DEF 14A of LifeMD, Inc.
Filed Apr 29, 2024 · FY20230001493152-24-017032
Proposal 1: Election of Directors
Proposal 1: Election of Directors The Company’s Board of Directors is currently comprised of nine directors. A total of nine directors will be elected at the Annual Meeting to serve until the next annual meeting of stockholders to be held in 2025, and until their successors are duly elected and qualified. Justin Schreiber, Naveen Bhatia, Dr. Joseph V. DiTrolio, M.D., Roberto Simon, John R. Strawn, Jr., Robert Jindal and Dr. Joan LaRovere, M.D. are all standing for reelection at the Annual Meeting. In addition, William Febbo, appointed to the Board in July 2023 and recommended by a non-management director, and Dr. Calum MacRae, M.D., Ph.D. appointed to the Board in April 2024 and recommended by a non-management director, are standing for election at the Annual Meeting. The persons named as “Proxies” in the enclosed Proxy will vote the shares represented by all valid returned proxies in accordance with the specifications of the stockholders returning such proxies. If no choice has been specified by a stockholder, the shares will be voted “FOR ALL” the nominees. If at the time of the Annual Meeting any of the nominees named below should be unable or unwilling to serve, which event is not expected to occur, the discretionary authority provided in the Proxy will be exercised to vote for such substitute nominee or nominees, if any, as shall be designated by the Board of Directors.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) (1) | All Other Compensation ($)(2) | Total ($) | | Justin Schreiber | 2023 | 300,000 | 225,000 | 355,000 | - | 8,803 | 888,803 | | Chief Executive Officer(3) | 2022 | 255,000 | - | - | - | - | 255,000 | | Marc Benathen | 2023 | 425,000 | 170,000 | 1,991,838 | - | 13,728 | 2,600,566 | | Chief Financial Officer (4) | 2022 | 378,750 | - | 997,750 | - | 10,820 | 1,387,320 | | Stefan Galluppi | 2023 | 300,000 | 275,000 | 1,012,500 | - | 10,284 | 1,597,784 | | Chief Innovation Officer (5) | | | | | | | |
Summary Compensation Table
| (1) Amounts reflect the aggregate grant date fair value of restricted stock units and stock options, computed in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 718, Stock Compensation. These amounts do not reflect the actual economic value that will be realized by the employee upon the vesting, settlement or exercise of the stock option and/or stock award. The assumptions that we used to calculate these amounts are discussed in Note 2 to our audited consolidated financial statements for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on March 11, 2024. The value of Mr. Benathen’s and Mr. Galluppi’s performance-based restricted stock in the “Stock Awards” column assumes target performance over the performance period and is consistent with the estimate of aggregate compensation cost to be recognized over the performance period determined as of the grant date under ASC Topic 718, excluding the effect of estimated forfeitures. The value at the grant date assuming maximum performance is $1,991,838 and $405,000 for Mr. Benathen’s and Mr. Galluppi’s performance-based restricted stock, respectively. | | (2) Amounts include Company contributions to each Named Executive Officer’s 401(k) accounts. | | (3) Mr. Schreiber became the Company’s President and Chief Executive Officer on February 2, 2018. Pursuant to the Schreiber Consulting Agreement (as defined below), Mr. Schreiber, as President of JLS Ventures, LLC, served as the Company’s Chief Executive Officer and Chairman of the Board of Directors, and received a monthly cash payment of $15,000 through March 31, 2022. Pursuant to the Schreiber Employment Agreement (as defined below), effective April 1, 2022, Mr. Schreiber receives an annual base salary of $300,000 and is eligible to receive a performance bonus with a target amount of 75% of the base salary. Effective November 13, 2023, Mr. Schreiber entered into a first amendment to the Schreiber Employment Agreement (as defined below). Mr. Schreiber received the following award pursuant to the first amendment to the Schreiber Employment Agreement: 50,000 restricted shares of common stock, vesting on January 1, 2024. | | (4) Mr. Benathen was appointed Chief Financial Officer of the Company on February 4, 2021. Pursuant to the Benathen Employment Agreement (as defined below), Mr. Benathen received an annual base salary of $325,000 and is eligible to receive a performance bonus with a target amount of 40% of the base salary. In 2021, Mr. Benathen was granted: (i) 15,000 restricted stock units of the Company’s common stock and (ii) stock options to purchase up to 200,000 shares of the Company’s common stock. | | Pursuant to the first amendment to the Benathen Employment Agreement (as defined below), on January 27, 2022, Mr. Benathen was granted long-term incentive awards of 75,000 restricted stock units and 250,000 performance share units. Effective April 1, 2022, Mr. Benathen’s annual base salary was increased to $425,000. |
Summary Compensation Table
| Pursuant to the second amendment to the Benathen Employment Agreement (as defined below), on July 11, 2023, Mr. Benathen was granted long-term incentive awards of: (i) 125,000 restricted shares of common stock, with 50,000 restricted shares vesting on January 1, 2024; and 75,000 restricted shares vesting on January 1, 2025; (ii) 261,250 restricted shares of common stock vesting upon achievement of net revenue and adjusted EBITDA margin milestones for the healthcare business over a four-year performance period; (iii) 150,000 restricted shares of common stock vesting based on personal performance over a two-year performance period; and (iv) vesting accelerated immediately on 25,000 restricted stock units previously granted to Mr. Benathen under the first amendment to the Benathen Employment Agreement, in exchange for the cancellation of stock options exercisable for 200,000 shares of the Company’s common stock, which were granted pursuant to the Benathen Employment Agreement, and 250,000 performance share units, which were granted pursuant to the first amendment to the Benathen Employment Agreement. | | (5) Mr. Galluppi currently serves as Chief Innovation Officer of the Company. Pursuant to the Galluppi Employment Agreement (as defined below), Mr. Galluppi received an annual base salary of $300,000 and is eligible to receive a performance bonus with a target amount of $100,000. Pursuant to the fourth amendment to the Galluppi Employment Agreement (as defined below), on October 12, 2023, Mr. Galluppi was granted long-term incentive award of: (i) 90,000 restricted shares of common stock, with 30,000 restricted shares vesting on January 1, 2024 and 60,000 restricted shares vesting on January 1, 2025; and (ii) 60,000 restricted shares of common stock vesting based on personal performance over a two-year performance period. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End Listed below is information with respect to equity incentive plan awards for each Named Executive Officer outstanding as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year End
| | Option Awards | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Option Exercise Price | Option Expiration | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | Name | Exercisable | Unexercisable | ($) | Date | (#) (4) | ($) (4) | (#) (5) | ($) (5) | | Justin Schreiber(1) | - | - | - | - | 50,000 | 414,500 | - | - | | Marc Benathen(2) | - | - | - | - | 128,750 | 1,067,338 | 411,152 | 3,409,263 | | Stefan Galluppi(3) | - | - | - | - | 90,000 | 746,100 | 60,000 | 497,400 |
Outstanding Equity Awards at Fiscal Year End
| (1) Mr. Schreiber’s 50,000 restricted shares granted on November 13, 2023 vested on January 1, 2024. | | (2) Mr. Benathen’s 15,000 restricted stock units granted on February 4, 2021 vest as follows: (i) 3,750 of the restricted stock units vested on February 4, 2021, (ii) 3,750 restricted stock units vested on February 4, 2022 (iii) 3,750 restricted stock units vested on February 4, 2023 and (iv) 3,750 restricted stock units vested on February 4, 2024. Mr. Benathen’s 75,000 restricted stock units granted on January 27, 2022 vest as follows: (i) 25,000 of the restricted stock units vested on the grant date, (ii) 25,000 of the restricted stock units vested on January 27, 2023 and (iii) 25,000 restricted stock units vested on an accelerated basis pursuant to the Second Benathen Amendment on July 11, 2023. Mr. Benathen’s 125,000 restricted shares granted on July 11, 2023 vest as follows: (i) 50,000 of the restricted shares vested on January 1, 2024 and (ii) 75,000 restricted shares vest on January 1, 2025. Mr. Benathen’s 411,250 restricted performance shares vest upon the achievement of: (1) key revenue and EBITDA milestones and (2) based on personal performance over a two-year performance. | | (3) Mr. Galluppi’s 90,000 restricted shares granted on October 12, 2023 vest as follows: (i) 30,000 of the restricted shares vested on January 1, 2024; and (ii) 60,000 of the restricted shares vest on January 1, 2025. Mr. Galluppi’s 60,000 restricted performance shares vest based on personal performance over a two-year performance period. | | (4) Market value is calculated by multiplying the closing market price of a share of the Company’s common stock at December 29, 2023 ($8.29) by the number of units. | | (5) Performance-based restricted stock units are valued at the target award level. Market value is calculated by multiplying the closing market price of a share of the Company’s common stock at December 29, 2023 ($8.29) by the number of units. |
Pay Versus Performance Table
Pay Versus Performance Table The table below shows the following information for the past three fiscal years: (i) “Total” compensation for our Named Executive Officers (each an “NEO”) for purposes of the “Summary compensation table”; (ii) the “Compensation actually paid” to Named Executive Officers (calculated using rules required by the SEC); (iii) our cumulative total shareholder return (“TSR”), and (iv) our net loss. Compensation actually paid does not represent the value of cash and shares of the Company’s common stock received by Named Executive Officers during the year, but rather is an amount calculated under SEC rules and includes, among other things, year-over-year changes in the value of unvested equity-based awards. As a result of the calculation methodology required by the SEC, Compensation actually paid amounts below differ from compensation actually received by the individuals.
Pay Versus Performance Table
| | | | | | Value Of Initial Fixed $100 Investment Based On: | | | | Summary Compensation Table Total for CEO(1)(2) ($) | Compensation Actually Paid to CEO(1)(2) ($) | Average Summary Compensation Table Total for Other NEOs(1)(2) ($) | Average Compensation Actually Paid to Other NEOs(1)(2) ($) | Total Shareholder Return(3) ($) | Net Loss ($ in thousands) | | 2023 | 888,803 | 948,303 | 2,099,175 | 2,820,243 | 105.61 | (17,839) | | 2022 | 255,000 | 255,000 | 1,078,398 | 441,541 | 29.71 | (45,021) | | 2021 | 180,000 | 180,000 | 5,862,099 | 1,211,572 | 59.26 | (61,324) |
Pay Versus Performance Table
| (1) For 2023, the CEO was Mr. Schreiber, and the other NEOs were Marc Benathen and Stefan Galluppi. For 2022, the CEO was Mr. Schreiber, and the other NEOs were Marc Benathen and Eric Yecies. For 2021, the CEO was Mr. Schreiber, and the other NEOs were Marc Benathen and Alex Mironov. | | (2) A reconciliation of Total compensation from the Summary Compensation Table (“SCT”) to Compensation actually paid to our CEO and the average of our Other NEOs is shown below: |
Pay Versus Performance Table
| | 2023 | | 2022 | | 2021 | | | Adjustments | CEO ($) | Average of Other NEOs ($) | CEO ($) | Average of Other NEOs ($) | CEO ($) | Average of Other NEOs ($) | | Total Compensation From SCT | 888,803 | 2,099,175 | 255,000 | 1,078,398 | 180,000 | 5,862,099 | | Adjustments for defined benefit and actuarial pension plans: | — | — | — | — | — | — | | Adjustments for stock awards: | | | | | | | | (Subtraction): SCT amounts | (355,000) | (1,502,169) | — | (717,613) | — | (5,483,557) | | Addition: Fair value at year-end of awards granted during the covered fiscal year that are outstanding and unvested at year-end | 414,500 | 2,288,006 | — | 417,100 | — | 602,269 | | Addition (Subtraction): Year-over-year change in fair value of awards granted in any prior fiscal year that are outstanding and unvested at year-end | — | 11,906 | — | (131,256) | — | — | | Addition: Vesting date fair value of awards granted and vesting during such year | — | — | — | 57,563 | — | 230,761 | | Addition (Subtraction): Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during such year | — | 39,169 | — | (262,651) | — | — | | (Subtraction): Fair value at end of prior year of awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during such year | — | (115,844) | — | — | — | — | | Addition: Dividends or other earnings paid on stock or option awards in the covered year prior to vesting if not otherwise included in the total compensation for the covered year | — | — | — | — | — | — | | Compensation Actually Paid (as calculated) | 948,303 | 2,820,243 | 255,000 | 441,541 | 180,000 | 1,211,572 |
Pay Versus Performance Table
| (3) Our cumulative total shareholder return is based on a fixed investment of one hundred dollars in our common stock measured from the market close on December 31, 2020 (the last trading day of 2020) through and including the end of the fiscal year for each year reported in the table, and reinvestment of all dividends during such period. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation Table
Director Compensation Table The following Director Compensation Table sets forth information concerning compensation for services rendered by our non-employee directors for the fiscal year ended December 31, 2023:
Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Total ($) | | Naveen Bhatia | - | 670,500 | - | 670,500 | | Dr. Joseph V. DiTrolio, M.D. | - | - | - | - | | Roberto Simon | 30,000 | 192,000 | - | 222,000 | | John R. Strawn, Jr. | 30,000 | 179,500 | - | 209,500 | | Bertrand Velge (2) | - | - | - | - | | Robert Jindal | 24,000 | 670,500 | - | 694,500 | | Kathleen E. Walsh (3) | - | - | - | - | | Dr. Joan LaRovere, M.D. (4) | 24,000 | 141,750 | 70,875 | 236,625 | | William Febbo (5) | - | 1,054,500 | 104,625 | 1,159,125 |
Director Compensation Table
| (1) Amounts reflect the aggregate grant date fair value of restricted shares and stock options, computed in accordance with the provisions of ASC Topic 718, Stock Compensation. These amounts do not reflect the actual economic value that will be realized by the director upon the vesting, settlement or exercise of the stock option and/or stock award. The assumptions that we used to calculate these amounts are discussed in Note 2 to our audited consolidated financial statements for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on March 11, 2024. | | (2) Mr. Velge resigned as a member of the Board of Directors on November 8, 2023. | | (3) Ms. Walsh was appointed as a member of the Board of Directors on December 15, 2022. Ms. Walsh resigned from the Board of Directors on February 9, 2023 in connection with her appointment as the Secretary of the Executive Office of Health and Human Services for the Commonwealth of Massachusetts. Ms. Walsh forfeited her stock awards and option awards when she resigned from the Board. | | (4) Dr. LaRovere was appointed as a member of the Board of Directors on February 9, 2023. | | (5) Mr. Febbo was appointed as a member of the Board of Directors on June 20, 2023. |
Director Compensation Table
The table below sets forth the stock options and restricted shares outstanding for each of our non-employee directors as of December 31, 2023:
Director Compensation Table
| Name | Aggregate Number of Option Awards Outstanding at December 31, 2023 | Aggregate Number of Stock Awards Outstanding at December 31, 2023 | | Naveen Bhatia | 100,000(1) | 112,500(1) | | Dr. Joseph V. DiTrolio, M.D. | 95,000 | - | | Roberto Simon | - | - | | John R. Strawn, Jr. | 120,000 | - | | Bertrand Velge | 20,000 | - | | Robert Jindal | - | 150,000(1) | | Kathleen E. Walsh | - | - | | Dr. Joan LaRovere, M.D. | 37,500 | 37,500 | | William Febbo | 37,500 | 287,500(2) |
Director Compensation Table
| (1) On June 14, 2023, the Company and Naveen Bhatia and Robert Jindal each entered into a consulting agreement, whereby Mr. Bhatia and Mr. Jindal will provide certain strategic business development services. Pursuant to the consulting agreements, Mr. Bhatia and Mr. Jindal each received 225,000 restricted shares of the Company’s common stock, each with a grant date fair value of $670,500, which will vest in six month installments from June 14, 2023 through December 14, 2024. | | (2) On May 30, 2023, the Company and William Febbo entered into a consulting agreement, whereby Mr. Febbo will provide certain investor relations and strategic business development services. Pursuant to the consulting agreement, Mr. Febbo received 375,000 restricted shares of the Company’s common stock, with a grant date fair value of $787,500, which will vest in quarterly installments from August 30, 2023 through November 30, 2024. |