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Notice of Annual Meeting and Proxy Statement Annual Meeting of Stockholders Monday, June 15, 2020

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Notice of Annual Meeting and Proxy Statement Annual Meeting of Stockholders Monday, June 15, 2020 Notice of Annual Meeting and Proxy Statement Annual Meeting of Stockholders Monday, June 15, 2020 NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS OF MEDIFAST, INC. TO BE HELD ON MONDAY, JUNE 15, 2020 April 28, 2020 DEAR FELLOW STOCKHOLDERS OF MEDIFAST, INC. Notice is hereby given that the 2020 annual meeting of stockholders (the “Annual Meeting”) of Medifast, Inc. (the “Company” or “Medifast”) will be held on Monday, June 15, 2020, at 4:30 p.m. ET, at https://web.lumiagm.com/258080113, for the following purposes, as more fully described in the accompanying Proxy Statement: 1. To elect ten nominees to the Board of Directors to serve for a one year term expiring in 2021; 2. To ratify the appointment of RSM US LLP (“RSM”) as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2020; 3. To approve, on an advisory basis, the compensation of the Company’s named executive officers; 4. To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. In light of public health concerns regarding the coronavirus (“COVID-19”) outbreak, this year’s Annual Meeting will be conducted in a virtual format only in order to assist in protecting the health and wellbeing of our stockholders and employees, and to provide access to our stockholders regardless of geographic location. There is no in-person meeting for you to attend. We designed the format of this year’s Annual meeting to ensure that our stockholders who attend the Annual Meeting will be afforded similar rights and opportunities to participate as they would at an in-person meeting. Jason L. Groves, Esq. Executive Vice President, General Counsel & Corporate Secretary Whether or not you plan to attend the Annual Meeting, please vote your shares as soon as possible by telephone, via the Internet or by completing, dating, signing and returning a proxy card to ensure your shares are voted, or, if you hold your shares in street name, by following the instructions provided by your bank, broker or other nominee. Submitting your proxy now will not prevent you from voting your shares at the Annual Meeting if you desire to do so, as your proxy is revocable at your option. TABLE OF CONTENTS Page PROXY SUMMARY ..................................................... i PROXY STATEMENT .................................................... 1 2020 Annual Meeting .................................................... 1 General Information About the Annual Meeting and Voting ......................... 1 PROPOSAL 1 ELECTION OF DIRECTORS .................................... 7 INFORMATION CONCERNING OUR BOARD OF DIRECTORS ................... 14 Director Independence ................................................... 14 Board Leadership Structure ............................................... 14 Lead Director ......................................................... 15 Director Education ..................................................... 15 Director Orientation .................................................... 16 THE COMMITTEES OF THE BOARD ....................................... 16 Audit Committee....................................................... 16 Compensation Committee ................................................ 17 Nominating/Corporate Governance Committee ................................. 17 Executive Committee .................................................... 18 BOARD’S ROLE IN RISK MANAGEMENT ................................... 18 CODE OF CONDUCT AND BUSINESS ETHICS AND CORPORATE GOVERNANCE GUIDELINES ........................................................ 19 TRANSACTIONS WITH RELATED PERSONS ................................. 19 DIRECTOR MEETINGS AND ATTENDANCE ................................. 19 STOCKHOLDER OUTREACH ............................................. 20 EXECUTIVE OFFICERS ................................................. 21 EXECUTIVE COMPENSATION ............................................ 23 Compensation Discussion and Analysis (“CD&A”) ............................... 23 Compensation Committee Interlocks and Insider Participation ....................... 35 Compensation Committee Report ........................................... 35 ANALYSIS OF RISK INHERENT IN OUR COMPENSATION POLICIES AND PRACTICES ......................................................... 36 EXECUTIVE AND DIRECTOR COMPENSATION TABLES ....................... 37 PROPOSAL 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020 .......................................... 47 REPORT OF THE AUDIT COMMITTEE ...................................... 48 INFORMATION REGARDING THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S FEES, SERVICES, AND INDEPENDENCE ............... 50 PROPOSAL 3 ADVISORY VOTE ON TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS ......................................... 51 SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATIONS PLANS — DECEMBER 31, 2019 .......................................... 52 SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS ..................... 53 Page SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS ...................... 55 ADDITIONAL INFORMATION ............................................ 57 Stockholder Proposals and Nominations for Director ............................. 57 CERTAIN MATTERS RELATING TO PROXY MATERIALS AND ANNUAL REPORTS . 60 Charitable Contributions ................................................. 60 Communications with the Board or Its Committees ............................... 60 2019 Annual Report ..................................................... 60 PROXY SUMMARY This summary highlights information contained elsewhere in this Proxy Statement and does not contain all of the information that you should consider. You should read the entire Proxy Statement carefully before voting. Annual Meeting Information Date and Time Location Record Date Wednesday, June 15, 2020 Held virtually, and participants can join by April 16, 2020 4:30 p.m., Eastern Time logging in at https://web.lumiagm.com/ 258080113 Record Date Who Can Vote April 16, 2020 Holders of our common stock are entitled to vote on all matters Matters to be Voted on at the Annual Meeting and Board Recommendations Board Vote Item Proposals Recommendation Page # 1 Elect ten nominees to the Board of Directors to serve for a ✓ FOR each 7 one year term expiring in 2021 director nominee 2 Ratify the appointment of RSM as the independent registered ✓ FOR 47 public accounting firm of the Company for the fiscal year ending December 31, 2020 3 Approve, on an advisory basis, the compensation of the ✓ FOR 51 Company’s named executive officers Our Board of Directors and Board Nominees The following table provides information about our current Board of Directors and nominees. Age at Annual Director Current Committee Name Meeting Since Independent Memberships Jeffrey J. Brown 59 2015 ✓ Audit, Executive, *, + Kevin G. Byrnes 73 2013 ✓ Audit, + Daniel R. Chard 55 2016 Executive Constance J. Hallquist 56 2015 ✓ NCG (Chair), Michael A. Hoer 64 2018 ✓ Audit, + Michael C. MacDonald 66 1998 Executive (Chair), ✧ Carl E. Sassano 70 2013 ✓ CC (Chair) Scott Schlackman 62 2015 ✓ CC, NCG Andrea B. Thomas 55 2019 ✓ CC Ming Xian 56 2018 ✓ NCG ✓ Independent Director ✧ Non-Executive Chairman of the Board Audit Audit Committee NCG Nominating/Corporate Governance Committee CC Compensation Committee + Audit Committee Financial Expert Executive Executive Committee * Lead Independent Director i 2019 Business Highlights and Performance Overview 2019 was a year of focused execution of our business plan and pursuit of growth strategies. Our disciplined approach to the management of our business resulted in our continuation of improved revenues and year-over-year profitability for 2019. In addition, we raised our quarterly dividend from $0.75 per share to $1.13 per share. Our Company went global, through our brand OPTAVIA, beginning with the Asia-Pacific region, as we successfully expanded into Hong Kong and Singapore. We exceeded our goal of growing our OPTAVIA Coach Community to 30,000 active earning independent OPTAVIA Coaches two quarters early, ending 2019 with 31,800 active earning independent OPTAVIA Coaches. Our Governance Highlights Good governance is a critical part of our corporate culture. The following provides an overview of certain of our governance practices: Board of Directors Board Processes Majority vote for director elections Independent directors meet without management present Lead Independent Director Annual Board and Committee self-assessments All directors are expected to attend the Annual Board orientation program Meeting Corporate Governance Guidelines approved by Board Composition Board Number of independent directors — 8 of our Full Board regularly reviews succession planning 10 director nominees Diverse Board with different backgrounds, experience and expertise, as well as balanced mix of ages and tenure of service Unclassified Board Compensation The majority of our executive compensation is Our 2012 Plan prohibits repricing and includes a tied to performance double-trigger in the event of a Change in Control Incentive compensation is subject to potential No supplemental retirement benefits for executives recoupment under our claw back policy Officers and Directors are prohibited from Dividends and dividend equivalents that accrue on engaging in hedging transactions, monetization equity awards are paid only to the extent that the transactions or similar arrangements
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