SETTLEMENT AGREEMENT
Exhibit 10.1
This Settlement Agreement (“Agreement”) is made and entered by and between the following
Parties: (i) General Nutrition Centers, Inc., a Delaware Corporation and wholly owned subsidiary
of GNC Corporation, a Delaware corporation (collectively, the “Company”) and (ii) ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the “Employee”). The Company and the
Employee are collectively referred to herein as the “Parties.”
WHEREAS, beginning on or about April 17, 2006, the Employee was employed by the Company as
Executive Vice President and Chief Merchandising Officer;
WHEREAS, effective as of April 17, 2006, the Employee and the Company entered into an
Employment Agreement, a true and correct conformed copy of which is attached as Exhibit A to this
Agreement (the “Employment Agreement”);
WHEREAS, effective as of April 28, 2006, the Employee’s employment with the Company ended due
to Employee’s resignation; and
WHEREAS, bona fide disputes and controversies exist between the Parties, both as to liability
and the amount thereof, if any, and by reason of such disputes and controversies, the Employee, on
the one hand, and the Company, on the other hand, desire to compromise and settle fully and
finally, by the execution of this Agreement, all claims and causes of action of any kind
whatsoever, whether known or unknown, which have arisen prior to or at the time of the execution of
this Agreement, for any matter, including, but in no way limited to, any and all claims,
controversies and causes of action arising out of or related to the Employee’s employment with
and/or departure from the Company, and any and all other disputes now existing between the Employee
on the one hand, and the Company on the other hand, and the Parties are desirous of reducing this
Agreement to writing;
NOW, THEREFORE, in full compromise, release and settlement, accord and satisfaction,
and discharge of all claims and causes of action, known or unknown, possessed by or belonging to
the Employee on the one hand, and the Company on the other hand, for and in consideration of the
above recitals and the mutual promises, covenants and agreements set forth herein, and the benefits
flowing therefrom, and other good and valuable consideration, the adequacy of which the Parties
hereby acknowledge for all purposes, including the purpose of enforcing this Agreement, the Parties
to this Agreement covenant and agree as follows:
1. Mutual General Releases:
a. Employee, individually, and on behalf of, as applicable, Employee’s
current, former, and successor attorneys, representatives, guardians, heirs, assigns,
successors, executors, administrators, insurers, servants, agents, employees, affiliates,
and entities does hereby GENERALLY RELEASE, ACQUIT, AND DISCHARGE the Company, and as
applicable, its respective current, former, and successor attorneys, representatives,
guardians, heirs, assigns, successors, executors, administrators, insurers,
servants, agents, employees, affiliates, and related corporations, firms, associations,
partnerships, and entities, specifically including the Other GNC Releasees, from any and all
Claims and Controversies; provided, however, that nothing in this Agreement will be
considered a release of Employee’s claims, if any, for vested employment benefits pursuant
to the Employee Retirement Income Security Act of 1974 as amended, worker’s compensation
insurance coverage, and/or unemployment insurance coverage.
b. The Company, and as applicable, its respective current, former, and
successor attorneys, representatives, guardians, heirs, assigns, successors, executors,
administrators, insurers, servants, agents, employees, affiliates, and related corporations,
firms, associations, partnerships, and entities, does hereby GENERALLY RELEASE, ACQUIT, AND
DISCHARGE the Employee, individually, and as applicable, Employee’s current, former, and
successor attorneys, representatives, guardians, heirs, assigns, successors, executors,
administrators, insurers, servants, agents, employees, affiliates, and entities, from any
and all Claims and Controversies.
2. Definitions:
a. For the purposes of this Agreement, including without limitation Section 1
of this Agreement, the term “Other GNC Releasees” means GNC Corporation, and all GNC
affiliates and all of their respective officers and directors.
b. For the purposes of this Agreement, including without limitation Section 1
of this Agreement, the term “Claims and Controversies” means any and all claims,
debts, damages, demands, liabilities, benefits, suits in equity, complaints, grievances,
obligations, promises, agreements, rights, controversies, costs, losses, and remedies,
including all claims for attorneys’ fees and expenses, back pay, front pay, severance pay,
percentage recovery, injunctive relief, lost profits, emotional distress, mental anguish,
personal injuries, liquidated damages, punitive damages, disability benefits, interest,
expert fees and expenses, reinstatement, and all other compensation, suits, appeals,
actions, and causes of action, of whatever kind or character, including without limitation,
any dispute, claim, charge, or cause of action arising under the Civil Rights Act of 1964,
Title VII, 42 U.S.C. §§ 2000e et seq., as amended (including the Civil Rights Act of 1991),
the Civil Rights Act of 1866, 42 U.S.C. §§ 1981 et seq., as amended, the Equal Pay Act
(EPA), 29 U.S.C. §§ 201 et seq., as amended, the Americans with Disabilities Act of 1990
(ADA), 42. U.S.C. §§ 12101 et seq., as amended, the Age Discrimination in Employment Act, 29
U.S.C. §§ 621 et seq., as amended, the Employee Retirement Income Security Act of 1974
(ERISA), 29 U.S.C. §§ 1001 et seq., as amended, the Consolidated Budget and Reconciliation
Act of 1985 (COBRA), §§ 1161 et seq., as amended, the Fair Labor Standards Act of 1938
(FLSA), 29 U.S.C. §§ 201 et seq., as amended, the Family and Medical Leave Act (FMLA), 29
U.S.C. §§ 2601 et seq., as amended, the Labor Management Relations Act (LMRA), 29 U.S.C. §§
141 et seq., as amended, the Racketeer Influenced and Corrupt Organizations Act (RICO), 18
U.S.C. §§ 1961 et seq., as amended, the Occupational Safety and Health Act (OSHA), 29 U.S.C.
§§ 651 et seq., as amended, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, 18 U.S.C. § 1514A, as amended, the
Pennsylvania Wage Payment and Collection Law, 43 P.S. §§ 260.1 et seq., as amended,
the Pennsylvania Whistleblower Law, 43 P.S. §§ 1421 et seq., as amended, the
Pennsylvania Human Relations Law, 43 P.S. §§ 951 et seq., as amended, and all other
constitutional, federal, state, local, and municipal law claims, whether statutory,
regulatory, common law (including without limitation, civil assault, breach of contract,
wrongful discharge in violation of public policy, breach of express or implied promise,
promissory estoppel, quantum meruit, fraud, fraud in the inducement, fraud in the factum,
statutory fraud, negligent misrepresentation, defamation, libel, slander, slander per se,
retaliation, tortious interference with prospective contract, tortious interference with
business relationship, tortious interference with contract, invasion of privacy, intentional
infliction of emotional distress, wrongful termination, and any other common law theory of
recovery, whether legal or equitable, negligent or intentional), or otherwise, whether known
or unknown to the Parties, foreseen or unforeseen, fixed or contingent, liquidated or
unliquidated, and including all claims directly or indirectly arising out of or relating to
any and all disputes now existing between Employee on the one hand, and the Company on the
other hand, whether related to or in any way growing out of, resulting from or to result
from Employee’s employment with and/or departure from the Company, for or because of any
matter or thing done, omitted, or allowed to be done by the Company, the Other GNC
Releasees, or the Employee, as applicable, for any incidents, including those past and
present, which existed or may have existed at any time prior to and/or contemporaneously
with the execution of this Agreement, including all past, present, and future damages,
injuries, costs, expenses, attorney’s fees, other fees, effects and results in any way
related to or connected with such incidents.
3. Settlement Proceeds: Subject to the terms of Paragraph 11 of
this Agreement, within ten (10) days following (i) the complete and proper execution of duplicate
originals of this Agreement by the Employee and his counsel, and (ii) the actual delivery through
the Employee’s counsel of said duplicate originals (including Exhibit A) to counsel for the
Company, the Company through its counsel agrees to issue and hand deliver to the Employee’s
attorney one check made payable to “▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇” for the total, agreed-upon, aggregate lump
sum of ONE HUNDRED AND SEVENTY FIVE THOUSAND DOLLARS & NO/100 ($175,000.00), minus tax and other
withholding as allowed by law, as payment in full compromise and settlement of all Claims and
Controversies, and for the other terms of this Agreement (the “Settlement Proceeds”). The
Employee’s counsel shall hold the Settlement Proceeds in trust and shall not disburse the
Settlement Proceeds until the Company’s counsel has delivered to the Employee’s counsel a fully
counter-executed duplicate original of this Agreement, which counsel for the Company shall
accomplish within seven (7) days after receipt of said duplicate originals from the Employee’s
counsel. The Employee shall be solely responsible for the payment of any and all applicable taxes,
penalties, and interest due on the Settlement Proceeds.
4. Reimbursement of Expenses: The Company will reimburse the Employee for
reasonable un-reimbursed temporary housing expenses, expenses for travel to and from Pittsburgh by
Employee and his wife for house shopping purposes, and approved business expenses, all as related
to Employee’s employment, subject to Company policy. Counsel for the Employee will send counsel
for the Company a letter fully describing and including
documentation for all such expenses, within ten (10) days after the execution of this
Agreement by the Employee. Within ten (10) days after actual receipt of the letter by counsel for
the Company, the Company will deliver a check to the Employee for reimbursement of such expenses
subject to the terms of this paragraph.
5. No Admission of Liability: The Parties understand and agree that this
Agreement is a settlement and compromise of disputed claims. The Parties recognize that by
entering into this Agreement, they do not admit, and they specifically deny, any violation of any
constitutional, federal, state, local, or municipal law, whether, statutory, regulatory, common
law, or otherwise. This Agreement shall not in any way be construed as an admission of liability
by any Party in any legal or administrative proceeding.
6. Resignation; Securities Filings: The Employee resigns from his
employment with the Company and all Company affiliates, as applicable, and all related positions,
effective as of April 28, 2006. The terms of this Agreement, including Employee’s resignation,
will be disclosed in an 8-K filing and/or other required securities filings with the Securities and
Exchange Commission, as applicable.
7. Continued Application of Restrictive Covenants: The provisions of
Sections 5 and 6.1 of the Employment Agreement (inclusive of their respective subparts) that apply
post-employment according to their terms shall survive the execution of this Agreement, and shall
continue to apply according to their terms.
8. Non-Disparagement and Neutral Job Reference: The Company agrees, solely
on behalf of its executives at the level of Senior Vice President and above, not to make any
statements, comments, or communications in any form, oral, written, or electronic, which would
constitute libel, slander, or disparagement of the Employee; provided, however, that the
terms of this paragraph shall not apply to communications between the Parties and as applicable,
their attorneys or other persons with whom communications would be subject to a claim of privilege
existing under common law, statute, or rule of procedure. In response to inquiries by prospective
employers of the Employee, the Company, solely on behalf of its Human Resources department, agrees
to provide only the Employee’s dates of employment, job titles, and upon request, verification of
base salary.
9. Waiver of Reemployment: The Employee waives and releases forever any
right or rights he might have to employment, reemployment, or reinstatement with the Company or the
Other GNC Releasees, for now and any time in the future, and agrees not to seek or make application
for employment with either the Company or the Other GNC Releasees.
10. Statement of Understanding: By executing this Agreement, Employee
acknowledges that (a) Employee has been given at least twenty-one (21) days to consider the terms
of this Agreement, and has either considered it for that period of time or knowingly and
voluntarily waived the right to do so; (b) Employee has been advised to consult with an attorney
regarding the terms of this Agreement; (c) Employee has consulted with an attorney of Employee’s
own choosing regarding the terms of this Agreement; (d) Employee has read this Agreement and fully
understands the terms of this Agreement and their import; (e) except as
provided by this Agreement, Employee has no contractual right or claim to the payments and
benefits described herein; (f) the consideration provided for herein is good and valuable; and (g)
Employee is entering into this Agreement voluntarily, of Employee’s own free will, and without any
coercion, undue influence, threat, or intimidation of any kind.
11. Revocation: Within the seven (7) consecutive calendar days following
Employee’s execution of this Agreement (the “Revocation Period”), Employee may revoke this
Agreement by written notice sent by both fax and overnight mail to the Company in care of
its attorney, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, fax number (▇▇▇) ▇▇▇-▇▇▇▇. Employee understands that if Employee revokes this
Agreement, Employee shall not receive any of the Settlement Proceeds described in Paragraph
3 of this Agreement. Employee also understands and agrees that if the Company does not receive
notice of revocation prior to the expiration of the Revocation Period, Employee shall have forever
waived the right to revoke this Agreement, which will then have full force and effect.
12. Return of Property: The Employee agrees to return to the Company all of
its property within Employee’s possession, custody, or control, including without limitation, all
originals and copies of all materials and documents, all equipment, and all hardcopy and/or
computer-based documents, books, records, videos, disks, data files, audio and video recordings,
and other things pertaining to the Company or containing its information, whether obtained directly
or indirectly from the Company and with or without its knowledge or consent (collectively, “the
Company Information”). The Employee warrants and represents that he will not directly or
indirectly duplicate, replicate, or otherwise retain any copies of any Company Information in any
form or fashion. Within three (3) business days of executing this Agreement, the Employee will
return the Company Information by hand delivery to GNC, c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Gardere ▇▇▇▇▇
▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
13. Attorneys’ Fees in the Event of Breach: The Parties agree that should a
Party to this Agreement make a claim against another Party to this Agreement for a breach of any
provision of this Agreement, the prevailing Party shall be entitled to recover its attorneys’ fees,
expenses, and costs. The Parties hereby agree that each Party shall have the right to seek
specific performance of this Agreement, and declaratory and injunctive relief.
14. Governing Law; Exclusive Venue: This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania, except where preempted
by federal law. The Parties consent, stipulate and agree that the exclusive venue of any lawsuit
or other court proceeding arising from or related to this Agreement shall be Pittsburgh,
Pennsylvania.
15. Entire Agreement: This Agreement constitutes the entire Agreement of
the Parties regarding the subject matter of this Agreement of settlement and related terms, and
supersedes all prior and contemporaneous negotiations and agreements, oral or written, regarding
the same subject matter, except for Sections 5 and 6.1 of the Employment Agreement, as
described in Paragraph 7 herein. All prior and contemporaneous negotiations and agreements of any
nature whatsoever regarding the same subject matter are deemed incorporated and merged
into this Agreement and are deemed to have been abandoned if not so incorporated, with the
exception noted above in this paragraph. No representations, oral or written, are being relied
upon by either Party in executing this Agreement other than the express representations contained
in this Agreement. The Parties have each relied on their own independent judgment and counsel in
negotiating and executing this Agreement. This Agreement cannot be changed or terminated without
the express written consent of all Parties.
16. Non-Waiver: One or more waivers of a breach of any covenant, term, or
provision of this Agreement by any Party shall not be construed as a waiver of a subsequent breach
of the same covenant, term or provision; nor shall it be considered a waiver of any other then
existing, preceding, or subsequent breach of a different covenant, term, or provision.
17. Authority: The Employee hereby acknowledges and expressly warrants and
represents for himself, and for his predecessors, successors, assigns, heirs, executors,
administrators, and legal representatives, as applicable, that he (a) is legally competent and
authorized to execute this Agreement; (b) has not assigned, pledged, or otherwise in any manner,
sold or transferred, either by instrument in writing or otherwise, any right, title, interest, or
claim that he may have by reason of any matter described in this Agreement; (c) has the full right
and authority to enter into this Agreement and to consummate the covenants contemplated herein; and
(d) will execute and deliver such further documents and undertake such further actions as may
reasonably be required to effect any of the agreements and covenants in this Agreement. The
Company hereby represents that this Agreement has been duly authorized by the Company and that the
person executing this Agreement on behalf of the Company is authorized to execute this Agreement.
18. Severability: If any provision or term of this Agreement is held to be
illegal, invalid, or unenforceable, such provision or term shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid, or unenforceable provision or term had
never comprised part of this Agreement; and the remaining provisions and terms of this Agreement
shall remain in full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or term or by its severance from this Agreement. Furthermore, in lieu of
each such illegal, invalid or unenforceable provision or term, there shall be added automatically
as a part of this Agreement another provision or term as similar to the illegal, invalid, or
unenforceable provision or term as may be possible, that is legal, valid, and enforceable.
19. Other Documentation: The Parties agree to promptly execute, acknowledge
and deliver all further documents and instruments that may be necessary or convenient to consummate
this Agreement; and to execute, acknowledge, attest and deliver all additional documents,
instruments, consents and approvals necessary or advisable to more fully evidence and perfect each
Party’s rights and obligations described in this Agreement.
20. Construction: The Parties were each fully represented by counsel in
negotiating this Agreement. The language of all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning, and not strictly for or against any Party. As
used in this
Agreement, the singular or plural number shall be deemed to include the other whenever the
context so indicates or requires.
21. Counterparts: It is understood and agreed that this Agreement may be
executed in multiple originals and/or counterparts, each of which shall be deemed an original for
all purposes, but all such counterparts together shall constitute one and the same instrument.
22. Headings: The headings of this Agreement are for purposes of reference
only and shall not limit or define the meaning of the provisions of this Agreement.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
AGREED AND EXECUTED on the dates indicated below:
EXECUTED in Boston, Massachusetts this 19th day of May, 2006.
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EXECUTED in Pittsburgh, Pennsylvania this 24th day of May, 2006.
| GENERAL NUTRITION CENTERS, INC. | ||||||
| /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||
| By: | ||||||
| SENIOR VICE PRESIDENT & CHIEF LEGAL OFFICER | ||||||
APPROVED AS TO FORM: |
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. |
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▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇ LLP |
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ |
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇ |
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ATTORNEYS FOR ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ |
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
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State Bar No. 07752000 |
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State Bar No. 03059200 |
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Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ LLP |
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ |
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇ |
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| ATTORNEYS FOR GENERAL NUTRITION CENTERS, INC. | ||