, and the other parties thereto, as the same may be amended, modified or
supplemented from time to time.

          (5) “Permitted Holder” means Ares, Ares Management, Inc., Ares Management LLC and
OTPP.

          (6) “Related Party” means:

               (x) any controlling equityholder, managing general partner or majority-owned subsidiary, of
any Permitted Holder;

               (y) any trust, corporation, partnership, limited liability company or other entity, the
beneficiaries, stockholders, partners, members, owners or Persons beneficially holding an 80% or
more controlling interest of which consist of any one or more Permitted Holders and/or such other
Persons referred to in the immediately preceding clause (x); or

               (z) any investment fund or similar entity managed by any one or more Permitted Holders and/or
such other Persons referred to in the immediately preceding clause (x) or (y).

     Notwithstanding anything to the contrary in this Exhibit A, the definition of Change of
Control shall be interpreted consistently with the definition of “Change of Control” contained in
Section 409A of the Code and regulations and guidance issued by the Internal Revenue Service under
Section 409A of the Code, including IRS Notice 2005-1.

EXHIBIT A - 2EX-10.1

 

Exhibit 10.1

Allegheny Technologies Incorporated

Key Executive Performance Plan

Effective as of January 1, 2004

And as amended February 24, 2005

and as further amended on February 22, 2006

and as further amended on February 21, 2007

and as further amended on February 21, 2008

Article I. Adoption and Purpose of the Key Executive Performance Plan

     1.01 Adoption. This Key Executive Performance Plan is adopted by the Personnel and
Compensation Committee of the Board of Directors as a part of the Allegheny Technologies
Incorporated executive compensation program effective January 1, 2004. The KEPP Payments,
if any, earned under this Plan are intended as performance based compensation within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, as incentive
compensation determined solely with reference to attainment in predetermined levels of
Earnings and Operational Goals within the relevant Performance Period.

     1.02 Purpose. The purposes of the KEPP are (i) to direct the focus of key management
employees to the achievement of goals deemed necessary for the success of the Corporation,
(ii) to assist the Corporation in retaining and motivating selected key management employees
of the Corporation and its subsidiaries who will contribute to the success of the
Corporation and (iii) to reward key management employees for the overall success of the
Corporation as determined with reference to predetermined levels of Earnings of the
Corporation and attainment of Operational Goals. The KEPP is intended to act as an
incentive to participating key management employees to achieve long-term objectives that
will inure to the benefit of all stockholders of the Corporation measured in terms of
achievement of predetermined levels of Earnings of the Corporation and attainment of
Operational Goals.

     1.03 Plan Document. This KEPP plan document is intended as the plan document as
adopted by the Committee, which will govern all Performance Periods of the KEPP beginning in
or after 2004.

Article II. Definitions

     For purposes of this Plan, the capitalized terms set forth below shall have the following
meanings:

     2.01 Award means an opportunity to earn a KEPP Payment in a particular Performance
Period. Each Award shall be denominated in dollars that can be earned upon attainment of
predetermined Earnings thresholds (Level 1) and the maximum amount that

 

 

may be paid with respect to Operational Goals before the application of Negative Discretion
(Level 2).

     2.02 Award Agreement means a written agreement between the Corporation and a
Participant or a written acknowledgment from the Corporation specifically setting forth the
terms and conditions of a KEPP Award granted to a Participant pursuant to Article VI of this
Plan.

     2.03 Board means the Board of Directors of the Corporation.

     2.04 Cause means a determination by the Committee that a Participant has engaged in
conduct that is dishonest or illegal, involves moral turpitude or jeopardizes the
Corporation’s right to operate its business in the manner in which it is now operated.

     2.05 Change in Control means any of the events set forth below:

          (a) The acquisition in one or more transactions, other than from the Corporation, by
any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of a number of Corporation Voting Securities in excess of 25% of the
Corporation Voting Securities unless such acquisition has been approved by the Board; or

          (b) Any election has occurred of persons to the Board that causes two-thirds of the
Board to consist of persons other than (i) persons who were members of the Board on January
1, 2001 and (ii) persons who were nominated for election as members of the Board at a time
when two-thirds of the Board consisted of persons who were members of the Board on January
1, 2001; provided, however, that any person nominated for election by the Board at a time
when at least two-thirds of the members of the Board were persons described in clauses (i)
and/or (ii) or by persons who were themselves nominated by such Board shall, for this
purpose, be deemed to have been nominated by a Board composed of persons described in clause
(i); or

          (c) Approval by the stockholders of the Corporation of a reorganization, merger or
consolidation, unless, following such reorganization, merger or consolidation, all or
substantially all of the individuals and entities who were the respective beneficial owners
of the Outstanding Stock and Corporation Voting Securities immediately prior to such
reorganization, merger or consolidation, following such reorganization, merger or
consolidation beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity resulting from such reorganization, merger or
consolidation in substantially the same proportion as their ownership of the Outstanding
Stock and Corporation Voting Securities immediately prior to such reorganization, merger or
consolidation, as the case may be; or

-2-

 

          (d) Approval by the stockholders of the Corporation of (i) a complete liquidation or
dissolution of the Corporation or (ii) a sale or other disposition of all or substantially
all the assets of the Corporation.

     2.06 Committee means the Personnel and Compensation Committee of the Board.

     2.07 Corporation means Allegheny Technologies Incorporated, a Delaware corporation, and
its successors.

     2.08 Corporation Voting Securities means the combined voting power of all outstanding
voting securities of the Corporation entitled to vote generally in the election of the
Board.

     2.09 Date of Award means the date as of which an Award is granted in accordance with
Article VI of this Plan.

     2.10 Disability means any physical or mental injury or disease of a permanent nature
which renders a Participant incapable of meeting the requirements of the employment
performed by such Participant immediately prior to the commencement of such disability. The
determination of whether a Participant is disabled shall be made by the Committee in its
sole and absolute discretion. Notwithstanding the foregoing, if a Participant’s employment
by the Corporation or an applicable subsidiary terminates by reason of a disability, as
defined in an Employment Agreement between such Participant and the Corporation or an
applicable subsidiary, such Participant shall be deemed to be disabled for purposes of the
KEPP.

     2.11 Earnings means the earnings of the Corporation determined in accordance with
generally accepted accounting principles, provided, however, for the 2005 through 2007, the
2006 through 2008, the 2007 through 2009 , and the 2008 through 2010 Performance Periods,
Earnings shall be expressed in terms of income before taxes.

     2.12 Effective Date means January 1, 2004.

     2.13 Exchange Act means the Securities Exchange Act of 1934, as amended.

     2.14 KEPP Payment means the amount actually earned by a Participant in a particular
Performance Period. Each KEPP Payment shall be the sum of the amounts earned by a
Participant during a Performance Period as Level I and Level 2 achievement or, for the
2006-2008, 2007-2009 and 2008-2010 Performance Period, the amount under the Participant
Retention Achievement Bank under Section 8.04.

     2.15 Level 1 means that portion of an Award that may be earned based on attainment of
Earnings.

     2.16 Level 2 means that portion of an Award that may be earned, after application of
Negative Discretion by the Committee, based on attainment of Operational Goals. The

-3-

 

Level 2 portion of any Award shall be denominated in the maximum amount that may be earned
with respect to Operational Goals prior to the application of Negative Discretion.

     2.17 Negative Discretion means the power of the Committee to be exercised solely in the
Committee’s discretion to reduce the Level 2 portion of any Award. It is anticipated that
the Committee will review with the Chief Executive Officer of the Corporation the relative
attainment of Operational Goals during a particular Performance Period before the Committee
exercises its Negative Discretion.

     2.18 Operational Goals means the goals set by the Committee at the commencement of a
Performance Period to be attained by the Participants during the course of a particular
Performance Period. Operational Goals will be set forth in terms of operating objectives
and/or criteria, which may or may not be earnings measures that, in the judgment of the
Committee after consultation with the Chief Executive Officer of the Corporation, will
enhance the success of the Corporation during and beyond a particular Performance Period.

..

     2.19 Participant means any key management employee selected by the Committee, pursuant
to Section 5.01 of this Plan, as eligible to participate under the KEPP for any one or more
Performance Period.

     2.20 Performance Period means a period of more than one fiscal year of the Corporation
over which the attainment of Earnings and Operational Goals shall be measured.

     2.21 Plan or KEPP means the Key Executive Performance Plan as set forth in this plan
document or as the same may be amended from time to time.

     2.22 Retirement means, a termination of employment with the Corporation and each
subsidiary of the Corporation at or after (i) attaining age 55 and (ii) completing five
years of employment with the Corporation and/or any subsidiary of the Corporation.

     2.23 Withholding Obligations means the amount of federal, state and local income and
payroll taxes the Corporation determines in good faith must be withheld with respect to a
KEPP Payment. Withholding Obligations may be settled by the Participant, as permitted by
the Committee in its discretion, in cash, previously owned shares of common stock of the
Corporation or any combination of the foregoing.

Article III. Administration

     In addition to any power reserved to the Committee under the governing documents of the
Corporation, the KEPP shall be administered by the Committee, which shall have exclusive and
final authority and discretion in each determination, interpretation or other action
affecting the KEPP and its Participants. The Committee shall have the sole and absolute
authority and discretion to interpret the KEPP, to amend or modify this Plan for the KEPP,
to select, in accordance with Section 5.01 of this Plan, the persons who will be
Participants hereunder, to set all Earnings thresholds and Operational Goals, to determine
all performance criteria, levels of Awards and KEPP Payments payable, to determine, after

-4-

 

review of the Corporation’s financial reports, the degree to which any threshold of Earnings
has been achieved for a Performance Period with respect to the Level 1 portion of any Award,
to review the attainment of Operational Goals and exercise Negative Discretion with respect
to the Level 2 portion of any Award, to impose such conditions and restrictions as it
determines appropriate and to take such other actions and make such other determinations in
connection with the KEPP as it may deem necessary or advisable.

Article IV. Overview of KEPP

     4.01 Cash Bonus Plan. KEPP is designed to pay cash bonuses to participating key
executives after the end of a Performance Period based on the level (i) of achievement of
predetermined Earnings thresholds and (ii) attainment of Operational Goals (to which the
Committee may exercise Negative Discretion).

     4.02 Levels of Awards. KEPP Awards are granted with two levels. The first level,
Level 1, is a cash bonus payment based on achievement of Earnings that the Committee has no
discretion to reduce. KEPP Payments earned under Level 1 will be earned solely with
reference to Earnings attained during the Performance Period. The second level, Level 2 is
a cash bonus payment based on level of attainment of Operational Goals that the Committee
has the Negative Discretion to reduce. The Committee’s judgment in exercising its Negative
Discretion to arrive at a KEPP Payment under Level 2 is expected to be guided by the degree
to which the Corporation generally or the participating key executives in particular have
attained predetermined Operational Goals. The Committee is expected to review the level of
attainment of Operational Goals with the Chief Executive Officer of the Corporation before
exercising any Negative Discretion. For the 2006-2008, the 2007-2009 and 2008-2010
Performance Period, the Committee has established the Participant Retention Achievement Bank
under Section 8.04.

     4.03 Participating Key Executives. It is intended that the number of participating key
executives shall be limited to those key executives with the most direct influence on the
attainment of Earnings and operational goals.

Article V. Participation

     5.01 Designation of Participants. Participants in the KEPP shall be such key
management employees of the Corporation or of its subsidiaries as the Committee, in its sole
discretion, may designate as eligible to participate in the KEPP for any one or more
Performance Periods. No later than 90 days after the commencement of each Performance
Period during the term of the KEPP, the Committee shall designate the Participants who are
eligible to participate in the KEPP during such Performance Period. The Committee’s
designation of a Participant with respect to any Performance Period shall not require the
Committee to designate such person as a Participant with respect to any other Performance
Period. The Committee shall consider such factors as it deems pertinent in selecting
Participants. The Committee shall promptly provide to each person selected as a Participant
written notice of such selection.

-5-

 

Article VI. Grants under the KEPP

     6.01 Annual Determination Regarding Performance Period. No later than the
60th day of each calendar year, the Committee shall determine whether to
establish a Performance Period, provided, however, for a Performance Period established in
calendar year 2004, the Committee may make a determination under this Section 6.01 at any
time prior to the 90th day of calendar year 2004.

     6.02 Determination of Grants, Awards (both Level 1 and Level 2) and Performance
Criteria. For each Performance Period, the Committee shall take the following actions no
later than the 90th day of the first calendar year of that Performance Period:

     (a) Identify Participants for that Performance Period.

     (b) Establish the level of Level 1 and Level 2 opportunities for each
Participant.

     (c) Set the Earnings target(s).

     (d) Set the Operational Goals and relative weightings after discussing such
goals and weighting with the Chief Executive Officer in order to bring the
Operational Goals as closely as possible in line with the Corporation’s business
plans.

     6.03 Termination of Employment. If a Participant terminates employment with the
Corporation and each subsidiary of the Corporation during a then uncompleted Performance
Period for reasons other than death, Disability or Retirement, any KEPP Award for any then
uncompleted Performance Period shall be forfeited automatically. If a Participant
terminates employment with the Corporation and each subsidiary of the Corporation for
reasons of death, Disability or Retirement during a then uncompleted Performance Period, the
Participant shall be entitled to receive a pro rata KEPP Payment for each then uncompleted
Performance Period determined:

     (a) when the KEPP Payments for all other Participants in such Performance
Period(s) are determined; and

     (b) based on the actual level of achievement of Earnings for that Performance
Period and the attainment of Operational Goals, after the application of Negative
Discretion.

Article VII. Determination of Achievement of Earnings and Operational Goals

     7.01 Determination of Earnings and Operational Goals. As promptly as administratively
feasible but in no event later than the March 1st of the calendar year following last
calendar year of each Performance Period, the Committee shall determine

-6-

 

Earnings of the Corporation and the attainment of Operational Goals and the degree, if any,
to which the Committee will exercise Negative Discretion.

     7.02 Determination of KEPP Payments. KEPP Payments for a particular Performance Period
for a particular Participant shall be the result of adding (i) the amount earned by a
particular Participant under Level 1 based on the Corporation’s actual Earnings during the
Performance Period and (ii) the amount earned by a particular Participant under Level 2
based on attainment of Operational Goals and after the application, if any, by the Committee
of Negative Discretion or, for the 2006-2008, for the 2007-2009 and for the 2008-2010
Performance Period, the Participant Retention Achievement Bank amount determined under
Section 8.04.

Article VIII. Miscellaneous

     8.01 Change in Control. In the event of a Change in Control, KEPP Payments shall be
determined for all then uncompleted Performance Periods as of the date of the Change in
Control at the highest level Earnings for each such uncompleted Performance Period and KEPP
Payments shall be delivered to the Participant as soon after the Change in Control as is
administratively feasible.

     8.02 Non-Uniform Determinations. The actions and determinations of the Committee need
not be uniform and may be taken or made by the Committee selectively among employees or
Participants, whether or not similarly situated.

     8.03 Amendment and Termination of the Plan. The Committee shall have complete power
and authority to amend or terminate this Plan at any time it is deemed necessary or
appropriate. No termination or amendment of the Plan may, without the consent of the
Participant to whom any award shall theretofore have been granted under the KEPP, adversely
affect the right of such individual under such award; provided, however, that the Committee
may, in its sole discretion, make such provision in the Award Agreement for amendments
which, in its sole discretion, it deems appropriate.

     8.04 Participant Retention Achievement Bank. In order to retain participants
designated as eligible to participate in KEPP for the 2006-2008, the 2007-2009 and the
2008-2010 Performance Period (“Banking Performance Period(s)”), for those Performance
Periods, KEPP Payments will be made under this Participant Retention Achievement Bank
provision if greater than the KEPP Payment otherwise due under the KEPP for the relevant
Banking Performance Periods. The aggregate amount in the Participant Retention Achievement
Bank shall be equal to the sum of the three amounts (none less than 0) determined as of the
close of each year in the relevant Banking Performance Period by taking the amount of
Earnings for that year multiplied by three and determining the Level 1 amount due for that
level of achievement for the entire three year, relevant Banking Performance Period(s) and
then dividing the KEPP Payment due under the foregoing clause by three. The resulting
amount will be one of the three amounts added together (one for each year in the relevant
Banking Performance Period) to comprise the aggregate Participant Retention Achievement
Bank. The amount of the KEPP Payment due to any

-7-

 

individual Participant for the relevant Banking Performance Period will be equal to the
amount determined by multiplying the Participant Retention Achievement Bank by a fraction,
the numerator of which is the Level 1 KEPP Payment due to that Participant if actual
performance for the relevant Banking Performance Period was at the 1X Threshold Reference
and the denominator of which is the sum of all payments due at Level 1 for 1X achievement
for all Participants for the relevant Banking Performance Period.

-8-

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