Exhibit 10.23

AMENDMENT

TO THE

EMPLOYMENT AGREEMENT

(Scott A. Falconer)

THIS AMENDMENT, dated as of December 30, 2008 (the “Amendment”), is between
NutriSystem, Inc., a Delaware corporation (the “Company”), and Scott A. Falconer
(the “Employee”).

RECITALS

WHEREAS, the Company and the Employee previously entered into an Employment
Agreement, dated May 14, 2008, (the “Employment Agreement”), that sets forth the
terms and conditions of the Employee’s employment with the Company;

WHEREAS, the Company and the Employee desire to amend the Employment Agreement
to comply with the requirements of section 409A of the Internal Revenue Code of
1986, as amended and the final regulations issued thereunder; and

WHEREAS, Section 16 of the Employment Agreement provides that the Employment
Agreement may be amended pursuant to a written amendment executed between the
Employee and the Company.

NOW, THEREFORE, the Company and the Employee, each intending to be legally bound
hereby, agree that, effective December 30, 2008, the Employment Agreement shall
be amended as follows:

A. Death. Section 9 of the Employment Agreement is hereby amended in its
entirety to read as follows:

“If the Employee dies during the Employment Term, then the Employment Term shall
terminate, and thereafter the Company shall not have any further liability or
obligation to the Employee, the Employee’s executors, administrators, heirs,
assigns or any other person claiming under or through the Employee, except
(a) that the Employee’s estate shall receive any unpaid Salary that has accrued
through the date of termination, (b) Employee’s estate shall receive a lump sum
cash payment in an amount equal to the Employee’s prorated Annual Bonus
(calculated as equal to 100% of Salary) for the fiscal year of his death, which
pro ration will be determined from the first day of the fiscal year in which the
Employee dies through the date of death; and (c) the Initial Stock Grant will be
accelerated for an additional period of 12 months following the month in which
the Employee dies that is applied between scheduled vesting dates to accelerate
vesting on the pro rata portion of the vesting schedule using a monthly basis
instead of the scheduled vesting dates. Cash payments under this Section 9 shall
be made by the Company within 60 days after the Employee’s death.”

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B. Total Disability. The first paragraph of Section 10 of the Employment
Agreement is hereby amended in its entirety to read as follows:

“If the Employee becomes “totally disabled,” then the Employment Term shall
terminate, and thereafter the Company shall have no further liability or
obligation to the Employee hereunder, except as follows: the Employee shall
receive (a) any unpaid Salary that has accrued through the date of termination,
(b) a lump sum cash payment equal to one month of Salary, (c) a lump sum cash
payment in an amount equal to the Employee’s prorated Annual Bonus (calculated
as equal to 100% of Salary) for the fiscal year of his termination pursuant to
this Section, which pro ration will be determined from the first day of the
fiscal year in which the Employee’s termination occurs through the date of
termination; (d) the Initial Stock Grant will be accelerated for an additional
period of 12 months following the month in which the Employee is totally
disabled that is applied between scheduled vesting dates to accelerate vesting
on the pro rata portion of the vesting schedule using a monthly basis instead of
the scheduled vesting dates; and (e) whatever benefits that he may be entitled
to receive under any then existing disability benefit plans of the Company. Cash
payments under this Section 10 shall be made by the Company within 60 days after
the Employee’s termination of employment.”

C. Termination by the Employee. Clause (i) in the second paragraph of Section 12
of the Employment Agreement is hereby amended in its entirety to read as
follows:

“(i) a material diminution in the Employee’s base compensation, which for this
purpose base compensation shall mean the Salary and the target Annual Bonus
opportunity, which is 100% of Salary;”

D. Termination without Cause or Non-Renewal by the Company. Subsections
(1) through (5) of Section 13 of the Employment Agreement are hereby amended in
their entirety to read as follows:

“(1) within 30 days following the Employee’s termination date, the Company will
pay to the Employee a lump sum cash severance payment in the amount equal to the
sum of:

(a) 24 months of the Salary then in effect;

(b) a pro rated amount of the Annual Bonus (calculated at 100% of Salary) from
the first day of the fiscal year in which the termination occurred through the
date of termination; and

 

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(c) the value of the premium cost to the Company to continue the Employee on the
Company’s group life and AD&D policy for the 12 month period following the
Employee’s termination date; and

(2) the Employee’s group heathcare coverage will be continued for 12 months, at
the Employee’s normal contribution rates; and

(3) the Employee’s covenants against non-competition (as described in the
Section 8 of this Agreement) shall be reduced to a 12 month period from the
termination date, from the period contained in the Agreement referred to in
Section 8 above; and

(4) the Initial Stock Grant will be accelerated for an additional period of 12
months following the month in which the Employee is terminated that is applied
between scheduled vesting dates to accelerate vesting on the pro rata portion of
the vesting schedule using a monthly basis instead of the scheduled vesting
dates; and

(5) the Employee and the Company will enter into, and the Employee must not
revoke, a mutual general release, which shall be a condition to the receipt of
the termination benefits under this Section.”

E. Compliance with Section 409A of the Code. The first sentence of the second
paragraph of Section 20 of the Employment Agreement is hereby amended in its
entirety to read as follows:

“To the maximum extent permitted under section 409A of the Code and its
corresponding regulations, the severance benefits payable under this Agreement
are intended to meet the requirements of the short-term deferral exemption under
section 409A of the Code and the ‘separation pay exception’ under Treas. Reg.
§1.409A-1(b)(9)(iii).”

F. Compliance with Section 409A of the Code. A new paragraph is hereby added to
the end of Section 20 of the Employment Agreement to read as follows:

“All reimbursements provided under this Agreement shall be made or provided in
accordance with the requirements of section 409A of the Code, including, where
applicable, the requirement that (i) any reimbursement is for expenses incurred
during the Employee’s lifetime (or during a shorter period of time specified in
this Agreement), (ii) the amount of expenses eligible for reimbursement during a
calendar year may not affect the expenses eligible for reimbursement in any
other calendar year, (iii) the reimbursement of an eligible expense will be made
on or before the last day of the taxable year following the year in which the

 

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expense is incurred, and (iv) the right to reimbursement is not subject to
liquidation or exchange for another benefit. Any tax gross-up payments to be
made hereunder shall be made not later than the end of Employee’s taxable year
next following Employee’s taxable year in which the related taxes are remitted
to the taxing authority.”

G. Excise Tax on Change of Control Payments. The last two sentences of
subsection (b) of Section 21 of the Employment Agreements are hereby amended in
their entirety to read as follows:

“If a reduction is required by this provision, the amounts payable or benefits
to be provided to the Employee shall be reduced such that the economic loss to
the Employee as a result of the reduction is minimized. In applying this
principle, the reduction shall be made in a manner consistent with the
requirements of section 409A of the Code and where two economically equivalent
amounts are subject to reduction but payable at different times, such amounts
shall be reduced on a pro rata basis but not below zero. The Company shall bear
all costs incurred in connection with any calculations contemplated by this
Section.”

H. Effect on Employment Agreement. In all respects not modified by this
Amendment, the Employment Agreement is hereby ratified and confirmed.

IN WITNESS WHEREOF, the Company and the Employee agree to the terms of the
foregoing Amendment, effective as of the date first written above.

 

NUTRISYSTEM, INC.

By:

 

/s/    David D. Clark

Name:

  David D. Clark

Title:

  Chief Financial Officer

EMPLOYEE

 

/s/    Scott A. Falconer

Name:

  Scott A. Falconer

 

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