Health Fitness Corporation Outside Director Compensation
||Initial Compensation Stock Grant. Upon first election to the HFC Board of Directors, a
Director will receive a grant of that number of shares of stock which is equal to the sum of
$60,000 divided by the per share fair market value of the Companys common stock as of such
date of election; provided that one-third of such shares shall be vested on the first
anniversary of such date of election, two-thirds of such shares shall be vested on the second
anniversary of the date of such election, and all of such shares shall be vested on the third
anniversary of the date of such election; further provided that any non-vested shares shall be
forfeited upon such directors resignation, termination, failure to stand for re-election..
||Annual Compensation Stock Options. Upon first election to the HFC Board of Directors, and
on a yearly basis thereafter, a director will receive a six-year fully vested option to
purchase 15,000 shares of HFC common stock. The option will have an exercise price equal to
the fair market value of HFCs common stock on the date of grant. A record of options earned
by each director will be maintained at the HFC corporate office by the CFO. A report of
options earned will be distributed to each director on a quarterly basis by the CFO.
||Annual Compensation Retainer. The Chairperson and Directors will receive a monthly cash
retainer of $1,000 ($12,000 annualized) payable quarterly at a rate of $3,000 per calendar
quarter. The Chairperson will also receive a monthly cash retainer of $500 ($6,000 annualized)
payable quarterly at a rate of $1,500 per calendar quarter. In addition, the Chairperson
shall receive an additional annual fee of $30,000 for additional services provided in
connection with the Companys strategic plan and related projects. This fee will be paid
quarterly and is subject to suspension or termination by the Board.
||Board Meeting Compensation. The Chairperson and Directors will receive a cash payment of
$1,000 for attending each regular or specially scheduled board meeting. Telephonic board
meetings (or a Directors telephonic attendance at a board meeting) will be compensated at 75%
of the cash payment.
||Committee Meeting Compensation. Committee Chairpersons and Committee Members will receive a
cash payment of $500 for attending each regular or specially scheduled committee meeting.
Telephonic committee meetings (or a Directors telephonic attendance at a committee meeting)
will be compensated at 75% of the cash payment. In addition to the Committee Meeting fee, the
Chairpersons of the Compensation/Human Capital Committee and the Nominating/Governance
Committee will each receive a monthly cash retainer of $208.33 ($2,500 annualized) payable
quarterly at a rate of $625 per calendar quarter. The Chairperson of the Audit Committee will
receive a monthly cash retainer of $416.66 ($5,000 annualized) payable quarterly at a rate of
$1,250 per calendar quarter. The Chairperson of the Finance and Strategy Committees and
(unless otherwise determined by the Board) any Ad Hoc Committees from time to time created
by the Board, will not receive retainers but will receive an additional cash payment of $250
above the $500 committee meeting fee for each committee meeting attended.
||Expense Reimbursement. The cost of out-of-town travel incurred by a director to attend board
meetings will be reimbursed by HFC. Directors should make travel plans at least 30 days in
advance if possible, and should travel at the lowest fare available. Costs of out-of-town
travel related to committee meeting attendance will not be reimbursed.
||Directors & Officers Insurance Coverage. Each director will be covered by a D&O liability
policy with policy limits of least $10 million and separate Side A Coverage with policy
limits of at least $5 million.
||A director shall be deemed to have been first elected to the Board upon the earlier of (i)
such directors election to the Board by the shareholders and (ii) such directors election
to the Board by the Board pursuant to its power to fill vacancies on the Board, including
any vacancy resulting from the death, resignation, removal or disqualification of a director
and any vacancy resulting from any newly created directorship.