10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2019

or

☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____  to _____

Commission file number 000-19364

TIVITY HEALTH, INC.

(Exact name of registrant as specified in its charter)

Delaware	62-1117144
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

701 Cool Springs Boulevard, Franklin, TN  37067

(Address of principal executive offices) (Zip code)

(800) 869-5311

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐	Smaller reporting company	☐
Non-accelerated filer	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock - $.001 par value	TVTY	The Nasdaq Stock Market LLC

As of April 30, 2019, there were outstanding 47,702,306 shares of the registrant’s common stock, par value $.001 per share (“Common Stock”).

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Tivity Health, Inc.

Form 10-Q

Table of Contents

			Page
PartI
	Item 1.	Financial Statements	4
	Item 2.	Management's Discussion andAnalysisof Financial Conditionand Results of Operations	27
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
	Item 4.	ControlsandProcedures	37
Part II
	Item 1.	Legal Proceedings	38
	Item 1A.	Risk Factors	38
	Item 6.	Exhibits	49

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PARTI

Item 1. Financial Statements

TIVITY HEALTH, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

	March 31, 2019			December 31, 2018
Current assets:
Cash and cash equivalents	$	18,788		$	1,933
Accounts receivable, net		120,800			67,139
Inventories		32,469			—
Prepaid expenses		13,116			3,655
Income taxes receivable		2,518			720
Other current assets		5,658			4,658
Total current assets		193,349			78,105
Property and equipment, net of accumulated depreciation of    $32,927 and $30,711 respectively		47,985			16,341
Right-of-use assets		46,747			—
Intangible assets, net		975,729			29,049
Goodwill, net		780,351			334,680
Other long-term assets		26,427			23,904
Total assets	$	2,070,588		$	482,079
Current liabilities:
Accounts payable	$	88,083		$	29,103
Accrued salaries and benefits		8,696			6,512
Accrued liabilities		51,576			42,563
Deferred revenue		16,129			582
Income taxes payable		493			—
Current portion of debt		44,900			57
Current portion of lease liabilities		14,808			—
Current portion of long-term liabilities		1,455			2,255
Total current liabilities		226,140			81,072
Long-term debt		1,066,940			30,589
Long-term lease liabilities		35,166			—
Long-term deferred tax liability		225,039			319
Other long-term liabilities		139			1,098
Stockholders' equity:
Preferred stock $.001 par value, 5,000,000 shares authorized,    none outstanding		—			—
Common Stock $.001 par value, 120,000,000 shares authorized,    47,679,712 and 41,049,418 shares outstanding, respectively		47			41
Additional paid-in capital		491,548			347,487
Retained earnings		53,751			49,655
Treasury stock, at cost, 2,254,953 shares in treasury		(28,182	)		(28,182	)
Total stockholders' equity		517,164			369,001
Total liabilities and stockholders' equity	$	2,070,588		$	482,079

See accompanying notes to the consolidated financial statements.

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TIVITY HEALTH, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except earnings per share data)

(Unaudited)

	Three Months Ended March 31,
	2019		2018
Revenues	$	214,094	$	149,930
Cost of revenue (exclusive of depreciation and    amortization of $2,008 and $975,    respectively, included below)		140,338		105,396
Marketing expenses		24,149		2,887
Selling, general and administrative expenses		27,186		8,577
Depreciation and amortization		3,582		1,123
Restructuring and related charges		1,591		—
Operating income		17,248		31,947
Interest expense		7,666		3,454
Income before income taxes		9,582		28,493
Income tax expense		5,368		7,157
Net income		4,214		21,336
Earnings per share:
Basic	$	0.10	$	0.54
Diluted	$	0.10	$	0.49
Comprehensive income	$	4,214	$	21,336
Weighted average common shares and equivalents:
Basic		42,745		39,783
Diluted		43,183		43,589

See accompanying notes to the consolidated financial statements.

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TIVITY HEALTH, INC.

CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2019		2018
Net income	$	4,214	$	21,336
Other comprehensive income		—		—
Comprehensive income	$	4,214	$	21,336

See accompanying notes to the consolidated financial statements.

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TIVITY HEALTH, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

For the Three Months Ended March 31, 2019

(In thousands)

(Unaudited)

	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)			Treasury Stock			Total
Balance, December 31, 2017	$	—	$	40	$	349,243		$	(49,148	)	$	(28,182	)	$	271,953
Comprehensive income		—		—		—			21,336			—			21,336
Exercise of stock options		—		—		770			—			—			770
Tax withholding for share-based    compensation		—		—		(894	)		—			—			(894	)
Share-based employee compensation    expense		—		—		1,410			—			—			1,410
Balance, March 31, 2018	$	—	$	40	$	350,529		$	(27,812	)	$	(28,182	)	$	294,575
Balance, December 31, 2018	$	—	$	41	$	347,487		$	49,655		$	(28,182	)	$	369,001
Comprehensive income		—		—		—			4,214			—			4,214
Issuance of Common Stock in connection with Merger		—		6		132,832			—			—			132,838
Share-based compensation replacement awards related to Merger and attributable to pre-combination services		—		—		9,107			—			—			9,107
Exercise of stock options		—		—		234			—			—			234
Tax withholding for share-based    compensation		—		—		(342	)		—			—			(342	)
Share-based employee compensation    expense		—		—		2,359			—			—			2,359
Other		—		—		(129	)		(118	)		—			(247	)
Balance, March 31, 2019	$	—	$	47	$	491,548		$	53,751		$	(28,182	)	$	517,164

See accompanying notes to the consolidated financial statements.

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TIVITY HEALTH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2019			2018
Cash flows from operating activities:
Net income	$	4,214		$	21,336
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,582			1,123
Amortization and write-off of deferred loan costs		900			522
Amortization of debt discount		389			2,044
Share-based employee compensation expense		2,359			1,410
Deferred income taxes		4,355			7,090
Increase in accounts receivable, net		(31,123	)		(12,712	)
Decrease in inventory		6,025			—
Decrease in other current assets		168			2,037
Increase (decrease) in accounts payable		6,555			(916	)
Decrease in accrued salaries and benefits		(767	)		(9,007	)
Increase (decrease) in other current liabilities		5,576			(1,185	)
Increase in deferred revenue		2,309			—
Other		660			625
Net cash flows provided by operating activities	$	5,202		$	12,367
Cash flows from investing activities:
Acquisition of property and equipment	$	(3,898	)	$	(1,946	)
Business acquisitions, net of cash acquired		(1,062,818	)		—
Net cash flows used in investing activities	$	(1,066,716	)	$	(1,946	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	$	1,274,925		$	8,400
Payments of long-term debt		(167,134	)		(8,793	)
Payments related to tax withholding for share-based compensation		(342	)		(894	)
Exercise of stock options		234			771
Deferred loan costs		(30,189	)		—
Change in cash overdraft and other		891			378
Net cash flows provided by (used in) financing activities	$	1,078,385		$	(138	)
Effect of exchange rate changes on cash	$	(16	)	$	69
Net increase in cash and cash equivalents	$	16,855		$	10,352
Cash and cash equivalents, beginning of period	$	1,933		$	28,440
Cash and cash equivalents, end of period	$	18,788		$	38,792

See accompanying notes to the consolidated financial statements.

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TIVITY HEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).  In our opinion, the accompanying consolidated financial statements of Tivity Health^®, Inc. and its wholly-owned subsidiaries, including the results of Nutrisystem^®, Inc. (“Nutrisystem”) acquired on March 8, 2019, (collectively, “Tivity Health,” the “Company,” or such terms as “we,” “us,” or “our”) reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement.  Our consolidated statements of operations include results of Nutrisystem from March 8, 2019 through March 31, 2019.  We have reclassified certain items in prior periods to conform to current classifications.

Following the acquisition of Nutrisystem, we organize and manage our operations within two reportable segments, based on the types of products and services they offer: Healthcare and Nutrition.  The Healthcare segment is comprised of our legacy business and includes SilverSneakers senior fitness, Prime Fitness and WholeHealth Living^TM.  The Nutrition segment is comprised of Nutrisystem’s legacy business and includes the Nutrisystem^® and the South Beach Diet^® products.

We have omitted certain financial information that is normally included in financial statements prepared in accordance with U.S. GAAP but that is not required for interim reporting purposes.  You should read the accompanying consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018.

2. Business Combinations

On December 9, 2018, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Nutrisystem, a provider of weight management products and services, and Sweet Acquisition, Inc., a wholly-owned subsidiary of Tivity Health (“Merger Sub”). The Merger Agreement provided that Merger Sub would merge with and into Nutrisystem, with Nutrisystem surviving as a wholly-owned subsidiary of Tivity Health (the “Merger”).  The Merger was completed on March 8, 2019 (“Closing”).  At Closing, except for certain excluded shares, each share of Nutrisystem common stock outstanding immediately prior to Closing was converted into the right to receive $38.75 in cash, without interest, and 0.2141 of a share of Tivity Health Common Stock (“Exchange Ratio”) (with cash payable in lieu of any fractional shares).  Nutrisystem shares excluded from the conversion were those shares held by Nutrisystem as treasury stock and shares with respect to which appraisal rights have been properly exercised in accordance with the General Corporation Law of the State of Delaware.

The acquisition of Nutrisystem enables us to offer, at scale, an integrated portfolio of fitness, nutrition and social engagement solutions to support overall health and wellness and to address weight management, chronic conditions, and social isolation.  The fair value of consideration transferred at Closing was $1.3 billion (“Merger Consideration”), which includes cash consideration, the fair value of the stock consideration, and the fair value of the consideration for Nutrisystem equity awards assumed by Tivity Health that related to pre-combination services (see Note 8). The following table summarizes the components of the Merger Consideration:

(In thousands)
Cash paid for outstanding Nutrisystem shares (1)	$	1,138,143
Value of Tivity Health Common Stock issued in the merger (2)		132,838
Value of Nutrisystem stock options (3)		6,020
Value of Tivity Health replacement awards attributable to pre-combination service (4)		9,107
Total Merger Consideration	$	1,286,108

(1) Represents the total cash paid to former Nutrisystem stockholders as cash consideration.  This amount is based on the 29,370,594 shares of Nutrisystem common stock issued and outstanding as of Closing and cash consideration of $38.75 per share, plus cash payable in lieu of fractional shares.

(2) Represents the fair value of 6.3 million shares of Tivity Health Common Stock issued for outstanding Nutrisystem shares as stock consideration.  This amount is based on (a) 29,370,594 Nutrisystem common

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shares issued and outstanding as of Closing, times (b) the Exchange Ratio of 0.2141, times (c) $21.12, which is equal to the volume-weighted averages of the trading price per share of our Common Stock for the five consecutive trading days up to and including March 6, 2019. 

(3) Represents the fair value of the cash consideration paid for the net settlement of approximately 204,000 Nutrisystem stock options vested and outstanding as of the closing date.  In accordance with the Merger Agreement, each vested and outstanding Nutrisystem stock option was cancelled, and the holder received a cash payment per option equal to approximately $43.27 minus the applicable exercise price of the stock option.

(4) Unvested restricted stock awards and performance stock units held by Nutrisystem employees were assumed by Tivity Health and converted into time-vesting restricted stock awards and time-vesting restricted stock units, respectively (“Replacement Awards”).  The value in the table represents the portion of the fair value of the Replacement Awards that relates to pre-combination services.  

We performed a valuation analysis of the fair market value of Nutrisystem’s assets and liabilities as of Closing. The following table sets forth an allocation of the Merger Consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, with the excess recorded to goodwill.  This allocation of the Merger Consideration may be subject to revision if new facts and circumstances arise over the measurement period, which may extend up to one year from Closing.

(In thousands)
Cash, cash equivalents, and short-term investments	$	81,217
Accounts receivable		22,639
Inventory		38,494
Prepaid expenses and other current assets		12,345
Property and equipment		31,233
Right-of-use assets		22,145
Intangible assets		948,000
Other assets/liabilities		7,161
Accounts payable		(58,253	)
Accrued salaries and benefits and other liabilities		(8,695	)
Deferred revenue		(13,339	)
Lease liabilities		(22,145	)
Deferred tax liabilities, net		(220,365	)
Total identifiable assets and liabilities acquired	$	840,437
Goodwill (1)		445,671
Total Merger Consideration	$	1,286,108

(1) Goodwill represents the excess of merger consideration over the preliminary fair value of the underlying assets acquired and liabilities assumed.  Goodwill is attributable to the assembled workforce of experienced personnel at Nutrisystem and synergies expected to be achieved from the combined operations of Tivity Health and Nutrisystem.

We consolidated Nutrisystem’s operating results into our financial statements beginning on March 8, 2019.  Refer to Note 16 for revenue and profit recognized from the Nutrition segment during the three months ended March 31, 2019.  

The following financial information presents the pro forma combined company results as if the acquisition of Nutrisystem had occurred on January 1, 2018:  

(In thousands)	Three Months Ended March 31,
	2019			2018
Revenue	$	347,542		$	360,860
Net loss	$	(4,635	)	$	(29,842	)

The above pro forma results are based on assumptions and estimates, which we believe to be reasonable.  They are not the operating results that would have been realized had the acquisition actually closed on January 1, 2018 and are not necessarily indicative of our ongoing combined operating results.  The pro forma results include

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adjustments related to purchase accounting, acquisition and integration costs, financing, and amortization of intangible assets.Material non-recurring pro forma adjustments reflected in the pro forma results for the three months ended March 31, 2019 include: (1) the operating results of Nutrisystem from January 1, 2019 to March 7, 2019, (2) acquisition, integration, and restructuring costs decrease of $33.4 million, and (3) income tax expense decrease of $2.7 million (see Note 9).For the three months ended March 31, 2018, material non-recurring pro forma adjustments reflected in the pro forma results include: (1) cost of revenue increase of $2.8 million due to the purchase accounting mark-up of inventory, (2) acquisition, integration, and restructuring costs increase of $38.7 million, and (3) income tax increase of $2.7 million (see Note 9).

3. Recent RelevantAccounting Standards

On January 1, 2019, we adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (“ASC 842”), which requires that lessees recognize assets and liabilities for leases with lease terms greater than 12 months in the statement of financial position.  We elected to recognize the cumulative effect of initially applying the standard as an adjustment to beginning retained earnings as of January 1, 2019.  The significant majority of our leases are classified as operating leases.  As of January 1, 2019, we recognized a right-of-use asset of $27.0 million and lease liabilities of $29.7 million.  On March 8, 2019, we assumed existing leases from Nutrisystem and recognized additional right-of-use assets and lease liabilities of $22.1 million each.  In addition, we elected the following practical expedients available under ASC 842: (1) the package of practical expedients whereby we are not required to reassess upon adoption of ASC 842 (a) whether a contract is or contains a lease, (b) lease classification, and (c) initial direct costs (ASC 842-10-65-1(f)); and (2) the short-term lease measurement and recognition exemption (ASC 842-20-25-2). ASC 842 also requires significant new disclosures about leasing activity. 

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other” (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test.  ASU 2017-04 is effective for annual and interim impairment tests in fiscal years beginning after December 15, 2019 and is required to be applied prospectively. Early adoption is allowed for annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not anticipate that adopting this standard will have an impact on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of ASC 820.  ASU 2018-13 is effective for fiscal years beginning on or after December 15, 2019, including interim periods therein, and is generally required to be applied retrospectively, except for certain components that are to be applied prospectively.  Early adoption is permitted for any eliminated or modified disclosures. We do not anticipate that adopting this standard will have a material impact on our disclosures.

In August 2018, the FASB issued ASU No. 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement. This standard is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. We do not anticipate that adopting this standard will have a material impact on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires companies to measure credit losses for financial assets held at the reporting date utilizing a methodology that reflects current expected credit losses over the lifetime of such assets.  ASU 2016-13 is effective for the Company on January 1, 2020 and is generally required to be applied using the modified retrospective approach, with limited exceptions for specific instruments.  We do not anticipate that adopting this standard will have an impact on our consolidated financial statements and related disclosures.

4. Revenue Recognition

Beginning in 2018, we account for revenue from contracts with customers in accordance with Accounting Standards Codification (“ASC”) Topic 606.  The unit of account in ASC Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods or services) or a series of distinct goods or services provided over a period of time. ASC Topic 606 requires that a

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contract's transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when or as the performance obligation is satisfied.

Healthcare Segment

Our Healthcare segment earns revenue from three programs, SilverSneakers® senior fitness, Prime® Fitness and WholeHealth Living^TM.  We provide the SilverSneakers senior fitness program to members of Medicare Advantage and Medicare Supplement plans through our contracts with such plans.  We offer Prime Fitness, a fitness facility access program, through contracts with employers, commercial health plans, and other sponsoring organizations that allow their members to individually purchase the program.  We sell our WholeHealth Living program primarily to health plans.

Except for Prime Fitness, our Healthcare segment’s customer contracts generally have initial terms of approximately three years.  Some contracts allow the customer to terminate early and/or determine on an annual basis to which of their members they will offer our programs.The significant majority of our Healthcare segment’s customer contracts contain one performance obligation - to stand ready to provide access to our network of fitness locations and fitness programming - which is satisfied over time as services are rendered each month over the contract term.  There are generally no performance obligations that are unsatisfied at the end of a particular month.  There was no material revenue recognized during the three months ended March 31, 2019 from performance obligations satisfied in a prior period.

Our fees within the Healthcare segment are variable month to month and are generally billed per member per month (“PMPM”) or billed based on a combination of PMPM and member visits to a network location.  We bill PMPM fees by multiplying the contractually negotiated PMPM rate by the number of members eligible for or receiving our services during the month.  We bill for member visits approximately one month in arrears once actual member visits are known.  Payments from customers are typically due within 30 days of invoice date.  When material, we capitalize costs to obtain contracts with customers and amortize them over the expected recovery period. 

Our Healthcare segment’s customer contracts include variable consideration, which is allocated to each distinct month over the contract term based on eligible members and/or member visits each month.  The allocated consideration corresponds directly with the value to our customers of our services completed for the month.  Under the majority of our Healthcare segment’s contracts, we recognize revenue each month using the practical expedient available under ASC 606-10-55-18, which provides that revenue is recognized in the amount for which we have the right to invoice. 

Although we evaluate our financial performance and make resource allocation decisions based upon the results of our two reportable segments, we believe the following information depicts how our Healthcare segment revenues and cash flows are affected by economic factors.  

The following table sets forth Healthcare revenue disaggregated by program.  Revenue from our SilverSneakers program is predominantly contracted with Medicare Advantage and Medicare Supplement plans.

(In thousands)	Three Months Ended March 31,
	2019		2018
SilverSneakers	$	123,024	$	120,925
Prime Fitness		28,743		24,734
WholeHealth Living		4,575		4,217
Other		185		54
	$	156,527	$	149,930

Sales and usage-based taxes are excluded from revenues.

Nutrition Segment

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Our Nutrition segment earns revenue from four sources: direct to consumer, retail, QVC and other.  Revenue is measured based on the consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties.  As explained in more detail below, revenue is recognized upon satisfaction of the performance obligation by transferring control over a product to a Nutrition segment customer.  Direct-mail advertising costs are expensed as incurred.  We recognize an asset for the carrying amount of product to be returned and for costs to obtain a contract if the amortization is more than one year in duration.  We expense costs to obtain a contract as incurred if the amortization period is less than one year.

We sell pre-packaged foods directly to weight loss program participants primarily through the Internet and telephone (referred to as the direct to consumer channel), through QVC (a television shopping network), and select retailers. Pre-packaged foods include both frozen and non-frozen (ready-to-go), shelf-stable products.

Products sold through the direct to consumer channel, both frozen and non-frozen, may be sold separately (a la carte) or as part of a packaged monthly meal plan for which Nutrition segment customers pay at the point of sale. Products sold through QVC are payable by QVC upon our shipment of the product to the end consumer. For both the direct to consumer channel and QVC, we recognize revenue at a point in time, i.e., at the shipping point.  Direct to consumer customers may return unopened ready-to-go products within 30 days after purchase in order to receive a refund or credit. Frozen products are non-returnable and non-refundable unless the order is canceled within 14 days after delivery.   

Products sold to retailers include both frozen and non-frozen products and are payable by the retailer upon receipt. We recognize revenue at a point in time, i.e., when the retailers take possession of the product. Certain retailers have the right to return unsold products.

We account for the shipment of frozen and non-frozen, ready-to-go products as separate performance obligations. The consideration, including variable consideration for product returns, is allocated between frozen and non-frozen products based on their standalone selling prices. The amount of revenue recognized is adjusted for expected returns, which are estimated based on historical data.

In addition to our pre-packaged foods, we sell prepaid gift cards through a wholesaler that are redeemable through the Internet or telephone. Prepaid gift cards represent grants of rights to goods to be provided in the future to gift card buyers. The wholesaler has the right to return all unsold prepaid gift cards. The wholesaler’s retail selling price of the gift cards is deferred in the balance sheet and recognized as revenue when we have satisfied our performance obligation, i.e., when a gift card holder redeems the gift card with us. We recognize breakage amounts (the estimated amount of unused gift cards) as revenue, in proportion to the actual gift card redemptions exercised by gift card holders in relation to the total expected redemptions of gift cards. We utilize historical experience in estimating the total expected breakage and period over which the gift cards will be redeemed.

Sales and other taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a Nutrition segment customer are excluded from revenue and presented on a net basis.  After control over a product has transferred to a Nutrition segment customer, shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost and are included in revenue and cost of revenue in the accompanying consolidated statements of operations. Revenue from shipping and handling charges was $1.8 million for the three months ended March 31, 2019.

The following table sets forth Nutrition segment revenue disaggregated by the source of revenue:

(In thousands)	Three Months Ended March 31,
	2019
Direct to consumer	$	52,654
Retail		4,304
QVC		522
Other		87
	$	57,567

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers:

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(In thousands)	March 31, 2019
Contract assets	$	480
Contract liabilities	$	14,997

The contract assets primarily relate to unbilled accounts receivable and are included as other current assets in the accompanying consolidated balance sheet. The contract liabilities (deferred revenue) primarily relate to sale of prepaid gift cards and unshipped foods, which are deferred until such time as the Company has satisfied its performance obligations.

Significant changes in the contract liabilities (deferred revenue) balance during the period are as follows:

	Three Months Ended March 31,
(In thousands)	2019
Revenue recognized that was included in the contract liability (deferred revenue) balance on March 8, 2019	$	(2,752	)
Increases due to cash received for prepaid gift cards sold or unshipped food, excluding amounts recognized as revenue	$	4,409

The following table includes estimated revenue from the prepaid gift cards expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) at the end of the reporting period:

(In thousands)
Remaining 2019	$	10,665
2020		1,303
2021		665
	$	12,633

We apply the practical expedient in subtopic ASC 606-10-50-14 and do not disclose information about remaining performance obligations that have original expected durations of one year or less.

We review the reserves for our Nutrition segment customer returns at each reporting period and adjust them to reflect data available at that time. To estimate reserves for returns, we consider actual return rates in preceding periods and changes in product offerings or marketing methods that might impact returns going forward. To the extent the estimate of returns changes, we will adjust the reserve, which will impact the amount of revenue recognized in the period of the adjustment. The provision for estimated returns for the three months ended March 31, 2019 was $1.4 million.   The reserve for estimated returns incurred but not received and processed was $1.3 million at March 31, 2019 and has been included in accrued liabilities in the accompanying consolidated balance sheet.

5. Inventories

Inventories consist principally of packaged food held in external fulfillment locations. We value inventories at the lower of cost or net realizable value, with cost determined using the first-in, first-out method. We continually assess quantities of inventory on hand to identify excess or obsolete inventory and record a provision for any estimated loss. We estimate the reserve for excess and obsolete inventory primarily on forecasted demand and/or our ability to sell the products, our ability to introduce new products, future production requirements, and changes in consumer behavior. The reserve for excess and obsolete inventory was $1.3 million atMarch 31, 2019.

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6. Intangible Assets and Goodwill

We amortize intangible assets subject to amortization on a straight-line basis over the applicable useful lives of the identifiable assets.  In connection with our acquisition of Nutrisystem on March 8, 2019, we recorded the following amounts of intangible assets and goodwill.  All of the goodwill was recorded to the Nutrition segment, and none of the goodwill is deductible for tax purposes.  

(In thousands)	Fair Value		Estimated Useful Life (in years)
Intangible assets subject to amortization:
Tradename - South Beach Diet		9,000		15
Customer list		125,000		7
Retail customer relationship		8,000		10
Noncompetition agreements		6,000		5
Subtotal	$	148,000
Intangible assets not subject to amortization:
Tradename - Nutrisystem		800,000	n/a
Total intangible assets	$	948,000
Goodwill		445,671	n/a

In addition, as of March 31, 2019, there was $334.7 million of goodwill and $29.0 million of intangible assets not subject to amortization allocated to the Healthcare segment.

The change in the carrying amount of goodwill during the three months ended March 31, 2019 was as follows:

(In thousands)
Balance, January 1, 2019	$	334,680
Acquisition of Nutrisystem		445,671
Balance, March 31, 2019	$	780,351

7. Marketing Expenses

Marketing expense includes media, advertising production, marketing and promotional expenses and payroll-related expenses, including share-based payment arrangements, for personnel engaged in these activities.  For the three months ended March 31, 2019, media expense was $20.3 million.  Internet advertising expense is recorded based on either the rate of delivery of a guaranteed number of impressions over the advertising contract term or on the cost per customer acquired, depending upon the terms.  All other advertising costs are charged to expense as incurred or the first time the advertising takes place. At March 31, 2019, $1.4 million of costs have been prepaid for future advertisements and promotions.

Prior to the acquisition of Nutrisystem, Tivity Health historically classified marketing expenses within cost of revenue and selling, general, and administrative expenses, while Nutrisystem presented marketing expenses in a separate line item.  Because marketing expense is material to the combined company and for purposes of comparability, we have reclassified historical Tivity Health marketing expenses to a separate line for the three months ended March 31, 2019 and 2018.

8. Share-Based Compensation

We currently havefive types of share-based awardsoutstandingto our employees and directors:stock options, restricted stock awards, restrictedstock units, performance stock units, andmarketstock units. We believethatourshare-basedawards alignthe interests of our employees anddirectors withthoseofourstockholders. Each of these award types generally vests over three or four years.

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During the three months ended March 31, 2019, we granted the following awards to employees of Nutrisystem in replacement of their unvested equity awards as of Closing (“Replacement Awards”): (i) approximately 258,000time-vesting restricted stock awards at a fair value of $19.42 per share and (ii) approximately 919,000time-vestingrestricted stock units at a fair value of $19.42 per share.  Approximately $9.1 million of the fair value of the Replacement Awards was attributable to pre-combination service and was included in the purchase price of Nutrisystem (see Note 2).  Post-combination expense related to the Replacement Awards of approximately $13.7 million is expected to be recognized over the remaining post-combination requisite service period.

We recognize share-based compensation expense for the market stock units if the requisite service period is rendered, even if the market condition is never satisfied. For the three months ended March 31, 2019, we recognized total share-based compensation costs of $2.4 million, including $0.1 million recorded to restructuring and related charges.  For the three months ended March 31, 2018, we recognized total share-based compensation costs of $1.4 million.  We account for forfeitures as they occur.  

A summary of our stock options as of March 31, 2019 and the changes during the three months then ended is presented below:

Options	Shares (In thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2019		431		$	17.83
Granted		—			—
Exercised		(35	)		10.70
Forfeited		—			—
Expired		—			—
Outstanding at March 31, 2019		396		$	18.46		4.4	$	1,262
Exercisable at March 31, 2019		316		$	13.57		3.3	$	1,262

The followingtableshows a summary ofour restricted stock awards as of March 31, 2019,aswellas activity during the three months then ended:

	Restricted Stock Awards
	Shares (In thousands)		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		—	$	—
Granted		—		—
Replacement Awards		258		19.42
Vested		—		—
Forfeited		—		—
Nonvested at March 31, 2019		258	$	19.42

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The followingtableshows a summary ofour restricted stock units as of March 31, 2019,aswellas activity during the three months then ended:

	Restricted Stock Units
	Shares (In thousands)			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		271		$	24.07
Granted		141			19.42
Replacement Awards		919			19.42
Vested		(68	)		11.42
Forfeited		—			—
Nonvested at March 31, 2019		1,263		$	20.84

The followingtableshows a summary ofourperformance stock unitsas of March 31, 2019, as wellas activity during the three months then ended:

	Performance Stock Units
	Shares (In thousands)		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		—	$	—
Granted		103		19.42
Vested		—
Forfeited		—
Nonvested at March 31, 2019		103	$	19.42

The followingtableshows a summary ofourmarket stock unitsas of March 31, 2019, as wellas activity during the three months then ended:

	Market Stock Units
	Shares (In thousands)		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		45	$	18.25
Granted		—		—
Vested		—		—
Forfeited		—		—
Nonvested at March 31, 2019		45	$	18.25

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9. Income Taxes

For the three months ended March 31, 2019 and March 31, 2018, we had an effective income tax rate from continuing operations of 56.0% and 25.1%, respectively.  Upon Closing of the Merger, we evaluated the realizability of beginning-of-the-year deferred tax assets and increased the valuation allowance on deferred tax assets related to state net operating loss carryforwards by $1.8 million. In addition, we recorded a $0.9 million reduction in deferred tax assets related to state income tax credits.  These adjustments increased our income tax expense for the three months ended by March 31, 2019 by approximately $2.7 million.  

We file income tax returns in the U.S. Federal jurisdiction and in various state and foreign jurisdictions.  Tax years remaining subject to examination in the U.S. Federal jurisdiction include 2015 to present.

10.  Leases

On January 1, 2019, we adopted ASC 842 using the modified retrospective approach. Therefore, the comparative information for periods ended prior to January 1, 2019 was not restated. Leases with an initial term of 12 months or less are considered short-term and are not recorded on the balance sheet. We recognize lease expense for these short-term leases on a straight-line basis over the lease term. With the exception of one finance lease related to office equipment, all of our leases are classified as operating leases.  We maintain lease agreements principally for our office spaces and certain equipment. In addition, certain of our contracts, such as those with our fulfillment vendor related to our warehouse space or contracts with certain equipment vendors, contain embedded leases.  We maintain two sublease agreements with respect to one of our office locations, each of which continues through the initial term of our master lease agreement.  Such sublease income and payments, while they reduce our rent expense, are not considered in the value of the right-of-use asset or lease liability.  In the aggregate, our leases generally have remaining lease terms of one to six years, some of which include options to extend the lease for additional periods.  Such extension options were not considered in the value of the right-of-use asset or lease liability since it is not probable that we will exercise the options to extend.  If applicable, allocations among lease and nonlease components would be achieved using relative standalone selling prices.

Upon adoption of ASC 842, we determined our estimated discount rate for existing leases as of January 1, 2019 based on the incremental borrowing rate that most closely aligned with the remaining lease term and payment schedule, as provided by our financial institution.  The discount rate for leases in the Nutrition segment was estimated as of the Closing date of the Merger.  

The following table shows the right-of-use assets and lease liabilities recorded on the balance sheet:

	March 31, 2019
(In thousands)
Right-of-use assets:
Operating	$	46,578
Finance		169
Total leased assets	$	46,747
Lease liabilities:
Current
Operating	$	14,762
Finance		46
Non-current
Operating	$	35,043
Finance		123
Total lease liabilities	$	49,974

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The following table shows the components of lease expense:

	Three Months Ended March 31,
(In thousands)	2019
Finance lease cost:
Amortization of leased assets	$	12
Interest of lease liabilities		2
Operating lease cost		2,716
Short-term lease cost		33
Total lease cost before subleases	$	2,763
Sublease income		(1,344	)
Total lease cost, net	$	1,419

The following provides information related to the lease term and discount rate as of March 31, 2019:

Weighted Average Remaining Lease Term (years)
Operating leases	3.6
Finance leases	3.3
Weighted Average Discount Rate
Operating leases	5.4	%
Finance leases	4.4	%

As of March 31, 2019, maturities of lease liabilities for each of the next five years and thereafter were as follows.

	Operating Leases								Financing
(In thousands)	Lease Payments			Sublease Receipts			Net		Leases
Remaining 2019	$	12,896		$	(4,233	)	$	8,663	$	39
2020		14,828			(5,667	)		9,161		52
2021		13,361			(5,699	)		7,662		52
2022		11,339			(5,732	)		5,607		39
2023		1,947			(956	)		991		—
2024 and thereafter		379			—			379		—
Total lease payments		54,750		$	(22,287	)	$	32,463		182
Less: interest		(4,945	)							(13	)
Present value of lease liabilities	$	49,805							$	169

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Supplemental cash flow information related to leases was as follows:

	Three Months Ended March 31,
(In thousands)	2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow attributable to operating leases	$	(1,547	)
Operating cash flow attributable to finance leases		(2	)
Financing cash flows attributable to finance leases		(11	)
Supplemental noncash information:
Right-of-use assets obtained in exchange for operating lease liabilities (1)		48,972
Right-of-use assets obtained in exchange for finance lease liabilities (1)		181

(1) No new leases were entered into during the three months ended March 31, 2019.  Amounts shown are due to the adoption of ASC 842 and reflect balances as of January 1, 2019 for the Healthcare segment and as of March 8, 2019 for the Nutrition segment (i.e., the date of our acquisition of Nutrisystem).

As of December 31, 2018, future minimum lease payments, net of total cash receipts from subleases of $23.7 million, under all non-cancelable operating leases for each of the next five years and thereafter were as follows.  As of December 31, 2018, future minimum lease payments under capital leases were not material.

(In thousands)	Operating
Year ending December 31,	Leases
2019	$	4,022
2020		2,040
2021		910
2022		827
2023		136
2024 and thereafter		—
Total minimum lease payments	$	7,935

11. Debt

The Company's debt, net of unamortized deferred loan costs and original issue discount, consistedof the following at March 31, 2019 and December 31, 2018:

(In thousands)	March 31, 2019			December 31, 2018
Term Loan A	$	341,000		$	—
Term Loan B		824,000			—
Delayed draw term loan		—			25,000
Revolving credit facility		—			5,450
Capital lease obligations and other (1)		—			196
		1,165,000			30,646
Less: deferred loan costs and original issue discount ("OID")		(53,160	)		—
		1,111,840			30,646
Less: current portion		(44,900	)		(57	)
	$	1,066,940		$	30,589

(1) Prior to the adoption of ASC 842 on January 1, 2019, our capital leases were recorded as part of debt.  Beginning on January 1, 2019, they are classified as financing leases under ASC 842 and are recorded as part of lease liabilities.  

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Credit Facility

In connection with the consummation of the Merger, on March 8, 2019, we entered into a new Credit and Guaranty Agreement (the “Credit Agreement”) with a group of lenders, Credit Suisse AG, Cayman Islands Branch, as general administrative agent, term facility agent and collateral agent, and SunTrust Bank, as revolving facility agent and swing line lender (“SunTrust”). The Credit Agreement replaced our prior Revolving Credit and Term Loan Agreement, dated April 21, 2017 (the “Prior Credit Agreement”), with a group of lenders and SunTrust, as administrative agent. The Credit Agreement provides us with (i) a $350.0 million term loan A facility (“Term Loan A”), (ii) an $830.0 million term loan B facility (“Term Loan B” and, together with Term Loan A, the “Term Loans”), (iii) a $125.0 million revolving credit facility that includes a $35.0 million sublimit for swingline loans and a $50.0 million sublimit for letters of credit (the “Revolving Credit Facility”; Term Loan A, Term Loan B and the Revolving Credit Facility are sometimes herein referred to collectively as the “Credit Facilities”), and (iv) uncommitted incremental accordion facilities in an aggregate amount at any date equal to the greater of $125.0 million or 50% of our consolidated EBITDA for the then-preceding four fiscal quarters, plus additional amounts based on, among other things, satisfaction of certain financial ratio requirements.

We used the proceeds of the Term Loans, borrowings under the Revolving Credit Facility and cash on hand to pay the Merger Consideration, to repay all of the outstanding indebtedness under the Prior Credit Agreement and all outstanding indebtedness of Nutrisystem under its credit agreement, and to pay transaction costs and expenses. Proceeds of the Revolving Credit Facility also may be used for general corporate purposes of the Company and its subsidiaries.

We are required to repay Term Loan A loans in consecutive quarterly installments, each in the amount of 2.50% of the aggregate initial amount of such loans, payable on June 30, 2019 and on the last day of each succeeding quarter thereafter until maturity on March 8, 2024, at which time the entire outstanding principal balance of such loans is due and payable in full. We are required to repay Term Loan B loans in consecutive quarterly installments, each in the amount of 0.75% of the aggregate initial amount of such loans, payable on June 30, 2019 and on the last day of each succeeding quarter thereafter until maturity on March 8, 2026, at which time the entire outstanding principal balance of such loans is due and payable in full. We are permitted to make voluntarily prepayments of borrowings under the Term Loans at any time without penalty.  We are required to repay in full any outstanding swingline loans and revolving loans under the Revolving Credit Facility on March 8, 2024.

Borrowings under the Credit Agreement bear interest at variable rates based on a margin or spread in excess of either (1) one-month, two-month, three-month or six-month LIBOR (or, with the approval of all lenders holding the particular class of loans, 12-month LIBOR), which may not be less than zero, or (2) the greatest of (a) the prime lending rate of the agent bank for the particular facility, (b) the federal funds rate plus 0.50%, and (c) one-month LIBOR plus 1.00% (the “Base Rate”), as selected by the Company. The LIBOR margin for Term Loan A loans is 4.25%, the LIBOR margin for Term Loan B loans is 5.25% and the LIBOR margin for revolving loans varies between 3.75% and 4.25%, depending on our total net leverage ratio. The Base Rate margin for Term Loan A loans is 3.25%, the Base Rate margin for Term Loan B loans is 4.25% and the Base Rate margin for revolving loans varies between 2.75% and 3.25%, depending on our total net leverage ratio.

The Credit Agreement also provides for annual commitment fees ranging between 0.250% and 0.500% of the unused commitments under the Revolving Credit Facility, depending on our total net leverage ratio, and annual letter of credit fees on the daily outstanding availability under outstanding letters of credit at the applicable LIBOR margin for the Revolving Credit Facility, depending on our total net leverage ratio.

Extensions of credit under the Credit Agreement are secured by guarantees from substantially all of the Company’s active material domestic subsidiaries and by security interests in substantially all of Company’s and such subsidiaries’ assets.

The Credit Agreement contains a financial covenant that requires us to maintain specified maximum ratios or levels of consolidated total net debt to EBITDA, calculated as provided in the Credit Agreement. The Credit Agreement also contains various other affirmative and negative covenants customary for financings of this type that, subject to certain exceptions, impose restrictions and limitations on the Company and certain of the Company’s subsidiaries with respect to, among other things, indebtedness; liens; negative pledges; restricted payments (including dividends, distributions, buybacks, redemptions, repurchases with respect to equity interests, and payments, redemptions, retirements, purchases, acquisitions, defeasance, exchange, conversion, cancellation or termination with respect to junior lien, subordinated or unsecured debt); restrictions on subsidiary distributions;

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loans, advances, guarantees, acquisitions and other investments; mergers and other fundamental changes; sales and other dispositions of assets (including equity interests in subsidiaries); sale/leaseback transactions; transactions with affiliates; conduct of business; amendments and waivers of organizational documents and material junior debt agreements; and changes to fiscal year.

Warrants

In July 2013, we sold separate privately negotiated warrants (the “Warrants”) initially relating, in the aggregate, to approximately 7.7 million shares of our Common Stock. The Warrants are call options with an initial strike price of approximately $25.95 per share.  Since October 1, 2018, the Warrants have been subject to automatic exercise on a pro rata basis each trading day continuing for a period of 160 trading days (i.e., approximately 48,000 warrants are subject to automatic exercise on each trading day).  The Warrants are net share settled by our issuing a number of shares of our Common Stock per Warrant with a value corresponding to the excess of the market price per share of our Common Stock (as measured on each warrant exercise date under the terms of the Warrants) over the applicable strike price of the Warrants. If such market price per share is less than the applicable strike price of the Warrants on any given exercise date, then the warrants subject to automatic exercise on such exercise date are not exercised but instead expire.  The Warrants meet the definition of derivatives under the guidance in ASC Topic 815; however, because these instruments have been determined to be indexed to our own stock and meet the criteria for equity classification under ASC Topic 815, the Warrants have been accounted for as an adjustment to our additional paid-in-capital.  During the three months ended March 31, 2019, we did not issue any shares of Common Stock related to the automatic exercise of the Warrants due to the market price per share of our Common Stock being less than the applicable strike price of the Warrants on each exercise date during such time period.

When the market price per share of our Common Stock exceeds the strike price of the Warrants, the Warrants have a dilutive effect on net income per share, and the “treasury stock” method is used in calculating the dilutive effect on earnings per share.  See Note 15 for additional information on such dilutive effect.

12. Commitments and Contingencies

Weiner, Denham, Allen, and Witmer Lawsuits

On November 6, 2017, United Healthcare issued a press release announcing expansion of its fitness benefits (“United Press Release”), and the market price of the Company's shares of Common Stock dropped on that same day. In connection with the United Press Release, four lawsuits have been filed against the Company as described below.  We are currently not able to predict the probable outcome of these matters or to reasonably estimate a range of potential losses, if any.  We intend to vigorously defend ourselves against all four complaints.

On November 20, 2017, Eric Weiner, claiming to be a stockholder of the Company, filed a complaint on behalf of stockholders who purchased the Company’s Common Stock between February 24, 2017 and November 3, 2017 (“Weiner Lawsuit”).  The Weiner Lawsuit was filed as a class action in the U.S. District Court for the Middle District of Tennessee, naming as defendants the Company, the Company's chief executive officer, chief financial officer and a former executive who served as both chief accounting officer and interim chief financial officer.  The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act in making false and misleading statements and omissions related to the United Press Release.  The complaint seeks monetary damages on behalf of the purported class.  On April 3, 2018, the Court entered an order appointing the Oklahoma Firefighters Pension and Retirement System as lead plaintiff, designated counsel for the lead plaintiff, and established certain deadlines for the case.  On June 4, 2018, plaintiff filed a first amended complaint.  On August 3, 2018, the Company filed a motion to dismiss the first amended complaint and a memorandum in support of a motion to dismiss seeking dismissal on grounds that the first amended complaint fails to plead any actionable statement or omission (the “Motion to Dismiss”).  On March 18, 2019, the Court denied the Company’s Motion to Dismiss.  On April 1, 2019, the Company filed a motion for reconsideration asking the Court to reconsider its denial of the Motion to Dismiss.  On April 15, 2019, the Court ordered plaintiff to respond to the substantive issues raised in the Company’s Motion to Dismiss.

On January 26, 2018, Charles Denham, claiming to be a stockholder of the Company, filed a purported shareholder derivative action, on behalf of the Company, in the U.S. District Court for the Middle District of

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Tennessee, naming the Company as a nominal defendant and the Company's chief executive officer, chief financial officer, a former executive who served as both chief accounting officer and interim chief financial officer, current directors and a former director of the Company, as defendants (“Denham Lawsuit”).  The complaint asserts claims for breach of fiduciary duty, waste, and unjust enrichment, largely tracking allegations in the Weiner Lawsuit.  The complaint further alleges that certain defendants engaged in insider trading.  The plaintiff seeks monetary damages on behalf of the Company, certain corporate governance and internal procedural reforms, and other equitable relief.

On August 24, 2018, Andrew H. Allen, claiming to be a stockholder of the Company, filed a purported shareholder derivative action, on behalf of the Company, in the U.S. District Court for the Middle District of Tennessee, naming the Company as a nominal defendant and the Company’s chief executive officer, chief financial officer, a former executive who served as both chief accounting officer and interim chief financial officer, together with nine current or former directors, as defendants (the “Allen Lawsuit”).  The complaint asserts claims for breach of fiduciary duty and violations of the Securities Act of 1933, as amended (the “Securities Act”) and the Exchange Act against all individual defendants, largely tracking allegations in the Weiner Lawsuit and Denham Lawsuit, and breach of fiduciary duty for insider trading against a former executive who served as both chief accounting officer and interim chief financial officer and one of the directors of the Company.  The plaintiff seeks to recover damages on behalf of the Company, certain corporate governance and internal procedural reforms, and other equitable relief, including restitution from the two defendants alleged to have engaged in insider trading from all unlawfully obtained profits.  On October 15, 2018, the Allen Lawsuit and the Denham Lawsuit were consolidated by stipulation.  On April 17, 2019, the Court entered an order approving a schedule for filing and briefing a motion to dismiss.

On March 25, 2019, Colleen Witmer, claiming to be a stockholder of the Company, filed a purported shareholder derivative action, on behalf of the Company, in the Chancery Court for Davidson County, Tennessee, naming the Company as a nominal defendant and the Company's chief executive officer, chief financial officer, a former executive who served as both chief accounting officer and interim chief financial officer, chief legal and administrative officer, certain current directors, and two former directors of the Company, as defendants. The complaint asserts claims for breach of fiduciary duty and unjust enrichment, largely tracking allegations in the Denham Lawsuit.  The complaint further alleges that certain defendants engaged in insider trading.  The plaintiff seeks monetary damages on behalf of the Company, restitution, certain corporate governance and internal procedural reforms, and other equitable relief.

Other

Additionally, from time to time, we are subject to contractual disputes, claims and legal proceedings that arise in the ordinary course of our business. Some of the legal proceedings pending against us as of the date of this report are expected to be covered by insurance policies.  As these matters are subject to inherent uncertainties, our view of these matters may change in the future.  We expense legal costs as incurred.

13. Fair Value Measurements

We account for certain assets and liabilities at fair value. Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date, assuming the transaction occurs in the principal or most advantageous market for that asset or liability.

Fair Value Hierarchy

The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1:  Quoted prices in active markets for identical assets or liabilities;

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Level 2:  Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-based valuation techniques in which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3:  Unobservable inputs that are supported by little or no market activity and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

Assets andLiabilitiesMeasuredat Fair ValueonaRecurring Basis

There were no assets and liabilitiesmeasuredat fair valueon arecurring basis at March 31, 2019 or December 31, 2018.

Fair Value of Other Financial Instruments

The estimatedfair value of eachclass of financial instruments at March 31, 2019 was as follows:

Cashandcashequivalents–Thecarryingamountof$18.8millionapproximatesfairvaluedue totheshortmaturityof those instruments (less than three months).

Debt–TheestimatedfairvalueofoutstandingborrowingsundertheCreditAgreement,which includesterm loan facilities and arevolvingcreditfacility(see Note 11),isdeterminedbasedonthefairvaluehierarchyasdiscussedabove.

The Term Loans are activelytradedandthereforeareclassifiedasLevel1valuations.Theestimatedfair valueisbasedonthe last quoted price of the Term Loans through March 31, 2019. The Revolving Credit Facility is not actively traded and therefore is classified as a Level 2 valuation based on the market for similar instruments.  There was no amount outstanding under the Revolving Credit Facility as of March 31, 2019. The estimated fair value and carrying amount of outstanding borrowings under the Term Loans at March 31, 2019 were $1,146 million and $1,165 million, respectively.  

14. Restructuring and Related Charges

During the first quarter of 2019, we began a reorganization primarily related to integrating the Healthcare and Nutrition segments and streamlining our corporate and operations support (the "2019 Restructuring Plan").  To date, we have incurred restructuring charges of $1.6 million related to actions executed in the first quarter of 2019 (the “Q1 2019 Actions”), of which $1.0 million related to the Healthcare segment and $0.6 million related to the Nutrition segment.  These expenses consist entirely of severance and other employee-related costs.  The Q1 2019 Actions are expected to result in additional costs of $0.8 million during the second quarter of 2019, all of which relates to the Nutrition segment.   Although we expect further actions to be taken under the 2019 Restructuring Plan during the remainder of 2019 that will result in additional restructuring charges and future savings, the Q1 2019 Actions are expected to result in total annualized savings of approximately $7.2 million, with $3.5 million relating to the Healthcare segment and $3.7 million relating to the Nutrition segment.

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15. Earnings Per Share

Thefollowingisareconciliationofthenumeratoranddenominatorofbasicanddilutedearningspershareforthe three months ended March 31, 2019and 2018:

(In thousands except per share data)	ThreeMonths Ended March 31,
	2019		2018
Numerator:
Net income	$	4,214	$	21,336
Denominator:
Shares used for basic income per share		42,745		39,783
Effect of dilutive stock options and    restricted stock units outstanding:
Non-qualified stock options		127		312
Restricted stock awards		16		—
Restricted stock units		292		405
Performance stock units		3		—
Market stock units		—		533
Warrants related to Cash Convertible Notes		—		2,556
Shares used for diluted income per share		43,183		43,589
Earnings per share:
Basic	$	0.10	$	0.54
Diluted	$	0.10	$	0.49
Dilutive securities outstanding not included in the    computation of earnings per share    because their effect is anti-dilutive:
Non-qualified stock options		80		—
Restricted stock units		56		14

(1) Figures may not add due to rounding.

Market stock units outstanding are considered contingently issuable shares, and certain of these stock units were excluded from the calculations of diluted earnings per share for all periods presented as the performance criteria had not been met as of the end of the reporting periods.

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16. Segment Information  

Following the acquisition of Nutrisystem in March 2019, we organize and manage our operations within two reportable segments, based on the types of products and services they offer: Healthcare and Nutrition.  The Healthcare segment consists of SilverSneakerssenior fitness, Prime Fitness and WholeHealth Living.  The Nutrition segment provides weight management products and services.

Each segment’s profit is measured as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding acquisition and integration costs and restructuring and related charges, as shown below:

(In thousands)
	Three Months Ended March 31, 2019
	Healthcare		Nutrition		Consolidated
Revenues	$	156,527	$	57,567	$	214,094
Adjusted EBITDA	$	26,129	$	13,344	$	39,473
Acquisition and integration costs					$	17,052
Restructuring and related charges						1,591
Interest expense						7,666
Depreciation and amortization						3,582
Income before income taxes					$	9,582
Total assets as of March 31, 2019	$	456,017	$	1,614,571	$	2,070,588

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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Tivity Health, Inc. (the “Company”) was founded and incorporated in Delaware in 1981.  Through our programs, which include SilverSneakers senior fitness, Prime Fitness and WholeHealth Living, we are focused on advancing health and vitality, especially in aging populations.  On March 8, 2019, we completed our acquisition of Nutrisystem, which is a provider of weight management products and services, including nutritionally balanced weight loss programs sold primarily through the Internet and telephone and multi-day kits and single items (a la carte) available at select retail locations.  The acquisition of Nutrisystem enables us to offer, at scale, an integrated portfolio of fitness, nutrition and social engagement solutions to support overall health and wellness and to address weight management and obesity – a major factor contributing to many chronic diseases. Our consolidated statements of operations include results of Nutrisystem from March 8, 2019 through March 31, 2019.

Following the acquisition of Nutrisystem, we organize and manage our operations within two reportable segments, based on the types of products and services they offer: Healthcare and Nutrition.  The Healthcare segment is comprised of our legacy business and includes SilverSneakers senior fitness, Prime Fitness and WholeHealth Living.  The Nutrition segment is comprised of Nutrisystem’s legacy business and includes Nutrisystem and the South Beach Diet.

As part of our Healthcare segment, the SilverSneakers senior fitness program is offered to members of Medicare Advantage and Medicare Supplement plans.  We also offer Prime Fitness, a fitness facility access program, through commercial health plans, employers, and other sponsoring organizations.  Our national network of fitness centers delivers both SilverSneakers and Prime Fitness.  In addition, a small portion of our fitness center network is available for discounted access through our WholeHealth Living program.  Our fitness networks encompass more than 16,000 partner locations and more than 1,000 alternative locations that provide classes outside of traditional fitness centers. Through our WholeHealth Living program, which we sell primarily to health plans, we offer a continuum of services related to complementary, alternative, and physical medicine.  Our WholeHealth Living network includes relationships with approximately 80,000 complementary, alternative, and physical medicine practitioners to serve individuals through health plans and employers who seek health services such as chiropractic care, acupuncture, physical therapy, occupational therapy, speech therapy, and more.

Our Nutrition segment includes Nutrisystem and the South Beach Diet. Typically, our Nutrition segment customers purchase monthly food packages containing a four-week meal plan consisting of breakfasts, lunches, dinners, snacks and flex meals, which they supplement, depending on the program they are following, with items such as fresh fruits, fresh vegetables, lean protein and dairy. Most Nutrition segment customers order on an auto-delivery basis (“Auto-Delivery”), which means we send a four-week meal plan on an ongoing basis until notified of a customer’s cancellation. Auto-Delivery customers are offered savings off of our regular one-time rate with each order. Monthly notifications are also sent to remind customers to update order preferences. We offer pre-selected favorites or customers may personalize their meal plan by selecting their entire menu or by customizing plans to their specific tastes or dietary preference. In total, our plans feature approximately 250 food options including frozen and unfrozen ready-to-go entrees, snacks, and shakes, at different price points. Additionally, we offer unlimited counseling from our trained weight loss counselors, registered dietitians and certified diabetes educators at no cost. Counselors are available as needed, seven days a week throughout an extended day, with further support provided through our digital tools.  The Nutrition segment also offers its products through select retailers and QVC, a television shopping network.

Forward-Looking Statements

This report contains forward-looking statements, which are based upon current expectations, involve a number of risks and uncertainties, and are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and those regarding the intent, belief, or expectations of the Company, including, without limitation, all statements regarding the Company's future earnings, revenues, and results of operations.  Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may vary from those in the forward-looking statements as a result of various factors, including, but not limited to:

• the market’s acceptance of our new products and services;

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• our ability to develop and implement effective strategies andtoanticipateandrespondtostrategicchanges,opportunities,andemergingtrendsinourindustryand/orbusiness, as well as toaccuratelyforecasttherelatedimpactonourrevenuesandearnings;

• the risk that expected benefits, synergies and growth opportunities from the acquisition of Nutrisystem may not be achieved in a timely manner or at all, including that the acquisition may not be accretive within the expected timeframe or to the extent anticipated;

• ourabilityto successfullyintegrate Nutrisystem’s business or any other neworacquiredbusinesses,services,technologies, solutions, or productsintoourbusiness andtoaccuratelyforecasttherelatedcosts;

• the risk that the significant indebtedness incurred in connection with the acquisition of Nutrisystem consideration may limit our ability to adapt to changes in the economy or market conditions, expose us to interest rate risk for the variable rate indebtedness and require a substantial portion of cash flows from operations to be dedicated to the payment of indebtedness;

• ourabilitytoserviceourdebt,makeprincipalandinterestpaymentsasthosepaymentsbecomedue,andremainincompliance withourdebtcovenants;

• ourabilitytoobtainadequatefinancingtoprovidethecapitalthatmaybenecessarytosupportour current or futureoperations;

• therisksassociatedwithchangesinmacroeconomicconditions, geopoliticalturmoil andthecontinuingthreatofdomesticorinternationalterrorism;

• theimpactofanyimpairmentofourgoodwill,intangibleassets,orotherlong-termassets;

• the risks associated with potential failures of our information systems;

• therisksassociatedwithdataprivacyorsecuritybreaches,computerhacking,networkpenetrationandotherillegalintrusionsof ourinformationsystemsorthoseofthird-partyvendorsorotherserviceproviders,whichmayresultinunauthorized access by third parties, loss, misappropriation, disclosure or corruption of customer, employee or our information, or other data subject to privacy lawsand may leadto a disruption in our business, costs to modify, enhance, or remediate our cybersecurity measures, enforcementactions,finesor litigationagainstus, or damage to our business reputation;

• theimpactofanyneworproposedlegislation,regulationsandinterpretationsrelatingtoMedicare,MedicareAdvantage, Medicare Supplement, e-commerce, advertising, and privacy and security laws;

• our ability to attract, hire, or retain key personnel or other qualified employees and to control labor costs;

• the effectiveness of the reorganization of our business and our ability to realize the anticipated benefits;

• our ability to effectively compete againstother entities, whose financial, research, staff, and marketing resources may exceed ourresources;

• theimpactoflegalproceedingsinvolvingusand/oroursubsidiaries, products, or services, including any potential claims related to intellectual property rights;

• our ability to enforce our intellectual property rights;

• the risks associated with deriving a significant concentration of our revenues from a limited number of our Healthcare segment customers, many of whom are health plans;

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• ourabilityand/ortheabilityofourHealthcare segment customerstoenrollparticipantsandtoaccuratelyforecasttheirlevelofenrollmentandparticipationinourprogramsinamannerandwithinthetimeframeanticipatedbyus;

• ourabilityto sign, renew and/or maintaincontracts withour Healthcare segment customers and/or our fitness partner locations underexistingterms or restructure thesecontracts on terms that would not havea materialnegative impacton our results of operations;

• theabilityofour Healthcare segment health plan customerstomaintainthenumberofcoveredlivesenrolledinthose health plansduringthetermsofouragreements;

• the impact of severe or adverse weather conditions and thepotentialemergenceofahealth pandemicor an infectiousdiseaseoutbreak on member participation in our Healthcare segment programs;

• the impact of healthcare reform on our business;

• the effectiveness of our marketing and advertising programs;

• loss, or disruption in the business, of any of our food suppliers or our fulfillment provider, or disruptions in the shipping of our food products for our Nutrition segment;

• the impact of claims that our Nutrition segment personnel are unqualified to provide proper weight loss advice;

• the impact of health- or advertising-related claims by our Nutrition segment customers;

• competition from other weight management industry participants or the development of more effective or more favorably perceived weight management methods;

• loss of any of our Nutrition segment third-party retailer agreements and any obligations associated with such loss;

• our ability to continue to develop innovative weight loss programs and enhance our existing programs, or the failure of our programs to continue to appeal to the market;

• the impact of claims from our Nutrition segment competitors regarding advertising or other marketing practices;

• ourabilitytodevelop and commercially introducenewproducts and services;

• our ability to receive referrals from existing Nutrition segment customers, a decline in which could adversely impact our customer acquisition costs;

• failure to attract spokespersons or negative publicity with respect to any of our spokespersons;

• ourabilityto anticipatechangeandrespondto emergingtrendsfor customer preferences andthe impact of the same ondemandfor ourservices and products;

• negative publicity with respect to the weight loss industry;

• the impact of increased governmental regulation on our Nutrition segment;

• claims arising from the sale of ingested products; and

• other risks detailed in this report and our other filings with the Securities and Exchange Commission.

We undertake no obligation to update or revise any such forward-looking statements.

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Business Strategy

Tivity Health is unique in offering, at scale, a package of services to address social determinants of health.  Our integrated portfolio of fitness, nutrition and social engagement solutions supports overall health and wellness programs, which we believe are critical to our health plan and employer-based customers.  Following the Nutrisystem acquisition, we believe the Company is well-positioned to address food insecurity, inactivity, weight management, chronic conditions, and social isolation.  We believe the diversification of our portfolio and increased scale will benefit all of the Company’s stakeholders – including government and commercial health plans, fitness partners, members and consumers – as our offerings support healthier lifestyles and can lower medical costs.

Our “A-B-C-D” strategy has been strengthened with the acquisition of Nutrisystem.  Strategy (A), add new members, will leverage Nutrisystem’s media expertise and scale to increase awareness of the SilverSneakers program and drive more enrolled members.  We will also cross-promote our nutrition and fitness solutions while adding new distribution channels for Nutrisystem. Strategy (B), build more awareness, empowerment and engagement, will lean on Nutrisystem’s precision marketing competency to drive visits and present a host of nutrition offerings to SilverSneakers and Prime Fitness members.  Strategy (C), collaborate with health plan partners to introduce new products and services that leverage our brand trust, drove our acquisition of Nutrisystem and will position us to offer nutrition-based as well as combined offerings.  Strategy (D), deepen relationships with our fitness center partners and their instructors within our national network, is bolstered through the Nutrisystem acquisition by providing new potential revenue streams for fitness partner locations while offering yet another distribution channel for Nutrisystem through those partner locations.  Finally, given the combination with Nutrisystem, we have added a new Strategy (E), execute on the integration, including realization of both cost and revenue synergies.  Our focus on revenue synergies is to address the social determinants of health, chronic conditions, and weight management and expand the channels of distribution for nutrition-based products.

Critical Accounting Policies

We describe oursignificant accountingpolicies inNote 1to the consolidatedfinancial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “2018 Form 10-K”).  We preparethe consolidatedfinancial statements inconformity with U.S. GAAP, which requires us to makeestimates and judgments that affect the reported amounts of assets andliabilitiesandrelateddisclosures at the date of the financial statements and the reported amounts of revenues andexpensesduring the reporting period.Actual results may differ from those estimates.

We believe the following accounting policies are the most critical in understanding the estimates and judgments that are involved in preparing our financial statements and the uncertainties that could impact our results of operations, financial condition and cash flows.  The first two policies presented below are new critical accounting policies due to the acquisition of Nutrisystem during the three months ended March 31, 2019.

Excess and Obsolete Inventory

We continually assess the quantities of inventory on hand to identify excess or obsolete inventory and record a provision for any estimated loss. We estimate the reserve for excess and obsolete inventory based primarily on our forecasted demand and/or our ability to sell the products, introduction of new products, future production requirements and changes in our customers’ behavior. The reserve for excess and obsolete inventory was $1.3 million at March 31, 2019.

Acquisition Accounting

In connection with any acquisitions, we allocate the purchase price to the assets and liabilities we acquire, such as net tangible assets, deferred revenue, identifiable intangible assets such as trade names, customer lists, and customer relationships, and goodwill.  We apply significant judgments and estimates in determining the fair market value of the assets acquired and their useful lives.  For example, we have determined the fair value of existing customer lists based on the multi-period excess earnings method under the income approach, which discounts estimated net future cash flows from such customers existing at the date of acquisition.  The fair values of trade names are based on the relief-from-royalty method under the income approach.  Different estimates and assumptions in valuing acquired assets could yield materially different results.

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Revenue Recognition

Beginning in 2018, we account for revenue from contracts with customers in accordance with ASC Topic 606.  The unit of account in ASC Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods or services) or a series of distinct goods or services provided over a period of time. ASC Topic 606 requires that a contract’s transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when or as the performance obligation is satisfied.

Healthcare Segment

Our Healthcare segment earns revenue from our threeprograms, SilverSneakers senior fitness, Prime Fitness andWholeHealth Living.  We provide the SilverSneakers senior fitness programto membersof MedicareAdvantage and MedicareSupplement plans through our contracts with those plans.  We offer Prime Fitness, a fitness facility access program, through contracts with employers, commercial health plans, and other sponsoring organizations that allow their members to individually purchase the program.  We sell our WholeHealth Living program primarily to health plans.

The significant majority of our Healthcare segment’s customer contracts contain one performance obligation - to stand ready to provide access to our network of fitness locations and fitness programming - which is satisfied over time as services are rendered each month over the contract term.  There are generally no performance obligations that are unsatisfied at the end of a particular month.  There was no material revenue recognized during the three months ended March 31, 2019 from performance obligations satisfied in a prior period.  

Our fees within our Healthcare segment are variable month to month and are generally billed per member per month (“PMPM”) or billed based on a combination of PMPM and member visits to a network location.  We bill PMPM fees by multiplying the contractually negotiated PMPM rate by the number of members eligible for or receiving our services during the month.  We bill for member visits approximately one month in arrears once actual member visits are known.  Payments from customers are typically due within 30 days of invoice date.  When material, we capitalize costs to obtain contracts with customers and amortize them over the expected recovery period.  

Our Healthcare segment’s customer contracts include variable consideration, which is allocated to each distinct month over the contract term based on eligible members and/or member visits each month.  The allocated consideration corresponds directly with the value to our customers of our services completed for the month.  Under the majority of our Healthcare segment’s contracts, we recognize revenue each month using the practical expedient available under ASC 606-10-55-18, which provides that revenue is recognized in the amount for which we have the right to invoice.  

Although we evaluate our financial performance and make resource allocation decisions based upon the results of our two reportable segments, we believe the following information depicts how our Healthcare segment revenues and cash flows are affected by economic factors.  For the three months ended March 31, 2019, revenue from our SilverSneakers program, which is predominantly contracted with Medicare Advantage and Medicare Supplement plans, comprised approximately 79% of revenues in the Healthcare segment, while revenue from our Prime Fitness and WholeHealth Living programs comprised approximately 18% and 3%, respectively, of revenues in the Healthcare segment.

Sales and usage-based taxes are excluded from revenues.

Nutrition Segment

Our Nutrition segment earns revenue from four sources: direct to consumer, retail, QVC and other.  Revenue is measured based on the consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties.  As explained in more detail below, revenue is recognized upon satisfaction of the performance obligation by transferring control over a product to a Nutrition segment customer.  The estimated breakage of gift cards (estimated amount of unused gift cards) is recognized over the pattern of redemption of the gift cards, and direct-mail advertising costs are expensed as incurred.  We recognize an asset for the carrying amount of product to be returned and for costs to obtain a contract if the amortization is more than one year in duration.  We expense costs to obtain a contract as incurred if the amortization period is less than one year.

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We sell pre-packaged foods directly to weight loss program participants primarily through the Internet and telephone (referred to as the direct to consumer channel), through QVC (a television shopping network), and select retailers. Pre-packaged foods are comprised of both frozen and non-frozen (ready-to-go), shelf-stable products.

Products sold through the direct to consumer channel, both frozen and non-frozen, may be sold separately (a la carte) or as part of a packaged monthly meal plan for which Nutrition segment customers pay at the point of sale. Products sold through QVC are payable by QVC upon our shipment of the product to the end consumer. For both the direct to consumer channel and QVC, we recognize revenue at a point in time, i.e., at the shipping point.  Direct to consumer customers may return unopened ready-to-go products within 30 days after purchase in order to receive a refund or credit. Frozen products are non-returnable and non-refundable unless the order is canceled within 14 days after delivery.   

Products sold to retailers include both frozen and non-frozen products and are payable by the retailer upon receipt. We recognize revenue at a point in time, i.e., when the retailers take possession of the product. Certain retailers have the right to return unsold products.

We account for the shipment of frozen and non-frozen, ready-to-go products as separate performance obligations. The consideration, including variable consideration for product returns, is allocated between frozen and non-frozen products based on their standalone selling prices. The amount of revenue recognized is adjusted for expected returns, which are estimated based on historical data.

In addition to our pre-packaged foods, we sell prepaid gift cards through a wholesaler that are redeemable through the Internet or telephone. Prepaid gift cards represent grants of rights to goods to be provided in the future to gift card buyers. The wholesaler has the right to return all unsold prepaid gift cards. The wholesaler’s retail selling price of the gift cards is deferred in the balance sheet and recognized as revenue when we have satisfied our performance obligation, i.e., when a gift card holder redeems the gift card with us. We recognize breakage amounts (the estimated amount of unused gift cards) as revenue, in proportion to the actual gift card redemptions exercised by gift card holders in relation to the total expected redemptions of gift cards. We utilize historical experience in estimating the total expected breakage and period over which the gift cards will be redeemed.

Sales and other taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a Nutrition segment customer are excluded from revenue and presented on a net basis.  After control over a product has transferred to a Nutrition segment customer, shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost and are included in revenue and cost of revenue in the accompanying consolidated statements of operations.

We review the reserves for our Nutrition segment customer returns at each reporting period and adjust them to reflect data available at that time. To estimate reserves for returns, we consider actual return rates in preceding periods and changes in product offerings or marketing methods that might impact returns going forward. To the extent the estimate of returns changes, we will adjust the reserve, which will impact the amount of revenue recognized in the period of the adjustment.  The provision for estimated returns for the three months ended March 31, 2019 was $1.4 million. The reserve for estimated returns incurred but not received and processed was $1.3 million at March 31, 2019 and has been included in accrued liabilities in the accompanying consolidated balance sheet.

Impairment of Intangible Assets and Goodwill

We reviewgoodwillfor impairment at thereportingunitlevel (operatingsegmentor onelevelbelowanoperatingsegment) on an annualbasis (duringthe fourth quarter of our fiscal year) ormore frequently wheneverevents orcircumstances indicatethat the carryingvalue may not be recoverable.  Following the acquisition of Nutrisystem in March 2019, we have two reporting units: Healthcare and Nutrition. Prior to such acquisition, we had one reporting unit.

As part of the impairment evaluation, we may elect to perform a qualitative assessment to determinewhether it is more likely than not that the fair valueof a reportingunit is less thanits carrying value.If we elect not to perform

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a qualitativeassessment or we determine that it is more likely than not that the fair valueof a reportingunit is less thanits carrying value, we perform a quantitative review as described below.

During a quantitative review of goodwill,we estimatethefair value of eachreporting unit based on a discounted cash flow model or a combination of a discounted cash flow model and a market-based approach, and we reconcile the aggregate fair value of our reporting units to our consolidated market capitalization.  If the fair value of the reporting unit exceeds its carrying amount, no impairment is indicated. If the fair value of the reporting unit is less than its carrying amount, impairment of goodwill is measured as the excess of the carrying amount over fair value.  Estimating fair value requires significant judgments, including management's estimate of future cash flows, which is dependent on internal forecasts, estimation of the long-term growth rate for our business, the useful life over which cash flows will occur, and determination of our weighted average cost of capital, as well as relevant comparable company earnings multiples for the market-based approach.  Changes in these estimates and assumptions could materially affect the estimate of fair value and potential goodwill impairment for each reporting unit.

Except for two tradenames that have an indefinite life and are not subject to amortization, we amortize identifiable intangible assets over their estimated useful lives using the straight-line method.We assess the potential impairment of intangible assets subject to amortizationwhenever events orchanges in circumstances indicate thatthe carrying values may not be recoverable. If we determine thatthe carrying value of other identifiable intangible assetsmay not be recoverable,we calculateany impairment using an estimate of the asset's fair value based on the estimated price that would be received to sell the asset in an orderly transaction between marketparticipants.  We estimate the fair value of our indefinite-lived tradenames using a present value technique, which requires management's estimate of future revenues attributable to such tradename, estimation of the long-term growth rate and royalty rate for such revenue, and determination of our weighted average cost of capital.  Changes in these estimates and assumptions could materially affect the estimates of fair values for the tradenames.

Executive Overviewof Results

The key financialresults for the three months ended March 31, 2019 are:

• Revenues of $214.1 million for the three months ended March 31, 2019, including $57.6 million attributable to the acquisition of Nutrisystem on March 8, 2019, compared to $149.9 million for the same period in 2018.

• Pre-tax income of $9.6 million for the three months ended March 31, 2019 compared to $28.5 million for the same period in 2018.  Pre-tax income for the three months ended March 31, 2019 includes:

o $17.1 million of acquisition and integration costs compared to $0 in the prior year;

o $24.1 million of marketing expenses, including $14.9 million attributable to the Nutrition segment, compared to $2.9 million in the prior year;

o $1.6 million of restructuring and related charges compared to $0 in the prior year;

o $7.7 million of interest expense compared to $3.5 million for the prior year; and

o $1.3 million of amortization expense compared to $0 for the same period in 2018.

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Results of Operations

The followingtable sets forth the components of the consolidated statements of operations for the three months ended March 31, 2019 and 2018 expressedas a percentage of revenues from continuing operations.

	ThreeMonths Ended March 31,
	2019			2018
Revenues		100.0	%		100.0	%
Cost of revenue (exclusive of depreciation and amortization    included below)		65.5	%		70.3	%
Marketing expenses		11.3	%		1.9	%
Selling, general and administrative expenses		12.7	%		5.7	%
Depreciation and amortization		1.7	%		0.7	%
Restructuring and related charges		0.7	%		0.0	%
Operating income (1)		8.1	%		21.3	%
Interest expense		3.6	%		2.3	%
Income before income taxes (1)		4.5	%		19.0	%
Income tax expense		2.5	%		4.8	%
Net income (1)		2.0	%		14.2	%

(1) Figures may not add due to rounding.

Revenues

Revenues for the three months ended March 31, 2019 increased to $214.1 million compared to $149.9 million for the same period in 2018, primarily due to $57.6 million of revenues attributable to the acquisition of Nutrisystem.  Excluding the acquisition, the increase in revenues in the Healthcare segment is primarily a result of the following: $4.4 million due to a net increase in the average participation per member in our fitness solutions, $3.2 million due to contracts with new customers, and a decrease of $1.8 million due to contract terminations and renegotiations.

Cost of Revenue

Cost of revenue (excluding depreciation and amortization) as a percentage of revenues decreased from the three months ended March 31, 2018 (70.3%) to the three months ended March 31, 2019 (65.5%) primarily due to the acquisition of Nutrisystem in the first quarter of 2019.  The Nutrition segment carries a lower cost of revenue as a percentage of revenues than the Healthcare segment.  Cost of revenue (excluding depreciation and amortization) as a percentage of revenues for the Healthcare segment increased from the three months ended March 31, 2018 (70.3%) to the three months ended March 31, 2019 (72.7%) primarily due to an increase in cost per visit due to certain contract renegotiations, as well as a higher number of average visits per member per month in 2019 compared to 2018.  

MarketingExpenses

Marketing expenses as a percentage of revenues increased from the three months ended March 31, 2018 (1.9%) to the three months ended March 31, 2019 (11.3%), primarily due to the impact from the acquisition of Nutrisystem in the first quarter of 2019 and the significance of media and marketing expense to the Nutrition segment’s sales strategy.  Marketing expenses as a percentage of revenues for the Healthcare segment increased from the three months ended March 31, 2018 (1.9%) to the three months ended March 31, 2019 (5.9%) primarily due to increased spending on SilverSneakers advertising and media campaigns as well as increased staffing.

Selling, General and AdministrativeExpenses

Selling, general and administrative expenses as a percentage of revenues increased from the three months ended March 31, 2018 (5.7%) to the three months ended March 31, 2019 (12.7%), primarily due to acquisition and integration costs of $16.2 million during the three months ended March 31, 2019 related to the acquisition of Nutrisystem.    

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Restructuring and Related Charges

During the first quarter of 2019, we began a reorganization primarily related to integrating the Healthcare and Nutrition segments and streamlining our corporate and operations support (the "2019 Restructuring Plan").  To date, we have incurred restructuring charges of $1.6 million related to actions executed in the first quarter of 2019 (the “Q1 2019 Actions”), of which $1.0 million related to the Healthcare segment and $0.6 million related to the Nutrition segment.  These expenses consist entirely of severance and other employee-related costs.  The Q1 2019 Actions are expected to result in additional costs of $0.8 million during the second quarter of 2019, all of which relates to the Nutrition segment. Although we expect further actions to be taken under the 2019 Restructuring Plan during the remainder of 2019 that will result in additional restructuring charges and future savings, the Q1 2019 Actions are expected to result in total annualized savings of approximately $7.2 million, with $3.5 million relating to the Healthcare segment and $3.7 million relating to the Nutrition segment.

Depreciationand Amortization

Depreciationand amortization expenseincreased $2.5 million for the three months ended March 31, 2019 primarily due to amortization expense on new intangible assets recorded in connection with the acquisition of Nutrisystem as well as increased depreciation expense attributable to the acquisition of Nutrisystem’s property and equipment.  

Interest Expense

Interest expense increased $4.2 million for the three months ended March 31, 2019 compared to the same period in 2018, primarily due to our entering into the Credit Agreement on March 8, 2019, including term loans totaling $1,180 million, in connection with the acquisition of Nutrisystem.    

Income TaxExpense

See Note 9 of the notes to consolidated financial statements in this report for a discussion of income tax expense.

Liquidityand Capital Resources

Overview

As of March 31, 2019, we had a working capital deficit of $32.8 million, including outstanding aggregate borrowings under our credit facility of $44.9 million due by March 31, 2020.  Based upon the pro forma calculations of compliance with the restrictive covenants under our credit agreement, as of March 31, 2019, we anticipate the ability to borrow under the Revolving Credit Facility (as defined below) up to a maximum of $124.3 million for the next 12 months and the foreseeable future. We believe our cash on hand, cash flows from operations and anticipated available credit under the Credit Agreement will be sufficient to fund our operations, debt payments and capital expenditures for the next 12 months and the foreseeable future.  We cannot assure you that we will be able to secure additional financing if needed and, if such funds are available, whether the terms or conditions will be favorable to us.

Credit Facility

In connection with the consummation of the Merger, on March 8, 2019, we entered into a new Credit and Guaranty Agreement (the “Credit Agreement”) with a group of lenders, Credit Suisse AG, Cayman Islands Branch, as general administrative agent, term facility agent and collateral agent, and SunTrust Bank, as revolving facility agent and swing line lender (“SunTrust”). The Credit Agreement replaced our prior Revolving Credit and Term Loan Agreement, dated April 21, 2017 (the “Prior Credit Agreement”), with a group of lenders and SunTrust, as administrative agent. The Credit Agreement provides us with (i) a $350.0 million term loan A facility (“Term Loan A”), (ii) an $830.0 million term loan B facility (“Term Loan B” and, together with Term Loan A, the “Term Loans”), (iii) a $125.0 million revolving credit facility that includes a $35.0 million sublimit for swingline loans and a $50.0 million sublimit for letters of credit (the “Revolving Credit Facility”; Term Loan A, Term Loan B and the Revolving Credit Facility are sometimes herein referred to collectively as the “Credit Facilities”), and (iv) uncommitted incremental accordion facilities in an aggregate amount at any date equal to the greater of $125.0 million or 50% of our

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consolidated EBITDA for the then-preceding four fiscal quarters, plus additional amounts based on, among other things, satisfaction of certain financial ratio requirements.

We used the proceeds of the Term Loans, borrowings under the Revolving Credit Facility and cash on hand to pay the consideration for the acquisition of Nutrisystem, to repay all of the outstanding indebtedness under the Prior Credit Agreement and all outstanding indebtedness of Nutrisystem under its credit agreement, and to pay transaction costs and expenses. Proceeds of the Revolving Credit Facility also may be used for general corporate purposes of the Company and its subsidiaries.

We are required to repay Term Loan A loans in consecutive quarterly installments, each in the amount of 2.50% of the aggregate initial amount of such loans, payable on June 30, 2019 and on the last day of each succeeding quarter thereafter until maturity on March 8, 2024, at which time the entire outstanding principal balance of such loans is due and payable in full. We are required to repay Term Loan B loans in consecutive quarterly installments, each in the amount of 0.75% of the aggregate initial amount of such loans, payable on June 30, 2019 and on the last day of each succeeding quarter thereafter until maturity on March 8, 2026, at which time the entire outstanding principal balance of such loans is due and payable in full. We are permitted to make voluntarily prepayments of borrowings under the Term Loans at any time without penalty.  We are required to repay in full any outstanding swingline loans and revolving loans under the Revolving Credit Facility on March 8, 2024. As of March 31, 2019, availability under the revolving credit facility totaled $124.3 million as calculated under the most restrictive covenant.

For a detailed description of the Credit Agreement, refer to Note 11 of the notes to consolidated financial statements in this report.  The Credit Agreement contains a financial covenant that requires us to maintain specified maximum ratios or levels of consolidated total net debt to EBITDA, calculated as provided in the Credit Agreement. We were in compliance with all of the financial covenant requirements of the Credit Agreement as of March 31, 2019. 

Cash Flows Provided by Operating Activities

Operating activities during the three months ended March 31, 2019 provided cash of $5.2 million compared to $12.4 million during the three months ended March 31, 2018.The decrease in operating cash flow is primarily due to a decrease in cash collections on accounts receivable due to timing and payments related to acquisition and integration costs, partially offset by net cash flows provided by the Nutrition segment.

Cash Flows Used in Investing Activities

Investing activities during the three months ended March 31, 2019 used $1,067 million in cash, compared to $1.9 million during the three months ended March 31, 2018.  This change is primarily due to the acquisition of Nutrisystem.

Cash Flows Provided By/Used in Financing Activities

Financing activities during the three months ended March 31, 2019 provided $1,078 million in cash, compared to cash used of $0.1 million during the three months ended March 31, 2018.  This change is primarily due to net borrowings under the Credit Agreement, slightly offset by payment of deferred loan costs.

General

If contract development accelerates or acquisition opportunities arise, we may need to issue additional debt or equity securities to provide the funding for these increased growth opportunities. We may also issue debt or equity securities in connection with future acquisitions or strategic alliances.  We cannot assure you that we would be able to issue additional debt or equity securities on terms that would be favorable to us.

RecentRelevant Accounting Standards

See Note 3 of the notes to consolidated financial statements included in this report for discussion of recent relevant accounting standards.

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Item 3.Quantitativeand QualitativeDisclosures About MarketRisk

We are subject to market risk related to interest rate changes, primarily as a result of the Credit Agreement.                     Borrowings under the Credit Agreement bear interest at variable rates based on a margin or spread in excess of either (1) one-month, two-month, three-month or six-month LIBOR (or, with the approval of all lenders holding the particular class of loans, 12-month LIBOR), which may not be less than zero, or (2) the greatest of (a) the prime lending rate of the agent bank for the particular facility, (b) the federal funds rate plus 0.50%, and (c) one-month LIBOR plus 1.00% (the “Base Rate”), as selected by the Company. The LIBOR margin for Term Loan A loans is 4.25%, the LIBOR margin for Term Loan B loans is 5.25%, and the LIBOR margin for revolving loans varies between 3.75% and 4.25%, depending on our total net leverage ratio. The Base Rate margin for Term Loan A loans is 3.25%, the Base Rate margin for Term Loan B loans is 4.25%, and the Base Rate margin for revolving loans varies between 2.75% and 3.25%, depending on our total net leverage ratio.

We estimate that a one-point interest rate change inour floating rate debt wouldhave resultedina change in interest expense of approximately $0.9 million for the three months ended March 31, 2019.

Item 4. Controls and Procedures

Evaluation of DisclosureControls and Procedures

The Company's principal executive officer and principal financial officer have reviewed and evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of March 31, 2019.  Based on that evaluation, the principal executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures are effective.  They are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

Beginning January 1, 2019, we adopted ASC 842, “Leases.” We implemented changes to our processes and the related control activities related to lease accounting.  As a result of the acquisition of Nutrisystem on March 8, 2019, we have implemented internal controls over financial reporting to include consolidation of Nutrisystem.  Nutrisystem utilizes separate information and accounting systems and processes. We are in the process of reviewing and evaluating the design and operating effectiveness of internal control over financial reporting relating to Nutrisystem’s operations, and, as a result, certain controls may be changed.  

Except as disclosed above, there were no changes in the Company's internal controls over financial reporting during the three months ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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Part IIOther Information

Item 1.Legal Proceedings

See Note 12 of the notes to consolidated financial statements included in this report for discussion of recent legal proceedings.

Item 1A.Risk Factors

Part I, Item 1A. “Risk Factors” in our 2018 Form 10-K is amended and restated in its entirety as follows:  

In the execution of our business strategy, our operations and financial condition are subject to certain risks.  A summary of certain material risks is provided below, and you should take such risks into account in evaluating any investment decision involving the Company. This section does not describe all risks applicable to us and is intended only as a summary of certain material factors that could impact our operations in the industry in which we operate. Other sections of this report contain additional information concerning these and other risks.

Risks Relating to Our Business Generally

Our business strategy relating to the development and introduction of new products and services exposes us to risks such as limited customer and/or market acceptance and additional expenditures that may not result in additional net revenue.

An important component of our business strategy is to focus on new products and services that enable us to provide immediate value to our customers.  Customer and/or market acceptance of these new products and services cannot be predicted with certainty, and if we fail to execute properly on this strategy or to adapt this strategy as market conditions evolve, our ability to grow revenue and our results of operations may be adversely affected.

If we fail to successfully implement our business strategy, our financial performance and our growth could be materially and adversely affected.

Our future financial performance and success are dependent in large part upon our ability to implement our business strategy successfully. Implementation of our strategy will require effective management of our operational, financial and human resources and will place significant demands on those resources. See Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations – Business Strategy" in this report for more information regarding our business strategy.  There are risks involved in pursuing our strategy, including the ability to hire or retain the personnel necessary to manage our strategy effectively.

In addition to the risks set forth above, implementation of our business strategy could be affected by a number of factors beyond our control, such as increased competition, legal developments, government regulation, general economic conditions, increased operating costs or expenses, and changes in industry trends. We may decide to alter or discontinue certain aspects of our business strategy at any time. If we are not able to implement our business strategy successfully, our long-term growth and profitability may be adversely affected. Even if we are able to implement some or all of the initiatives of our business strategy successfully, our operating results may not improve to the extent we anticipate, or at all.

We may fail to realize the anticipated benefits and cost savings of the acquisition of Nutrisystem, which could adversely affect the value of our Common Stock.

The success of the acquisition of Nutrisystem will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining the business of Nutrisystem with our legacy business. Our ability to realize these anticipated benefits and cost savings is subject to certain risks including:

• our ability to combine successfully the business of Nutrisystem with our legacy business, including with respect to the integration of our systems and technology;

• whether the combined businesses will perform as expected;

• the possibility that we paid more for Nutrisystem than the value we will derive from the acquisition;

• the reduction of our cash available for operations and other uses and the incurrence of indebtedness to finance the acquisition; and

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• the assumption of known and unknown liabilities of Nutrisystem.

If we are not able to successfully combine the business of Nutrisystem with our legacy business within the anticipated time frame, or at all, the anticipated cost savings and other benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected, the combined businesses may not perform as expected, and the value of our Common Stock may be adversely affected.

We cannot provide assurances that Nutrisystem’s business and our legacy business can be integrated successfully. It is possible that the integration process could result in the loss of key employees, the disruption of our ongoing businesses or in unexpected integration issues, higher than expected integration costs, and an overall integration process that takes longer than originally anticipated.

In addition, at times, the attention of certain members of our management and resources may be focused on completion of the integration and diverted from day-to-day business operations, which may disrupt our ongoing business.

We may experience difficulties associated with the implementation and/or integration of new businesses, services (including outsourced services), technologies, solutions, or products.

We may face difficulties, costs, and delays in effectively implementing and/or integrating acquired businesses, services (including outsourced services), technologies, solutions, or products into our business.  Implementing internally-developed solutions and products, and/or integrating newly acquired businesses, services (including outsourced services), and technologies could be time-consuming and may strain our resources. Consequently, we may not be successful in implementing and/or integrating these new businesses, services, technologies, solutions, or products and may not achieve anticipated revenue and cost benefits.

The performance of our business and the level of our indebtedness could prevent us from meeting the obligations under our credit agreement or have an adverse effect on our future financial condition, our ability to raise additional capital, or our ability to react to changes in the economy or our industry.

In connection with the acquisition of Nutrisystem, on March 8, 2019, we entered into the Credit Agreement with a group of lenders. As of March 31, 2019, outstanding debt under the Credit Agreement was $1,165 million.

Our ability to service our indebtedness will depend on our ability to generate cash in the future.  We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available in an amount sufficient to enable us to service our indebtedness or to fund other liquidity needs.

The Credit Agreement contains a financial covenant that requires us to maintain specified maximum ratios or levels of consolidated total net debt to EBITDA, calculated as provided in the Credit Agreement. The Credit Agreement also contains various other affirmative and negative covenants customary for financings of this type that, subject to certain exceptions, impose restrictions and limitations on our and certain of our subsidiaries with respect to, among other things, indebtedness; liens; negative pledges; restricted payments (including dividends, distributions, buybacks, redemptions, repurchases with respect to equity interests, and payments, redemptions, retirements, purchases, acquisitions, defeasance, exchange, conversion, cancellation or termination with respect to junior lien, subordinated or unsecured debt); restrictions on subsidiary distributions; loans, advances, guarantees, acquisitions and other investments; mergers and other fundamental changes; sales and other dispositions of assets (including equity interests in subsidiaries); sale/leaseback transactions; transactions with affiliates; conduct of business; amendments and waivers of organizational documents and material junior debt agreements; and changes to fiscal year.

Our indebtedness could adversely affect our future financial condition or our ability to react to changes in the economy or industry by, among other things:

• increasing our vulnerability to a downturn in general economic conditions, loss of revenue and/or profit margins in our business, or to increases in interest rates, particularly with respect to the portion of our outstanding debt that is subject to variable interest rates;

• potentially limiting our ability to obtain additional financing or to obtain such financing on favorable terms;

causing us to dedicate a portion of future cash flow from operations to service or pay down our debt, which reduces the cash available for other purposes, such as operations, capital expenditures, and future

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business opportunities; and

possibly limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may be less leveraged.

Changes in macroeconomic conditions may adversely affect our business.

Economic difficulties and other macroeconomic conditions could reduce the demand and/or the timing of purchases for certain of our services from customers and potential customers.  In addition, changes in economic conditions could create liquidity and credit constraints. We cannot assure you that we would be able to secure additional financing if needed and, if such funds were available, that the terms and conditions would be acceptable to us.

We have a significant amount of goodwill and intangible assets, the value of which could become impaired.

We have recorded significant portions of the purchase price of certain acquisitions as goodwill and/or intangible assets. At March 31, 2019, we had approximately $780.4 million and $975.7million of goodwill and intangible assets, respectively. We review goodwill and intangible assets not subject to amortization for impairment on an annual basis (during the fourth quarter) or more frequently whenever events or circumstances indicate that the carrying value may not be recoverable. If we determine that the carrying values of our goodwill and/or intangible assets are impaired, we may incur a non-cash charge to earnings, which could have a material adverse effect on our results of operations for the period in which the impairment occurs.

A failure of our information technology or systems could adversely affect our business.

Our ability to deliver our products and services depends on effectively using information technology.  We rely upon our information technology and systems for operating and monitoring all major aspects of our business. These technologies and systems and, therefore, our operations could be damaged or interrupted by natural disasters, power loss, network failure, improper operation by our employees, data privacy or security breaches, computer viruses, computer hacking, network penetration or other illegal intrusions or other unexpected events. Any disruption in the operation of our information technology or systems, regardless of the cause, could adversely impact our operations, which may adversely affect our financial condition, results of operations and cash flows.

A cybersecurity incident could result in the loss of confidential data, give rise to remediation and other expenses, expose us to liability under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), consumer protection laws, common law theories or other laws, subject us to litigation and federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business.

The nature of our business involves the receipt, storage and use of personal data about the participants in our programs, including individually identifiable health information, as well as employees and customers. Additionally, we rely upon third parties that are not directly under our control to do so as well.  The secure maintenance of this confidential information is critical to our business operations. To protect our information systems from attack, damage and unauthorized use, we have implemented multiple layers of security, including technical safeguards, processes, and our people. Our defenses are monitored and routinely tested internally and by external parties. Despite these efforts, threats from malicious persons and groups, new vulnerabilities, and advanced attacks against information systems create risk of cybersecurity incidents. We cannot provide assurance that we or our third-party vendors or other service providers will not be subject to cybersecurity incidents, which may result in unauthorized access by third parties, loss, misappropriation, disclosure or corruption of customer, employee, or our information; member personal health information; or other data subject to privacy laws. Such cybersecurity incidents may lead to a disruption in our systems or business, costs to modify, enhance, or remediate our cybersecurity measures, liability under privacy, security and consumer protection laws or litigation under these or other laws, including common law theories, and subject us to enforcement actions, fines, regulatory proceedings or litigation against us, damage to our business reputation, a reduction in participation and sales of our products and services, and legal obligations to notify customers or other affected individuals about an incident, which could cause us to incur substantial costs and negative publicity, any of which could have a material adverse effect on our financial condition and results of operations and harm our business reputation.

As a result, cybersecurity and the continued development and enhancement of our controls, processes and practices remain a priority for us. We may be required to expend significant additional resources in our efforts to modify or enhance our protective measures against evolving threats or to investigate and remediate any cybersecurity vulnerabilities.

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Our business is subject to changing privacy and security laws, rules and regulations, including HIPAA, the Payment Card Industry Data Security Standards, the Telephone Consumer Protection Act and other state privacy regulations, for which failure to adhere could negatively impact our business.

Our business is subject to various privacy and data security laws, regulations, and codes of conduct that apply to our various business units (e.g., Payment Card Industry Data Security Standards and Telephone Consumer Protection Act). These laws and regulations may be inconsistent across jurisdictions and are subject to evolving and differing (sometimes conflicting) interpretations. Government regulators, privacy advocates and class action attorneys are increasingly scrutinizing how companies collect, process, use, store, share and transmit personal data. This increased scrutiny may result in new interpretations of existing laws, thereby further impacting our business.  For example, in June 2018, the State of California passed the California Consumer Privacy Act of 2018 (“CCPA”), which takes effect January 1, 2020.  The new law applies broadly to information that identifies or is associated with any California household or individual, and compliance with the new law requires that we implement several operational changes, including processes to respond to individuals’ data access and deletion requests.  Additionally, the Federal Trade Commission (the “FTC”) and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the collection, use, dissemination and security of data.  The obligations imposed by the CCPA and other similar laws that may be enacted at the federal and state level may require us to modify our business practices and policies and to incur substantial expenditures in order to comply.

In order to be successful, we must attract, engage, retain and integrate key employees and have adequate succession plans in place, and failure to do so could have an adverse effect on our ability to manage our business.

Our success depends, in large part, on our ability to attract, engage, retain and integrate qualified executives and other key employees throughout all areas of our business. Identifying, developing internally or hiring externally, training and retaining highly-skilled managerial and other personnel are critical to our future, and competition for experienced employees can be intense. Failure to successfully hire executives and key employees or the loss of any executives and key employees could have a significant impact on our operations. The loss of services of any key personnel, the inability to retain and attract qualified personnel in the future, or delays in hiring may harm our business and results of operations. Further, changes in our management team may be disruptive to our business, and any failure to successfully integrate key newly hired employees could adversely affect our business and results of operations.

We face competition for staffing, which may increase our labor costs and reduce profitability.

We compete with other healthcare and services providers in recruiting qualified management, including executives with the required skills and experience to operate and grow our business, and staff personnel for the day-to-day operations of our business. These challenges may require us to enhance wages and benefits to recruit and retain qualified management and other professionals. Difficulties in attracting and retaining qualified management and other professionals, or in controlling labor costs, could have a material adverse effect on our profitability.

We are or may become a party to litigation that could potentially force us to pay significant damages and/or harm our reputation.

We are subject to certain legal proceedings, which potentially involve large claims and significant defense costs (see Part II, Item 1. "Legal Proceedings" in this report). These legal proceedings and any other claims that we may face in the future, whether with or without merit, could result in costly litigation, and divert the time, attention, and resources of our management. Although we currently maintain various types of liability insurance, we cannot provide assurance that the coverage limits of such insurance policies will be adequate or that all such claims will be covered by insurance. Although we believe that we have conducted our operations in full compliance with applicable statutory and contractual requirements and that we have meritorious defenses to outstanding claims, it is possible that resolution of these legal matters could have a material adverse effect on our results of operations.  In addition, legal expenses associated with the defense of these matters may be material to our results of operations in a particular financial reporting period.

Third parties may infringe on our brands, trademarks and other intellectual property rights, which may have an adverse impact on our business.

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We currently rely on a combination of trademark and other intellectual property laws and confidentiality procedures to establish and protect our proprietary rights, including our brands. If we fail to successfully enforce our intellectual property rights, the value of our brands, services and products could be diminished and our business may suffer. Our precautions may not prevent misappropriation of our intellectual property. Any legal action that we may bring to protect our brands and other intellectual property could be unsuccessful and expensive and could divert management’s attention from other business concerns. In addition, legal standards relating to the validity, enforceability and scope of protection of intellectual property, especially in Internet-related businesses, are uncertain and evolving. We cannot assure you that these evolving legal standards will sufficiently protect our intellectual property rights in the future.

We may in the future be subject to intellectual property rights claims.

Third parties may in the future make claims against us alleging infringement of their intellectual property rights. Any intellectual property claims, regardless of merit, could be time-consuming and expensive to litigate or settle and could significantly divert management’s attention from other business concerns. In addition, if we were unable to successfully defend against such claims, we may have to pay damages, stop selling the service or product or stop using the software, technology or content found to be in violation of a third party’s rights, seek a license for the infringing service, product, software, technology or content or develop alternative non-infringing services, products, software, technology or content. If we cannot license on reasonable terms, develop alternatives or stop using the service, product, software, technology or content for any infringing aspects of our business, we may be forced to limit our service and product offerings. Any of these results could reduce our revenue and our ability to compete effectively, increase our costs or harm our business.

Damage to our reputation could harm our business, including our competitive position and business prospects.

Our ability to attract and retain customers, members and employees is impacted by our reputation. Harm to our reputation can arise from various sources, including employee misconduct, security breaches, unethical behavior, litigation or regulatory outcomes, which could, among other consequences, increase the size and number of litigation claims and damages asserted or subject us to enforcement actions, fines and penalties and cause us to incur related costs and expenses.

We could be adversely affected by violations of the Foreign Corrupt Practices Act ("FCPA") and similar anti-bribery laws of other countries in which we provided services prior to the sale of our total population health services ("TPHS") business.

Because of the international operations that we previously conducted as part of our TPHS business that we sold to Sharecare, Inc. in July 2016, we could be adversely affected by violations of the FCPA and similar anti-bribery laws of other countries in which we provided services prior to the sale. The FCPA and similar anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to government officials or other third parties for the purpose of obtaining or retaining business or gaining any business advantage. While our policies mandated compliance with these anti-bribery laws, we cannot provide assurance that our internal control policies and procedures always protected us from reckless or criminal acts committed by our employees, contractors or agents. Failure to comply with the FCPA and similar legislation prior to the sale of our TPHS business could result in the imposition of civil or criminal fines and penalties and could disrupt our business and adversely affect our results of operations, cash flows and financial condition.

Risks Relating to Our Healthcare Segment

A significant percentage of Healthcare segment revenues is derived from health plan customers.

A significant percentage of our Healthcare segment revenues is derived from health plan customers. The health plan industry may continue to consolidate, and we cannot assure you that we will be able to retain health plan customers, or continue to provide our products and services to such health plan customers on terms at least as favorable to us as currently provided, if they are acquired by other health plans that already participate in competing programs or are not interested in our programs. Increasing vertical integration efforts involving health plans and healthcare providers or entities that provide wellness services may increase these challenges. Our health plan customers that are part of larger healthcare enterprises may have greater bargaining power, which may lead to

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further pressure on the prices for our products and services. In addition, a reduction in the number of covered lives enrolled with our health plan customers or in the payments we receive could adversely affect our results of operations. Our health plan customers are subject to continuing competition and reduced reimbursement rates from governmental and private sources, which could lead current or prospective customers to seek reduced fees or choose to reduce or delay the purchase of our services. Finally, health plan customers could attempt to offer services themselves that compete directly with our offerings, stop providing our offerings to certain or all of their members, or offer fitness benefits in addition to SilverSneakers and Prime Fitness, which could adversely affect our business and results of operations.

We currently derive a significant percentage of our Healthcare segmentrevenues from three customers.

For the year ended December 31, 2018, Humana, United Healthcare, and the Blue Cross Blue Shield Association (“BCBSA”) each comprised more than 10%, and together comprised approximately 45%, of our revenues from continuing operations. Our primary contract with Humana was renewed in 2018 and continues through December 31, 2022. The term of our contract with United Healthcare continues through December 31, 2020. Our primary contract with BCBSA continues through December 31, 2022.  The loss or restructuring of a contract with Humana, United Healthcare, BCBSA, or any other significant customers of our Healthcare segment could have a material adverse effect on our business and results of operations.  None of these contracts allows Humana, United Healthcare, or BCBSA to terminate for convenience prior to the expiration of the contract.

In 2018 and 2019, United Healthcare discontinued offering SilverSneakers to its individual Medicare Advantage beneficiaries in certain states and instead provided those beneficiaries a fitness benefit offered by its wholly-owned subsidiary Optum, while continuing to offer SilverSneakers to its group Medicare Advantage members in all 50 states. Revenue from United Healthcare is expected to be in a range of $60 million to $62 million in 2019, approximately one-third of which is expected to be earned from its individual Medicare Advantage business.  We expect that beginning in 2020 United Healthcare will offer SilverSneakers to its group Medicare Advantage members only and will no longer offer SilverSneakers to its individual Medicare Advantage beneficiaries.

Our inability to renew and/or maintain contracts with our Healthcare segmentcustomers and/or fitness partner locations under existing terms or restructure these contracts under favorable terms could adversely affect our business and results of operations.

If our Healthcare segment customers and/or fitness partner locations choose not to renew their contracts with us, our business and results of operations could be materially adversely affected.  Loss of a significant fitness partner or health plan customer or a reduction in a health plan customer's enrolled lives could have a material adverse effect on our business and results of operations.  In addition, a restructuring of a contract with a health plan customer and/or fitness partner on terms that aren’t favorable to us could adversely affect our business and results of operations.

Reductions in Medicare Advantage health plan reimbursement rates may negatively impact our Healthcare segmentbusiness and results of operations.

A significant portion of our Healthcare segment revenue is indirectly derived from the monthly premium payments paid by the U.S. Department of Health and Human Services to our health plan customers for services they provide to Medicare Advantage beneficiaries.  As a result, our results of operations are, in part, dependent on government funding levels for Medicare Advantage programs. Any changes that limit or reduce Medicare Advantage reimbursement levels, such as reductions in or limitations of reimbursement amounts or rates under these programs, reductions in funding of these programs, expansion of benefits without adequate funding, elimination of coverage for certain benefits, or elimination of coverage affecting the services that we provide, could have a material adverse effect on our Healthcare segment health plan customers, and as a result, on our business and results of operations.

Our results of operations could be adversely affected by severe or unexpected weather, health epidemics or outbreaks of disease.

Adverse weather conditions or other extreme changes in the weather may cause people to refrain, or prevent people, from visiting fitness partner locations and using our Healthcare segment services.  Additionally, widespread health epidemics or outbreaks of disease, such as influenza, may cause members to avoid public gathering places and negatively impact their use of our services.  As some of the fees that we charge our customers are based on

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member participation, a decrease in member participation could adversely affect our business and results of operations.

Compliance with existing or newly adopted federal and state laws and regulations or new or revised interpretations of such requirements could adversely affect our results of operations or may require us to spend substantial amounts, and the failure to comply with applicable laws and regulations could subject us to penalties or negatively impact our ability to provide services.

Our Healthcare segment customers are subject to considerable state and federal government regulation, and a substantial majority of our Healthcare segment business involves providing services to Medicare Advantage beneficiaries. As a result, we are subject directly to various federal laws and regulations, including the federal False Claims Act, billing and reimbursement requirements and other provisions related to fraud and abuse. The Centers for Medicare & Medicaid Services is in the process of expanding its Recovery Audit Contractor program for Medicare Advantage, which may result in increased government enforcement. Further, our contracts with Medicare Advantage plans require us to comply with a number of regulatory provisions and to permit these health plan customers to perform compliance audits of our processes and programs. Many of these regulations are vaguely written and subject to differing interpretations that may, in certain cases, result in unintended consequences that could impact our ability to effectively deliver services. Further, we are required to comply with most requirements of the HIPAA privacy and security laws and regulations and may be subject to criminal or civil penalties for violations of these regulations. Certain of our services, including health utilization management and certain claims payment functions, require licensure and may be regulated by government agencies. We are subject to a variety of legal requirements in order to obtain and maintain such licenses, but little guidance is available to determine the scope of some of these requirements.

We continually monitor the extent to which federal and state legislation and regulations govern our operations. New federal or state laws or regulations or new interpretations of existing requirements that affect our operations could have a material adverse effect on our results of operations. If we are found to have violated applicable laws, to have caused any of our Healthcare segment customers to submit false claims or make false statements, or to have failed to comply with our contractual compliance obligations, we could be required to restructure our Healthcare segment operations, be subject to contractual penalties, including termination of our Healthcare segment customer agreements, and be subject to significant civil and criminal penalties.

Healthcare reform efforts may result in a reduction to our revenues from government health programs and private insurance companies or otherwise directly or indirectly impact our business.

The healthcare industry is subject to various political, regulatory, scientific, and technological influences. Efforts at federal and state levels of government have resulted in laws and regulations intended to effect significant change within the healthcare system. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), the most prominent of these efforts, affects coverage, delivery, and reimbursement of healthcare services. Among other effects, several of its provisions may increase the costs and/or reduce the revenues of our customers or prospective customers. For example, the ACA eliminates pre-existing condition exclusions by commercial health plans, bans annual benefit limits, and mandates minimum medical loss ratios for health plans.

However, there is substantial uncertainty regarding the net effect and future of the ACA. The presidential administration and Congress have made significant changes to the ACA, its implementation and its interpretation. The president signed an executive order that directs agencies to minimize “economic and regulatory burdens” of the ACA. Final rules issued in 2018 expand the availability of association health plans and allow the sale of short-term, limited-duration health plans, neither of which are required to cover all of the essential benefits mandated by the ACA.  Further, effective January 2019, Congress eliminated the penalty associated with the ACA’s individual mandate.  As a result, a federal court in Texas ruled in December 2018 that, because the penalty associated with the individual mandate was eliminated, the entire ACA was unconstitutional.  However, the law remains in effect pending appeal.  It is possible that the reforms imposed by the ACA or uncertainty regarding significant changes or court challenges to the law will adversely affect the profitability of our Healthcare segment customers and cause our Healthcare segment customers or prospective customers to reduce or delay the purchase of our services or to demand reduced fees. Because of this uncertainty and many other variables, including the ACA’s complexity and the difficulty of predicting the impact of changes on other healthcare industry participants and the ultimate outcome of court challenges, we are unable to predict all of the ways in which the ACA could impact us. Furthermore, we could also be impacted by future legislative and regulatory healthcare reform initiatives. For example, beginning in

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2020, the Chronic Care Act will allow Medicare Advantage plans to cover supplemental benefits that are not primarily health-related, but that have the reasonable expectation of improving or maintaining health. Members of Congress have proposed measures that would expand government-sponsored coverage, including single-payor proposals.

Risks Relating to Our Nutrition Segment

Our Nutrition segment's future growth and profitability will depend in large part upon the effectiveness and efficiency of our marketing expenditures and our ability to select effective markets and media in which to advertise.

Our Nutrition segment'sfuture growth and profitability will depend in large part upon the effectiveness and efficiency of our marketing expenditures, including our ability to:

• create greater awareness of our Nutrition segmentbrands and programs;

• identify the most effective and efficient levels of spending in each market, media and specific media vehicle;

• determine the appropriate creative messages and media mix for advertising, marketing and promotional expenditures;

• effectively manage marketing costs (including creative and media) in order to maintain acceptable customer acquisition costs;

• acquire cost-effective national television advertising;

• select the most effective markets, media and specific media vehicles in which to advertise; and

• convert Nutrition segmentcustomer inquiries into actual orders.

Our planned marketing expenditures for our Nutrition segment may not result in increased revenue or generate sufficient levels of brand name and program awareness. We may not be able to manage our Nutrition segment'smarketing expenditures on a cost-effective basis whereby our Nutrition segmentcustomer acquisition costs may exceed the contribution profit generated from each additional customer.

Our Nutrition segment relies on third parties to provide it with adequate food supply, freight and fulfillment and Internet and networking services, the loss of any of which could cause our revenue, earnings or reputation to suffer.

Food Manufacturers and Other Suppliers. Our Nutrition segment relies solely on third-party manufacturers to supply all of the food and other products we sell as well as packaging materials. If we are unable to obtain sufficient quantity, quality and variety of food, other products and packaging materials in a timely and low-cost manner from our manufacturers, we will be unable to fulfill our Nutrition segmentcustomers’ orders in a timely manner, which may cause us to lose revenue and market share or incur higher costs, as well as damage the value of our brands.

Freight and Fulfillment. Currently, all of our Nutrition segment customer order fulfillment is handled by one third-party provider.  Also, almost all of our direct to consumer Nutrition segment customer orders are shipped by one third-party provider and almost all of our orders for Nutrition segmentretail programs were shipped by another third-party provider. Should these providers be unable to service our needs for even a short duration, our revenue and business could be adversely affected. Additionally, the cost and time associated with replacing these providers on short notice would add to our costs. Any replacement fulfillment provider would also require startup time, which could cause us to lose sales and market share.

Internet and Networking. Our Nutrition segmentbusiness also depends on a number of third parties for Internet access and networking, and we have limited control over these third parties. Should our Nutrition segment's network connections go down, our ability to fulfill orders would be delayed. Further, if our Nutrition segment'swebsites or call center become unavailable for a noticeable period of time due to Internet or communication failures, our business could be adversely affected, including harm to our brands and loss of sales.

Therefore, we are dependent on maintaining good relationships with these third parties. The services we require from these parties may be disrupted by a number of factors associated with their businesses, including the following:

• labor disruptions;

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• delivery problems;

• financial condition or results of operations;

• internal inefficiencies;

• equipment failure;

• severe weather;

• fire;

• natural or man-made disasters; and

• with respect to our food suppliers, shortages of ingredients or United States Department of Agriculture ("USDA") or United States Food and Drug Administration (“FDA”) compliance issues.

We may be subject to claims that our Nutrition segment personnel are unqualified to provide proper weight loss advice.

We offer counseling options from weight loss counselors, registered dietitians and certified diabetes educators with varying levels of training. We may be subject to claims from our Nutrition segmentcustomers alleging that our personnel lack the qualifications necessary to provide proper advice regarding weight loss and related topics. We may also be subject to claims that our Nutrition segment personnel have provided inappropriate advice or have inappropriately referred or failed to refer customers to health care providers for matters other than weight loss. Such claims could result in lawsuits, damage to our reputation and divert management’s attention from our business, which would adversely affect our business.

We may be subject to health related claims from our customers.

Our Nutrition segment's weight loss programs do not include medical treatment or medical advice, and we do not engage physicians or nurses to monitor the progress of our Nutrition segmentcustomers. Many people who are overweight suffer from other physical conditions, and our target customers could be considered a high-risk population. A Nutrition segmentcustomer who experiences health problems could allege or bring a lawsuit against us on the basis that those problems were caused or worsened by participating in our weight management programs or by consuming one or more of our individual products. For example, our Nutrition segment'spredecessor businesses suffered substantial losses due to health-related claims and related publicity. If we become subject to any such claims, while we would defend ourselves against such claims, we may ultimately be unsuccessful in our defense. Also, defending ourselves against such claims, regardless of their merit and ultimate outcome, would likely be lengthy and costly, and adversely affect our results of operations. Further, our general liability insurance may not cover claims of these types.

The weight management industry is highly competitive. If any of our competitors or a new entrant into the market with significant resources pursues a weight management program similar to ours, our Nutrition segment business could be significantly affected.

Competition is intense in the weight management industry and we must remain competitive in the areas of program efficacy, price, taste, customer service and brand recognition. The competitors of our Nutrition segmentinclude companies selling pharmaceutical products and weight loss programs, digital tools and wearable trackers, as well as a wide variety of diet foods and meal replacement bars and shakes, appetite suppressants and nutritional supplements. Some of our Nutrition segment'scompetitors are significantly larger than we are and have substantially greater resources. Our Nutrition segmentbusiness could be adversely affected if someone with significant resources decided to imitate our weight management programs. For example, if a major supplier of pre-packaged foods decided to enter this market and made a substantial investment of resources in advertising and training diet counselors, our Nutrition segmentbusiness could be significantly affected. Any increased competition from new entrants into our Nutrition segment's industry or any increased success by existing competition could result in reductions in our Nutrition segmentsales or prices, or both, which could have an adverse effect on our business and results of operations.

We are dependent on certain third-party agreements for a percentage of revenue.

Our Nutrition segment has agreements with certain third-party retailers. Under these agreements, these third parties control when and how often our Nutrition segment products are offered and we are not guaranteed any minimum level of sales. If any third party elects not to renew their agreement with us or reduces the promotion of our Nutrition segment products, our revenue will suffer. In addition, our third-party retailers may decide to stop

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selling our Nutrition segment products upon written notice, which may result in an increased level of reclamation claims. In the event any retailer terminates its relationship with us and the level of reclamation claims exceeds the estimated amount reserved on our balance sheet at the time of sale to the retailer, we will have to record an expense for the excess claims, which could adversely impact our results of operations and financial condition. Additionally, in certain instances, we could be prohibited from selling our Nutrition segment products through competitors of these third parties for a specified time after the termination of the agreements.

New weight loss products or services may put us at a competitive disadvantage.

On an ongoing basis, many existing and potential providers of weight loss solutions, including many pharmaceutical firms with significantly greater financial and operating resources than we have, are developing new products and services. The creation of a weight loss solution, such as a drug therapy, that is perceived to be safe, effective and “easier” than a portion-controlled meal plan would put our Nutrition segment at a disadvantage in the marketplace and our results of operations could be negatively affected.

We may be subject to litigation from our competitors.

Our Nutrition segment's competitors may pursue litigation against us based on our advertising or other marketing practices regardless of its merit and chances of success, especially if we engage in comparative advertising, which includes advertising that directly or indirectly mentions a competitor or a competitor’s weight loss program in comparison to our Nutrition segment programs. While we would defend ourselves against any such claims, our defense may ultimately be unsuccessful. Also, defending against such claims, regardless of their merit and ultimate outcome, may be lengthy and costly, strain our resources and divert management’s attention from their core responsibilities, which would have a negative impact on our business. 

We have and expect to continue to launch new weight loss programs and brands which may not be successful due to the failure of such programs or brands to achieve anticipated levels of market acceptance, which could adversely affect our Nutrition segment business, financial condition and results of operations.

There are a number of risks inherent in any new program or brand introduction, which could prevent us from achieving revenue growth and increasing our Nutrition segment's overall market share in the commercial weight loss market. Any new program or brand may fail to achieve the anticipated level of market acceptance or appeal to customer tastes and preferences. In addition, introduction costs, including product testing and marketing, may be greater than anticipated. If the new program or brand is not successful or falls short of anticipated market acceptance, we may be adversely affected by continued expenses and the diversion of management time to this initiative. Any or all of such events could have adverse effects on our business, financial condition and results of operations.

If we do not continue to receive referrals from existing Nutrition segmentcustomers, our Nutrition segment's customer acquisition cost may increase.

We rely on word-of-mouth advertising for a portion of our new Nutrition segment customers. If our brands suffer or the number of customers acquired through referrals drops due to other circumstances, our costs associated with acquiring new Nutrition segment customers and generating revenue will increase, which will, in turn, have an adverse effect on our profitability.

We use third-party marketing vendors to promote our Nutrition segment products. If the spokespersons affiliated with the third-party marketing vendors suffer adverse publicity or elect to not renew, our revenue could be adversely affected.

Our Nutrition segment's marketing strategy depends in part on celebrity spokespersons, as well as customer spokespersons, to promote our weight loss programs. Any of these spokespersons may become the subject of adverse news reports, negative publicity or otherwise be alienated from a segment of our Nutrition segment customer base, whether weight loss related or not. If so, such events may reduce the effectiveness of his or her endorsement and, in turn, adversely affect our revenue and results of operations. Additionally, if a spokesperson elects not to renew their agreement with us, our revenue may suffer.

Changes in customerpreferences could negatively impact our operating results.

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Our Nutrition segment programs feature frozen and ready-to-go food selections, which we believe offer convenience and value to our customers. Our continued success depends, to a large degree, upon the continued popularity of our Nutrition segment programs versus various other weight loss, weight management and fitness regimens, such as low carbohydrate diets, appetite suppressants and diets featured in the published media. Changes in customer tastes and preferences away from our frozen or ready-to-go food and support and counseling services, and any failure to provide innovative responses to these changes, may have a materially adverse impact on our business, financial condition, operating results and cash flows.

Our success is also dependent on our food innovation including maintaining a robust array of food items and improving the quality of existing items. If we do not continually expand our food items or provide customers with items that are desirable in taste and quality, our business could be adversely impacted.

The weight loss industry is subject to adverse publicity, which could harm our Nutrition segment business.

The weight loss industry receives adverse publicity from time to time, and the occurrence of such publicity could harm us, even if the adverse publicity is not directly related to us. In the early 1990s, our Nutrition segment's predecessor businesses were subject to extremely damaging adverse publicity relating to a large number of lawsuits alleging that the Nutrisystem® weight loss program in use at that time led to gall bladder disease. This publicity was a factor that contributed to the bankruptcy of our Nutrition segment's predecessor businesses in 1993. In addition, our Nutrition segment's predecessor businesses were severely impacted by significant litigation and damaging publicity related to their customers’ use of fen-phen as an appetite suppressant, which the FDA ordered withdrawn from the market in September 1997. The significant decline in business resulting from the fen-phen problems caused our Nutrition segment's predecessor businesses to close all of their company-owned weight loss centers.

Congressional hearings about practices in the weight loss industry have also resulted in adverse publicity and a consequent decline in the revenue of weight loss businesses. Future research reports or publicity that is perceived as unfavorable or that question certain weight loss programs, products or methods could result in a decline in our revenue. Because of our dependence on customer perceptions, adverse publicity associated with illness or other undesirable effects resulting from the consumption of our Nutrition segment products or similar products by competitors, whether or not accurate, could also damage customer confidence in our Nutrition segment weight loss programs and result in a decline in revenue. Adverse publicity could arise even if the unfavorable effects associated with weight loss products or services resulted from the user’s failure to use such products or services appropriately.

The industry in which our Nutrition segment operatesis subject to governmental regulation that could increase in severity and hurt results of operations.

The industry in which our Nutrition segment operates is subject to federal, state and other governmental regulation. Certain federal and state agencies, such as the FTC, regulate and enforce such laws relating to advertising, disclosures to customers, privacy, customer pricing and billing arrangements and other customer protection matters. A determination by a federal or state agency, or a court, that any of our practices do not meet existing or new laws or regulations could result in liability, adverse publicity and restrictions on our business operations. Some advertising practices in the weight loss industry, in particular, have led to investigations from time to time by the FTC and other governmental agencies and many companies in the weight loss industry, including our Nutrition segment's predecessor businesses, have entered into consent decrees with the FTC relating to weight loss claims and other advertising practices. In addition, the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising require us and other weight loss companies to use a statement as to what the typical weight loss a customer can expect to achieve on our Nutrition segment programs when using a customer’s weight loss testimonial in advertising. Federal and state regulation of advertising practices generally, and in the weight loss industry in particular, may increase in scope or severity in the future, which could have a material adverse impact on our business.

Other aspects of the industry in which our Nutrition segment operates are also subject to government regulation. For example, the manufacturing, labeling and distribution of food products, including dietary supplements, are subject to strict USDA and FDA requirements and food manufacturers are subject to rigorous inspection and other requirements of the USDA and FDA, and companies operating in foreign markets must comply with those countries’ requirements for proper labeling, controls on hygiene, food preparation and other matters. If federal, state, local or foreign regulation of the weight loss industry increases for any reason, then we may be required to incur significant expenses, as well as modify our operations to comply with new regulatory requirements, which

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could harm our operating results. Additionally, remedies available in any potential administrative or regulatory actions may include product recalls and requiring us to refund amounts paid by all affected customers or pay other damages, which could be substantial. 

Laws and regulations directly applicable to communications, operations or commerce over the Internet such as those governing intellectual property, privacy, libel and taxation, are becoming more prevalent and some remain unsettled. If we are required to comply with new laws or regulations or new interpretations of existing laws or regulations, or if we are unable to comply with these laws, regulations or interpretations, our business could be adversely affected.

Future laws or regulations, including laws or regulations affecting our marketing and advertising practices, relations with customers, employees, service providers, or our services and products, may have an adverse impact on us.

The sale of ingested products involves product liability and other risks.

Like other distributors of products that are ingested, we face an inherent risk of exposure to product liability claims if the use of our Nutrition segment products results in illness or injury. The foods that we resell in the U.S. are subject to laws and regulations, including those administered by the USDA and FDA that establish manufacturing practices and quality standards for food products. Product liability claims could have a material adverse effect on our business as existing insurance coverage may not be adequate. Distributors of weight loss food products, including dietary supplements, as well as our Nutrition segment's predecessor businesses, have been named as defendants in product liability lawsuits from time to time. The successful assertion or settlement of an uninsured claim, a significant number of insured claims or a claim exceeding the limits of our insurance coverage would harm us by adding costs to the business and by diverting the attention of senior management from the operation of our business. We may also be subject to claims that our Nutrition segment products contain contaminants, are improperly labeled, include inadequate instructions as to use or inadequate warnings covering interactions with other substances. Product liability litigation, even if not meritorious, is very expensive and could also entail adverse publicity for us and adversely affect our results of operations. In addition, the products we distribute, or certain components of those products, may be subject to product recalls or other deficiencies. Any negative publicity associated with these actions would adversely affect our brands and may result in decreased product sales and, as a result, lower revenue and profits.

Item 6.Exhibits

(a) Exhibits

10.1	Amended and Restated Employment Agreement, dated March 18, 2019, between Tivity Health, Inc. and Donato Tramuto (incorporated herein by reference to Exhibit 10.1 to Tivity Health’s Current Report on Form 8-K, filed March 18, 2019 (File No. 000-19364)).
10.2	Employment Agreement, dated March 8, 2019, by and between Tivity Health and Dawn Zier (incorporated herein by reference to Exhibit 10.2 to Tivity Health’s Current Report on Form 8-K, filed March 8, 2019 (File No. 000-19364)).
10.3	Form of Nondisclosure and Noncompete Agreement for Ms. Zier (incorporated herein by reference to Exhibit 10.2 to Tivity Health’s Current Report on Form 8-K, filed March 8, 2019 (File No. 000-19364)).
10.4	Form of Amended and Restated 2014 Stock Incentive Plan Restricted Stock Unit Award Agreement for Ms. Zier (incorporated herein by reference to Exhibit 10.2 to Tivity Health’s Current Report on Form 8-K, filed March 8, 2019 (File No. 000-19364)).
10.5	Form of Amended and Restated 2014 Stock Incentive Plan Performance Stock Unit Award Agreement for Ms. Zier (incorporated herein by reference to Exhibit 10.2 to Tivity Health’s Current Report on Form 8-K, filed March 8, 2019 (File No. 000-19364)).
10.6	Form of Nutrisystem Stock Incentive Plan Restricted Stock Award Agreement for Ms. Zier (incorporated herein by reference to Exhibit 10.2 to Tivity Health’s Current Report on Form 8-K, filed March 8, 2019 (File No. 000-19364)).

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10.7	Form of Nutrisystem Stock Incentive Plan 2016 Restricted Stock Unit Award Agreement for Ms. Zier (incorporated herein by reference to Exhibit 10.2 to Tivity Health’s Current Report on Form 8-K, filed March 8, 2019 (File No. 000-19364)).
10.8	Form of Nutrisystem Stock Incentive Plan 2017 Restricted Stock Unit Award Agreement for Ms. Zier (incorporated herein by reference to Exhibit 10.2 to Tivity Health’s Current Report on Form 8-K, filed March 8, 2019 (File No. 000-19364)).
10.9	Form of Nutrisystem Stock Incentive Plan 2018 Restricted Stock Unit Award Agreement for Ms. Zier (incorporated herein by reference to Exhibit 10.2 to Tivity Health’s Current Report on Form 8-K, filed March 8, 2019 (File No. 000-19364)).
10.10	Offer of Employment Letter, dated August 25, 2016, by and between Tivity Health and Steve Janicak.*
10.11	Employment Agreement, dated March 8, 2019, by and between Tivity Health and Keira Krausz.*
10.12	Form of Nondisclosure and Noncompete Agreement for Ms. Krausz (included in Exhibit 10.11).*
10.13	Form of Amended and Restated 2014 Stock Incentive Plan Restricted Stock Unit Award Agreement for Ms. Krausz (included in Exhibit 10.11).*
10.14	Form of Nutrisystem Stock Incentive Plan Restricted Stock Award Agreement for Ms. Krausz (included in Exhibit 10.11).*
10.15	Form of Nutrisystem Stock Incentive Plan 2016 Restricted Stock Unit Award Agreement for Ms. Krausz (included in Exhibit 10.11).*
10.16	Form of Nutrisystem Stock Incentive Plan 2017 Restricted Stock Unit Award Agreement for Ms. Krausz (included in Exhibit 10.11).*
10.17	Form of Nutrisystem Stock Incentive Plan 2018 Restricted Stock Unit Award Agreement for Ms. Krausz (included in Exhibit 10.11).*
10.18	Nutrisystem Stock Incentive Plan (incorporated herein by reference to Exhibit 99.1 to Tivity Health’s Registration Statement on Form S-8, filed March 8, 2019 (File No. 333-230173).
10.19	Credit and Guaranty Agreement, dated March 8, 2019, by and among Tivity Health, certain subsidiaries of Tivity Health, the lenders party thereto, Credit Suisse AG, Cayman Islands Branch and SunTrust Bank. (incorporated herein by reference to Exhibit 10.1 to Tivity Health’s Current Report on Form 8-K, filed March 8, 2019 (File No. 000-19364)).
31.1	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 made by Donato Tramuto, Chief Executive Officer.*
31.2	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 made by Adam Holland, Chief Financial Officer.*
32	Certification Pursuant to 18 U.S.C section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 made by Donato Tramuto, Chief Executive Officer, and Adam Holland, Chief Financial Officer.*
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase

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101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
*	Filed herewith

51

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Tivity Health, Inc.
			(Registrant)
Date:	May 9, 2019	By	/s/ Adam Holland
			Chief Financial Officer
			(Principal Financial Officer)

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EX-10.10

Exhibit 10.10

[Healthways logo]

August 25, 2016

Steve Janicak

Address on file

Dear Steve,

We are delighted to confirm the offer to join Healthways as Chief Growth Officer! We anticipate your start date to be September 13, 2016.  In your new position with us, you will report directly to me and play a pivotal role as a member of the Healthways Executive Leadership Team and in delivering on our purpose − − to create a healthier world one person at a time. We are excited about adding your talent to our team.

As you have undoubtedly experienced in the hiring process, our culture is one that fosters well−being improvement. Well−being improvement is not only what we do, it's who we are. We are the Living Lab for what we take to market and we expect our colleagues to proactively engage in improving your personal and our collective well−being in all five elements; physical, financial, social, community, and purpose. Our collective commitment to well−being improvement for our members and ourselves is foundational to our culture. It makes us strong, unique, and even somewhat quirky. Our culture envelopes us, connects us, and makes Healthways a magical place to work.

As part of this commitment to our culture, you'll be expected to follow all Healthways policies and procedures including our Code of Business Conduct.

Steve, we are convinced you are going to bring your A−game and we look forward to changing the world together.

Now, the good stuff:

Compensation and Benefits

• Your base salary will be $345,000.00 or $13,269.23 payable bi−weekly.

• Your role also makes you eligible for our Colleague Bonus program. Your bonus award target is 50% of your eligible base earnings this fiscal year. Payout is contingent upon achievement of specific company performance targets and your individual performance objectives. All colleagues must be actively employed on the payout dates to be eligible.

• A one-time grant of 25,000 restricted stock units (“RSUs”), vesting over three (3) years in equal annual installments.  

• A one-time grant of 25,000 market stock units (“MSUs”), vesting at the end (cliff vesting) of three (3) years.

• You will receive a one-time signing bonus of $5,000.00 (grossed up for taxes) payable after 30 days of employment.  Your signing bonus is contingent upon the execution of the Bonus Repayment Agreement.  

• As a full−time, exempt employee, you will be eligible to receive our full complement of benefits following your eligibility waiting period for each of the plans. New colleagues have 30 days from hire date to make elections in order to activate your benefits.  Your benefit elections become effective on your 31st day of employment.  We have enclosed a summary of our Be Well benefits for your review.

• If you're at least 21 years old, you are eligible to participate in our 401(k) program on your first day of employment. In support of your financial well−being you will automatically be enrolled in the plan after 90 days of employment if you haven't already made elections. You may enroll at www.401k.com to select or change your deferral rate at any time.

• Eligibility for our Capital Accumulation Plan (CAP).

Steve Janicak

Chief Growth Officer

Like all responsible companies, Healthways has a few conditions that come along with this offer.  See below for the fine print.

Prior Employment

You represent that you are not subject to any non−competition provisions or restrictive covenants that would prevent or affect your acceptance of this offer of employment and the performance of your employment obligations at Healthways. You further represent that the performance of your employment obligations will not violate or breach any other agreement or arrangement with a prior employer. In your work for the company, you will be expected not to use or disclose any confidential or proprietary information or trade secrets of any prior employer or other person to whom you have an obligation of confidentiality.

Restrictive Covenants

Upon acceptance of this offer, you understand and agree that your employment is contingent upon your execution of and delivery to the company of a Trade Secret and Proprietary Information Agreement enclosed. To translate, that means you need to protect our proprietary information.

At−Will Employment

You understand that your employment with Healthways is for an unspecified duration that constitutes at−will employment and that either you or the company can terminate this relationship at any time, with or without cause.

Company Events and Activities

While here, you'll have the opportunity to participate in a number of engaging activities and events that help you optimize your well−being. We take pictures at events and share them across our sites. Sometimes those photos, stories, and videos are so great that we use them for other purposes, such as recruiting videos, sales or client meetings, and even Board meetings. You accept that your image may be used by Healthways.

Background Check and Drug Test

You understand that this offer is contingent upon the successful completion of our background check and drug testing process.

Please return a signed copy of this offer letter to Ross Scott. Feel free to contact him directly should you have any questions or need assistance with the enclosed materials.

Welcome home!

Donato Tramuto

Acknowledged and Agreed:

/s/ Steve Janicak8/25/2016

Steve JanicakDate

Addendum to Offer Letter for Steve Janicak dated August 25, 2016

Termination Provisions:

If your employment is terminated at any time without Cause⁽¹⁾ or if you terminate your employment for Good Reason⁽²⁾, you will be entitled to receive:

All base salary and benefits due through the date of termination payable within thirty (30) days of the date of termination, with the date of such payment determined by the Company in its sole discretion.

Upon your execution of a full release of claims in favor of the Company, provided that such release must be executed and become effective and any revocation period must expire within sixty (60) days of the date of termination, you will also be entitled to receive:

An amount equal to your base salary for a total of twelve (12) months following the date of termination.⁽³⁾

Group medical benefits for twelve (12) months after the date of termination. The costs of the Company's portion of any premiums due will be included in your gross income to the extent the provision of such benefits is deemed to be discriminatory under Section 105(h) of the Internal Revenue Code of 1986, as amended.⁽³⁾

A pro-rata portion of any annual bonus for the year in which the termination occurs, based on actual Company performance, which pro-rata annual bonus amount will be determined after the end of the fiscal year for which the bonus plan was in place and paid in accordance with the terms of such bonus plan.

⁽¹⁾ The following events constitute “Cause” for termination:

Continued failure to substantially perform your duties after written notice and failure to cure within sixty (60) days;

Conviction of a felony or engaging in misconduct that is materially injurious to the Company, monetarily or to its reputation or otherwise, or that would damage your ability to effectively perform your duties;

Theft or dishonesty by you;

Intoxication while on duty; or

Willful violation of Company policies or procedures after written notice and failure to cure within thirty (30) days.

⁽²⁾ You may terminate your employment by written notice of your resignation delivered within sixty (60) days after the occurrence of any of the following events, each of which shall constitute "Good Reason" for resignation and together shall be "Good Reason Events":

a.            a material reduction in your base salary (unless such reduction is part of an across-the-board reduction affecting all Company executives with a comparable role or title); and

b.            a requirement by the Company to relocate your residence, unless such relocation is mutually agreed upon by you and the Company.

You shall give the Company written notice of your intention to resign for Good Reason within sixty (60) days after the occurrence of one of the Good Reason Events.  The notice must state with reasonable specificity the Good Reason Event. Thereafter, the Company shall have sixty (60) days (the "Cure Period") to rescind the Good Reason Event(s).  If the Company rescinds the Good Reason Event(s) within the Cure Period, you no longer shall have the right to resign for Good Reason. If the Company fails to rescind the Good Reason Event(s) before the expiration of the Cure Period, then you may resign for Good Reason as long as the resignation for Good Reason occurs within thirty (30) days following the expiration of the Cure Period; otherwise the right to resign on the basis of such Good Reason Event(s) shall be deemed to have been waived.

⁽³⁾ These amounts will be paid to you periodically at the Company's regular payroll dates commencing within sixty (60) days following the date of termination (the commencement date will be determined by the Company, in its sole discretion).

EX-10.11

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.

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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.

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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

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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

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EXHIBIT B

Special Retention Award

[Attached.]

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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

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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 Unitsat 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

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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.

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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

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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

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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]

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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.

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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 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:

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(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

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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

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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

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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]

8

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 $36,325.60of 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.

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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 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.

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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.

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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

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

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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.]

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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 $19,924.00of 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

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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.

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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.

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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

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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

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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 D

Form of Release

[Attached.]

Form Release of Claims

In consideration of the payments and other benefits set forth in Section VI.BandSection VI.Dof 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.

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I represent and warrant that I have notpreviously filed, and to the maximum extent permitted by law agree that I will not file, a complaint, charge, or lawsuit against the Company regarding anyoftheclaimsreleasedherein.If,notwithstandingthisrepresentationandwarranty,Ihavefiledor 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).

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Date:By:

Keira Krausz

Date:By:

Company Representative

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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 Krausz

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Donato Tramuto, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tivity Health, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:    May 9, 2019

/s/ Donato Tramuto

Donato Tramuto

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Adam Holland, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tivity Health, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:    May 9, 2019

/s/ Adam Holland

Adam Holland

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Tivity Health, Inc. (the "Company") on Form 10-Q for the quarter ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Donato Tramuto, Chief Executive Officer of the Company, and Adam Holland, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Donato Tramuto

Donato Tramuto

Chief Executive Officer

May 9, 2019

/s/ Adam Holland

Adam Holland

Chief Financial Officer

May 9, 2019

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document And Entity Information [Abstract]
Entity Registrant Name	TIVITY HEALTH, INC.
Entity Central Index Key	0000704415
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	TVTY
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Entity Common Stock, Shares Outstanding		47,702,306

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 18,788	$ 1,933
Accounts receivable, net	120,800	67,139
Inventories	32,469
Prepaid expenses	13,116	3,655
Income taxes receivable	2,518	720
Other current assets	5,658	4,658
Total current assets	193,349	78,105
Property and equipment, net of accumulated depreciation of $32,927 and $30,711 respectively	47,985	16,341
Right-of-use assets	46,747
Intangible assets, net	975,729	29,049
Goodwill, net	780,351	334,680
Other long-term assets	26,427	23,904
Total assets	2,070,588	482,079
Current liabilities:
Accounts payable	88,083	29,103
Accrued salaries and benefits	8,696	6,512
Accrued liabilities	51,576	42,563
Deferred revenue	16,129	582
Income taxes payable	493
Current portion of debt	44,900	57
Current portion of lease liabilities	14,808
Current portion of long-term liabilities	1,455	2,255
Total current liabilities	226,140	81,072
Long-term debt	1,066,940	30,589
Long-term lease liabilities	35,166
Long-term deferred tax liability	225,039	319
Other long-term liabilities	139	1,098
Stockholders' equity:
Preferred stock $.001 par value, 5,000,000 shares authorized, none outstanding
Common Stock $.001 par value, 120,000,000 shares authorized, 47,679,712 and 41,049,418 shares outstanding, respectively	47	41
Additional paid-in capital	491,548	347,487
Retained earnings	53,751	49,655
Treasury stock, at cost, 2,254,953 shares in treasury	(28,182)	(28,182)
Total stockholders' equity	517,164	369,001
Total liabilities and stockholders' equity	$ 2,070,588	$ 482,079

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Accumulated depreciation	$ 32,927	$ 30,711
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares outstanding (in shares)	47,679,712	41,049,418
Treasury stock (in shares)	2,254,953	2,254,953

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Revenues	$ 214,094	$ 149,930
Cost of revenue (exclusive of depreciation and amortization of $2,008 and $975, respectively, included below)	140,338	105,396
Marketing expenses	24,149	2,887
Selling, general and administrative expenses	27,186	8,577
Depreciation and amortization	3,582	1,123
Restructuring and related charges	1,591
Operating income	17,248	31,947
Interest expense	7,666	3,454
Income before income taxes	9,582	28,493
Income tax expense	5,368	7,157
Net income	$ 4,214	$ 21,336
Earnings per share:
Basic	$ 0.10	$ 0.54
Diluted	$ 0.10	$ 0.49
Comprehensive income	$ 4,214	$ 21,336
Weighted average common shares and equivalents:
Basic	42,745	39,783
Diluted	43,183	43,589

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Cost of services, depreciation and amortization	$ 2,008	$ 975

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 4,214	$ 21,336
Comprehensive income	$ 4,214	$ 21,336

XML

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)	Treasury Stock
Balance at Dec. 31, 2017	$ 271,953	$ 40	$ 349,243	$ (49,148)	$ (28,182)
Comprehensive income	21,336			21,336
Exercise of stock options	770		770
Tax withholding for share-based compensation	(894)		(894)
Share-based employee compensation expense	1,410		1,410
Balance at Mar. 31, 2018	294,575	40	350,529	(27,812)	(28,182)
Balance at Dec. 31, 2018	369,001	41	347,487	49,655	(28,182)
Comprehensive income	4,214			4,214
Issuance of Common Stock in connection with Merger	132,838	6	132,832
Share-based compensation replacement awards related to Merger and attributable to pre-combination services	9,107		9,107
Exercise of stock options	234		234
Tax withholding for share-based compensation	(342)		(342)
Share-based employee compensation expense	2,359		2,359
Other	(247)		(129)	(118)
Balance at Mar. 31, 2019	$ 517,164	$ 47	$ 491,548	$ 53,751	$ (28,182)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net income	$ 4,214	$ 21,336
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,582	1,123
Amortization and write-off of deferred loan costs	900	522
Amortization of debt discount	389	2,044
Share-based employee compensation expense	2,359	1,410
Deferred income taxes	4,355	7,090
Increase in accounts receivable, net	(31,123)	(12,712)
Decrease in inventory	6,025
Decrease in other current assets	168	2,037
Increase (decrease) in accounts payable	6,555	(916)
Decrease in accrued salaries and benefits	(767)	(9,007)
Increase (decrease) in other current liabilities	5,576	(1,185)
Increase in deferred revenue	2,309
Other	660	625
Net cash flows provided by operating activities	5,202	12,367
Cash flows from investing activities:
Acquisition of property and equipment	(3,898)	(1,946)
Business acquisitions, net of cash acquired	(1,062,818)
Net cash flows used in investing activities	(1,066,716)	(1,946)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	1,274,925	8,400
Payments of long-term debt	(167,134)	(8,793)
Payments related to tax withholding for share-based compensation	(342)	(894)
Exercise of stock options	234	771
Deferred loan costs	(30,189)
Change in cash overdraft and other	891	378
Net cash flows provided by (used in) financing activities	1,078,385	(138)
Effect of exchange rate changes on cash	(16)	69
Net increase in cash and cash equivalents	16,855	10,352
Cash and cash equivalents, beginning of period	1,933	28,440
Cash and cash equivalents, end of period	$ 18,788	$ 38,792

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).  In our opinion, the accompanying consolidated financial statements of Tivity Health^®, Inc. and its wholly-owned subsidiaries, including the results of Nutrisystem^®, Inc. (“Nutrisystem”) acquired on March 8, 2019, (collectively, “Tivity Health,” the “Company,” or such terms as “we,” “us,” or “our”) reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement.  Our consolidated statements of operations include results of Nutrisystem from March 8, 2019 through March 31, 2019.  We have reclassified certain items in prior periods to conform to current classifications.

Following the acquisition of Nutrisystem, we organize and manage our operations within two reportable segments, based on the types of products and services they offer: Healthcare and Nutrition.  The Healthcare segment is comprised of our legacy business and includes SilverSneakers senior fitness, Prime Fitness and WholeHealth Living^TM.  The Nutrition segment is comprised of Nutrisystem’s legacy business and includes the Nutrisystem^® and the South Beach Diet^® products.

We have omitted certain financial information that is normally included in financial statements prepared in accordance with U.S. GAAP but that is not required for interim reporting purposes.  You should read the accompanying consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018.

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Business Combinations

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Business Combinations

2. Business Combinations

On December 9, 2018, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Nutrisystem, a provider of weight management products and services, and Sweet Acquisition, Inc., a wholly-owned subsidiary of Tivity Health (“Merger Sub”). The Merger Agreement provided that Merger Sub would merge with and into Nutrisystem, with Nutrisystem surviving as a wholly-owned subsidiary of Tivity Health (the “Merger”).  The Merger was completed on March 8, 2019 (“Closing”).  At Closing, except for certain excluded shares, each share of Nutrisystem common stock outstanding immediately prior to Closing was converted into the right to receive $38.75 in cash, without interest, and 0.2141 of a share of Tivity Health Common Stock (“Exchange Ratio”) (with cash payable in lieu of any fractional shares).  Nutrisystem shares excluded from the conversion were those shares held by Nutrisystem as treasury stock and shares with respect to which appraisal rights have been properly exercised in accordance with the General Corporation Law of the State of Delaware.

The acquisition of Nutrisystem enables us to offer, at scale, an integrated portfolio of fitness, nutrition and social engagement solutions to support overall health and wellness and to address weight management, chronic conditions, and social isolation.  The fair value of consideration transferred at Closing was $1.3 billion (“Merger Consideration”), which includes cash consideration, the fair value of the stock consideration, and the fair value of the consideration for Nutrisystem equity awards assumed by Tivity Health that related to pre-combination services (see Note 8). The following table summarizes the components of the Merger Consideration:

(In thousands)
Cash paid for outstanding Nutrisystem shares (1)	$	1,138,143
Value of Tivity Health Common Stock issued in the merger (2)		132,838
Value of Nutrisystem stock options (3)		6,020
Value of Tivity Health replacement awards attributable to pre-combination service (4)		9,107
Total Merger Consideration	$	1,286,108

(1) Represents the total cash paid to former Nutrisystem stockholders as cash consideration.  This amount is based on the 29,370,594 shares of Nutrisystem common stock issued and outstanding as of Closing and cash consideration of $38.75 per share, plus cash payable in lieu of fractional shares.

(2) Represents the fair value of 6.3 million shares of Tivity Health Common Stock issued for outstanding Nutrisystem shares as stock consideration.  This amount is based on (a) 29,370,594 Nutrisystem common shares issued and outstanding as of Closing, times (b) the Exchange Ratio of 0.2141, times (c) $21.12, which is equal to the volume-weighted averages of the trading price per share of our Common Stock for the five consecutive trading days up to and including March 6, 2019. 

(3) Represents the fair value of the cash consideration paid for the net settlement of approximately 204,000 Nutrisystem stock options vested and outstanding as of the closing date.  In accordance with the Merger Agreement, each vested and outstanding Nutrisystem stock option was cancelled, and the holder received a cash payment per option equal to approximately $43.27 minus the applicable exercise price of the stock option.

(4) Unvested restricted stock awards and performance stock units held by Nutrisystem employees were assumed by Tivity Health and converted into time-vesting restricted stock awards and time-vesting restricted stock units, respectively (“Replacement Awards”).  The value in the table represents the portion of the fair value of the Replacement Awards that relates to pre-combination services.  

We performed a valuation analysis of the fair market value of Nutrisystem’s assets and liabilities as of Closing. The following table sets forth an allocation of the Merger Consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, with the excess recorded to goodwill.  This allocation of the Merger Consideration may be subject to revision if new facts and circumstances arise over the measurement period, which may extend up to one year from Closing.

(In thousands)
Cash, cash equivalents, and short-term investments	$	81,217
Accounts receivable		22,639
Inventory		38,494
Prepaid expenses and other current assets		12,345
Property and equipment		31,233
Right-of-use assets		22,145
Intangible assets		948,000
Other assets/liabilities		7,161
Accounts payable		(58,253	)
Accrued salaries and benefits and other liabilities		(8,695	)
Deferred revenue		(13,339	)
Lease liabilities		(22,145	)
Deferred tax liabilities, net		(220,365	)
Total identifiable assets and liabilities acquired	$	840,437
Goodwill (1)		445,671
Total Merger Consideration	$	1,286,108

(1) Goodwill represents the excess of merger consideration over the preliminary fair value of the underlying assets acquired and liabilities assumed.  Goodwill is attributable to the assembled workforce of experienced personnel at Nutrisystem and synergies expected to be achieved from the combined operations of Tivity Health and Nutrisystem.

We consolidated Nutrisystem’s operating results into our financial statements beginning on March 8, 2019.  Refer to Note 16 for revenue and profit recognized from the Nutrition segment during the three months ended March 31, 2019.  

The following financial information presents the pro forma combined company results as if the acquisition of Nutrisystem had occurred on January 1, 2018:  

(In thousands)	Three Months Ended March 31,
	2019			2018
Revenue	$	347,542		$	360,860
Net loss	$	(4,635	)	$	(29,842	)

The above pro forma results are based on assumptions and estimates, which we believe to be reasonable.  They are not the operating results that would have been realized had the acquisition actually closed on January 1, 2018 and are not necessarily indicative of our ongoing combined operating results.  The pro forma results include adjustments related to purchase accounting, acquisition and integration costs, financing, and amortization of intangible assets.  Material non-recurring pro forma adjustments reflected in the pro forma results for the three months ended March 31, 2019 include: (1) the operating results of Nutrisystem from January 1, 2019 to March 7, 2019, (2) acquisition, integration, and restructuring costs decrease of $33.4 million, and (3) income tax expense decrease of $2.7 million (see Note 9). For the three months ended March 31, 2018, material non-recurring pro forma adjustments reflected in the pro forma results include: (1) cost of revenue increase of $2.8 million due to the purchase accounting mark-up of inventory, (2) acquisition, integration, and restructuring costs increase of $38.7 million, and (3) income tax increase of $2.7 million (see Note 9).

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Recent Relevant Accounting Standards

3 Months Ended

Mar. 31, 2019

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Relevant Accounting Standards

3. Recent RelevantAccounting Standards

On January 1, 2019, we adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (“ASC 842”), which requires that lessees recognize assets and liabilities for leases with lease terms greater than 12 months in the statement of financial position.  We elected to recognize the cumulative effect of initially applying the standard as an adjustment to beginning retained earnings as of January 1, 2019.  The significant majority of our leases are classified as operating leases.  As of January 1, 2019, we recognized a right-of-use asset of $27.0 million and lease liabilities of $29.7 million.  On March 8, 2019, we assumed existing leases from Nutrisystem and recognized additional right-of-use assets and lease liabilities of $22.1 million each.  In addition, we elected the following practical expedients available under ASC 842: (1) the package of practical expedients whereby we are not required to reassess upon adoption of ASC 842 (a) whether a contract is or contains a lease, (b) lease classification, and (c) initial direct costs (ASC 842-10-65-1(f)); and (2) the short-term lease measurement and recognition exemption (ASC 842-20-25-2). ASC 842 also requires significant new disclosures about leasing activity. 

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other” (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test.  ASU 2017-04 is effective for annual and interim impairment tests in fiscal years beginning after December 15, 2019 and is required to be applied prospectively. Early adoption is allowed for annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not anticipate that adopting this standard will have an impact on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of ASC 820.  ASU 2018-13 is effective for fiscal years beginning on or after December 15, 2019, including interim periods therein, and is generally required to be applied retrospectively, except for certain components that are to be applied prospectively.  Early adoption is permitted for any eliminated or modified disclosures. We do not anticipate that adopting this standard will have a material impact on our disclosures.

In August 2018, the FASB issued ASU No. 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement. This standard is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. We do not anticipate that adopting this standard will have a material impact on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires companies to measure credit losses for financial assets held at the reporting date utilizing a methodology that reflects current expected credit losses over the lifetime of such assets.  ASU 2016-13 is effective for the Company on January 1, 2020 and is generally required to be applied using the modified retrospective approach, with limited exceptions for specific instruments.  We do not anticipate that adopting this standard will have an impact on our consolidated financial statements and related disclosures.

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Revenue Recognition

3 Months Ended

Mar. 31, 2019

Revenue From Contract With Customer [Abstract]

Revenue Recognition

4. Revenue Recognition

Beginning in 2018, we account for revenue from contracts with customers in accordance with Accounting Standards Codification (“ASC”) Topic 606.  The unit of account in ASC Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods or services) or a series of distinct goods or services provided over a period of time. ASC Topic 606 requires that a contract's transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when or as the performance obligation is satisfied.

Healthcare Segment

Our Healthcare segment earns revenue from three programs, SilverSneakers® senior fitness, Prime® Fitness and WholeHealth Living^TM.  We provide the SilverSneakers senior fitness program to members of Medicare Advantage and Medicare Supplement plans through our contracts with such plans.  We offer Prime Fitness, a fitness facility access program, through contracts with employers, commercial health plans, and other sponsoring organizations that allow their members to individually purchase the program.  We sell our WholeHealth Living program primarily to health plans.

Except for Prime Fitness, our Healthcare segment’s customer contracts generally have initial terms of approximately three years.  Some contracts allow the customer to terminate early and/or determine on an annual basis to which of their members they will offer our programs.The significant majority of our Healthcare segment’s customer contracts contain one performance obligation - to stand ready to provide access to our network of fitness locations and fitness programming - which is satisfied over time as services are rendered each month over the contract term.  There are generally no performance obligations that are unsatisfied at the end of a particular month.  There was no material revenue recognized during the three months ended March 31, 2019 from performance obligations satisfied in a prior period.

Our fees within the Healthcare segment are variable month to month and are generally billed per member per month (“PMPM”) or billed based on a combination of PMPM and member visits to a network location.  We bill PMPM fees by multiplying the contractually negotiated PMPM rate by the number of members eligible for or receiving our services during the month.  We bill for member visits approximately one month in arrears once actual member visits are known.  Payments from customers are typically due within 30 days of invoice date.  When material, we capitalize costs to obtain contracts with customers and amortize them over the expected recovery period. 

Our Healthcare segment’s customer contracts include variable consideration, which is allocated to each distinct month over the contract term based on eligible members and/or member visits each month.  The allocated consideration corresponds directly with the value to our customers of our services completed for the month.  Under the majority of our Healthcare segment’s contracts, we recognize revenue each month using the practical expedient available under ASC 606-10-55-18, which provides that revenue is recognized in the amount for which we have the right to invoice. 

Although we evaluate our financial performance and make resource allocation decisions based upon the results of our two reportable segments, we believe the following information depicts how our Healthcare segment revenues and cash flows are affected by economic factors.  

The following table sets forth Healthcare revenue disaggregated by program.  Revenue from our SilverSneakers program is predominantly contracted with Medicare Advantage and Medicare Supplement plans.

(In thousands)	Three Months Ended March 31,
	2019		2018
SilverSneakers	$	123,024	$	120,925
Prime Fitness		28,743		24,734
WholeHealth Living		4,575		4,217
Other		185		54
	$	156,527	$	149,930

Sales and usage-based taxes are excluded from revenues.

Nutrition Segment

Our Nutrition segment earns revenue from four sources: direct to consumer, retail, QVC and other.  Revenue is measured based on the consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties.  As explained in more detail below, revenue is recognized upon satisfaction of the performance obligation by transferring control over a product to a Nutrition segment customer.  Direct-mail advertising costs are expensed as incurred.  We recognize an asset for the carrying amount of product to be returned and for costs to obtain a contract if the amortization is more than one year in duration.  We expense costs to obtain a contract as incurred if the amortization period is less than one year.

We sell pre-packaged foods directly to weight loss program participants primarily through the Internet and telephone (referred to as the direct to consumer channel), through QVC (a television shopping network), and select retailers. Pre-packaged foods include both frozen and non-frozen (ready-to-go), shelf-stable products.

Products sold through the direct to consumer channel, both frozen and non-frozen, may be sold separately (a la carte) or as part of a packaged monthly meal plan for which Nutrition segment customers pay at the point of sale. Products sold through QVC are payable by QVC upon our shipment of the product to the end consumer. For both the direct to consumer channel and QVC, we recognize revenue at a point in time, i.e., at the shipping point.  Direct to consumer customers may return unopened ready-to-go products within 30 days after purchase in order to receive a refund or credit. Frozen products are non-returnable and non-refundable unless the order is canceled within 14 days after delivery.   

Products sold to retailers include both frozen and non-frozen products and are payable by the retailer upon receipt. We recognize revenue at a point in time, i.e., when the retailers take possession of the product. Certain retailers have the right to return unsold products.

We account for the shipment of frozen and non-frozen, ready-to-go products as separate performance obligations. The consideration, including variable consideration for product returns, is allocated between frozen and non-frozen products based on their standalone selling prices. The amount of revenue recognized is adjusted for expected returns, which are estimated based on historical data.

In addition to our pre-packaged foods, we sell prepaid gift cards through a wholesaler that are redeemable through the Internet or telephone. Prepaid gift cards represent grants of rights to goods to be provided in the future to gift card buyers. The wholesaler has the right to return all unsold prepaid gift cards. The wholesaler’s retail selling price of the gift cards is deferred in the balance sheet and recognized as revenue when we have satisfied our performance obligation, i.e., when a gift card holder redeems the gift card with us. We recognize breakage amounts (the estimated amount of unused gift cards) as revenue, in proportion to the actual gift card redemptions exercised by gift card holders in relation to the total expected redemptions of gift cards. We utilize historical experience in estimating the total expected breakage and period over which the gift cards will be redeemed.

Sales and other taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a Nutrition segment customer are excluded from revenue and presented on a net basis.  After control over a product has transferred to a Nutrition segment customer, shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost and are included in revenue and cost of revenue in the accompanying consolidated statements of operations. Revenue from shipping and handling charges was $1.8 million for the three months ended March 31, 2019.

The following table sets forth Nutrition segment revenue disaggregated by the source of revenue:

(In thousands)	Three Months Ended March 31,
	2019
Direct to consumer	$	52,654
Retail		4,304
QVC		522
Other		87
	$	57,567

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers:

(In thousands)	March 31, 2019
Contract assets	$	480
Contract liabilities	$	14,997

The contract assets primarily relate to unbilled accounts receivable and are included as other current assets in the accompanying consolidated balance sheet. The contract liabilities (deferred revenue) primarily relate to sale of prepaid gift cards and unshipped foods, which are deferred until such time as the Company has satisfied its performance obligations.

Significant changes in the contract liabilities (deferred revenue) balance during the period are as follows:

	Three Months Ended March 31,
(In thousands)	2019
Revenue recognized that was included in the contract liability (deferred revenue) balance on March 8, 2019	$	(2,752	)
Increases due to cash received for prepaid gift cards sold or unshipped food, excluding amounts recognized as revenue	$	4,409

The following table includes estimated revenue from the prepaid gift cards expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) at the end of the reporting period:

(In thousands)
Remaining 2019	$	10,665
2020		1,303
2021		665
	$	12,633

We apply the practical expedient in subtopic ASC 606-10-50-14 and do not disclose information about remaining performance obligations that have original expected durations of one year or less.

We review the reserves for our Nutrition segment customer returns at each reporting period and adjust them to reflect data available at that time. To estimate reserves for returns, we consider actual return rates in preceding periods and changes in product offerings or marketing methods that might impact returns going forward. To the extent the estimate of returns changes, we will adjust the reserve, which will impact the amount of revenue recognized in the period of the adjustment. The provision for estimated returns for the three months ended March 31, 2019 was $1.4 million.   The reserve for estimated returns incurred but not received and processed was $1.3 million at March 31, 2019 and has been included in accrued liabilities in the accompanying consolidated balance sheet.

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Inventories

3 Months Ended

Mar. 31, 2019

Inventory Disclosure [Abstract]

Inventories

5. Inventories

Inventories consist principally of packaged food held in external fulfillment locations. We value inventories at the lower of cost or net realizable value, with cost determined using the first-in, first-out method. We continually assess quantities of inventory on hand to identify excess or obsolete inventory and record a provision for any estimated loss. We estimate the reserve for excess and obsolete inventory primarily on forecasted demand and/or our ability to sell the products, our ability to introduce new products, future production requirements, and changes in consumer behavior. The reserve for excess and obsolete inventory was $1.3 million atMarch 31, 2019.

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Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

6. Intangible Assets and Goodwill

We amortize intangible assets subject to amortization on a straight-line basis over the applicable useful lives of the identifiable assets.  In connection with our acquisition of Nutrisystem on March 8, 2019, we recorded the following amounts of intangible assets and goodwill.  All of the goodwill was recorded to the Nutrition segment, and none of the goodwill is deductible for tax purposes.  

(In thousands)	Fair Value		Estimated Useful Life (in years)
Intangible assets subject to amortization:
Tradename - South Beach Diet		9,000		15
Customer list		125,000		7
Retail customer relationship		8,000		10
Noncompetition agreements		6,000		5
Subtotal	$	148,000
Intangible assets not subject to amortization:
Tradename - Nutrisystem		800,000	n/a
Total intangible assets	$	948,000
Goodwill		445,671	n/a

In addition, as of March 31, 2019, there was $334.7 million of goodwill and $29.0 million of intangible assets not subject to amortization allocated to the Healthcare segment.

The change in the carrying amount of goodwill during the three months ended March 31, 2019 was as follows:

(In thousands)
Balance, January 1, 2019	$	334,680
Acquisition of Nutrisystem		445,671
Balance, March 31, 2019	$	780,351

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Marketing Expenses

3 Months Ended

Mar. 31, 2019

Marketing And Advertising Expense [Abstract]

Marketing Expenses

7. Marketing Expenses

Marketing expense includes media, advertising production, marketing and promotional expenses and payroll-related expenses, including share-based payment arrangements, for personnel engaged in these activities.  For the three months ended March 31, 2019, media expense was $20.3 million.  Internet advertising expense is recorded based on either the rate of delivery of a guaranteed number of impressions over the advertising contract term or on the cost per customer acquired, depending upon the terms.  All other advertising costs are charged to expense as incurred or the first time the advertising takes place. At March 31, 2019, $1.4 million of costs have been prepaid for future advertisements and promotions.

Prior to the acquisition of Nutrisystem, Tivity Health historically classified marketing expenses within cost of revenue and selling, general, and administrative expenses, while Nutrisystem presented marketing expenses in a separate line item.  Because marketing expense is material to the combined company and for purposes of comparability, we have reclassified historical Tivity Health marketing expenses to a separate line for the three months ended March 31, 2019 and 2018.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-Based Compensation

8. Share-Based Compensation

We currently havefive types of share-based awardsoutstandingto our employees and directors:stock options, restricted stock awards, restrictedstock units, performance stock units, andmarketstock units. We believethatourshare-basedawards alignthe interests of our employees anddirectors withthoseofourstockholders. Each of these award types generally vests over three or four years.

During the three months ended March 31, 2019, we granted the following awards to employees of Nutrisystem in replacement of their unvested equity awards as of Closing (“Replacement Awards”): (i) approximately 258,000time-vesting restricted stock awards at a fair value of $19.42 per share and (ii) approximately 919,000time-vestingrestricted stock units at a fair value of $19.42 per share.  Approximately $9.1 million of the fair value of the Replacement Awards was attributable to pre-combination service and was included in the purchase price of Nutrisystem (see Note 2).  Post-combination expense related to the Replacement Awards of approximately $13.7 million is expected to be recognized over the remaining post-combination requisite service period.

We recognize share-based compensation expense for the market stock units if the requisite service period is rendered, even if the market condition is never satisfied. For the three months ended March 31, 2019, we recognized total share-based compensation costs of $2.4 million, including $0.1 million recorded to restructuring and related charges.  For the three months ended March 31, 2018, we recognized total share-based compensation costs of $1.4 million.  We account for forfeitures as they occur.  

A summary of our stock options as of March 31, 2019 and the changes during the three months then ended is presented below:

Options	Shares (In thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2019		431		$	17.83
Granted		—			—
Exercised		(35	)		10.70
Forfeited		—			—
Expired		—			—
Outstanding at March 31, 2019		396		$	18.46		4.4	$	1,262
Exercisable at March 31, 2019		316		$	13.57		3.3	$	1,262

The followingtableshows a summary ofour restricted stock awards as of March 31, 2019,aswellas activity during the three months then ended:

	Restricted Stock Awards
	Shares (In thousands)		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		—	$	—
Granted		—		—
Replacement Awards		258		19.42
Vested		—		—
Forfeited		—		—
Nonvested at March 31, 2019		258	$	19.42

The followingtableshows a summary ofour restricted stock units as of March 31, 2019,aswellas activity during the three months then ended:

	Restricted Stock Units
	Shares (In thousands)			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		271		$	24.07
Granted		141			19.42
Replacement Awards		919			19.42
Vested		(68	)		11.42
Forfeited		—			—
Nonvested at March 31, 2019		1,263		$	20.84

The followingtableshows a summary ofourperformance stock unitsas of March 31, 2019, as wellas activity during the three months then ended:

	Performance Stock Units
	Shares (In thousands)		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		—	$	—
Granted		103		19.42
Vested		—
Forfeited		—
Nonvested at March 31, 2019		103	$	19.42

The followingtableshows a summary ofourmarket stock unitsas of March 31, 2019, as wellas activity during the three months then ended:

	Market Stock Units
	Shares (In thousands)		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		45	$	18.25
Granted		—		—
Vested		—		—
Forfeited		—		—
Nonvested at March 31, 2019		45	$	18.25

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

For the three months ended March 31, 2019 and March 31, 2018, we had an effective income tax rate from continuing operations of 56.0% and 25.1%, respectively.  Upon Closing of the Merger, we evaluated the realizability of beginning-of-the-year deferred tax assets and increased the valuation allowance on deferred tax assets related to state net operating loss carryforwards by $1.8 million. In addition, we recorded a $0.9 million reduction in deferred tax assets related to state income tax credits.  These adjustments increased our income tax expense for the three months ended by March 31, 2019 by approximately $2.7 million.  

We file income tax returns in the U.S. Federal jurisdiction and in various state and foreign jurisdictions.  Tax years remaining subject to examination in the U.S. Federal jurisdiction include 2015 to present.

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

10.  Leases

On January 1, 2019, we adopted ASC 842 using the modified retrospective approach. Therefore, the comparative information for periods ended prior to January 1, 2019 was not restated. Leases with an initial term of 12 months or less are considered short-term and are not recorded on the balance sheet. We recognize lease expense for these short-term leases on a straight-line basis over the lease term. With the exception of one finance lease related to office equipment, all of our leases are classified as operating leases.  We maintain lease agreements principally for our office spaces and certain equipment. In addition, certain of our contracts, such as those with our fulfillment vendor related to our warehouse space or contracts with certain equipment vendors, contain embedded leases.  We maintain two sublease agreements with respect to one of our office locations, each of which continues through the initial term of our master lease agreement.  Such sublease income and payments, while they reduce our rent expense, are not considered in the value of the right-of-use asset or lease liability.  In the aggregate, our leases generally have remaining lease terms of one to six years, some of which include options to extend the lease for additional periods.  Such extension options were not considered in the value of the right-of-use asset or lease liability since it is not probable that we will exercise the options to extend.  If applicable, allocations among lease and nonlease components would be achieved using relative standalone selling prices.

Upon adoption of ASC 842, we determined our estimated discount rate for existing leases as of January 1, 2019 based on the incremental borrowing rate that most closely aligned with the remaining lease term and payment schedule, as provided by our financial institution.  The discount rate for leases in the Nutrition segment was estimated as of the Closing date of the Merger.  

The following table shows the right-of-use assets and lease liabilities recorded on the balance sheet:

	March 31, 2019
(In thousands)
Right-of-use assets:
Operating	$	46,578
Finance		169
Total leased assets	$	46,747
Lease liabilities:
Current
Operating	$	14,762
Finance		46
Non-current
Operating	$	35,043
Finance		123
Total lease liabilities	$	49,974

The following table shows the components of lease expense:

	Three Months Ended March 31,
(In thousands)	2019
Finance lease cost:
Amortization of leased assets	$	12
Interest of lease liabilities		2
Operating lease cost		2,716
Short-term lease cost		33
Total lease cost before subleases	$	2,763
Sublease income		(1,344	)
Total lease cost, net	$	1,419

The following provides information related to the lease term and discount rate as of March 31, 2019:

Weighted Average Remaining Lease Term (years)
Operating leases	3.6
Finance leases	3.3
Weighted Average Discount Rate
Operating leases	5.4	%
Finance leases	4.4	%

As of March 31, 2019, maturities of lease liabilities for each of the next five years and thereafter were as follows.

	Operating Leases								Financing
(In thousands)	Lease Payments			Sublease Receipts			Net		Leases
Remaining 2019	$	12,896		$	(4,233	)	$	8,663	$	39
2020		14,828			(5,667	)		9,161		52
2021		13,361			(5,699	)		7,662		52
2022		11,339			(5,732	)		5,607		39
2023		1,947			(956	)		991		—
2024 and thereafter		379			—			379		—
Total lease payments		54,750		$	(22,287	)	$	32,463		182
Less: interest		(4,945	)							(13	)
Present value of lease liabilities	$	49,805							$	169

Supplemental cash flow information related to leases was as follows:

	Three Months Ended March 31,
(In thousands)	2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow attributable to operating leases	$	(1,547	)
Operating cash flow attributable to finance leases		(2	)
Financing cash flows attributable to finance leases		(11	)
Supplemental noncash information:
Right-of-use assets obtained in exchange for operating lease liabilities (1)		48,972
Right-of-use assets obtained in exchange for finance lease liabilities (1)		181

(1) No new leases were entered into during the three months ended March 31, 2019.  Amounts shown are due to the adoption of ASC 842 and reflect balances as of January 1, 2019 for the Healthcare segment and as of March 8, 2019 for the Nutrition segment (i.e., the date of our acquisition of Nutrisystem).

As of December 31, 2018, future minimum lease payments, net of total cash receipts from subleases of $23.7 million, under all non-cancelable operating leases for each of the next five years and thereafter were as follows.  As of December 31, 2018, future minimum lease payments under capital leases were not material.

(In thousands)	Operating
Year ending December 31,	Leases
2019	$	4,022
2020		2,040
2021		910
2022		827
2023		136
2024 and thereafter		—
Total minimum lease payments	$	7,935

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Debt

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Debt

11. Debt

The Company's debt, net of unamortized deferred loan costs and original issue discount, consistedof the following at March 31, 2019 and December 31, 2018:

(In thousands)	March 31, 2019			December 31, 2018
Term Loan A	$	341,000		$	—
Term Loan B		824,000			—
Delayed draw term loan		—			25,000
Revolving credit facility		—			5,450
Capital lease obligations and other (1)		—			196
		1,165,000			30,646
Less: deferred loan costs and original issue discount ("OID")		(53,160	)		—
		1,111,840			30,646
Less: current portion		(44,900	)		(57	)
	$	1,066,940		$	30,589

(1) Prior to the adoption of ASC 842 on January 1, 2019, our capital leases were recorded as part of debt.  Beginning on January 1, 2019, they are classified as financing leases under ASC 842 and are recorded as part of lease liabilities.  

Credit Facility

In connection with the consummation of the Merger, on March 8, 2019, we entered into a new Credit and Guaranty Agreement (the “Credit Agreement”) with a group of lenders, Credit Suisse AG, Cayman Islands Branch, as general administrative agent, term facility agent and collateral agent, and SunTrust Bank, as revolving facility agent and swing line lender (“SunTrust”). The Credit Agreement replaced our prior Revolving Credit and Term Loan Agreement, dated April 21, 2017 (the “Prior Credit Agreement”), with a group of lenders and SunTrust, as administrative agent. The Credit Agreement provides us with (i) a $350.0 million term loan A facility (“Term Loan A”), (ii) an $830.0 million term loan B facility (“Term Loan B” and, together with Term Loan A, the “Term Loans”), (iii) a $125.0 million revolving credit facility that includes a $35.0 million sublimit for swingline loans and a $50.0 million sublimit for letters of credit (the “Revolving Credit Facility”; Term Loan A, Term Loan B and the Revolving Credit Facility are sometimes herein referred to collectively as the “Credit Facilities”), and (iv) uncommitted incremental accordion facilities in an aggregate amount at any date equal to the greater of $125.0 million or 50% of our consolidated EBITDA for the then-preceding four fiscal quarters, plus additional amounts based on, among other things, satisfaction of certain financial ratio requirements.

We used the proceeds of the Term Loans, borrowings under the Revolving Credit Facility and cash on hand to pay the Merger Consideration, to repay all of the outstanding indebtedness under the Prior Credit Agreement and all outstanding indebtedness of Nutrisystem under its credit agreement, and to pay transaction costs and expenses. Proceeds of the Revolving Credit Facility also may be used for general corporate purposes of the Company and its subsidiaries.

We are required to repay Term Loan A loans in consecutive quarterly installments, each in the amount of 2.50% of the aggregate initial amount of such loans, payable on June 30, 2019 and on the last day of each succeeding quarter thereafter until maturity on March 8, 2024, at which time the entire outstanding principal balance of such loans is due and payable in full. We are required to repay Term Loan B loans in consecutive quarterly installments, each in the amount of 0.75% of the aggregate initial amount of such loans, payable on June 30, 2019 and on the last day of each succeeding quarter thereafter until maturity on March 8, 2026, at which time the entire outstanding principal balance of such loans is due and payable in full. We are permitted to make voluntarily prepayments of borrowings under the Term Loans at any time without penalty.  We are required to repay in full any outstanding swingline loans and revolving loans under the Revolving Credit Facility on March 8, 2024.

Borrowings under the Credit Agreement bear interest at variable rates based on a margin or spread in excess of either (1) one-month, two-month, three-month or six-month LIBOR (or, with the approval of all lenders holding the particular class of loans, 12-month LIBOR), which may not be less than zero, or (2) the greatest of (a) the prime lending rate of the agent bank for the particular facility, (b) the federal funds rate plus 0.50%, and (c) one-month LIBOR plus 1.00% (the “Base Rate”), as selected by the Company. The LIBOR margin for Term Loan A loans is 4.25%, the LIBOR margin for Term Loan B loans is 5.25% and the LIBOR margin for revolving loans varies between 3.75% and 4.25%, depending on our total net leverage ratio. The Base Rate margin for Term Loan A loans is 3.25%, the Base Rate margin for Term Loan B loans is 4.25% and the Base Rate margin for revolving loans varies between 2.75% and 3.25%, depending on our total net leverage ratio.

The Credit Agreement also provides for annual commitment fees ranging between 0.250% and 0.500% of the unused commitments under the Revolving Credit Facility, depending on our total net leverage ratio, and annual letter of credit fees on the daily outstanding availability under outstanding letters of credit at the applicable LIBOR margin for the Revolving Credit Facility, depending on our total net leverage ratio.

Extensions of credit under the Credit Agreement are secured by guarantees from substantially all of the Company’s active material domestic subsidiaries and by security interests in substantially all of Company’s and such subsidiaries’ assets.

The Credit Agreement contains a financial covenant that requires us to maintain specified maximum ratios or levels of consolidated total net debt to EBITDA, calculated as provided in the Credit Agreement. The Credit Agreement also contains various other affirmative and negative covenants customary for financings of this type that, subject to certain exceptions, impose restrictions and limitations on the Company and certain of the Company’s subsidiaries with respect to, among other things, indebtedness; liens; negative pledges; restricted payments (including dividends, distributions, buybacks, redemptions, repurchases with respect to equity interests, and payments, redemptions, retirements, purchases, acquisitions, defeasance, exchange, conversion, cancellation or termination with respect to junior lien, subordinated or unsecured debt); restrictions on subsidiary distributions; loans, advances, guarantees, acquisitions and other investments; mergers and other fundamental changes; sales and other dispositions of assets (including equity interests in subsidiaries); sale/leaseback transactions; transactions with affiliates; conduct of business; amendments and waivers of organizational documents and material junior debt agreements; and changes to fiscal year.

Warrants

In July 2013, we sold separate privately negotiated warrants (the “Warrants”) initially relating, in the aggregate, to approximately 7.7 million shares of our Common Stock. The Warrants are call options with an initial strike price of approximately $25.95 per share.  Since October 1, 2018, the Warrants have been subject to automatic exercise on a pro rata basis each trading day continuing for a period of 160 trading days (i.e., approximately 48,000 warrants are subject to automatic exercise on each trading day).  The Warrants are net share settled by our issuing a number of shares of our Common Stock per Warrant with a value corresponding to the excess of the market price per share of our Common Stock (as measured on each warrant exercise date under the terms of the Warrants) over the applicable strike price of the Warrants. If such market price per share is less than the applicable strike price of the Warrants on any given exercise date, then the warrants subject to automatic exercise on such exercise date are not exercised but instead expire.  The Warrants meet the definition of derivatives under the guidance in ASC Topic 815; however, because these instruments have been determined to be indexed to our own stock and meet the criteria for equity classification under ASC Topic 815, the Warrants have been accounted for as an adjustment to our additional paid-in-capital.  During the three months ended March 31, 2019, we did not issue any shares of Common Stock related to the automatic exercise of the Warrants due to the market price per share of our Common Stock being less than the applicable strike price of the Warrants on each exercise date during such time period.

When the market price per share of our Common Stock exceeds the strike price of the Warrants, the Warrants have a dilutive effect on net income per share, and the “treasury stock” method is used in calculating the dilutive effect on earnings per share.  See Note 15 for additional information on such dilutive effect.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

Weiner, Denham, Allen, and Witmer Lawsuits

On November 6, 2017, United Healthcare issued a press release announcing expansion of its fitness benefits (“United Press Release”), and the market price of the Company's shares of Common Stock dropped on that same day. In connection with the United Press Release, four lawsuits have been filed against the Company as described below.  We are currently not able to predict the probable outcome of these matters or to reasonably estimate a range of potential losses, if any.  We intend to vigorously defend ourselves against all four complaints.

On November 20, 2017, Eric Weiner, claiming to be a stockholder of the Company, filed a complaint on behalf of stockholders who purchased the Company’s Common Stock between February 24, 2017 and November 3, 2017 (“Weiner Lawsuit”).  The Weiner Lawsuit was filed as a class action in the U.S. District Court for the Middle District of Tennessee, naming as defendants the Company, the Company's chief executive officer, chief financial officer and a former executive who served as both chief accounting officer and interim chief financial officer.  The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act in making false and misleading statements and omissions related to the United Press Release.  The complaint seeks monetary damages on behalf of the purported class.  On April 3, 2018, the Court entered an order appointing the Oklahoma Firefighters Pension and Retirement System as lead plaintiff, designated counsel for the lead plaintiff, and established certain deadlines for the case.  On June 4, 2018, plaintiff filed a first amended complaint.  On August 3, 2018, the Company filed a motion to dismiss the first amended complaint and a memorandum in support of a motion to dismiss seeking dismissal on grounds that the first amended complaint fails to plead any actionable statement or omission (the “Motion to Dismiss”).  On March 18, 2019, the Court denied the Company’s Motion to Dismiss.  On April 1, 2019, the Company filed a motion for reconsideration asking the Court to reconsider its denial of the Motion to Dismiss.  On April 15, 2019, the Court ordered plaintiff to respond to the substantive issues raised in the Company’s Motion to Dismiss.

On January 26, 2018, Charles Denham, claiming to be a stockholder of the Company, filed a purported shareholder derivative action, on behalf of the Company, in the U.S. District Court for the Middle District of Tennessee, naming the Company as a nominal defendant and the Company's chief executive officer, chief financial officer, a former executive who served as both chief accounting officer and interim chief financial officer, current directors and a former director of the Company, as defendants (“Denham Lawsuit”).  The complaint asserts claims for breach of fiduciary duty, waste, and unjust enrichment, largely tracking allegations in the Weiner Lawsuit.  The complaint further alleges that certain defendants engaged in insider trading.  The plaintiff seeks monetary damages on behalf of the Company, certain corporate governance and internal procedural reforms, and other equitable relief.

On August 24, 2018, Andrew H. Allen, claiming to be a stockholder of the Company, filed a purported shareholder derivative action, on behalf of the Company, in the U.S. District Court for the Middle District of Tennessee, naming the Company as a nominal defendant and the Company’s chief executive officer, chief financial officer, a former executive who served as both chief accounting officer and interim chief financial officer, together with nine current or former directors, as defendants (the “Allen Lawsuit”).  The complaint asserts claims for breach of fiduciary duty and violations of the Securities Act of 1933, as amended (the “Securities Act”) and the Exchange Act against all individual defendants, largely tracking allegations in the Weiner Lawsuit and Denham Lawsuit, and breach of fiduciary duty for insider trading against a former executive who served as both chief accounting officer and interim chief financial officer and one of the directors of the Company.  The plaintiff seeks to recover damages on behalf of the Company, certain corporate governance and internal procedural reforms, and other equitable relief, including restitution from the two defendants alleged to have engaged in insider trading from all unlawfully obtained profits.  On October 15, 2018, the Allen Lawsuit and the Denham Lawsuit were consolidated by stipulation.  On April 17, 2019, the Court entered an order approving a schedule for filing and briefing a motion to dismiss.

On March 25, 2019, Colleen Witmer, claiming to be a stockholder of the Company, filed a purported shareholder derivative action, on behalf of the Company, in the Chancery Court for Davidson County, Tennessee, naming the Company as a nominal defendant and the Company's chief executive officer, chief financial officer, a former executive who served as both chief accounting officer and interim chief financial officer, chief legal and administrative officer, certain current directors, and two former directors of the Company, as defendants. The complaint asserts claims for breach of fiduciary duty and unjust enrichment, largely tracking allegations in the Denham Lawsuit.  The complaint further alleges that certain defendants engaged in insider trading.  The plaintiff seeks monetary damages on behalf of the Company, restitution, certain corporate governance and internal procedural reforms, and other equitable relief.

Other

Additionally, from time to time, we are subject to contractual disputes, claims and legal proceedings that arise in the ordinary course of our business. Some of the legal proceedings pending against us as of the date of this report are expected to be covered by insurance policies.  As these matters are subject to inherent uncertainties, our view of these matters may change in the future.  We expense legal costs as incurred.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

13. Fair Value Measurements

We account for certain assets and liabilities at fair value. Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date, assuming the transaction occurs in the principal or most advantageous market for that asset or liability.

Fair Value Hierarchy

The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1:  Quoted prices in active markets for identical assets or liabilities;

Level 2:  Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-based valuation techniques in which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3:  Unobservable inputs that are supported by little or no market activity and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

Assets andLiabilitiesMeasuredat Fair ValueonaRecurring Basis

There were no assets and liabilitiesmeasuredat fair valueon arecurring basis at March 31, 2019 or December 31, 2018.

Fair Value of Other Financial Instruments

The estimatedfair value of eachclass of financial instruments at March 31, 2019 was as follows:

Cashandcashequivalents–Thecarryingamountof$18.8millionapproximatesfairvaluedue totheshortmaturityof those instruments (less than three months).

Debt–TheestimatedfairvalueofoutstandingborrowingsundertheCreditAgreement,which includesterm loan facilities and arevolvingcreditfacility(see Note 11),isdeterminedbasedonthefairvaluehierarchyasdiscussedabove.

The Term Loans are activelytradedandthereforeareclassifiedasLevel1valuations.Theestimatedfair valueisbasedonthe last quoted price of the Term Loans through March 31, 2019. The Revolving Credit Facility is not actively traded and therefore is classified as a Level 2 valuation based on the market for similar instruments.  There was no amount outstanding under the Revolving Credit Facility as of March 31, 2019. The estimated fair value and carrying amount of outstanding borrowings under the Term Loans at March 31, 2019 were $1,146 million and $1,165 million, respectively.  

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Restructuring and Related charges

3 Months Ended

Mar. 31, 2019

Restructuring And Related Activities [Abstract]

Restructuring and Related Charges

14. Restructuring and Related Charges

During the first quarter of 2019, we began a reorganization primarily related to integrating the Healthcare and Nutrition segments and streamlining our corporate and operations support (the "2019 Restructuring Plan").  To date, we have incurred restructuring charges of $1.6 million related to actions executed in the first quarter of 2019 (the “Q1 2019 Actions”), of which $1.0 million related to the Healthcare segment and $0.6 million related to the Nutrition segment.  These expenses consist entirely of severance and other employee-related costs.  The Q1 2019 Actions are expected to result in additional costs of $0.8 million during the second quarter of 2019, all of which relates to the Nutrition segment.   Although we expect further actions to be taken under the 2019 Restructuring Plan during the remainder of 2019 that will result in additional restructuring charges and future savings, the Q1 2019 Actions are expected to result in total annualized savings of approximately $7.2 million, with $3.5 million relating to the Healthcare segment and $3.7 million relating to the Nutrition segment.

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Earnings Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

15. Earnings Per Share

Thefollowingisareconciliationofthenumeratoranddenominatorofbasicanddilutedearningspershareforthe three months ended March 31, 2019and 2018:

(In thousands except per share data)	ThreeMonths Ended March 31,
	2019		2018
Numerator:
Net income	$	4,214	$	21,336
Denominator:
Shares used for basic income per share		42,745		39,783
Effect of dilutive stock options and    restricted stock units outstanding:
Non-qualified stock options		127		312
Restricted stock awards		16		—
Restricted stock units		292		405
Performance stock units		3		—
Market stock units		—		533
Warrants related to Cash Convertible Notes		—		2,556
Shares used for diluted income per share		43,183		43,589
Earnings per share:
Basic	$	0.10	$	0.54
Diluted	$	0.10	$	0.49
Dilutive securities outstanding not included in the    computation of earnings per share    because their effect is anti-dilutive:
Non-qualified stock options		80		—
Restricted stock units		56		14

(1) Figures may not add due to rounding.

Market stock units outstanding are considered contingently issuable shares, and certain of these stock units were excluded from the calculations of diluted earnings per share for all periods presented as the performance criteria had not been met as of the end of the reporting periods.

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Segment Information

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Segment Information

16. Segment Information  

Following the acquisition of Nutrisystem in March 2019, we organize and manage our operations within two reportable segments, based on the types of products and services they offer: Healthcare and Nutrition.  The Healthcare segment consists of SilverSneakerssenior fitness, Prime Fitness and WholeHealth Living.  The Nutrition segment provides weight management products and services.

Each segment’s profit is measured as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding acquisition and integration costs and restructuring and related charges, as shown below:

(In thousands)
	Three Months Ended March 31, 2019
	Healthcare		Nutrition		Consolidated
Revenues	$	156,527	$	57,567	$	214,094
Adjusted EBITDA	$	26,129	$	13,344	$	39,473
Acquisition and integration costs					$	17,052
Restructuring and related charges						1,591
Interest expense						7,666
Depreciation and amortization						3,582
Income before income taxes					$	9,582
Total assets as of March 31, 2019	$	456,017	$	1,614,571	$	2,070,588

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Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).  In our opinion, the accompanying consolidated financial statements of Tivity Health^®, Inc. and its wholly-owned subsidiaries, including the results of Nutrisystem^®, Inc. (“Nutrisystem”) acquired on March 8, 2019, (collectively, “Tivity Health,” the “Company,” or such terms as “we,” “us,” or “our”) reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement.  Our consolidated statements of operations include results of Nutrisystem from March 8, 2019 through March 31, 2019.  We have reclassified certain items in prior periods to conform to current classifications.

Following the acquisition of Nutrisystem, we organize and manage our operations within two reportable segments, based on the types of products and services they offer: Healthcare and Nutrition.  The Healthcare segment is comprised of our legacy business and includes SilverSneakers senior fitness, Prime Fitness and WholeHealth Living^TM.  The Nutrition segment is comprised of Nutrisystem’s legacy business and includes the Nutrisystem^® and the South Beach Diet^® products.

We have omitted certain financial information that is normally included in financial statements prepared in accordance with U.S. GAAP but that is not required for interim reporting purposes.  You should read the accompanying consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Recent Relevant Accounting Standards

On January 1, 2019, we adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (“ASC 842”), which requires that lessees recognize assets and liabilities for leases with lease terms greater than 12 months in the statement of financial position.  We elected to recognize the cumulative effect of initially applying the standard as an adjustment to beginning retained earnings as of January 1, 2019.  The significant majority of our leases are classified as operating leases.  As of January 1, 2019, we recognized a right-of-use asset of $27.0 million and lease liabilities of $29.7 million.  On March 8, 2019, we assumed existing leases from Nutrisystem and recognized additional right-of-use assets and lease liabilities of $22.1 million each.  In addition, we elected the following practical expedients available under ASC 842: (1) the package of practical expedients whereby we are not required to reassess upon adoption of ASC 842 (a) whether a contract is or contains a lease, (b) lease classification, and (c) initial direct costs (ASC 842-10-65-1(f)); and (2) the short-term lease measurement and recognition exemption (ASC 842-20-25-2). ASC 842 also requires significant new disclosures about leasing activity. 

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other” (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test.  ASU 2017-04 is effective for annual and interim impairment tests in fiscal years beginning after December 15, 2019 and is required to be applied prospectively. Early adoption is allowed for annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not anticipate that adopting this standard will have an impact on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of ASC 820.  ASU 2018-13 is effective for fiscal years beginning on or after December 15, 2019, including interim periods therein, and is generally required to be applied retrospectively, except for certain components that are to be applied prospectively.  Early adoption is permitted for any eliminated or modified disclosures. We do not anticipate that adopting this standard will have a material impact on our disclosures.

In August 2018, the FASB issued ASU No. 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement. This standard is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. We do not anticipate that adopting this standard will have a material impact on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires companies to measure credit losses for financial assets held at the reporting date utilizing a methodology that reflects current expected credit losses over the lifetime of such assets.  ASU 2016-13 is effective for the Company on January 1, 2020 and is generally required to be applied using the modified retrospective approach, with limited exceptions for specific instruments.  We do not anticipate that adopting this standard will have an impact on our consolidated financial statements and related disclosures.

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Business Combinations (Tables)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Summary of Component of Merger Consideration

The following table summarizes the components of the Merger Consideration:

(In thousands)
Cash paid for outstanding Nutrisystem shares (1)	$	1,138,143
Value of Tivity Health Common Stock issued in the merger (2)		132,838
Value of Nutrisystem stock options (3)		6,020
Value of Tivity Health replacement awards attributable to pre-combination service (4)		9,107
Total Merger Consideration	$	1,286,108

(1) Represents the total cash paid to former Nutrisystem stockholders as cash consideration.  This amount is based on the 29,370,594 shares of Nutrisystem common stock issued and outstanding as of Closing and cash consideration of $38.75 per share, plus cash payable in lieu of fractional shares.

(2) Represents the fair value of 6.3 million shares of Tivity Health Common Stock issued for outstanding Nutrisystem shares as stock consideration.  This amount is based on (a) 29,370,594 Nutrisystem common shares issued and outstanding as of Closing, times (b) the Exchange Ratio of 0.2141, times (c) $21.12, which is equal to the volume-weighted averages of the trading price per share of our Common Stock for the five consecutive trading days up to and including March 6, 2019. 

(3) Represents the fair value of the cash consideration paid for the net settlement of approximately 204,000 Nutrisystem stock options vested and outstanding as of the closing date.  In accordance with the Merger Agreement, each vested and outstanding Nutrisystem stock option was cancelled, and the holder received a cash payment per option equal to approximately $43.27 minus the applicable exercise price of the stock option.

(4) Unvested restricted stock awards and performance stock units held by Nutrisystem employees were assumed by Tivity Health and converted into time-vesting restricted stock awards and time-vesting restricted stock units, respectively (“Replacement Awards”).  The value in the table represents the portion of the fair value of the Replacement Awards that relates to pre-combination services.  

Preliminary Allocation of Estimated Merger Consideration to the Identifiable Tangible and Intangible Assets Acquired and Liabilities Assumed

We performed a valuation analysis of the fair market value of Nutrisystem’s assets and liabilities as of Closing. The following table sets forth an allocation of the Merger Consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, with the excess recorded to goodwill.  This allocation of the Merger Consideration may be subject to revision if new facts and circumstances arise over the measurement period, which may extend up to one year from Closing.

(In thousands)
Cash, cash equivalents, and short-term investments	$	81,217
Accounts receivable		22,639
Inventory		38,494
Prepaid expenses and other current assets		12,345
Property and equipment		31,233
Right-of-use assets		22,145
Intangible assets		948,000
Other assets/liabilities		7,161
Accounts payable		(58,253	)
Accrued salaries and benefits and other liabilities		(8,695	)
Deferred revenue		(13,339	)
Lease liabilities		(22,145	)
Deferred tax liabilities, net		(220,365	)
Total identifiable assets and liabilities acquired	$	840,437
Goodwill (1)		445,671
Total Merger Consideration	$	1,286,108

(1) Goodwill represents the excess of merger consideration over the preliminary fair value of the underlying assets acquired and liabilities assumed.  Goodwill is attributable to the assembled workforce of experienced personnel at Nutrisystem and synergies expected to be achieved from the combined operations of Tivity Health and Nutrisystem.

Summary of Pro forma Combined Company Results

The following financial information presents the pro forma combined company results as if the acquisition of Nutrisystem had occurred on January 1, 2018:  

(In thousands)	Three Months Ended March 31,
	2019			2018
Revenue	$	347,542		$	360,860
Net loss	$	(4,635	)	$	(29,842	)

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2019

Summary of Information about Contract Assets and Contract Liabilities from Contracts with Customers

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers:

(In thousands)	March 31, 2019
Contract assets	$	480
Contract liabilities	$	14,997

Significant changes in the contract liabilities (deferred revenue) balance during the period are as follows:

	Three Months Ended March 31,
(In thousands)	2019
Revenue recognized that was included in the contract liability (deferred revenue) balance on March 8, 2019	$	(2,752	)
Increases due to cash received for prepaid gift cards sold or unshipped food, excluding amounts recognized as revenue	$	4,409

Summary of Revenue from Prepaid Gift Cards Expected to be Recognized in Future Related to Performance Obligation Unsatisfied or Partially Satisfied

The following table includes estimated revenue from the prepaid gift cards expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) at the end of the reporting period:

(In thousands)
Remaining 2019	$	10,665
2020		1,303
2021		665
	$	12,633

Healthcare

Summary of Revenue Disaggregated

The following table sets forth Healthcare revenue disaggregated by program.  Revenue from our SilverSneakers program is predominantly contracted with Medicare Advantage and Medicare Supplement plans.

(In thousands)	Three Months Ended March 31,
	2019		2018
SilverSneakers	$	123,024	$	120,925
Prime Fitness		28,743		24,734
WholeHealth Living		4,575		4,217
Other		185		54
	$	156,527	$	149,930

Nutrition

Summary of Revenue Disaggregated

The following table sets forth Nutrition segment revenue disaggregated by the source of revenue:

(In thousands)	Three Months Ended March 31,
	2019
Direct to consumer	$	52,654
Retail		4,304
QVC		522
Other		87
	$	57,567

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Intangible Assets and Goodwill (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets Subject to and Not Subject to Amortization

(In thousands)	Fair Value		Estimated Useful Life (in years)
Intangible assets subject to amortization:
Tradename - South Beach Diet		9,000		15
Customer list		125,000		7
Retail customer relationship		8,000		10
Noncompetition agreements		6,000		5
Subtotal	$	148,000
Intangible assets not subject to amortization:
Tradename - Nutrisystem		800,000	n/a
Total intangible assets	$	948,000
Goodwill		445,671	n/a

Change in Carrying Amount of Goodwill

The change in the carrying amount of goodwill during the three months ended March 31, 2019 was as follows:

(In thousands)
Balance, January 1, 2019	$	334,680
Acquisition of Nutrisystem		445,671
Balance, March 31, 2019	$	780,351

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Options

A summary of our stock options as of March 31, 2019 and the changes during the three months then ended is presented below:

Options	Shares (In thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2019		431		$	17.83
Granted		—			—
Exercised		(35	)		10.70
Forfeited		—			—
Expired		—			—
Outstanding at March 31, 2019		396		$	18.46		4.4	$	1,262
Exercisable at March 31, 2019		316		$	13.57		3.3	$	1,262

Summary of Restricted Stock Awards

The followingtableshows a summary ofour restricted stock awards as of March 31, 2019,aswellas activity during the three months then ended:

	Restricted Stock Awards
	Shares (In thousands)		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		—	$	—
Granted		—		—
Replacement Awards		258		19.42
Vested		—		—
Forfeited		—		—
Nonvested at March 31, 2019		258	$	19.42

Summary of Restricted Stock Units

The followingtableshows a summary ofour restricted stock units as of March 31, 2019,aswellas activity during the three months then ended:

	Restricted Stock Units
	Shares (In thousands)			Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		271		$	24.07
Granted		141			19.42
Replacement Awards		919			19.42
Vested		(68	)		11.42
Forfeited		—			—
Nonvested at March 31, 2019		1,263		$	20.84

Summary of Performance Stock Units

The followingtableshows a summary ofourperformance stock unitsas of March 31, 2019, as wellas activity during the three months then ended:

	Performance Stock Units
	Shares (In thousands)		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		—	$	—
Granted		103		19.42
Vested		—
Forfeited		—
Nonvested at March 31, 2019		103	$	19.42

Summary of Market Stock Units

The followingtableshows a summary ofourmarket stock unitsas of March 31, 2019, as wellas activity during the three months then ended:

	Market Stock Units
	Shares (In thousands)		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2019		45	$	18.25
Granted		—		—
Vested		—		—
Forfeited		—		—
Nonvested at March 31, 2019		45	$	18.25

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Schedule of Right-of-Use Assets and Lease Liabilities

The following table shows the right-of-use assets and lease liabilities recorded on the balance sheet:

	March 31, 2019
(In thousands)
Right-of-use assets:
Operating	$	46,578
Finance		169
Total leased assets	$	46,747
Lease liabilities:
Current
Operating	$	14,762
Finance		46
Non-current
Operating	$	35,043
Finance		123
Total lease liabilities	$	49,974

Schedule of Components of Lease Expense

The following table shows the components of lease expense:

	Three Months Ended March 31,
(In thousands)	2019
Finance lease cost:
Amortization of leased assets	$	12
Interest of lease liabilities		2
Operating lease cost		2,716
Short-term lease cost		33
Total lease cost before subleases	$	2,763
Sublease income		(1,344	)
Total lease cost, net	$	1,419

Schedule of Weighted Average Remaining Term and Discount Rates

The following provides information related to the lease term and discount rate as of March 31, 2019:

Weighted Average Remaining Lease Term (years)
Operating leases	3.6
Finance leases	3.3
Weighted Average Discount Rate
Operating leases	5.4	%
Finance leases	4.4	%

Schedule of Maturities of Lease Liabilities

As of March 31, 2019, maturities of lease liabilities for each of the next five years and thereafter were as follows.

	Operating Leases								Financing
(In thousands)	Lease Payments			Sublease Receipts			Net		Leases
Remaining 2019	$	12,896		$	(4,233	)	$	8,663	$	39
2020		14,828			(5,667	)		9,161		52
2021		13,361			(5,699	)		7,662		52
2022		11,339			(5,732	)		5,607		39
2023		1,947			(956	)		991		—
2024 and thereafter		379			—			379		—
Total lease payments		54,750		$	(22,287	)	$	32,463		182
Less: interest		(4,945	)							(13	)
Present value of lease liabilities	$	49,805							$	169

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:

	Three Months Ended March 31,
(In thousands)	2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow attributable to operating leases	$	(1,547	)
Operating cash flow attributable to finance leases		(2	)
Financing cash flows attributable to finance leases		(11	)
Supplemental noncash information:
Right-of-use assets obtained in exchange for operating lease liabilities (1)		48,972
Right-of-use assets obtained in exchange for finance lease liabilities (1)		181

(1) No new leases were entered into during the three months ended March 31, 2019.  Amounts shown are due to the adoption of ASC 842 and reflect balances as of January 1, 2019 for the Healthcare segment and as of March 8, 2019 for the Nutrition segment (i.e., the date of our acquisition of Nutrisystem).

Summary of Future Minimum Lease Payments Under All Non-cancelable Operating Leases

As of December 31, 2018, future minimum lease payments, net of total cash receipts from subleases of $23.7 million, under all non-cancelable operating leases for each of the next five years and thereafter were as follows.  As of December 31, 2018, future minimum lease payments under capital leases were not material.

(In thousands)	Operating
Year ending December 31,	Leases
2019	$	4,022
2020		2,040
2021		910
2022		827
2023		136
2024 and thereafter		—
Total minimum lease payments	$	7,935

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Debt (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Summary of Debt, Net of Unamortized Deferred Loan Costs And Original Issue Discount

The Company's debt, net of unamortized deferred loan costs and original issue discount, consistedof the following at March 31, 2019 and December 31, 2018:

(In thousands)	March 31, 2019			December 31, 2018
Term Loan A	$	341,000		$	—
Term Loan B		824,000			—
Delayed draw term loan		—			25,000
Revolving credit facility		—			5,450
Capital lease obligations and other (1)		—			196
		1,165,000			30,646
Less: deferred loan costs and original issue discount ("OID")		(53,160	)		—
		1,111,840			30,646
Less: current portion		(44,900	)		(57	)
	$	1,066,940		$	30,589

(1) Prior to the adoption of ASC 842 on January 1, 2019, our capital leases were recorded as part of debt.  Beginning on January 1, 2019, they are classified as financing leases under ASC 842 and are recorded as part of lease liabilities.  

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Reconciliation of the Numerator and Denominator of Basic and Diluted Earnings Per Share

Thefollowingisareconciliationofthenumeratoranddenominatorofbasicanddilutedearningspershareforthe three months ended March 31, 2019and 2018:

(In thousands except per share data)	ThreeMonths Ended March 31,
	2019		2018
Numerator:
Net income	$	4,214	$	21,336
Denominator:
Shares used for basic income per share		42,745		39,783
Effect of dilutive stock options and    restricted stock units outstanding:
Non-qualified stock options		127		312
Restricted stock awards		16		—
Restricted stock units		292		405
Performance stock units		3		—
Market stock units		—		533
Warrants related to Cash Convertible Notes		—		2,556
Shares used for diluted income per share		43,183		43,589
Earnings per share:
Basic	$	0.10	$	0.54
Diluted	$	0.10	$	0.49
Dilutive securities outstanding not included in the    computation of earnings per share    because their effect is anti-dilutive:
Non-qualified stock options		80		—
Restricted stock units		56		14

(1) Figures may not add due to rounding.

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Schedule of Each Segment's Profit

Each segment’s profit is measured as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding acquisition and integration costs and restructuring and related charges, as shown below:

(In thousands)
	Three Months Ended March 31, 2019
	Healthcare		Nutrition		Consolidated
Revenues	$	156,527	$	57,567	$	214,094
Adjusted EBITDA	$	26,129	$	13,344	$	39,473
Acquisition and integration costs					$	17,052
Restructuring and related charges						1,591
Interest expense						7,666
Depreciation and amortization						3,582
Income before income taxes					$	9,582
Total assets as of March 31, 2019	$	456,017	$	1,614,571	$	2,070,588

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Basis of Presentation - Additional Information (Details)	3 Months Ended
	Mar. 31, 2019 Segment
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Number of reportable segments	2

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Business Combinations - Additional Information (Details) $ / shares in Units, $ in Thousands			3 Months Ended
	Mar. 08, 2019 USD ($) $ / shares	Dec. 09, 2018	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)
Business Acquisition [Line Items]
Increase (decrease) in acquisition, integration, and restructuring costs			$ (33,400)	$ 38,700
Increase (decrease) in income tax expense			$ (2,700)	2,700
Increase in cost of revenue				$ 2,800
Nutrisystem, Inc.
Business Acquisition [Line Items]
Business acquisition, cash received in conversion | $ / shares	$ 38.75
Business acquisition, common stock exchange ratio	0.2141
Merger consideration	$ 1,286,108
Nutrisystem, Inc. | Merger Agreement
Business Acquisition [Line Items]
Business acquisition, agreement date		Dec. 09, 2018
Business acquisition, effective date of acquisition	Mar. 08, 2019
Business acquisition, cash received in conversion | $ / shares	$ 38.75
Business acquisition, common stock exchange ratio	0.2141

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Business Combinations - Summary of Component of Merger Consideration (Details) - Nutrisystem, Inc. $ in Thousands	Mar. 08, 2019 USD ($)
Business Acquisition [Line Items]
Cash paid for outstanding Nutrisystem shares	$ 1,138,143	[1]
Value of Tivity Health Common Stock issued in the merger	132,838	[2]
Value of Nutrisystem stock options	6,020	[3]
Value of Tivity Health replacement awards attributable to pre-combination service	9,107	[4]
Total Merger Consideration	$ 1,286,108

[1] Represents the total cash paid to former Nutrisystem stockholders as cash consideration. This amount is based on the 29,370,594 shares of Nutrisystem common stock issued and outstanding as of Closing and cash consideration of $38.75 per share, plus cash payable in lieu of fractional shares.

[2] Represents the fair value of 6.3 million shares of Tivity Health Common Stock issued for outstanding Nutrisystem shares as stock consideration. This amount is based on (a) 29,370,594 Nutrisystem common shares issued and outstanding as of Closing, times (b) the Exchange Ratio of 0.2141, times (c) $21.12, which is equal to the volume-weighted averages of the trading price per share of our Common Stock for the five consecutive trading days up to and including March 6, 2019.

[3] Represents the fair value of the cash consideration paid for the net settlement of approximately 204,000 Nutrisystem stock options vested and outstanding as of the closing date. In accordance with the Merger Agreement, each vested and outstanding Nutrisystem stock option was cancelled, and the holder received a cash payment per option equal to approximately $43.27 minus the applicable exercise price of the stock option.

[4] Unvested restricted stock awards and performance stock units held by Nutrisystem employees were assumed by Tivity Health and converted into time-vesting restricted stock awards and time-vesting restricted stock units, respectively (“Replacement Awards”). The value in the table represents the portion of the fair value of the Replacement Awards that relates to pre-combination services.

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Business Combinations - Summary of Component of Merger Consideration (Parenthetical) (Details) - Nutrisystem, Inc.	Mar. 08, 2019 $ / shares shares
Business Acquisition [Line Items]
Number of Shares converted into cash upon acquisition | shares	29,370,594
Cash consideration per share | $ / shares	$ 38.75
Business acquisition, share issued in conversion | shares	6,300,000
Business acquisition, common stock exchange ratio	0.2141
Volume-weighted average of trading price of common stock | $ / shares	$ 21.12
Number of consecutive trading days	5 days
Stock options vested and outstanding | shares	204,000
Business acquisition cash payment per option net of exercise price | $ / shares	$ 43.27

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Business Combinations - Preliminary Allocation of Estimated Merger Consideration to the Identifiable Tangible and Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 08, 2019		Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill, net	$ 780,351			$ 334,680
Nutrisystem, Inc.
Business Acquisition [Line Items]
Cash, cash equivalents, and short-term investments		$ 81,217
Accounts receivable		22,639
Inventory		38,494
Prepaid expenses and other current assets		12,345
Property and equipment		31,233
Right-of-use assets		22,145
Intangible assets		948,000
Other assets/liabilities		7,161
Accounts payable		(58,253)
Accrued salaries and benefits and other liabilities		(8,695)
Deferred revenue		(13,339)
Lease liabilities		(22,145)
Deferred tax liabilities, net		(220,365)
Total identifiable assets and liabilities acquired		840,437
Goodwill, net	$ 445,671	445,671	[1]
Total Merger Consideration		$ 1,286,108

[1] Goodwill represents the excess of merger consideration over the preliminary fair value of the underlying assets acquired and liabilities assumed. Goodwill is attributable to the assembled workforce of experienced personnel at Nutrisystem and synergies expected to be achieved from the combined operations of Tivity Health and Nutrisystem.

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Business Combinations - Summary of Pro forma Combined Company Results (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Business Combinations [Abstract]
Revenue	$ 347,542	$ 360,860
Net loss	$ (4,635)	$ (29,842)

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Recent Relevant Accounting Standards - Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 08, 2019	Jan. 01, 2019
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Right-of-use asset	$ 46,747
Lease liabilities	$ 49,974
ASU 2016-02
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Right-of-use asset			$ 27,000
Lease liabilities			$ 29,700
ASU 2016-02 | Nutrisystem, Inc.
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Right-of-use asset		$ 22,100
Lease liabilities		$ 22,100

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Revenue Recognition - Additional Information (Details)	3 Months Ended
	Mar. 31, 2019 USD ($) Segment Program Obligation Source	Mar. 31, 2018 USD ($)
Disaggregation Of Revenue [Line Items]
Number of reportable segments | Segment	2
Revenue, Practical Expedient, Initial Application and Transition, Qualitative Assessment	true
Revenues	$ 214,094,000	$ 149,930,000
Healthcare
Disaggregation Of Revenue [Line Items]
Number of programs | Program	3
Number of performance obligations | Obligation	1
Number of performance obligation unsatisfied | Obligation	0
Revenue recognized from performance obligations satisfied in prior period	$ 0
Period of billing in arrears once timing of services to customers is known	1 month
Number of days for customer to make payment after being invoiced	30 days
Number of reportable segments | Segment	2
Revenues	$ 156,527,000	$ 149,930,000
Nutrition
Disaggregation Of Revenue [Line Items]
Number of sources for revenue recognition | Source	4
Description of return of obligation	Direct to consumer customers may return unopened ready-to-go products within 30 days after purchase in order to receive a refund or credit.
Return of purchase order to refund or credit, period	30 days
Purchase order canceled of delivery, period	14 days
Revenues	$ 57,567,000
Provision for estimated returns	1,400,000
Nutrition | Accrued Liabilities
Disaggregation Of Revenue [Line Items]
Reserve for estimated returns	1,300,000
Nutrition | Shipping and Handling Charges
Disaggregation Of Revenue [Line Items]
Revenues	$ 1,800,000

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Revenue Recognition - Summary of Revenue Disaggregated by Program (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation Of Revenue [Line Items]
Revenues	$ 214,094	$ 149,930
Healthcare
Disaggregation Of Revenue [Line Items]
Revenues	156,527	149,930
Healthcare | SilverSneakers
Disaggregation Of Revenue [Line Items]
Revenues	123,024	120,925
Healthcare | Prime Fitness
Disaggregation Of Revenue [Line Items]
Revenues	28,743	24,734
Healthcare | WholeHealth Living
Disaggregation Of Revenue [Line Items]
Revenues	4,575	4,217
Healthcare | Other
Disaggregation Of Revenue [Line Items]
Revenues	$ 185	$ 54

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Revenue Recognition - Summary of Revenue Disaggregated by Source (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation Of Revenue [Line Items]
Revenues	$ 214,094	$ 149,930
Nutrition
Disaggregation Of Revenue [Line Items]
Revenues	57,567
Nutrition | Direct to Consumer
Disaggregation Of Revenue [Line Items]
Revenues	52,654
Nutrition | Retail
Disaggregation Of Revenue [Line Items]
Revenues	4,304
Nutrition | QVC
Disaggregation Of Revenue [Line Items]
Revenues	522
Nutrition | Other
Disaggregation Of Revenue [Line Items]
Revenues	$ 87

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Revenue Recognition - Summary of Information about Receivables, Contract Assets and Contract Liabilities from Contracts with Customers (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Revenue From Contract With Customer [Abstract]
Contract assets	$ 480
Contract liabilities	$ 14,997

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Revenue Recognition - Summary of Significant Changes in Contract Liabilities (Deferred Revenue) Balance (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Revenue From Contract With Customer [Abstract]
Revenue recognized that was included in the contract liability (deferred revenue) balance on March 8, 2019	$ (2,752)
Increases due to cash received for prepaid gift cards sold or unshipped food, excluding amounts recognized as revenue	$ 4,409

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Revenue Recognition - Summary of Revenue from Prepaid Gift Cards Expected to be Recognized in Future Related to Performance Obligation Unsatisfied or Partially Satisfied (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Disaggregation Of Revenue [Line Items]
Revenue, remaining performance obligation, amount	$ 12,633
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-04-01
Disaggregation Of Revenue [Line Items]
Revenue, remaining performance obligation, amount	$ 10,665
Revenue, remaining performance obligation, expected timing of satisfaction, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01
Disaggregation Of Revenue [Line Items]
Revenue, remaining performance obligation, amount	$ 1,303
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01
Disaggregation Of Revenue [Line Items]
Revenue, remaining performance obligation, amount	$ 665
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year

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Revenue Recognition - Summary of Revenue from Prepaid Gift Cards Expected to be Recognized in Future Related to Performance Obligation Unsatisfied or Partially Satisfied (Details 1) $ in Thousands	Mar. 31, 2019 USD ($)
Revenue From Contract With Customer [Abstract]
Revenue, remaining performance obligation, amount	$ 12,633

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Revenue Recognition - Additional Information (Details 1)	3 Months Ended
	Mar. 31, 2019
Revenue From Contract With Customer [Abstract]
Revenue, practical expedient, financing component [true false]	true

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Inventories - Additional Information (Details) $ in Millions	Mar. 31, 2019 USD ($)
Inventory Disclosure [Abstract]
Reserve for excess and obsolete inventory	$ 1.3

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Intangible Assets and Goodwill - Intangible Assets Subject to and Not Subject to Amortization (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 08, 2019	[1]	Dec. 31, 2018
Finite Lived Intangible Assets [Line Items]
Total intangible assets, Fair Value	$ 975,729			$ 29,049
Goodwill	780,351			$ 334,680
Nutrisystem, Inc.
Finite Lived Intangible Assets [Line Items]
Intangible assets subject to amortization, Fair Value	148,000
Total intangible assets, Fair Value	948,000
Goodwill	445,671	$ 445,671
Nutrisystem, Inc. | Tradename - Nutrisystem
Finite Lived Intangible Assets [Line Items]
Intangible assets not subject to amortization:	800,000
Tradename - Nutrisystem | Nutrisystem, Inc.
Finite Lived Intangible Assets [Line Items]
Intangible assets subject to amortization, Fair Value	$ 9,000
Intangible assets subject to amortization, Fair Value, Estimated Useful Life	15 years
Customer list | Nutrisystem, Inc.
Finite Lived Intangible Assets [Line Items]
Intangible assets subject to amortization, Fair Value	$ 125,000
Intangible assets subject to amortization, Fair Value, Estimated Useful Life	7 years
Retail customer relationship | Nutrisystem, Inc.
Finite Lived Intangible Assets [Line Items]
Intangible assets subject to amortization, Fair Value	$ 8,000
Intangible assets subject to amortization, Fair Value, Estimated Useful Life	10 years
Noncompetition agreements | Nutrisystem, Inc.
Finite Lived Intangible Assets [Line Items]
Intangible assets subject to amortization, Fair Value	$ 6,000
Intangible assets subject to amortization, Fair Value, Estimated Useful Life	5 years

[1] Goodwill represents the excess of merger consideration over the preliminary fair value of the underlying assets acquired and liabilities assumed. Goodwill is attributable to the assembled workforce of experienced personnel at Nutrisystem and synergies expected to be achieved from the combined operations of Tivity Health and Nutrisystem.

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Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Indefinite Lived Intangible Assets By Major Class [Line Items]
Goodwill	$ 780,351	$ 334,680
Healthcare
Indefinite Lived Intangible Assets By Major Class [Line Items]
Goodwill	334,700
Intangible assets not subject to amortization	$ 29,000

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Intangible Assets and Goodwill - Change in Carrying Amount of Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Balance, January 1, 2019	$ 334,680
Acquisition of Nutrisystem	445,671
Balance, March 31, 2019	$ 780,351

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Marketing Expenses - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Marketing And Advertising Expense [Abstract]
Media expense	$ 20.3
Prepaid for future advertisements and promotions	$ 1.4

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Share-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) Type $ / shares shares	Mar. 31, 2018 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Types of share based awards | Type	5
Share based awards, desription	We currently have five types of share-based awards outstanding to our employees and directors: stock options, restricted stock awards, restricted stock units, performance stock units, and market stock units.
Share-based compensation costs | $	$ 2.4	$ 1.4
Restructuring and Related Charges
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation costs | $	$ 0.1
Time-Vesting Restricted Stock Awards (Replacement Awards)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based awards, granted | shares	258,000
Share based awards, fair value | $ / shares	$ 19.42
Time-Vesting Restricted Stock Awards (Replacement Awards) | Employees | Nutrisystem
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based awards, granted | shares	258,000
Share based awards, fair value | $ / shares	$ 19.42
Time-Vesting Restricted Stock Units (Replacement Awards)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based awards, granted | shares	919,000
Share based awards, fair value | $ / shares	$ 19.42
Time-Vesting Restricted Stock Units (Replacement Awards) | Employees | Nutrisystem
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based awards, granted | shares	919,000
Share based awards, fair value | $ / shares	$ 19.42
Replacement Awards | Nutrisystem
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of replacement awards attributable to pre-combination service | $	$ 9.1
Post-combination expense expected to be recognized | $	$ 13.7
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Each of share based awards, vesting period	3 years
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Each of share based awards, vesting period	4 years

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Share-Based Compensation - Summary of Stock Options (Details) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) $ / shares shares
Shares [Roll Forward]
Outstanding, beginning of period (in shares) | shares	431
Exercised (in shares) | shares	(35)
Outstanding, end of period (in shares) | shares	396
Exercisable, end of period (in shares) | shares	316
Weighted-Average Exercise Price [Roll Forward]
Outstanding, beginning of period (in dollars per share) | $ / shares	$ 17.83
Exercised (in dollars per share) | $ / shares	10.70
Outstanding, end of period (in dollars per share) | $ / shares	18.46
Exercisable, end of period (in dollars per share) | $ / shares	$ 13.57
Weighted-Average Remaining Contractual Term [Abstract]
Outstanding	4 years 4 months 24 days
Exercisable	3 years 3 months 18 days
Aggregate Intrinsic Value [Abstract]
Outstanding, end of period | $	$ 1,262
Exercisable, end of period | $	$ 1,262

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Share-Based Compensation - Summary of Restricted Stock Awards (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Restricted Stock Awards
Shares [Roll Forward]
Nonvested, end of period (in shares) | shares	258
Weighted-Average Grant Date Fair Value [Roll Forward]
Nonvested, end of period (in dollars per share) | $ / shares	$ 19.42
Restricted Stock Awards Replacement Awards
Shares [Roll Forward]
Granted (in shares) | shares	258
Weighted-Average Grant Date Fair Value [Roll Forward]
Granted (in dollars per share) | $ / shares	$ 19.42

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Share-Based Compensation - Summary of Restricted Stock Units (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Restricted Stock Units (RSUs)
Shares [Roll Forward]
Nonvested, beginning of period (in shares) | shares	271
Granted (in shares) | shares	141
Vested (in shares) | shares	(68)
Nonvested, end of period (in shares) | shares	1,263
Weighted-Average Grant Date Fair Value [Roll Forward]
Nonvested, beginning of period (in dollars per share) | $ / shares	$ 24.07
Granted (in dollars per share) | $ / shares	19.42
Vested (in dollars per share) | $ / shares	11.42
Nonvested, end of period (in dollars per share) | $ / shares	$ 20.84
Restricted Stock Units (RSUs) Replacement Awards
Shares [Roll Forward]
Granted (in shares) | shares	919
Weighted-Average Grant Date Fair Value [Roll Forward]
Granted (in dollars per share) | $ / shares	$ 19.42

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Share-Based Compensation - Summary of Performance Stock Units (Details) - Performance Stock Units shares in Thousands	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Shares [Roll Forward]
Granted (in shares) | shares	103
Nonvested, end of period (in shares) | shares	103
Weighted-Average Grant Date Fair Value [Roll Forward]
Granted (in dollars per share) | $ / shares	$ 19.42
Nonvested, end of period (in dollars per share) | $ / shares	$ 19.42

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Share-Based Compensation - Summary of Market Stock Units (Details) - Market Stock Units shares in Thousands	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Shares [Roll Forward]
Nonvested, beginning of period (in shares) | shares	45
Granted (in shares) | shares	0
Vested (in shares) | shares	0
Forfeited (in shares) | shares	0
Nonvested, end of period (in shares) | shares	45
Weighted-Average Grant Date Fair Value [Roll Forward]
Nonvested, beginning of period (in dollars per share) | $ / shares	$ 18.25
Granted (in dollars per share) | $ / shares	0
Vested (in dollars per share) | $ / shares	0
Forfeited (in dollars per share) | $ / shares	0
Nonvested, end of period (in dollars per share) | $ / shares	$ 18.25

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Income Taxes- Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating Loss Carryforwards [Line Items]
Effective tax rate	56.00%	25.10%
Increase in income tax expense	$ 2.7
Earliest Tax Year
Operating Loss Carryforwards [Line Items]
Open tax year	2015
State
Operating Loss Carryforwards [Line Items]
Increase in valuation allowance of net operating loss carryforwards	$ 1.8
Reduction in deferred tax asset related to income tax credits	$ (0.9)

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Leases - Additional Information (Details) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019 Agreement	Dec. 31, 2018 USD ($)
Lessee Lease Description [Line Items]
Number of sublease agreements | Agreement	2
Total cash receipts from subleases | $		$ 23.7
Minimum
Lessee Lease Description [Line Items]
Remaining lease terms	1 year
Maximum
Lessee Lease Description [Line Items]
Remaining lease terms	6 years

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Leases - Schedule of Right-of-Use Assets and Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Right-of-use assets:
Operating	$ 46,578
Finance	169
Total leased assets	46,747
Current
Operating	14,762
Finance	46
Non-current
Operating	35,043
Finance	123
Total lease liabilities	$ 49,974

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Leases - Schedule of Components of Lease Expense (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Amortization of leased assets	$ 12
Interest of lease liabilities	2
Operating lease cost	2,716
Short-term lease cost	33
Total lease cost before subleases	2,763
Sublease income	(1,344)
Total lease cost, net	$ 1,419

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Leases - Schedule of Weighted Average Remaining Term and Discount Rates (Details)	Mar. 31, 2019
Weighted Average Remaining Lease Term (years)
Operating leases, Weighted average remaining lease term (years)	3 years 7 months 6 days
Finance leases, Weighted average remaining lease term (years)	3 years 3 months 18 days
Weighted Average Discount Rate
Operating leases, Weighted average discount rate	5.40%
Finance leases, Weighted average discount rate	4.40%

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Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Operating Leases Lease Payments
Remaining 2019	$ 12,896
2020	14,828
2021	13,361
2022	11,339
2023	1,947
2024 and thereafter	379
Total lease payments	54,750
Less: interest	(4,945)
Present value of lease liabilities	49,805
Operating Leases Sublease Receipts
Remaining 2019	(4,233)
2020	(5,667)
2021	(5,699)
2022	(5,732)
2023	(956)
Total Operating Leases Sublease Receipts	(22,287)
Operating Leases Net
Remaining 2019	8,663
2020	9,161
2021	7,662
2022	5,607
2023	991
2024 and thereafter	379
Total operating lease payments Net	32,463
Financing Leases
Remaining 2019	39
2020	52
2021	52
2022	39
Total lease payments	182
Less: interest	(13)
Present value of lease liabilities	$ 169

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Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow attributable to operating leases	$ (1,547)
Operating cash flow attributable to finance leases	(2)
Financing cash flows attributable to finance leases	(11)
Supplemental noncash information:
Right-of-use assets obtained in exchange for operating lease liabilities	48,972	[1]
Right-of-use assets obtained in exchange for finance lease liabilities	$ 181	[1]

[1] No new leases were entered into during the three months ended March 31, 2019. Amounts shown are due to the adoption of ASC 842 and reflect balances as of January 1, 2019 for the Healthcare segment and as of March 8, 2019 for the Nutrition segment (i.e., the date of our acquisition of Nutrisystem).

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Leases - Summary of Future Minimum Lease Payments Under All Non-cancelable Operating Leases (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 4,022
2020	2,040
2021	910
2022	827
2023	136
Total minimum lease payments	$ 7,935

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Debt - Summary of Debt, Net of Unamortized Deferred Loan Costs And Original Issue Discount (Details) - USD ($) $ in Thousands		Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Debt, net of unamortized original issue discount		$ 1,165,000	$ 30,646
Less: deferred loan costs and original issue discount ("OID")		(53,160)
Total debt		1,111,840	30,646
Less: current portion		(44,900)	(57)
Long-term debt		1,066,940	30,589
Term Loan A
Debt Instrument [Line Items]
Debt, net of unamortized original issue discount		341,000
Term Loan B
Debt Instrument [Line Items]
Debt, net of unamortized original issue discount		$ 824,000
Delayed Draw Term Loan
Debt Instrument [Line Items]
Debt, net of unamortized original issue discount			25,000
Revolving Credit Facility
Debt Instrument [Line Items]
Debt, net of unamortized original issue discount			5,450
Capital Lease Obligations and Other
Debt Instrument [Line Items]
Debt, net of unamortized original issue discount	[1]		$ 196

[1] Prior to the adoption of ASC 842 on January 1, 2019, our capital leases were recorded as part of debt. Beginning on January 1, 2019, they are classified as financing leases under ASC 842 and are recorded as part of lease liabilities.

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Debt - Credit Facility - Additional Information (Details) - USD ($)		3 Months Ended
	Mar. 08, 2019	Mar. 31, 2019
Prior Credit Agreement
Line Of Credit Facility [Line Items]
Initiation date		Apr. 21, 2017
Credit Agreement
Line Of Credit Facility [Line Items]
Initiation date		Mar. 08, 2019
Credit Agreement | Federal Funds Rate
Line Of Credit Facility [Line Items]
Basis spread on variable rate	0.50%
Credit Agreement | One-Month LIBOR
Line Of Credit Facility [Line Items]
Basis spread on variable rate	1.00%
Credit Agreement | Minimum
Line Of Credit Facility [Line Items]
Unused commitment fee percentage	0.25%
Credit Agreement | Minimum | LIBOR
Line Of Credit Facility [Line Items]
Variable rate basis	0.00%
Credit Agreement | Maximum
Line Of Credit Facility [Line Items]
Unused commitment fee percentage	0.50%
Credit Agreement | Revolving Credit Facility
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	$ 125,000,000
Maturity date		Mar. 08, 2024
Credit Agreement | Revolving Credit Facility | Minimum | LIBOR
Line Of Credit Facility [Line Items]
Margin rate	3.75%
Credit Agreement | Revolving Credit Facility | Minimum | Base Rate
Line Of Credit Facility [Line Items]
Margin rate	2.75%
Credit Agreement | Revolving Credit Facility | Maximum | LIBOR
Line Of Credit Facility [Line Items]
Margin rate	4.25%
Credit Agreement | Revolving Credit Facility | Maximum | Base Rate
Line Of Credit Facility [Line Items]
Margin rate	3.25%
Credit Agreement | Swingline Sub Facility
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	$ 35,000,000
Maturity date		Mar. 08, 2024
Credit Agreement | Letters of Credit Sub Facility
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	50,000,000
Credit Agreement | Term Loan Facility A
Line Of Credit Facility [Line Items]
Debt instrument, face amount	$ 350,000,000
Periodic principal payment as percentage of aggregate principal amount	2.50%
Maturity date		Mar. 08, 2024
Credit Agreement | Term Loan Facility A | LIBOR
Line Of Credit Facility [Line Items]
Margin rate	4.25%
Credit Agreement | Term Loan Facility A | Base Rate
Line Of Credit Facility [Line Items]
Margin rate	3.25%
Credit Agreement | Term Loan Facility B
Line Of Credit Facility [Line Items]
Debt instrument, face amount	$ 830,000,000
Periodic principal payment as percentage of aggregate principal amount	0.75%
Maturity date		Mar. 08, 2026
Credit Agreement | Term Loan Facility B | LIBOR
Line Of Credit Facility [Line Items]
Margin rate	5.25%
Credit Agreement | Term Loan Facility B | Base Rate
Line Of Credit Facility [Line Items]
Margin rate	4.25%
Credit Agreement | Uncommitted Incremental Accordion Facility | Minimum
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	$ 125,000,000
Percentage of consolidated EBITDA requirement	50.00%

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Debt - Cash Convertible Notes - Additional Information (Details) - $ / shares		3 Months Ended
	Oct. 01, 2018	Mar. 31, 2019	Jul. 31, 2013
Debt Instrument [Line Items]
Number of trading days, warrants automatically exercised on a pro rata basis	160 days
Number of warrants are automatically exercised on each trading day	48,000
Common Stock
Debt Instrument [Line Items]
Common stock shares issued related to automatic exercise of warrants		0
Common Stock | Warrants | Cash Convertible Notes Hedge
Debt Instrument [Line Items]
Shares issued upon conversion of debt			7,700,000
1.50% Cash Convertible Senior Notes Due 2018
Debt Instrument [Line Items]
Warrants strike price (in dollars per share)			$ 25.95

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Commitments and Contingencies - Additional Information - (Details)	Nov. 06, 2017 Lawsuit
Commitments And Contingencies Disclosure [Abstract]
Number of lawsuits filed	4

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Fair Value Measurements - Additional Information (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Revolving Credit Facility
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Line of credit	$ 0
Carrying Value
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Cash and cash equivalents	18,800,000
Cash Convertible Notes Hedges and Cash Conversion Derivative
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Assets and liabilities measured at fair value on a recurring basis	0	$ 0
Term Loans
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt instrument fair value	1,146,000,000
Debt instrument carrying amount	$ 1,165,000,000

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Restructuring and Related Charges - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019
Restructuring Cost And Reserve [Line Items]
Restructuring and related charges		$ 1,591
2019 Restructuring Plan
Restructuring Cost And Reserve [Line Items]
Restructuring and related charges		1,600
Total annualized savings		7,200
Healthcare | 2019 Restructuring Plan
Restructuring Cost And Reserve [Line Items]
Restructuring and related charges		1,000
Total annualized savings		3,500
Nutrition | 2019 Restructuring Plan
Restructuring Cost And Reserve [Line Items]
Restructuring and related charges		600
Total annualized savings		$ 3,700
Nutrition | 2019 Restructuring Plan | Scenario, Forecast
Restructuring Cost And Reserve [Line Items]
Severance and other employee-related costs	$ 800

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Earnings Per Share - Reconciliation of the Numerator and Denominator of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Numerator [Abstract]
Net income	$ 4,214	$ 21,336
Denominator [Abstract]
Shares used for basic income per share	42,745	39,783
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Shares used for diluted income per share	43,183	43,589
Earnings per share: [Abstract]
Basic	$ 0.10	$ 0.54
Diluted	$ 0.10	$ 0.49
Non-Qualified Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Dilutive securities outstanding not included in the computation of earnings (loss) per share because their effect is anti-dilutive (in shares)	80
Restricted Stock Units
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Dilutive securities outstanding not included in the computation of earnings (loss) per share because their effect is anti-dilutive (in shares)	56	14
Restricted Stock Awards
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)	16
Non-Qualified Stock Options
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)	127	312
Restricted Stock Units
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)	292	405
Performance Stock Units
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)	3
Market Stock Units
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)		533
Warrants Related to Cash Convertible Notes
Effect of dilutive stock options and restricted stock units outstanding [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)		2,556

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Segment Information - Additional Information (Details)	3 Months Ended
	Mar. 31, 2019 Segment
Segment Reporting [Abstract]
Number of reportable segments	2

XML

Segment Information - Schedule of Each Segment's Profit (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Revenues	$ 214,094	$ 149,930
Adjusted EBITDA	39,473
Acquisition and integration costs	17,052
Restructuring and related charges	1,591
Interest expense	7,666	3,454
Depreciation and amortization	3,582	1,123
Income before income taxes	9,582	28,493
Total assets	2,070,588		$ 482,079
Healthcare
Segment Reporting Information [Line Items]
Revenues	156,527	$ 149,930
Adjusted EBITDA	26,129
Total assets	456,017
Nutrition
Segment Reporting Information [Line Items]
Revenues	57,567
Adjusted EBITDA	13,344
Total assets	$ 1,614,571