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.