Document:

tvty-ex1011_7.htm

Exhibit 10.11

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is effective as of the Effective Date (as defined below) and is made by and between Tivity Health, Inc., a Delaware corporation (the “Company”), and Keira Krausz (“Executive”). This Agreement replaces and supersedes any other agreements between Executive and the Company or its subsidiaries.

WHEREAS, the Company has entered into that certain Agreement and Plan of Merger, dated as of December 9, 2018, by and among the Company, Sweet Acquisition, Inc., a Delaware corporation, and Nutrisystem, Inc., a Delaware corporation (the “Merger Agreement”);

WHEREAS, Executive has previously served as Executive Vice President and Chief Marketing Officer of Nutrisystem, Inc. pursuant to that certain Letter Agreement, dated as of February 5, 2013, by and between Executive and Nutrisystem, Inc., a copy of which is attached hereto as Exhibit A (as amended, the “NTRI Employment Agreement”);

WHEREAS, the Company desires that Executive serve in the role identified herein and Executive desires to hold such position under the terms and conditions of this Agreement; and

WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship of Executive with the Company, effective as of the closing of the transaction contemplated by the Merger Agreement (the “Effective Date”). 

NOW, THEREFORE, intending to be legally bound hereby, the parties agree as follows:

I.EMPLOYMENT. The Company hereby employs Executive and Executive hereby accepts employment with the Company, upon the terms and conditions set forth in this Agreement.

II.TERM. The Company agrees to employ Executive pursuant to the terms of this Agreement, and Executive agrees to be so employed, for a term of one year (the “Initial Term”) commencing as of the Effective Date. On each anniversary of the Effective Date following the Initial Term, the term of this Agreement shall be automatically extended for successive one-year periods, provided, however, that either party hereto may elect not to extend this Agreement by giving written notice to the other party at least 30 days prior to the end of the Initial Term or any renewal term. Notwithstanding the foregoing, Executive’s employment hereunder may be earlier terminated in accordance with Section VI hereof. The period of time between the Effective Date and the termination of Executive’s employment under this Agreement shall be referred to herein as the “Term.” A non-renewal of the Term by the Company in accordance with this Section II shall be treated as a termination without Cause (as defined below), and a non-renewal of the Term by Executive in accordance with this Section II shall be treated as a termination without Good Reason (as defined below).

III.POSITION. 

A.Position and Duties. Executive shall serve as Division President, Nutrition of the Company. In this capacity, Executive shall have the duties, authorities and responsibilities commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies, and such other duties, authorities and responsibilities as the Board of Directors of the Company (the “Board”) shall designate from time to time that are not inconsistent with the Executive’s position as Division President, Nutrition of the Company. Executive shall report to the President and Chief Operating Officer of the Company; provided that if Dawn Zier is no longer serving as President and Chief Operating Officer of the Company, Executive shall report to the Chief Executive Officer or President of the Company. When Executive’s employment terminates for any reason, Executive will resign as an officer of the Company (and any of its subsidiaries). All resignations shall be effective no later than the Date of Termination (as defined in Section VI.H).

 

 

 

B. Primary Location; Travel. Executive will perform services for the Company primarily in Fort Washington, Pennsylvania; provided, however, that Executive will travel as reasonably required to fulfill Executive’s obligations under this Agreement. 

IV.DUTIES. Executive shall devote Executive’s full working time and attention to the business and affairs of the Company; provided, however, that it shall not be a violation of this Agreement for Executive to manage her passive personal investments, or to engage in or serve such civic, community, charitable, educational, or religious organizations as she may select, so long as she does not, directly or indirectly hold more than a total of 2% of all shares of stock of any public company and such other activities do not materially interfere with the performance of Executive’s responsibilities under this Agreement or violate Executive’s restrictive covenant obligations in Section IX of this Agreement.

V.COMPENSATION.

A.Base Salary. Executive’s initial base salary as of the Effective Date is $475,000.  The initial base salary and any increase is defined as the “Base Salary.” The Base Salary is paid in accordance with the Company’s normal payroll practices, but not less frequently than monthly, and subject to applicable taxes and withholding. Executive’s Base Salary shall be subject to annual review by the Board (or a committee thereof), and may be increased, but not decreased below its then current level, from time to time by the Board.

B.Special Retention Award. On or effective as of the Effective Date, the Executive will be granted restricted stock units with a grant date fair value of $750,000, which will be issued pursuant to the Company’s Amended and Restated 2014 Stock Incentive Plan and the restricted stock unit award agreement, in substantially the form attached as Exhibit B hereto (the “Special Retention Award”).

C.Annual Bonus. Commencing in respect of fiscal year 2019, the Executive will be eligible to receive an annual bonus (“Bonus”) in cash that is targeted to equal 75% of Base Salary. The 2019 bonus program will be established by the Compensation Committee of the Board, and any corporate level performance metrics applicable to Executive will be generally consistent with those established for the other senior executives of the Company. Bonus shall be structured and paid in accordance with the terms and conditions of the bonus program established by the Compensation Committee of the Board. Except as set forth in Section VI of this Agreement, the Bonus for fiscal year 2019 will not be prorated for Executive’s partial year of service following the Effective Date.

D.Long-Term Incentive Awards. Executive will participate in the Company’s long-term incentive program (“LTIP”). Each year, including 2019, Executive will be granted an LTIP award with a target grant date fair market value of $1,050,000. The LTIP award will be in addition to the Special Retention Award.

E.Stock Ownership Guidelines. The stock ownership guidelines applicable to Executive shall be no less favorable than those applicable to any other individual who has the same or higher salary grade as Executive and will initially be 2.0x Base Salary.

F.Assumed Equity Awards. 

1.Stock options held by Executive as of the Effective Date and assumed by the Company pursuant to the Merger Agreement shall be cashed out in accordance with the terms of the Merger Agreement.

2. Restricted stock awards held by Executive as of the Effective Date and assumed by the Company pursuant to the Merger Agreement shall be subject to the terms and conditions set forth in the restricted stock award agreement attached hereto as Exhibit C-1.

3. Performance-based restricted stock unit awards held by Executive as of the Effective Date and assumed by the Company pursuant to the Merger Agreement shall be subject to the 

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terms and conditions set forth in the restricted unit award agreements attached hereto as Exhibit C-2, Exhibit C-3, and Exhibit C-4. 

G.Benefit Plans. Executive shall be entitled to participate in all those benefit plans that are maintained by the Company for senior executives, on the same basis as those benefits are generally made available to other senior executives of the Company. Also, during the Term, Executive shall be entitled to fringe benefits and perquisites on the same basis as those benefits are generally made available to other senior executives of the Company. Nothing in this Agreement shall require the Company to establish and/or maintain any such plans.

 

H. Vacation. Executive shall be entitled to paid vacation in accordance with the Company’s policy generally applicable to other senior executives of the Company as in effect from time to time.

 

I.Business and Travel Expenses. In accordance and subject to compliance with the Company’s expense reimbursement policy, upon presentation of appropriate documentation, Executive shall be reimbursed for all reasonable business expenses incurred in connection with the performance of Executive’s duties hereunder.

 

VI.TERMINATION OF EMPLOYMENT. The termination of Executive’s employment and this Agreement may occur as follows:

A.By Mutual Consent. The Company and Executive may agree in writing to terminate this Agreement at any time.

B.Death or Disability. If Executive’s employment ceases due to Executive’s death or Disability (as defined below), Executive (or Executive’s estate) will be entitled to the following:

1.The “Accrued Amounts,” which shall mean: (A) any unpaid Base Salary through the Date of Termination, payable within 30 days following the Date of Termination; (B) any Bonus earned but unpaid with respect to the fiscal year ending on or preceding the Date of Termination, payable at the time such bonuses would have been paid if Executive was still employed with the Company; (C) reimbursement for any unreimbursed business expenses incurred through the Date of Termination within 30 days following the Date of Termination; and (D) any vested benefits payable under the terms of any applicable plan and in accordance therewith; and

2.The “Pro-Rata Bonus,” which shall mean a pro-rata portion of Executive’s Bonus for the fiscal year in which the Date of Termination occurs based on actual results for such year (determined by multiplying the amount of such Bonus which would be due for the full fiscal year by a fraction, the numerator of which is the number of days during the fiscal year of termination that Executive is employed by the Company and the denominator of which is 365), payable in accordance with the term of the applicable Bonus plan at the same time the Bonus would have been paid if Executive continued to be employed by the Company. 

If Executive’s employment ceases due to Executive suffering a Disability, the payments and benefits provided for in this Section VI.B, other than the Accrued Amounts, will be conditioned on (1) Executive’s execution and delivery to the Company of an enforceable release of claims against the Company and its affiliates, in a form attached hereto as Exhibit D (the “Release”); (2) such Release becoming irrevocable within 30 days following the cessation of Executive’s employment (or within any longer period designated for review and revocation period within such Release); and (3) Executive’s continued compliance with Executive’s restrictive covenant obligations to the Company in Section IX of this Agreement.

For purposes of this Agreement, “Disability” shall mean a condition entitling Executive to benefits under any long-term disability plan or policy maintained or funded by the Company.

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C.By the Company for Cause.

1.If any of the following occurs, the Company may terminate Executive’s employment by written notice to Executive specifying the event(s) (each of which shall constitute “Cause” for termination):

(a)Executive is convicted of a felony; or 

(b)in the reasonable determination of the Company, Executive has done any one of the following: (1) committed an act of fraud, embezzlement, or theft in the course of Executive’s employment, (2) caused intentional, wrongful damage to the property of the Company, (3) Executive’s material breach of any agreement with the Company or its affiliates or any duty owed to the Company or its stockholders, or material violation of any written policy or procedure of the Company, and such breach or violation (if curable) is not cured within 30 days after receiving written notice from the Company specifying the details of the breach, or (4) engaged in gross misconduct or gross negligence in the course of employment. For avoidance of doubt, (x) Executive’s unwillingness to relocate her family’s permanent residence to any location at the Company’s request shall not constitute “Cause,” and (y) a termination due to Executive suffering a Disability will not constitute a termination “without Cause.”

2.If Executive’s employment is terminated under this Section VI.C., Executive shall be entitled to receive the Accrued Amounts, and nothing more, subject to Section VI.F.   

D.By the Company Without Cause or by Executive for Good Reason or as a Result of Non-Extension of this Agreement. If Executive’s employment ceases due to a termination by the Company without Cause, a resignation by Executive with Good Reason (as defined below) or as a result of the non-extension of the Term by the Company as provided in Section II, Executive will be entitled to: 

	
 
	
1.
	
The Accrued Amounts;

	
 
	
2.
	
Continuation of then-current Base Salary for one year at customary payroll intervals;

	
 
	
3.
	
Credit against total monthly COBRA premium (if administratively possible) or reimbursement to Executive of the portion of the monthly COBRA premium that exceeds the active employee cost of group health coverage for 12 months (such credits/reimbursements to be made monthly based on continued COBRA enrollment); and    

	
 
	
4.
	
The Pro-Rata Bonus.

The payments and benefits provided for this Section VI.D (other than the Accrued Amounts) are conditioned upon: (1) Executive’s execution and delivery to the Company of the Release; (2) the Release becoming irrevocable within 30 days following the cessation of Executive’s employment (or within any longer period designated for review and revocation period within such Release); and (3) Executive’s continued compliance with Executive’s restrictive covenant obligations to the Company in Section IX of this Agreement. 

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For purposes of this Agreement, “Good Reason” means (a) a material diminution of Executive’s title, authority, duties or responsibilities, or a change in Executive’s reporting structure, each as in effect immediately following the Effective Date in accordance with this Agreement or any greater level existing following the Effective Date; (b) a material reduction in Executive’s then-current annual Base Salary, target annual Bonus opportunity, or target long term equity incentive grant; (c) a material change in the geographic location at which Executive performs services hereunder from that in effect immediately prior to the Effective Date; or (d) a material breach of this Agreement by the Company; provided, that any such event will constitute Good Reason only if Executive notifies the Company in writing of such event within 90 days following the initial occurrence thereof, the Company fails to cure such event within 30 days after receipt from Executive of written notice thereof, and Executive resigns her employment within 30 days following expiration of the cure period.

E. Termination by Executive Without Good Reason At Any Time. If Executive terminates Executive’s employment without Good Reason at any time, Executive shall be entitled to the Accrued Amounts. 

F. Treatment of Equity Awards.  For purposes of Sections VI.A. through VI.E., all outstanding stock options, restricted stock, RSUs, PSUs and any other equity incentives, including the Special Retention Award, shall be treated solely in accordance with the terms of the award agreements to which the Company and Executive are parties on the Date of Termination.  

G.Timing of Payments. 

1. Delay of Payments Pursuant to Section 409A.  It is intended that (1) each installment of the payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the Internal Revenue Code (the “Code”) and (2) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v). Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on the Date of Termination or at such other time that the Company determines to be relevant, Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)) of the Company and (ii) that any payments to be provided to Executive pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code if provided at the time otherwise required under this Agreement then such payments shall be delayed until the date that is six months after the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) with the Company, or, if earlier, the date of Executive’s death. Any payments delayed pursuant to this Section VI.G shall be made in a lump sum on the first day of the seventh month following Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)), or, if earlier, the date of Executive’s death. In addition, to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which Executive participates during Executive’s employment or thereafter provides for a “deferral of compensation” within the meaning of Section 409A of the Code, such amount shall be paid in accordance with Section 1.409A-3(i)(1)(iv) of the Treasury Regulations, including (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) any such reimbursement or payment may not be subject to liquidation or exchange for another benefit. In addition, notwithstanding any other provision to the contrary, in no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Section 409A of the Code and the Treasury Regulations promulgated thereunder be subject to offset by any other amount unless otherwise 

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permitted by Section 409A of the Code. For the avoidance of doubt, any payment due under this Agreement within a period following Executive’s termination of employment or other event shall be made on a date during such period as determined by the Company in its sole discretion. Notwithstanding any other provision of this Agreement, if the Release consideration and revocation period begins and ends in separate years, the payment or commencement of any payments contingent upon the return and nonrevocation of the Release, shall be made or commence in the subsequent year in all events. For purposes of the payment or reimbursement of medical premiums (including any reimbursement of COBRA premiums), the Company may treat the amounts paid by it for premiums as taxable to Executive or make such payments (less any required withholding) directly to Executive to the extent required to avoid adverse consequences to Executive or the Company under either Section 105(h) of the Code, or the Patient Protection and Affordable Care Act of 2010 as amended, and/or the Health Care and Education Reconciliation Act of 2010, as amended (to the extent applicable) (collectively, the “PPACA”). Additionally, the Company may modify or discontinue the continuation coverage contemplated by this Agreement to the extent reasonably necessary to avoid the imposition of any excise taxes on the Company for failure to comply with the nondiscrimination requirements of the PPACA (to the extent applicable).

2. Parachute Payments. If the severance and other benefits provided for in the Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section VI.G.2, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance and other benefits under the Agreement shall be payable either (A) in full, or (B) as to such lesser amount which would result in no portion of such severance and other benefits being subject to the excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits under the Agreement, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. Any reduction shall be made in the following manner: first a pro-rata reduction of (i) cash payments subject to Section 409A of the Code as deferred compensation and (ii) cash payments not subject to Section 409A of the Code, and second a pro rata cancellation of (i) equity-based compensation subject to Section 409A of the Code as deferred compensation and (ii) equity-based compensation not subject to Section 409A of the Code Reduction in either cash payments or equity compensation benefits shall be made pro-rata between and among benefits which are subject to Section 409A of the Code and benefits which are exempt from Section 409A of the Code. Unless the Company Parties and Executive otherwise agree in writing, any determination required under this Section VI.G.2 shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon Executive and the Company Parties for all purposes. For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section VI.G.2. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section VI.G.2.

H.Date of Termination. The date of delivery of a notice of termination, resignation, or non-renewal by either the Company or Executive shall constitute the “Date of Termination,” unless otherwise set forth herein or in the notice of termination, resignation or non-renewal. For purposes of this Agreement, Executive will be deemed to have terminated employment when Executive has a “separation from service” from the Company as determined in accordance with Treasury Regulation 1.409A-1(h).

VII.REPRESENTATIONS. Executive represents and warrants that Executive is not a party to any agreement or instrument that would prevent Executive from entering into or performing Executive’s duties in any way under this Agreement. 

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VIII.ASSIGNMENT, BINDING AGREEMENT. This Agreement is a personal contract and the rights and interests of Executive hereunder may not be sold, transferred, assigned, pledged, encumbered, or hypothecated by Executive, except as otherwise expressly permitted by the provisions of this Agreement. This Agreement shall inure to the benefit of and be enforceable by Executive and Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amount would still be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designee or, if there is no such designee, to Executive’s estate. 

IX.CONFIDENTIALITY, NON-COMPETITION, NON-SOLICITATION. Executive shall comply with all of the terms of that certain nondisclosure and noncompete agreement, of even date hereof, by and between Executive and the Company, a copy of which is attached hereto as Exhibit E. 

X.INDEMNIFICATION. Executive will be entitled to indemnification for acts performed or omissions made in her capacity as an officer of the Company to the extent provided in the Company’s governing documents. 

XI. TAX WITHHOLDING. The Company shall withhold from any and all amounts payable under this Agreement such federal, state and local taxes as are required to be withheld pursuant to any applicable law or regulation. 

XII. LIABILITY INSURANCE. During the Term, the Company shall maintain, for the benefit of the Executive, director and officer liability insurance in form at least as comprehensive as, and in an amount that is at least equal to, that maintained by the Company for any other senior executive officer or director. The Executive’s rights under this Section XII shall continue so long as such liability may exist, whether or not this Agreement or Executive’s employment with the Company may have terminated prior thereto.

XIII. LEGAL FEES. Within 30 days upon presentation of appropriate documentation, the Company shall pay all reasonable and documented legal fees and related expenses incurred in connection with the drafting, negotiation and execution of this Agreement and other documents relating to equity arrangements.

XIV.ENTIRE AGREEMENT. This Agreement, together with the other agreements specifically referenced in this Agreement, contains all the understandings between the parties pertaining to the matters referred to herein, and supersedes any other undertakings and agreements (including, without limitation, the NTRI Employment Agreement and all other agreements between Nutrisystem, Inc. and Executive, each of which is hereby terminated), whether oral or written, previously entered into by them with respect thereto. Executive represents that, in executing this Agreement, Executive does not rely and has not relied upon any representation or statement not set forth herein made by the Company with regard to the subject matter or effect of this Agreement or otherwise and that Executive has had the opportunity to be represented by counsel of Executive’s choosing. 

XV.AMENDMENT OR MODIFICATION; WAIVER. No provision of this Agreement may be amended or waived, unless such amendment or waiver is agreed to in writing, signed by Executive and by a duly authorized officer of the Company. No waiver by any party hereto of any breach by another party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar condition or provision at the same time, any prior time or any subsequent time. 

XVI.NOTICES. Any notice to be given hereunder shall be in writing and shall be deemed given when delivered personally, sent by courier, facsimile or registered or certified mail, postage prepaid, return receipt requested, addressed to the party concerned at the address indicated on the signature page or to such other address as such party may subsequently give notice in writing. Any notice delivered personally or by courier shall be deemed given on the date delivered. Any notice sent by facsimile, registered or 

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certified mail, postage prepaid, return receipt requested, shall be deemed given on the date transmitted by facsimile or mailed. 

XVII.SEVERABILITY. If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid and unenforceable, shall not be affected thereby, and each provision hereof shall be validated and shall be enforced to the fullest extent permitted by law. 

XVIII.SURVIVORSHIP. The rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations. 

XIX.GOVERNING LAW; VENUE. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof, and any disputes, actions, claims or causes of action arising out of or in connection with this Agreement or the employment relationship between the Company and Executive shall be subject to the exclusive jurisdiction of the United States District Court for the District of Delaware.

XX.HEADINGS. All descriptive headings of sections and paragraphs in this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the heading of any section or paragraph. 

XXI.COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 

 

[remainder of page intentionally left blank; signature page follows]

 

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Exhibit 10.11

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement. 

 

TIVITY HEALTH, INC.

 

By:  /s/ Adam Holland

Name: Adam Holland

Title: Chief Financial Officer

 

EXECUTIVE

 

/s/ Keira KrauszKeira Krausz

Date: 3/7/19

 

Addresses for Notice:

		
	
Keira Krausz

On file_____________________

___________________________

___________________________

 
	
Tivity Health, Inc.
701 Cool Springs Blvd. 
Franklin, TN 37067
Attn: Chief Legal and Administrative Officer

 

 

 

Exhibit 10.11

EXHIBIT A

 

NTRI Employment Agreement

 

[Attached.]

 

 

 

Nutrisystem, Inc.

February 5, 2013

Ms. Keira Krausz

[Address Redacted]

Dear Keira:

We are pleased to extend to you (“Executive”) an offer to join NutriSystem, Inc. (the “the Company”) on the terms set forth in this letter agreement (this “Agreement”).

 

	
 
	
 
	
 

	
Commencement Date:
	
  
	
February 11, 2013.

	
 
	
 

	
Title/Reporting:
	
  
	
Executive Vice President and Chief Marketing Officer, reporting to the Company’s Chief Executive Officer. Executive will devote her full business time and best efforts to the performance of her duties for the Company; provided, however, that Executive shall be able to manage her personal investments or to engage in or serve such civic, community, charitable, educational, or religious organizations as she may select, so long as such service does not create a conflict of interest with, or interfere with the performance of, Executive’s duties hereunder or conflict with Executive’s covenants under the restrictive covenants agreement (attached hereto as Exhibit A), which Executive is required to execute as a condition of her employment.

	
 
	
 

	
At-Will Employment:
	
  
	
Executive will be an at-will employee, which means that her employment may be terminated by either the Company or by her at any time, for any reason. Upon any cessation of her employment, except as otherwise provided herein, Executive’s entitlement will be limited to the payment of Base Salary accrued but unpaid through the effective date of that cessation.

	
 
	
 

	
Annual Base Salary:
	
  
	
$300,000, subject to annual review.

	
 
	
 

	
Signing Bonus:
	
  
	
$25,000, payable the first pay date after the Commencement Date, subject to prompt repayment in full if Executive’s employment with the Company ceases before the first anniversary of the Commencement Date, .

	
 
	
 

	
Initial Equity Grant:
	
  
	
On the Commencement Date Executive will receive an equity grant (the “Initial Equity Grant”) with a grant date fair value of $500,000, with such grant date fair value allocated as follows: 25% Performance RSUs (the “Inducement PRSUs”), 25% Non-Qualified Stock Options and 50% Restricted Shares. The terms of the Performance RSU’s will be established by the Compensation Committee (“Compensation Committee”) of the Company’s Board of Directors (“Board”) and will be substantially similar to the terms of the Performance RSUs applicable to the Company’s other executive officers. Restricted Shares and Options are time-based vesting 25% per year.

 

 

	
Annual Cash Bonus Opportunity:
	
  
	
Target annual bonus will be 70% of the then current Base Salary. Actual range of payout will be 0 to 150% of the target, based on actual performance against objectives established by the Compensation Committee for the Company’s other executive officers. Bonuses are paid within 2 1/2months following the end of the relevant fiscal year. Except as otherwise provided herein, Executive will be required to remain employed through the applicable bonus payment date in order to receive any bonus.

	
 
	
 

	
Annual Equity Incentives:
	
  
	
Equity awards will be determined annually by the Compensation Committee in its discretion; provided, however, that for 2013, the awarded annual grant date fair value will be an amount sufficient to achieve the 50th percentile of executive pay benchmarking for total direct compensation (TDC), excluding the Initial Equity Grant. The components and terms of the 2013 grant will be substantially consistent with the components and terms of 2013 annual grants made to the Company’s other executive officers.

	
 
	
 

 

 

	
Benefits; Expenses:
	
  
	
Executive will participate in the same vacation policies, benefit programs, and health, life and disability coverages (as in effect from time to time and on terms and conditions consistent with those) provided to the Company’s other senior executives. The Company will reimburse Executive, in accordance with the Company’s policy, for reasonable out of pocket travel and other expenses that she incurs in connection with her employment.

	
 
	
 

	
Definitions:
	
  
	
“Cause” means: (a) Executive is convicted of a felony, or (b) in the reasonable determination of the Board, Executive has done any one of the following: (1) committed an act of fraud, embezzlement, or theft in the course of her employment, (2) caused intentional, wrongful damage to the property of the Company, (3) Executive’s material breach of any agreement with the Company or its affiliates, any duty owed to the Company or its stockholders or any published policy of the Company, which breach (if curable) is not cured within 30 days after receiving written notice from the Board specifying the details of the breach, or (4) engaged in gross misconduct or gross negligence in the course of employment. For avoidance of doubt, a termination due to Executive suffering a “Disability” will not constitute a termination “without Cause.” For this purpose, “Disability” means a condition entitling Executive to benefits under any Company sponsored or funded long term disability plan or policy.

 

“Good Reason” means: (a) a material diminution of Executive’s title, authority, duties or responsibilities; (b) a material reduction in Executive’s then current Base Salary or annual bonus target opportunity; (c) a material change in the geographic location at which Executive performs services for the Company, which for this purpose shall mean the relocation of the Company’s headquarters by more than 50 miles; and (d) a material breach of this Agreement by the Company; provided that any such event will constitute Good Reason only if Executive notifies the Company in writing of such event within 90 days following the initial occurrence thereof, the Company fails to cure such event within 30 days after receipt from Executive of such written notice thereof, and Executive resigns her employment within 30 days following the expiration of that cure period.

 

 

 

	
Severance; Post-Termination Restrictive Covenants:
	
  
	
In the event of a termination by the Company without Cause or a resignation by Executive for Good Reason, Executive will be entitled to:

 

(a) One year continuation of Base Salary at customary payroll intervals.

 

(b) One year continuation of group health benefits at active employee rates.

 

(c) Continued eligibility for a pro-rata portion of the annual cash bonus for the year of termination, based on actual performance in that year.

 

(d) If such termination occurs after the second anniversary of the Commencement Date: (i) any time-vested equity awards under the Initial Equity Grant that remain unvested shall vest, and (ii) if such termination occurs prior to the end of the performance period for the Inducement PRSUs, Executive will remain eligible to earn a pro-rata portion of those PRSUs based on actual performance through the end of that performance period and pro-rated based on the number of days of service completed during that performance period.

 

(e) Relief from Executive’s obligation to repay the signing bonus, if such termination occurs before the first anniversary of the Commencement Date.

 

All severance benefits are conditioned on: (1) Executive’s execution and delivery to the Company of a general release of claims against the Company and its affiliates, substantially in a form approved by the Board (the “Release”); (2) such Release becoming irrevocable within 30 days following the Company’s delivery of such Release to Executive’s; and (3) Executive’s continued compliance with her restrictive covenant obligations to the Company. Except for items (c) and (d)(ii) above, these payments and benefits will be paid or provided (or begin to be paid or provided, as applicable) on the first regularly scheduled payroll date that occurs after the Release becomes irrevocable; provided, however, that if the 30-day period described above begins in one taxable year and ends in a second taxable year, such payments or benefits shall not commence until the second taxable year. The 

payments, if any, required by item (c) and (d)(ii) above will be paid within 2 1/2 months following the end of the applicable performance period.

	
Section 409A:
	
  
	
Notwithstanding anything herein to the contrary, to the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A of the Internal Revenue Code (“Section 409A”) to any payments due to Executive upon or following her Separation from Service (within the meaning of Treas. Reg. § 1.409A-1(h)(1) or any successor provision)), then notwithstanding any other provision of this Agreement (or any otherwise applicable plan, policy, agreement or arrangement), any such payments that are otherwise due within six months following Executive’s Separation from Service will be deferred without interest and paid to Executive in a lump sum immediately following the end of such six-month period. This paragraph should not be construed to prevent the application of Treas. Reg. §§ 1.409A-1(b)(4) or - 1(b)(9)(iii) (or any successor provisions) to amounts payable to Executive. For purposes of the application of Treas. Reg. § 1.409A-1(b)(4) (or any successor provision) to amounts payable hereunder, each payment in a series of payments will be deemed a separate payment.

 

While the parties have endeavored to structure Executive’s compensation rights so that payments to her are exempt from or compliant with Section 409A, the Company makes no representation to Executive in this regard and will have no obligation to indemnify Executive for taxes or interest imposed under Section 409A.

	
 
	
 

	
Indemnification:
	
  
	
Executive will be entitled to indemnification for acts performed or omissions made in her capacity as an officer of the Company to the extent provided in the Company’s governing documents.

	
 
	
 

 

 

	
Other:
	
  
	
(a) Executive will be subject to all corporate policies applicable to executive officers, including the Company’s securities trading policy, anti-hedging policy, clawback policy and stock ownership guidelines.

 

(b) All payments (or transfers of property) to Executive will be subject to tax withholding to the extent required by applicable law.

 

(c) Both during and following her service with the Company, Executive agrees to cooperate with the Company in connection with any action or proceeding (or any appeal from any action or proceeding) that relates to events occurring during Executive’s employment by the Company. After Executive’s employment ceases, the Company will provide reasonable advance notice of its need for Executive’s cooperation and will attempt to schedule and limit the need for Executive’s cooperation so as to minimize any disruption of Executive’s personal and other professional obligations. The Company will reimburse Executive, in accordance with the Company’s policy, for reasonable out-of-pocket travel and other expenses that she incurs as a result of her cooperation.

 

(d) Executive represents and warrants to the Company that there are no orders, judgments, decrees, restrictions, agreements or understandings by which she is bound that would prevent or make unlawful her execution of this Agreement, that would be inconsistent or in conflict with this Agreement or her obligations hereunder, or that would otherwise prevent, limit or impair the performance of her duties to the Company.

 

(e) Notices permitted or required under this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier addressed, in the case of the Company, c/o its General Counsel at its principal executive office and, in the case of Executive, to her most recent address set forth in the personnel records of the Company.

 

(f) This Agreement shall inure to the benefit of, and shall be binding upon, the parties, their heirs, executors, administrators, agents, successors, permitted assigns, and estates, provided that Executive’s rights and obligations under this Agreement are personal to her and may not be assigned.

 

(g) This Agreement is governed by Pennsylvania law, without regard to the principles of conflicts of laws. Any disputes, actions, claims or causes of action arising out of or in connection with this Agreement or the employment relationship between the Company and Executive shall be subject to the exclusive jurisdiction of the United States District Court for the Eastern District of Pennsylvania or the Pennsylvania state courts located in Montgomery County.

 

(h) This Agreement sets forth the parties’ entire agreement regarding Executive’s employment and compensation by the Company and supersedes all prior agreements (including that certain Consulting Agreement dated January 14, 2013, except with respect to provisions thereof that by their nature are intended to survive any termination thereof), discussions and understandings on those topics. This Agreement may not be modified in any way except by a written amendment executed by Executive and a duly authorized representative of the Company.

 

#         #         #         #         #

[Remainder of page intentionally left blank; signature page follows]

 

 

Exhibit 10.11

Your signature below confirms that all information provided to us during the interview and hiring process is true and accurate in all material respects. To indicate your acceptance of our offer and its terms, please sign and date this Agreement in the space provided below and return it to me. Please retain a copy for your records.

 

	
 

	
Sincerely,

	
 

	
/s/ Dawn M. Zier

	
Dawn M. Zier

	
President and CEO

 

	
 
	
 
	
 

	
Agreed and accepted on February 5, 2013:

	
 
	
 

	
By:
	
 
	
/s/ Keira Krausz

	
 
	
 
	
Keira Krausz

 

 

 

 

Nutrisystem, Inc.

January 2, 2015

Ms. Keira Krausz

[Address Redacted]

Dear Keira:

Reference is hereby made to the letter agreement between us dated February 5, 2013 (the “Agreement”). The parties hereby agree to amend the Agreement as of the date first set forth above on the terms set forth in this letter agreement (this “First Amendment”).

With respect to the provisions in the Agreement set forth opposite the caption labelled “Annual Cash Bonus Opportunity”, the second sentence thereof is hereby amended to delete the percentage “150%” referenced therein and to replace it with the percentage “200%.” Except as expressly amended by this First Amendment, the terms of the Agreement are unchanged and remain in full force and effect.

To acknowledge your agreement with the foregoing, please sign this First Amendment in the space provided below and return it to me. Please retain a copy for your records.

 

	
 

	
Sincerely,

	
 

	
/s/ Dawn M. Zier

	
 

	
Dawn M. Zier

	
President and CEO

Agreed and accepted:

 

	
 

	
/s/ Keira Krausz

	
Keira Krausz

7

 

 

December 27, 2017

 

Ms. Keira Krausz

[Address Redacted]

 

RE:Second Amendment to Employment Agreement

 

Dear Keira:

 

Reference is hereby made to the letter agreement between us dated February 5, 2013, as amended by that letter agreement dated January 2, 2015 (as so amended, the “Agreement”).  The parties hereby agree to further amend the Agreement as of the date first set forth above on the terms set forth in this letter agreement (this “Second Amendment”).

 

With respect to the provisions in the Agreement set forth opposite the caption labelled “Annual Cash Bonus Opportunity”, the first sentence thereof is hereby deleted in its entirety and replaced with the following: “Commencing January 1, 2018, target annual bonus will be 75% of the then current Base Salary (provided that the Compensation Committee or the Board, as applicable, may, in its sole discretion, increase the target annual bonus from time to time).” Except as expressly amended by this Second Amendment, the terms of the Agreement are unchanged and remain in full force and effect.  

 

To acknowledge your agreement with the foregoing, please sign this Second Amendment in the space provided below and return it to me.  Please retain a copy for your records.

 

	
 

	
Sincerely,

	
 

	
/s/ Dawn M. Zier

	
 

	
Dawn M. Zier

	
President and CEO

Agreed and accepted:

 

	
 

	
/s/ Keira Krausz

	
Keira Krausz

8

 

 

EXHIBIT B

 

Special Retention Award

 

[Attached.]

 

9

 

 

TIVITY HEALTH, INC.

AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT 

 

This RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”), dated March 8, 2019 (the “Grant Date”), is by and between Tivity Health, Inc., a Delaware corporation (the “Company”), and Keira Krausz (the “Grantee”), under the Company’s Amended and Restated 2014 Stock Incentive Plan (the “Plan”). Terms not otherwise defined herein shall have the meanings given to them in the Grantee’s employment agreement with the Company (as may be amended from time to time, the “Employment Agreement”), or if not defined in the Employment Agreement, then the meanings given to them in the Plan.

 

Section 1.Restricted Stock Unit Award. The Grantee is hereby granted 38,620 restricted stock units (the “Restricted Stock Units”). Each Restricted 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.

Section 2.Vesting of the Award. Except as otherwise provided in Section 3 and Section 5 below, the Restricted Stock Units will vest at such times (the “Vesting Date”) and in the percentages set forth below, as long as the Grantee is serving as an employee of the Company on the Vesting Date.

 

			
	
Vesting Date
	
 
	
Award Percentage of Restricted Stock Units

	
One Year from Grant Date

Two Years from Grant Date

Three Years from Grant Date

 
	
 
	
33%

33%

34%

 

The Company shall issue one share of Stock to the Grantee (or Grantee’s estate or personal representative, as applicable) in settlement of each vested Restricted Stock Unit (the “Distributed Shares”) at the time the Restricted Stock Unit vests pursuant to any provision of this Agreement, but in no event later than March 15 of the calendar year following the calendar year in which the applicable Vesting Date occurs. The Distributed Shares 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, then all Restricted Stock Units that have not vested prior to the Date of Termination of Grantee’s employment will be forfeited and the Grantee shall have no further rights with respect to such Restricted Stock Units. “Date of Termination” shall have the meaning set forth in the Employment Agreement. 

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, then, subject to Grantee’s execution of the release of claims in the form attached to the Employment Agreement, all of the Restricted Stock Units granted hereunder shall immediately vest on the Date of Termination, and the Date 

10

 

 

of Termination shall be the Vesting Date for purposes of this Agreement. For purposes of this Agreement, the terms “Good Reason” and “Cause” shall have the meanings set forth in the Employment Agreement.

3.3.Termination by Death or Disability. If the Grantee’s employment by the Company terminates by reason of death or Disability (as defined in the Plan), the Restricted Stock Units granted hereunder shall immediately vest and the Date of Termination shall be the Vesting Date for purposes of this Agreement.

3.4.Other Termination. If the Grantee’s employment by the Company is terminated for any reason other than as described in Sections 3.1 through 3.3 above, then all Restricted Stock Units that have not vested prior to the Date of Termination will immediately thereupon be forfeited and the Grantee shall have no further rights with respect to such Restricted 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 Restricted 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 Restricted 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 Restricted 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 Restricted Stock Units prior to the vesting of the Restricted 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.Restrictions on Transfer. The Restricted Stock Units shall not be transferable by the Grantee (or the 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 in Control.  If Grantee’s employment with the Company (or its successor company) (a) is involuntarily terminated within 12 months following a Change in Control for any reason other than termination for Cause, or (b) is terminated by the Grantee for Good Reason within 12 months following a Change in Control, all restrictions imposed on the Restricted Stock Units shall thereupon lapse, the Restricted Stock Units will become free of all restrictions and become fully vested, and the Company (or its successor company) shall issue the Stock underlying the Restricted Stock Units to the Grantee on or about the Date of Termination; provided, however, that if in connection with a Change in Control, the acquiring corporation (or other successor to the Company in the Change in Control) does not assume the Restricted Share Units, then the Restricted Share Units shall vest and be settled in Stock issued to the Grantee immediately prior to the Change in Control. For purposes of this Section 5.2, the terms “Good Reason” and “Cause” shall have the meanings set forth in Section 3.2.  

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 

11

 

 

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.Restricted Stock Units Award Subject to Recoupment Policy. The award of Restricted Stock Units is subject to the Tivity Health, Inc. Compensation Recoupment Policy (the “Policy”). The award of Restricted Stock Units, or any amount traceable to the award of Restricted 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 Restricted Stock Units subject to this Agreement shall be equitably and proportionately adjusted by the Committee in accordance with the Plan (including compliance with Section 409A of the Code, if applicable) 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 Restricted Stock Units prior to the delivery of the Distributed Shares, 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.

Section 11.Confidentiality, Non-Solicitation and Non-Compete. In the event Grantee breaches any of the confidentiality, non-solicitation or non-compete covenants set forth in the Nondisclosure and Noncompete Agreement attached to the Employment Agreement, the Restricted 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.

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 Restricted 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 Restricted 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

 

 

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:
	
Keira Krausz

	
(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 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 any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or its affiliates to the Grantee or for the Grantee’s benefit pursuant to the terms of this Agreement or otherwise ("Covered Payments") constitute parachute payments ("Parachute Payments") within the meaning of Section 280G of the Code and would, but for this Section 12.9(b) be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax 

13

 

 

imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the "Excise Tax"), then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to the Grantee of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to the Grantee if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under (i) above is less than the amount under (ii) above will the Covered Payments be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the "Reduced Amount"). "Net Benefit" shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes. The Covered Payments shall be reduced in a manner that maximizes the Grantee’s economic position. 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. Any determination required under this Section 12.9(b) shall be made in writing in good faith by an independent accounting firm selected by the Company that is reasonably acceptable to the Grantee (the "Accountants"), which shall provide detailed supporting calculations to the Company and the Grantee as requested by the Company or the Grantee. The Company and the Grantee shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 12.9(b). For purposes of making the calculations and determinations required by this Section 12.9(b), the Accountants may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Accountants' determinations shall be final and binding on the Company and the Grantee. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 12.9(b). It is possible that after the determinations and selections made pursuant to this Section 12.9(b) the Grantee will receive Covered Payments that are in the aggregate more than the amount provided under this Section 12.9(b) ("Overpayment") or less than the amount provided under this Section 12.9(b) ("Underpayment"). In the event that (A) the Accountants determine, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or the Grantee which the Accountants believe has a high probability of success, that an Overpayment has been made or (B) it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved that an Overpayment has been made, then the Grantee shall pay any such Overpayment to the Company.  In the event that (x) the Accountants, based upon controlling precedent or substantial authority, determine that an Underpayment has occurred or (y) a court of competent jurisdiction determines that an Underpayment has occurred, any such Underpayment will be paid promptly by the Company to or for the benefit of the Grantee.

(c)Notwithstanding anything herein to the contrary, to the maximum extent permitted by applicable law, the settlement of the Restricted Stock Units (including any dividend equivalent rights) to be made to the Grantee pursuant to this Agreement is 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, settlement of the Restricted Stock Units or any dividend equivalent rights may not so qualify, and in that case, the Committee shall administer the grant and settlement of such Restricted Stock Units and any dividend equivalent rights in strict compliance with Section 409A of the Code and this Agreement shall be interpreted in accordance therewith. 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 

14

 

 

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 Restricted Stock Units (and related dividend equivalent rights) constitutes a “separate payment” for purposes of Section 409A of the Code. If the Restricted Stock Units constitute deferred compensation and are subject to Section 409A of the Code, if a Release is required for settlement of Restricted 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 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.

 

[remainder of page intentionally left blank; signature page follows]

 

 

15

 

 

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

 

 

TIVITY HEALTH, INC.

 

Name: Donato Tramuto

Title:Chief Executive Officer

 

 

GRANTEE: Keira Krausz

 

Online Grant Acceptance Satisfies

Signature Requirement

 

 

EXHIBIT C-1

 

Restricted Stock Award Agreement

 

[Attached.]

 

 

 

TIVITY HEALTH, INC.

 

NUTRISYSTEM STOCK INCENTIVE PLAN

 

RESTRICTED STOCK AWARD AGREEMENT

 

 

 

This RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”), dated as of March 8, 2019, is delivered by Tivity Health, Inc., a Delaware corporation (“Tivity Health”), to Keira Krausz (the “Grantee”).

RECITALS

A.Nutrisystem, Inc., a Delaware corporation (the “Company”), Tivity Health and Sweet Acquisition, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Tivity Health (“Merger Sub”), entered into that certain Agreement and Plan of Merger, dated as of December 9, 2018 (the “Merger Agreement”), pursuant to which, as of the effective time of the merger contemplated thereby (the “Effective Time”), Merger Sub was merged with and into the Company, with the Company surviving the merger as a direct, wholly-owned subsidiary of Tivity Health.

B.The Second Amended and Restated Nutrisystem, Inc. 2008 Long-Term Incentive Plan, as in effect at the Effective Time (the “Prior Plan”), permitted the grant of stock awards in accordance with the terms and conditions of the Prior Plan.

C.Pursuant to Section 2.5(b) of the Merger Agreement, each award of restricted shares of the Company’s common stock that was outstanding immediately prior to the Effective Time (the “Nutrisystem Restricted Stock Award”) must be assumed by Tivity Health and converted into an award of restricted shares of Tivity Health’s common stock. 

D.The Company has assigned, and Tivity Health has assumed, the Prior Plan, which has been amended to replace, among other things, references to Company Stock with references to shares of Tivity Health’s common stock (the Prior Plan, as amended, the “Plan”).

E.Pursuant to that certain 2017 Restricted Stock Award Agreement dated January 3, 2017, (the “2017 RSA Agreement”) and 2018 Restricted Stock Award Agreement dated January 2, 2018 (the “2018 RSA Agreement”), Grantee was previously granted Nutrisystem Restricted Stock Awards of which 3,561 (the “2017 RSAs”) and 6,641 (the “2018 RSAs”) restricted shares of the Company’s common stock, respectively, were outstanding, immediately prior to the Effective Time.

F.This Agreement serves as evidence of the assumption of the 2017 RSAs and 2018 RSAs outstanding as of the Effective Time by Tivity Health. 

G.Capitalized terms used but not otherwise defined herein will have the meanings defined in the Prior Plan or the Plan, as applicable.

3

 

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:

1.Assumption and Conversion of Nutrisystem Restricted Stock Awards.  Subject to the terms and conditions set forth in this Agreement and the Plan, Tivity Health hereby assumes the 2017 RSAs and 2018 RSAs outstanding as of immediately prior to the Effective Time, and, in accordance with the terms of the Merger Agreement, such awards are hereby converted into an award of 20,894 shares of Tivity Health’s common stock subject to the restrictions set forth below and in the Plan (the “Restricted Stock”). Shares of Restricted Stock may not be transferred by the Grantee or subjected to any security interest until the shares have become vested pursuant to this Agreement and the Plan.

2.Vesting and Nonassignability of Restricted Stock.

a.Except as otherwise provided in Paragraph 2(b) below, the Restricted Stock shall become vested, and the restrictions described in Paragraph 2(e) shall lapse at such times set forth below (the “Vesting Date”), as long as the Grantee has continuously served as an employee of Tivity Health (or an affiliate of Tivity Health) from the Effective Time through the applicable Vesting Date: 

i.6,800 shares of Restricted Stock will vest in full on January 2, 2020; and

ii.7,293 shares of Restricted Stock will vest in full on January 3, 2020; and

iii.6,801 shares of Restricted Stock will vest in full on January 2, 2021.

The vesting of the shares subject to the Restricted Stock shall be cumulative, but shall not exceed 100% of the shares subject to the Restricted Stock.

b.If, prior to any applicable Vesting Date, the Grantee ceases to be employed by, or provide services to, Tivity Health and its affiliates on account of (i) the death of the Grantee, (ii) termination by Tivity Health because the Grantee becomes “totally disabled” (as defined below), (iii) a termination by Tivity Health without “cause” (as defined below), or (iv) the resignation by the Grantee with “good reason” (as defined below), then (i) if such termination occurs on or prior to March 7, 2020, 100% of the Restricted Stock will become vested as of the date of such cessation, and (ii) if such termination occurs after March 7, 2020, the next tranche of the Restricted Stock that would otherwise have vested under Paragraph 2(a) above (but for such cessation of employment or service) will become vested as of the date of such cessation; provided that, in its discretion, Tivity Health may condition such accelerated vesting on the execution by the Grantee or the Grantee’s estate (as applicable) of a release of claims in the form attached to the employment agreement between Tivity Health and Grantee dated as of March 8, 2019 (as may be amended from time to time, the “Employment Agreement”) (the “Release”) and on the Release becoming irrevocable within 30 days following the cessation of the Grantee’s employment or service.

c.For purposes of this Agreement: 

 

4

 

 

(i) “cause” and “good reason” will have the meanings set forth in the Employment Agreement; and

(ii) “totally disabled” means a condition entitling Grantee to benefits under any long term disability plan or policy maintained or funded by Tivity Health. 

 

d.Except as otherwise provided in this Paragraph 2, if the Grantee’s employment or service with Tivity Health and its affiliates terminates for any reason before the Restricted Stock is fully vested, the shares of Restricted Stock that are not then vested (or do not then become vested) shall be forfeited and must be immediately returned to Tivity Health, and Tivity Health shall pay to the Grantee, as consideration for the return of the non-vested shares, the lesser of $0.001 per share or the Fair Market Value of a share of Tivity Health’s common stock on the date of the forfeiture, for each returned share.

e.During the period before the shares of Restricted Stock vest (the “Restriction Period”), the non-vested shares of Restricted Stock may not be assigned, transferred, pledged or otherwise disposed of by the Grantee. Any attempt to assign, transfer, pledge or otherwise dispose of the shares of Restricted Stock contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the shares of Restricted Stock, shall be null, void and without effect.

3.Issuance of Shares.

a.Tivity Health will cause the Restricted Stock to be issued in the Grantee’s name either by book-entry registration or issuance of a stock certificate or certificates. While the Restricted Stock remains unvested, Tivity Health will cause an appropriate stop-transfer order to be issued and to remain in effect with respect to the Restricted Stock. As soon as practicable following the vesting of any of the Restricted Stock (and provided that appropriate arrangements have been made with Tivity Health for the satisfaction of any required tax withholding), Tivity Health will cause the stop-transfer order to be removed from an appropriate number of shares.

b.If any certificate is issued in respect of Restricted Stock, that certificate will include such legends as Tivity Health determines are appropriate and will be held in escrow by Tivity Health or its designee. In addition, the Grantee may be required to execute and deliver to Tivity Health or its designee a stock power with respect to the Restricted Stock. When any certificated Restricted Stock becomes vested, Tivity Health will cause a new certificate to be issued without that portion of the legend referencing the forfeiture conditions described in Paragraph 2 and will cause that new certificate to be delivered to the Grantee (provided that appropriate arrangements have been made with Tivity Health for the satisfaction of any required tax withholding).

c.During the Restriction Period, the Grantee shall receive any cash dividends or other distributions paid with respect to the shares of Restricted Stock and may vote the shares of Restricted Stock. In the event of a dividend or distribution payable in stock or other property or a reclassification, split up or similar event during the Restriction Period, the shares or other property issued or declared with respect to the non-vested shares of Restricted Stock shall be subject to the same forfeiture conditions and transfer restrictions as those non-vested shares.

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d.The obligation of Tivity Health to deliver shares upon the vesting of the Restricted Stock shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate to comply with relevant securities laws and regulations.

4.Dissolution or Liquidation; Sale or Merger. In the event of a dissolution, liquidation, sale or merger of Tivity Health or similar event or transaction, the Committee may take such actions with respect to the Restricted Stock as it deems appropriate and consistent with the Plan.

5.Agreement Subject to Plan Provisions. The terms of the Plan are incorporated herein by reference, and this Agreement shall be interpreted in accordance with the Plan in all respects. In the event of any contradiction, distinction or difference between this Agreement and the terms of the Plan, the terms of the Plan will control. The Agreement is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the shares of Restricted Stock, (c) changes in capitalization of Tivity Health, and (d) other requirements of applicable law. The Committee shall have the authority to interpret and construe this Agreement pursuant to the terms of the Plan, its decisions shall be conclusive as to any questions arising hereunder and the Grantee’s acceptance of the Restricted Stock is the Grantee’s agreement to be bound by the interpretations and decisions of the Committee with respect to this Agreement and the Plan.

6.Withholding. The Grantee shall be required to pay to Tivity Health or make other arrangements satisfactory to Tivity Health to provide for the payment of, any federal, state, local or other taxes that Tivity Health is required to withhold with respect to the grant and vesting of the Restricted Stock. Notwithstanding anything to the contrary in the Plan or this Agreement, until the Grantee has satisfied Tivity Health’s withholding obligation with respect to the shares of Restricted Stock, the Grantee shall not have any rights to sell or transfer any shares that have become vested pursuant to Paragraph 2.

7.Restrictions on Sale or Transfer of Shares.

a.The Grantee will not sell, transfer, pledge, donate, assign, mortgage, hypothecate or otherwise encumber the shares of Restricted Stock underlying this Agreement unless the shares are registered under the 1933 Act, or Tivity Health is given an opinion of counsel reasonably acceptable to Tivity Health that such registration is not required under the 1933 Act.

b.In consideration for the Restricted Stock, the Grantee agrees to be bound by Tivity Health’s policies as in effect from time to time, including, but not limited to, Tivity Health’s Code of Business Conduct, and understands that there may be certain times during the year that the Grantee will be prohibited from selling, transferring, donating, assigning, mortgaging, hypothecating or otherwise encumbering Tivity Health’s securities.

8.No Employment or Other Rights. This Agreement shall not confer upon the Grantee any right to be retained by or in the employ or service of Tivity Health and shall not interfere in any way with the right of Tivity Health to terminate the Grantee’s employment or service at any 

6

 

 

time. Except to the extent expressly set forth in the Employment Agreement, the right of Tivity Health to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved.

9.Confidential Information, Non-Competition and Non-Solicitation. The Grantee affirms her obligations under the Nondisclosure and Noncompete Agreement, dated as of March 8, 2019. 

10.Assignment by Tivity Health. The rights and protections of Tivity Health hereunder shall extend to any successors or assigns of Tivity Health and to Tivity Health’s parents, subsidiaries, and affiliates. This Agreement may be assigned by Tivity Health without the Grantee’s consent.

11.Effect on Other Benefits. The value of the shares of Restricted Stock subject hereto shall not be considered eligible earnings for purposes of any other plan maintained by Tivity Health, and such value shall not be considered part of the Grantee’s compensation for purposes of determining or calculating other benefits that are based on compensation, such as life insurance.

12.Applicable Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

13.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 Tivity Health:   Tivity Health, Inc.

   701 Cool Springs Blvd

   Franklin, Tennessee 37067

 

		
	
To the Grantee:
	
Keira Krausz

	
(Grantee name and address)
	
Address on File

	
 
	
at Tivity Health

	
 
	
 

14.Entire Agreement. This Agreement and the Plan contain the entire understanding and agreement between Tivity Health and the Grantee concerning the Restricted Stock provided for herein, and supersede any prior or contemporaneous negotiations and understandings, including the 2017 RSA Agreement and the 2018 RSA Agreement. Tivity Health and the Grantee have made no promises, agreements, conditions, or understandings relating to the Restricted Stock, either orally or in writing, that are not included in this Agreement or the Plan.

15.Amendment. This Agreement cannot be changed, modified, extended or terminated except upon written amendment executed by the parties hereto. Any such written amendment must be approved by the Committee to be effective against Tivity Health.

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

17.Consent to Electronic Delivery. The Grantee hereby authorizes Tivity Health to deliver electronically any prospectuses or other documentation related to this Agreement, the Plan and any other compensation or benefit plan or arrangement in effect from time to time (including, without limitation, reports, proxy statements or other documents that are required to be delivered to participants in such plans or arrangements pursuant to federal or state laws, rules or regulations). For this purpose, electronic delivery will include, without limitation, delivery by means of e-mail or e-mail notification that such documentation is available on Tivity Health’s intranet site. Upon written request, Tivity Health will provide to the Grantee a paper copy of any document also delivered to the Grantee electronically. The authorization described in this paragraph may be revoked by the Grantee at any time by written notice to Tivity Health.

[Remainder of page intentionally left blank; signature page follows]

 

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

 

 

TIVITY HEALTH, INC.

 

Name: Donato Tramuto

Title:Chief Executive Officer

 

 

 

GRANTEE: Keira Krausz 

 

Online Acceptance Satisfies

Signature Requirement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT C-2

 

2016 Special Restricted Stock Unit Award Agreement

 

[Attached.]

 

 

 

TIVITY HEALTH, INC.

 

NUTRISYSTEM STOCK INCENTIVE PLAN

 

2016 RESTRICTED STOCK UNIT AWARD AGREEMENT

 

 

This 2016 RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of March 8, 2019, is delivered by Tivity Health, Inc., a Delaware corporation (“Tivity Health”), to Keira Krausz (the “Grantee”).

RECITALS

A.Nutrisystem, Inc., a Delaware corporation (the “Company”), Tivity Health, and Sweet Acquisition, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Tivity Health (“Merger Sub”), entered into that certain Agreement and Plan of Merger, dated as of December 9, 2018 (the “Merger Agreement”), pursuant to which, as of the effective time of the merger contemplated thereby (the “Effective Time”), Merger Sub was merged with and into the Company, with the Company surviving the merger as a direct, wholly-owned subsidiary of Tivity Health.

B.The Second Amended and Restated Nutrisystem, Inc. 2008 Long-Term Incentive Plan, as in effect at the Effective Time (the “Prior Plan”), permitted the grant of performance-based restricted stock units in accordance with the terms and conditions of the Prior Plan.

C.Pursuant to Section 2.5(c) of the Merger Agreement, each grant of performance-based restricted stock units (“PRSUs”) with respect to shares of the Company’s common stock that was outstanding immediately prior to the Effective Time must be assumed by Tivity Health and converted into an award of time-vesting Restricted Stock Units (as hereinafter defined) of Tivity Health. 

D.The Company has assigned, and Tivity Health has assumed, the Prior Plan, which has been amended to replace, among other things, references to Company Stock with references to shares of Tivity Health’s common stock (the Prior Plan, as amended, the “Plan”).

E.Pursuant to that certain 2016 Special Performance-Based Restricted Stock Unit Grant Agreement (the “2016 Special PRSU Agreement”), dated December 30, 2016 (the “Date of Grant”), Grantee was granted an award of performance-based restricted stock units (“Nutrisystem 2016 Special PRSU Award”), 20,202 of which were outstanding immediately prior to the Effective Time (assuming maximum performance as set forth in the 2016 Special PRSU Agreement), and such 20,202 PRSUs had $34,343.40 of dividend equivalents accrued with respect thereto as of immediately prior to the Effective Time (“Accrued Dividend Equivalents”).

F.This Agreement serves as evidence of the assumption of the Nutrisystem 2016 Special PRSU Award outstanding as of the Effective Time by Tivity Health. 

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G.Except as otherwise defined in this Agreement, capitalized terms used herein shall have the meanings set forth in the Prior Plan or the Plan, as applicable.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:

1.Assumption and Conversion of the Nutrisystem 2016 Special PRSU Award.  Subject to the terms and conditions set forth in this Agreement and the Plan, Tivity Health hereby assumes the Nutrisystem 2016 Special PRSU Award outstanding as of immediately prior to the Effective Time, and, in accordance with the terms of the Merger Agreement, such award is hereby converted into an award of 41,374 restricted stock units (the “Restricted Stock Units”) of Tivity Health. Each Restricted Stock Unit represents the right to receive one share of Tivity Health’s common stock, $.001 par value per share (the “Stock”), subject to the restrictions set forth below and in the Plan.

	
 
	
2.
	
Vesting.  

a.If the Grantee remains in continuous service with Tivity Health through December 31, 2019, the Restricted Stock Units shall vest in full on such date.

b.If, prior to December 31, 2019, the Grantee ceases to be employed by, or provide services to, Tivity Health and its affiliates on account of (i) the death of the Grantee, (ii) termination by Tivity Health because the Grantee suffers a “disability” (as defined below), (iii) termination by Tivity Health without “cause” (as defined below), or (iv) the resignation by the Grantee with “good reason” (as defined below), 100% of the Restricted Stock Units that are not yet vested will become vested as of the date of such cessation; provided that, in its discretion, Tivity Health may condition such accelerated vesting on the execution by the Grantee or the Grantee’s estate (as applicable) of a release of claims in the form attached to the employment agreement between Tivity Health and Grantee dated as of March 8, 2019 (as may be amended from time to time, the “Employment Agreement”) (the “Release”) and on the Release becoming irrevocable within 30 days following the cessation of the Grantee’s employment or service.

c.For purposes of this Agreement “cause,” “good reason” and “disability” will have the meanings set forth in the Employment Agreement.

d.Except as otherwise provided in this Paragraph 2, if the Grantee’s employment or service with Tivity Health and its affiliates terminates for any reason before any of the Restricted Stock Units are fully vested, the Restricted Stock Units that are not then vested shall be forfeited and the Grantee shall not have any further rights with respect to such Restricted Stock Units. 

3.Time and Form of Payment with Respect to Restricted Stock Units. Upon vesting under Paragraph 2(a) or 2(b), Tivity Health shall issue one share of Stock to the Grantee in settlement of each vested Restricted Stock Unit (the “Distributed Shares”).

4.Dividend Equivalents. At the same time that the Restricted Stock Units are converted to shares of Stock and distributed to the Grantee as set forth in Paragraph 3 above, the Company 

4

 

 

shall pay to the Grantee a lump sum cash payment equal to the sum of the dividends that would have been payable between the date hereof and the date of such distribution with respect to a number of shares of Stock equal to the number of shares then distributable (equitably adjusted by the Committee to take into account any stock splits, reverse splits, mergers, recapitalizations or similar events occurring during such period), plus the Accrued Dividend Equivalents. If or to the extent the Restricted Stock Units are forfeited, dividend equivalent payments will not be made under this Paragraph 4.

5.Change of Control. In the event of a Change of Control prior to vesting of any Restricted Stock Units, the Committee may in its discretion take such actions with respect to such Restricted Stock Units as it deems appropriate, provided that such actions do not cause the settlement of any Restricted Stock Units to be subject to any additional tax under Section 409A of the Code.

6.Acknowledgment by Grantee. By accepting the Restricted Stock Units, the Grantee acknowledges that with respect to any right to distribution and payment pursuant to this Agreement, the Grantee is and shall be an unsecured general creditor of Tivity Health without any preference as against other unsecured general creditors of Tivity Health, and the Grantee hereby covenants for herself, and anyone at any time claiming through or under the Grantee, not to claim any such preference, and hereby disclaims and waives any such preference which may at any time be at issue, to the fullest extent permitted by applicable law. The Grantee also hereby agrees to be bound by the terms and conditions of the Plan and this Agreement. The Grantee further agrees to be bound by the determinations and decisions of the Committee with respect to this Agreement and the Plan and the Grantee’s rights to benefits under this Agreement and the Plan, and agrees that all such determinations and decisions of the Committee shall be binding on the Grantee, her beneficiaries and any other person having or claiming an interest under this Agreement and the Plan on behalf of the Grantee.

7.Restrictions on Issuance or Transfer of Shares of Tivity Health’s Common Stock.

a.The obligation of Tivity Health to deliver shares of Stock hereunder shall be subject to the condition that if at any time the Committee shall determine in its discretion that the listing, registration or qualification of the shares of Stock upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance of shares of Stock pursuant to this Agreement, the shares of Stock may not be issued in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The issuance of shares of Stock and the payment of cash to the Grantee pursuant to this Agreement, if any, are subject to any applicable taxes and other laws or regulations of the United States and of any state having jurisdiction thereof.

b.In consideration for the Restricted Stock Units, the Grantee agrees to be bound by Tivity Health’s policies as in effect from time to time, including, but not limited to, Tivity Health’s Code of Business Conduct and Tivity Health’s Compensation Recoupment Policy, and understands that there may be certain times during the year that the Grantee will be prohibited from selling, transferring, donating, assigning, mortgaging, hypothecating or otherwise encumbering Tivity Health’s securities.

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8.Agreement Subject to Plan Provisions. The terms of the Plan are incorporated herein by reference, and this Agreement shall be interpreted in accordance with the Plan in all respects. In the event of any contradiction, distinction or difference between this Agreement and the terms of the Plan, the terms of the Plan will control. This Agreement is subject to the interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the shares of Stock, (c) changes in capitalization of Tivity Health, and (d) other requirements of applicable law. The Committee shall have the authority to interpret and construe this Agreement pursuant to the terms of the Plan, its decisions shall be conclusive as to any questions arising hereunder and the Grantee’s acceptance of the Restricted Stock Units is the Grantee’s agreement to be bound by the interpretations and decisions of the Committee with respect to this Agreement and the Plan.

9.No Rights as Stockholder. The Grantee shall not have any rights as a stockholder of Tivity Health, including the right to any cash dividends (except as provided in Paragraph 4 hereof) or the right to vote, with respect to any Restricted Stock Units. 

10.No Rights to Continued Employment or Service. This Agreement shall not confer upon the Grantee any right to be retained by or in the employ or service of Tivity Health and shall not interfere in any way with the right of Tivity Health to terminate the Grantee’s employment or service at any time. Except to the extent expressly set forth in the Employment Agreement, the right of Tivity Health to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved.

11.Confidential Information, Non-Competition and Non-Solicitation. The Grantee affirms her obligations under the Nondisclosure and Noncompete Agreement, dated as of March 8, 2019.

12.Assignment and Transfers. No Restricted Stock Units or dividend equivalents provided for in this Agreement may be transferred, assigned, pledged, or encumbered by the Grantee and the Restricted Stock Units and dividend equivalents shall be distributed during the lifetime of the Grantee only for the benefit of the Grantee. Any attempt to transfer, assign, pledge, or encumber the Restricted Stock Units or dividend equivalents provided for in this Agreement by the Grantee shall be null, void and without effect. The rights and protections of Tivity Health hereunder shall extend to any successors or assigns of Tivity Health and to Tivity Health’s parents, subsidiaries, and affiliates. This Agreement may be assigned by Tivity Health without the Grantee’s consent.

13.Withholding. The Grantee shall be required to pay to Tivity Health, or make other arrangements satisfactory to Tivity Health to provide for the payment of, any federal, state, local or other taxes that Tivity Health is required to withhold with respect to the grant, vesting and distribution of the Restricted Stock Units and dividend equivalents. Notwithstanding anything to the contrary herein or the Plan, until the Grantee has satisfied Tivity Health’s withholding obligation with respect to this Agreement, the Grantee shall not have any rights to sell or transfer any shares of Stock that have been distributed to the Grantee pursuant to this Agreement.

14.Effect on Other Benefits. The value of the Restricted Stock Units and the shares of Stock and dividend equivalents potentially distributable hereunder shall not be considered eligible earnings for purposes of any other plan maintained by Tivity Health, and such value shall not be 

6

 

 

considered part of the Grantee’s compensation for purposes of determining or calculating other benefits that are based on compensation, such as life insurance.

15.Applicable Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

16.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 Tivity Health:   Tivity Health, Inc.

   701 Cool Springs Blvd

   Franklin, Tennessee 37067

 

		
	
To the Grantee:
	
Keira Krausz 

	
(Grantee name and address)
	
Address on File

	
 
	
at Tivity Health

	
 
	
 

17.Section 409A. The amounts payable under this Agreement are intended to be compliant with the requirements of Section 409A of the Code and this Agreement should be interpreted accordingly. If required to avoid the imposition of tax under Section 409A of the Code, any distribution under Paragraph 3 will be delayed until the date that is six months and one day following the Grantee’s separation from service (or, if earlier, the Grantee’s death).

18.Entire Agreement. This Agreement and the Plan contain the entire understanding and agreement between Tivity Health and the Grantee concerning the Restricted Stock Units provided for herein, and supersede any prior or contemporaneous negotiations and understandings, including the 2016 Special PRSU Agreement. Tivity Health and the Grantee have made no promises, agreements, conditions, or understandings relating to the Restricted Stock Units, either orally or in writing, that are not included in this Agreement or the Plan.

19.Amendment. This Agreement cannot be changed, modified, extended or terminated except upon written amendment executed by the parties hereto. Any such written amendment must be approved by the Committee to be effective against Tivity Health.

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

21.Consent to Electronic Delivery. The Grantee hereby authorizes Tivity Health to deliver electronically any prospectuses or other documentation related to this Agreement, the Plan and any other compensation or benefit plan or arrangement in effect from time to time (including, without limitation, reports, proxy statements or other documents that are required to be delivered to participants in such plans or arrangements pursuant to federal or state laws, rules or regulations). For this purpose, electronic delivery will include, without limitation, delivery by 

7

 

 

means of e-mail or e-mail notification that such documentation is available on Tivity Health’s intranet site. Upon written request, Tivity Health will provide to the Grantee a paper copy of any document also delivered to the Grantee electronically. The authorization described in this paragraph may be revoked by the Grantee at any time by written notice to Tivity Health.

[Remainder of page intentionally left blank; signature page follows]

 

 

 

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

 

 

TIVITY HEALTH, INC.

 

Name: Donato Tramuto

Title:Chief Executive Officer

 

 

GRANTEE: Keira Krausz

 

Online Acceptance Satisfies

Signature Requirement 

 

 

 

 

EXHIBIT C-3

 

2017 Restricted Stock Unit Award Agreement

 

[Attached.]

 

 

 

 

TIVITY HEALTH, INC.

 

NUTRISYSTEM STOCK INCENTIVE PLAN

 

2017 RESTRICTED STOCK UNIT AWARD AGREEMENT

 

This 2017 RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of March 8, 2019, is delivered by Tivity Health, Inc., a Delaware corporation (“Tivity Health”), to Keira Krausz (the “Grantee”).

RECITALS

A.Nutrisystem, Inc., a Delaware corporation (the “Company”), Tivity Health, and Sweet Acquisition, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Tivity Health (“Merger Sub”), entered into that certain Agreement and Plan of Merger, dated as of December 9, 2018 (the “Merger Agreement”), pursuant to which, as of the effective time of the merger contemplated thereby (the “Effective Time”), Merger Sub was merged with and into the Company, with the Company surviving the merger as a direct, wholly-owned subsidiary of Tivity Health.

B.The Second Amended and Restated Nutrisystem, Inc. 2008 Long-Term Incentive Plan, as in effect at the Effective Time (the “Prior Plan”), permitted the grant of performance-based restricted stock units in accordance with the terms and conditions of the Prior Plan.

C.Pursuant to Section 2.5(c) of the Merger Agreement, each grant of performance-based restricted stock units (“PRSUs”) with respect to shares of the Company’s common stock that was outstanding immediately prior to the Effective Time must be assumed by Tivity Health and converted into an award of time-vesting Restricted Stock Units (as hereinafter defined) of Tivity Health. 

D.The Company has assigned, and Tivity Health has assumed, the Prior Plan, which has been amended to replace, among other things, references to Company Stock with references to shares of Tivity Health’s common stock (the Prior Plan, as amended, the “Plan”).

E.Pursuant to that certain 2017 Performance-Based Restricted Stock Unit Grant Agreement (the “2017 PRSU Agreement”), effective as of January 2, 2017 (the “Date of Grant”), Grantee was granted an award of performance-based restricted stock units (“Nutrisystem 2017 PRSU Award”), 21,368 of which were outstanding immediately prior to the Effective Time (assuming actual performance as set forth in the 2017 PRSU Agreement), and such 21,368 PRSUs had $36,325.60 of dividend equivalents accrued with respect thereto as of immediately prior to the Effective Time (“Accrued Dividend Equivalents”).

F.This Agreement serves as evidence of the assumption of the Nutrisystem 2017 PRSU Award outstanding as of the Effective Time by Tivity Health. 

G.Except as otherwise defined in this Agreement, capitalized terms used herein shall have the meanings set forth in the Prior Plan or the Plan, as applicable.

3

 

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:

1.Assumption and Conversion of the Nutrisystem 2017 PRSU Award.  Subject to the terms and conditions set forth in this Agreement and the Plan, Tivity Health hereby assumes the Nutrisystem 2017 PRSU Award outstanding as of immediately prior to the Effective Time, and, in accordance with the terms of the Merger Agreement, such award is hereby converted into an award of 43,762 restricted stock units (the “Restricted Stock Units”) of Tivity Health. Each Restricted Stock Unit represents the right to receive one share of Tivity Health’s common stock, $.001 par value per share (the “Stock”), subject to the restrictions set forth below and in the Plan.

	
 
	
2.
	
Vesting.  

a.If the Grantee remains in continuous service with Tivity Health through December 31, 2019, the Restricted Stock Units shall vest in full on such date.

b.If the Grantee’s service with Tivity Health ceases prior to December 31, 2019 due to the Grantee’s death or “total disability” (as defined below), the Grantee shall become vested in a pro rata portion of the Restricted Stock Units. The pro rata portion shall be (i) the Restricted Stock Units, multiplied by (ii) a fraction, (x) the numerator of which is the number of days of continuous service performed by the Grantee for Tivity Health or the Company during the period beginning January 1, 2017 and ending on December 31, 2019 (the “Service Period”), and (y) the denominator of which is 1095, subject to the Grantee’s execution and delivery of a general release of claims against Tivity Health and its affiliates in the form attached to the employment agreement between Tivity Health and Grantee dated as of March 8, 2019 (as may be amended from time to time, the “Employment Agreement”) (the “Release”) and on the Release becoming irrevocable within 45 days following the Grantee’s cessation of service. Any Restricted Stock Units that do not vest in connection with such death or total disability shall be forfeited as of the date the Grantee’s service ceases, and the Grantee shall not have any further rights with respect to those Restricted Stock Units.

c.If the Grantee’s service with Tivity Health ceases prior to December 31, 2019 due to (i) a termination by Tivity Health without “cause” (as defined below) or (ii) a resignation by the Grantee with “good reason” (as defined below), then the Grantee shall become vested in a pro rata portion of the Restricted Stock Units. The pro rata portion shall be (i) the Restricted Stock Units, multiplied by (ii) a fraction, (1) the numerator of which is the number of days of continuous service performed by the Grantee for Tivity Health or the Company during the Service Period, and (2) the denominator of which is 1095, subject to the Grantee’s execution and delivery of a general release of claims against Tivity Health and its affiliates in a form prescribed by Tivity Health and subject further to that release becoming irrevocable within 45 days following the Grantee’s cessation of service. Any Restricted Stock Units that cannot vest because of the pro-ration described above or due to a failure to satisfy the release condition described above will be forfeited as of the date the Grantee’s service ceases, and the Grantee shall not have any further rights with respect to those Restricted Stock Units. 

d.Except as otherwise provided in Paragraph 2(d) above, if the Grantee’s service with Tivity Health ceases prior to December 31, 2019 due to a resignation by the Grantee without “good reason” (other than a resignation by the Grantee in anticipation of a termination 

4

 

 

for “cause”), then the Grantee shall become vested in a pro rata portion of the Restricted Stock Units. The pro rata portion shall be (i) the Restricted Stock Units, multiplied by (ii) a fraction, (1) the numerator of which is the number of full (but not partial) calendar years of continuous service performed by the Grantee for Tivity Health or the Company during the Service Period and (2) the denominator of which is three, subject to the Grantee’s execution and delivery of a general release of claims against Tivity Health and its affiliates in a form prescribed by Tivity Health and subject further to that release becoming irrevocable within 45 days following the Grantee’s cessation of service. Any Restricted Stock Units that cannot vest because of the pro-ration described above or due to a failure to satisfy the release condition described above will be forfeited as of the date the Grantee’s service ceases, and the Grantee shall not have any further rights with respect to those Restricted Stock Units.

e.Notwithstanding any other provision of this Agreement, if prior to the payment date described below in Paragraph 3, the Grantee’s employment or service with Tivity Health ceases due to a termination by Tivity Health for “cause” (or due to a resignation by the Grantee in anticipation of a termination for “cause”), all of the Restricted Stock Units shall be immediately forfeited and the Grantee shall not have any further rights with respect to this Grant. 

f.For purposes of this Agreement:

i.“cause,” and “good reason” will have the meanings set forth in the Employment Agreement.

ii.“total disability” means a condition entitling the Grantee to benefits under any long-term disability plan or policy maintained or funded by Tivity Health.

3.Time and Form of Payment with Respect to Restricted Stock Units. The Grantee shall receive a distribution with respect to vested Restricted Stock Units within two and one-half months following December 31, 2019. The Restricted Stock Units will be distributed in shares of Stock, with each vested Restricted Stock Unit representing the right to receive one share of Stock (equitably adjusted by the Committee in accordance with Section 5(d) of the Plan or any successor provision).

4.Dividend Equivalents. At the same time that the Restricted Stock Units are converted to shares of Stock and distributed to the Grantee as set forth in Paragraph 3 above, the Company shall pay to the Grantee a lump sum cash payment equal to the sum of the dividends that would have been payable between the date hereof and the date of such distribution with respect to a number of shares of Stock equal to the number of shares then distributable (equitably adjusted by the Committee to take into account any stock splits, reverse splits, mergers, recapitalizations or similar events occurring during such period), plus the Accrued Dividend Equivalents. If or to the extent the Restricted Stock Units are forfeited, dividend equivalent payments will not be made under this Paragraph 4.

5.Change of Control. In the event of a Change of Control prior to settlement of this award, the Committee may in its discretion: (a) accelerate settlement of this Grant, to the extent consistent with Treas. Reg. § 1.409A~3(j)(4)(ix) or any successor provision and/or (b) take such other actions as it deems appropriate with respect to this Grant, provided that such other actions do not cause this award to be subject to tax under Section 409A of the Code.

5

 

 

6.Acknowledgment by Grantee. By accepting the Restricted Stock Units, the Grantee acknowledges that with respect to any right to distribution and payment pursuant to this Agreement, the Grantee is and shall be an unsecured general creditor of Tivity Health without any preference as against other unsecured general creditors of Tivity Health, and the Grantee hereby covenants for herself, and anyone at any time claiming through or under the Grantee, not to claim any such preference, and hereby disclaims and waives any such preference which may at any time be at issue, to the fullest extent permitted by applicable law. The Grantee also hereby agrees to be bound by the terms and conditions of the Plan and this Agreement. The Grantee further agrees to be bound by the determinations and decisions of the Committee with respect to this Agreement and the Plan and the Grantee’s rights to benefits under this Agreement and the Plan, and agrees that all such determinations and decisions of the Committee shall be binding on the Grantee, her beneficiaries and any other person having or claiming an interest under this Agreement and the Plan on behalf of the Grantee.

7.Restrictions on Issuance or Transfer of Shares of Tivity Health’s Common Stock.

a.The obligation of Tivity Health to deliver shares of Stock hereunder shall be subject to the condition that if at any time the Committee shall determine in its discretion that the listing, registration or qualification of the shares of Stock upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance of shares of Stock pursuant to this Agreement, the shares of Stock may not be issued in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The issuance of shares of Stock and the payment of cash to the Grantee pursuant to this Agreement, if any, are subject to any applicable taxes and other laws or regulations of the United States and of any state having jurisdiction thereof.

b.The Grantee hereby (i) agrees to be bound by Tivity Health’s policies as in effect from time to time, including, but not limited to, Tivity Health’s Code of Business Conduct and Tivity Health’s Compensation Recoupment Policy, and (ii) understands that there may be certain times during the year that the Grantee will be prohibited from selling, transferring, donating, assigning, mortgaging, hypothecating or otherwise encumbering Tivity Health’s securities.

6

 

 

8.Agreement Subject to Plan Provisions. The terms of the Plan are incorporated herein by reference, and this Agreement shall be interpreted in accordance with the Plan in all respects. In the event of any contradiction, distinction or difference between this Agreement and the terms of the Plan, the terms of the Plan will control. This Agreement is subject to the interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the shares of Stock, (c) changes in capitalization of Tivity Health, and (d) other requirements of applicable law. The Committee shall have the authority to interpret and construe this Agreement pursuant to the terms of the Plan, its decisions shall be conclusive as to any questions arising hereunder and the Grantee’s acceptance of the Restricted Stock Units is the Grantee’s agreement to be bound by the interpretations and decisions of the Committee with respect to this Agreement and the Plan.

9.No Rights as Stockholder. The Grantee shall not have any rights as a stockholder of Tivity Health, including the right to any cash dividends (except as provided in Paragraph 4 hereof) or the right to vote, with respect to any Restricted Stock Units. 

10.No Rights to Continued Employment or Service. This Agreement shall not confer upon the Grantee any right to be retained by or in the employ or service of Tivity Health and shall not interfere in any way with the right of Tivity Health to terminate the Grantee’s employment or service at any time. Except to the extent expressly set forth in the Employment Agreement, the right of Tivity Health to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved.

11.Confidential Information, Non-Competition and Non-Solicitation. The Grantee affirms her obligations under the Nondisclosure and Noncompete Agreement, dated as of March 8, 2019.

12.Assignment and Transfers. No Restricted Stock Units or dividend equivalents provided for in this Agreement may be transferred, assigned, pledged, or encumbered by the Grantee and the Restricted Stock Units and dividend equivalents shall be distributed during the lifetime of the Grantee only for the benefit of the Grantee. Any attempt to transfer, assign, pledge, or encumber the Restricted Stock Units or dividend equivalents provided for in this Agreement by the Grantee shall be null, void and without effect. The rights and protections of Tivity Health hereunder shall extend to any successors or assigns of Tivity Health and to Tivity Health’s parents, subsidiaries, and affiliates. This Agreement may be assigned by Tivity Health without the Grantee’s consent.

13.Withholding. The Grantee shall be required to pay to Tivity Health, or make other arrangements satisfactory to Tivity Health to provide for the payment of, any federal, state, local or other taxes that Tivity Health is required to withhold with respect to the grant, vesting and distribution of the Restricted Stock Units and dividend equivalents. Notwithstanding anything to the contrary herein or the Plan, until the Grantee has satisfied Tivity Health’s withholding obligation with respect to this Agreement, the Grantee shall not have any rights to sell or transfer any shares of Stock that have been distributed to the Grantee pursuant to this Agreement.

14.Effect on Other Benefits. The value of the Restricted Stock Units and the shares of Stock and dividend equivalents potentially distributable hereunder shall not be considered eligible earnings for purposes of any other plan maintained by Tivity Health, and such value shall not be 

7

 

 

considered part of the Grantee’s compensation for purposes of determining or calculating other benefits that are based on compensation, such as life insurance.

15.Applicable Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

16.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 Tivity Health:   Tivity Health, Inc.

   701 Cool Springs Blvd

   Franklin, Tennessee 37067

 

		
	
To the Grantee:
	
Keira Krausz 

	
(Grantee name and address)
	
Address on File

	
 
	
at Tivity Health

	
 
	
 

17.Section 409A. The amounts payable under this Agreement are intended to be compliant with the requirements of Section 409A of the Code and this Agreement should be interpreted accordingly. If required to avoid the imposition of tax under Section 409A of the Code, any distribution under Paragraph 3 will be delayed until the date that is six months and one day following the Grantee’s separation from service (or, if earlier, the Grantee’s death).

18.Entire Agreement. This Agreement and the Plan contain the entire understanding and agreement between Tivity Health and the Grantee concerning the Restricted Stock Units provided for herein, and supersede any prior or contemporaneous negotiations and understandings, including the 2017 PRSU Agreement. Tivity Health and the Grantee have made no promises, agreements, conditions, or understandings relating to the Restricted Stock Units, either orally or in writing, that are not included in this Agreement or the Plan.

19.Amendment. This Agreement cannot be changed, modified, extended or terminated except upon written amendment executed by the parties hereto. Any such written amendment must be approved by the Committee to be effective against Tivity Health.

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

21.Consent to Electronic Delivery. The Grantee hereby authorizes Tivity Health to deliver electronically any prospectuses or other documentation related to this Agreement, the Plan and any other compensation or benefit plan or arrangement in effect from time to time (including, without limitation, reports, proxy statements or other documents that are required to be delivered to participants in such plans or arrangements pursuant to federal or state laws, rules or regulations). For this purpose, electronic delivery will include, without limitation, delivery by 

8

 

 

means of e-mail or e-mail notification that such documentation is available on Tivity Health’s intranet site. Upon written request, Tivity Health will provide to the Grantee a paper copy of any document also delivered to the Grantee electronically. The authorization described in this paragraph may be revoked by the Grantee at any time by written notice to Tivity Health.

[Remainder of page intentionally left blank; signature page follows]

 

 

 

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

 

 

TIVITY HEALTH, INC.

 

Name: Donato Tramuto

Title:Chief Executive Officer

 

 

GRANTEE: Keira Krausz

 

Online Acceptance Satisfies

Signature Requirement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT C-4

 

2018 Restricted Stock Unit Award Agreement

 

[Attached.]

 

11

 

 

TIVITY HEALTH, INC.

 

NUTRISYSTEM STOCK INCENTIVE PLAN

 

2018 RESTRICTED STOCK UNIT AWARD AGREEMENT

 

 

This 2018 RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of March 8, 2019, is delivered by Tivity Health, Inc., a Delaware corporation (“Tivity Health”), to Keira Krausz (the “Grantee”).

RECITALS

A.Nutrisystem, Inc., a Delaware corporation (the “Company”), Tivity Health, and Sweet Acquisition, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Tivity Health (“Merger Sub”), entered into that certain Agreement and Plan of Merger, dated as of December 9, 2018 (the “Merger Agreement”), pursuant to which, as of the effective time of the merger contemplated thereby (the “Effective Time”), Merger Sub was merged with and into the Company, with the Company surviving the merger as a direct, wholly-owned subsidiary of Tivity Health.

B.The Second Amended and Restated Nutrisystem, Inc. 2008 Long-Term Incentive Plan, as in effect at the Effective Time (the “Prior Plan”), permitted the grant of performance-based restricted stock units in accordance with the terms and conditions of the Prior Plan.

C.Pursuant to Section 2.5(c) of the Merger Agreement, each grant of performance-based restricted stock units (“PRSUs”) with respect to shares of the Company’s common stock that was outstanding immediately prior to the Effective Time must be assumed by Tivity Health and converted into an award of time-vesting Restricted Stock Units (as hereinafter defined) of Tivity Health. 

D.The Company has assigned, and Tivity Health has assumed, the Prior Plan, which has been amended to replace, among other things, references to Company Stock with references to shares of Tivity Health’s common stock (the Prior Plan, as amended, the “Plan”).

E.Pursuant to that certain 2018 Performance-Based Restricted Stock Unit Grant Agreement (the “2018 PRSU Agreement”), effective as of January 2, 2018 (the “Date of Grant”), Grantee was granted an award of performance-based restricted stock units (“Nutrisystem 2018 PRSU Award”), 19,924 of which were outstanding immediately prior to the Effective Time (assuming maximum performance as set forth in the 2018 PRSU Agreement), and such 19,924 PRSUs had $19,924.00 of dividend equivalents accrued with respect thereto as of immediately prior to the Effective Time (“Accrued Dividend Equivalents”).

F.This Agreement serves as evidence of the assumption of the Nutrisystem 2018 PRSU Award outstanding as of the Effective Time by Tivity Health. 

G.Except as otherwise defined in this Agreement, capitalized terms used herein shall have the meanings set forth in the Prior Plan or the Plan, as applicable.

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NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:

1.Assumption and Conversion of the Nutrisystem 2018 PRSU Award.  Subject to the terms and conditions set forth in this Agreement and the Plan, Tivity Health hereby assumes the Nutrisystem 2018 PRSU Award outstanding as of immediately prior to the Effective Time, and, in accordance with the terms of the Merger Agreement, such award is hereby converted into an award of 40,804 restricted stock units (the “Restricted Stock Units”) of Tivity Health. Each Restricted Stock Unit represents the right to receive one share of Tivity Health’s common stock, $.001 par value per share (the “Stock”), subject to the restrictions set forth below and in the Plan.

	
2.
	
Vesting.  

a.If the Grantee remains in continuous service with Tivity Health through December 31, 2020, the Restricted Stock Units shall vest in full on such date.

b.If the Grantee’s service with Tivity Health ceases prior to December 31, 2020 due to the Grantee’s death or “total disability” (as defined below), the Grantee shall become vested in a pro rata portion of the Restricted Stock Units. The pro rata portion shall be (i) the Restricted Stock Units, multiplied by (ii) a fraction, (x) the numerator of which is the number of days of continuous service performed by the Grantee for Tivity Health or the Company during the period beginning January 1, 2018 and ending on December 31, 2020 (the “Service Period”), and (y) the denominator of which is 1095, subject to the Grantee’s execution and delivery of a general release of claims against Tivity Health and its affiliates in the form attached to the employment agreement between Tivity Health and Grantee dated as of March 8, 2019 (as may be amended from time to time, the “Employment Agreement”) (the “Release”) and on the Release becoming irrevocable within 45 days following the Grantee’s cessation of service. Any Restricted Stock Units that do not vest in connection with such death or total disability shall be forfeited as of the date the Grantee’s service ceases, and the Grantee shall not have any further rights with respect to those Restricted Stock Units.

c.If the Grantee’s service with Tivity Health ceases prior to December 31, 2020 due to (i) a termination by Tivity Health without “cause” (as defined below) or (ii) a resignation by the Grantee with “good reason” (as defined below), then the Grantee shall become vested in a pro rata portion of the Restricted Stock Units. The pro rata portion shall be (i) the Restricted Stock Units, multiplied by (ii) a fraction, (1) the numerator of which is the number of days of continuous service performed by the Grantee for Tivity Health or the Company during the Service Period, and (2) the denominator of which is 1095, subject to the Grantee’s execution and delivery of a general release of claims against Tivity Health and its affiliates in a form prescribed by Tivity Health and subject further to that release becoming irrevocable within 45 days following the Grantee’s cessation of service. Any Restricted Stock Units that cannot vest because of the pro-ration described above or due to a failure to satisfy the release condition described above will be forfeited as of the date the Grantee’s service ceases, and the Grantee shall not have any further rights with respect to those Restricted Stock Units. 

d.Except as otherwise provided in Paragraph 2(d) above, if the Grantee’s service with Tivity Health ceases prior to December 31, 2020 due to a resignation by the Grantee without “good reason” (other than a resignation by the Grantee in anticipation of a termination 

13

 

 

for “cause”), then the Grantee shall become vested in a pro rata portion of the Restricted Stock Units. The pro rata portion shall be (i) the Restricted Stock Units, multiplied by (ii) a fraction, (1) the numerator of which is the number of full (but not partial) calendar years of continuous service performed by the Grantee for Tivity Health or the Company during the Service Period and (2) the denominator of which is three, subject to the Grantee’s execution and delivery of a general release of claims against Tivity Health and its affiliates in a form prescribed by Tivity Health and subject further to that release becoming irrevocable within 45 days following the Grantee’s cessation of service. Any Restricted Stock Units that cannot vest because of the pro-ration described above or due to a failure to satisfy the release condition described above will be forfeited as of the date the Grantee’s service ceases, and the Grantee shall not have any further rights with respect to those Restricted Stock Units.

e.Notwithstanding any other provision of this Agreement, if prior to the payment date described below in Paragraph 3, the Grantee’s employment or service with Tivity Health ceases due to a termination by Tivity Health for “cause” (or due to a resignation by the Grantee in anticipation of a termination for “cause”), all of the Restricted Stock Units shall be immediately forfeited and the Grantee shall not have any further rights with respect to this Grant. 

f.For purposes of this Agreement:

i.“cause,” and “good reason” will have the meanings set forth in the Employment Agreement.

ii.“total disability” means a condition entitling the Grantee to benefits under any long-term disability plan or policy maintained or funded by Tivity Health.

3.Time and Form of Payment with Respect to Restricted Stock Units. The Grantee shall receive a distribution with respect to vested Restricted Stock Units within two and one-half months following December 31, 2020. The Restricted Stock Units will be distributed in shares of Stock, with each vested Restricted Stock Unit representing the right to receive one share of Stock (equitably adjusted by the Committee in accordance with Section 5(d) of the Plan or any successor provision).

4.Dividend Equivalents. At the same time that the Restricted Stock Units are converted to shares of Stock and distributed to the Grantee as set forth in Paragraph 3 above, the Company shall pay to the Grantee a lump sum cash payment equal to the sum of the dividends that would have been payable between the date hereof and the date of such distribution with respect to a number of shares of Stock equal to the number of shares then distributable (equitably adjusted by the Committee to take into account any stock splits, reverse splits, mergers, recapitalizations or similar events occurring during such period), plus the Accrued Dividend Equivalents. If or to the extent the Restricted Stock Units are forfeited, dividend equivalent payments will not be made under this Paragraph 4.

5.Change of Control. In the event of a Change of Control prior to settlement of this award, the Committee may in its discretion: (a) accelerate settlement of this Grant, to the extent consistent with Treas. Reg. § 1.409A~3(j)(4)(ix) or any successor provision and/or (b) take such other actions as it deems appropriate with respect to this Grant, provided that such other actions do not cause this award to be subject to tax under Section 409A of the Code.

14

 

 

6.Acknowledgment by Grantee. By accepting the Restricted Stock Units, the Grantee acknowledges that with respect to any right to distribution and payment pursuant to this Agreement, the Grantee is and shall be an unsecured general creditor of Tivity Health without any preference as against other unsecured general creditors of Tivity Health, and the Grantee hereby covenants for herself, and anyone at any time claiming through or under the Grantee, not to claim any such preference, and hereby disclaims and waives any such preference which may at any time be at issue, to the fullest extent permitted by applicable law. The Grantee also hereby agrees to be bound by the terms and conditions of the Plan and this Agreement. The Grantee further agrees to be bound by the determinations and decisions of the Committee with respect to this Agreement and the Plan and the Grantee’s rights to benefits under this Agreement and the Plan, and agrees that all such determinations and decisions of the Committee shall be binding on the Grantee, her beneficiaries and any other person having or claiming an interest under this Agreement and the Plan on behalf of the Grantee.

7.Restrictions on Issuance or Transfer of Shares of Tivity Health’s Common Stock.

a.The obligation of Tivity Health to deliver shares of Stock hereunder shall be subject to the condition that if at any time the Committee shall determine in its discretion that the listing, registration or qualification of the shares of Stock upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance of shares of Stock pursuant to this Agreement, the shares of Stock may not be issued in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The issuance of shares of Stock and the payment of cash to the Grantee pursuant to this Agreement, if any, are subject to any applicable taxes and other laws or regulations of the United States and of any state having jurisdiction thereof.

b.The Grantee hereby (i) agrees to be bound by Tivity Health’s policies as in effect from time to time, including, but not limited to, Tivity Health’s Code of Business Conduct and Tivity Health’s Compensation Recoupment Policy, and (ii) understands that there may be certain times during the year that the Grantee will be prohibited from selling, transferring, donating, assigning, mortgaging, hypothecating or otherwise encumbering Tivity Health’s securities.

15

 

 

8.Agreement Subject to Plan Provisions. The terms of the Plan are incorporated herein by reference, and this Agreement shall be interpreted in accordance with the Plan in all respects. In the event of any contradiction, distinction or difference between this Agreement and the terms of the Plan, the terms of the Plan will control. This Agreement is subject to the interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the shares of Stock, (c) changes in capitalization of Tivity Health, and (d) other requirements of applicable law. The Committee shall have the authority to interpret and construe this Agreement pursuant to the terms of the Plan, its decisions shall be conclusive as to any questions arising hereunder and the Grantee’s acceptance of the Restricted Stock Units is the Grantee’s agreement to be bound by the interpretations and decisions of the Committee with respect to this Agreement and the Plan.

9.No Rights as Stockholder. The Grantee shall not have any rights as a stockholder of Tivity Health, including the right to any cash dividends (except as provided in Paragraph 4 hereof) or the right to vote, with respect to any Restricted Stock Units. 

10.No Rights to Continued Employment or Service. This Agreement shall not confer upon the Grantee any right to be retained by or in the employ or service of Tivity Health and shall not interfere in any way with the right of Tivity Health to terminate the Grantee’s employment or service at any time. Except to the extent expressly set forth in the Employment Agreement, the right of Tivity Health to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved.

11.Confidential Information, Non-Competition and Non-Solicitation. The Grantee affirms her obligations under the Nondisclosure and Noncompete Agreement, dated as of March 8, 2019.

12.Assignment and Transfers. No Restricted Stock Units or dividend equivalents provided for in this Agreement may be transferred, assigned, pledged, or encumbered by the Grantee and the Restricted Stock Units and dividend equivalents shall be distributed during the lifetime of the Grantee only for the benefit of the Grantee. Any attempt to transfer, assign, pledge, or encumber the Restricted Stock Units or dividend equivalents provided for in this Agreement by the Grantee shall be null, void and without effect. The rights and protections of Tivity Health hereunder shall extend to any successors or assigns of Tivity Health and to Tivity Health’s parents, subsidiaries, and affiliates. This Agreement may be assigned by Tivity Health without the Grantee’s consent.

13.Withholding. The Grantee shall be required to pay to Tivity Health, or make other arrangements satisfactory to Tivity Health to provide for the payment of, any federal, state, local or other taxes that Tivity Health is required to withhold with respect to the grant, vesting and distribution of the Restricted Stock Units and dividend equivalents. Notwithstanding anything to the contrary herein or the Plan, until the Grantee has satisfied Tivity Health’s withholding obligation with respect to this Agreement, the Grantee shall not have any rights to sell or transfer any shares of Stock that have been distributed to the Grantee pursuant to this Agreement.

14.Effect on Other Benefits. The value of the Restricted Stock Units and the shares of Stock and dividend equivalents potentially distributable hereunder shall not be considered eligible earnings for purposes of any other plan maintained by Tivity Health, and such value shall not be 

16

 

 

considered part of the Grantee’s compensation for purposes of determining or calculating other benefits that are based on compensation, such as life insurance.

15.Applicable Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

16.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 Tivity Health:   Tivity Health, Inc.

   701 Cool Springs Blvd

   Franklin, Tennessee 37067

 

		
	
To the Grantee:
	
Keira Krausz 

	
(Grantee name and address)
	
Address on File

	
 
	
at Tivity Health

	
 
	
 

17.Section 409A. The amounts payable under this Agreement are intended to be compliant with the requirements of Section 409A of the Code and this Agreement should be interpreted accordingly. If required to avoid the imposition of tax under Section 409A of the Code, any distribution under Paragraph 3 will be delayed until the date that is six months and one day following the Grantee’s separation from service (or, if earlier, the Grantee’s death).

18.Entire Agreement. This Agreement and the Plan contain the entire understanding and agreement between Tivity Health and the Grantee concerning the Restricted Stock Units provided for herein, and supersede any prior or contemporaneous negotiations and understandings, including the 2018 PRSU Agreement. Tivity Health and the Grantee have made no promises, agreements, conditions, or understandings relating to the Restricted Stock Units, either orally or in writing, that are not included in this Agreement or the Plan.

19.Amendment. This Agreement cannot be changed, modified, extended or terminated except upon written amendment executed by the parties hereto. Any such written amendment must be approved by the Committee to be effective against Tivity Health.

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

21.Consent to Electronic Delivery. The Grantee hereby authorizes Tivity Health to deliver electronically any prospectuses or other documentation related to this Agreement, the Plan and any other compensation or benefit plan or arrangement in effect from time to time (including, without limitation, reports, proxy statements or other documents that are required to be delivered to participants in such plans or arrangements pursuant to federal or state laws, rules or regulations). For this purpose, electronic delivery will include, without limitation, delivery by 

17

 

 

means of e-mail or e-mail notification that such documentation is available on Tivity Health’s intranet site. Upon written request, Tivity Health will provide to the Grantee a paper copy of any document also delivered to the Grantee electronically. The authorization described in this paragraph may be revoked by the Grantee at any time by written notice to Tivity Health.

[Remainder of page intentionally left blank; signature page follows]

 

 

 

18

 

 

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

 

 

TIVITY HEALTH, INC.

 

Name: Donato Tramuto

Title:Chief Executive Officer

 

 

 

GRANTEE: Keira Krausz

 

Online Acceptance Satisfies

Signature Requirement

 

 

 

 

EXHIBIT D

 

Form of Release

 

[Attached.]

 

 

Form Release of Claims

 

In consideration of the payments and other benefits set forth in Section VI.B and Section VI.D of the Employment Agreement dated March 8, 2019, to which this form is attached, I, Keira Krausz, hereby furnish Tivity Health, Inc. (the “Company”), with the following release and waiver (“Release and Waiver”).

 

In exchange for the consideration provided to me by the Company, that I am not otherwise entitled to receive, I, on behalf of myself, my executors, heirs, administrators, and assigns, hereby release and forever discharge the Company together with its directors, managers, officers, employees, members, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (the “Released Parties”), from any and all claims, liabilities and obligations, both known and unknown, suspected or claimed against any of the Released Parties related to (a) my employment with the Company or the termination of that employment; (b) my compensation or benefits from the Company or any of the Released Parties, including, but not limited to, salary, bonuses, commissions, vacation pay, severance pay, or fringe benefits, except to the extent provided below; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing, to the extent related to my employment with the Company or the termination of that employment; (d) all tort claims, including, but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy, to the extent related to my employment with the Company or the termination of that employment; (e) all federal, state, and local statutory claims, including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act, the Age Discrimination in Employment Act of 1967 (“ADEA”), and the Employee Retirement Income Security Act; each as may be amended from time to time, to the extent related to my employment with the Company or the termination of that employment; and (f) any applicable local, state or federal equal employment opportunity or anti-discrimination law, statute, policy, order, ordinance or regulation, to the extent related to my employment with the Company or the termination of that employment.

 

Nothing in this Release and Waiver shall be construed to waive any right that is not subject to waiver by private agreement under federal, state or local employment or other laws, such as claims for workers’ compensation or unemployment benefits.  In addition, nothing in this Release and Waiver will be construed to affect any of the following claims, all rights in respect of which I reserve: (a) reimbursement of unreimbursed business expenses properly incurred prior to my termination date in accordance with the Company’s policy; (b) claims under the [Award Agreements] in respect of vested Restricted Stock Units (as defined in the [Award Agreements]) then held by me and claims in respect of such Restricted Stock Units solely in my capacity as a holder of Restricted Stock Units; (c) claims as an equityholder in the Company (including any rights I have arising under operative documents applicable to me in such capacity); (d) any vested benefits to which I am entitled under any employee benefit plans or programs of the Company in which I participate; (e) any claim for unemployment compensation or workers’ compensation administered by a state government to which I am presently or may become entitled; (f) any claim that the Company has breached this Release and Waiver; and (g) indemnification as an officer or director of the Company (including as a fiduciary of any employee benefit plan), or inclusion as a beneficiary of any insurance policy related to my service in such capacity.

I acknowledge and agree that as of the date I execute this Release and Waiver, I have no knowledge of any facts or circumstances that give rise or could give rise to any claims under any of the laws listed in the preceding paragraphs, or that I have fully disclosed to the Company, in writing, any such matters.

 

2

 

 

I represent and warrant that I have not previously filed, and to the maximum extent permitted by law agree that I will not file, a complaint, charge, or lawsuit against the Company regarding any of the claims released herein. If, notwithstanding this representation and warranty, I have filed or file such a complaint, charge, or lawsuit, I agree that I shall cause such complaint, charge, or lawsuit to be dismissed with prejudice and shall pay any and all costs required in obtaining dismissal of such complaint, charge, or lawsuit, including without limitation the attorneys’ fees of the Company. I acknowledge that in accordance with 29 C.F.R. § 1625.23(b), this covenant not to sue is not intended to preclude me from bringing a lawsuit to challenge the validity of the release language contained in this Release and Waiver.

 

Moreover, I agree that this Release and Waiver will not prevent me from filing a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”), or its equivalent state or local agencies, or otherwise participating in an administrative investigation.  However, to the fullest extent permitted by law, I agree to relinquish and forgo all legal relief, equitable relief, statutory relief, reinstatement, back pay, front pay, and any other damages, benefits, remedies, and relief to which I may be entitled as a result of any claim, charge, or complaint against the Company and agree to forgo and relinquish reinstatement, all back pay, front pay, and other damages, benefits, remedies, and relief that I could receive from claims, actions, or suits filed or charges instituted or pursued by any agency or commission based upon or arising out of the matters that are released and waived by this Release and Waiver.  The parties intend that this paragraph and the release of claims herein be construed as broadly as lawfully possible.

 

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company. If I am 40 years of age or older upon execution of this Release and Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the Release and Waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; (c) I have twenty-one (21) days in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the eighth day after I execute this Release and Waiver and the revocation period has expired.

 

I acknowledge my continuing obligations under that certain Nondisclosure and Noncompete Agreement, dated as of March 8, 2019, by and between me and the Company, as may be amended from time to time (the “Nondisclosure and Noncompete Agreement”), and agree that my right to the severance pay I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my obligations under the Nondisclosure and Noncompete Agreement.  

 

This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by any member of the Company or any other person released hereunder that is not expressly stated herein. This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company (other than me).

 

 

3

 

 

Date:By:

Keira Krausz

 

 

Date:By:

Company Representative

 

4

 

 

EXHIBIT E

 

Nondisclosure and Noncompete Agreement

 

[Attached.]

 

 

 

Nondisclosure and Noncompete Agreement

(Keira Krausz)

This Nondisclosure and Noncompete Agreement (“Agreement”), executed and delivered as of March 8, 2019 (the “Effective Date”), by and between Tivity Health, Inc., a Delaware corporation, and its subsidiaries, including, but not limited to, Nutrisystem, Inc., a Delaware corporation (“Nutrisystem”), having a principal place of business at 701 Cool Springs Boulevard, Franklin, Tennessee 37067 (hereinafter called the “Company”), and Keira Krausz (“Employee”) (the Company and Employee are collectively referred to herein as the “Parties”).

 

In consideration of Employee’s employment by Tivity Health, Inc. and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

	
1.
	
Confidentiality. 

a.Confidential Information. Employee understands and acknowledges that during the course of employment, Employee will have access to and learn about confidential, secret and proprietary documents, materials, data and other information, in tangible and intangible form, of and relating to the Company and its businesses and existing and prospective customers, suppliers, investors and other associated third parties referred to herein as “Confidential Information” (as defined below). Employee further understands and acknowledges that this Confidential Information and the Company’s ability to reserve it for the exclusive knowledge and use of the Company is of great competitive importance and commercial value, and that improper use or disclosure of the Confidential Information by Employee will cause irreparable harm to the Company, for which remedies at law will not be adequate and may also cause the Company to incur financial costs, loss of business advantage, liability under confidentiality agreements with third parties, civil damages and criminal penalties.

For purposes of this Agreement, the term “Confidential Information” includes, but is not limited to, all information not generally known to the public, in spoken, printed, electronic or any other form or medium, relating directly or indirectly to proposed or new products or markets developed or to be developed by the Company, secret or 

confidential business procedures or plans relating to the Company’s new or existing markets, new proposed acquisitions or mergers, the name and processes of those with whom the Company is dealing in connection with such new products, markets, procedures or business and all things of a same or similar confidential nature, as well as any of the following information: technical information, processes, formulae, compositions, systems, techniques, inventions, computer programs and software developed by or for the Company, research projects, agreements, customer and prospective customer lists, pricing data, strategies, sources of supply, personnel records, financial data and information, sales and marketing methods, marketing plans,  production, merchandising systems and plans, acquisitions and potential acquisitions and other information confidential to the Company. As used herein, the term “Person” shall mean any individual, corporation, limited liability company, association, partnership, business, joint venture, trust estate, unincorporated organization, governmental authority, or any other entity.

Employee understands that the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise identified as confidential or proprietary, or that would otherwise appear to a reasonable individual to be confidential or proprietary in the context and circumstances in which the information is known or used.  Employee understands and agrees that Confidential Information developed by Employee in the course of Employee’s employment shall be subject to the terms and conditions of this Agreement as if the Company had furnished the same Confidential Information to Employee in the first instance. Confidential 

 

 

Information shall not include information that is generally available to and known by the public; provided that such disclosure to the public is through no direct or indirect fault of Employee or Person(s) acting on Employee’s behalf.

b.Disclosure and Use Restrictions. Employee agrees and covenants: (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated or made available, in whole or part, to any Person whatsoever (including other employees of the Company) not having a need to know and authority to know and use the Confidential Information in connection with the business of the Company and, in any event, not to anyone outside of the direct employ of the Company except with the prior consent of an authorized officer acting on behalf of the Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent); and (iii) not to access or use any Confidential Information, and not to copy any documents, records, files, media or other resources containing any Confidential Information, or remove any such documents, records, files, media or other resources from the premises or control of the Company, except with the prior consent of an authorized officer acting on behalf of the Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent). Employee acknowledges that nothing herein shall be construed to restrict or prevent disclosure of Confidential Information at any time (x) as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation or order; (y) as part of providing information to, or testifying or otherwise assisting in any investigation or proceeding brought by, any federal regulatory or law enforcement agency or legislative body, or any self-regulatory organization; or (z) in the course of filing, testifying, participating in or otherwise assisting in a proceeding relating to an 

alleged violation of any federal or state law relating to fraud, or any rule or regulation of the Securities and Exchange Commission. Employee shall provide written notice of any such order to an authorized officer of the Company promptly upon receiving such order, but in any event sufficiently in advance of making any disclosure to permit the Company to contest the order or seek confidentiality protections, as determined in its sole discretion.

c.Duration of Confidentiality Obligations. Employee understands and acknowledges that Employee’s obligations under this Agreement with regard to any particular Confidential Information shall commence immediately upon Employee first having access to such Confidential Information and shall continue during and after Employee’s employment until such time as such Confidential Information has become public knowledge other than as a result of Employee’s breach of this Agreement or breach by those acting in concert with Employee or on Employee’s behalf.

d.Insider Trading. Employee acknowledges that (i) the Confidential Information may contain material, non-public information regarding the Company, the securities of which are publicly traded and (ii) the United States securities laws and regulations prohibit any Person who is in possession of material, non-public information pertaining to an issuer from purchasing or selling securities or related financial instruments of such issuer or from communicating such information to any other Person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities. Employee agrees to comply with such laws and regulations.

2.Proprietary Rights.

a.Work Product. Employee acknowledges and agrees that all writings, works of authorship, technology, inventions, discoveries, ideas and other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived or reduced to practice by Employee individually or jointly 

 

 

 

with others during the period of Employee’s employment and relating in any way to the business or contemplated business, research or development of the Company (regardless of when or where such work product is prepared or whose equipment or other resources is used in preparing the same) and all printed, physical and electronic copies, all improvements, rights and claims related to the foregoing, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights in and to copyrights, trade secrets, trademarks (and related goodwill), patents and other intellectual property rights therein arising in any jurisdiction throughout the world and all related rights of priority under international conventions with respect thereto, including all pending and future applications and registrations therefor, and continuations, divisions, continuations-in-part, reissues, extensions and renewals thereof (collectively, “Intellectual Property Rights”), shall be the sole and exclusive property of the Company.

b.Work Made for Hire Assignment. Employee acknowledges that, by reason of Employee’s employment at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in the Copyright Act of 1976 (17 U.S.C. § 101), as amended, and such copyrights are therefore owned by the Company. To the extent that the foregoing does not apply, Employee hereby irrevocably assigns to the Company, for no additional consideration, Employee’s entire right, title and interest in and to all Work Product and Intellectual Property Rights therein, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, and all rights corresponding thereto throughout the world. Nothing contained in this Agreement shall be construed to reduce or limit the Company’s rights, title or interest in any Work Product or Intellectual Property Rights so as to be less in any respect than that the Company would have had in the absence of this Agreement.

c.Further Assurances; Power of Attorney. During and after Employee’s employment, Employee agrees to reasonably cooperate with the Company (at the Company’s expense) to (i) apply for, obtain, perfect and transfer to the Company the Work Product and Intellectual Property Rights in the Work Product in any jurisdiction in the world; and (ii) maintain, protect and enforce the same, including executing and delivering to the Company any and all applications, oaths, declarations, affidavits, waivers, assignments and other documents and instruments as shall be requested by the Company. Employee hereby irrevocably grants to the Company power of attorney to execute and deliver any such documents on Employee’s behalf in Employee’s name and to do all other lawfully permitted acts to transfer the Work Product to the Company and further the transfer, issuance, prosecution and maintenance of all Intellectual Property Rights therein, to the full extent permitted by law, if Employee does not promptly cooperate with the Company’s request. The power of attorney is coupled with an interest and shall not be affected by Employee’s subsequent incapacity.

d.Moral Rights. To the extent any copyrights are assigned under this Agreement, Employee hereby irrevocably waives, to the extent permitted by applicable law, any and all claims Employee may now or hereafter have in any jurisdiction to all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as “moral rights” with respect to all Work Product and all Intellectual Property Rights therein.

e.No License. Employee understands that this Agreement does not, and shall not be construed to grant Employee any license or right of any nature with respect to any Work Product or Intellectual Property Rights or any Confidential Information, materials, software or other tools made available to Employee by the Company.

f.No Additional Compensation. It is understood and agreed that Employee shall not be entitled to any additional or special compensation in regard to any and all such 

 

 

Work Product and all Intellectual Property Rights.

3.Security. 

a.Security and Access. Employee agrees and covenants (i) to comply with all Company security policies and procedures as in force from time to time, including those regarding computer equipment and systems, facilities access, key cards, access codes, internet, social media, e-mail systems, computer networks, data security, firewalls, passwords (collectively, “Facilities Information Technology and Access Resources”); (ii) not to access or use any Facilities and Information Technology Resources except as authorized by the Company; and (iii) not to access or use any Facilities and Information Technology Resources in any manner after the termination of Employee’s employment, whether termination is voluntary or involuntary. Employee agrees to notify the Company promptly in the event Employee learns of any violation of the foregoing by others, or of any other misappropriation or unauthorized access, use, reproduction or reverse engineering of, or tampering with any Facilities and Information Technology Access Resources or other Company property or materials by others.

b.Exit Obligations. Upon (1) voluntary or involuntary termination of Employee’s employment or (ii) the Company’s request at any time during Employee’s employment, Employee shall (A) provide or return any and all Company property, including keys, key cards, access  cards, identification cards, security devices, credit cards, network access devices, computers, cell phones, smartphones, PDAs, manuals, reports, files, work product, e-mail messages, recordings, disks, thumb drives or other removable information storage devices, and data and all Company documents and materials stored in any fashion, including those that constitute or contain any Confidential Information or Work Product, that are in the possession or control of Employee, whether they were provided to Employee by the Company or any of its business associates or created by Employee in connection with Employee’s 

employment; and (B) delete or destroy all copies of any such documents and materials not returned to the Company that remain in Employee’s possession or control, including those stored on any non-Company devices, networks, storage locations and media in Employee’s possession or control.

4.Non-disparagement. Employee agrees and covenants that Employee will not at any time make, publish or communicate to any Person or in any public forum any defamatory or disparaging remarks, comments or statements concerning the Company or its businesses, or any of its Employees, officers, and existing and prospective customers, suppliers, investors and other associated third parties, or make any maliciously false statements about the Company’s Employees and officers.

5.Non-Competition and Non-Solicitation.

a.Non-Competition. Employee agrees that Employee will not at any time during the term of Employee’s employment and for a period of one (1) year after the termination of Employee’s employment, within the United States, become associated directly or indirectly as an agent on behalf of, or be employed in, act as a consultant to, or as a director of or in connection with any Person engaged in any business substantially similar to or competitive with any business being conducted by the Company at any time during Employee’s employment. 

b.Non-Solicitation. During Employee’s employment and for a period of two (2) years immediately following the termination thereof, regardless of the reason, timing or party who initiates termination of employment, Employee promises and agrees not to, directly or indirectly, either for Employee or any other Person, solicit or hire (or attempt to solicit or hire) any employee of the Company or any of its subsidiaries (including Nutrisystem and any other subsidiary of the Company or affiliate of the Company) or any person who was an employee of the Company or any of its subsidiaries (including Nutrisystem and any other subsidiary of the Company or affiliate of the Company) within six (6) months prior to any 

 

 

such solicitation or hiring (or attempt to solicit or hire) or otherwise induce any employee of the Company to terminate such employment.

6.Remedies. 

a.Employee acknowledges that the Confidential Information and the Company’s ability to reserve it for its exclusive knowledge and use is of great competitive importance and commercial value to the Company, and that improper use or disclosure of the Confidential Information by Employee will cause irreparable harm to the Company, for which remedies at law will not be adequate. In the event of a breach or threatened breach by Employee of any of the provisions of this Agreement, Employee hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that monetary damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief. Employee further acknowledges that each affiliate and subsidiary of the Company is an intended third-party beneficiary of this Agreement.

b.If Employee violates the restrictive covenants set forth in this Agreement and the Company brings legal action for injunctive or other relief, the Company shall not, as a result of the time involved in obtaining such relief, be deprived of the benefit of the full period of the restrictive covenant at issue. Accordingly, the restrictive covenants shall be deemed to have the duration specified in this Agreement, computed from the date such relief is granted but reduced by the time expired between the date of this Agreement and the date of the first violation of the covenant.

7.Acknowledgment. Employee acknowledges and agrees that the services to be rendered by Employee are of a special and 

unique character; that Employee will obtain knowledge and skill relevant to the Company’s industry, methods of doing business and marketing strategies by virtue of Employee’s employment; and that the terms and conditions of this Agreement are reasonable under these circumstances. Employee further acknowledges that this Agreement is not a contract of employment and shall not be construed as a commitment by either of the Parties to continue an employment relationship for any certain period of time. Nothing in this Agreement shall be construed to in any way terminate, supersede, undermine or otherwise modify the at-will status of the employment relationship between the Company and Employee, pursuant to which either the Company or Employee may terminate the employment relationship at any time, with or without cause, with or without notice.

8.Miscellaneous. 

a.Amendment. This Agreement may not be amended or modified other than by an agreement in writing signed by each of the Parties. Any waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby.

b.Assignment. The Company may assign this Agreement to any subsidiary or affiliate, or to any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of its business or assets. This Agreement shall inure to the benefit of the Company and its respective successors and permitted assigns. Employee may not assign this Agreement or any part hereof. Any purported assignment by Employee shall be null and void.

c.Entire Agreement; Binding Effect. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior understandings and agreements of the Parties with respect thereto. For the avoidance of doubt, upon the effectiveness of this Agreement, that certain Nondisclosure and Noncompete Agreement for Management Employees, dated February 5, 

 

 

2013, between Nutrisystem and Employee (the “Prior Agreement”), shall be superseded and replaced in its entirety by this Agreement. Upon such effectiveness, all provisions of, rights granted and covenants made in the Prior Agreement are hereby waived, released and superseded in their entirety by the provisions hereof and shall have no further force or effect. 

Subject to the provisions set forth in Section 8(b), this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, permitted assigns, heirs and legal representatives. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Person other than the Parties, and their respective successors, permitted assigns, heirs and legal representatives.

d.Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to its provisions concerning choice of laws, choice of forum or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. 

e.Consent to Jurisdiction. Any legal suit, action or proceeding (each, a “Proceeding”) arising out of or relating to this Agreement shall be instituted in the United States District Court for the District of Delaware; provided, however, that if any such Proceeding is unable to be heard by such court, then such Proceeding shall be instituted in the courts of the State of Delaware located in Kent County. Each Party irrevocably submits to the exclusive jurisdiction of such court in any such Proceeding. The Parties irrevocably and unconditionally waive any objection to the laying of venue of any Proceeding in such court and irrevocably waives and agrees not to plead or claim in such court that any such Proceeding brought in any such court has been brought in an inconvenient forum.

f.WAIVER OF JURY TRIAL. THE PARTIES HEREBY EXPRESSLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING BROUGHT BY OR AGAINST 

EITHER OF THEM RELATING TO THIS AGREEMENT.

g.Attorneys’ Fees. In the event the Company is required to enforce the terms and conditions contained in this Agreement through legal proceedings, upon a judgment in favor of Employee, the Company shall be responsible for all reasonable attorneys’ fees, court costs and expenses incurred by Employee.

h.Waivers. Neither the failure nor the delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege shall preclude any other or further exercise of any such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law, no waiver that may be given by a Party shall be applicable except in the specific instance for which it was given.

i.Severability. If any provision of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. Upon any such determination that any provision is invalid, illegal or unenforceable, the Parties hereto shall negotiate in good faith to modify this Agreement so as to give effect to the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

j.Captions. Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any section or paragraph.

k.Counterparts. This Agreement may be executed in counterparts (delivery of which may 

 

 

occur via facsimile), each of which shall be binding as of the date first written above, and all of which shall constitute one and the same instrument. Each such copy shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account 

for more than one such counterpart. A facsimile signature or electronically scanned copy of a signature shall constitute and shall be deemed to be sufficient evidence of a Party’s execution of this Agreement, without the necessity of further proof thereof.

 

 

Employee AFFIRMS THAT SHE HAS READ THIS AGREEMENT IN ITS ENTIRETY, UNDERSTANDS THE NATURE OF THE OBLIGATIONS Employee IS ASSUMING AND AGREES TO ABIDE BY ALL OF THE TERMS AND PROVISIONS HEREINABOVE SET FORTH.

[Signature Page Follows.]

 

 

 

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date above.

TIVITY HEALTH, INC.

 

 

By:

Name:

Title:

 

 

 

Employee

 

 

  

Keira KrauszExhibit 10.1

 

 

May  3, 2019

 

Dr. Merushe (Meri) Verli

 

DELIVERED VIA EMAIL

 

RE:                          Offer of Employment

 

Dear Meri:

 

I am pleased to provide you with our revised offer letter of employment to you with McEwen Mining Inc. (the “Company”), referenced hereto as Schedule “A” as Chief Financial Officer (CFO), effective asap.

 

Kindly note that your employment is conditional upon you executing and returning a signed copy of this letter and signed/initialed copies of the attached Schedules “A”, “B” and “C” (the “Agreement”) to me. In exchange for the covenants contained in the Agreement.

 

Please ensure you retain a copy of the Agreement for your records.

 

Meri, I would like to welcome you to the McEwen Mining and I am looking forward to working with you.  I wish you a successful and rewarding career with us.

 

Sincerely,

 

 

Robert R. McEwen

Chairman, Chief Owner & CEO

MCEWEN MINING INC.

 

I, Merushe , acknowledge that I have read, understood and accept this offer and the terms and conditions contained in the attached Schedules (which form the Agreement as defined above) and agree to be bound by the terms and conditions of employment as outlined therein, including those that limit my entitlements, if any, upon the end of my employment with the Company.

 

	
/s/ Merushe Verli
    	
 
    	
May 3, 2019
    
	
Merushe Verli
    	
 
    	
Date
    

 

150 King Street West, Suite 2800, P.O. Box 24. Toronto, Ontario Canada M5H 1J9

Tel: 647.258.0395 Toll Free: 1.866.441.0690 Fax: 647.258.0408

Website: www.mcewenmining.com  Email: info@mcewenmining.com

 

 

SCHEDULE “A”

 

MCEWEN MINING INC.

Terms and Conditions of Employment

 

The following outlines the terms and conditions of employment with McEwen Mining Inc. (the “Company”).

 

	
Title
    	
 
    	
TITLE OF POSITION
    
	
Initial Reporting Relationship
    	
 
    	
Rob McEwen, Chairman, CEO and Chief Owner
    
	
Effective Date
    	
 
    	
TBA
    
	
Location
    	
 
    	
Toronto, Ontario
    
	
Status
    	
 
    	
Full Time
    
	
Currency
    	
 
    	
Unless otherwise specified, all currency in this   Agreement shall be in Canadian dollars.
    
	
Base Salary
    	
 
    	
$300,000 per annum paid on a   bi-weekly basis through direct deposit.
    
	
Stock Options
    	
 
    	
You shall receive an initial grant of 180,000 Stock Options vesting as to one third on each of   the first, second and third anniversaries of the Effective Date and in   accordance with the terms of the Company’s Equity Incentive Plan and Grant   Agreement to be issued and priced based on the closing price on the day of   issuance.

 

Future granting of equity or options is at the sole   discretion of the Board of Directors.
    
	
Annual Bonus
    	
 
    	
You will be entitled to be considered for an annual   bonus at the discretion of the Compensation Committee of the Board of   Directors of the Company (the “Board”). Your target annual bonus will be 60% of your base salary. Your annual bonus will be   determined based on you achieving personal KPIs and corporate performance   objectives and goals as set out annually, in advance, by the Chief Executive   Officer. You can select to have it paid in cash or stock (or a combination of   both), pro-rated for the first fiscal year of your employment. If paid in   stock, the issuance price and timing of issuance of such stock shall be   valued as determined by the Board.

 

The bonus, if any, will be paid after the public   release of the Company’s annual financial statements and has been approved by   the CEO and Board of Directors. Any such bonus payment does not form part of   your regular compensation and is also not automatic, retroactive or precedent   based.

 

Please note that, subject to the Ontario Employment Standards Act, 2000, as amended from time to   time, or its successor legislation (the “ESA”), and to   the terms set out in this agreement, you must be actively employed at the   time of award to receive any such annual bonus.
    

 

	
 
    	
EMPLOYEE INITIALS MV
    

 

2

 

	
Vacation
    	
 
    	
You will be entitled to four (4) weeks   of vacation annually, accrued on a monthly basis, to be taken at a time as   determined or agreeable to the Company having due regard to its operations.   Subject to only the minimum requirements under the ESA, any unused vacation   in excess of your statutory minimums that has not been used at the end of the   calendar year shall be forfeited and forever lost without further payment by   the Company, unless you were required to forego your vacation as directed by   the CEO , due to business demands, in which case, such foregone vacation   days, if unused at the end of the fiscal year in which they occurred, shall   be paid to you at the end of such fiscal year. You will otherwise be subject   to the Company’s vacation policy, as the same may be amended from time to   time.
    
	
Benefits
    	
 
    	
You shall be entitled to participate in all benefit   plans of Company and pension Plan as may be made available to employees of   Company from time to time for which you are eligible in accordance with   applicable plans and/or insurance contracts. You will receive complete details   of all benefits and pension plans as part of your orientation.
    
	
Expenses
    	
 
    	
The Company shall provide a parking spot for your   use, near the Company’s offices in Toronto. In addition, while in active   employment, the Company shall reimburse you for the reasonable costs   associated with a cell phone, fuel, and your travel to and from the office   such as TTC or GO Transit Fees. Such   expense reimbursements do not form part of your compensation and shall not be   continued following the effective date of termination of your employment for   any reason.
    
	
Travel
    	
 
    	
As per the requirements of your position, you will   be expected to travel to our different locations, as the operations of the   business reasonably demand. You agree that risks associated with such travel   have been described to you as part of the hiring process and that you   voluntarily assume those risks. The Company will continue to provide you with   ongoing and reasonable information as it relates to such risks.
    
	
Policies and Standards
    	
 
    	
The Company has established a variety of policies   and standards, which shall form part of your employment terms with the   Company, including the Code of Business Conduct and Ethics, Global   Anti-Corruption, Anti-Harassment and the Expense Reimbursement Policy. You   agree to be bound by these policies and standards, as amended or otherwise   introduced from time to time at the sole discretion of the Company.
    
	
No Obligations to Third Parties
    	
 
    	
You hereby represent and warrant to the Company that   you are not party to any written or oral agreement with any third party that   would restrict your ability to enter into this Agreement or Schedule “C” (the   Confidentiality and Intellectual Property Information Agreement) or to   perform your obligations hereunder and that you will not, by joining Company,   breach any non-disclosure, intellectual property rights, non-competition,   non-solicitation or other covenant in favour of any third party.
    
	
Changes to Duties and/or Compensation
    	
 
    	
If your duties or compensation should change during   the course of your employment with the Company, the validity of this   Agreement, including the section regarding “Termination by You With Notice”,   “Termination by the Company for Cause” and “Termination by the Company   without Cause” will continue in full force and effect.
    

 

3

 

	
Termination by You With Notice
    	
 
    	
You may terminate your employment under this   Agreement by providing the Company with 60 days’ advance written notice.   Subject to any requirements under the ESA, the Company may waive such further   notice, or change your assignment, or place of work during such notice of   termination, provided such changes are made in good faith and reasonably   required, and it shall not constitute a constructive dismissal. Any unvested   stock options that have not vested as of the effective date of your written   notice (the end of the 60 day notice period), shall be governed by the terms   of the applicable stock option plan.
    
	
Termination by the Company With Cause
    	
 
    	
The Company may terminate your employment without   notice for any of the following reasons, or as specified under the ESA or   “Cause” under common law, including: (a) your continued failure to   substantially perform your duties as described in Schedule “B”, or otherwise   required by the Company; (b) your willful engagement in misconduct which   is injurious to the Company, other than business decisions made in good   faith; (c) the willful violation by you of the provisions of this   Agreement or any material policy, including the Code of Business Conduct and   Ethics, Global Anti-Corruption, Anti-Harassment and Expense Reimbursement   Policy; (d) dishonesty; (e) you being found guilty of an offence   under criminal or quasi criminal legislation that has a reasonably drawn   nexus to the workplace which in the Company’s sole determination caused or   could cause damage to its reputation; or (f) engaging in an apparent   conflict of interest that is not remedied by you within ten   (10) business days after the Company provides you with written notice setting   out in reasonable detail the alleged conflict of interest. In the event of a   termination under this section, the Company shall pay you any unpaid wages   earned to the date of termination and any accrued and unpaid vacation pay   earned by you during the same calendar year. Except for as may be required   under the ESA, the Company shall have no further obligations to you. Any   unvested stock options that have not vested as of the date that the notice of   termination for cause is provided to you, shall be governed by the terms of   the applicable stock option plan.
    
	
Termination by the Company Without Cause
    	
 
    	
The Company may terminate your employment without   Cause, for any reason other than pursuant to a Change of Control (as defined   below), by providing you with the greater of: (a) a lump sum payment   equal to twelve (12) months’ base salary (with no annual bonus other than any   prorated bonus, at the discretion of the Board, for the year in which the   termination occurs) if you are terminated in the first year of employment,   and a lump sum payment of twelve (12) months’ base salary plus one   (1) additional month for each year of service up to a maximum of 18   total months of base salary plus 1.5 times the average bonus you received   over the prior two years if you are terminated thereafter; or (b) only   your minimum entitlement to notice or pay in lieu of notice and statutory   severance pay owing to you under the ESA. The lump sum payment will be   provided within thirty (30) days of the notice of termination being provided   to you by the Company.

 

In either case of (a) or (b) in this   Section, benefits shall be continued for the minimum period required under   the ESA and you shall receive your vacation pay as set forth under the ESA.   For certainty, any such payments
    

 

4

 

	
 
    	
 
    	
contemplated in this Section shall be inclusive   of, and you shall receive, the notice required by the ESA and/or pay in lieu   of such notice, or statutory severance pay (if any) owing under the ESA,   contract or common law.
    
	
Change of Control
    	
 
    	
If a Change of Control occurs (as defined below) and   within 6 months following the date of the Change of Control, you give notice   to the Company to terminate your employment on a date within 30 days from the   date of notice, the Company shall pay the Agreed Severance Sum (as defined   below) to you within one month of the date of termination and any unvested   stock options shall become fully vested and exercisable at the end of the 30   day notice period.

 

“Change of Control”   means: any change in the direct or indirect ownership of, or control of the   Company as a result of which a person, or group of persons acting jointly or   in concert within the meaning of the Securities Act   (Ontario) not currently representing ownership of the Company, acquire 51%   control of the shares of the Company.

 

“Agreed Severance Sum”   means: an amount equal to 18 months’ base salary and target bonus plus   benefits (except for any short or long-term disability benefits which shall   end following the end of the statutory notice period). Again, as set forth in   the section “Termination by the Company Without Cause” you shall receive any   vacation and any other minimum entitlements owing to you under the ESA.
    
	
Release of Claims
    	
 
    	
In order to receive any payment in excess of   statutory minimums prescribed by the ESA you agree to execute a Release of   claims relating to your employment in favour of the Company and its   affiliates. For greater certainty, such Release shall not include a release   of your continuing rights to insurance coverage and director &   officer indemnity or a release of your rights to the compensation and   benefits listed in this Agreement.
    
	
Effect of Termination
    	
 
    	
You agree that upon cessation of your employment for   any reason you shall be deemed to have immediately resigned any position that   you may have as an officer, director or employee of the Company together with   any other office, position or directorship that you may hold in any of the   Company’s related entities. In such event, you shall execute any and all   documents appropriate to evidence such resignations. You agree that you are   not entitled to any payments in respect of the resignations in addition to   those provided herein.
    
	
Compliance with Ontario Legislation
    	
 
    	
Nothing in this Agreement is intended to conflict   with the ESA. In the event of a conflict between any provision or language in   this Agreement and the ESA, such ESA shall govern.

 

You agree that you have received a copy of the ESA   Poster v. 7.0.

 

The Company provides accommodations for employees   with disabilities. If you require a specific accommodation because of a   disability or medical need, please contact Kevin Fearn, VP People and   Community 1-416-452-2649 or by e-mail at HR@mcewenmining.com   before your start date so that, subject to measures constituting undue   hardship, the appropriate accommodations can be in place before you begin   work.
    

 

5

 

	
Statutory Deductions and Withholdings
    	
 
    	
The Company may withhold from any amounts payable to   you such federal or provincial taxes and other statutory deductions that are   required under applicable law to be so withheld and deducted.
    
	
Severability
    	
 
    	
If any court of competent jurisdiction renders any   provision or section of this Agreement unenforceable, such unenforceability   shall not affect the enforceability of any other provision or section of this   Agreement.
    
	
Entire Agreement
    	
 
    	
This Agreement, inclusive of the Schedules,   supersedes any and all other agreements, whether oral or in writing, between   the parties with respect to your employment with the Company, and you hereby   acknowledge that you have not been induced from prior employment.
    
	
Governing Law
    	
 
    	
This Agreement is governed by the laws of the   Province of Ontario and the Employee agrees to the non-exclusive jurisdiction   of the courts of the Province of Ontario in relation to this Agreement.
    
	
Confidentiality and Intellectual Property
    	
 
    	
As highlighted in the offer letter, attached, this   Agreement is conditional upon you agreeing to and abiding by the   “Confidentiality and Intellectual Property Information Agreement” attached   hereto as Schedule “C.”
    
	
Legal Advice
    	
 
    	
By signing below you acknowledge that you have had   the opportunity to obtain independent legal advice.
    

 

Remainder of Page Intentionally Left Blank

 

6

 

SCHEDULE “B”

 

Position Description

 

SERVICES

 

Title: Chief Financial Officer (CFO)

 

Reporting Structure:

 

 

SUMMARY

 

McEwen Mining Inc. is a growing gold and silver producer operating in Argentina, Mexico, Canada and the United States. The Company is publicly traded and listed on the NYSE and TSX.

 

SUMMARY OF ROLE AND KEY RESPONSIBILITIES

 

Responsible for overseeing all the finance and accounting functions including monthly financial reporting and analysis, budgeting and forecasting, cost accounting, cash flow management and assist with corporate business planning and strategy..

 

SKILLS AND QUALIFICATIONS:

 

·                  Demonstrates professionalism and adheres to best management practices.

·                  Works directly with the President/ COO & CEO, in conjunction with the Board of Directors, to provide leadership in setting the Company’s strategic and annual operating plan.

 

7

 

·                  Complies and works in accordance with the Quality System (Quality Manual, Standard Operating Procedures and Test Methods)

·                  Directly involved in the preparation of monthly and quarterly financial statements, consolidations, and ancillary reports for McEwen Mining

·                  Manages the Company’s budgetary planning process.

·                  Periodically evaluates and monitors the Company’s corporate tax position and develops tax strategies that manage exposure and/or leverage current and pending tax legislation. Assesses tax implications of material transactions and provides recommendations for structure to the Board of Directors, shareholders and/or the executive team, as appropriate.

·                  Oversees year end audit for McEwen Mining.

·                  Supports operating divisions with special projects (i.e. cost analysis, project costing, revenue forecasting and monthly reporting).

·                  Ensures compliance with all tax jurisdictions, which may include coordination of audits and inquiries by federal, provincial and local regulatory agencies in multiple countries.

·                  Ensures all fixed asset transactions are accounted for in accordance with established policies and generally accepted accounting principles.

·                  Assumes responsibilities for the planning, development, and implementation of effective accounting strategies, policies and procedures. Ensures that policies are in accordance with evolving regulations, legal requirements and industry trends.

·                  Prepares and delivers financial reports at the Board of Directors’ meetings.

·                  Establishing, implementing and monitoring accounting systems, policies and procedures, and other internal control documentation for the Company.

·                  Implements and maintains internal controls and procedures consistent with corporate mandate.

·                  Managed multiple operation simultaneously

·                  Capital markets experience — capital raising

·                  Persuasive presenter

·                  Good problem solver

 

Qualifications

 

Education:

 

·                  Bachelor’s degree or diploma in Finance or Accounting combined with a CPA designation along with ongoing leadership development programs.

·                  A Master’s in Business Administration is preferred.

 

8

 

SCHEDULE “C”

 

Employee Covenants

Confidentiality and Intellectual Property Agreement

 

In consideration of employment with McEwen Mining Inc. (the “Company”), Merushe Verli (the “Employee”) and for other payments and benefits provided, the sufficiency of which is acknowledged by the Employee, the Employee agrees and covenants as follows:

 

1.              Employment with the Company will give the Employee access to intellectual and confidential information belonging to the Company, its customers, its suppliers and others (the confidential information is collectively referred to in this Agreement as “Confidential Information”).  Confidential Information includes records, data, materials and information and copies thereof and all information relating to any properties, procedures, suppliers, services, personnel, policies and practice, cost and expense structure, business, prospects and business/organizational opportunities and plans of the Company and all financial information and other information or disclosure relating to the business and affairs of the Company.  Confidential Information does not include information that at the time it was received was in the public domain, was disclosed to the Employee through no fault of the Employee, was legitimately known to Employee prior to disclosure, or is required by law to be disclosed.

 

2.              The Employee covenants and agrees that the Company shall solely and exclusively own all right, title and interest in, and to, all “Intellectual Property”, which is defined as follows:  all intellectual and industrial property and rights therein, whether or not registered or registrable, and all registrations, applications, divisional, extensions, and reissues therefor, including without limitation all works in which copyright subsists or may subsist, derivative works, computer software, moral rights, designs, industrial designs, Confidential Information, as defined above, trademarks and trade names including all goodwill associated therewith, patents, discoveries, improvements, inventions and integrated circuit topographies, specifically developed, created, produced or contributed to by the Employee at any time, pursuant to this Agreement.  The Employee hereby assigns all Intellectual Property to the Company.  The Employee further agrees to sign and deliver to the Company all documents the Company may reasonably require to confirm or evidence such assignment and the Company’s ownership of the Intellectual Property, when and as requested by the Company.  The Employee agrees to waive, and hereby waives, any and all moral rights or rights of a similar nature which the Employee has or in the future may have (including in Intellectual Property which may come into existence after the date of this Agreement) in each jurisdiction throughout the world, to the extent that such rights may be waived in each respective jurisdiction.  The Employee further agrees to sign and deliver to the Company all documents the Company may reasonably require to confirm or evidence such waiver of the moral rights, when and as requested by the Company.  For clarity, the Employee acknowledges that the Company and its affiliates and licensees have the unlimited right to use (or not to use) the Intellectual Property and all elements thereof, including the right to edit, change, distort, transpose and otherwise modify the Intellectual Property in any manner and to use the Intellectual Property in association with any and all goods, services, products and institutions and the Employee shall waive and hereby waives any right to receive authorship or ownership credit in connection with any use of the Intellectual Property or elements thereof.

 

9

 

3.              The Employee shall, during and after employment, keep all Confidential Information and Proprietary Property confidential and shall not use any of it except for the purpose of carrying out authorized activities on behalf of the Company.

 

4.              The Employee covenants and agrees not to make any unauthorized use whatsoever of or to bring onto the Company’s premises for the purpose of making any unauthorized use whatsoever of any trade secrets, confidential information or intellectual property of any third party, including without limitation any trade-marks or copyrighted materials, during the course of employment.  The Employee agrees and represents that employment and the execution of this Agreement do not and will not breach any agreement to which the Employee is currently a party or which currently applies to the Employee.

 

5.              The Employee agrees that the Employee will, if requested from time to time by the Company, execute such further reasonable agreements as to confidentiality and intellectual property rights as the Company’s customers or suppliers reasonably required to protect Confidential Information or Intellectual Property.

 

6.              Regardless of any changes in position, salary or otherwise, including, without limitation, termination of the Engagement, unless otherwise stipulated pursuant to the terms hereof, the Employee will continue to be subject to each of the terms and conditions of this Agreement and any other(s) executed pursuant to the preceding paragraph.

 

7.              The Employee acknowledges that the services provided by the Employee to the Company are unique.  The Employee further agrees that irreparable harm will be suffered by the Company in the event of the Employee’s breach or threatened breach of any of their obligations under this Agreement, and that the Company will be entitled to seek, in addition to any other rights and remedies that it may have at law or equity, a temporary or permanent injunction restraining the Employee from engaging in or continuing any such breach hereof.  Any claims asserted by the Employee against the Company shall not constitute a defence in any injunction action, application or motion brought against the Employee by the Company.

 

8.              This Agreement is governed by the laws of the Province of Ontario and the Employee agrees to the non-exclusive jurisdiction of the courts of the Province of Ontario in relation to this Agreement.

 

9.              If any court of competent jurisdiction renders any provision or section of this Agreement unenforceable, such unenforceability shall not affect the enforceability of any other provision or section of this Agreement.

 

IN WITNESS WHEREOF the Company has caused this Agreement to be executed as of the     th day of May 2019.

 

10

 

	
SIGNED, SEALED AND   DELIVERED
    	
 
    	
)
    	
 
    
	
In the presence of:
    	
 
    	
)
    	
/s/ Merushe Verli
    
	
 
    	
 
    	
)
    	
Merushe Verli
    
	
/s/ Kliton Verli
    	
 
    	
)
    	
 
    
	
Witness
    	
 
    	
)
    	
 
    

 

11

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