MSLP Muscle Pharm Corporation (CE)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 24, 2015

 

MUSCLEPHARM CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada		000-53166		77-0664193
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

4721 Ironton Street, Building A

Denver, Colorado 80239

(Address of principal executive offices) (Zip Code)

 

(303) 396-6100

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-14(c)).

 

 

ITEM 1.01

ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

 

ITEM 5.02

DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANANGEMENTS OF CERTAIN OFFICERS.

 

Election of New Director

 

On June 24, 2015, the Board of Directors (the “Board”) of MusclePharm Corporation (the “Company”) appointed Ryan Drexler to its Board of Directors and elected Mr. Drexler as Chairman of the Board.  The Board has determined that Mr. Drexler qualifies as an independent director under the rules of the NASDAQ Stock Market LLC.

 

Ryan Drexler, Age 44, is currently the Chief Executive Officer of Consac, LLC (“Consac”), a privately held firm that invests in the securities of publicly traded and venture-stage companies. Previously, Mr. Drexler served as President of Country Life Vitamins, a family owned nutritional supplements and natural products company 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 BA in political science.

 

There is no family relationship between Mr. Drexler and any of our other officers and directors.  There are no understandings or arrangements between Mr. Drexler and any other person pursuant to which Mr. Drexler was appointed as director. Mr. Drexler will be compensated pursuant to the Company’s Non-Employee Director Compensation Program. The Company believes Mr. Drexler is qualified to serve as a director because of his extensive knowledge of health and nutrition products and his experience as an investor.

 

Except for the aforementioned appointments and actions, there has been no transaction or currently proposed transaction, in which the Company was or is to be a participant and the amount involved exceeds $120,000, and in which any of Mr. Drexler had or will have a direct or indirect material interest since the beginning of the Company’s last fiscal year.

 

As of the date hereof, Mr. Drexler owns or controls approximately 1.4 million shares of the outstanding common stock of the Company. Prior to appointment of Mr. Drexler to the Board of Directors, Consac entered into a non-disclosure, confidentiality and standstill agreement with the Company.

 

Employment Agreements

 

On June 24, 2015, the Company entered into a new executive employment agreement with Brad Pyatt, the Chief Executive Officer of the Company (“Pyatt Agreement”) and Richard Estalella (“Estalella Agreement”), the President of the Company, pursuant to which Mr. Pyatt and Mr. Estalella agreed to serve as the Chief Executive Officer and President of the Company for an initial term of five years.

 

The Pyatt Agreement is automatically renewed for successive one year terms after the initial five year term unless terminated by either party at least three months prior to the end of the initial five year term or any successive one year term, as applicable. The Company agrees to pay Mr. Pyatt a base salary of $425,000 for 2015, $570,000 for 2016 and $592,000 for 2017 (“Pyatt Base Salary”). The annual adjustments after 2017 shall be determined by the Compensation Committee of the Board (“Compensation Committee”). In addition, Mr. Pyatt is also entitled to receive (i) an annual incentive bonus of up to 125% of the Pyatt Base Salary, based on his substantial performance as determined by the Compensation Committee (“Pyatt Annual Bonus”) and (ii) restricted shares, incentive stock options and/or performance shares or combination thereof to be determined by the Compensation Committee (“Pyatt Long Term Incentive”). The fixed value of the Pyatt Long Term Incentive granted to Mr. Pyatt shall be $817,000 for 2015, $840,000 for 2016 and $873,600 for 2017. In addition to the Pyatt Long Term Incentive, Mr. Pyatt shall be eligible for grants of awards available to senior executive officers of the Company under the Company’s Equity Incentive Plans as the Compensation Committee or the Board of Directors may from time to time determine.

 

Upon termination of employment for any reason, Mr. Pyatt shall be entitled to: (A) all Pyatt Base Salary earned through the date of termination; (B) any and all reasonable expenses paid or incurred by Mr. Pyatt; (C) any accrued but unused vacation time through the termination date; and (D) any Pyatt Annual Bonuses earned through the date of termination; and (E) all Pyatt Long Term Incentives earned prior to termination. Additionally, if Mr. Pyatt’s employment is terminated prior to expiration of the employment period other than for Cause (as defined in the Pyatt Agreement) or Mr. Pyatt terminates his employment without Good Reason (as defined in the Pyatt Agreement) and other than for a Change in Control (as defined in the Pyatt Agreement), Mr. Pyatt shall be entitled to receive a cash amount equal to 300% of the sum of the Pyatt Base Salary, Pyatt Annual Bonus and Pyatt Long Term Incentive earned during the year immediately preceding the date of termination.

 

 

The Pyatt Agreement also contains other standard terms, including but not limited to clawback rights, benefits, and non-competition provisions.

 

The Estalella Agreement is automatically renewed for successive one year terms after the initial five year term unless terminated by either party at least three months prior to the end of the initial five year term or any successive one year term, as applicable. The Company agrees to pay Mr. Estalella a base salary of $375,000 for 2015, $484,500 for 2016 and $503,880 for 2017 (“Estalella Base Salary”). The annual adjustments after 2017 shall be determined by the Compensation Committee. In addition, Mr. Estalella is also entitled to receive (i) an annual incentive bonus of up to 125% of the Estalella Base Salary, based on his substantial performance as determined by the Compensation Committee (“Estalella Annual Bonus”) and (ii) restricted shares, incentive stock options and/or performance shares or combination thereof to be determined by the Compensation Committee (“Estalella Long Term Incentive”). The fixed value of the Estalella Long Term Incentive granted to Mr. Estalella shall be $695,000 for 2015, $714,000 for 2016 and $742,500 for 2017. In addition to the Estalella Long Term Incentive, Mr. Estalella shall be eligible for grants of awards available to senior executive officers of the Company under the Company’s Equity Incentive Plans as the Compensation Committee or the Board of Directors may from time to time determine.

 

Upon termination of employment for any reason, Mr. Estalella shall be entitled to: (A) all Estalella Base Salary earned through the date of termination; (B) any and all reasonable expenses paid or incurred by Mr. Estalella; (C) any accrued but unused vacation time through the termination date; and (D) any Estalella Annual Bonuses earned through the date of termination; and (E) all Estalella Long Term Incentives earned prior to termination. Additionally, if Mr. Estalella’s employment is terminated prior to expiration of the employment period other than for Cause (as defined in the Estalella Agreement) or Mr. Estalella terminates his employment without Good Reason (as defined in the Estalella Agreement) and other than for a Change in Control (as defined in the Estalella Agreement), Mr. Estalella shall be entitled to receive a cash amount equal to 200% of the sum of the Estalella Base Salary, Estalella Annual Bonus and Estalella Long Term Incentive earned during the year immediately preceding the date of termination.

 

The Estalella Agreement also contains other standard terms, including but not limited to clawback rights, benefits, and non-competition provisions.

 

The foregoing description of the principal terms of the Pyatt Agreement and Estalella Agreement is a general description only, does not purport to be complete, and is qualified in its entirety by reference to the terms of the Pyatt Agreement and Estalella Agreement, which will be attached as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 and, when filed, such Pyatt Agreement and Estalella Agreement shall be incorporated by reference herein.

 

ITEM 7.01

REGULATION FD DISCLOSURE.

 

On June 25, 2015, the Company issued a press release announcing the appointment of Mr. Drexler to the Board of Directors and the position of Chairman of the Board. A copy of the press release is attached to this report as Exhibit 99.1 and shall not be deemed incorporated by reference into any of the Company’s registration statements or other filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in such filing.

 

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS

 

(d)

Exhibits.

 

Exhibit No.

 

99.1

MusclePharm Corporation Press Release issued June 25, 2015.

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	MUSCLEPHARM CORPORATION
Dated: June 25, 2015
	By:	/s/ Brad Pyatt
	Name:	Brad J. Pyatt
	Title:	Chief Executive Officer

 

 

 

Exhibit 99.1

 

 

 

MusclePharm Announces Appointment of Experienced Nutrition and Fitness
Executive and Investment Manager Ryan Drexler To Board of Directors

Appointment Completes Previously Announced

Separation of Duties of Chairman and CEO

 

Denver, CO – June 25, 2015 – MusclePharm Corporation (OTCQB: MSLP) (“MusclePharm” or the “Company”), a scientifically driven, performance-lifestyle sports nutrition company, today announced Ryan Drexler as its new chairman. The announcement is a part of the Company’s continued effort to institute best-in-class corporate governance practices and fulfills its commitment to separate the roles of CEO and Chairman. Mr. Drexler is an experienced investor and manages Consac, LLC, based in Beverly Hills, California. Consac, which invests in publicly traded and venture companies in the health and wellness space, has made significant investments in MusclePharm’s stock in the public market and in private transactions.

 

“After an extensive search for a candidate who has both financial expertise and substantial experience in the nutrition and health industries, we are pleased that Ryan Drexler has agreed to join our team,” said Brad Pyatt, CEO and Founder of MusclePharm. “His skills and experience will help us to achieve our goals and we welcome his wealth of experience as an investor and related products.”

 

Ryan Drexler has a long and successful history in the nutritional and fitness industries. Prior to his current position at Consac, he served as president of Country Life Vitamins. During his tenure, he developed new brands that included the BioChem family of nutrition products and led the process which resulted in the sale of Country Life to Japanese conglomerate Kikkoman Corp.

 

“Mr. Drexler will help position the company as it continues pursuing future growth opportunities and in providing us with the investor perspective when managing our growth.” said Mr. Pyatt.

 

In addition to separating the roles of CEO and Chairman, the Company has announced that it will increase the number of directors to seven, with five independent directors. Each of the directors will stand for election at the 2015 Annual Meeting of Stockholders presently scheduled for August 26, 2015. The Company also has established the position of internal auditor and completed its first Sarbanes-Oxley internal review during 2015.

 

About Ryan Drexler

Ryan Drexler is currently the Chief Executive Officer of Consac, LLC, a privately held firm that invests in the securities of publicly traded and venture-stage companies using proprietary capital. Previously, Mr. Drexler served as President of Country Life Vitamins, a family owned nutritional supplements and natural products company 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 BA in political science.

 

 

About MusclePharm

MusclePharm® is a scientifically-driven, performance lifestyle company that currently develops, manufactures, markets and distributes branded nutritional supplements. The company offers a complete range of powders, capsules, tablets and gels. Its portfolio of recognized brands, including MusclePharm® Hybrid and Core Series, Arnold Schwarzenegger Series™ and FitMiss™, are marketed and sold in more than 120 countries and available in over 45,000 retail outlets globally. These clinically-proven and scientific nutritional supplements are developed through a six-stage research process utilizing the expertise of leading nutritional scientists, doctors and universities. MusclePharm is the innovator of the sports nutrition industry. For more information, visit www.musclepharm.com. Follow MusclePharm Corporation on Facebook, Twitter, and Instagram. To sign up to receive MusclePharm news via email, please visit http://ir.musclepharmcorp.com/email-alerts.

 

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Statements that are not a description of historical facts constitute forward-looking statements and may often, but not always, be identified by the use of such words as “expects”, “anticipates”, “intends”, “estimates”, “plans”, “potential”, “possible”, “probable”, “believes”, “seeks”, “may”, “will”, “should”, “could” or the negative of such terms or other similar expressions. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in the Company’s business. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, the Company’s Quarterly Reports on Form 10-Q and other filings submitted by the Company to the SEC, copies of which may be obtained from the SEC’s website at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this release to reflect events or circumstances after the date hereof

 

# # #

Investors:

Allyson Vento and Dana Gorman

Abernathy MacGregor Group

(212) 371-5999

AMV@abmac.com / DTG@abmac.com

 

Media:

Becky Warren

(916) 607-0129

beckywarren22@gmail.com