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Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Effective as of July 20, 2020, the Board
of Directors of Medifast, Inc. (the “Company”) appointed Mr. James P. Maloney as Chief Financial Officer of the Company.
Mr. Maloney succeeds Joseph P. Kelleman, who has served as Interim Chief Financial Officer since April 2020 and will remain with
the Company through July 31, 2020, to ensure an orderly transition. Mr. Maloney will serve in such position until his separation
or removal.
Mr. Maloney, age 52, most recently served
as Senior Vice President Chief Financial Officer of L.B. Foster Company (NASDAQ: FSTR), a publicly held global manufacturer and
distributor of products and services for transportation and energy infrastructure. Prior to L.B. Foster Company, he served as Chief
Financial Officer of First Insight, Inc., a privately held company providing consumer data to leading retailers and brands, where
he continues to serve as a Board Advisor. Before joining First Insight, Mr. Maloney held roles at the H.J. Heinz Company (“Heinz”),
including Vice President of Global Financial Planning and Supply Chain Finance, Director of Finance for Supply Chain for Heinz
North America, and Controller of Heinz North America. He also held multiple roles in the U.S. and Europe at Ernst & Young LLP,
including Senior Manager of the Assurance Practice.
Mr. Maloney holds a Bachelor of Science
degree from Clarion University and a Master of Business Administration degree from the University of Pittsburgh, and is a Certified
Public Accountant.
There are no arrangements or understandings,
other than the offer letter between the Company and Mr. Maloney described below, pursuant to which Mr. Maloney was appointed as
Chief Financial Officer of the Company, and Mr. Maloney does not have any transactions reportable under Item 404(a) of Regulation
S-K.
Offer Letter with Mr. Maloney
The Company entered into an offer letter
with Mr. Maloney in connection with his appointment as Chief Financial Officer (the “Offer Letter”). Pursuant to the
Offer Letter, Mr. Maloney will: (i) receive an annual base salary of $425,000; (ii) participate in the Company’s annual Incentive
Bonus Plan, with an annual target bonus equal to 70% of base salary; (iii) beginning in the 2021 fiscal year, participate
in the Company's long-term incentive program, which currently consists of annual grants of deferred shares, with a grant date fair
value equal to his base salary at the beginning of the next performance year (January 2021); and (iv) receive relocation assistance
pursuant to the Company's relocation policy.
In addition, pursuant to the Offer Letter,
the Company granted Mr. Maloney a sign-on long-term incentive award with a grant date fair value of $425,000 (the "Sign-On
Award"), consisting of (i) time-based deferred shares, as to 40% of the award, which vest over three years in equal annual
installments, subject to Mr. Maloney’s continued service through each vesting date, and (ii) performance-based deferred shares,
as to 60% of the award, which vest based on the achievement of certain performance metrics, in each case subject to Mr. Maloney’s
continued service through the applicable vesting date. The Sign-On Award will be granted pursuant to the Medifast, Inc. Amended
and Restated 2012 Share Incentive Plan.
Mr. Maloney will be eligible to participate
in the Company's Executive Severance Plan, pursuant to which he will be eligible to receive severance benefits in the event of
certain terminations of employment.
The press release announcing Mr. Maloney’s
appointment as Chief Financial Officer is furnished as Exhibit 99.1 hereto. The information set forth in Exhibit 99.1 shall not
be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended.