SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Medifast, Inc.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:____________________________________________________
2) Form, Schedule or Registration Statement No.:______________________________
3) Filing Party:______________________________________________________________
4) Date Filed:________________________________________________________________
MEDIFAST INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 14, 2001
To the Stockholders:
The Annual Meeting of stockholders of Medifast, Inc., a Delaware
corporation (the "Company"), will be held at Jason Pharmaceuticals, Inc. 11445
Cronhill Drive, Owings Mills, Maryland 21117 on Thursday, June 14, 2001, at 2:00
P.M., Eastern Time, for the following purposes:
(1) To elect five Directors of the Company, each of whom is to hold office
until the next Annual Meeting of Stockholders and until the due
election and qualification of his successor.
(2) To approve the re-appointment of Wooden & Benson, Chartered, as the
Company's independent auditors for the fiscal year ending December 31,
2001.
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 23, 2001 will
be entitled to notice of, and to vote at, the meeting or any adjournments
thereof.
If you cannot personally attend the meeting, it is requested that you
promptly fill in, sign, and return the proxy submitted to you herewith.
By Order of the Board of Directors,
Dated: April 30, 2001
MEDIFAST, INC.
-----------------------
PROXY STATEMENT
This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Medifast Inc., a Delaware corporation
(the "Company" or "Medifast"), to be voted at the Annual Meeting of Stockholders
(the "Meeting") scheduled to be held at Jason Pharmaceuticals, Inc. 11445
Cronhill Drive, Owings Mills, Maryland 21117 on Thursday, June 14, 2001, at 2:00
P.M., Eastern Time, and at any adjournments thereof.
Only stockholders of record as of the close of business on April 23, 2001*
are entitled to notice of and to vote at the Meeting or any adjournment thereof.
On that date, the Company had outstanding 6,524,531 shares of Common Stock, par
value $.01 per share (the "Common Stock") and 552,757 shares of Series "B"
Preferred Convertible Stock (the "Preferred Stock"). Each share of Common Stock
is entitled to one vote, and each share of Series "B" Preferred Stock is
entitled to 4 votes. Total voting power equals to 8,735,559 votes eligible at
the Annual Meeting.
Each form of proxy which is properly executed and returned to the Company
will be voted in accordance with the directions specified thereon, or, if no
directions are specified, will be voted (i) for the election as Directors of the
persons named herein under the caption "Election of Directors," and (ii) for the
approval of the appointment of Wooden & Benson, Chartered as the Company's
independent auditors for the fiscal year ending December 31, 2001. Any
stockholder giving a proxy may revoke it at any time before it is exercised.
Such revocation may be effected by voting in person or by proxy at the Meeting,
by returning to the Company prior to the Meeting a proxy bearing a later date,
or by otherwise notifying the Secretary of the Company in writing prior to the
Meeting.
The Company's executive offices are at 11445 Cronhill Drive, Owings Mills,
Maryland 21117 and its telephone number is (410) 581-8042. This proxy statement
and the accompanying proxy are first being distributed to the stockholders of
the Company on or about April 30, 2001.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of March 31, 2001, information concerning
the ownership of Common Stock and Preferred Stock by persons which, to the
Company's knowledge, own beneficially more than 5% of the outstanding shares of
Common Stock or Preferred Stock.
Common Stock % of
Name and Address Beneficially Owned Outstanding
---------------- ------------------ -----------
Bradley T. MacDonald ........... 1,755,000 (1) 27.00%
11445 Cronhill Drive
Owings Mills, MD 21117
Warren H. Haber ................ 462,500 7.00%
c/o Founder's Management
New York City, NY 10021
John L. Teeger ................. 425,000 6.50%
c/o Founder's Management
New York City, NY 10021
* Record Date
Series "B" Voting
Preferred Convertible Stock % of
Name and Address Beneficially Owned Outstanding
---------------- ------------------ -----------
"DS" Capital Investors ....... 552,757 (2) 100%
150 Broadway
New York, NY 10038
1
- ----------
(1) Includes 215,000 shares which may be acquired by exercise of options
exercisable within 60 days of the date hereof.
(2) On January 19, 2000, Medifast, Inc. closed a Private Placement Offering of
552,757 shares of Series "B" Voting Preferred Convertible Stock.
ELECTION OF DIRECTORS
The Board of Directors recommends the election of the five nominees for
Director listed below. The Directors to be elected are to hold office until the
next Annual Meeting of Stockholders and until their respective successors are
elected and shall have qualified. If for any reason any of said nominees shall
become unavailable for election, proxies will be voted for a substitute nominee
designed by the Board, but the Board has no reason to believe that this will
occur. Directors of the Company are elected by a plurality of the votes cast at
a meeting of Stockholders.
INFORMATION CONCERNING NOMINEES
The name and age of each nominee and the year he/she became a Director of the
Company, according to information furnished by each, is as follows:
FIRST
BECAME A
NAME AGE DIRECTOR
- ---- --- --------
Bradley T. MacDonald*....................................... 53 1996
Donald F. Reilly............................................ 53 1998
Michael C. MacDonald*....................................... 47 1999
Scott Zion*................................................. 49 1999
Kristina DeSantis........................................... 31 2000
- ---------------
* Member of the Executive Committee.
BRADLEY T. MACDONALD became Chairman of the Board and Chief Executive
Officer of Medifast, Inc. on January 28, 1998. Prior to joining the Company, he
was appointed as Program Director of the U.S. Olympic Coin Program of the
Atlanta Centennial Olympic Games. Mr. MacDonald was previously employed by the
Company as its Chief Executive Officer from September, 1996 to August, 1997.
From 1991 through 1994, Colonel MacDonald returned to active duty to be Deputy
Director and Chief Financial Officer of the Retail, Food, Hospitality and
Recreation Businesses for the United States Marine Corps. Prior thereto, Mr.
MacDonald served as Chief Operating Officer of the Bonneau Sunglass Company,
President of Pennsylvania Optical Co., Chairman and CEO of MacDonald and
Associates, which had major financial interests in a retail drug, consumer
candy, and pilot sunglass companies. Mr. MacDonald was national president of the
Marine Corps Reserve Officers Association and retired from the United States
Marine Corps Reserve as a Colonel in 1997, after 27 years of service. He also
serves on the Board of Directors of the Wireless Accessories Group (OTCBB:
WIRX).
REVEREND DONALD FRANCIS REILLY, O.S.A., a Director, holds a Doctorate in
Ministry (Counseling) from New York Theological and an M.A. from Washington
Theological Union as well as a B.A. from Villanova University. Reverend Don
Reilly was ordained a priest in 1974. His assignments included Associate Pastor,
pastor at St. Denis, Havertown, Pennsylvania, Professor at Villanova University,
Personnel Director of the Augustinian Province of St. Thomas of Villanova,
Provincial Counselor, Founder of SILOAM Ministries where he ministers and
counsels HIV/AIDS patients and caregivers. He is currently on the Board of
Directors of Villanova University, is President of the board of "Bird Nest" in
Philadelphia, Pennsylvania and is Board Member of Prayer Power.
MICHAEL C. MACDONALD, a Director, is a corporate officer, the President,
North American Solutions Group for the Xerox Corporation. Mr. MacDonald's former
positions at Xerox Corporation include executive positions in the sales and
marketing areas. He is currently on the Board of Trustees of Rutgers University
and a Director of the Jimmy V Foundation. Mr. MacDonald is the brother of
Bradley T. MacDonald, the CEO of the Company.
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KRISTINA DESANTIS, a Director, is an Executive who manages the recruitment
processes at Linklaters & Alliance. She also worked at Goldman, Sachs & Co.,
Asset management Division. Formerly employed at Brown Brothers Harriman & Co. as
an Administrative Manager where she aided the work of six Research Analysts,
researched potential investor companies by processing analytical data,
coordinated and assisted in presentations. She also worked at Livecchi Eye
Associates as an Independent Marketing Manager. She is a former varsity athlete
and distinguished graduate of Dominican College with extensive knowledge of
corporate wellness programs.
SCOTT ZION, a Director, received a Bachelor of Arts Degree from Denison
University Granville, Ohio. Mr. Zion is currently Senior Vice President of
Santen, Inc, Napa, California. Mr. Zion was formerly employed at Akorn, Inc., an
ophthalmologic distribution company, as Senior Vice President and General
Manager. He also was employed at Pilkington Barnes Hind, in Sunnyvale,
California as Senior Vice President-North American Sales and Senior Vice
President U.S. Sales and Marketing. Prior to that, he was the Sales Director for
Mead Johnson/Bristol Myers Squibb for over 20 years. Mr. Zion, an expert in
nutritional products, was also a Mead Johnson Regional Director for the Pacific
and Southwestern regions of the United States, a District Sales Manager in
Chicago and a Sales Representative, successfully generating sales and profits
from pharmaceutical and nutritional products.
MEETINGS AND COMMITTEES
During the fiscal year ended December 31, 2000 ("Fiscal 2000"), the Board
of Directors held three (3) meetings, including those in which matters were
adopted by unanimous written consent. The Board has an Audit Committee, an
Executive Committee, and a Compensation Committee.
The Audit Committee of the Board of Directors consists of Rev. Donald
Reilly, O.S.A. and Ms. Kristina DeSantis. It held three (3) meetings during
fiscal year 2000. The duties and responsibilities of the Audit Committee
include, among other things, review of the Company's financial statements,
consideration of the nature and scope of the work to be performed by the
Company's independent auditors, discussion of the results of such work, the
receipt from such auditors of their letters to management which evaluate (as
part of their annual audit of the Company's financial statements) the internal
accounting control systems of the Company and meeting with representatives of
management to discuss particular areas of the Company's operations.
Messrs. Michael MacDonald, Scott Zion, and Bradley MacDonald are members of
the Executive Committee. The Committee meets periodically during the year to
develop and review strategic operational and management policies for the
Company. The Committee held three meetings during fiscal year 2000.
The Compensation Committee of the Board of Directors held one (1) meeting
during fiscal year 2000. The members are Mr. Michael MacDonald and Mr. Scott
Zion. No decisions on Mr. Bradley T. MacDonald's salary compensation have been
considered by the current Committee. The Committee approved the issue of
1,000,000 shares of stock at par value as consideration for Mr. MacDonald
providing a personal guarantee so the Company could finance its operations on
more favorable conditions since it had a "going concern" opinion in fiscal year
1999.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
and the rules of the Securities and Exchange Commission (the "Commission")
thereunder require the Company's Directors and officers, and any person who owns
more than ten percent of the Company's Common Stock (collectively, "Reporting
Persons"), to file reports of their ownership and changes in ownership of Common
Stock with the Commission. Reporting Persons are also required to furnish the
Company with copies of all Section 16(a) reports they file.
Based solely upon a review of copies of such reports furnished to the
Company, and written representations that certain reports were not required, the
Company believes that all of its Reporting Persons filed on a timely basis all
reports required by Section 16(a) of the Exchange Act during or with respect to
the year ended December 31, 2000.
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BOARD REPORT ON EXECUTIVE COMPENSATION
The compensation of the company's executive officers has been determined by
agreements negotiated prior to their employment. The Compensation and Stock
Options committee (the "Committee") is authorized to review and make
recommendation to the Board as to the compensation in cash or other forms for
its executive officers. Its compensation policy will be to provide for base
salaries which are comparable to the compensation paid to executive officers of
equivalent competency and responsibilities by companies of comparable size and
capitalization both in and out of the nutraceutical industry. The Committee also
intends to provide for the payment of cash bonuses to executive officers and
stock options, as an incentive to remain with the Company and enhance
shareholder value. It is also intended to be used when the Company attains
favorable operating results.
The Committee believes that the Company's stock option program, as it has
been in the past, should be used as a means to conserve cash in rewarding key
consultants, executives, and key employees for good or exceptional performance;
the performance of increased responsibilities, improved performance independent
of operating results, loyalty and seniority.
In the year ending December 31, 2000, the Committee did not make any
recommendations to the Board with regard to the compensation of the Chief
Executive Officer since all compensation received by the Chief Executive Officer
is currently set forth in an Employment Agreement entered into by the Chief
Executive Officer in 1998. (See "Employment Agreements" on page 5). The
Committee recommended and the Board approved the issue of 1,000,000 shares of
stock at par value as consideration for Mr. MacDonald providing a personal
guarantee so the Company could finance its operations on more favorable
conditions since it had a "going concern" opinion in fiscal year 1999. The
Compensation and Stock Option Committee have two members, Mr. Michael C.
MacDonald and Mr. Scott Zion.
DIRECTORS' COMPENSATION
The Company is authorized to pay a fee of $300 for each meeting attended by
its Directors who are not executive officers. It reimburses those who are not
employees of the Company for their expenses incurred in attending meetings.
Independent Directors claimed $1,275.00 in Director's fees and/or expenses in
2000. See "Executive Compensation - Stock Options" for stock options granted
under the 1993 Plan to the Directors.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information as to the compensation of the
Chief Executive Officer of the Company and each other executive officer who
received compensation in excess of $100,000 for 2000, 1999, or 1998.
Annual Compensation
-------------------
Value of Common Other
Salary Bonus Stock Issued In Option Annual
Name Year ($) ($) Lieu of Cash Awards Compensation
- ---- ---- -------- --- ------------ ------- ------------
Bradley T. MacDonald ......... 2000 $120,872 (0) $ 1,000 (1) 100,000 0
Chairman of the Board & CEO .. 1999 $125,000 (0) $ 25,000 (2) (3) 15,000 0
............................. 1998 $100,000 (0) $ 50,000 (2) (3) 100,000 0
- -------------
(1) The Board of Directors granted Mr. MacDonald and his family 1,000,000
shares of stock at par value ($.001) for providing a personal guarantee for
the financial package of almost $850,000 and in recognition of his efforts
to attract financing and returning the Company to profitability. The stock
issued is part of the personal guarantee collateral for the Jason
Pharmaceuticals Inc. loans and is restricted for two years, There is little
economic value of the stock to Mr. Mac Donald until the loans are paid off
and the restrictions removed. Mr. MacDonald did not take his contract
amount of salary due to other cash requirements.
(2) Compensation Committee and Board approved payment in stock in lieu of cash
at average 30-day stock price at fiscal year end 1998 and in June of 1999.
4
(3) Mr. MacDonald's 1999 and 1998 annual compensation is authorized at
$150,000. Due to cash flow problems, the Board paid his compensation in
1998 at $100,000 cash and 25,000 shares of stock issued in lieu of cash,
and in 1999 at $125,000 in cash with 33,000 shares of stock issued in lieu
of cash.
EMPLOYMENT AGREEMENTS
Mr. MacDonald's employment agreement signed in 1998 continues in effect
with no changes.
STOCK OPTIONS
The Company's 1993 Employee Stock Option Plan (the "Plan"), as amended in
July 1995 and again in December 1997, authorizes the issuance of options for
700,000 shares of Common Stock. The Plan authorizes the Board of Directors or a
Stock Option Committee appointed by the Board to grant incentive stock options
and non-incentive stock options to officers, key employees, directors, and
independent consultants, with directors who are not employees and consultants
eligible only to receive non-incentive stock options.
The following tables set forth pertinent information as of December 31,
2000 with respect to options granted under the Plan since the inception of the
Plan to the persons set forth under the Summary Compensation Table, all current
executive officers as a group, all current Directors who are not executive
officers as a group and all employees of the Company. In addition, a chart
listing all option holders, grants made in FY 00, and a list of aggregated
options and the value of these options, is provided.
ALL CURRENT ALL CURRENT
EXECUTIVE INDEPENDENT
BRADLEY T. OFFICERS DIRECTORS
MACDONALD (1) AS A GROUP AS A GROUP
------------- ---------- -----------
Options granted ................... 215,000 241,000 170,000
Average exercise price ............ $0.90 $0.88 $0.55
Options exercised ................. -- -- --
Average exercise price ........... -- -- --
Shares sold ....................... -- -- --
Options unexercised as of 2/1/00 .. 215,000 234,000 170,000
(1) 100,000 options issued at $1.50 per share in 1996 have expired and are
unexercised.
APPROXIMATE 5 YR
FY 00 GRANTS @ POTENTIAL REALIZABLE AGGREGATED VALUE OF
PRICE & EXPIRATION VALUE AT 10% ANNUAL OPTIONS OPTIONS
LIST OF OPTION HOLDERS MONTH/YEAR STOCK APPRECIATION THROUGH 2000 AS OF 12/31/00
- ---------------------- -------------------- ------------------ ------------ --------------
Bradley T. MacDonald/Chairman ................ 100,000 @ $.25 5/05 $.75 215,000 0
Scott Zion/Director .......................... 45,000 @ $.25 5/05 $.75 50,000 0
Rev. Donald Reilly/Director .................. 20,000 @ $.25 5/05 $.75 50,000 0
Michael C. MacDonald/Director ................ 20,000 @ $.25 5/05 $.75 50,000 0
Kristina DeSantis/Director 20,000 @ $.25 5/05 $.75 20,000 0
Paul Warren/Vice President 25,000 @ $.25 5/05 $.75 26,000 0
Alan Silver, Silver & Silver/CPA ............. 35,000 @ $.45 5/05 $.75 35,000 0
Steve & Susan Rade/Consultants ............... 150,000 @ $.25 11/05 $.75 150,000 0
Continental Financial Inc./Consultant ........ 10,000 @ $.45 11/05 $.75 10,000 0
Ronald O. Hauge/Advisor to the Board ......... 20,000 @ $.25 5/05 $.75 20,000 0
The Board will report no changes to the Compensation Committee.
The following table provides information as to the value of the unexercised
options held by the persons named in the Summary Compensation Table who are
optionholders as of December 31, 2000 measured in terms of the closing bid price
of the Company's Common Stock on such date:
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN THE MONEY
OPTIONS AS OF 12/31/00 OPTIONS ON 12/31/00
EXERCISABLE/UNEXERCISABLE EXERCISABLE/ UNEXERCISABLE
------------------------- --------------------------
Bradley T. MacDonald (1) ...... 215,000/0 $-0- /$-0-
Paul Warren ................... 26,000/0 $-0- /$-0-
- ------------
* On February 15, 2001 the closing bid price was $.45 on the NASDAQ OTC BB.
(1) Mr. MacDonald acquired no shares upon the exercise of options during 2000.
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Sample Peer Group Industry Comparison of Stock Prices
February 15, 2001 February 15, 2000 $ %
Company Stock Price Stock Price Change Change
- ------- ----------- ----------- ------ ------
Medifast (MDFT) ............................... .45 .4000 .05 12.5%
Natural Alternatives International, Inc. (NAII) 2.81 2.0312 .78 38.34%
Weider Nutrition (WNI) ........................ 2.90 4.3125 (1.41) (32.75)%
Pure World, Inc (PURW) ........................ .19 4.1875 (4.00) (95.46)%
Twinlab Corporation (TWLB) .................... 2.19 7.6875 (5.50) (71.51)%
Natures Sunshine Products, Inc. (NATR) ........ 9.16 8.9062 .25 2.85%
Sample Peer Group for 2001 With Medifast, Inc. Change
February 15, 2001 % Increase Over
Company Stock Price 2000
- ------- ---------------- --------------
Medifast (MDFT)............................ .45 11%
Abbott Labs (ABT).......................... 47.74 36%
Unilever (UL).............................. 31.48 34%
Novartis (NVS)............................. 42.05 12%
Bristol Myers Squibb (BMY) ................ 63.20 2%
Index Comparison
----------------
1997 2001
---- ----
Adams Harkness & Hill Healthy Living Index............. 100 (1) 110
Medifast............................................... 100 33
Source: Adams Harkness & Hill Healthy Living Index
Factual material is obtained from sources believed to be reliable, but the
publisher is not responsible for any errors or omissions contained herein.
(1) $100 dollars invested in 1997 would return $110 in 2001.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information with respect to the beneficial
ownership of shares of Common Stock as of December 31, 2000 of the Chief
Executive Officer, each Director, each nominee for Director, each current
executive officer named in the Summary Compensation Table under "Executive
Compensation" and all executive officers and Directors as a group. The number of
shares beneficially owned is determined under the rules of the Securities and
Exchange Commission and the information is not necessarily indicative of
beneficial ownership for any other person. Under such rules, "beneficial
ownership" includes shares as to which the undersigned has sole or shared voting
power or investment power and shares which the undersigned has the right to
acquire within 60 days of April 30, 2001 through the exercise of any stock
option or other right. Unless otherwise indicated, the named person has sole
investment and voting power with respect to the shares set forth in the table.
NUMBER % OF
NAME AND ADDRESS* OF SHARES OUTSTANDING
- ----------------- --------------- -----------
Bradley T. MacDonald........................ 1,755,000 (1) (2) 27%
Paul E. Warren.............................. 26,000 .6%
Donald F. Reilly............................ 50,000 (3) .8%
Michael C. MacDonald........................ 50,000 .8%
Scott Zion.................................. 250,000 4%
Kristina DeSantis........................... 20,000 .3%
Executive Officers and Directors as a group
(6 persons)............................ 2,151,000 33%
* The address is c/o Medifast, Inc., 11445 Cronhill Drive, Owings Mills,
Maryland 21117
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(1) Also, he purchased 140,000 shares in July, 1998 from the private placement;
it includes 215,000 shares issuable upon exercise of options, which by
their terms are currently exercisable or become exercisable within 60 days.
(2) Included 1,000,000 shares issued to Shirley D. MacDonald and Margaret E.
MacDonald as part of Mr. & Mrs. MacDonald's personal guarantee of the most
recent financial package in November, 2000. Mr. MacDonald is the beneficial
owner of these shares.
(3) All independent directors shares issuable upon exercise of options, which
by their terms are currently exercisable or become exercisable immediately.
ANNUAL REPORT
The Annual Report of the Company to the stockholders for the year ended
December 31, 2000 on Form 10K immediately follows this Proxy Statement. No part
thereof is incorporated by reference in this Proxy Statement.
On written request, the Company will provide without charge to each record
or beneficial holder of the Common Stock as of April 23, 2001, a copy of the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2000 as
filed with the Securities and Exchange Commission. Requests should be addressed
to Bradley T. MacDonald, c/o Medifast, Inc., 11445 Cronhill Drive, Owings Mills,
Maryland 21117.
PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
the use of the mails, proxies may be solicited, personally or by telephone or
telegraph, by officers, Directors and regular employees of the Company, who will
not be specially compensated for this purpose. The Company will also request
record holders of Common Stock who are securities brokers, custodians, nominees
and fiduciaries to forward soliciting material to the beneficial owners of such
stock, and will reimburse such brokers, custodians, nominees and fiduciaries for
their reasonable out-of-pocket expenses in forwarding soliciting material.
INDEPENDENT PUBLIC ACCOUNTANTS
Wooden & Benson, Chartered, certified public accountants, which has audited
the Company's financial statements as of December 31, 2000 and for the year then
ended, has been selected by management to audit the Company's financial
statements for the current fiscal year. A representative of that firm is
expected to be present or available by telephone at the Meeting with an
opportunity to make a statement to the stockholders if he desires to do so, and
will respond to appropriate questions. The Company will compensate Wooden &
Benson $45,000 for the 2000 audit and an additional $6,000 for their quarterly
10-Q reviews. The Company paid Richard A. Eisner & Company, LLP $80,000 in 2000
to audit the 1999 financial statements and was compelled to pay an additional
$18,000 to reissue the 1999 opinion for the most recent 10-KSB submitted to the
SEC in March, 2001.
OTHER MATTERS
The Company is unaware of any matters, above, which will be brought before
the Meeting other matters properly come before the Meeting, persons named in the
accompanying form of proxy accordance with their judgment on such matters.
Any proposals intended to be presented at the Meeting of Stockholders to be
held in 2001 must be received by the Company for inclusion in the Company's
proxy material no later than April 30, 2001.
It is important that your proxy be returned promptly no matter how small or
large your holding may be. Stockholders who do not expect to attend in person
are urged to execute and return the enclosed form of proxy.
April 30, 2001
7
PROXY
MEDIFAST, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Bradley T. MacDonald with full power of
substitution, as attorneys for and in the name, place and stead of the
undersigned, to vote all the shares of the common stock of MEDIFAST INC., owned
or entitled to be voted by the undersigned as of the record date, at the Annual
Meeting of Stockholders of said Company scheduled to be held at Jason
Pharmaceuticals, Inc, 11445 Cronhill Drive, Owings Mills, Maryland 21117, on
Thursday, June 14, 2001 at 2:00 P.M., Eastern Time or at any adjournment or
adjournments of said meeting, on the following proposals as indicated.
(1) Election of Five Directors.
[ ] FOR All nominees (except as marked to the contrary below) [ ] WITHHOLD
Bradley T. MacDonald, Rev. Donald F. Reilly, O.S.A., Michael C. MacDonald, Scott
Zion and Kristina DeSantis.
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
(2) To approve the appointment of Wooden & Benson, Chartered as the Company's
independent auditors for the fiscal year ending December 31, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) To transact such other business as may properly come before the meeting or
any adjournment thereof. (Please date and sign on reverse side).
This proxy if properly executed and returned will be voted in accordance
with the directions specified hereof. If no directions are specified, this proxy
will be voted FOR the election of the Directors named above or their substitutes
as designated by the Board of Directors and the proposal to amend the Stock
Option Plan.
Dated: _______________________ ____________________________________
Signature of Stockholder
____________________________________
Signature of Co-Holder (if any)
Please sign exactly as your name appears hereon and date. Joint owners
should each sign. Trustees and fiduciaries should indicate the capacity in which
they are signing.
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