Exhibit 10.2

 

TIVITY HEALTH, INC.

NUTRISYSTEM STOCK INCENTIVE PLAN

2019 PERFORMANCE STOCK UNIT AWARD AGREEMENT

(Legacy Nutrisystem)

 

This 2019 PERFORMANCE STOCK UNIT AWARD AGREEMENT (the “Agreement”), dated GRANT
DATE (the “Grant Date”), is by and between Tivity Health, Inc., a Delaware
corporation (the “Company”), and GRANTEE (the “Grantee”), under the Company’s
Nutrisystem Stock Incentive Plan (the “Plan”). Terms not otherwise defined
herein shall have the meanings given to them in the Grantee’s employment
agreement or offer letter with the Company (as may be amended from time to time,
the “Employment Agreement”), if applicable, or in the absence of an Employment
Agreement or if not defined in an Employment Agreement, then the meanings given
to them in the Plan.

 

Section 1.Performance Stock Unit Award; Performance Goals. Subject to adjustment
as set forth herein, the Grantee is hereby granted NUMBER OF UNITS performance
stock units (the “Target Award”) under the Plan, with the specific number of
performance stock units earned to be determined in accordance with Exhibit A
hereto (the “Performance Stock Units”). Each Performance Stock Unit represents
the right to receive one share of the Company’s Common Stock, $.001 par value
(the “Stock”), subject to the terms and conditions of this Agreement and the
Plan. Except as otherwise provided in Section 3 or Section 5.2, before the
Performance Stock Units will be earned and settled, the Committee shall
determine the level of achievement of the Performance Goals described in Exhibit
A hereto which the Committee shall do as soon as practicable after the last day
of the Performance Period (as defined in Exhibit A hereto) (such last day, the
“End Date of the Performance Period”). Any Performance Stock Units that are not
earned as a result of the level of achievement of the Performance Goals at of
the End Date of the Performance Period shall be immediately forfeited as of the
End Date of the Performance Period.

 

Section 2.Vesting of the Award; Settlement of the Award. Except as otherwise
provided in Section 3 and Section 5.2 below, 100% of the Performance Stock Units
determined by the Committee to be earned pursuant to Section 1 hereof will vest
on December 31, 2021 (the “Vesting Date”), as long as the Grantee is serving as
an employee of the Company on such date. Except as otherwise provided in Section
5.2 below, the Company shall, in its sole discretion, issue (a) one share of
Stock (in the aggregate, such shares, the “Distributed Shares”), (b) cash in an
amount equal to the closing stock price per share of Stock on the Vesting Date
(or if the Vesting Date is not a trading day, then on the last trading day
immediately preceding the Vesting Date) or (c) a combination of cash and Stock
(as described in this Section 2), to the Grantee (or Grantee’s estate or
personal representative, as applicable) in settlement of each earned and vested
Performance Stock Unit  at or promptly following the Vesting Date, but in no
event later than seventy-five (75) days following the Vesting Date. The
Distributed Shares, if any, shall be represented by a certificate or by a
book-entry.

 

Section 3.Forfeiture on Termination of Employment.  

 

3.1.Termination by the Company for Cause. If the Grantee’s employment with the
Company is involuntarily terminated for Cause prior to the Vesting Date, then
all Performance Stock Units will be forfeited and the Grantee shall have no
further rights with respect to such Performance Stock Units.

 

3.2.Termination by the Company without Cause or by the Grantee for Good Reason.
If Grantee’s employment with the Company (a) is involuntarily terminated by the
Company for any reason other than termination for Cause, or (b) is terminated by
the Grantee for Good Reason (provided that this subsection (b) shall apply only
if Grantee is a party to an Employment Agreement that provides rights to

 

 

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Grantee upon a termination for Good Reason), then, subject to Grantee’s
execution of the release of claims in the form attached to the Employment
Agreement, if applicable, or, in the absence of an Employment Agreement, in the
form acceptable to the Company, the Vesting Date shall be the later of (x) the
date of Grantee’s termination of employment or (y) the End of the Performance
Period, and the number of Performance Stock Units that shall vest shall be the
product of (i) a fraction, the numerator of which is the number of full calendar
months elapsed between January 1, 2019 and the date on which Grantee’s
employment is terminated, and the denominator of which is 36 (such fraction, the
“Pro Rata Amount”), multiplied by (ii) the number of Performance Stock Units
determined to have been earned (or that would have been determined to have been
earned as of the End Date of the Performance Period but for the termination of
Grantee’s employment) pursuant to Exhibit A (i.e., based on actual performance).
For purposes of this Agreement, the terms “Cause” and “Good Reason” shall have
the meanings set forth in the Employment Agreement, if applicable, or, with
respect to “Cause” only, in the absence of an Employment Agreement or if not
defined in an Employment Agreement, “Cause” shall mean (i) a felony conviction
of Grantee or the failure of a Grantee to contest prosecution for a felony, or
(ii) Grantee's willful misconduct or dishonesty, which is directly and
materially harmful to the business or reputation of the Company or any
subsidiary or affiliate. Any Performance Stock Units that vest pursuant to this
Section 3.2 shall be settled promptly following the Vesting Date (as modified),
but in no event later than seventy-five (75) days following such Vesting Date.

 

3.3.Termination by Death or Disability. If the Grantee’s employment with the
Company terminates by reason of death or Disability (as defined below), the
Vesting Date shall be deemed to be the date of such termination of employment
and the number of Performance Stock Units that shall vest and settle in
accordance with Section 2 as of such Vesting Date shall be the product of (i)
the Pro Rata Amount, multiplied by (ii) the Target Award; provided, that if
Grantee’s termination of employment by reason of death or Disability occurs
after the End of the Performance Period, the number of Performance Stock Units
that shall vest and be settled shall be the number that would have vested had
Grantee remained employed through the Vesting Date that would have otherwise
applied. For the purposes of this Agreement, the term “Disability” shall mean
either of the following: (x) Grantee is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (y) Grantee is, by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering employees of
Grantee’s employer.

 

3.4.Termination by Reason of Retirement.  If the Grantee’s employment with the
Company terminates by reason of Retirement (as defined below), the Performance
Stock Units granted hereunder shall not be forfeited but shall be settled in
Stock (or cash as provided in Section 2) to the Grantee on the same schedule as
provided in Section 2 (or otherwise) as if the Grantee had continued employment
through the Vesting Date; provided, that in the event Grantee dies following
Retirement but prior to the End of the Performance Period, the provisions of
Section 3.3 shall apply; provided further, that in the event a Change in Control
occurs following Grantee’s Retirement, any Performance Stock Units that vest
hereunder shall be settled immediately prior to the date of such Change in
Control. For the purposes of this Agreement, “Retirement” shall mean either (i)
retirement from active employment with the Corporation and any Subsidiary or
Affiliate on or after age 65, or (ii) early retirement, which will be deemed to
have occurred if (x) the sum of the Grantee's age plus years of employment at
the Company as of the proposed retirement date is equal to or greater than 70,
(y) the participant has given written notice to the Company at least one year
prior to the proposed early retirement date of his or her intent to retire and
(z) the Chief Executive Officer shall have approved in writing such early
retirement request prior to the proposed early retirement date, provided that in
the event the Chief Executive Officer does not approve the request for early
retirement or the Chief Executive Officer is the Grantee giving notice of his or
her intent to retire,

 

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then in both cases, the Committee shall make the determination of whether to
approve or disapprove such request.

 

3.5. Other Termination. Subject to Section 5.2, if the Grantee’s employment with
the Company terminates for any reason other than as described in Sections 3.1
through 3.4 above (or if Grantee fails to execute any release of claims pursuant
to the Employment Agreement, if applicable), then all Performance Stock Units
that have not vested prior to the date on which Grantee’s employment is
terminated will immediately thereupon be forfeited and the Grantee shall have no
further rights with respect to such Performance Stock Units.

Section 4.Voting Rights and Dividends. Prior to the date that Distributed Shares
are delivered to Grantee, the Grantee shall be credited with cash dividend
equivalents with respect to the Performance Stock Units at the time of any
payment of dividends to stockholders on shares of Common Stock in accordance
with the terms set forth in the Plan, and such dividend equivalents shall
accumulate and be paid (in cash, without interest) to the Grantee when (and only
if) the Performance Stock Units to which they relate become vested and are
settled in accordance with this Agreement. Dividend equivalents and any amounts
that may become distributable in respect thereof shall be treated separately
from the Performance Stock Units and the rights arising in connection therewith
for purposes of the designation of time and form of payments required by Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”). The Grantee
shall not have any voting rights with respect to the Stock underlying the
Performance Stock Units prior to the vesting of the Performance Stock Units and
the issuance of the Stock as set forth in Section 2. A holder of Distributed
Shares shall have full dividend and voting rights as a holder of Stock.

 

Section 5.Restrictions on Transfer; Change of Control.

 

5.1.General Restrictions. The Performance Stock Units shall not be transferable
by the Grantee (or Grantee’s legal representative or estate, as applicable)
other than by will or by the laws of descent and distribution. The terms of this
Agreement shall be binding on the executors, administrators, heirs and
successors of the Grantee.

 

5.2.Change of Control.

 

(a)If in connection with a Change of Control, the acquiring corporation (or
other successor to the Company in the Change of Control) does not assume the
Performance Stock Units:

 

(i) if the Change of Control occurs after the End of the Performance Period, the
number of Performance Stock Units that would have vested on the Vesting Date
shall vest and be settled in Stock issued to the Grantee immediately prior to
such Change of Control; and

 

(ii)if the Change of Control occurs prior to the End of the Performance Period,
a number of Performance Stock Units shall vest and be settled in Stock issued to
the Grantee immediately prior to the Change of Control equal to the greater of
(A) the Target Award, or (B) the number of Performance Stock Units that would
have vested pursuant to Exhibit A on the Vesting Date (i.e., based on actual
performance); provided, however that for purposes of this Section 5.2(a)(ii)(B),
(I) the End Date of the Performance Period shall be deemed to be the date of the
Change of Control, and (II) the Performance Goals shall be adjusted and
determined by the Committee in its sole discretion (such greater amount, the
“Adjusted Award”).

 

(b)If in connection with a Change of Control, the acquiring corporation  (or
other successor to the Company in the Change in Control) assumes the Performance
Stock Units, then the Vesting Date shall remain December 31, 2021 (or as
otherwise provided in Section 3 or this Section 5.2),

 

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and:

 

(i)if the Change of Control occurs after the End of the Performance Period, the
number of Performance Stock Units that are eligible to vest on the Vesting Date
shall remain the number that would have vested on the Vesting Date in the
absence of a Change of Control; and

 

(ii)if the Change of Control occurs prior to the End of the Performance Period,
the number of Performance Stock Units that shall be eligible to vest on the
Vesting Date shall be the Adjusted Award;

 

provided, that for purposes of this Section 5.2(b), if Grantee’s employment with
the Company (or its successor company) (i) is involuntarily terminated within 12
months following such Change of Control for any reason other than termination
for Cause, or (ii) is terminated by the Grantee for Good Reason within 12 months
following a Change of Control and Grantee is a party to an Employment Agreement
that provides rights to Grantee upon a termination for Good Reason, then subject
to Grantee’s execution of any release of claims set forth in the Employment
Agreement, if applicable, a number of Performance Stock Units equal to the
Adjusted Award shall vest upon Grantee’s termination of employment.

 

Section 6.Restrictive Agreement. As a condition to the receipt of any
Distributed Shares, the Grantee (or Grantee’s legal representative or estate or
any third party transferee, as applicable), if the Company so requests, will
execute an agreement in form satisfactory to the Company in which the Grantee or
such other recipient of the shares represents that he or she is purchasing the
shares for investment purposes, and not with a view to resale or distribution.  

 

Section 7.Performance Stock Units Award Subject to Recoupment Policy. If Grantee
is an executive officer of the Company, the award of Performance Stock Units is
subject to the Tivity Health, Inc. Compensation Recoupment Policy (the
“Policy”), and such Performance Stock Units, or any amount traceable to the
award of Performance Stock Units, shall be subject to the recoupment obligations
described in the Policy.

 

Section 8.Adjustment. In the event of any merger, reorganization, consolidation,
recapitalization, extraordinary cash dividend, stock dividend, stock split or
other change in corporate structure affecting the Stock, the number of
Performance Stock Units subject to this Agreement, as well as the performance
criteria set forth on Exhibit A, shall be equitably and proportionately adjusted
by the Committee in accordance with the Plan (including compliance with Section
409A of the Code, if applicable) and the intent of this Agreement without
duplication of Section 4.

 

Section 9.Tax Withholding. The Company shall have the right to require the
Grantee to remit to the Company an amount necessary to satisfy any federal,
state and local withholding tax requirements attributable to the vesting and
payment of the Performance Stock Units prior to the delivery of the Distributed
Shares or cash, as applicable, or may withhold from the Distributed Shares an
amount of Stock having a Fair Market Value equal to such federal, state or local
taxes as shall be required to be withheld pursuant to any applicable law or
regulation.

 

Section 10.Plan. This Agreement is made under and subject to the provisions of
the Plan, and all of the provisions of the Plan that do not conflict with this
Agreement are also provisions of this Agreement. If there is a difference or
conflict between the provisions of this Agreement and the provisions of the
Plan, the provisions of this Agreement will govern. By signing this Agreement,
the Grantee confirms that he or she has received a copy of the Plan.

 

 

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Section 11.Confidentiality, Non-Solicitation and Non-Compete.

 

 

(a)

This Section 11(a) shall apply if Grantee has an Employment Agreement or a
Nondisclosure and Noncompete Agreement with the Company that contains
confidentiality, non-solicitation or non-compete covenants.  In the event
Grantee breaches any such confidentiality, non-solicitation or non-compete
covenants, the Performance Stock Units shall immediately thereupon expire and be
forfeited, and the Company shall be entitled to seek other appropriate remedies
it may have available in connection with such breach.  

 

 

(b)

This Section 11(b) shall apply if Grantee does not have an Employment Agreement
or a Nondisclosure and Noncompete Agreement with the Company that contains
confidentiality, non-solicitation or non-compete covenants.  It is in the
interest of all colleagues to protect and preserve the assets of the Company. In
this regard, in consideration for granting the Performance Stock Units and as
conditions of Grantee’s ability to receive the Distributed Shares or cash, as
applicable, Grantee acknowledges and agrees that:

 

 

(i)

Confidentiality. In the course of Grantee's employment, Grantee will have access
to trade secrets and other confidential information of the Company and its
clients.  Accordingly, Grantee agrees that, without the prior written consent of
the Company, Grantee will not, other than in the normal conduct of the Company’s
business affairs, divulge, furnish, publish or use for personal benefit or for
the direct or indirect benefit of any other person or business entity, whether
or not for monetary gain, any trade secrets or confidential or proprietary
information of the Company or its clients, including, without limitation, any
information relating to any business methods, marketing and business plans,
financial data, systems, customers, suppliers, policies, procedures, techniques
or research developed for the benefit of the Company or its
clients.  Proprietary information includes, but is not limited to, information
developed by the Grantee for the Company while employed by the Company.  The
obligations of the Grantee under this paragraph will continue after the Grantee
has left the employment of the Company.  Grantee agrees that upon leaving the
employment of the Company, Grantee will return to the Company all property and
confidential information in the Grantee's possession and agrees not to copy or
otherwise record in any way such information.

 

 

(ii)

Non-Solicitation.  While employed by the Company and for a period of two years
thereafter, Grantee shall not, upon Grantee's own behalf or on behalf of any
other person or entity, directly or indirectly:

 

 

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hire or solicit to leave the employ of the Company any person employed by or
under contract as an independent contractor to the Company; or

 

 

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contact, solicit, entice away, or divert any healthcare and/or well-being
support services, coaching or management business from any person or entity who
is a client or with whom the Company was engaged in discussions as a potential
client within one year prior to the date of termination of Grantee.

 

 

(iii)

Non-Compete.  While employed by the Company and continuing during the period
while any amounts are being paid to Grantee by the Company and for a period of
18 months thereafter, Grantee will not own or be employed by or assist anyone
else in the conduct of any business (i) which is in competition with any
business conducted by the Company or (ii) which Grantee knows the Company was
actively evaluating for possible entry, in either

 

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case in the United States or in any other jurisdiction in which the Company is
engaged in business or has been engaged in business during Grantee’s employment
by the Company, or in such jurisdictions where Grantee knows the Company is
actively pursuing business opportunities at the time of Grantee’s termination of
employment with the Company; provided that ownership of five percent (5%) or
less of the voting stock or other ownership interests of any business entity
that is listed on a national securities exchange shall not constitute a
violation hereof.

 

In the event Grantee breaches any provisions of this Section 11(b), the
Performance Stock Units shall immediately expire, and the Company shall be
entitled to seek other appropriate remedies it may have available in connection
with such breach.

 

Section 12.Miscellaneous.

 

12.1.Entire Agreement. This Agreement and the Plan contain the entire
understanding and agreement between the Company and the Grantee concerning the
Performance Stock Units granted hereby, and supersede any prior or
contemporaneous negotiations and understandings. The Company and the Grantee
have made no promises, agreements, conditions, or understandings relating to the
Performance Stock Units, either orally or in writing, that are not included in
this Agreement or the Plan.

 

12.2.Employment. By establishing the Plan, granting awards under the Plan, and
entering into this Agreement, the Company does not give the Grantee any right to
continue to be employed by the Company or to be entitled to any remuneration or
benefits not set forth in this Agreement or the Plan.  

 

12.3.Captions. The captions and section numbers appearing in this Agreement are
inserted only as a matter of convenience. They do not define, limit, construe,
or describe the scope or intent of the provisions of this Agreement.

 

12.4.Counterparts. This Agreement may be executed in counterparts, each of which
when signed by the Company and the Grantee will be deemed an original and all of
which together will be deemed the same Agreement.

 

12.5.Notice. All notices required to be given under this Agreement shall be
deemed to be received if delivered or mailed as provided for herein, to the
parties at the following addresses, or to such other address as either party may
provide in writing from time to time.

 

To the Company:   Tivity Health, Inc.

   701 Cool Springs Blvd

   Franklin, Tennessee 37067

 

To the Grantee:

GRANTEE

(Grantee name and address)

Address on File

 

at Tivity Health

 

 

 

12.6.Amendment. Subject to the restrictions contained in the Plan, the Committee
may amend the terms of this Agreement, prospectively or retroactively, but,
subject to Section 8 above, no such amendment shall impair the rights of the
Grantee hereunder without the Grantee’s consent.

 

12.7.Governing Law. This Agreement shall be governed and construed exclusively
in accordance with the law of the State of Delaware applicable to agreements to
be performed in the State of

 

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Delaware to the extent it may apply.

 

12.8.Validity; Severability. If, for any reason, any provision hereof shall be
determined to be invalid or unenforceable, the validity and effect of the other
provisions hereof shall not be affected thereby. Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein. If any court determines that any provision of this Agreement is
unenforceable but has the power to reduce the scope or duration of such
provision, as the case may be, such provision, in its reduced form, shall then
be enforceable.

 

12.9.Interpretation; Resolution of Disputes; Section 409A.

 

(a)It is expressly understood that the Committee is authorized to administer,
construe and make all determinations necessary or appropriate to the
administration of the Plan and this Agreement, all of which shall be binding
upon the Grantee. Any dispute or disagreement which may arise under, or as a
result of, or in any way related to, the interpretation, construction or
application of this Agreement shall be determined by the Board. Any
determination made hereunder shall be final, binding and conclusive on the
Grantee and the Company for all purposes.

 

(b)Notwithstanding anything herein to the contrary, the Performance Stock Units
are intended to qualify as a “short-term deferral” pursuant to Section
1.409A-1(b)(4) of the U.S. Treasury Regulations and this Agreement shall be
interpreted consistently therewith. However, under certain circumstances,
administration of the Performance Stock Units may not so qualify, and in that
case, the Committee shall administer the grant and settlement of such
Performance Stock Units in strict compliance with Section 409A of the Code.
Further, notwithstanding anything herein to the contrary, if at the time of a
Participant’s termination of employment with the Company, the Participant is a
“specified employee” as defined in Section 409A of the Code, and the deferral of
the commencement of any payments or benefits otherwise payable hereunder as a
result of such termination of service is necessary in order to prevent the
imposition of any accelerated or additional tax under Section 409A of the Code,
then the Company will defer the commencement of the payment of any such payments
or benefits hereunder (without any reduction in such payments or benefits
ultimately paid or provided to the Participant) to the minimum extent necessary
to satisfy Section 409A of the Code until the date that is six months and one
day following the Participant’s termination of employment with the Company (or
the earliest date as is permitted under Section 409A of the Code), if such
payment or benefit is payable upon a termination of employment. Each payment of
Performance Stock Units (and related dividend equivalent rights) constitutes a
“separate payment” for purposes of Section 409A of the Code. Notwithstanding any
other provision of this Agreement, if and to the extent that any payment under
this Agreement constitutes non-qualified deferred compensation under Section
409A of the Code, and is payable upon (i) the Grantee’s termination of
employment, then such payment shall be made or provided to the Grantee only upon
a “separation from service” as defined for purposes of Section 409A of the Code,
or (ii) a Change of Control, then such payment shall be made or provided to the
Grantee only upon a “change in the ownership”, a “change in effective control”
or a “change in the ownership of a substantial portion of the assets” of the
applicable corporation as defined for purposes of Section 409A of the Code. If
the Performance Stock Units constitute deferred compensation and are subject to
Section 409A of the Code, if a Release is required for settlement of Performance
Stock Units and if the period in which to consider and revoke the Release begins
in one taxable year and ends in a second taxable year, such settlement shall not
occur until the second taxable year.

 

12.10.Successors in Interest. This Agreement shall inure to the benefit of and
be binding

 

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upon any successor to the Company. This Agreement shall inure to the benefit of
the Grantee’s legal representative and permitted assignees. All obligations
imposed upon the Grantee and all rights granted to the Company under this
Agreement shall be binding upon the Grantee’s heirs, executors, administrators,
successors and assignees.  

 

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IN WITNESS WHEREOF, the parties have caused the Performance Stock Unit Award
Agreement to be duly executed as of the day and year first written above.

 

 

TIVITY HEALTH, INC.

 

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Name:Donato Tramuto

Title:Chief Executive Officer

 

 

 

GRANTEE:

 

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