DE
|
23-3012204
|
|
(State or other jurisdiction of
|
(IRS Employer
|
|
incorporation)
|
Identification No.)
|
On the Effective Date, the compensation committee of the Board of Directors (the "Compensation Committee") granted 50,000 shares of Company common stock to Mr. Blair under a stock award agreement (the "Stock Grant"). The Stock Grant will vest over four years from the Effective Date, with a tranche of 25% vesting on each of the first four anniversaries of the Effective Date. In the event of termination for any reason other than (i) "cause" (as defined in the employment agreement), (b) death, or (c) Mr. Blair becoming "totally disabled" (as defined in the employment agreement), the next unvested tranche of the Stock Grant will vest as of the date of such termination. In the event of a Change of Control (as defined in the employment agreement), Mr. Blair will become fully vested in the Stock Grant on the date of the Change of Control.
On the Effective Date, Mr. Blair also entered into a nondisclosure and noncompete agreement with the Company. Under this agreement, Mr. Blair agreed not to compete with the Company for two years after termination of his employment.
The term of the employment agreement begins on the Effective Date and extends for three years. If Mr. Blair is terminated without cause, then, in exchange for a mutual release, (1) the Company will pay a lump sum severance payment in an amount equal to (a) 12 months of the salary then in effect and (b) the value of the premium costs to the Company to continue Mr. Blair on the Company's group life and accident, death, and disability policy for the 12 month period following Mr. Blair's termination date, (2) the Company will provide group healthcare coverage for 12 months at Mr. Blair's normal contribution rates, and (3) Mr. Blair's covenants against non-competition will be reduced from two years following employment to one year following employment.
On the Effective Date, the Compensation Committee of the Board of Directors also granted 35,968 shares of Company common stock to David D. Clark, the Company's Chief Financial Officer, under a stock award agreement (the "Clark Stock Grant"). The Clark Stock Grant will vest over four years from the Date of Grant, with a tranche of 25% vesting on each of the first four anniversaries of the Effective Date. The Company and Mr. Clark previously entered into an employment agreement on October 26, 2007. In the event of (a) termination for any reason other than "cause" (as defined in the employment agreement), (b) death, or (c) Mr. Clark's resignation on account of "Good Reason" (as defined in the employment agreement), the shares that would have vested within the 12 month period following such termination of employment if the vesting schedule were based on a monthly vesting schedule, as opposed to the annual vesting schedule, over the four year period from the Effective Date shall become vested on the date of such termination. Mr. Clark shall become fully vested in the Clark Stock Grant on the date of a Change of Control (as defined in the employment agreement).
|
|
NUTRI SYSTEM INC DE
|
||||||
Date: July 11, 2008
|
By:
|
/s/ David D Clark
|
||||||
David D Clark
|
||||||||
Chief Financial Officer
|
||||||||