DEF 14A of Xponential Fitness, Inc.
Filed Apr 18, 2024 · FY20230001140361-24-020435
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS We currently have six (6) directors on our Board of Directors. At the Annual Meeting, two (2) nominees for Class III Directors, Mr. Anthony Geisler and Mr. Mark Grabowski, are to be elected to hold office until the annual meeting of stockholders to be held in 2027, until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. The proposal regarding the election of director requires the approval of a plurality of the votes cast. This means that the nominees receiving the highest number of affirmative “FOR” votes will be elected as Class III Directors. Votes withheld and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal. As set forth in our Amended and Restated Certificate of Incorporation (“Amended and Restated Certificate of Incorporation”), the Board of Directors is currently divided into three classes with staggered, three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. The current class structure is as follows: Class I, whose term currently expires at the 2025 annual meeting of stockholders; Class II, whose term currently expires at the 2026 annual meeting of stockholders; and Class III, whose term will expire at the Annual Meeting and whose subsequent term will expire at the 2027 annual meeting of stockholders. The current Class I Directors are Brenda Morris and Jeffrey Lawrence; the current Class II Directors are Chelsea A. Grayson and Jair Clarke; and the current Class III Directors are Mark Grabowski and Anthony Geisler. Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that the authorized number of directors may be changed from time to time by the Board of Directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as equally as possible, each class will consist of one-third of the directors. The division of our Board of Directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of our Company. Our directors may be removed only for cause by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock entitled to vote in the election of directors. If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote the Shares represented thereby for the election as Class III Directors of the persons whose names and biographies appear below. In the event that Mr. Geisler and Mr. Grabowski should become unable to serve, or for good cause will not serve, as a director, it is intended that votes will be cast for a substitute nominee designated by the Board of Directors, or the Board may elect to reduce its size. The Board of Directors has no reason to believe that Mr. Geisler and Mr. Grabowski will be unable to serve if elected. Mr. Geisler and Mr. Grabowski have consented to being named in this proxy statement and to serve if elected.
Nominees For Class III Directors (terms to expire at the 2027 annual meeting of stockholders)
Nominees For Class III Directors (terms to expire at the 2027 annual meeting of stockholders) The current members of the Board of Directors who are also the nominees for election to the Board of Directors as Class III Directors are as follows:
Nominees For Class III Directors (terms to expire at the 2027 annual meeting of stockholders)
| Name | Age | Served as a Director Since | Position | | Anthony Geisler | 47 | 2017 | Founder, Chief Executive Officer, and Director Nominee | | Mark Grabowski | 48 | 2017 | Chairman of the Board and Director Nominee |
Nominees For Class III Directors (terms to expire at the 2027 annual meeting of stockholders)
The principal occupations and business experience of the Class III Director nominees for election at the 2024 Annual Meeting are as follows: Anthony Geisler is our founder and has served as our Chief Executive Officer and on our Board of Directors since 2017. Mr. Geisler began his career in fitness with the purchase of LA Boxing in 2001. He franchised the brand and built it into the largest boxing, kickboxing, and mixed martial arts fitness franchise in the country. Mr. Geisler sold the business to UFC Gym in 2012. In 2015, Mr. Geisler purchased Club Pilates, which at the time had about 30 locations. Mr. Geisler served as CEO and led the company through robust growth, roughly quadrupling the number of open studio locations, before selling a stake of the company to private equity firm TPG Growth in May 2017. Later in 2017, Mr. Geisler created Xponential Fitness, with the vision of integrating leading boutique fitness brands across all fitness verticals on one platform. In addition to Club Pilates, he has brought 10 other brands onto the platform since, creating the largest boutique fitness franchise company in the world, with over 2,600 global locations as of December 31, 2023. The addition of Lindora in January 2024 complements our existing brands and will help us deliver on consumers’ increasing demand for a holistic approach to health. Mr. Geisler holds a B.A. from University of Southern California. We believe Mr. Geisler is qualified to serve on our Board of Directors because he is a fitness industry veteran with more than 19 years of experience and an accomplished entrepreneur. Furthermore, Mr. Geisler has accumulated extensive perspective, operational insight and expertise as our founder and Chief Executive Officer. Mark Grabowski has served as the Chairman of the Board of Directors since May 2017. Mr. Grabowski is a Managing Partner at Snapdragon Capital Partners, which he founded in 2018, where he focuses on health and wellness as a core vertical of investment. From August 2016 to June 2018, Mr. Grabowski was a partner at TPG Growth, where he oversaw the platform’s consumer investments. From January 2007 to August 2016, Mr. Grabowski was a Managing Director at L Catterton, a middle market consumer-focused private equity firm. Mr. Grabowski has prior private equity experience at AEA Investors and American Capital Strategies. Mr. Grabowski holds an A.B. degree in Economics from Dartmouth College and an M.B.A. from The Wharton School of the University of Pennsylvania. We believe Mr. Grabowski is qualified to serve on our Board of Directors because of his extensive business and investment expertise and his knowledge of the Company and our industry. Continuing members of the Board of Directors: The current members of the Board of Directors who are Class II Directors (terms to expire at the 2026 annual meeting of stockholders) and Class I Directors (terms to expire at the 2025 annual meeting of stockholders) are as follows:
Nominees For Class III Directors (terms to expire at the 2027 annual meeting of stockholders)
| Name | Class | Age | Served as a Director Since | Position | | Jair Clarke | II | 42 | 2022 | Director | | Chelsea A. Grayson | II | 52 | 2021 | Director | | Jeffrey Lawrence | I | 50 | 2024 | Director | | Brenda Morris | I | 58 | 2019 | Director |
Nominees For Class III Directors (terms to expire at the 2027 annual meeting of stockholders)
The principal occupations and business experience of each of Class II and Class I Directors are as follows:
Human Capital Management Committee
| • | reviewing and recommending to our Board of Directors the compensation of our directors; |
Summary Compensation Table
Summary Compensation Table The following table sets forth information concerning the compensation paid to our principal executive officer and our two other most highly compensated executive officers (our “Named Executive Officers” or “NEOs”) during our fiscal year ended December 31, 2023, 2022 and 2021.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Awards(2)(3)(4) ($) | Non-Equity Incentive Plan Compensation(5) ($) | All Other Compensation(6) ($) | Total ($) | | Anthony Geisler Chief Executive Officer | 2023 | 600,000 | — | 695,886 | 648,973 | 22,754 | 1,967,613 | | | 2022 | 600,000 | — | 6,294,303 | — | 1,615 | 6,895,918 | | | 2021 | 492,308 | 415,068 | 15,911,118 | — | 247,545 | 17,066,039 | | John Meloun Chief Financial Officer | 2023 | 367,747 | 400,000 | 182,670 | 243,814 | 31,239 | 1,225,470 | | | 2022 | 310,961 | — | 4,720,708 | — | 42,323 | 5,073,992 | | | 2021 | 300,000 | 150,000 | 870,951 | — | 40,138 | 1,361,089 | | Andrew Hagopian(7) Chief Legal Officer | 2023 | 308,846 | — | 3,599,142 | 175,678 | 8,735 | 4,092,401 |
Summary Compensation Table
| (1) Reflects bonus earned for annual performance for each named executive officer pursuant to our annual cash bonus program. For Mr. Meloun, the 2023 bonus reflects a special cash bonus of $400,000 approved on February 23, 2024, by the Human Capital Management Committee payable in 2024, in recognition of his performance in connection with certain financing transactions during 2023. |
Summary Compensation Table
| (2) Reflects the grant date value of stock-based awards granted during the applicable year as calculated using the Black-Scholes method in accordance with ASC 718. The underlying assumptions made in 2021 for this valuation are set forth in Note 13 to our consolidated financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. |
Summary Compensation Table
| (3) FY 21 amounts reflect the incremental fair value associated with the modification of the performance vesting of outstanding LLC Units of Xponential Holdings LLC in connection with the IPO determined in accordance with ASC 718. Assumptions made in the course of this valuation are set forth in Note 13 to our consolidated financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. For Mr. Geisler, the incremental fair value was $14,632,211, and for Mr. Meloun, the incremental fair value was $870,951. |
Summary Compensation Table
| (4) Reflects the aggregate grant date fair value of restricted stock units granted to each of our named executive officers determined in accordance with ASC 718. The underlying assumptions made for this valuation are set forth in Note 13 to our consolidated financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. |
Summary Compensation Table
| (5) Reflects the 2023 annual bonuses, which were paid in the form of fully-vested RSUs to the applicable named executive officers in February 2024. The bonus was earned based on performance against pre-determined goals for 2023 adjusted EBITDA. The 2023 bonus reflects the aggregate grant date fair value of the 2023 annual bonuses that were granted as RSUs, computed in accordance with FASB Accounting Standards Codification Topic 718 (“ASC 718”). |
Summary Compensation Table
| (6) Reflects the matching contributions to the 401(k) plan, and our payments to cover the employee portion of medical and dental insurance coverage for each executive officer. For Mr. Geisler, this amount also reflects parking expenses of $21,600 for 2023 and consulting fees paid to Mr. Geisler by H&W Investco Management LLC for services rendered to us pursuant to the Consulting Agreement totaling $233,333 for 2021. For Mr. Meloun, this amount also reflects reimbursement of travel fees totaling $25,000 for each year presented. |
Summary Compensation Table
| (7) Mr. Hagopian was hired as Chief Legal Officer in February 2023. |
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control Pursuant to the Geisler Employment Agreement, if Mr. Geisler’s employment is terminated (i) by us without “cause” (as defined in the Geisler Employment Agreement), (ii) by Mr. Geisler for “good reason” (as defined in the Geisler Employment Agreement) or (iii) as a result of Mr. Geisler’s death or disability, and Mr. Geisler executes a release of all claims in substance and form satisfactory to us, Mr. Geisler will be entitled to severance payments of 12 months’ base salary, payable in periodic installments according to our regular payroll practices. In addition, Mr. Geisler will be entitled to (i) reimbursement for the cost of COBRA coverage until Mr. Geisler is covered under different health insurance, (ii) subject to the business’s achievement of 90% of its EBITDA budget for the year of termination, full acceleration of the Geisler Equity Grant, (iii) full acceleration of any other equity grant, stock options or long term incentive benefits and (iv) if Mr. Geisler’s termination occurs more than six months into the Company’s calendar year, a prorated annual bonus.
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table sets forth information concerning outstanding equity incentive plan awards for our Named Executive Officers as of the end of our fiscal year ended December 31, 2023.
Outstanding Equity Awards at Fiscal Year End
| | Stock Awards | | | Name | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | | Anthony Geisler | 241,593(2) | 3,114,134 | | John Meloun | 181,194(3) | 2,335,591 | | Andrew Hagopian | 220,021(4) | 2,836,071 |
Outstanding Equity Awards at Fiscal Year End
| (1) Reflects the value of each award based on the value of a share of Class A common stock as of December 29, 2023, the last business day of the fiscal year, which was $12.89 per unit. |
Outstanding Equity Awards at Fiscal Year End
| (2) Represents unvested portion of 322,124 RSUs granted on March 4, 2022, which settle in shares of Class A common stock on a one-for-one basis. The award vests 25% each year at the first anniversary of the grant date and on the same date over the subsequent three years, subject to continued service through such date. |
Outstanding Equity Awards at Fiscal Year End
| (3) Represents unvested portion of 241,592 RSUs granted on March 4, 2022, which settle in shares of Class A common stock on a one-for-one basis. The award vests 25% each year at the first anniversary of the grant date and on the same date over the subsequent three years, subject to continued service through such date. |
Outstanding Equity Awards at Fiscal Year End
| (4) Represents 200,000 RSUs granted on October 9, 2023, which settle in shares of Class A common stock on a one-for-one basis. The award vests 25% each year at the first anniversary of the grant date and on the same date over the subsequent three years, subject to continued service through such date. Additionally, includes 20,021 RSUs granted on February, 23, 2023, which settle in shares of Class A common stock on a one-for-one basis. The award vests 33% each year at the first anniversary of the grant date and on the same date over the subsequent two years, subject to continued service through such date. |
Non-Employee Director Compensation
Non-Employee Director Compensation The table below shows the equity and other compensation granted to our non-employee directors for fiscal 2023.
Non-Employee Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Total ($) | | Brenda Morris | 149,517 | 86,131 | 235,648 | | Mark Grabowski | 137,001 | 86,131 | 223,132 | | Chelsea A. Grayson | 102,140 | 86,131 | 188,271 | | Jair Clarke | 98,515 | 24,079 | 122,594 |
Non-Employee Director Compensation
| (1) As of December 31, 2023, our non-employee directors held unvested RSUs in the following amounts: Ms. Morris: 2,901, Mr. Grabowski: 2,901, Ms. Grayson: 2,901 and Mr. Clarke: 811. |
Non-Employee Director Compensation
In connection with our IPO, we adopted an Outside Director Compensation Policy, or Policy, pursuant to which our non-employee directors receive equity awards and cash retainers as compensation for service on our Board of Directors and its committees. This Policy is intended to enable us to attract qualified non-employee directors, provide them with compensation at a level that is consistent with our compensation objectives and, in the case of equity-based compensation, align their interests with those of our stockholders. Effective May 10, 2023, this Policy was updated. Under the updated Policy, non-employee directors will receive the following annual cash retainers, payable in quarterly installments:
Non-Employee Director Compensation
| • | Board member: increased from $75,000 to $78,750 |
Non-Employee Director Compensation
| • | Non-executive board chair: increased from $50,000 to $52,500 |
Non-Employee Director Compensation
| • | Lead director: increased from $20,000 to $21,000 |
Non-Employee Director Compensation
| • | Audit committee chair: increased from $18,000 to $18,900 |
Non-Employee Director Compensation
| • | Audit committee member: increased from $9,500 to $9,975 |
Non-Employee Director Compensation
| • | Human Capital Management committee chair: increased from $12,500 to $13,125 |
Non-Employee Director Compensation
| • | Human Capital Management committee member: increased from $7,500 to $7,875 |
Non-Employee Director Compensation
| • | Nominating and Corporate Governance committee chair: increased from $10,000 to $10,500 |
Non-Employee Director Compensation
| • | Nominating and Corporate Governance committee member: increased from $5,000 to $5,250 |
Non-Employee Director Compensation
Under the updated Policy, non-employee directors will also receive equity-based awards with a grant date value of $89,250, subject to continued service on the Board through the applicable vesting date(s) (which amount shall be pro-rated, as applicable, for new directors). In 2023, we made equity-based awards in the form of RSUs to each of Ms. Morris (2,901 RSUs), Mr. Grabowski (2,901 RSUs), Ms. Grayson (2,901 RSUs) and Mr. Clarke (811), which are eligible to vest, subject to continued service, in May 2024. In addition, we will reimburse all of our non-employee directors for their reasonable travel expenses incurred in attending meetings of our Board of Directors or committees. Our non-employee directors may also be eligible to receive other compensation and benefits, including reasonable personal benefits and perquisites, as determined by the Board of Directors from time to time. Pursuant to our OIP, the maximum number of shares of our Class A common stock subject to an award granted during a single fiscal year to any non-employee director, taken together with any cash fees paid during the fiscal year, in respect to the non-employee director’s service as a member of our Board of Directors during such year, shall not exceed $650,000 in total value or in the event such non-employee director is first appointed or elected to the Board of Directors, $1,000,000 in total value during the initial annual period, in each case calculating the value of any equity awards based on the grant date fair value of such equity awards for financial reporting purposes.