NutriSystem, Inc. Compensation Policy for Non-Employee Directors (Effective December 19, 2005)

Summary

This policy outlines the compensation for non-employee directors of NutriSystem, Inc. New non-employee directors receive $100,000 in restricted stock, vesting over three years. All non-employee directors receive an annual grant of $25,000 in restricted stock, fully vested but subject to a one-year holding period. Directors also receive a $20,000 annual cash retainer, with additional cash compensation for committee chairs and Audit Committee members. Payments are made quarterly. The policy sets clear terms for both equity and cash compensation for board service.

EX-10.1 2 rrd101253_10495.htm COMPENSATION POLICY FOR NON-EMPLOYEE DIRECTORS COMPENSATION POLICY FOR NON-EMPLOYEE DIRECTORS NUTRISYSTEM, INC.

Compensation Policy For Non-Employee Directors
Effective December 19, 2005
EQUITY COMPENSATION

New Director Equity Grant

Upon first appointment or election to the Company's Board of Directors, a new non-employee director will receive shares of restricted stock with a value of $100,000. Vesting will be one-third each year for three years on the anniversary of the date of grant. The number of restricted shares shall be determined by dividing $100,000 by the closing price per common share on the date of grant.

Annual Equity Retainer Grant

Each non-employee director will receive shares of restricted stock with a value of $25,000. Grants will be made at the end of each fiscal year. Shares will be fully vested on the date of grant, but may not be sold until the first anniversary of the date of grant. The number of restricted shares shall be determined by dividing $25,000 by the closing price per common share on the date of grant.

CASH COMPENSATION:
Annual Cash Retainer Fee

$20,000 annual cash retainer for each director, payable in the amount of $5,000 per quarter in arrears.

Annual Cash Retainers for Committee Service

$10,000 annual cash retainer for the chair of the Audit Committee, payable in the amount of $2,500 quarterly in arrears.
$2,000 annual cash retainer for the chair of each standing board committee other than the Audit Committee, payable in the amount of $500 quarterly in arrears.
$5,000 annual cash retainer for the non-chair members of the Audit Committee, payable in the amount of $1,250 quarterly in arrears.
Non-chair members of committees other than the Audit Committee shall receive no additional compensation.