UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


SCHEDULE 14A

(Rule 14a-101)

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MusclePharm Corporation

(NameExact name of Registrantregistrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

specified in its charter)

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May 13, 2016


October 26, 2018
Dear Fellow MusclePharm Shareholders,

When Stockholders:

I last wrote youam pleased to report that the efforts and strong contributions from my team haveaided MusclePharm in December, I said I was very bullish about my investment in MusclePharm’s future. Many events have happenedmaking significant progress toward sustainable and profitable growth.
With the previously disclosed restructuring behind us, 2017 ended with the first sequential quarterly top-line revenue growth since then to reinforce my original enthusiasm forearly 2016. Our newly crafted strategy focused the Company in four key areas:
●
Diversify our customer base.
●
Build out a world-class consumer-based marketing capability.
●
Invest in new product development.
●
Manage our costs to ensure profitable revenue growth.
In 2017, we leaned heavily into our expectation that our customers want to be able to easily find and forpurchase our products online. As such, we partnered with Amazon to optimize the brand.MusclePharm experience on that platform, resulting in a 247% year-over-year increase in associated revenue growth. We made a strategic decision to focus on the Food, Drug, Mass (“FDM”) segment and fill our retail sales leadership role. Under this FDM leadership, we have gained a deep understanding of the FDM landscape, which yielded a redesigned FDM product portfolio that is being met with strong customer feedback. Finally, we increased our international efforts and were able to shift our international portfolio from 35%in 2016 up to 40% in 2017.
We believe that it is our responsibility to be deeply in-tune with the needs of our customer base. We believe that listening to our customers is the best strategy to succeed. As part of our focus on our customers, in the fall of 2017, we relocated our corporate headquarters from Denver, Colorado to Burbank, California in order to be in closer proximity to our core consumer base and key industry influencers. We believe being in such close proximity is an advantage in our highly competitive industry.
Investment in product development is the next pillar that we believe will be essential to MusclePharm’s future success. We take pride in developing delicious, effective, and exciting supplement products, and we have renewed our efforts to do so. In the last six months,second quarter of 2017, we have strengthened the healthreintroduced our MP Natural product line. This line meets a growing trend of the business,non-GMO performance supplements and are committed to continuing to drive growth in the Company’s financialsopens a new distribution opportunity with natural retailers, as well as an opportunity to further penetrate FDM retailers. In the brand.

In 2016,third quarter of 2017, we demonstrated positive momentum yet again:

Revenue was $42.9 million forcaptured an additional portion of the first quarter;growing pre-workout market with Wreckage Pre-Workout, which includes 300 milligrams of caffeine and new-to-the-market ingredient, Vaso6. We transitioned Combat Crunch, the Bodybuilding.com three-time Protein Bar of the Year award winner, back to its original recipe late in the fourth quarter of 2017.

Operating Expenses decreased $2.6 million sequential quarter-over-quarter;
The MusclePharm team spent considerable time in 2017 evaluating and

Entered into diversifying our portfolio of products with a definitive agreement forgoal that our go-forward product line contributes to both top-line and bottom-line growth. At the sale of our wholly-owned subsidiary, BioZone Laboratories, Inc. (“BioZone”).

Althoughsame time, we have improved financial results for the past two quarters, wepartnered with our supply chain vendors to realize cost savings and negotiate terms that are not goingmutually beneficial.

We continue to slow down to celebrate. Management is focusedexecute our growth strategy and focus on executing our strategycore operations. We expect revenue to grow MusclePharm’s award-winning family of brandsas we heighten the focus on our core MusclePharm products and expand markets and product offerings to meet the expectations of both the serious fitness enthusiast and the casual weekend warrior.

develop new exciting products. We also continue to restructure our operations to allow for growth and profitabilityhave a thoughtful marketing strategy rooted in 2016 and beyond. We grew the health of the business by rationalizing SKUs and decreasing overhead spending, without sacrificing customer service, which was one of my top priorities. We also saw significant improvement in fulfillment rates due to the reduction in SKUs and aligning inventory levels with customer demand.

As I previously discussed, I have identified supply chain issues as one of our primary challenges,consumer insights and we are working on measures to address this critical area.bring additional product innovation to the market. We continue to target improvementhave improved manufacturing and distribution infrastructure in fill rates from our current run rate, whicha way that we believe would provide a significant incremental addition to operating income.

The agreement for the sale of BioZone goes a long way toward my goal of focusing the organization on sales and marketing, allowing us to concentrate on our core competencies while leaving other aspects of the business to strategic partners or outside parties who can bring more expertise to other areas.

At MusclePharm, we exist to serve athletes of all kinds and ensure the products we provide are safe, effective and support their goals to push harder and be the best. Our success is determined by our ability to innovate, inspire and exceed athlete expectations. In recent months, we introduced many innovative products that expanded business: 100% whey, flavor additions to the successful Combat Crunch Bar, and MusclePharm Pro-Gels.

We have many challenges ahead, but we believe we have the plans, expertise, and strategies to overcome them and continue to enhance shareholder value.

supports expense management.
Sincerely yours,
/s/ Ryan Drexler
Ryan Drexler
Interim
Chief Executive Officer and Interim President

Denver, Colorado

May 13, 2016

Burbank, California
October 26, 2018
Important notice regarding the Internet availability of proxy materials for the stockholders meeting to be held on December 7, 2018. Stockholders may access, view and download the 2018 Proxy Statement and the 2017 Annual Report on Form 10-K at www.musclepharm.com.
i
MusclePharm Corporation

4721 Ironton Street

Denver, CO 80239

4400 Vanowen St.
Burbank, CA 91505
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

June 27, 2016

December 7, 2018
The Annual Meeting of the Stockholders of MusclePharm Corporation (the “Company”) will be held on June 27, 2016December 7, 2018 at 11:00 a.m. Mountain DaylightPacific Time, at MusclePharm Corporation, 4721 Ironton Street, Denver, CO, 80239,4400 Vanowen St., Burbank, CA 91505, for the following purposes:

To elect four (4) members of the Board of Directors to hold office until the next annual meeting or until their successors are duly elected and qualified;

To ratify the appointment of EKS&H LLLP as the Independent Registered Public Accounting Firm of the Company for our fiscal year ending December 31, 2016;
●To elect four (4) members of the Board of Directors to hold office until the next annual meeting or until their successors are duly elected and qualified;

To hold an advisory vote on executive compensation;

To hold an advisory vote on the frequency of the advisory vote on executive compensation; and
●To ratify the appointment of Plante & Moran, PLLC as the Independent Registered Public Accounting Firm of the Company for our year ending December 31, 2018;

To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

●To hold an advisory vote on executive compensation; and
●To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
The Board of Directors recommends that you vote FOR all of the proposed agenda items disclosed herein.

These items of business are more fully described in the proxy statement accompanying this notice. The Board of Directors has fixed the close of business on May 11, 2016October16,2018 as the record date for the determination of stockholders entitled to receive notice of, and to vote at, the Annual Meeting of Stockholders, or at any adjournments of the Annual Meeting of Stockholders.

In order to ensure your representation at the Annual Meeting of Stockholders, you are requested to submit your proxy by mail. If you attend the Annual Meeting of Stockholders and file with the Corporate Secretary of the Company an instrument revoking your proxy or a duly executed proxy bearing a later date, your proxy will not be used.

All stockholders are cordially invited to attend the Annual Meeting of Stockholders.

A Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy materials, including this Proxy Statement and our 2017 Annual Report on Form 10-K, is being mailed to stockholders on or about October 26, 2018. The Notice also provides instructions on how to vote over the Internet, by phone or by mail. If you receive a Notice by mail, you will not receive printed and mailed proxy materials unless you specifically request them.

By Order of the Board of Directors

MusclePharm Corporation

/s/ Ryan Drexler
Ryan Drexler
Chairman of the Board of Directors

Denver, CO

May 13, 2016

Burbank, CA
October 26, 2018
ii
Table of Contents

PROXY STATEMENT

  1

EXECUTIVE OFFICERS

AND DIRECTORS		  43

EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)

  1511

EXECUTIVE COMPENSATION PRACTICES

17

THE EXECUTIVE COMPENSATION DECISION MAKING PROCESS

17

ELEMENTS OF EXECUTIVE COMPENSATION

  1912

COMPENSATION COMMITTEE REPORT

25

COMPENSATION OF EXECUTIVE OFFICERS

  2614

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

35

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  3617

EQUITY COMPENSATION PLAN INFORMATION

  3818

AUDIT COMMITTEE REPORT

  3918

RELATED PARTY TRANSACTIONS

  4019

PROPOSAL 1 ELECTION OF DIRECTORS

  4322

PROPOSAL 2 RATIFICATION OF APPOINTMENT OF EXTERNAL AUDITORS

  4423

PROPOSAL 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION

  4624

PROPOSAL 4 ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION

47

HOUSEHOLDING OF PROXY MATERIALS

  4824

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

  4926

OTHER MATTERS

  5026

iii
MusclePharm Corporation

4721 Ironton Street

Denver, CO 80239

4400 Vanowen St.,
Burbank, CA 91505
PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS

June 27, 2016

December 7, 2018
INFORMATION CONCERNING SOLICITATION AND VOTING

General

This proxy statement is furnished in connection with the solicitation of proxies for use prior to or at the Annual Meeting of Stockholders (the “Annual Meeting”) of MusclePharm Corporation (together with its subsidiaries, herein referred to as the “Company”), a Nevada corporation, to be held at 11:00 a.m. Mountain DaylightPacific Time on June 27, 2016December 7, 2018 and at any adjournments or postponements thereof for the following purposes:

To elect four (4) members of the Board of Directors to hold office until the next annual meeting or until their successors are duly elected and qualified;

To ratify the appointment of EKS&H LLLP as the Independent Registered Public Accounting Firm of the Company for our fiscal year ending December 31, 2016;
●To elect four (4) members of the Board of Directors to hold office until the next annual meeting or until their successors are duly elected and qualified;

To hold an advisory vote on executive compensation;

To hold an advisory vote on the frequency of the advisory vote on executive compensation; and
●To ratify the appointment of Plante & Moran, PLLC as the Independent Registered Public Accounting Firm of the Company for the year ending December 31, 2018;

To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

●To approve, on an advisory basis, the compensation of the Company’s named executive officers; and
●To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
We made this proxy statement and accompanying form of proxy available to stockholders beginning on May 13, 2016.

October 26,2018.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on June 27, 2016:

December 7, 2018:

This proxy statement, form of proxy and the Company’s 20152017 Annual Report on Form 10-K are available electronically at our website at www.musclepharmcorp.com.

Solicitation

This solicitation is made on behalf of our Board of Directors. The Company will bear the costs of preparing, mailing, and other costs of the proxy solicitation made by our Board of Directors. Certain of our officers and employees may solicit the submission of proxies authorizing the voting of shares in accordance with the Board of Directors’ recommendations. Such solicitations may be made by telephone, facsimile transmission or personal solicitation. No additional compensation will be paid to such officers, directors or regular employees for such services. We will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in sending proxy material to stockholders.

Voting Rights and Outstanding Shares

Only holders of record of our common stock as of the close of business on May 11, 2016October 16, 2018 are entitled to receive notice of, and to vote at, the Annual Meeting. The outstanding common stock constitutes the only class of our

securities entitled to vote at the Annual Meeting, and each holder of common stock shall be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting. At the close of business on May 11, 2016,October 22, 2018, there were 13,634,68015,314,667 shares of common stock issued and outstanding, which were held by approximately 341309 holders of record.


A quorum of stockholders is necessary to take action at the Annual Meeting. Stockholders representing a majority of the outstanding shares of our common stock present in person or represented by proxy with authority to vote on at least one matter to be presented at the meeting, which includes brokers who are able to vote on any of the routine matters presented at the Annual Meeting, will constitute a quorum. We will appoint an election inspector for the meeting to determine whether or not a quorum is present and to tabulate votes cast by proxy or in person at the Annual Meeting.

We have adopted a plurality vote standard for director elections.

All otherof our proposals require the affirmative vote of holders of a majority of outstanding shares present in person or by proxy and entitled to vote at the Annual Meeting. Abstentions have the same effect as negative votes on such proposals. Broker non-votes are not counted for any purpose in determining whether proposals have been approved.

Voting by Proxy by Mail

Stockholders whose shares are registered in their own names may vote by proxy by mail. Instructions for voting by proxy by mail are set forth on the Notice of Proxy Materials mailed to you, or on the proxy card mailed to you if you chose to receive materials by mail.

If you sign and return a proxy card by mail but do not give voting instructions, your shares will be voted (1) FOR ALL of the four (4) nominees named in Proposal No. 1 in this proxy statement; (2) FOR the ratification of the appointment of EKS&H LLLPPlante & Moran, PLLC as the Independent Registered Public Accounting Firm for the Company for the fiscal year ending December 31, 2016;2018; (3) FOR the approval of compensation of our named executive officers (“NEOs”) as disclosed in this proxy statement; and (4) as the proxy holders deem advisable, in their discretion, on other matters that may properly come before the Annual Meeting.

If your shares are held in street name, the voting instruction form sent to you by your broker, bank or other nominee should indicate whether the institution has a process for beneficial holders to provide voting instructions over the Internet or by telephone. A number of banks and brokerage firms participate in a program that permits stockholders whose shares are held in street name to direct their vote over the Internet or by telephone. If your bank or brokerage firm gives you this opportunity, the voting instructions from the bank or brokerage firm that accompany this proxy statement will tell you how to use the Internet or telephone to direct the vote of shares held in your account. If your voting instruction form does not include Internet or telephone information, please complete and return the voting instruction form in the self-addressed, postage-paid envelope provided by your broker. Stockholders who vote by proxy over the Internet or by telephone need not return a proxy card or voting instruction form by mail, but may incur costs, such as usage charges, from telephone companies or Internet service providers.

Voting in Person at the Annual Meeting

If you plan to attend the Annual Meeting and wish to vote in person, you will be given a ballot at the Annual Meeting. Please note, however, that if your shares are held in “street name,” which means your shares are held of record by a broker, bank or other nominee, and you wish to vote at the Annual Meeting, you must bring to the Annual Meeting a legal proxy from the broker, bank or other nominee who is the record holder of the shares, authorizing you to vote at the Annual Meeting.

Revocability of Proxies

Any proxy may be revoked at any time before it is exercised by filing with the Company’s Corporate Secretary an instrument revoking it or by submitting prior to the time of the Annual Meeting a duly executed proxy bearing a later date. Stockholders who have executed and returned a proxy and who then attend the Annual Meeting and desire to vote in person are requested to so notify the Corporate Secretary in writing prior to the time of the Annual Meeting. We request that all such written notices of revocation to the Company be addressed to Corporate Secretary, MusclePharm Corporation, at the address of our principal executive offices at 4721 Ironton Street, Denver, CO 80239.4400 Vanowen St., Burbank, CA 91505. Our telephone number is (720) 399-7351.

(800) 292-3909.

Stockholder Proposals to be Presented at the Next Annual Meeting

Any stockholder who meets the requirements of the proxy rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), may submit to the Board of Directors proposals to be presented at the 20172018 annual meeting. Such proposals must comply with the requirements of Rule 14a-8 under the Exchange Act. To be timely, a stockholder’s notice of a proposal must be submitted in writing by notice delivered or mailed by first-class United States mail, postage prepaid, to our Corporate Secretary at our principal executive offices at the address set forth above no earlier than February 22, 2017July 16, 2018 and no later than March 24, 2017 in order to be considered for inclusion in the proxy materials to be disseminated by the Board of Directors for such annual meeting.

August 15, 2018.


The chairman of the meeting may refuse to acknowledge the introduction of any stockholder proposal if it is not made in compliance with the applicable notice provisions.

provisions.

EXECUTIVE OFFICERS

The following table provides information regarding our executive officers and directors as of April 29, 2016. AND DIRECTORS

The names of our directors and executive officers, their ages as of April 29, 2016October 26, 2018 and certain other information about them are set forth below. There are no family relationships among any of our directors or executive officers.

Name

 

Age

 

Position

Ryan Drexler

 4547 Interim Chief Executive Officer, Interim President and Chairman of the Board of Directors

John Price

Brian Casutto		 4647 Chief Financial OfficerExecutive Vice President of Sales and Operations and Director

Michael Doron

William Bush		 5553 Director

William Bush

John J. Desmond		 51Director

Stacey Jenkins

41Director

Noel Thompson

35Director

Richard Estalella

5468 Director

RYAN DREXLER

INTERIM – CHIEF EXECUTIVE OFFICER, INTERIM PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS

Ryan Drexler was appointed to serve as our interim chief executive officer, interimChief Executive Officer and President on November 18, 2016. Prior to that, Mr. Drexler served as our Interim Chief Executive Officer, President and chairmanChairman of the Board of Directors onsince March 15, 2016 and was designated as our interim Principal Executive Officer.2016. Mr. Drexler has served as chairmanChairman of our Board of Directors since August 26, 2015 and will continue to serve as the chairman of the board of directors while the Company conducts a search for a new full-time chief executive officer and president.2015. Mr. Drexler is currently the chief executive officerChief Executive Officer of Consac, LLC (“Consac”), a privately heldprivately-held firm that invests in the securities of publicly tradedpublicly-traded and venture-stage companies. Previously, Mr. Drexler served as President of Country Life Vitamins, a family ownedfamily-owned nutritional supplements and natural products company that he joined in 1993. In addition to developing strategic objectives and overseeing acquisitions for Country Life, Mr. Drexler created new brands that include the BioChem family of sports and fitness nutrition products. Mr. Drexler negotiated and led the process which resulted in the sale of Country Life in 2007 to the Japanese conglomerate Kikkoman Corp. Mr. Drexler graduated from Northeastern University, where he earned a BAB.A. in political science. Because of his experience in running and developing nutritional supplement companies, we believe that Mr. Drexler is well qualified to serve on our boardBoard of directors.

JOHN PRICE

CHIEF FINANCIAL OFFICER

John PriceDirectors.

BRIAN CASUTTO – EXECUTIVE VICE PRESIDENT OF SALES AND OPERATIONS AND DIRECTOR
Brian Casutto was appointed as our chief financial officer on March 5, 2015 and was designated as our Principal Financial Officer. Mr. Price had previously served as our executive vice president of finance. Prior to joining MusclePharm, Mr. Price served as vice president of finance—North America at Opera Software, a Norwegian public company focused on digital advertising. From 2011 to 2013, he served as vice president of finance and corporate controller GCT Semiconductor. From 2004 to 2011, Mr. Price served in various roles at Tessera Technologies including VP of Finance & Corporate Controller when Mr. Price left the company. During his tenure at Tessera Technologies, Mr. Price developed the world-wide finance and accounting organization, integrated multiple domestic and international acquisitions, implemented accounting systems, and managed corporate compliance and SEC reporting. Prior to Tessera Technologies, Mr. Price served various roles at Ernst &Young LLP. Mr. Price served nearly three years in the San Jose, California office and nearly five years in the Pittsburgh, Pennsylvania office. Mr. Price has been a certified public accountant (currently inactive) since 2000 and attended Pennsylvania State University, where he earned a Bachelor’s of Science Degree in Accounting.

MICHAEL DORON

DIRECTOR

Michael Doron has served on our Board of Directors as an independenta director since November 5, 2012,during July 2017. Mr. Casutto was appointed to the role of Executive Vice President of Sales and currently serves as the Lead DirectorOperations in July of 2015. Mr. Casutto joined MusclePharm in June of 2014 to lead product development and brand positioning of the Board of Directors, responsibleNatural Series. From 1997 to 2014, Mr. Casutto served as Executive Vice President, Sales for leading the independent directors and providing direct input to management. Mr. Doron also serves as the chair of the Compensation Committee and member of both the Audit Committee and the Nominating & Corporate Governance Committee. He has extensive corporate finance and business development experiences in both executive and board level positions with private and public companies. Two years ago, Mr. Doron moved to Stockholm, Sweden, and shortly thereafter co-founded Alta Nordic Advisors. Alta Nordic offers its clients a sophisticated international practice with a particular concentration of experience and skill related to capital markets and financing methods. Previously, from 2008 through 2013, Mr. Doron was Co-Founder and a Partner in DDR & Associates and Evolution Capital. DDR & Associates is a business development company specializing in pre-IPO companies that are committed to and capable of becoming public and traded on one of the three national stock exchanges. DDR & Associates provided the legal work, management incubation, and public market experience necessary to enable private companies to transition into a fully exchange-qualified listing in a cohesive, smooth process. Evolution Capital invested in early stage publicly traded companies. Both companies have been in continuous operations since their co-inception by Mr. Doron in 2008. Mr. Doron currently serves on the Board of Directors of Next Graphite, Inc. (OTC: GPNE) a development stage mineral exploration company and has been a director since April 2014.Country Life Vitamins. Because of his significant experience in corporate financerunning and business development,developing nutritional supplement companies, we believe that Mr. DoronCasutto is well qualified to serve on our Board of Directors.

WILLIAM BUSH

–DIRECTOR

William Bush has served onjoined our Board of Directors as an independent director sincein May 2015 and serves as lead director, as chair of the chairCompensation Committee, as a member of the Audit Committee and a memberas Chair of the CompensationNominating & Corporate Governance Committee. Since November 2016, Mr. Bush serves as chief financial officer of Stem, Inc., a leading software-driven energy storage provider. From January 2010 to November 2016, Mr. Bush has served as the chief financial officer of Borrego Solar Systems, Inc., which is one of the nation’s leading financiers, designers and installers of commercial and industrial grid-connected solar systems. From October 2008 to December 2009, Mr. Bush served as the chief financial officer of Solar Semiconductor, Ltd., a private vertically integrated manufacturer and distributor of photovoltaic modules and systems targeted for use in industrial, commercial and residential applications, with operations in India, helping it reach $100 million in sales in its first 15 months of operation. Prior to that, Mr. Bush served as chief financial officer and corporate controller for a number of high growth software and online media companies as well as being one of the founding members of Buzzsaw.com, Inc., a spinoff of Autodesk, Inc. Prior to his work at Buzzsaw.com, Mr. Bush served as corporate controller for Autodesk, Inc. (NasdaqGM: ADSK), the fourth largest software applications company in the world. His prior experience includes seven years in public accounting with Ernst & Young LLP and PricewaterhouseCoopers. Mr. Bush holds a B.S. degree in Business Administration from U.C. Berkeley and is a certified public accountant (currently inactive). Mr. Bush currently serves on the Board of Directors of Towerstream Corporation (NASDAQ: TWER), a fixed wireless provider, and has been a director since 2007. Because of his significant experience in finance, we believe that Mr. Bush is well qualified to serve on our Board of Directors.

STACEY JENKINS


JOHN J. DESMOND –DIRECTOR

Stacey Jenkins has served on

John J. Desmond joined our Board of Directors as an independent director since May 2015. He alsoin July 2017 and serves as chair of the chairmanAudit Committee, a member of ourthe Nominating & Corporate Governance Committee, and as a member of our Auditthe Compensation Committee. He isPreviously, Mr. Desmond was Partner-in-Charge of the Long Island (New York) office of Grant Thornton LLP from 1988 through his retirement from the firm in 2015, having served over 40 years in the public accounting profession. At Grant Thornton LLP, Mr. Desmond's experience included among other things, serving as lead audit partner for many public and privately-held global companies. Mr. Desmond was elected by the U.S. Partners of Grant Thornton LLP to their Partnership Board from 2001 through 2013. The Partnership Board was responsible for oversight of many of the firm's activities including strategic planning, the performance of the senior leadership team and financial performance. Mr. Desmond currently serves on the Board of Directors of The First of Long Island (Nasdaq: FLIC) and its wholly owned bank subsidiary, The First National Bank of Long Island, and has been a licensed attorney with extensive background in commercial contracts, securities and general corporate law. For the past two years,director since October 2016. Mr. JenkinsDesmond also serves or has served as a senior in-house attorney with Medicity, Inc.,Board member of a wholly owned subsidiarynumber of Aetna Life Insurance Company, where he focuses on contract negotiation,

technology licensing, privacynot-for-profit entities. Mr. Desmond holds a B.S. degree in Accounting from St. John's University and other regulatory matters. Prior to joining Medicity, Mr. Jenkins focused on his private practice, providing general corporate legal services, securities guidance, human resources consulting and litigation support foris a range of corporate and individual clients. Prior to this period of solo practice, Mr. Jenkins was Regulatory Counsel for Teleperformance USA, a market leader of inbound and outbound teleservices, where he focused on privacy, security, telecommunications and human resources matters. Prior to his employment with Teleperformance, Mr. Jenkins served as general counsel for Opinionology Inc. (FKA Western Wats Center, Inc.), an online global data collection and survey company, where he focused on contract negotiation, telecommunications regulatory matters and complex HR issues. Additionally, he helped prepare and guide Opinionology through its merger with Sampling International. Prior to joining Opinionology, Mr. Jenkins developed his own legal private practice and consultancy, providing corporate guidance and oversight, as well as technology assistance to companies. Prior to his private practice, Mr. Jenkins managed IT infrastructure for Moen Faucets. Mr. Jenkins received his law degree from the University of Utah SJ Quinney College of Law, and attended college at Montana State University.Certified Public Accountant. Because of his significant experience with growth companies andin corporate governance, banking, strategic planning, business leadership, organizational management and business operations, accounting and financial reporting, finance, mergers and acquisitions, legal and regulatory, we believe that Mr. JenkinsDesmond is well qualified to serve on our Board of Directors.

NOEL THOMPSON

DIRECTOR

Noel Thompson has served on our

Board of Directors as an independent director since May 2015 and serves as a member of the Compensation Committee. Currently Mr. Thompson serves as the chief executive officer and chief investment officer of Thompson Global LLC, and owner and operator of Thompson Global LP, which is engaged in investment and advisory services of client and proprietary assets. Mr. Thompson also currently operates Thompson Global Sports which provides advisory, financing, and consulting services to investors and companies in the sports industry and Thompson Global Special Situations which participates as adviser, lender, and principle in commodity, energy, infrastructure projects globally. Mr. Thompson currently serves on the Board of Directors for the World Anti-Doping Agency Charitable Foundation. Mr. Thompson also serves on the Board of Trustees for The United States Olympic and Para Olympic Foundation, as an Executive Board member of the Board of Governors for the National Wrestling Hall of Fame, and on the Board Directors of Hofstra University Athletics and the Titan Mercury Wrestling Club. Mr. Thompson also sits on The Board of Directors for Beat The Streets NY, which develops the full athletic potential for inner city kids in NYC using wrestling as a vehicle. Prior to Thompson Global, from 2010 to 2011 Mr. Thompson worked at JP Morgan Securities and from 2005 until 2010, Mr. Thompson served in various roles including as a Global Futures and Commodities Trader for Goldman Sachs & Co. Mr. Thompson graduated from Hofstra University. Because of his experience in capital markets, we believe Mr. Thompson is well qualified to serve on our Board of Directors.

RICHARD ESTALELLA

DIRECTOR

Richard Estalella has served on our Board of Directors since September 2013. Mr. Estalella served as our president from April 2014 until December 2015 when he resigned from the Company but remained on the board of directors. Prior to joining MusclePharm, Mr. Estalella served as senior vice president of operations at Arbonne International, LLC since 2005. Mr. Estalella was instrumental in Arbonne’s expansion operations and distribution upgrades. He was responsible for all warehouse and distribution facilities, facilities maintenance departments and Customer Service. Previously, between 1998 and 2005, he owned a consulting business specializing in retail, operations, warehousing and distribution. Prior to that, Mr. Estalella served as senior vice president of warehouse operations for Office Depot between 1987 and 1998 and established many of its retail markets, along with its nationwide distribution center network which helped grow it into a $9 billion company. Because of his experience in warehousing and distribution, we believe Mr. Estalella is well qualified to serve on our Board of Directors.

Board of Directors

Our Board of Directors may establish the authorized number of directors from time to time by resolution. Our bylaws authorize a Board of Directors to consist of between one and nine members. The number of directors currently authorized by resolution of the Board of Directors is six, but will be reduced to four as of the time of the Annual Meeting due to Messrs. Estalella and Thompson not standing for reelection. As a result, fourfour. Four directors are nominated to be elected at the Annual Meeting .The current authorized number of directors is six (6).Meeting. Our nominated directors, if elected, will continue to serve as directors until the next annual meeting of stockholders and until his successor has been elected and qualified, or until his or her earlier death, resignation, or removal.

Our Board of Directors held 13seven meetings during 2015.2017. The Board of Directors also acted 11four times by unanimous written consent. No member of our Board of Directors attended fewer than 75% of the aggregate of the total number of meetings of the Board of Directors (held during the period for which he was a director) and the total number of meetings held by all committees of the Board of Directors on which such director served (held during the period that such director served). Members of our Board of Directors are invited and encouraged to attend each annual meeting of stockholders.

Board Leadership Structure

Ryan Drexler, our Interim Chief Executive Officer and Interim President, serves as Chairman of our Board of Directors and presides over meetings of the Board of Directors, and holds such other powers and carries out such other duties as are customarily carried out by the Chairman of our Board of Directors. Mr. Drexler brings valuable insight to our Board of Directors due to the perspective and experience that he brings as our interim Chief Executive Officer and President.

Director Independence

The rules of NASDAQ generally require that a majority of the members of a listed company’s Board of Directors be independent. In addition, the listing rules generally require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and governance committees be independent. Although we

We are an over-the-counter listed company we have nevertheless opted under our Corporate Governance Guidelines to comply with certain NASDAQNasdaq corporate governance rules requiring director independence. The Board of Directors has determined that all of the Company’sour non-employee directors, nominated for election, other than Mr. DrexlerDesmond and Mr. Estalella,Bush, are each “independent directors” as such term is defined in NASDAQNasdaq Marketplace Rule 5605(a)(2). Additionally, we have and, therefore, the Compensation Committee, Nominating and& Corporate Governance Committee, and Audit committeesCommittee are each comprised solely of independent directors.

Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the Board of Directors, or any other board committee: accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or be an affiliated person of the listed company or any of its subsidiaries.


Our Board of Directors has determined that none of our non-employee directors has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the rules of NASDAQ.Nasdaq. Our Board of Directors has also determined that past and present Directors, who comprise our Audit Committee, Compensation Committee, Nominating & Corporate Governance Committee and our Nominating and Corporate GovernanceStrategic Initiatives Committee, satisfied and satisfy the independence standards for those committees established by applicable SEC rules, NASDAQNasdaq rules and applicable rules of the Internal Revenue Code of 1986, as amended.

Involvement in Certain Legal Proceedings

Except as outlined below, to our knowledge, during the past ten (10) years, none of our directors, executive officers, promoters, control persons, or nominees has been:

the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
●the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law
●convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

●subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
●found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.
Board Committees

Our Board of Directors has established an Audit Committee, a Compensation Committee, and a Nominating and& Corporate Governance Committee, each of which have the composition and responsibilities described below. Members serve on these committees until their resignations or until otherwise determined by our Board of Directors. The Board of Directors has further determined that Mr. WilliamMessrs. Desmond and Bush, achair and member, respectively, of the Audit Committee of the Board of Directors, isare both an “Audit Committee Financial Expert,” as such term is defined in Item 407(d)(5) of Regulation S-K promulgated by the SEC, by virtue of histheir relevant experience listed in histheir respective biographical summarysummaries provided above in the section entitled “Executive Officers and Directors.” Each of these committees has a written charter. Current copies of the charters of the Audit Committee, Compensation Committee, and Nominating & Corporate Governance Committee are available on our website at ir.musclepharmcorp.com/governance-documents.

Audit Committee.Committee. The Audit Committee reviews the work of our internal accounting and audit processes and the Independent Registered Public Accounting Firm. The Audit Committee has sole authority for the appointment, compensation and oversight of our Independent Registered Public Accounting Firm and to approve any significant non-audit relationship with the Independent Registered Public Accounting Firm. The Audit Committee is also responsible for preparing the report required by the rules of the SEC to be included in our annual proxy statement. The Audit Committee is currently comprised of Mr. Desmond, as chair, and Mr. Bush, as a member. Mr. Desmond assumed the Chair, Mr. Doron and Mr. Jenkins. Mr. Bush joined the Audit Committee as chairman in May 2015, Mr. Jenkins joinedrole of chair of the Audit Committee in July 2017 from Mr. Bush who served as chair since May 2015 and Mr. Doron joined the Audit Committee in October 2012.2015. During 2015,2017, the Audit Committee held 8four meetings.

Compensation Committee.Committee. The Compensation Committee approves our goals and objectives relevant to compensation, stays informed as to market levels of compensation and, based on evaluations submitted by management, recommends to our Board of Directors compensation levels and systems for the Board of Directors and our officers that correspond to our goals and objectives. The Compensation Committee, with the assistance of Longnecker, also produces an annual report on executive compensation for inclusion in our proxy statement. The Compensation Committee is currently comprised of Mr. DoronBush, as the Chair, Mr. Jenkinschair, and Mr. Bush.Desmond, as a member. Mr. DoronDesmond joined the Compensation Committee as chairman in May 2015 and Mr. JenkinsJuly 2018 and Mr. Bush joined as membersa member in May 2015. During 2015,2017, the Compensation Committee held 37four meetings.


Nominating & Corporate Governance Committee.Committee. The Nominating & Corporate Governance Committee is responsible for recommending to our Board of Directors individuals to be nominated as directors and committee members. This includes evaluation of new candidates as well as evaluation of current directors. In evaluating the

current directors, the Nominating & Corporate Governance Committee conducted a thorough self-evaluation process, which included the use of questionnaires and a third-party expert that interviewed each of the directors and provided an analysis of the results of the interviews to the committee. This committee is also responsible for developing and recommending to the Board of Directors our corporate governance guidelines, as well as reviewing and recommending revisions to the guidelines on a regular basis. The Nominating & Corporate Governance Committee is currently comprised of Mr. JenkinsBush, as the Chair, Mr. Thompson (not standing for reelection)chair and Mr. Doron. Mr. Jenkins joined the Nominating & Corporate Governance Committee as chairman in May 2015 and Mr. Thompson joinedDesmond, as a member in May 2015. The Board of Directors will determine who will replace Mr. Thompson on the Nominating & Corporate Governance Committee following the conclusion of the Annual Meeting.member. During 2015,2017, the Nominating & Corporate Governance Committee held 9no meetings.

Strategic Initiative

Refinancing Committee.The Strategic InitiativeRefinancing Committee evaluateswas established as a special committee to evaluate options and assists the boardmake a recommendation to our Board of directors in overseeing the Company’s implementation of key strategic initiatives.Directors to refinance our debt. The Strategic InitiativeRefinancing Committee is currentlywas comprised of Mr. DrexlerBush, as the Chair, Mr. Bush, Mr. Doronchair and Mr. Jenkins.

Desmond, as a member. The committee was dissolved once the refinancing was complete.

Director Nominations

The director qualifications developed to date focus on what the Board believes to be essential competencies to effectively serve on the Board. The Nominating & Corporate Governance Committee may consider the following criteria in recommending candidates for election to the board:

experience in corporate governance, such as an officer or former officer of a publicly held company;

experience in the Company’s industry;
●experience in corporate governance, such as an officer or former officer of a publicly held company;

experience as a board member of other publicly held companies; and

technical expertise in an area of the Company’s operations.
●experience in the Company’s industry;

●experience as a board member of other publicly held companies; and
●technical expertise in an area of the Company’s operations.
The Nominating & Corporate Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of assembling a Board that can best perpetuate the success of the Company and represent shareholderstockholder interests through the exercise of sound judgment using its diversity of experience.

Prior to each annual meeting of stockholders at which directors are to be elected, and whenever there is otherwise a vacancy on the Board of Directors, the Nominating & Corporate Governance Committee will consider incumbent Board members and other well-qualified individuals as potential director nominees. The Nominating & Corporate Governance Committee will determine whether to retain an executive search firm to identify Board candidates, and if so, will identify the search firm and approve the search firm’s fees and other retention terms and will specify for the search firm the criteria to use in identifying potential candidates, consistent with the director qualification criteria described above. The Nominating & Corporate Governance Committee will review each potential candidate. Management may assist the Nominating & Corporate Governance Committee in the review process at the Nominating & Corporate Governance Committee’s direction. The Nominating & Corporate Governance Committee will select the candidate or candidates it believes are the most qualified to recommend to the Board for selection as a director nominee. Our Nominating & Corporate Governance Committee will consider candidates recommended by our stockholders in accordance with the procedures set forth in the Nominating & Corporate Governance Committee Charter. Such recommendations must be submitted in writing to the Chairman of the Nominating & Corporate Governance Committee, c/o the Corporate Secretary, 4721 Ironton Street, Denver, CO 80239 no later than 120 days prior to the anniversary of the date on which the Company’s proxy statement was mailed or made available to stockholders in connection with the previous year’s annual meeting of stockholders. The recommendations must be accompanied by the following information: the nameCharter and address of the nominating stockholder, a representation that the nominating stockholder is a record holder, a representation that the nominating stockholder intends to appear in person or by proxy at the annual meeting to nominate the person or persons specified, information regarding each nominee that would be required to be included in a proxy statement, a description of any arrangements or understandings between the nominating stockholder and the nominee, and the

consent of each nominee to serve as a director, if elected.our bylaws. Candidates recommended by the stockholders are evaluated in the same manner as candidates identified by a Nominating & Corporate Governance Committee member.

Each of the nominees for election as director at the 20162018 Annual Meeting is recommended by the Nominating & Corporate Governance CommitteeCommittee. Messrs. Bush, Casutto, Desmond and each nominee isDrexler are presently a directordirectors and standsstand for re-election by the stockholders.


Stockholders who wish to nominate persons for election to the Board of Directors at an annual meeting must be a stockholder of record both at the time of giving the notice and at the meeting, must be entitled to vote at the meeting and must comply with the notice provisions in our bylaws. A stockholder’s notice of nomination to be made at an annual meeting must be delivered to our principal executive offices not less than 90 days nor more than 120 days before the anniversary date of the immediately preceding annual meeting. However, if an annual meeting is more than 30 days before or more than 60 days after such anniversary date, the notice must be delivered no later than the 90th day prior to such annual meeting or, if later, the 10th day following the day on which the first public announcement of the date of such annual meeting was made. A stockholder’s notice of nomination to be made at a special meeting at which the election of directors is a matter specified in the notice of meeting must be delivered to our principal executive offices not earlier than the 120th day prior to and not later than the 90th day prior to such special meeting or, if later, the 10th day following the day on which first public announcement of the date of such special meeting was made. The stockholder’s notice must include the following information for the person making the nomination:

name and address;

the class and number of shares of the Company owned beneficially or of record;
●name and address;

disclosure regarding any derivative, swap or other transactions which give the nominating person economic risk similar to ownership of shares of the Company or provide the opportunity to profit from an increase in the price or value of shares of the Company;

any proxy, agreement, arrangement, understanding or relationship that confers a right to vote any shares of the Company;
●the class and number of shares of the Company owned beneficially or of record;

any agreement, arrangement, understanding or relationship, engaged in to mitigate economic risk related to, or the voting power with respect to, shares of the Company;

any rights to dividends on the shares that are separate from the underlying shares;
●disclosure regarding any derivative, swap or other transactions which give the nominating person economic risk similar to ownership of shares of the Company or provide the opportunity to profit from an increase in the price or value of shares of the Company;

any performance related fees that the nominating person is entitled to based on any increase or decrease in the value of any shares of the Company; and

any other information relating to the nominating person that would be required to be disclosed in a proxy statement filed with the SEC.
●any proxy, agreement, arrangement, understanding or relationship that confers a right to vote any shares of the Company;

●any agreement, arrangement, understanding or relationship, engaged in to mitigate economic risk related to, or the voting power with respect to, shares of the Company;
●any rights to dividends on the shares that are separate from the underlying shares;
●any performance related fees that the nominating person is entitled to be based on any increase or decrease in the value of any shares of the Company; and
●any other information relating to the nominating person that would be required to be disclosed in a proxy statement filed with the SEC.
The stockholder’s notice must also include the following information for each proposed director nominee:

description of all direct and indirect financial or other relationships between the nominating person and the nominee during the past three years;

the same information as for the nominating person (see above);
●description of all direct and indirect financial or other relationships between the nominating person and the nominee during the past three years;

all information required to be disclosed in a proxy statement in connection with a contested election of directors.

●the same information as for the nominating person (see above); and
●all information required to be disclosed in a proxy statement in connection with a contested election of directors.
The stockholder’s notice must be updated and supplemented, if necessary, so that the information required to be provided in the notice is true and correct as of the record date for the meeting and as of the date that is ten business days prior to the meeting.

The chairman of the meeting will determine if the procedures in the bylaws have been followed, and if not, declare that the nomination be disregarded. The nominee must be willing to provide any other information reasonably requested by the Nominating & Corporate Governance Committee in connection with its evaluation of the nominee’s independence.


Stockholder Communications with the Board of Directors

Stockholders may send correspondence to the Board of Directors or any member of the Board of Directors, c/o the Corporate Secretary at our principal executive offices at the address set forth above. The Corporate Secretary will review all correspondence addressed to the Board of Directors, or any individual Board member, for any inappropriate correspondence and correspondence more suitably directed to management. However, the Corporate Secretary will summarize all correspondence not forwarded to the Board of Directors and make the correspondence available to the Board of Directors for its review at the Board of Director’s request. The Corporate Secretary will forward stockholder communications to the Board of Directors prior to the next regularly scheduled meeting of the Board of Directors following the receipt of the communication.

Director Compensation

Non-Employee Director Compensation Arrangements

The Board of Directors hashad adopted a non-employee director compensation policy that provides annual retainer fees. All Board members received anfees to each of our non-employee directors. The annual retainer fee was at a rate of $35,000$55,000 for the first and second quarter and $42,500 for the third and fourth quarter, paid in the first month of the quarter.2017. The Chairman of the Board received an additional annual retainer of $40,000, beginning in the third quarter, and the leadLead Director received an additional $25,000 annual retainer beginning in the third quarter, each paid quarterly.under this policy. Additionally, Committee members receivereceived annual retainers each paid quarterly, as follows:

   Q1 & Q2   Q3 & Q4 

Committee

  Chairman   Member   Chairman   Member 

Audit Committee

  $15,000    $10,000    $20,000    $8,500  

Compensation Committee

  $10,000    $5,000    $15,000    $6,500  

Nominating & Corporate Governance Committee

  $7,000    $5,000    $7,500    $5,000  

Strategic Initiative Committee

   NA     NA    $7,500    $5,000  

 
 
Q1 & Q2 2017
 
Committee
 
Chairman
 
 
Member
 
Audit Committee
 $20,000 
 $8,500 
Compensation Committee
  15,000 
  6,500 
Nominating & Corporate Governance Committee
  7,500 
  5,000 
Strategic Initiative Committee
  7,500 
  5,000 
In July 2017, the Board approved a new compensation program for our non-employee directors. Under this policy, as of July 1, 2017, Mr. Bush and Mr. Desmond will earn annual cash retainer fees of $140,000 and $100,000, respectively, and be granted, on an annual basis, restricted shares having a grant date fair value of $100,000 and $150,000, respectively. Additionally, in conjunction with our refinancing, each member of our refinancing committee, were granted a onetime fee of $40,000. Our non-employee directors will also receive an additional cash payment to compensate them for taxes payable in respect of their restricted share grants, described below.
All cash retainers are prorated for partial years of service. We pay annual cash retainer fees to our non-employee directors quarterly. We also reimburse our non-employee directors for their travel and out of pocket expenses. Members of the Board of Directors who also are our employees do not receive any compensation for their service as directors. Our directors do not receive Board meeting fees.

During 2015, For 2017, each of our non-employee directors received awards of restricted common stock having a grant date value of $80,000,as described above, which was distributed quarterly.were granted in quarterly installments. The number of shares distributed for each quarterly award iswas determined by dividing $20,000[one-fourth of] the dollar value above by the average closing price of MusclePharm’s common stock for the first fifteen business days of the first month of eachsuch quarter. TheseFor 2017, our non-employee directors also received additional cash payments to compensate them for taxes payable in respect of their restricted common stock awards are vested upon grant.

2015share awards.

2017 Director Compensation. The table below sets forth the compensation paid to each current non-employee member of ourthe Board of Directors during the fiscal year ended December 31, 2015:

Name

  Total Fees
Earned or Paid
in Cash ($)		   Stock Awards
($) (1)		   Total ($) 

Ryan Drexler (0)(4)

  $22,229    $17,771    $40,000  

Michael Doron (2)(3)(4)(5)(10)

  $79,649    $64,000    $143,649  

William J. Bush (4)(5)(8)

  $41,208    $45,460    $86,668  

Stacey Y. Jenkins (4)(5)(7)

  $38,806    $45,460    $84,266  

Noel Thompson (4)(5)(7)

  $37,583    $45,460    $83,043  

Richard Estalella (9)

  $0    $0    $0  

Daniel McClory (Former) (2)(3)(6)

  $27,500    $37,176    $64,676  

Gregory Macosko (Former) (2)(3)(6)

  $30,000    $37,176    $67,176  

Andrew Lupo (Former) (2)(3)(6)

  $22,500    $37,176    $59,676  

2017. Messrs. Drexler and Casutto received no additional compensation for their service as a director, and, consequently, are not included in this table. The compensation received by Messrs. Drexler and Casutto in respect of their employment is set forth in the “Summary Compensation Table” below.

Name
 
Fees Earnedor Paidin Cash ($)  
 
 
StockAwards(1) ($)  
 
 
All Other Compensation(2) ($)   
 
 
Total ($)      
 
John J. Desmond
 $90,000 
 $150,000 
 $12,200 
 $212,200 
William J. Bush
  199,000 
  121,900 
  63,300 
  344,200 
Michael Doran(3)
  133,625 
  87,500 
  — 
  221,125 
(1)
The grant date fair value of stock awards was calculated in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures, based upon the closing price of a share of our common stock on the date of grant. As of December 31, 2017, the aggregate number of shares of restricted stock held by our non-employee directors was as follows:
(0)
Name
Reflects amount paid to Mr. Drexler for his service on our Board
Number of Directors during 2015. Amounts paid to him with respect to his serviceStock Awards Outstanding as Executive Chairman are included in the Summary Compensation table above.of
December 31,
2017
John J. Desmond
60,160
William J. Bush
40,107
(1)The amounts reflected represent the aggregate grant date fair value of the restricted stock awards granted to our non-employee directors in 2015, determined in accordance with ASC 718, by multiplying the number of shares by the closing price of our common stock on the grant date and do not reflect the actual economic value realized by the director. None of the non-employee directors held any outstanding stock options as of December 31, 2015.
(2)The grant date fair value was based upon the 15-day average closing price of the common stock of $8.60.
(3)The grant date fair value was based upon the 15-day average closing price of the common stock of $4.17.
(4)The grant date fair value was based upon the 15-day average closing price of the common stock of $5.30.
(5)The grant date fair value was based upon the 15-day average closing price of the common stock of $3.95.
(6)Andrew Lupo, Gregory Macosko and Daniel McClory each resigned as a director on May 21, 2015.
(7)Stacey Jenkins and Noel Thompson each were appointed as a director on May 22, 2015.
(8)William Bush was appointed as a director on May 27, 2015.
(9)Richard Estalella resigned as an employee on December 30, 2015 and remained a member of our Board of Directors. Mr. Estalella did not receive any compensation for his service as a member of our Board of Directors during 2015.
(10)Mr. Doron did not receive his Q1 2015 stock grant due to a recordkeeping oversight. Mr. Doron will be issued 2,167 shares in 2016, the same number of shares other non-employee board members received in the first quarter 2015. The $64,000 of stock award compensation excludes this stock grant.

(2)
Amounts reported in this column represent additional cash payments paid to each of our non-employee directors for taxes payable in respect of their restricted share awards.

(3)
Mr. Doran retired from our Board of Directors effective in June 2017.
Code of Conduct
Our Board of Directors established a Code of Conduct applicable to our officers and employees. The Code of Conduct is accessible on our website at www.musclepharmcorp.com. If we make any substantive amendments to the Code of Conduct or grant any waiver, including any implicit waiver, from a provision of the Code of Conduct to our officers, we will disclose the nature of such amendment or waiver on our website or in a report on Form 8-K.
Corporate Governance Overview

Our business, assets and operations are managed under the direction of our Board of Directors. Members of our Board of Directors are kept informed of our business through discussions with our chief executive officer, chief financial officer,Chief Executive Officer, our external counsel, members of management and other Company employees as well as our independent auditors, and by reviewing materials provided to them and participating in meetings of the Board of Directors and its committees.

In addition to its management oversight function, our Board of Directors remains committed to strong and effective corporate governance, and, as a result, it regularly monitors our corporate governance policies and practices to ensure we meet or exceed the requirements of applicable laws, regulations and rules, the NASDAQNasdaq listing standards (even though we are not subject to them), as well as the best practices of other public companies.

Our corporate governance program features the following:

●
a Board of Directors that is upnominated for election annually;

all of our directors, other than our interim chief executive officer, interim president and chairman of the board of directors, and former president, are independent;

●
we have no stockholder rights plan in place;

●
periodically updated charters for each of the Board’s committees, which clearly establish the roles and responsibilities of each such committee;

●
regular executive sessions among our non-employee and independent directors;


●
a Board of Directors that enjoys unrestricted access to our management, employees and professional advisers;

in 2015, each director attended at least 75% of the aggregate of the total number of Board meetings and total number of meetings of Board committees on which such director served during the time he served on the Board of Directors or committees.;

●
a clear Code of Conduct that is reviewed regularly for best practices;

●
a clear Insider Trading Policy that is reviewed regularly;

●
a Corporate Communications Policy that is reviewed with employees and the Board periodically;

●
a clear set of Corporate Governance Guidelines that is reviewed regularly for best practices;

our Compensation Committee or Board of Directors may require the forfeiture, recovery or reimbursement of incentive compensation from an executive officer as required under United States securities laws;

●
no board member is serving on an excessive number of public company boards; and

the Compensation Committee’s engagement of an independent compensation consultant.

Board of Directors’Directors Role in Risk Management

The Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance shareholderstockholder value. Risk management includes not only understanding company specific risks and the steps management implements to manage those risks, but also the level of risk acceptable and appropriate for us. Management is responsible for establishing our business strategy, identifying and assessing the related risks and implementing appropriate risk management practices. Our Board of Directors reviews our business strategy and management’s assessment of the related risk, and discusses with management the appropriate level of risk for us. For example, the Board of Directors meets with management at least quarterly to review, advise and direct management with respect to strategic business risks, risks related to our new product development, financial risks, among others. The Board of Directors also delegates oversight to Board committees to oversee selected elements of risk.

The Audit Committee oversees financial risk exposures, including monitoring the integrity of our financial statements, internal controls over financial reporting, and the independence of our Independent Registered Public Accounting Firm. The Audit Committee reviews periodic internal controls and related assessments from our finance department and an annual attestation report on internal control over financial reporting from the Company’s Independent Registered Public Accounting Firm.department. The Audit Committee also assists the Board of Directors in fulfilling its oversight responsibility with respect to compliance matters and meets at least quarterly with our finance department, Independent Registered Public Accounting Firm and internal or external legal counsel to discuss risks related to our financial reporting function. In addition, the Audit Committee ensures that

our business is conducted with the highest standards of ethical conduct in compliance with applicable laws and regulations by monitoring our Code of Business Conduct and our Corporate Compliance Hotline, and the Audit Committee discusses other risk assessment and our risk management policies periodically with management.

The Compensation Committee participates in the design of the compensation structures thatprogram and helps create incentives that do not encourage a level of risk-taking behavior consistentthat is inconsistent with our business strategy, as is further described in the Compensation Discussion and Analysis section.

strategy.

The Nominating & Corporate Governance Committee oversees governance-related risks by working with management to establish corporate governance guidelines applicable to us, and making recommendations regarding director nominees, the determination of director independence, Board of Directors leadership structure and membership on Board committees.

The Strategic Initiative Committee evaluates


EXECUTIVE COMPENSATION
Overview
We are eligible to take advantage of the rules applicable to a “smaller reporting company,” as defined in the Exchange Act, for the fiscal year ended December 31, 2017. As a “smaller reporting company” we are permitted, and assistshave opted, to comply with the Boardscaled back executive compensation disclosure rules applicable to a “smaller reporting company” under the Exchange Act. Only two individuals served as executive officers, as defined in Rule 3b-7 under the Exchange Act, as of Directors in overseeing our implementationthe end of key strategic initiatives.

COMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)

the fiscal year ended December 31, 2017 and only one additional individual served as an executive officer at any time during such fiscal year. The following discussion and analysis contains statements regarding individual and company performance targets and goals used in setting compensation for our named executive officers. These targets and goals are disclosed in the limited context of the Company’s compensation programs and should not be understood to be statements of management’s future expectations or estimates of future results or other guidance. The Company specifically cautions investors not to apply these statements to other contexts.

The following Compensation Discussion and Analysis (“CD&A”) is designed to provide insight into the Company’s executive compensation philosophy, objectives and programs, as well as our decisions relatedrelates to the compensation of our namedthose executive officers, (“NEOs”) for 2015 andwho we refer to as our “named executive officers” or “NEOs” in this proxy statement. For the beginning of 2016. During 2015, and continuing into 2016, the Company experienced a significant amount of turnover offiscal year ended December 31, 2017, our NEOs in connection with our execution of strategic actions related to restructuring and realigning the Company to enhance shareholder value. As a result, this CD&A will highlight compensation decisions related to the following NEOs for 2015 and 2016, including several former NEOs:

were:
●
Ryan Drexler—Interim Chief Executive Officer, Interim President and Chairman of the Board of DirectorsDirectors;

John Price—Chief Financial Officer
●

Brad Pyatt—Former Chief Executive Officer

Richard Estalella—Former President

James Greenwell—Former Chief Operating Officer

Cory Gregory—Former Executive Vice President

Don Prosser—Former Chief Financial Officer

EXECUTIVE SUMMARY

NEO Departures and Appointments

In connection with the execution of the Company’s strategic plan, the following events took place in 2015 and early 2016.

Mr. Drexler, the current Interim Chief Executive Officer, Interim President and Chairman of the Board of Directors, was appointed Executive Chairman of the Company on August 25, 2015 and Interim Chief Executive Officer, Interim President and Chairman of the Board of Directors upon Mr. Pyatt’s termination of employment.

Mr. Pyatt served as our Chief Executive Officer until his termination of employment on March 15, 2016.

Mr. Estalella terminated his position as President on December 30, 2015. He remains a member of our Board of Directors.

Mr. Gregory terminated his position as Executive Vice President on November 6, 2015.

Mr. Greenwell terminated his position as Chief Operating Officer on August 25, 2015.

Mr. Prosser stepped down as Chief Financial Officer on March 2, 2015, and remained a non-executive employee of the Company through April 15, 2015.

On March 5, 2015, our Board of Directors appointed Mr. Price, who had previously been the Company’sBrian Casutto – Executive Vice President of Finance, as the Company’s Chief Financial Officer.

Company Revenue Performance

MusclePharm has experienced growth across multiple nutritional supplement categoriesSales and geographies. In 2015, we realized net revenueOperations; and

●
Brent Baker – Former Executive Vice President of $167 million (a five-year compound annual growth rate of 120%). Net revenue is equal to our gross revenue less product discounts, customer rebates and incentives.

AlthoughInternational Business*

*Mr. Baker’s employment with the Company has experienced revenue growth in recent years, the Company’s revenues for 2015 did not meet the threshold set by the Compensation Committee under the Company’s Executive Bonus Program and, as a result, no bonuses were paid to those named executive officers who were eligible to receive a 2015 bonus with respect to this metric. For additional discussion of the Company’s Executive Bonus Program and resulting payouts basedterminated on 2015 performance, see the section titled “2015 Executive Bonus Program.”

EXECUTIVE COMPENSATION PRACTICES

Compensation Philosophy

Compensation Principles and MusclePharm Best Practices

The following highlights compensation best practices we engage in and practices we avoid to align our executive compensation program with shareholder interests:

What we do:

¨Pay for performance

¨Maintain a significant portion of compensation as variable for each executive’s total compensation, including compensation related to annual and long-term incentives

¨Cap annual incentive payouts for each executive

¨Utilize an independent compensation consultant who reports directly to the Compensation Committee

¨Continue ongoing dialogue with shareholders

¨Utilize external benchmarking practices

¨Mitigate undue risk through an annual risk assessment to determine the degree to which compensation plans and decisions impact executive risk taking

¨The Company generally vests equity awards ratably over three years

What we don’t do:

¨Provide excise tax gross-ups

¨Allow hedging or derivative transactions utilizing company stock by any employee or director

¨Reprice or backdate stock options

THE EXECUTIVE COMPENSATION DECISION MAKING PROCESS

Compensation Objectives

MusclePharm’sMarch 23, 2017.

Our executive compensation program is designed to attract, motivate and retain talented executives that will drive Company growth and create long-term shareholder value. The Compensation Committee has established the following set of objectives for the executive compensation program:

Compensation should be market competitive: The executive compensation program is designed to provide market-competitive total compensation while maintaining fiscal responsibility for shareholders.

Compensation should reward performance and support MusclePharm’s business strategy: A significant portion of the named executive officers’ total compensation is variable and the amount actually realized is dependent upon the achievement of key annual performance measures or stock price.

Compensation should be aligned with shareholders’ interests: MusclePharm’s compensation program also seeks to reward executive officers for increasing the Company’s stock price over the long-term by providing the majority of total compensation opportunities for executive officers in the form of long-term equity awards. While this is the Company’s general approach, due to limited equity awards in response to significant turnover during 2015, the Company reported a heavier ratio of cash-to-equity compensation than is typically provided.

Roles of the Compensation Committee, Independent Compensation Consultant, and Chief Executive Officer in Compensation Decision Making

The Compensation Committee oversees and administers our executive compensation program, with input and recommendations from our Chief Executive Officer, as well as input from an independent executive compensation consulting firm, as described below.

To aid the Compensation Committee in making its compensation determinations, during 2015 the Chief Executive Officer provided recommendations to the Compensation Committee regarding the compensationOfficer.

Elements of all executive officers, excluding himself. Each named executive officer other than the Chief Executive Officer, in turn, participates in an annual performance review with the Chief Executive Officer to provide input about his individual contributions to the Company’s success. The Compensation Committee gathers data on the Chief Executive Officer’s performance through several channels, including qualitative and quantitative assessments of the Company’s performance, discussions with other members of the management team and discussions with other members of the Board of Directors. Each Compensation Committee meeting ordinarily includes an executive session without members of management present.

The Compensation Committee establishes corporate and individual performance goals at the beginning of each year for use under the Company’s annual bonus plan based on the Company’s annual financial plan (with respect to the corporate performance goals). The Company’s annual financial plan is formulated by the executive management team and is submitted for review and approval by the Board of Directors. The Compensation Committee retains authority under the Company’s annual and long-term incentive plans to use negative discretion in relation to the annual incentive and equity awards achieved by meeting or exceeding pre-determined objectives. In addition, the Compensation Committee also has the authority to make discretionary bonus awards to our named executive officers. It did not exercise this discretion in 2015.

Independent Compensation Consultant

The Compensation Committee has retained Longnecker, an independent executive compensation consulting firm, since 2013 to assist in providing advice and data with respect to executive and board of director compensation matters. Longnecker reports to the Compensation Committee, and may not conduct any other work for the Company without the authorization of the Compensation Committee. Longnecker did not provide any additional services to MusclePharm in 2015 beyond its engagement as an advisor to the Compensation Committee on executive compensation matters. After review and consultation with Longnecker, the Compensation Committee has determined that Longnecker is independent and there is no conflict of interest resulting from the engagement of Longnecker. In reaching these conclusions, the Compensation Committee considered the factors set forth under SEC rules.

In 2014, Longnecker provided market executive and board of director compensation analyses as well as advice to the Compensation Committee with respect to competitive compensation practices in similar organizations and determining the appropriate levels of salary, annual incentives and long-term incentives to the Company’s top executive officers and independent board members. In 2015, Longnecker worked with the Compensation Committee and management to revise the 2015 annual and long-term incentive programs, as well as provide advice related to the design of the Company’s independent director compensation program.

Establishing the Competitive Market

Longnecker works with the Compensation Committee to establish a compensation peer group to be used in its market executive compensation analysis. When determining potential peer companies, Longnecker and the Compensation Committee analyzed public companies similar to MusclePharm based on factors such as size of revenue, assets, net income, market capitalization and total enterprise value. Additional factors such as geographical operations, complexity of operations, and optical implications are also considered in the peer

company selection process. In 2015, the Compensation Committee, based on advice from Longnecker, approved the following compensation peer group. This compensation peer group was redesigned from 2014’s peer group to include more sector-specific and similarly-sized competitors. Specifically, American Oriental Bioengineering, Inc., Blyth, Inc., Nu Skin Enterprises Inc., Prestige Brands Holdings, Inc., The Hain Celestial Group, Inc. and Vitacost.com, Inc. were removed from the peer group and Balchem Corp., Immunotec Inc., Innophos Holdings Inc., Natural Alternatives International Inc., Natural Health Trends Corp. and Reliv International, Inc. were added to the peer group.

2015 Compensation Peer Group

Balchem Corp.Natural Alternatives International Inc.
Boulder Brands, Inc.Natural Health Trends Corp.
Immunotec Inc.Nature’s Sunshine Products Inc.
Innophos Holdings Inc.Nutraceutical International Corporation
Lifevantage CorporationNutrisystem, Inc.
Mannatech, IncorporatedOmega Protein Corporation
Medifast Inc.Reliv International, Inc.

The Compensation Committee also reviews and considers applicable published survey data when making compensation decisions. In setting 2015 compensation, Longnecker provided applicable data to the Compensation Committee from the following survey sources: Economic Research Institute, Mercer, Pay Factors, and Towers Watson.

Setting Executive Compensation

The Compensation Committee considers external data, described above, as well as data compiled from individuals within the Company in making executive compensation decisions. Every year the Committee reviews the executive compensation program relative to the market using a blend of data gathered from proxy statements of our companies included in our compensation peer group and published compensation survey data. This analysis provides the necessary background to the Compensation Committee to ensure the executive compensation program is market-competitive. However, the Compensation Committee does not guarantee that any executive will receive a specific market-derived compensation level.

In addition, the Compensation Committee has taken the approach of determining the mix of compensation elements, such as base salary, annual incentives and long-term equity awards, on an individual basis. The Compensation Committee allocates total compensation between cash and equity compensation based on a number of factors, including competitive practices utilized by the companies in MusclePharm’s compensation peer group, the role and responsibilities of the individual executive, and the performance the Company wants to drive behaviors toward.

ELEMENTS OF EXECUTIVE COMPENSATION

MusclePharm’s

Our executive compensation program has three majormain components: base salary, annualcash bonuses and incentive and long-term incentive compensation. A significant portion of each executive’s total compensation package is typically comprised of long-term equity compensation, which creates a natural alignment between executives’ interests and shareholder interests, and also serves as a retention vehicle for ourawards. Our named executive officers. Given executive transitions during 2015, mostofficers also receive employee benefits that are made available to our salaried employees generally, are eligible to receive certain compensation and benefits in connection with a change in control or termination of employment, and receive certain perquisites, in each case, as described below.
Base Salary
The Compensation Committee determined the initial base salary for each of our named executive officers did not receive equity awards and as a result, with respect to certain named executive officers, the make-up of our executive compensation program for 2015 was different than in prior years.

Base Salary

Base salaries play an essential role in attracting and retaining the key talent needed to run MusclePharm successfully. Eacheach year the Compensation Committee determines whether to approve merit increases to our named executive officers’any base salariessalary adjustments based upon the Company’s performance, theirthe named executive officer’s individual performance, changes in duties and responsibilities of the named executive officer and the recommendations of our Chief Executive Officer (except for purposes of determining(other than with respect to his own base salary). Typically, no formulaic or guaranteedFor 2017, Messrs. Drexler’s and Casutto’s base salaries were not increased from 2016 levels and Mr. Baker’s annual base salary increases are provided towas increased by $50,000. For 2017, our named executive officers. As an overall group, theofficers’ base salaries forwere as follows:

Name
2017 Base Salary
Ryan Drexler
$550,000
Brian Casutto
$400,000
Brent Baker
$350,000
Cash Bonuses
Pursuant to their employment agreements, each of our named executive officers historically were aligned with or under the market 25th percentile of our compensation peer group, described above. The Committee will continue to competitively align base salaries with the market as appropriate, which will position the Company to remain competitive from an attraction and retention perspective.

After performing its annual review of the executive team’s base salary levels, the Compensation Committee decided to increase base salaries for 2015 in order to be more competitive with the market. The following table summarizes the adjustments made to each executive’s base salary. The base salaries for Messrs. Gregory and Prosser were not increased because their salaries were determined to be market competitive. Mr. Price’s base salary was increased from $225,000 to $250,000 in connection with his promotion to chief financial officer. The Compensation Committee determined the amount of the increase after reviewing compensation paid to chief financial officers of companies in our compensation peer group and published survey data, as described above, as well as considering Mr. Price’s skills and experience.

Name

  2014
Base Salary		   2015
Base Salary		 

Ryan Drexler

   N/A     N/A  

John Price 1

  $225,000    $250,000  

Brad Pyatt 2

  $325,000    $425,000  

Richard Estalella 3

  $300,000    $375,000  

James Greenwell 3

  $275,000    $300,000  

Cory Gregory 3

  $200,000    $200,000  

Don Prosser 3

  $275,000    $275,000  

1Mr. Price was not an executive officer of the Company during 2014.
2Mr. Pyatt’s employment with the Company terminated on March 15, 2016.
3Messrs. Estalella, Greenwell, Gregory and Prosser’s employment terminated during 2015.

More recently, we aligned our Interim Chief Executive Officer, Interim President and Chairman of the Board of Directors base salary to the 50th percentile based upon his experiences with sports nutrition companies and ability to manage the Company’s restructuring activities. During 2015, Mr. Drexler did not receive a base salary from the Company. In February 2016, the Compensation Committee decided to pay him a lump sum amount equal to $250,000 as compensation for his service to the Company as Executive Chairman. In February 2016, the Company also entered into an employment agreement with Mr. Drexler pursuant to which he will receive an annual base salary of $550,000. The Compensation Committee determined his base salary after reviewing compensation paid to chief executive officers of companies in our compensation peer group and survey data as described above, as well as considering Mr. Drexler’s skills and experience.

Annual Incentive (“2015 Executive Bonus Program”)

In early 2015, the Compensation Committee revised the Company’s Executive Bonus Program to better reflect the Company’s objectives for 2015. The Compensation Committee determined that a corporate profitability metric should be implemented under the 2015 Executive Bonus Program and added a gross margin percentage metric. Gross Margin Percentage is defined as the difference between net revenue and cost of sales divided by cost of sales. The Compensation Committee retained revenue and Adjusted EBITDA as metrics under the Executive Bonus Program because revenues are an important measure of our business and how well our products

and brands sell and Adjusted EBITDA is a measure of ongoing business performance that is important to our investors. Mr. Drexler was not eligible to participate in the 2015 Executive Bonus Program. Given their employment status, Messrs. Drexler and Prosser were not eligible to participate in the Company’s 2015 Executive Bonus.

The following table illustrates the Compensation Committee’s structure for the 2015 Executive Bonus Program. In regards to threshold, target, and stretch target performance achievements, the correlating bonus amount paid out if achieved would equal 75%, 100%, or up to 125%, respectively, of the portion of the bonus associated with such metric (in thousands except %).

   

2015 Executive Bonus

Program Measures

  Threshold  Target  Stretch Target  Weighting 

Corporate

  Net Revenue  $188,000   $221,000   $236,000    25% 
  Adjusted EBITDA  ($11,500)  ($10,000)  ($8,000)   20% 
  Gross Margin Percentage   32%   34%   36%   10% 

Individual

  A number of goals and objectives, both quantitative and qualitative, specific to each executive’s responsibilities within the Company.      45% 

Adjusted EBITDA is a Non-GAAP financial measure. An explanation of how we calculate this measure in contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the Securities and Exchange Commission.

Each named executive officer is eligible to earn an annual incentivea cash bonus, based onwith a target dollar amount established by the Compensation Committee. For 2015, Mr. Pyatt’s target bonus was $450,000, Mr. Price’s, $250,000, Mr. Estalella’s, $350,000, Mr. Greenwell’s, $300,000 and Mr. Gregory’s, $225,000. An executive can earn between 75% and 125% of their weighted target incentiveCommittee, based on the achievement of eachspecified performance goals. For 2017, the target bonus amount was $300,000 for Mr. Casutto and $400,000 for Mr. Baker. Mr. Drexler was eligible to receive cash bonuses of up to $350,000 based on the goals described above. In no event may an executive earn more than 200%achievement of his total target bonus.

2015 Executive Bonus Program—Corporate Objectives Payout

In January 2016, the Compensation Committee reviewed the 2015 corporatespecified performance goals. For 2017, Messrs. Drexler and each executive’s 2015 performance and determined their actual bonus payout. The following tables summarize the actual bonus payouts determined by Compensation Committee (in thousands, except %, bonus target and bonus earned).

   Threshold   Net Revenue 
Executive      Target   Stretch   Actual   % of Goal
Achieved l		  Bonus Target   Bonus Earned 

John Price

  $188,000    $221,000    $236,000    $166,858     0%  $62,500    $0  

Brad Pyatt

  $188,000    $221,000    $236,000    $166,858     0%  $106,250    $0  

Richard Estalella 1

  $188,000    $221,000    $236,000    $166,858     0%  $87,500     NA  

James Greenwell 1

  $188,000    $221,000    $236,000    $166,858     0%  $75,000     NA  

Cory Gregory 1

  $188,000    $221,000    $236,000    $166,858     0%  $56,250     NA  

Don Prosser 1

  $188,000    $221,000    $236,000    $166,858     0%   NA     NA  

   Threshold  Adjusted EBITDA 
Executive     Target  Stretch  Actual  % of Goal
Achieved l		  Bonus Target   Bonus Earned 

John Price

  ($11,500)  ($10,000)  ($8,000)  ($2,672)   125%  $50,000    $62,500  

Brad Pyatt

  ($11,500)  ($10,000)  ($8,000)  ($2,672)   125%  $85,000    $106,250  

Richard Estalella 1

  ($11,500)  ($10,000)  ($8,000)  ($2,672)   125%  $70,000     NA  

James Greenwell 1

  ($11,500)  ($10,000)  ($8,000)  ($2,672)   125%  $60,000     NA  

Cory Gregory 1

  ($11,500)  ($10,000)  ($8,000)  ($2,672)   125%  $45,000     NA  

Don Prosser 1

  ($11,500)  ($10,000)  ($8,000)  ($2,672)   125%   NA     NA  
   Threshold  Gross Margin Percentage 
Executive     Target  Stretch  Actual  % of Goal
Achieved l		  Bonus Target   Bonus Earned 

John Price

   32%   34%   36%   34%   100%  $25,000    $25,000  

Brad Pyatt

   32%   34%   36%   34%   100%  $42,500    $42,500  

Richard Estalella 1

   32%   34%   36%   34%   100%  $35,000     NA  

James Greenwell 1

   32%   34%   36%   34%   100%  $30,000     NA  

Cory Gregory 1

   32%   34%   36%   34%   100%  $22,500     NA  

Don Prosser 1

   32%   34%   36%   34%   100%   NA     NA  

1As a result of their employment terminations during 2015, none of Messrs. Estalella, Greenwell, Gregory or Prosser was entitled to an annual bonus for 2015. As part of his severance, Mr. Greenwell received a lump sum payment equal to 50% of his 2015 target bonus.

2015 Executive Bonus Program—Individual Objectives Payout

The Compensation Committee evaluated the performance of each of the named executive officers in relation to their pre-determined individual goals for 2015 and determined that 50% of such goals,Casutto earned cash bonuses in the aggregate, were achieved.amounts set forth in the “Summary Compensation Table” below. In connection with his termination of employment in March 2017, Mr. Price’s goals were: SecureBaker received a new credit facility, ensure timely and accurate SEC reporting, deliver positive cash flow and implement a new software solutionbonus of $80,311 for expense reporting. Mr. Pyatt’s goals were: Recruitmentthe first quarter of experienced executives, sign a new celebrity endorser, uplist to major market and develop and launch two new product lines.

   Individual Goals 
   Bonus target   Bonus Earned 

John Price

  $112,500    $56,250  

Brad Pyatt

  $191,250    $95,625  

Richard Estalella 1

  $157,500    $0  

James Greenwell 1

  $135,000    $0  

Cory Gregory 1

  $101,250    $0  

Don Prosser 1

   N/A     N/A  

1As a result of their employment terminations during 2015, none of Messrs. Estalella, Greenwell, Gregory or Prosser were entitled to an annual bonus for 2015. As part of his severance, Mr. Greenwell received a lump sum payment equal to 50% of his 2015 target bonus.

2015 Executive Bonus Program—Total Bonus Payout

Overall, our named executive officers’ total bonus payouts for 2015 performance resulted in below target awards.

   Total 2015 Bonus Payout 
   Target   Actual   Actual as a % of
Target		 

John Price

  $250,000    $143,750     57.5% 

Brad Pyatt

  $425,000    $244,375     57.5% 

Richard Estalella 1

  $350,000    $0     0% 

James Greenwell 1

  $300,000    $0     0% 

Cory Gregory 1

  $200,000    $0     0% 

Don Prosser 1

   N/A     N/A     N/A  

1As a result of their employment terminations during 2015, none of Messrs. Estalella, Greenwell, Gregory or Prosser was entitled to an annual bonus for 2015. As part of his severance, Mr. Greenwell received a lump sum payment equal to 50% of his 2015 target bonus.

Long-term Incentives

Long-term incentives2018.


Incentive Equity Awards
Incentive equity awards granted by the Company have historically been in the form of restricted stock awards. The Company also grants stock options from time to time. The Compensation Committee believes that equity-based awards which generally vest over a three year period. Restricted stock grants are used as an effective retention tool while simultaneously aligningthat also align our executives’ interests with those of shareholders. The Compensation Committee believes thatour stockholders. In 2017, we granted Mr. Drexler 350,000 shares of restricted stock, which vested in full on the first anniversary of the grant date. Mr. Drexler’s equity awards are an effective tool for adding an immediate financial incentive to remain with the Company and work for us that will mitigate potential attempts by labor market competitors to recruit critical employees.

also vest in full upon a termination of his employment or upon change in control. None of our other named executive officers were granted equity-based awards in 2017. In connection with his promotion to Chief Financial Officertermination of employment in 2015, Mr. Price received an award of 50,000 restricted shares. This award vests 60% on December 31, 2016, 20% on December 31,March 2017, and 20% on December 31, 2018. The Compensation Committee determined the size of Mr. Price’s grant after reviewing the value of equity awards granted to chief financial officers of companies in our compensation peer group and survey data as described above, as well as the Company’s historical grant practices. Also in 2015, the Board of Directors granted awards of restricted stock to Mr. Drexler. Mr. Drexler was granted 3,35310,000 shares of restricted stock for service on our Board of Directorsheld by Mr. Baker that were granted in 2016 vested in full in accordance with our compensation program for non-employee directors. He was also awarded 28,571 vested shares of restricted stock in consideration for his individual guaranty of Company debt. See “Related Party Transactions” for more information on this grant. Nonethe original terms of the other named executive officers received a grant of long-term incentive awards in 2015.

Severance and Change in Controlgrant.

Employment Agreements

We have entered into employment agreements with each of Mr. Drexler and Mr. Casutto that include certain severance and change in control agreements and severance agreements with certain of our executive officers. The Compensation Committee believes these types ofpayments.These agreements are essentialdescribed in orderdetail under “Narrative Disclosure to attract and retain qualified executives in our senior management team. For details, including with respect to the severance payments paid to certain terminated named executive officers, see “Employment, Severance and Change in Control Arrangements”Summary Compensation Table” below.

Employee Benefit Plans

and Perquisites

We maintain a Section 401(k) Savings/Retirement Plan (the “401(k) Plan”) to cover401(k) Plan) for eligible employees of the Company and any designated affiliate in the United States.certain affiliates, including our named executive officers. The 401(k) Plan permits eligible employees to defer up to the maximum dollar amount allowed by law including a catch-up provision for employees over the age of 50.law. The employees’employee’s elective deferrals are immediately vested upon contribution to the 401(k) Plan. We currently make discretionary matching contributions to the 401(k) Plan in an amount equal to 100% of each eligible employee’s deferrals up to 4%

of the participant’s annual base pay andhis or her qualifying compensation, subject to a total employer contribution maximum of $10,600 and certain other limits.

limits imposed by applicable law.

We do not maintain any other defined benefit, defined contribution or deferred compensation plans for our employees.

Our current named executive officers are eligible to participate in all of our employee benefit plans, such as medical, dental, vision, group life and disability insurance, in each case on the same basis as our other employees, subject to applicable law. We also provide vacation and other paid holidays to all employees, including our current named executive officers. In addition, we provide certain highly-compensated employees, including our current named executive officers, with life insurance and supplemental long-term disability coverage. For purposes of eligibility for this coverage, highly-compensated employees are defined as those employees whose monthly income is greater than $13,333, or $160,000 per year. Certain of our executive areWe also entitled toprovide certain perquisites, as described and quantified in the Summary Compensation Table below.

Risk Assessment of Compensation Policies and Programs

In early 2016, management assessed our compensation policies and programs for all employees for purposes of determining the relationship of such policies and programs and the enterprise risks faced by the Company and presented its assessment to the Compensation Committee. Based on its assessment, management recommended, and the Compensation Committee concluded, that none of our compensation policies or programs create risks that are reasonably likely to have a material adverse effect on the Company. In connection with their review, management and the Compensation Committee noted certain key attributes of our compensation policies and programs that help to reduce the likelihood of excessive risk taking, including:

The program design provides a balanced mix of cash and equity compensation, delivered as fixed and variable compensation and via base salary, annual incentives and long-term incentives.

Corporate performance objectives are designed to be both rigorous and consistent with the Company’s overall business plan and strategy, as approved by the Board of Directors.

The determination of executive incentive awards is based on a review of a variety of indicators of performance, including both financial and non-financial goals, reducing the risk associated with any single indicator of performance.

Incentive payments are capped at no more than 200% of target.

The Company’s equity awards generally vest over three year periods.

The Compensation Committee has the right to exercise negative discretion over executive incentive plan payments.

Tax and Accounting Considerations

Section 162(m) of the Internal Revenue Code disallows a tax deduction for any publicly-held corporation for individual compensation exceeding $1 million in any taxable year for a company’s named executive officers, other than its Chief Financial Officer, unless compensation qualifies as performance-basedbelow under such section. The Compensation Committee considers the tax impact of our executive compensation programs as one of the factors to be considered when setting and evaluating these programs. The Compensation Committee retains full discretion to award compensation packages that will best attract, retain, and reward executive officers and contribute to the achievement of our business objectives. We have awarded and may or may not in the future award compensation that is not fully deductible under Section 162(m).

The Compensation Committee considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors (the “Compensation Committee”) has furnished this report on executive compensation. None of the members of the Compensation Committee is currently an officer or employee of the Company and all are “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act and “outside directors” for purposes of Section 162(m) of the Internal Revenue Code. The Compensation Committee is responsible for designing, recommending to the Board of Directors for approval and evaluating the compensation plans, policies and programs of the Company and reviewing and approving the compensation of the Chief Executive Officer and other officers and directors.

This report, filed in accordance with Item 407(e)(5) of Regulation S-K, should be read in conjunction with the other information relating to executive compensation which is contained elsewhere in this proxy statement and is not repeated here.

In this context, the Compensation Committee hereby reports as follows:

1. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section contained herein with management.

2. Based on the review and discussions referred to in paragraph (1) above, the Compensation Committee recommended to our Board of Directors, that the Compensation Discussion and Analysis be included in this proxy statement on Schedule 14A for filing with the SEC.

May 13, 2016

COMPENSATION COMMITTEE

/s/ Michael Doron, Chairman

Noel Thompson

William J. Bush

COMPENSATION OF EXECUTIVE OFFICERS

“All Other Compensation.”


Summary Compensation Table for 2015

The following summary compensation tables sets forth all compensation awarded to, earned by, or paid to our named executive officers duringfor 2017 and 2016 in respect of their employment with the years ended December 31, 2015, 2014, 2013.

Name and Principal Position

 Year  Salary ($)  Bonus ($)  Stock
Awards ($)		  Option
Awards
($)		  Non-Equity
Incentive Plan
Compensation ($)		  All Other
Compensation
($) **		  Total ($) 

Current

        

Ryan Drexler (1)

  2015    250,000(8)   —      —      —      —      77,876(12)  $327,876  

Interim Chief Executive Officer,

        

Interim President and Chairman of the Board of Directors

        

John Price (2)

  2015    244,375    —      214,500(9)   —     $143,750    11,525(12)   614,150  

Chief Financial Officer

        

Former

        

Bradley J. Pyatt (3)

  2015    420,833     —      —     $244,375    133,278(12)   798,486  

Chief Executive Officer

  2014    325,000    314,063    6,500,000(10)    —      (20,628)   7,118,435  
  2013    250,000    260,000    3,853,500(11)    —      99,042    4,462,542  

Richard F. Estalella (4)

  2015    371,875    —      —      —    —      47,865(12)   419,740  

President and Chief Operating

  2014    291,167    264,063    3,250,000(10)    —      22,238    3,827,468  

Officer

  2013    163,000    250,000    1,101,000(11)    —      32,763   

James J. Greenwell (5)

  2015    480,598    —      —      —      —      184,533(12)   665,131  

Chief Operating Officer

  2014    172,500    140,993    1,300,000(10)    —      5,547    1,619,040  

Cory J. Gregory (6)

  2015    215,809    —      —      —      —      26,379(12)   242,188  

Executive Vice President of Brand

  2014    200,000    182,813    1,300,000(10)    —      7,224    1,690,037  

Awareness and Social Media

  2013    150,000    160,000    1,651,500(11)    —      16,713    1,978,213  

Donald W. Prosser (7)

  2015    95,026       —      7,195(12)   102,221  

Chief Financial Officer and Treasurer

  2014    195,416    81,680    1,300,000(10)    —      7,226    1,584,322  

**The Company’s executive compensation table and, specifically, perquisites as disclosed in the “Other Compensation” column of the executive compensation table was previously under review with the SEC as part of an SEC Investigation, which was resolved in September 2015, as discussed in Note 12 of the Notes to Consolidated Financial Statements included in our Form 10-K for our 2015 fiscal year. The Audit Committee conducted a detailed and thorough analysis of the perquisites for the periods of 2010, 2011, 2012 and 2013 as part of the preparation of these tables and the SEC Investigation. The Company and SEC agreed to appoint Chord Advisors, LLC for a 12-month period to monitor the Company’s reporting practices and internal controls.
(1)On August 26, 2015, our Board of Directors appointed Mr. Drexler as the Company’s Executive Chairman. On February 11, 2016, Mr. Drexler entered into an employment agreement with the Company, pursuant to which the Company agreed to pay him a lump sum of $250,000 in respect of his service to the Company, in lieu of any base salary for 2015. On March 15, 2016, Mr. Drexler was appointed as the Interim Chief Executive Officer, Interim President and Chairman of the Board of Directors. Amounts paid to Mr. Drexler in connection with his service as a member of our Board of Directors, including the grant of restricted stock received in his capacity as a director, are included in the “Director Compensation Table” below.Company.
Name and Principal Position
 
Year
 
 
Salary($)
 
 
Bonus($)
 
 
StockAwards($)
 
 
OptionAwards($)
 
 
All OtherComp-ensation($)
 
 
Total($)   
 
Ryan Drexler (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chairman of the Board,2017
  550,000 
  426,226 
  686,000(2)
  — 
  31,841(7)
  1,694,067 
  Chief Executive Officer and President2016
  466,667(1)
  750,000 
  454,000(3)
  236,263(4)
  76,155 
  1,983,085 
 
    
    
    
    
    
    
Brian Casutto2017
  400,000 
  178,670 
  — 
  — 
  93,641(7)
  672,311 
Executive Vice President of Sales and Operations2016
  395,833 
  233,750 
  94,500(5)
  — 
  28,176 
  752,259 
 
    
    
    
    
    
    
Brent Baker (6)
2017
  136,123 
  80,311 
  — 
  — 
  361,178(7)
  577,612 
Former Executive Vice President of International Business2016
  300,000 
  210,000 
  — 
  — 
  30,179 
  540,179 
(1)
Mr. Drexler is our Chief Executive Officer, President and the Chairman of the Board of Directors. On November 18, 2016, Mr. Drexler agreed to continue to serve as the Chairman of the Board of Directors and as our Chief Executive Officer and President. For information regarding certain transactions between Mr. Drexler and the Company, see “Related Party Transactions” below.
(2)
Reflects the grant date fair value of the restricted stock award granted to Mr. Drexler in connection with his individual guaranty of Company debt see “Related Party Transactions” below.
(2)Mr. Price joined the Company in July 2014 as the Company’s Executive Vice President of Finance and was appointed to his position as the Company’s Chief Financial Officer on March 5, 2015.
(3)Mr. Pyatt resigned from his position as the Company’s Chief Executive Officer on March 15, 2016. Mr. Pyatt had also served as our President until he resigned from that position in April 2014.

(4)Mr. Estalella was appointed to his position as the Company’s Chief Operating Officer on April 29, 2013 and was appointed as President in April 2014 at which time he resigned as Chief Operating Officer. On December 30, 2015, Mr. Estalella resigned as President and remained a member of our Board of Directors.
(5)Mr. Greenwell was appointed to his position as the Company’s Chief Operating Officer on May 12, 2014 and resigned his position on the Board of Directors. On August 25, 2015, Mr. Greenwell resigned as the Chief Operating Officer.
(6)Mr. Gregory resigned his position as Executive Vice President of brand awareness and social media on November 6, 2015.
(7)Mr. Prosser was appointed to his position as the Company’s Chief Financial Officer on April 16, 2014 and resigned his position on the Board of Directors. On March 2, 2015, Mr. Prosser resigned his position as Chief Financial Officer and remained with the Company in a non-executive role until his contract ended on April 15, 2015. Amounts included as base salary for Mr. Prosser include amounts paid to him in respect of his service as Chief Financial Officer as well as a non-executive employee of the Company.
(8)Mr. Drexler did not receive a base salary from the Company in 2015. In February 2016, however, the Company’s Compensation Committee agreed to compensate Mr. Drexler in 2017, calculated in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures, based on the closing price of our common stock of $1.96 on the date of the grant multiplied by the number of shares of restricted stock granted.
(3)
Reflects the grant date fair value of the restricted stock award granted to Mr. Drexler in 2016, calculated in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures, based on the closing price of our common stock of $2.27 on the date of the grant multiplied by the number of shares of restricted stock granted.
(4)
Reflects the grant date fair value of the option awards granted to Mr. Drexler in 2016, calculated in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures. The grant date fair value of $1.72 per share was determined using the Black-Sholes option-pricing model, with the following assumptions:
For the Year Ended 
December 31,
2016
Expected term of options6.5 years
Expected stock price volatility131.0%
Expected dividend yield0%
Risk-free interest rate1.71%

(5)
Reflects the grant date fair value of the restricted stock award granted to Mr. Casutto in 2016, calculated in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures, based on the closing price of our common stock of $1.89 on the date of the grant multiplied by the number of shares of restricted stock granted.
(6)
Mr. Baker’s employment with the Company terminated on March 23, 2017.
(7)
Amounts under All Other Compensation for 2017 include Company 401(k) matching contributions, insurance premiums paid by the Company on behalf of our named executive officers, perquisites and severance payments, as follows:
 
 
Drexler
 
 
Casutto
 
 
Baker
 
Company 401(k) Matching Contributions
 $— 
 $— 
 $5,575 
Severance (a)
  — 
  — 
  350,000 
Miscellaneous (b)
  16,204 
  19,292 
  900 
Automobile Expenses (c)
  — 
  20,967 
  3,250 
Housing Costs(d)
  15,637 
  46,215 
  — 
Insurance Premiums(e)
  — 
  7,167 
  1,453 
TOTAL
 $31,841 
 $93,641 
 $361,178 
(a)Represents the amount of $250,000 for his serviceseverance paid or accrued in 2017 relating to the Company as Executive Chairman from August 2015. In February 2016, the Company also entered into an employment agreement with Mr. Drexler pursuantBaker’s termination of employment. For details relating to which he will receive an annual base salary of $550,000.these payments, see “Narrative Disclosure to Summary Compensation Table” below.
(9)Reflects the full grant date fair value of restricted stock awards granted in 2015 calculated in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures, based on the closing price of the common stock of $4.29 on the date of the grant.
(10)Reflects the full grant date fair value of restricted stock award granted in 2014 calculated in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures, based on the closing price of the common stock of $13.00 on the date of the grant.
(11)Reflects the full grant date fair value of restricted stock award granted in 2013 calculated in accordance with FASB ASC Topic 718, disregarding the effects of estimated forfeitures, based on the closing price of the common stock of $11.01 on the date of the grant.
(12)Amounts under “All Other Compensation” for 2015 include the following Company 401(k) matching contributions, life insurance premiums paid by the Company on behalf of the executive officers, perquisites and severance payments:

  Drexler ($)  Price ($)  Pyatt ($)  Estalella ($)  Greenwell ($)  Gregory ($)  Prosser ($) 

Company 401(k) Matching Contributions

  —     $—     $10,600   $10,600   $7,918   $9,119   $3,616  

Miscellaneous (a)

 $32   $3,875   $20,534   $19,137   $157,308   $8,331   $1,458  

Automobile Expenses (b)

 $5,947   $7,650   $20,864   $9,000   $14,000   $7,700   $1,750  

Club Fees, Expenses and Golf Tournaments (c)

  —      —     $29,602    —      —      —      —    

Attorney Fees (d)

 $71,897    —     $3,245    —      —      —      —    

Sports Donations (e)

 $20,186        

Sports Tickets (f)

  —      —     $14,467    —      —      —      —    

Travel (g)

  —      —     $12,872   $4,025   $4,025    —      —    

Life Insurance Premiums

  —      —     $908   $5,103    1,282   $1,229   $371  

TOTAL

 $77,876   $11,525   $133,278   $47,865   $184,533   $26,379   $7,195  

(a)(b)These amounts include an allowanceamounts paid by the Company for miscellaneous expenses, Company provided matchincluding Company-provided matching contributions to health savings accounts for our named executive officer and amounts paid for expenses incurred by our executivesnamed executive officers that have been inadequately documented to supportwere not adequately substantiated or did not qualify as a reimbursable business purposes or personal in nature. For Mr. Pyatt, amounts also include Company paid vacation housing and additional apparel not covered by the allowance. For Mr. Greenwell, amounts also include his 2015 bonus paid in conjunction with his severance (paid in 2016.)expense under our expense reimbursement policy.

(b)(c)We provideprovided an automobile allowance for Mr. Price, Mr. Estalella, Mr. Greenwell, Mr. Gregory and Mr. ProsserCasutto, and the use of a Company car forby Mr. Drexler and Mr. Pyatt.Casutto while he was in Colorado. For the Company car provided to Mr. Drexler and Mr. Pyatt,Casutto, during 2017, the Company insuresinsured the car under its insurance programs, payspaid all registration, license, taxes and other fees on the car, payspaid for all repairs and reimbursesreimbursed for all gas and maintenance costs on the car. The amount disclosed in the table above for Mr. Drexler and Mr. Pyatt represent that portionCassuto represents one-half of the total annual cost for 2017 to the Company for the automobile provided to the executive attributable to their personal use.Company car.
(c)Represents payments(d)We paid for golf club membershipstemporary housing for Mr. Pyatt, including monthly dues, guest fees, mealsCasutto and entertainment costs at the golf clubs and other personal expenses incurred by Mr. Pyatt at the golf clubs, including apparel. Amount also includes golf tournament fees and housing at a major golf event.
(d)Represents legal fees in relation to the bank guarantee provided by Mr. Drexler withfor periods when they lived in Colorado while they maintained residency outside of the Company’s bank, legal feesstate. Additionally, we provide housing for Mr. Casutto for his apartment in relation toCalifornia as his residency remains out of the convertible note thatState. The amounts disclosed in the Company entered into with Mr. Drexlertable above represents rent and legal fees related to Mr. Pyatt’s employment contract and related chief executive officer’s duties.utility costs billed by the landlord for this temporary housing.
(e)Represents amountInsurance premiums were paid by the Company for football equipmentpursuant to Arvada West High School, for which Mr. Pyatt coaches.our employee health insurance plan.
(f)Amount represents the cost of tickets to attend a Denver Broncos game in the Company’s luxury suite, including catered food. Mr. Pyatt donated the tickets to his son’s football team to be utilized for fund raising.
(g)Represents amounts paid by the Company for our executive’s utilization of private jet travel for business purposes. Amount represents the difference between the private travel cost and commercial airfare travel cost for the applicable trip.

Grants of Plan-Based Awards in Fiscal Year 2015

       Estimated possible payouts under non-equity
incentive plan awards		   All Other Stock
Awards:
Number of
Shares of Stock		   Grant Date Fair
Value of Stock
and Option
Awards		 

Name

  Grant date   Threshold ($)   Target ($)   Maximum ($)   (#)   ($) 

John Price

   4/28/2015    $187,500    $250,000    $312,500     50,000     214,500  

Brad Pyatt

   —      $318,750    $425,000    $531,250     —       —    

Richard Estalella 1

   —      $262,500    $350,000    $437,500     —       —    

James Greenwell 1

   —      $225,000    $300,000    $375,000     —       —    

Cory Gregory 1

   —      $168,750    $225,000    $281,250     —       —    

Don Prosser 1

   —       NA     NA     NA     —       —    

1As a result of their employment terminations during 2015, none of Messrs. Estalella, Greenwell, Gregory or Prosser was entitled to an annual bonus for 2015. As part of his severance, Mr. Greenwell received a lump sum payment equal to 50% of his 2015 target bonus.

Narrative disclosureDisclosure to Summary Compensation Table
We have entered into employment agreements with each of Mr. Drexler and Grants of Plan-Based Awards Table

Mr. Casutto that include certain severance and change in control payments and entered into a separation agreement with Mr. Baker that provides for severance benefits, in each case, as described below. As used below, the terms “without cause,” “good reason,” “qualifying sale,” “aggregate purchase price,” “performance bonus,” “cash-based incentives,” and “change in control” are defined in the applicable agreements.

Mr. Drexler. Mr. Drexler is party to an employment agreement with the Company, datedwhich was entered into as of February 11, 2016. The2016 and has subsequently been amended and restated, most recently effective as of February 1, 2018. Subject to earlier termination as provided therein, the term of his agreement is for three years, subject to automatic renewalruns through February 1, 2021 and automatically renews for successive one-year periodsterms thereafter, unless either party provides the other withat least three months’ written notice of its or his or its intention not to renew the agreement at least three months prior to the expiration of the initial or renewal term. Mr. Drexler is entitled to a base salary of $550,000, subject to adjustment, and an annual bonus of up to 200% ofreview. Under his base salary. With respect to his services since August 26, 2015, in lieu of any base salary for 2015, Mr. Drexler was paid $250,000 on March 1, 2016. In connection with the execution of the employment agreement, Mr. Drexler was entitled to a stock option grant havingbase salary of $550,00 per year for 2017 and is entitled to a value equalbase salary of $700,000 per year for 2018, which will be increased to $250,000. On February 22, 2016$750,000 per year effective January 1, 2020, in each case, subject to increase by the Boardboard. For 2017, Mr. Drexler was eligible to receive cash-based incentives of Directors (excluding Ryan Drexler) unanimously approved a stock option grantup to $350,000 based on the achievement of 137,362 options with an exercise price of $1.89, two year vesting schedulespecified performance goals and, ten year life. The options were granted under the 2015 Equity Incentive Plan. Mr. Drexlerhis amended and restated agreement, is eligible to receive a 2018 performance bonus equal to 75% of his annual base salary, subject to the Company’s achievement of specified performance conditions unless otherwise determined by the Board. Under his amended and restated employment agreement, Mr. Drexler is also eligible to receive additional cash-based incentives of up to $350,000 based on the achievement of specified performance goals.

Concurrently with entering into the amended and restated employment agreement in February 2018, Mr. Drexler and the Company entered into a transaction bonus ifagreement, which provides that, upon the occurrence of a qualifying sale, and provided that at the time of the qualifying sale Mr. Drexler is an owner of at least 20% of the shares of the Company, occurs on or priorMr. Drexler will be entitled to February 11, 2019 in an amounta transaction bonus equal to 10% of the

aggregate purchase price, if such price is in such sale.excess of $50 million. Mr. Drexler is entitled to participatethis transaction bonus regardless of whether the qualifying transaction occurs during his employment or at any time thereafter.

If Mr. Drexler’s employment is terminated for any reason, each equity award granted to him will fully vest and he will be entitled to any unpaid performance bonus or cash-based incentives (as described above), to the extent earned as of the date of such termination, in our benefit plansaddition to any amounts required by law or Company policy. In addition, if Mr. Drexler’s employment is terminated by the Company without cause or by Mr. Drexler for good reason prior to (but not in connection with) a qualifying sale, Mr. Drexler will be entitled to receive (i) 12 months’ of base salary continuation, (ii) up to 12 months’ of Company-subsidized COBRA premiums, and (iii) a lump sum payment of the performance bonus for the year his employment terminates. If Mr. Drexler’s employment is terminated by the Company without cause or by Mr. Drexler for good reasonwithin 12 months following (or prior to, but in connection with or anticipation of) a qualifying sale, Mr. Drexler will be entitled to receive, in lieu of the amounts described in the preceding sentence, (i)a lump sum payment equal to 200% of his annual base salary, (ii) up to 18 months’ of Company-subsidized COBRA, and (iii) a lump sum payment equal to 200% of the performance bonus for the year his employment terminates.The severance payable to Mr. Drexler on the same basis as other senior employees, except thata termination of his employment by the Company without cause or by Mr. Drexler for good reason is subject to his execution (and non-revocation) of a release of claims in favor of the Company.
Under the employment agreement, Mr. Drexler has agreed to pay 100%certain restrictions on solicitation of employees, which continue for 12 months following the termination of his employment, if his employment is terminated due to disability, by him for good reason or by the Company with or without cause, due to expiration of the costemployment period by notice of any group medical, visionnon-renewal or dental coverage elected by Mr. Drexler and 50%due to termination of his employment upon a notice of termination. The employment agreement also contains restrictions with respect to disclosure of the additional incremental cost for coverage elected by him or his family.

Company’s confidential information.

Mr. PriceCasutto.Mr. Casutto is party to an employment agreement with the Company, datedwhich was entered into as of April 29, 2015.July 15, 2015 and was amended and restated as of January 1, 2018. The original term of histhe employment agreement endsended on December 31, 2017 unless it is terminated earlier or extended.and has been extended to December 31, 2018. Under his employment agreement, Mr. PriceCasutto is entitled to a base salary of $250,000, and an annual$400,000 per year, which may be increased at the discretion of the Compensation Committee. In addition, Mr. Casutto is eligible to receive cash bonuses based on performance criteria to be adopted by the Compensation Committee, with a potential bonus pool of up to $250,000, subject to annual review. Mr. Price$350,000 per year, which may be adjusted at the discretion of the Compensation Committee. Under his employment agreement, Mr Casutto is entitled to participate in our benefit plans made available to executive officers and is titled to a monthly vehicle allowance of $1,000 and an annuala miscellaneous expense allowance of up to $5,000.

Prior$5,000 per year.

If Mr. Casutto’s employment is terminated without cause or he resigns for good reason, he will be entitled to receive (i) base salary continuation for the lesser of 12 months and the remainder of the term of the employment agreement, (ii) a bonus equal to the greater of 25% of his target bonus for the year (or 50%, if the termination of employment occurs between July 1 and December 31 of the year) and the bonus for the year of termination of employment, as determined by the Compensation Committee at its discretion, and (iii) reimbursement of COBRA premiums for up to 12 months. In addition, unless otherwise provided in March 2016,an equity award agreement, all equity awards held by Mr. Pyatt had beenCasutto will vest in full. If Mr. Casutto’s employment is terminated without cause or he resigns for good reason within six months prior to (under certain circumstances) or within two years following a change in control (or the end of the term of the employment agreement, if earlier), then Mr. Casutto will be entitled to receive, in lieu of the amounts described above, (i) base salary continuation for 12 months,(ii) a bonus equal to the greater of 100% of his target bonus and the bonus for the year of termination of employment as determined by the Compensation Committee, (iii) a lump sum cash payment of $500,000, (iv) reimbursement of COBRA premiums for up to 12 months and (v) all equity and other incentive awards held by Mr. Casutto will fully vest. If Mr. Casutto’s employment is terminated due to his death or disability, he will be entitled to receive (i) the greater of 100% of his target bonus for the year of termination or the bonus for such year as determined by the Compensation Committee, (ii) reimbursement of COBRA premiums for up to 12 months, and (iii) if such termination is due to his disability, base salary continuation for 6 months. All severance payable to Mr. Casutto under his employment agreement is subject to his execution (and non-revocation) of a release of claims in favor of the Company.

Under the employment agreement, Mr. Casutto has agreed to certain restrictions on competition and solicitation, which continue for 12 months following the termination of his employment. The employment agreement also contains restrictions with respect to disclosure of the Company’s confidential information.
Mr. Baker.Mr. Baker was party to an employment agreement with the Company, datedwhich was entered into as of June 24, 2015, which agreement supersededJanuary 1, 2016. Under his prior employment agreement, with the Company. The term of his agreement was for five years, subject to automatic renewal for successive one-year periods unless either party provides the other with his or its intention not to renew the agreement at least three months prior to the expiration of the initial or renewal term. Mr. PyattBaker was entitled to a base salary of $425,000$350,000 for 2015 and an annual2017, subject to increase at the discretion of the Compensation Committee. In addition, Mr. Baker was eligible to receive cash bonuses based on performance criteria to be adopted by the Compensation Committee, with a potential bonus in an amountpool of up to 125%$400,000 per year, payable quarterly.
Under the employment agreement, Mr. Baker agreed to certain restrictions on competition and solicitation, which continue for 12 months following the termination of his base salary. Each year during theemployment. The employment period, Mr. Pyatt wasagreement also contained restrictions with respect to receive an equity award or equity awards having a pre-established fixed value ($817,000 for 2015). Mr. Pyatt was entitled to participate in our benefit plans on the same basis as other senior employees, except that the Company had agreed to pay 100%disclosure of the cost of any group medical, vision or dental coverage elected by Company’s confidential information.
Mr. Pyatt and 50% of the additional incremental cost for coverage elected by him or his family.

Prior toBaker’s employment terminated on March 23, 2017. In connection with his termination of employment, on December 30, 2015, Mr. Estalella had been partysubject to an employment agreement withhis execution (and non-revocation) of a release of claims in favor of the Company, dated as of June 24, 2015. This agreement had substantially the same terms as the agreement with Mr. Pyatt, described above, except that his annual base salary for 2015 was $375,000 and his equity award value for 2015 was $695,000.

Each of our named executive officers, Messrs. Greenwell, Gregory and Estalella, was party to an employment agreement during fiscal year 2015 until the date of termination of their employment that entitled them to an annual base salary and the ability to earn an incentive bonus as well as to participate in our benefit plans made available to executive officers. As a result of their employment terminations during 2015, none of Messrs. Estalella, Greenwell, Gregory or Prosser wasBaker became entitled to an annual bonus for 2015. As partreceive (i) severance in the amount of his severance, Mr. Greenwell received$350,000, payable over a 12-month period, a lump sum payment equalof $39,378, representing Mr. Baker’s accrued and unused vacation time, and a first quarter bonus of $80,311, and 10,000 shares of unvested restricted stock held by Mr. Baker became fully vested. In addition, the restrictions on competition contained in his employment agreement were reduced to 50%6 months following his termination of his 2015 target bonus.

The severance arrangements with our named executive officers and the effect of a change in control on their outstanding options are described below under “Potential payments upon termination or change of control”.

employment.

Outstanding Equity Awards at Year End

The following table provides information concerning restricted stock awardsand options to purchase shares of our common stock held by our named executive officers as of December 31, 2015. This table includes unvested restricted stock awards with vesting conditions

that were not satisfied as of December 31, 2015. Each equity grant is shown separately for each named executive officer. The vesting schedule for each outstanding equity award is shown in the footnotes following this table.

  Outstanding Equity Awards at Year End 
     Option Awards  Stock Awards 

Name

 Grant Date  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable		  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable		  Option
Exercise
Price
($)		  Option
Expiration
Date		  Number of
Shares 
of Stock
that
Have Not
Vested (1)
(#)		  Market Value of
Shares or Units
of Stock that
Have Not
Vested (2) ($)		 

John Price

  10/1/2014    —      —      —      —      50,000    114,000  
  4/28/2015    —      —      —      —      50,000    114,000  

Bradley Pyatt

  10/1/2014    —      —      —      —      500,000    1,140,000  

Richard Estalella

  10/1/2014    —      —      —      —      —      —    

Cory Gregory (3)

  10/1/2014    —      —      —      —      —      —    

James Greenwell (3)

  10/1/2014    —      —      —      —      —      —    

Donald Prosser (3)

  10/1/2014    —      —      —      —      —      —    

2017.
Outstanding Equity Awards at Year End
  
 
Option Awards
 
 
Stock Awards
 
Name
 
Grant Date
 
 
Number of Securities Underlying Unexercised Options (#) Exercisable
 
 
Number of Securities Underlying Unexercised Options (#) Unexercisable
 
 
Option Exercise Price ($)
 
 
Option Expiration Date
 
 
Number of Shares of Stock that Have Not Vested (1) (#)
 
 
Market Value of Shares or Units of Stock that Have Not Vested (2)
 
Ryan Drexler(3)
1/1/2017
 
 
 
 
 
 
 
 
 
 
 
 
 $350,000 
  227,500 
 2/22/2016
  120,191 
 $17,171 
  1.89 
 
 2/22/2026
 
    
    
 
    
    
    
 
 
 
    
    
Brian Casutto10/1/2014
  — 
  — 
  — 
  — 
  30,000 
  19,500 
 2/23/2016
  — 
  — 
  — 
  — 
  20,000 
  13,000 
(1)The table below shows the vesting dates for the respective unvested shares of restricted stock awards listed in the above Outstanding Equity Awards at Year-End for 2015 Table.2017 Table, generally subject to the named executive officer’s continued employment through such date. The restricted stock granted to Mr. Drexler would vest in full upon a termination of his employment or a change in control. The restricted stock granted to Mr. Casutto would vest in connection with a termination of Mr. Casutto’s employment under certain circumstances, as described under “Narrative Disclosure to Summary Compensation Table” above.
Vesting Date
Drexler
 Casutto
1/1/2018
350,000
—
5/23/2018
—
10,000
12/31/2018
—
30,000
5/23/2019
—
10,000
(2)MarketThe market value of the restricted stock award represents the product of the closing price of a share of our common stock as of December 31, 201529, 2017 (the last trading day of the year), which was $2.28,$0.65, and the number of shares underlying each such award.of restricted stock held by the named executive officer on December 31, 2017.
(3)As a result of their employment terminations during 2015,
The stock options granted to Mr. Drexler vest in equal quarterly installments over the unvested portion of all outstanding restricted stock awards vested immediately based upon the terms of the stock grant.

Vesting Date

  Price   Pyatt 

12/31/2016

   60,000     300,000  

12/31/2017

   20,000     100,000  

12/31/2018

   20,000     100,000  

Total

   100,000     500,000  

Options Exercised and Stock Vested

The following table provides information regarding the vesting of restricted stock awards with respect to our named executive officers during 2015. No stock options were exercised by our named executive officers during 2015.

   Option Awards   Stock Awards 

Name

  Number of
Shares Acquired
on Exercise		   Value Realized
on Exercise		   Number of
Shares Acquired
on Vesting		   Value Realized
on Vesting (1)		 

John Price

   —       —       0    $0  

Brad Pyatt

   —       —       290,500    $662,340  

Richard Estalella

   —       —       0    $0  

Cory Gregory (2)

   —       —       224,500    $886,775  

James Greenwell (2)

   —       —       126,521    $638,931  

Donald Prosser (2)

   —       —       128,219    $534,673  

(1)Value realizedtwo-year period commencing on vesting is computed by multiplying the number of shares that vested by the per-share closing price of our common stock on the vesting date.
(2)As a result of their employment terminations during 2015, the unvested portion of all outstanding restricted stock awards vested immediately based upon the terms of the stock grant.

Nonqualified Deferred Compensation and Pension Benefits

We maintain a 401(k) plan as previously discussed in the Compensation Discussion and Analysis. We do not maintain any defined benefit or nonqualified deferred compensation plans.

Potential Payments Upon Termination or Change-in-Control

Messrs. Drexler, Pyatt and Price

Pursuant to the terms of their employment agreements, each of Messrs. Drexler, Pyatt and Price is entitled to certain payments and benefits upon a termination of employment with the Company due to the executive’s death or disability, upon a termination by the Company without cause (as such term is defined in the respective agreement) or a resignation by the executive for good reason (as such term is defined in the respective agreement) and, in certain circumstances, in connection with a change of control of the Company.

Mr. Pyatt’s employment with the Company terminated on March 15, 2016. Pursuant to Mr. Pyatt’s separation agreement with the Company, in exchange for a release of claims, the Company agreed to pay him severance in the amount of $1,062,000, payable over a 12-month period and a lump sum payment of $250,000 and to reimburse COBRA premiums for him and his eligible dependents for 12 months. In addition, all stock awards held by Mr. Pyatt vested in full on his termination. As a result of his acceptance of the terms of the separation agreement, the benefits detailed below were foregone, including past and future contractual equity awards.

Death or Disability

The employment agreements with Messrs. Drexler and Pyatt provide that the following benefits will be paid or provided upon a termination of employment due to death or disability:

(i)earned but unpaid base salary through the date of termination;

(ii)reasonable business expenses paid or incurred by the executive but not reimbursed as of the date of termination;

(iii)any accrued but unused vacation time in accordance with Company policy ((i)-(iii), the “Accrued Obligations”);

(iv)any annual bonuses earned through the date of termination;

(v)regarding Mr. Pyatt, all long-term incentives earned prior to date of termination, a cash amount equal to three hundred percent (300%) of his base salary, annual bonus and long-term incentive amount earned during the year immediately preceding the date of termination (the “Separation Payment”) and reimbursement of COBRA premiums for 18 months following termination; and

(vi)regarding Mr. Drexler, any transaction bonus earned through the date of termination and full vesting of all equity awards.

Mr. Drexler remains eligible to receive a transaction bonus under his employment agreement equal to 10% of the purchase price if a qualifying sale of the Company occurs before February 10, 2021.

The employment agreement for Mr. Price provides that that the following benefits will be paid or provided upon a termination of employment due to death or his inability to perform his duties as a result of disability:

(i)the Accrued Obligations;

(ii)the greater of (a) one hundred percent (100%) of his target bonus for the year in which the date of termination occurs or (b) a bonus for such year as may be determined by the Committee in its sole discretion;

(iii)in the case of inability to perform due to disability, six months of base salary, payable in monthly installments; and

(iv)reimbursement of COBRA premiums for 12 months.

Termination by the Company for Cause or Resignation without Good Reason

Upon termination for cause or resignation without good reason, each of Messrs. Drexler, Pyatt and Price is generally entitled to receive the Accrued Obligations. In addition, all equity awards held by Mr. Drexler will vest in full.

By the Company without Cause or by the Executive for Good Reason

The employment agreements provide that Messrs. Drexler and Pyatt are entitled to receive the following upon a termination of employment by the Company without cause or the executive for good reason:

(i)the Accrued Obligations;

(ii)any annual bonuses earned through the date of termination;

(iii)regarding Mr. Pyatt, all long-term incentives earned prior to date of termination, the Separation Payment and reimbursement of COBRA premiums for 18 months following termination; and

(iv)regarding Mr. Drexler, any transaction bonus earned through the date of termination and full vesting of all equity awards.

Mr. Drexler remains eligible to receive a transaction bonus under his employment agreement equal to 10% of the purchase price if a qualifying sale of the Company occurs before February 10, 2021.

Mr. Pyatt could have terminated his employment in connection with a change in control and received these same benefits.

The employment agreement for Mr. Price provides that he is entitled to receive the following upon a termination by the Company without cause or by him for good reason outside of a change in control:

(i)the Accrued Obligations

(ii)the lesser of (a) nine months of Mr. Price’s base salary at the time of termination, payable in installments over a three-month period, or (b) the base salary remaining under the employment agreement;

(iii)any annual bonuses earned through the date of termination plus either (a) twenty-five percent (25%) of Mr. Price’s target bonus if the termination date is between January 1 and June 30 or (b) fifty percent (50%) of Mr. Price’s target bonus if the termination date is between July 1 and December 31;

(iv)reimbursement of COBRA premiums for 12 months following termination; and

(v)full vesting of equity awards.

If Mr. Price’s employment is terminated by the Company without cause or by him for good reason during the “Protection Period”, in lieu of the benefits described above, he will be entitled to receive:

(i)the Accrued Obligations;

(ii)one year of base salary, payable over a 12-month period;

(iii)the greater of (a) 100% of his target bonus for the year of termination or (b) a bonus for such year as determined by the Compensation Committee in its sole discretion;

(iv)a one-time cash payment equal to $500,000, payable in a lump sum;

(v)reimbursement of COBRA premiums for 12 months following termination; and

(vi)full vesting of equity awards.

“Protection Period” means the period commencing on the date of a change in control and continuing until the earlier of the second anniversary of such change in control and the term of the agreement; and the six-month period prior to such change in control if Mr. Price’s employment is terminated without cause or for good reason and in either case the termination was requested by the party that effectuates the change in control or occurs in connection with or in anticipation of the change in control.

Mr. Drexler has agreed not to disclose our confidential information and to not compete with us or solicit our employees, independent contractors or customers generally for a period of 12 months following termination (the post-termination restrictions will not apply on a termination due to cause or a voluntary termination). Mr. Price has agreed to not disclose our confidential information, to not compete with us for six months following termination and to not solicit our employees (or anyone who was an employee within the 90-day period before such solicitation) for 12 months following termination.

Messrs. Greenwell and Gregory

Mr. Greenwell’s employment with the Company terminated on August 25, 2015. Pursuant to Mr. Greenwell’s separation agreement with the Company, in exchange for a release of claims, the Company agreed to pay him nine months of base salary, paid as salary continuation over a three-month period, and a lump sum payment of $150,000, which represented 50% of his 2015 target bonus, and to reimburse COBRA premiums for him and his eligible dependents for 12 months and to pay key man insurance policy premiums on behalf of Mr. Greenwell until December 31, 2015. In addition, all stock awards held by Mr. Greenwell vested in full on his termination. Mr. Greenwell agreed to provide consulting services to the Company upon its request until December 31, 2016 for an hourly fee of $150. Mr. Greenwell agreed not to compete with us or to solicit our employees until December 31, 2016.

Mr. Gregory’s employment with the Company terminated on November 5, 2015. Pursuant to Mr. Gregory’s separation agreement with the Company, in exchange for a release of claims, the Company agreed to pay him six months of base salary, paid as salary continuation over a nine-month period, and to reimburse COBRA premiums for him and his eligible dependents for 12 months and to pay key man insurance policy premiums on behalf of Mr. Gregory until December 31, 2015. In addition, all stock awards held by Mr. Gregory vested in full on his termination. Mr. Gregory agreed not to compete with us or to solicit our employees for six months following termination.

Mr. Prosser

Mr. Prosser resigned from the Company effective April 15, 2015. In connection with his resignation, Mr. Prosser was entitled to accrued but unpaid compensation and benefits through the date of termination. In connection with his termination of employment, all stock awards held by Mr. Prosser vested in full on his termination.

Mr. Estalella

Mr. Estalella’s employment with the Company terminated on December 30, 2015. Mr. Estalella did not receive severance upon his termination of employment and is currently in a dispute with the Company regarding such severance payments.

The following tables describe (i) the potential payments and benefits to which Messrs. Pyatt and Price would be entitled upon a termination of their employment under their employment agreements assuming a termination of employment and a change in control had each occurred on December 31, 2015 (the last business day of our last completed fiscal year) and (ii) the actual payments and benefits that Messrs. Gregory, Greenwell and Prosser

received upon their terminations of employment during 2015. Mr. Drexler would not have been entitled to any payments or benefits had his employment been terminated on December 31, 2015 since he was not an employee as of December 31, 2015 and his employment agreement with the Company was entered into following the end of the last fiscal year. Amounts in respect of equity acceleration for each of Messrs. Pyatt and Price were determined using the closing price of a share of our common stock on December 31, 2015 ($2.28). Amounts in respect to equity acceleration for each of Messrs. Gregory, Greenwall and Prosser were determined using the closing price of a share of common stock on the date of termination ($3.95, $5.05, $4.17, respectively.)

   Involuntary
Termination
Without
Cause/
For Good
Reason ($)		   Death/
Disability ($)		   Involuntary
Termination
Without
Cause/For
Good Reason
Following
Change in
Control ($)		 

Bradley J. Pyatt (1)

      

Cash severance

  $5,319,750    $5,319,750    $5,319,750  

Health and welfare continuation

  $23,400    $23,400    $23,400  

Equity acceleration

  $1,140,000    $1,140,000    $1,140,000  
  

 

 

   

 

 

   

 

 

 

Total

  $6,483,150    $6,483,150    $6,483,150  
  

 

 

   

 

 

   

 

 

 

John Price

      

Cash severance

  $153,000    $375,000    $1,000,000  

Health and welfare continuation

  $24,000    $24,000    $24,000  

Equity acceleration

  $228,000    $228,000    $228,000  
  

 

 

   

 

 

   

 

 

 

Total

  $405,000    $627,000    $1,252,000  
  

 

 

   

 

 

   

 

 

 

Cory Gregory

      

Cash severance

  $110,573     —      —   

Health and welfare continuation

  $5,400     —      —   

Equity acceleration

  $886,775     —      —   
  

 

 

   

 

 

   

 

 

 

Total

  $1,002,748     —      —   
  

 

 

   

 

 

   

 

 

 

James Greenwell

      

Cash severance

  $375,000     —      —   

Health and welfare continuation

  $15,600     —      —   

Equity acceleration

  $638,931     —      —   
  

 

 

   

 

 

   

 

 

 

Total

  $1,029,531     —      —   
  

 

 

   

 

 

   

 

 

 

Donald Prosser

      

Cash severance

   —      —      —   

Health and welfare continuation

   —      —      —   

Equity acceleration

  $534,673     —      —   
  

 

 

   

 

 

   

 

 

 

Total

  $534,673     —      —   
  

 

 

   

 

 

   

 

 

 

(1)Mr. Pyatt’s employment with the Company terminated on March 15, 2016. Pursuantgrant, generally subject to Mr. Pyatt’s separation agreement with the Company, in exchange for a release of claims, the Company agreedDrexler’s continued employment. The stock options granted to pay him severance in the amount of $1,062,000, payable over a 12-month period and a lump sum payment of $250,000 and to reimburse COBRA premiums for him and his eligible dependents for 12 months. In addition, all stock awards held by Mr. PyattDrexler vested in full on his termination. Mr. Pyatt forewent his contractual termination benefits detailed here and all contractual past and future equity awards.February 22, 2018.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

All compensation and related matters are reviewed by our Compensation Committee. Our Compensation Committee consists of Michael Doron, Noel Thompson and William Bush. None of the members of our Compensation Committee is or has at any time during the past year been an officer or employee of ours. None of our executive officers currently serves or in the past year has served as a member of the Board of Directors or Compensation Committee of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the beneficial ownership of shares of our common stock by (i) each current director, (ii) each named executive officer, and (iii) each person who we know beneficially owns more than 5% of our common stock as of April 18, 2016.

October 22, 2018.

We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.

   Shares Beneficially Owned 
   Common Stock (1) 

Name of Beneficial Owner

          Shares               % (2)     

Named Executive Officers:

    

Ryan Drexler (3)

   4,140,028     26%

John Price

   100,000     1%

Non-Employee Directors:

    

Michael Doron

   79,197     1%

William Bush

   19,412     0%

Stacey Jenkins

   19,412     0%

Noel Thompson

   19,412     0%

Richard Estalella

   46,049     0%
  

 

 

   

 

 

 

Officers and Directors as a Group (seven persons):

   4,423,510     27%
  

 

 

   

 

 

 

 
 
Shares Beneficially Owned
 
 
 
Common Stock (1)
 
Name of Beneficial Owner
 
 Shares
 
 
  % (2)
 
Named Executive Officers:
 
 
 
 
 
 
Ryan Drexler
  18,516,023 
  58.7%
Brian Casutto
  125,000 
  * 
Non-Employee Directors:
    
    
William Bush
  254,086 
  * 
John J. Desmond
  230,214 
  * 
Officers and Directors as a Group (four persons):
  18,794,210 
  60.7%
*Represents less than one percent.
(1)This column lists beneficial ownership of voting securities as calculated under SEC rules. Otherwise, except to the extent noted below, each director, named executive officer or entity has sole voting and investment power over the shares reported. Standard brokerage accounts may include nonnegotiable provisions regarding set-offs or similar rights.
(2)Percent of total voting power represents voting power with respect to 13,600,78515,314,667 shares of common stock outstanding as of April 18, 2016,October 22, 2018, plus 2,608,69616,216,216 shares of common stock as if the conversion option of the outstanding convertible debt was exercised (16,209,481and options to purchase common shares 137,262 shares (31,996,734 common shares). were also exercised.
(3)Ryan Drexler, the Company’s interim chief executive officer, interim president and chairman of the board of directors is the sole member of Consac, LLC, and as such has voting and investment power over the securities owned by the stockholder. These shares are also included in the beneficial owners of more than five percent table below.

Beneficial Owners of More than Five Percent

The following table shows the number of shares of our common stock, as of April 18, 2016,October 22, 2018, held by persons known to us to beneficially own more than five percent of our outstanding common stock.

   Shares Beneficially Owned 
   Common Stock (1) 

Name of Beneficial Owner

          Shares               % (2)     

Wynnefield Capital (3)

   920,415     6%

Consac, LLC (4)

   4,140,028     26%

Marine MP (5)

   780,000     5%

 
 
Shares Beneficially Owned
 
 
 
Common Stock (1)
 
Name of Beneficial Owner
 
 Shares
 
 
  % (2)
 
Wynnefield Capital (3)
  1,671,305 
  10.8%
Ryan Drexler
  18,516,023 
  58.7%
Amerop Holdings, Inc. (4)
  2,927,677 
  19.1%
(1)This column lists beneficial ownership of voting securities as calculated under SEC rules. Otherwise, except to the extent noted below, each director, named executive officer or entity has sole voting and investment power over the shares reported. Standard brokerage accounts may include nonnegotiable provisions regarding set-offs or similar rights.

(2)
Percent of total voting power represents voting power with respect to 13,600,78515,314,667 shares of common stock outstanding as of April 18, 2016, plus 2,608,696October 22, 2018. To compute the percentage of outstanding shares of common stock as ifheld by each person and unless otherwise noted, any share of common stock which such person has the right to acquire pursuant to the exercise of stock options exercisable within 60 days of October 22, 2018 or upon conversion option of the outstanding convertible debt was exercised (16,209,481 common shares).is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
(3)Joshua Landes and Nelson Obus may be deemed to hold an indirect beneficial interest in these shares, which are directly beneficially owned by Wynnefield Partners Small Cap Value, L.P., Wynnefield Partners Small Cap Value, L.P. I, Wynnefield Small Cap Value Offshore Fund and Wynnefield Capital, Inc. Profit Sharing Plan because they are a co-managing members of Wynnefield Capital Management, LLC and principal executive officers of Wynnefield Capital, Inc. The principal place of business for Wynnefield Capital is 450 Seventh Avenue, Suite 509, New York, New York 10123. This information is based on a Schedule 13D/A filed on October 18, 2018 with the SEC.
(4)Ryan Drexler,
Amerop Holdings, Inc. and Leonard P. Wessell III may be deemed to hold an indirect beneficial interest to 1,463,839 of these shares. White Winston Select Asset Funds, LLC, Todd M. Enright, Mark Blundell, Donald Feagan, and Robert Mahoney may be deemed to hold an indirect beneficial interest in these shares. White Winston Select Asset Fund Series Fund MP-18, LLC reported sole voting power with respect to 2,927,677 shares. The address of White Winston Select Asset Funds Series Fund MP-18, LLC is 265 Franklin St., Suite 1702, Boston, MA 02110.This information is based on a Schedule 13D filed on August 24, 2018 with the Company’s interim chief executive officer, interim president and chairman of the board of directors is the sole member of Consac, LLC, and as such has voting and investment power over the securities owned by the stockholder. These shares are also included in the Named Executive Officers portion of the Management Beneficial Ownership table above.SEC.
(5)Arnold Schwarzenegger is the sole member of Marine MP, LLC, and as such has voting and investment power over the securities owned by the stockholder.

EQUITY COMPENSATION PLAN INFORMATION

In 2015, we adopted the MusclePharm Corporation 2015 Equity Incentive Compensation Plan that has been(the “2015 Plan”). The 2015 Plan was approved by our stockholders to replace theand replaced our 2010 Equity Incentive Plan. We have not issued any shares under the 2015 Equity Incentive Plan and all options issued under the 2010 Equity Incentive Plan have expired. The following table sets forth the number and weighted-average exercise price of securities to be issued upon exercise of outstanding options, warrants and rights, and the number of securities remaining available for future issuance under all of our equity compensation plans, atas of December 31, 2015:

PLAN CATEGORY

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights (a)		Weighted average
exercise price of
outstanding
options, warrants
and rights (b)		Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column a) (c)

Equity compensation plans approved by security holders:

2015 Equity Incentive Purchase Plan

—  $—  2,000,000

2015 Employee Stock Purchase Plan

—  —  1,500,000

2014 Restricted Stock Pool

—  —  170,000

Equity compensation plans not approved by security holders:

—  —  —  

Total

—  $—  3,670,000

2017:

PLAN CATEGORY
 
Number of securities to be issued uponexercise of outstanding options, warrants and rights (a)
 
 
Weighted average exercise price of outstanding options, warrants and rights (b)
 
 
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c)
 
Equity compensation plans approved by security holders:
 
 
 
 
 
 
 
 
 
2015 Incentive Compensation Plan
  331,584 
 $2.10 
  1,374,519 
 
    
    
    
Total
  331,584 
 $2.10 
  1,374,519 
AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors (the “Audit Committee”) has furnished this report concerning the independent audit of the Company’s financial statements. Each member of the Audit Committee meets the enhanced independence standards established by the Sarbanes-Oxley Act of 2002 and rulemaking of the Securities and Exchange Commission (the “SEC”) and the NASDAQNasdaq Stock Market regulations. A copy of the Audit Committee Charter is available on the Company’s website at http://www.musclepharmcorp.

ir.musclepharmcorp.com/governance-documents.


The Audit Committee’s responsibilities include assisting the Board of Directors regarding the oversight of the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the Independent Registered Public Accounting Firm’s qualifications and independence, and the performance of the Company’s internal audit function and the Independent Registered Public Accounting Firm.

In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the Company’s financial statements for the fiscal year ended December 31, 20152017 with the Company’s management and EKS&H LLLP,Plante & Moran,PLLC, the Company’s Independent Registered Public Accounting Firm. In addition, the Audit Committee has discussed with EKS&H LLLP,Plante & Moran,PLLC, with and without management present, their evaluation of the Company’s internal accounting controls and overall quality of the Company’s financial reporting. The Audit Committee also discussed with EKS&H LLLPPlante & Moran, PLLC the matters required to be discussed by AICPA, Professional Standards, Vol. 1, AU Section 380 (Communication with Audit Committees), as modified or supplemented. The Audit Committee also received the written disclosures and the letter from EKS&H LLLPPlante & Moran, PLLC required by the Public Company Accounting Oversight Board Rule 3526 (Communication with Audit CommitteeCommittees Concerning Independence) and the Audit Committee discussed with EKS&H LLLPPlante & Moran, PLLC the independence of EKS&H LLLPPlante & Moran, PLLC from the Company and the Company’s management.

Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20152017 for filing with the Securities and Exchange Commission.

The Audit Committee and the Board of Directors also have recommended, subject to stockholder approval, the selection of EKS&H LLLPPlante & Moran, PLLC as the Company’s Independent Registered Public Accounting Firm for the year ending December 31, 2016.

AUDIT COMMITTEE

/s/ William J. Bush, CHAIRMAN

Michael Doron

Stacey Y. Jenkins

2018.

RELATED PARTY TRANSACTIONS

Interim Chief Executive Officer, Interim President and

Related-Party Notes Payable
On November 3, 2017, we entered into a refinancing transaction (the “Refinancing”) with Mr. Ryan Drexler, the Company’s Chairman of the Board of Directors’ Debt Guarantee

In October 2015, the Company entered into loan modification agreements with ANB Bank under the line of credit and term loan to: (i) change the maturity date of the loans to January 15, 2016, (ii) prohibit the loans to be declared in default prior to December 10, 2015, except for defaults resulting from failure to make timely payments, and (iii) delete certain financial covenants from the line of credit. In consideration for these modifications, Ryan Drexler, the Company’s interim chief executive officer, interim president and chairman of the board of directors and a family member, provided their individual guaranty for the remaining balance of the term loan and line credit of $6.2 million. In consideration for executing his guaranty, the Company issued Ryan Drexler 28,571 shares of common stock with a grant date fair value of $80,000 (based upon the closing price of common stock on the date of issuance).

InterimDirectors, Chief Executive Officer Interim President and ChairmanPresident. The refinancing was overseen and approved by a Special Committee of the Board of Directors’Directors, comprised of John J. Desmond and William Bush, each of whom is an independent member of our Board of Directors. As part of the Refinancing, we issued to Mr. Drexler an amended and restated convertible secured promissory note (the “Refinanced Convertible Secured Promissory Note Agreement

In December 2015,Note”) in the Company entered intooriginal principal amount of $18,000,000, which amends and restates (i) a convertible secured promissory note agreementdated as of December 7, 2015, and amended as of January 14, 2017, in the original principal amount of $6,000,000 with Ryan Drexler, interim chief executive officer, interim presidentan interest rate of 8% prior to the amendment and chairman10% following the amendment (the “2015 Convertible Note”), (ii) a convertible secured promissory note dated as of November 8, 2016, in the original principal amount of $11,000,000 with an interest rate of 10% (the “2016 Convertible Note”) , and (iii) a secured demand promissory note dated as of July 27, 2017, in the original principal amount of $1,000,000 with an interest rate of 15% (the “2017 Note”, and together with the 2015 Convertible Note and the 2016 Convertible Note, collectively, the “Prior Notes”). The due date of the board2015 Convertible Note and the 2016 Convertible Note was November 8, 2017. The 2017 Note was due on demand.

2017 Refinanced Convertible Note
The $18 million Refinanced Convertible Note bears interest at the rate of directors pursuant12% per annum. Interest payments are due on the last day of each quarter. At our option (as determined by its independent directors), we may repay up to which he lendedone sixth of any interest payment by either adding such amount to the Company $6.0 million. Proceeds fromprincipal amount of the note were usedor by converting such interest amount into an equivalent amount our common stock. Any interest not paid when due shall be capitalized and added to fund working capital requirements. The convertible note is secured by all assets and propertiesthe principal amount of the CompanyRefinanced Convertible Note and its subsidiaries whether tangible or intangible. The convertible note carries anbear interest at 8% per annum, or 10% inon the event of default. applicable interest payment date along with all other unpaid principal, capitalized interest, and other capitalized obligations.
Both the principal and the interest under the convertible noteRefinanced Convertible Note are due in January 2017,on December 31, 2019, unless converted earlier. The holder can

Mr. Drexler may convert the outstanding principal and accrued interest into shares of our common stock for $2.30at a conversion price of $1.11 per share at any time. The CompanyWe may prepay the convertible note at the aggregate principal amount therein plus accrued interestRefinanced Convertible Note by giving the holderMr. Drexler between 15 and 60 day-notice,days’ notice depending upon the specific circumstances, provided thatsubject to Mr. Drexler’s conversion right.
The Refinanced Convertible Note contains customary events of default, including, among others, the holder mayfailure by us to convertmake a payment of principal or interest when due. Following an event of default, interest will accrue at the note duringrate of 14% per annum. In addition, following an event of default, any conversion, redemption, payment or prepayment of the noticeRefinanced Convertible Note will be at a premium of 105%. The Refinanced Convertible Note also contains customary restrictions on the ability of us to, among other things, grant liens or incur indebtedness other than certain obligations incurred in the ordinary course of business. The restrictions are also subject to certain additional qualifications and carveouts, as set forth in the Refinanced Convertible Note. The Refinanced Convertible Note is subordinated to certain other indebtedness of us, as described below.
As part of the Refinancing, we and Mr. Drexler entered into a restructuring agreement (the “Restructuring Agreement”) pursuant to which the parties agreed to enter into the Refinanced Convertible Note and to amend and restate the security agreement pursuant to which the Prior Notes were secured by all of the assets and properties of us and our subsidiaries whether tangible or intangible, by entering into the Third Amended and Restated Security Agreement (the “Amended Security Agreement”). Pursuant to the Restructuring Agreement, we agreed to pay, on the effective date of the Refinancing, all outstanding interest on the Prior Notes through November 8, 2017 and certain fees and expenses incurred by Mr. Drexler in connection with the Restructuring.
In connection with the refinancing, the Company recorded a debt discount of $1.2 million. The debt discount is equal to the change in the fair value of the conversion option between the Refinanced Convertible Note and the Prior Notes. The fair value of the conversion option was determined a Monte Carlo simulation and the model of stock price behavior known as GBM which simulates a future period as a random step from a previous period. The Company recordedengaged a third-party valuation firm to perform this complex valuation.
In addition, the convertible noteRefinanced Convertible Note contains two embedded derivatives for default interest and an event of $6.0default put. Due to the unlikely event of default, the embedded derivatives have a de minimis value as of December 31, 2017.
For the years ended December 31, 2017 and 2016, interest expense related to the related party notes was $2.4 million as a liabilityand $0.7 million, respectively. During the years ended December 31, 2017 and 2016, $2.2 million and $0.5 million, respectively, in interest was paid to Mr. Drexler. For the balance sheet and alsoyear ended December 31, 2016, in connection with issuing the Prior Notes, the Company recorded a beneficial conversion feature of $52,000$601,000 as a debt discount upon issuance of the convertible note, which is beingwas amortized over the original term of the convertible debt using the effective interest method. The beneficial conversion feature was calculated based on the difference between the fair value of common stock and the effective conversion price of the convertible note. As of December 31, 2015, the convertible note had an outstanding principal balance of $6.0 million.

In connection with the Company entering into the convertible promissory note with Mr. Drexler, the Company granted Mr. Drexler the right to designate two directors to the Company’s Board of Directors. The Company agreed to take all actions necessary to permit such designation.

Charitable Youth Sports Program

In March 2014, the Board of Directors of the Company approved and the Company established a charitable youth sports grant program (the “Program”) pursuant to which the Company will donate product, equipment and cash to organizations such as schools, sports teams and training facilities. The Company had tentatively established an annual budget of approximately $250,000 for the Program. The primary intent of the Program was to build MusclePharm brand awareness with youth athletes. The Company’s other business purposes in establishing the Program was to help needy organizations achieve their goals, promote the Company’s brand, help athletes develop stronger and better skills and to build the reputation of the Company as a contributor to the community. A committee formerly consisting of the Company’s former president, former director of team development, and former chief operating officer oversaw the Program. In 2014, the Company made an initial grant in the amount of approximately $250,000 to Arvada West High School and similar charitable contributions to other charitable sports organizations of approximately $30,000. The Company’s former chief executive officer, Mr. Brad Pyatt, is a graduate of Arvada West High School and serves as a volunteer football coach. The Company did not make a

charitable grant to Arvada West High School during 2015. The Company did make charitable grants to other youth sports organizations during 2015 totaling approximately $278,000. We expect this amount to decrease substantially in 2016 and any future grant will be approved by the chief executive officer and chief financial officer.

Sports Tickets

The Company maintains a luxury box at the Sports Authority Field in Denver, Colorado. Employees are able to attend Denver Bronco football games and utilize the luxury box. During 2015, our chief executive officer donated tickets to one of the Denver Broncos games to a youth football team for fund raising. Brad’s son is a member of the youth football team. The total cost for the event was approximately $15,000.

Key Executive Life Insurance

For the year ended December 31, 2015, the Company purchased split dollar life insurance policies on certain key executives. In September 2015, the Company increased the coverage on one of its key executives officers. These policies provide a split of 50% of the death benefit proceeds to the Company and 50% to the officer’s designated beneficiaries.

Lease Agreement with Significant Shareholder

In October 2013, the Company entered into an Office Lease Agreement with Frost Real Estate Holdings, LLC, a Florida limited liability company owned by Dr. Phillip Frost, a significant shareholder. Pursuant to the lease, the Company rented 1,437 square feet of office space for an initial term of three years, with an option to renew the lease for an additional three-year term. This facility was closed in September 2015 and included in the Company’s restructuring plan. The remaining lease obligation through April 2017 for $77,000 was included in the restructuring expense. For the years ended December 31, 2015, 2014 and 2013, the Company incurred rent expense of $39,000, $54,000 and $13,000, respectively.

Lease Agreement with Former Employee

The Company leased office and warehouse facility in Hamilton, Ontario, Canada from 2017275 Ontario Inc., which is a company owned by Renzo Passaretti, vice president and general manager of MusclePharm Canada Enterprises Corp, the Company’s wholly-owned Canadian subsidiary. Mr. Passaretti separated from the Company on September 2, 2015. For the years ended December 31, 2015, 2014 and 2013, the Company paid rent of $83,000, $86,000 and $75,000, respectively. The lease was terminated in November 2015.

Business Relationship with Former Employee

Ryan DeLuca, the former chief executive officer of Bodybuilding.com, is the brother of Jeremy DeLuca, MusclePharm’s former executive vice president, MusclePharm brand and global business development. The Company maintained a business relationship with Bodybuilding.com prior to hiring Mr. DeLuca. The Company does not offer preferential pricing of our products to Bodybuilding.com based on these relationships. Mr. DeLuca separated from MusclePharm on September 15, 2015. Net revenue from products sales to Bodybuilding.com were $16.9 million, $24.0 million and $29.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. The Company had $1.5 million and $1.9 million in trade receivables with Bodybuilding.com as of December 31, 2015 and 2014, respectively. The Company purchased marketing services from Bodybuilding.com of $0.4 million and $1.4 million for the years ended December 31, 2015 and 2014, respectively.

Indemnification Agreements

We have entered into indemnification agreements with each of our directors and named executive officers. The indemnification agreements and our bylaws require us to indemnify our directors to the fullest extent permitted by Nevada law.

Review, Approval or Ratification of Transactions with Related Parties

We intend to adoptadopted a written related person transactions policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of our common stock, and any members of the immediate family of and any entity affiliated with any of the foregoing persons, are not permitted to enter into a material related person transaction with us without the review and approval of our Audit Committee, or a committee composed solely of independent directors in the event it is inappropriate for our Audit Committee to review such transaction due to a conflict of interest. We expect theThe policy to provideprovides that any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of our common stock or with any of their immediate family members or affiliates, in which the amount involved exceeds $120,000 will be presented to our Audit Committee for review, consideration and approval. In approving or rejecting any such proposal, we expect that our Audit Committee will consider the relevant facts and circumstances available and deemed relevant to the Audit Committee, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’spersons interest in the transaction.


Although we have not always had a written policy for the review and approval of transactions with related persons, our Board of Directors has historically reviewed and approved any transaction where a director or officer had a financial interest, including all of the transactions described above. Prior to approving such a transaction, the material facts as to a director’s or officer’s relationship or interest as to the agreement or transaction were disclosed to our Board of Directors. Our Board of Directors would take this information into account when evaluating the transaction and in determining whether such transaction was fair to us and in the best interest of all of our stockholders.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act, requires our directors and named executive officers, and persons who beneficially own more than 10% of our common stock, to file initial reports of ownership and reports of changes in ownership of our common stock and our other equity securities with the SEC. As a practical matter, we assist our directors and officers by monitoring transactions and completing and filing Section 16 reports on their behalf. Based solely on a review of the copies of such forms in our possession and on written representations from reporting persons, we believe that during 2015, all ofDuring 2017, our named executive officers and directors filed the required reports on a timely basis under Section 16(a) of the Exchange Act except for (i) Michael Doron, William Bush, Stacey Jenkins and Noel Thompson regarding the July 2015 board grant.

as follows:


Name
Date of Award
Date
Filed
StockAwards
Ryan Drexler12/08/2016
2/7/2017
200,000
Ryan Drexler1/01/2017
2/7/2017
350,000
Michael Doran4/21/2017
 —
10,081
William J. Bush4/21/2017
9/22/2017
10,081
William J. Bush7/24/2017
9/22/2017
53,476
John J. Desmond7/24/2017
3/29/2018
80,214

PROPOSAL 1

ELECTION OF DIRECTORS

General

The Board of Directors has nominated the four (4) individuals identified under “Director Nominees” below for election as directors, all of whom are currently directors of the Company. Each of the nominees has agreed to be named in this proxy statement and to serve as a director if elected. Our Board of Directors is currently comprised of six (6) members, however Messrs. Estalella and Thompson are not standing for reelection and will retire from the Board of Directors following the Annual Meeting.four (4) members. Directors are elected at each annual meeting and hold office until their successors are duly elected and qualified at the next annual meeting. In the absence of instructions to the contrary, the persons named as proxy holders in the accompanying proxy intend to vote in favor of the election of the four (4) nominees designated below to serve until the 20172018 Annual Meeting of Stockholders and until their respective successors shall have been duly elected and qualified.

Director Nominees

The following table sets forth certain information concerning the nominees for directors of the Company as of May 13, 2016.

Name

  Age   Director
Since		   

Position with the Company

Ryan Drexler

   45     2015    Chairman of the Board, Interim Chief Executive Officer and President

Michael Doron

   55     2012    Director

William Bush

   51     2015    Director

Stacey Jenkins

   41     2015    Director

October 22, 2018.

Name
  Age DirectorSince 
Position with the Company
Ryan Drexler  47  2015  Chairman of the Board, Chief Executive Officer and President
Brian Casutto 47 2017 Executive Vice President of Sales and Operations and Director
William Bush  53  2015  Director
John J. Desmond 68 2017 Director
Required Vote

The election of the directors of the Company requires the affirmative vote of a pluralitythe majority of the votes cast by stockholders, who are entitled to vote, present in person or represented by Proxy at the Annual Meeting, which will be the nominees receiving the largest number of votes, which may or may not constitute less than a majority.

Meeting.

THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES


PROPOSAL 2

RATIFICATION OF APPOINTMENT OF EXTERNAL AUDITORS

The Audit Committee has selected EKS&H LLLP,Plante & Moran,PLLC, an independent registered public accounting firm, to audit the consolidated financial statements of MusclePharm Corporation for the fiscal year ending December 31, 20162018 and recommends that stockholders vote for ratification of such appointment. Although we are not required to submit to a vote of the stockholders the ratification of the appointment of EKS&H LLLP,Plante & Moran,PLLC, the Company, the Board and the Audit Committee, as a matter of good corporate governance, have determined to ask the stockholders to ratify the appointment. If the appointment of EKS&H LLLPPlante & Moran, PLLC is not ratified, the Audit Committee will take the vote under advisement in evaluating whether to retain EKS&H LLLP.

Plante & Moran,PLLC.

Representatives of EKS&H LLLPPlante & Moran, PLLC attend meetings of the Audit Committee of the Board including executive sessions of the Audit Committee at which no members of MusclePharm’s management are present. EKS&H LLLPPlante & Moran, PLLC has audited the Company’s financial statements for each fiscal year since the fiscal year ended December 31, 2013. Representatives of EKS&H LLLPPlante & Moran, PLLC are not expected to be present at the Annual Meeting. In addition,However, if they are present they will have an opportunity to make a statement if they desire to do so, and if they are present they would be expected to be available to respond to appropriate questions from stockholders.

The following table shows fees and expenses that we paid (or accrued) for professional services rendered by EKS&H LLLPPlante & Moran, PLLC for the years ended December 31, 20142017 and 2015:

   2015   2014 

Audit fees (1)

  $305,000    $305,000  

Audit-related fees (2)

   55,000     53,000  

Tax fees (3)

   0     1,000  

All other fees (4)

   20,000     25,000  
  

 

 

   

 

 

 

Total

  $380,000    $384,000  

2016:
 
 
2017
 
 
2016
 
Audit fees (1)
 $245,000 
 $239,000 
Audit-related fees (2)
  62,000 
  60,000 
All other fees (3)
  17,000 
  25,000 
Total
 $324,000 
 $324,000 
(1)Represents the aggregate fees billed for the audit of the Company’s financial statements, review of the financial statements included in the Company’s quarterly reports and services in connection with the statutory and regulatory filings or engagements for those fiscal years.statements.
(2)Represents the aggregate fees billed for assurance and related services, including the fees for the Quarterly reviews, that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “auditaudit fees.”
(3)Represents the aggregate fees billed for tax compliance, advice and planning.
(4)Represents the aggregate fees billed for all products and services provided that are not included under “auditaudit fees,” “audit-related fees” audit-related fees or “taxtax fees.” These services included a review of a Registration Statement on Form S-8 and related consent procedures, review of the agreement to sell our wholly-owned subsidiary, BioZone Laboratories, Inc. and various Current Reports on Form 8-K.

Audit Committee Pre-Approval Policies

Before an Independent Registered Public Accounting Firm is engaged by us or our subsidiaries to render audit or non-audit services, the Audit Committee shall pre-approve the engagement. Audit Committee pre-approval of audit and non-audit services will not be required if the engagement for the services is entered into pursuant to pre-approval policies and procedures established by the Audit Committee regarding our engagement of the Independent Registered Public Accounting Firm, provided the policies and procedures are detailed as to the particular service, the Audit Committee is informed of each service provided and such policies and procedures do not include delegation of the Audit Committee’s responsibilities under the Exchange Act to our management. The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to grant pre-approvals, provided such approvals are presented to the Audit Committee at a subsequent meeting. If the Audit Committee elects to establish pre-approval policies and procedures regarding non-audit services, the Audit Committee must be informed of each non-audit service provided by the Independent Registered Public

Accounting Firm. Audit Committee pre-approval of non-audit services (other than review and attest services) also will not be required if such services fall within available exceptions established by the SEC. All non-audit services provided by EKS&H LLLPPlante & Moran, PLLC during fiscal years 20142015 and 20152016 were pre-approved by the Audit Committee in accordance with the pre-approval policy described above.

Required Vote

The affirmative vote of the holders of a majority of the outstanding shares of common stock present or represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the appointment of EKS&H LLLP.

Plante & Moran,PLLC.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF EKS&H LLLPPlante & Moran, PLLC AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016.

2018.


PROPOSAL 3

ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) enables our stockholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with SEC rules.

Our executive officer compensation program is designed to attract and retain talented and qualified senior executives to manage and lead our Company and to motivate them to pursue and meet our corporate objectives. Under this program, our named executive officers are rewarded for individual and collective contributions to our success consistent with our “pay for performance” orientation. Furthermore, the executive officer total compensation program is aligned with the nature and dynamics of our business, which focuses management on achieving the Company’s annual and long-term business strategies and objectives. Additional details about our executive compensation programs are described under the section titled “Compensation Discussion and Analysis.”

Our Compensation Committee regularly reviews theour executive officer compensation program to ensure that it achieves the desired goals of emphasizing long-term value creation and aligning the interests of management and stockholders through the use of equity-based awards. We are asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s proxy statement for the 20162017 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.”

Required Vote

The affirmative vote of the holders of a majority of the outstanding shares of common stock present or represented by proxy and entitled to vote at the Annual Meeting will be required to approve the compensation of the named executive officers as disclosed in this proxy statement.

The “say-on-pay” vote is advisory, and therefore not binding on the Company, the Compensation Committee or our Board of Directors. Although the vote is non-binding, the Compensation Committee and the Board of Directors value the opinions of the stockholders and will consider the outcome of the vote when making future compensation decisions.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS, AS DESCRIBED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.

PROPOSAL 4

ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION

In addition to the advisory approval of our executive compensation program, we are also holding a non-binding advisory vote by stockholders on the frequency with which stockholders would have an opportunity to hold a non-binding advisory vote on our executive compensation program. We have included this proposal among the items to be considered at the annual meeting pursuant to the requirements of Section 14A of the Securities Exchange Act of 1934. We are providing stockholders the option of selecting a frequency of one, two or three years, or abstaining. We recommend that our stockholders select “One Year” when voting on the frequency.

After careful consideration, the Board believes that holding an advisory vote annually on executive compensation is currently the most appropriate alternative for the Company. We therefore recommend that our stockholders select “One Year” when voting on the frequency of advisory votes on executive compensation. Although the advisory vote is non-binding, our Board will review the results of the vote and take them into account in making a determination concerning the frequency of future advisory votes on executive compensation.

The option of one year, two years or three years that receives the highest number of votes cast by stockholders will be the frequency of the advisory note on executive compensation that has been selected by stockholders. However, because this vote is advisory and not binding on the Board of Directors or the Company, the Board may decide that it is in the best interests of our stockholders and the Company to hold an advisory vote on executive compensation more or less frequently than the option approved by our stockholders.

Required Vote

The affirmative vote of the holders of a majority of the outstanding shares of common stock present or represented by proxy and entitled to vote at the Annual Meeting will be required to approve the advisory vote on the frequency of the advisory vote on the compensation of the named executive officers as disclosed in this proxy statement.

The stockholder vote on executive compensation is an advisory vote only, and it is not binding on the Company, the Board of Directors, or the Compensation Committee. Although the vote is non-binding, the Compensation Committee and the Board of Directors value the opinions of the stockholders and will consider the outcome of the vote when making future compensation decisions.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR HOLDING FUTURE ADVISORY VOTES REGARDING COMPENSATION OF THE NAMED EXECUTIVE OFFICERS EVERY ONE YEAR.


HOUSEHOLDING OF PROXY MATERIALS

We have adopted a procedure approved by the SEC known as “householding.” This procedure allows multiple stockholders residing at the same address the convenience of receiving a single copy of our Annual Report on Form 10-K and proxy statement, if they have elected to receive proxy materials by mail.the Notice. This allows us to save money by reducing the number of documents we must print and mail, and helps protect the environment as well.

Householding is available to both registered stockholders (i.e., those stockholders with certificates registered in their name) and streetname holders (i.e., those stockholders who hold their shares through a brokerage).

The Company will promptly deliver, upon oral or written request, a separate copy of the Notice to any stockholder residing at an address to which only one copy was mailed. Requests for additional copies should be directed to Investor Relations.


Registered Stockholders

If you are a registered stockholder that has requested to receive proxy materials by mail and you have consented to our mailing of proxy materials and other stockholder information only to one account in your household, as identified by you, we will deliver or mail a single copy of our Annual Report on Form 10-K and proxy statement for all registered stockholders residing at the same address. Your consent will be perpetual unless you revoke it, which you may do at any time by contacting the Householding Department of Broadridge Financial Solutions, Inc., at 51 Mercedes Way, Edgewood, NY 11717, or by calling 1-800-542-1061. If you revoke your consent, we will begin sending you individual copies of future mailings of these documents within 30 days after we receive your revocation notice. If you received a householded mailing this year, and you would like to receive additional copies of our Annual Report on Form 10-K and proxy statement mailed to you, please callsend a e-mail request to Investor Relations at (301) 279-5980, send an e-mail request to investors@musclepharm.com, or write to c/o Investor Relations, MusclePharm Corporation, 4721 Ironton Street, Building A, Denver, CO 802394400 Vanowen St., Burbank, CA 91505 and we will promptly deliver the requested copy.

Registered stockholders that have requested to receive proxy materials by mail and have not consented to householding will continue to receive copies of our Annual Reports on Form 10-K and our proxy statements for each registered stockholder residing at the same address. As a registered stockholder, you may elect to participate in householding and receive only a single copy of the Annual Reports on Form 10-K and proxy statements for all registered stockholders residing at the same address by contacting Broadridge as outlined above.

Streetname Holders

Stockholders who hold their shares through a brokerage may elect to participate in householding or revoke their consent to participate in householding by contacting their respective brokers.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Proxy Statement, as well as other written reports and oral statements that we make from time to time, includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). The words “ongoing,” “believes,” “expects,” “may,” “will” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are not guarantees that the future results, plans, intentions or expectations expressed or implied will be achieved. Matters subject to forward-looking statements involve known and unknown risks and uncertainties, including regulatory, competitive and other factors, which may cause actual financial or operating results or the timing of events to be materially different than those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include, but are not limited to: execution of our restructuring plan, inability to raise capital with agreeable terms or at all, resolve litigation, failure of our manufacturers to meet our production needs; failure to successfully invest in or launch new product introductions; general economic conditions in the markets in which we operate, including financial market conditions, and the other factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 20152017 and in other public filings with the SEC. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments.

OTHER MATTERS

We are not aware of any matters that may come before the meeting other than those referred to in the Notice of Annual Meeting of Stockholders. If any other matter shall properly come before the Annual Meeting, however, the persons named in the accompanying proxy intend to vote all proxies in accordance with their best judgment.

Accompanying this proxy statement is our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Copies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015,2017, as filed with the SEC, are available free of charge on our website at www.musclepharmcorp.com or you can request a copy free of charge by callinge-mail request to Investor Relations at 301-279-5980 or sending an e-mail request to investors@musclepharm.com. Please include your contact information with the request.

By Order

Burbank, California
October 26, 2018

Important Notice Regarding the Availability of Proxy Materials for the Board of Directors

MusclePharm Corporation.

Sincerely,

/s/ John Price

John Price

Corporate Secretary

Denver, Colorado

May 13, 2016

Annual Meeting:

The Notice and Proxy Statement and Annual Report are available atwww.musclepharm.com.
PROXY ANNUAL MEETING OF SHAREHOLDERSSTOCKHOLDERS PROXY
 OF 
 MUSCLEPHARM CORPORATION 
 JUNE 27, 2016December 7, 2018 

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Ryan Drexler and John Price and each or any of them proxies,as proxy, with power of substitution, to vote all shares of the undersigned at the annual meeting of shareholdersstockholders of MusclePharm Corporation to be held on June 27, 2016December 7, 2018 at 11:00 a.m. localPacific time at 4721 Ironton Street the 4400 Vanowen St., Denver, CO 80239,Burbank, CA 91505, or at any adjournment thereof, upon the matters set forth in the proxy statement for such meeting, and in their discretion, on such other business as may properly come before the meeting.

1.TO ELECT DIRECTORS, EACH TO SERVE SUCH TERM AS SET FORTH IN THE PROXY STATEMENT OR UNTIL HIS SUCCESSOR HAS BEEN DULY ELECTED AND QUALIFIED.

 ¨FOR THE NOMINEES LISTED BELOWForAgainstAbstain

 ¨WITHHOLD AUTHORITY to vote for the nominee listed belowRyan Drexler☐☐☐

 ¨FOR ALL EXCEPT (See instructions below)

John J. Desmond (INSTRUCTION:☐☐ To withhold authority to vote for any individual nominee(s) mark “FOR ALL EXCEPT” and fill in the box next to each nominee you wish to withhold as shown here:

☐
 

¨Ryan Drexler

William J. Bush		 

¨Stacey Y. Jenkins

☐
☐ 

¨Michael Doron

☐
 

¨William J. Bush

Brian Casutto		☐☐☐

2.TO RATIFY THE APPOINTMENT OF EKS&H LLLPPlante & Moran, PLLC AS THE INDEPENDENT AUDITORS.

 

¨       FOR

 

¨       AGAINST

 

¨

☐       FOR☐       AGAINST☐       ABSTAIN

3.TO HOLD AN ADVISORY VOTE ON EXECUTIVE COMPENSATION.

 

¨       FOR

 

¨       AGAINST

 

¨       ABSTAIN

4.TO HOLD AN ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION.

 

¨☐       FOR

  

¨☐       AGAINST

  

¨☐       ABSTAIN

5.
4.
TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJORNMENT OR POSTPONEMENT THEROF.THEREOF.

IF NO CONTRARY SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3, & 4.3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO TRANSACT ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING. PLEASE MARK, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.

Dated: 

 , 20162018

 
Signature 
 

 
Signature if held jointly 

NOTE: When shares are held by joint tenants,

both should sign. Persons signing as executor,

administrator, trustee, etc., should so indicate.

Please sign exactly as the name appears on the

proxy.

 

27