NOTICE IS HEREBY GIVEN THATSTOCKHOLDERS
| | Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on June 14, 2023. | | |
| | The Notice, Proxy Statement and Annual Report to Stockholders are available at https://www.stagwellglobal.com/2023-annual-meeting-materials/. | | |
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fiscal year ending December 31, 2023.
Shareholders who are unableor vote by proxy in advance. Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares by proxy in advance of the Annual Meeting through the internet, by telephone or by completing and returning a printed proxy card that you may request or we may elect to deliver at a later time to ensure your vote is counted.
Proxies If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
By Internet: www.cstvotemyproxy.comAnnual Meeting through the internet, by telephone or using a printed proxy card, and enterhow to vote in person at the 13 digit control number printed on the form of proxy andAnnual Meeting.
final vote at the Annual Meeting.
By Order ofthrough the Board of Directors
MITCHELL S. GENDELGeneral Counsel and Corporate Secretary
New York, N.Y.April 22, 2016
This Proxy Statement and Management Information Circular (the “Circular”) is furnished in connection with the solicitation of proxies by the management of MDC Partners Inc. (“MDC Partners,” “MDC” or the “Company”) for use at the annual meeting of shareholders of MDC Partners to be held at the time and place and for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders, and any adjournments or postponements thereof. Such meeting is hereinafter referred to as the “Meeting”. The information contained in this Circular is given as of the date hereof, except as otherwise noted herein. The address of the principal executive office of MDC Partners is 745 Fifth Avenue, 19th Floor, New York, NY 10151, and its registered address is 33 Draper Street, Toronto, Ontario M5V 2M3. This Circular, the accompanying notice and the enclosed form of proxy are expected to first be mailed to shareholders on or about Friday, April 22, 2016.
Management expects that proxies will be solicited primarily by mail. Employees of MDC Partners or persons retained by MDC Partners for that purpose may also solicit proxies personallyinternet or by telephone. Employees who help us
The Company has entered into an agreement with Kingsdale Shareholder Services for proxy solicitation and advisory services in connection with this solicitation, for which Kingsdale will receive a fee up to $40,000 together with reimbursement for its reasonable out-of-pocket expenses, and will be indemnified against certain liabilities and expenses, including certain liabilities under the federal securities laws. Kingsdale will solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders.
The shares represented by the accompanying form of proxy, if the same is properly executed in favor of Messrs. Kauffman and Gendel, the management nominees, and received at the offices of CST Trust Company, Attn: Proxy Department, P.O. Box 721, Agincourt, Ontario M1S 0A1 (the “Transfer Agent”) not later than 10:00 a.m. (Eastern Daylight Time) on Monday, May 30, 2016 (or, if the Meeting is adjourned, not later than 48 hours, excluding Saturdays, Sundays and holidays, preceding the time of such adjourned Meeting), will be voted or withheld fromotherwise vote without marking any voting at the Meeting and, subject to Section 152 of theCanada Business Corporations Act, where a choice is specified in respect of any matter to be acted upon, will be voted in accordance with the specifications made. The proxy cut off time may be waived or extended by the Chairman of the Meeting without notice.In the absence of such a specification, to the extent permitted, suchselections, your shares will be voted (i) FORas follows: (1) “FOR” the election of each of the five nominees for the Board of Directors of MDC Partners named in this proxy statement; (ii) FOR the appointment of BDO USA, LLP as auditors of MDC Partners and to authorize the Audit Committee to fix their remuneration; (iii) FOR thedirector; (2) “FOR” approval of the 20162023 Employee Stock IncentivePurchase Plan; and (iv) FOR the(3) “FOR” approval, on an advisory basis, of the 2022 compensation of the Company’sour named executive officers. The accompanying formofficers; (4) “ONE YEAR”, on an advisory basis, on the frequency of future advisory votes on executive compensation; and (5) “FOR” ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023. If any other matter is properly presented at the Annual Meeting or any adjournment or postponement thereof, your proxy confers discretionary authority uponholder (one of the personsindividuals named thereinon your proxy card) will vote your shares using his best judgment.
At any meetingabstentions and broker non-votes:
Proposal | | | Vote Required | | | “Withhold” Vote | | | Abstentions | | | Broker Non-Votes | |
Proposal 1 – Election of nine directors to hold office until the 2023 Annual Meeting | | | Plurality of votes cast. The nine nominees receiving the most “FOR” votes will be elected. | | | No effect | | | Not Applicable | | | No effect | |
Proposal 2 – Approval of 2023 Employee Stock Purchase Plan | | | Majority of the voting power entitled to vote and present in person or represented by proxy. | | | Not applicable | | | Against | | | No effect | |
Proposal 3 – Advisory vote on 2022 compensation of our named executive officers | | | Majority of the voting power entitled to vote and present in person or represented by proxy. | | | Not applicable | | | Against | | | No effect | |
Proposal 4 – Advisory vote on frequency of future advisory votes on executive compensation | | | Plurality of votes cast, with the alternative receiving the most votes informing the Human Resources and Compensation Committee’s careful review and recommendation. | | | Not applicable | | | No effect | | | No effect | |
Proposal 5 – Ratification of selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023 | | | Majority of the voting power entitled to vote and present in person or represented by proxy. | | | Not applicable | | | Against | | | Not applicable | |
“record date”) will be entitled to vote, or grant proxies to vote, his or her Class A Subordinate Voting Shares (“Class A Shares”) or Class B Shares at the Meeting (subject, in the case of voting by proxy, to the timely deposit of his or her executed form of proxy as described herein).
All matters are ordinary resolutions which must be passed byif stockholders holding at least a majority of the votes castvoting power are present at the Annual Meeting in person or represented by shareholdersproxy. At the close of business on the Record Date, there were
Each shareholder has the right to appoint a person other than the persons named in the accompanying form of proxy, who need not be a shareholder, to attend and act for him or her and on his or her behalf at the Meeting. Any shareholder wishing to exercise such right may do so by inserting in the blank space provided in the accompanying form of proxy the name of the person whom such shareholder wishes to appoint as proxy and by duly depositing such proxy,telephone, or by duly completingother means of communication. Directors and depositing another proper form of proxy and depositing the same with the Transfer Agent at the address and within the time specified under “Manner In Which Proxies Will Be Voted” above.
A shareholder giving a proxy has the power to revoke it. Such revocation may be made by the shareholder by duly executing another form of proxy bearing a later date and duly depositing the same before the specified time, or may be made by written instrument revoking such proxy executed by the shareholder or by his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized, and deposited either at the corporate office of MDC Partners, 745 Fifth Avenue, 19th Floor, New York, NY 10151, not later than 10:00 a.m. (Eastern Daylight Time) on Monday, May 30, 2016 (or, if the Meeting is adjourned, not later than 48 hours, excluding Saturdays, Sundays and holidays, preceding the time of such adjourned Meeting), or with the Chairman of the Meeting on the day of the Meeting or any adjournment thereof. If such written instrument is deposited with the Chairman of the Meeting on the day of the Meeting or any adjournment thereof, such instrumentemployees will not be effective with respect topaid any matter on which a vote has already been cast pursuant to such proxy.
Most shareholders are “beneficial owners” who are non-registered shareholders. Their shares are registered in the name of an intermediary, such as a securities broker, financial institution, trustee, custodian oradditional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other nominee who holds the shares on their behalf, or in the name of a clearing agency in which the intermediary is a participant (such as The Canadian Depository for Securities Limited). Intermediaries have obligations to forward meeting materials to the non-registered holders, unless otherwise instructed by the holder (and as required by regulation in some cases, despite such instructions).
Only registered shareholders or their duly appointed proxyholders are permitted to vote at the Meeting. Non-registered holders should follow the directions of their intermediaries with respect to the procedures to be followed for voting. Generally, intermediaries will provide non-registered holders with either: (a) a voting instruction form for completion and execution by the non-registered holder, or (b) a proxy form, executed by the intermediary and restricted to the number of shares owned by the non-registered holder, but otherwise uncompleted. These are procedures to permit the non-registered holders to direct the voting of the shares that they beneficially own.
If the non-registered holder wishes to attend and vote in person at the meeting, they must insert their own name in the space providedagents for the appointmentcost of a proxyholder on the voting instruction form or proxy form provided by the intermediary, and carefully follow the intermediary’s instructions for return of the executed form or other method of response.
If the non-registered shareholder does not provide voting instructions to its intermediary, the shares will not be voted on any proposal on which the intermediary does not have discretionary authority to vote. Under current rules, certain intermediaries may not have discretionary authority to vote shares at the Meeting on the proposal relating to the election of directors or the advisory vote on executive compensation. We encourage all non-registered shareholders to provide instructions to the securities broker, financial institution, trustee, custodian or other nominee who holds the shares on their behalf by carefully following the instructions provided.
Unless otherwise stated, all amounts reported in this Proxy Statement and Management Information Circular are in U.S. dollars. Canadian dollar amounts have been translated to U.S. dollars at the following rates:
2014 | 2015 | 2016 | ||||||||||
As at December 31st | 1.1601 | 1.3840 | — | |||||||||
As at March 31st | 1.1055 | 1.2666 | 1.2987 | |||||||||
Average for year ended December 31st | 1.1044 | 1.2788 | — |
The authorized capital of MDC Partners consists of an unlimited number of Class A Subordinate Voting Shares (the “Class A Shares”); an unlimited number of Class B Shares (the “Class B Shares”) (the Class A Shares and the Class B Shares are herein referred to collectively as the “shares”); and an unlimited number of non-voting Preference Shares, issuable in series, in an unlimited number of which 5,000 Series 1 Preference Shares, 700,000 Series 2 Preference Shares and an unlimited number of Series 3 Preference Shares have been designated.
As at April 11, 2016, MDC Partners had outstanding51,629,540 Class A Shares (including restricted stock awards), 3,755 Class B Shares, no Series 1 Preference Shares, no Series 2 Preference Shares and no Series 3 Preference Shares. The holders of the Class A Shares are entitled to one vote in respect of each Class A Share held in connection with each matter to be acted upon at the Meeting and the holders of the Class B Shares are entitled to twenty votes in respect of each Class B Share held in connection with each matter to be acted upon at the Meeting. Approximately 99.9% of the aggregate voting rights attached to the issued and outstanding shares of MDC Partners are represented by the Class A Shares. Cumulative voting in the election of directors is not permitted.
The articles of MDC Partners contain provisions providing that, in the event an offer is made to purchase Class B Shares which must, by reason of applicable securities legislation or the requirements of a stock exchange on which the Class B Shares are listed, be made to all or substantially all of the Class B Shares, and which offer is not made on identical terms, as to price per share and percentage of outstanding shares, to purchase the Class A Shares, the holders of Class A Shares shall have the right to convert such shares into Class B Shares in certain specified instances.
To the knowledge of the directors and officers of MDC Partners, no person (or group of persons) beneficially owns, directly or indirectly, or exercises control or direction over, voting securities of MDC Partners representing more than 5% of the voting rights attached to any class of voting securities of MDC Partners other than: FMR LLC; Invesco Ltd.; Roystone Capital Management LP; GMT Capital Corp.; and Cardinal Capital. See “Security Ownership of Management and Certain Beneficial Owners” below for details of shares beneficially owned by these persons and entities.
MDC Partners will pay all of the expenses of soliciting proxies for management. In addition to the mailing of the proxy material, such solicitation may be made in person or by telephone by directors, officers and employees of MDC Partners, whose directors, officers and employees will receive no compensation for such solicitation other than their regular salaries or fees. MDC Partners has retained CST Trust Company and Kingsdale to aid in the solicitation of proxies. MDC Partners expects the additional expense of that assistance to be approximately $40,000 in the aggregate. MDC Partners also will make arrangements with brokerage houses and other custodians, nominees and fiduciaries to sendforwarding proxy materials to beneficial owners. MDC Partners
With the exception of Mr. Kauffman, the Board has determined that all
| Charlene Barshefsky | | | Eli Samaha | |
| Bradley J. Gross | | | Irwin D. Simon | |
| Wade Oosterman | | | Rodney Slater | |
| Mark J. Penn | | | Brandt Vaughan | |
| Desirée Rogers | | | | |
MDC Partners believes that each nomineeof the nominees for election as director possesses the personal and professional qualifications necessary to serve as a member of the Board, including the particular experience, talent, expertise and background set forth in “Information Concerning Management’s Nominees for Election as Directors” below. The following information relating toUnder the terms of the Transaction Agreement, Charlene Barshefsky, Eli Samaha, Rodney Slater and Brandt Vaughan were designated as nominees by Stagwell Media. With the exception of Mr. Penn, the Board has determined that all of the nominees as directors, including their principal occupationsare independent under applicable Nasdaq rules.
Scott L. Kauffman, age 60, has been the Chairman and Chief Executive Officer (“CEO”)election of the Company since July 20, 2015. He is also currentlynine nominees named above. If any nominee becomes unavailable for election as a result of an unexpected occurrence, your shares may be voted for the Chairmanelection of several venture-backed internet companies. From April 2013 to May 2014, he was President and Chief Executive Officer of New Engineering University, a new university system designed to educate the next generation of world-class engineers. From April 2011 to January 2013, Mr. Kauffman was a member of the board of directors and then Chairman of LookSmart, Ltd, a publicly-traded, syndicated pay-per-click search network. From January 2009 to August 2010, Mr. Kauffman was President and Chief Executive Officer, and a member of the board of directors, of GeekNet, Inc., a publicly-traded open source software application developer and e-commerce website operator. From September 2006 until its acquisitionsubstitute nominee proposed by Yahoo! in October 2007, Mr. Kauffman was President and Chief Operating Officer, and a member of the board of directors, of BlueLithium, Inc., an internet advertising network and performance marketing company. Prior to joining BlueLithium, Mr. Kauffman was President and CEO, and a member of the board of directors, of several early stage companies, including Zinio Systems, Inc., MusicNow LLC and Coremetrics Inc., where he continuedus. Each person nominated for election has agreed to serve as a board member until the company was acquired by IBM in July 2010. Mr. Kauffmanif elected. Our management has served in senior and executive management capacities with other digital entertainment, consumer marketing, media and technology companies, including CompuServe and Time Warner.
In 1996, Advertising Age named Mr. Kauffman one of twenty digital media masters, and in 1992, Advertising Age named him one of the top 100 marketers in the country. Mr. Kauffman brings extensive media and marketing experienceno reason to the Board and has a long history of leading complex entrepreneurial companies at the crossroads of advertising, technology and data. Mr. Kauffman has been a member of the MDC Partners board of directors since his appointment on April 28, 2006. He currently serves as MDC’s Chairman and Chief Executive Officer, a role he assumed on July 20, 2015, and as a member of the Special Committee. Mr. Kauffman is a resident of Palo Alto, California.
Clare R. Copeland, age 80, is Vice Chairman of Falls Management Company, a commercial development and casino operator in Niagara Falls, Ontario, a position he has held since January 15, 2015, following his tenure as Chief Executive Officer since November 2004. Previously, Mr. Copeland was Chairman and Chief Executive Officer of OSF Inc., a manufacturer of retail store interiors and Chief Executive Officer of People’s Jewelers Corporation, a jewelry retailer. He was also Chairman of Toronto Hydro from 1999 to 2013, and was a director of Danier Leather Inc. from 1998 until November 9, 2015. In addition, Mr. Copeland is a member of the board of trustees of RioCan Real Estate Investment Trust, Chesswood Income Fund and Telesat, and is a member of the board of directors of Entertainment One Ltd. Mr. Copeland brings extensive experience in management and oversight to the Board. Mr. Copeland has been a member of the MDC Partners board of directors since June 30, 2007. He is currently Chairman of the Human Resources & Compensation Committee and a member of the Audit Committee. Mr. Copeland resides in Toronto, Ontario. If re-elected, Mr. Copeland intends to continue to serve as a director until such time as the Board identifies and appoints a successor independent director to the Board who is also a Canadian resident and citizen.
Lawrence S. Kramer, age 65, was the founder, Chairman and CEO of MarketWatch Inc., an operator of financial information websites; is past President and Publisher of USA Today, a nationwide newspaper company; and past President of CBS Digital Media, the digital media division of the CBS broadcasting network. Mr. Kramer currently serves as Chairman and Interim Chief Executive Officer of TheStreet, Inc., a digital financial media company. He is also a member of the board of directors of Gannett and a member of the boards of trustees at both Syracuse University and Harvard Business School Publishing. He also served on the board of directors for Discovery Communications from 2008 to 2012. He has been one of the pioneers in digital media since the beginning of the internet, with decades of leadership experience as an executive and board member of private and public companies. He brings to the Board extensive experience in building consumer media brands that leverage emerging digital technology and in helping established media properties navigate the shifting consumer landscape. Spencer Stuart, a leadership consulting firm that was engaged by the MDC Partners board of directors to complete an extensive director search, recommended Mr. Kramer to the board. Mr. Kramer’s leadership at both financial and media related companies facilitated the determination that he should be nominated to the MDC Partners board of directors. Mr. Kramer has been a member of the MDC Partners board of directors since his appointment on March 1, 2016. He is currently a member of the Human Resources & Compensation Committee, Audit Committee and Nominating and Corporate Governance Committee. Mr. Kramer resides in New York, New York.
Anne Marie O’Donovan, age 57, is an experienced strategic senior executive, public company board member, and CPA, with over 30 years of Canadian and global financial services industry expertise. She is a Corporate Director and the President of O’Donovan Advisory Services Ltd., a financial advisory company, and has been a member of the board of directors of Indigo Books & Music, a Canadian bookstore company, since 2009. Most recently she served as Executive Vice President at Scotiabank, where she was Chief Administrative Officer for Global Banking and Markets division. Prior to that Ms. O’Donovan had a long, distinguished career at Ernst & Young, a professional services and accounting firm, as Partner. She holds an HBA degree from the Richard Ivey School of Business at the University of Western Ontario and is a Fellow of the Institute of Chartered Accountants of Ontario. Spencer Stuart, a leadership consulting firm that was engaged by the MDC Partners’ board of directors to complete an extensive director search, recommended Ms. O’Donovan to the board. Ms. O’Donovan brings to the board an in-depth knowledge in the areas of executive leadership, risk management, regulatory, governance, financial management, technology, operations and internal audit, as well as relevant experience working with international teams across Europe, Asia and Latin America. Such knowledge, gleaned through experience at accounting and financial advisory firms, facilitated the determination that Ms. O’Donovan should be nominated to the MDC Partners board of directors. Ms. O’Donovan has been a member of the MDC Partners board of directors since her appointment on March 1, 2016. She is currently Chair of the Audit Committee, and a member of the Human Resources & Compensation Committee and Nominating and Corporate Governance Committee. Ms. O’Donovan resides in Oakville, Ontario.
Irwin D. Simon, age 57, is the founder of The Hain Celestial Group, Inc., a leading organic and natural products company and a Nasdaq listed corporation, and has been its President, Chief Executive Officer and a member of the board of directors since its inception in 1993. In addition, Mr. Simon has served as Chairman
of the board of directors of Hain Celestial since 2000. Mr. Simon also served as a member of the board of directors of Jarden Corporation, a consumer products company from June 2002 until April 14, 2016. Mr. Simon has been a member of the MDC Partners board of directors since his appointment on April 25, 2013, and currently serves as Presiding Director. He is also currently the Chairman of the Nominating and Corporate Governance Committee and a member of the Human Resources & Compensation Committee, the Audit Committee and the Special Committee. Mr. Simon brings to the Board unique perspectives on aspects of advertising and marketing services, as well as extensive operational and entrepreneurial experience. In addition, Mr. Simon possesses a great depth of knowledge and experience regarding the consumer packaged goods industry and related marketing services that are provided by the Company’s partner firms. Mr. Simon resides in New York, New York.
The following table sets forth certain information regarding the beneficial ownership of the Class A Shares of MDC outstanding as of April 11, 2016 by each beneficial owner of more than five percent of such shares, by each of the directors and named executive officers of MDC and the current nominees for Board election and by all current directors and executive officers of MDC as a group.
Number of Voting Shares Beneficially Owned, or Over Which Control or Direction is Exercised(1) | Approximate Percentage of Class(5) | |||||||||||||||||||
Name | Type of Shareholding | Class A Subordinate Voting Shares(2) | Class A Shares Underlying Options, Warrants or Similar Right Exercisable Currently or Within 60 Days(3) | Class A Shares Underlying All Options, Warrants or Similar Right(4) | Class A Shares | |||||||||||||||
Scott L. Kauffman | Direct | 308,364 | (6) | 37,500 | 37,500 | * | ||||||||||||||
Clare Copeland | Direct | 67,341 | (7) | 37,500 | 37,500 | * | ||||||||||||||
Michael Kirby | Direct | 69,991 | (7) | — | — | * | ||||||||||||||
Larry Kramer | Direct | 5,000 | (6) | — | — | * | ||||||||||||||
Anne Marie O’Donovan | Direct | 5,000 | — | — | * | |||||||||||||||
Irwin Simon | Direct | 30,570 | (6) | — | — | * | ||||||||||||||
David B. Doft | Direct | 191,599 | (6) | — | — | * | ||||||||||||||
Indirect | 1,500 | |||||||||||||||||||
Andre Coste | Direct | 47,641 | (6) | — | — | * | ||||||||||||||
Robert Kantor | Direct | 127,399 | (6) | — | — | * | ||||||||||||||
All directors and officers of MDC as a group of 13 persons | 1,026,573 | 75,000 | 75,000 | 2.0 | % | |||||||||||||||
Miles Nadal | 0 | — | — | 0 | % | |||||||||||||||
Lori Senecal | 69,626 | (6) | — | — | * | |||||||||||||||
FMR LLC(8)(9) | 7,490,264 | — | — | 14.5 | % | |||||||||||||||
Invesco Ltd.(8) | 5,347,747 | — | — | 10.4 | % | |||||||||||||||
Roystone Capital Management LP(8)(10) | 3,423,500 | — | — | 6.6 | % | |||||||||||||||
GMT Capital Corporation(8) | 3,293,899 | — | — | 6.4 | % | |||||||||||||||
Cardinal Capital Management, LLC(8) | 2,592,982 | — | — | 5.0 | % |
The Board oversees the management of the business and affairs of MDC Partners as required by Canadian law. The Board conducts its business through meetings of the Board and three standing committees: the Audit Committee, the Human Resources & Compensation Committee and the Nominating and Corporate Governance Committee.
The Board has established guidelines for determining director independence, and all current directors, with the exception of Mr. Kauffman, have been determined by the Board to be independent under applicable NASDAQ rules and the Board’s governance principles, and applicable Canadian securities laws within the meaning of National Instrument 58-101 — Disclosure of Corporate Governance Practices.
MDC Partners has also adopted a writtenCode of Conduct(as amended in November 2015) in order to help directors, officers and employees resolve ethical issues in an increasingly complex business environment. The Code of Conduct applies to all directors, officers and employees, including the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Operating Officer, the Chief Accounting Officer, the General Counsel and any other employee with any responsibility for the preparation and filing of documents with the Securities and Exchange Commission. The Code of Conduct covers topics including, but not limited to, conflicts of interest, confidentiality of information and compliance with laws. In addition, the Board of MDC Partners adopted a set ofCorporate Governance Guidelines as a framework within which the Board and its committees conduct business.
The Company’s Corporate Governance Guidelines contain a majority vote provision, which requires a director nominee who receives, in an uncontested election, a number of votes “withheld” that is greater than the number of votes cast “for” his or her election to promptly offer to resign from the Board. The Board shall accept the resignation absent exceptional circumstances. Unless the Board decides to reject the offer, the resignation shall become effective 60 days after the date of the election. In making a determination whether to reject the offer or postpone the effective date, the Board of Directors shall consider all factors it considers relevant to the best interests of the Company. A director who tenders a resignation pursuant to this Policy will not participate in any meeting of the Board at which the resignation is considered. The Company will promptly issue a news release with the Board’s decision.
Copies of the charters of the Audit Committee, the Human Resources & Compensation Committee and the Nominating and Corporate Governance Committee, as well the Code of Conduct and Corporate
Governance Guidelines, are available free of charge at MDC Partners’ website located athttp://www.mdc-partners.com/#investors/corporate-governance. Copies of these documents are also available in print to any shareholder upon written request to 745 Fifth Avenue, 19th Floor, New York, NY 10151, Attention: Investor Relations.
The Board held ten (10) meetings in 2015. All current members of the Board that served as directors during 2015 attended each of these Board meetings in 2015.
The various Board committees met the number of times shown in parentheses: Audit Committee (5); Human Resources & Compensation Committee (8); and Nominating & Corporate Governance Committee (1). Each incumbent director that served as a director during 2015 attended all meetings of all Board committees on which they served during such period. MDC has a formal policy regarding attendance by directors at its annual general meetings of shareholders which states that all directors are expected to attend, provided that a director who is unable to attend such a meeting is expected to notify the Chairman of the Board in advance of any such meeting. All of the members of the Board that served as directors during 2015 attended the 2015 annual meeting of shareholders.
The Board currently has three standing committees: the Audit Committee, the Human Resources & Compensation Committee and the Nominating & Corporate Governance Committee. In December 2014, the Board also formed an independent Special Committee composed of Messrs. Kauffman and Simon to oversee the production of documents and review issues related to a subpoena received from the SEC. The terms of reference and mandate for each committee of the Board are summarized below.
The Audit Committee is composed of five members, all of whom are considered to be “independent” according to the applicable rules of NASDAQ, the Securities and Exchange Commission and applicable Canadian laws. The Audit Committee reviews all financial statements, annual and interim, intended for circulation to shareholders and reports upon these to the Board. In addition, the Board may refer to the Audit Committee on matters and questions relating to the financial position of MDC Partners and its affiliates. The Audit Committee is also responsible for overseeing and reviewing with management and the independent auditor the adequacy and effectiveness of the Company’s accounting and internal control policies and procedures; reviewing with management its compliance with prescribed policies, procedures and internal controls; and reviewing with management and the independent auditor any reportable conditions affecting internal controls, as more fully disclosed in Item 9A (Controls and Procedures) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. While the Audit Committee has the duties and responsibilities set forth above, the Audit Committee is not responsible for planning or conducting the audit or for determining whether the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. Management has the responsibility for preparing the financial statements and implementing internal controls and the independent auditor has the responsibility of auditing the financial statements.
Effective as of April 21, 2016, the current members of the Audit Committee are: Anne Marie O’Donovan (Chairperson), Clare Copeland, Michael Kirby, Larry Kramer and Irwin Simon. Mr. Kirby is retiring from the Board at the June 1, 2016 shareholder meeting. The Board has determined that Ms. O’Donovan qualifies as an “audit committee financial expert” under the Sarbanes-Oxley Act of 2002 and applicable NASDAQ and Securities and Exchange Commission regulations. In addition, each of the members of the Audit Committee is “financially literate” as required by applicable Canadian securities laws. The Audit Committee’s current charter is appended hereto as Exhibit A.
The Nominating & Corporate Governance Committee is composed of three (3) members, all of whom are considered to be “independent” according to the applicable rules of NASDAQ and the Securities and Exchange Commission and by applicable Canadian securities laws. The Nominating & Corporate Governance
Committee is responsible for reviewing and making recommendations to the full Board with respect to developments in the area of corporate governance and the practices of the Board. The Nominating & Corporate Governance Committee is also responsible for evaluating the performance of the Board as a whole and for reporting to the Board with respect to appropriate candidates for nominations to the Board. The current members of the Nominating & Corporate Governance Committee are: Irwin Simon (Chairman), Larry Kramer and Anne Marie O’Donovan. The Committee’s current charter is available at http://www.mdc-partners.com/#investors/corporate-governance. The Company will disclose any amendments to, or waivers of, the charter on its website atwww.mdc-partners.com in accordance with applicable law and the requirements of the NASDAQ corporate governance standards.
Effective as of April 21, 2016, the current members of the Human Resources & Compensation Committee (the “Compensation Committee”) are: Clare Copeland (Chairman), Larry Kramer, Anne Marie O’Donovan and Irwin Simon. All of the members of the Compensation Committee are considered to be “independent” according to the applicable rules of NASDAQ and the Securities and Exchange Commission and applicable Canadian securities laws, and an outside director within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and a non-employee director within the meaning of Rule 16b-3 under the Exchange Act. The Compensation Committee makes recommendations to the Board on, among other things, the compensation of senior executives. The Compensation Committee discusses personnel and human resources matters including recruitment and development, management succession and benefits plans and grants awards under the SARs Plan, the 2011 Stock Incentive Plan and the 2008 Key Partners Incentive Plan (each as defined below). Salary, bonus or other payments for the benefit of senior management are reviewed and approved by the Compensation Committee. From 2010 through 2016, the Compensation Committee engaged Mercer Human Resource Consulting LLC to review and evaluate the Company’s executive compensation levels, and to make recommendations for compensation of the Company’s executive officers based on comparable industry levels, which recommendations have been implemented by the Compensation Committee. The Compensation Committee’s current charter is available athttp://www.mdc-partners.com/#investors/corporate-governance. The Company will disclose any amendments to, or waivers of, the charter on its website atwww.mdc-partners.com in accordance with applicable law and the requirements of the NASDAQ corporate governance standards.
The Special Committee is composed of two (2) members, Messrs. Kauffman and Simon. Mr. Simon is considered to be “independent” according to the applicable rules of Nasdaq; Mr. Kauffman was an independent director until his appointment as CEO of the Company on July 20, 2015. The Special Committee was formed in December 2014, for the purpose of overseeing the production of documents and to review issues relating to the Subpoena received from the Securities and Exchange Commission.
Presently, Mr. Kauffman, our Chief Executive Officer, is also the Chairman of the Board. The Board does not require the separation of the offices of Chairman of the Board and Chief Executive Officer or President. All of the Company’s directors, whether members of management or not, have a fiduciary duty to exercise their business judgment in the best interests of the Company. The Board believes separating the roles of Chairman of the Board and Chief Executive Officer or President would not diminish or augment these fiduciary duties. The Board deliberates and decides, each time it selects a Chairman of the Board, whether the roles should be combined or separate, based upon the then current needs of the Company and the Board. The Board believes that the Company is currently best served by having Mr. Kauffman hold each of these positions, and by having a separate independent director (currently Mr. Simon) serve as “Presiding Director.” In the Board’s view, the current leadership structure facilitates strong communication and coordination between management and the Board and enables the Board to adeptly fulfill its risk oversight responsibilities.
Non-employee directors frequently meet in executive sessions without management in conjunction with each regularly scheduled Board meeting. The Company’s Presiding Director has the primary responsibility to preside over these sessions of the Board. The current Presiding Director is Irwin Simon; he was appointed to that position effective July 20, 2015. Additional information about the role of the Presiding Director is set
forth in the Company’s Corporate Governance Guidelines, which are available free of charge at MDC Partners’ website athttp://www.mdc-partners.com/#investors/corporate-governance. Shareholders or others who wish to communicate with the Presiding Director or any other member of the Board may do so by mail or courier, to MDC Partners Inc., c/o David B. Doft, Chief Financial Officer, 745 Fifth Avenue, 19th Floor, New York, NY 10151. To facilitate a response, in appropriate circumstances, shareholders are asked to provide the following information: (i) their name; (ii) an address, telephone number, fax number and e-mail address at which they can be reached; and (iii) the number of shares or aggregate principal amount of debt that they hold, and the date those securities were acquired.
The Nominating and Corporate Governance Committee identifies, selects and recommends to the Board individuals qualified to serve both on the Board and on Board committees, including persons suggested by shareholdersstockholders and others. WhileUnder the terms of the Transaction Agreement, and subject to the fiduciary duties of the Board, Stagwell Media has not adopted a formal policydesignated four nominees for election as director at the Annual Meeting and has the same right in regards to consideration of diversity in identifying director nominees,connection with the Nominating and Corporate Governance Committee seeks to maintain at all times a Board with a diverse range of experience, talent, expertise and background appropriate for the business of the Company. Beginning in 2015, Spencer Stuart, a leadership consulting firm, conducted an extensive search for qualified nominees, resulting in the recommendation of Ms. O’Donovan and Mr. Kramer. 2023 Annual Meeting.
Pursuant
| Talent Management | | | Our ability to attract and retain the most talented professionals is fundamental to the success of an advertising and marketing holding company business such as ours, and the Board’s oversight function is particularly critical with respect to succession planning for our senior leadership team and ensuring that we continue to prioritize the diversity of perspectives on the Board. | |
| Character | | | Our Board’s ability to honestly and ethically assess and maximize long-term shareholder value is essential for the Company’s well-being. Integrity and sound judgment are fundamental aspects of our Company’s values. We also highly value collaboration, and expect directors to have strong diplomatic and interpersonal skills. | |
| Industry Experience | | | Directors with experience relevant to our industry are well-suited to help guide the Company in key areas of our business such as marketing and advertising and public relations, and to assess growth opportunities. Relevant industry experience extends to knowledge of the products and services that the Company’s partner firms provide, as this aids customer relationship management. | |
| CEO Experience | | | We believe that experience serving as a CEO enables directors to contribute deep insight into business strategy and operations, positioning the Board to serve as a valuable thought leader and challenge key assumptions while overseeing management. | |
| Legal / Regulatory | | | Our Board must be able to effectively evaluate the Company’s legal risks and obligations, as well as the complex, multinational regulatory environments in which our businesses operate, to help protect the Company’s reputational integrity and promote long-term success. | |
| Technology | | | Technological experience enables our directors to provide important insight regarding social and digital media, data privacy, cybersecurity, and other matters related to our information security and technology systems. We value directors with an ability to focus on digital innovation, as we navigate a time of rapid technological advancement industry-wide. | |
| Public Company Board Experience | | | Through their experience serving on the boards of other large publicly traded companies, directors bring a valuable understanding of board functions and effective independent oversight. | |
| Mark J. Penn Age 69 Director since: March 18, 2019 | | | Mr. Penn is the Chairman and Chief Executive Officer of the Company. Mr. Penn previously served as the Chairman and Chief Executive Officer of MDC since March 18, 2019. He has also been the President and Managing Partner of The Stagwell Group, a private equity fund that invests in digital marketing services companies, since its formation in June 2015. Prior to The Stagwell Group, Mr. Penn served in various senior executive positions at Microsoft. As Executive Vice President and Chief Strategy Officer of Microsoft, he was responsible for working on core strategic issues across the company, blending data analytics with creativity. Mr. Penn also has extensive experience growing and managing agencies. As the co-founder and CEO of Penn Schoen Berland, a market research firm that he built and later sold to WPP Group, he demonstrated value-creation, serving clients with innovative techniques such as being the first to offer overnight polling and unique ad testing methods now used by politicians and major corporations. At WPP Group, he also became CEO of Burson Marsteller, and managed the two companies to substantial profit growth during that period. A globally recognized strategist, Mr. Penn has advised corporate and political leaders both in the United States and internationally. He served for six years as White House Pollster to President Bill Clinton and was a senior adviser in his 1996 re-election campaign, receiving recognition for his highly effective strategies. Mr. Penn later served as chief strategist to Hillary Clinton in her Senate campaigns and her 2008 Presidential campaign. Internationally, Mr. Penn helped elect more than 25 leaders in Asia, Latin America and Europe, including Tony Blair and Menachem Begin. Qualifications Mr. Penn has extensive leadership experience as a CEO and an agency operator, and his background as an agency founder, executive strategist and marketer, and global thought leader were critical qualifications that led to his appointment as CEO and a member of the Board. Mr. Penn was originally designated as a nominee for election as a director of the Company by Stagwell Agency Holdings LLC pursuant to its rights as purchaser of the Class A Subordinate Voting Shares and Series 6 Convertible Preference Shares of MDC and subsequently renominated by the Board. | |
| Charlene Barshefsky Age 72 Director since: April 8, 2019 Committees: Audit Committee | | | Ambassador Barshefsky is a member of our Board of Directors. She previously served as a member of MDC’s Board of Directors since April 8, 2019. Ambassador Barshefsky is Chair of Parkside Global Advisors, a position she has held since April 2021. Prior to this, she was a Senior International Partner at WilmerHale, a multinational law firm based in Washington, D.C., from 2001 through March 2021. At WilmerHale, Ambassador Barshefsky advised multinational corporations on their market access, regulatory, investment and acquisition strategies in major markets across the globe. Prior to joining WilmerHale, Ambassador Barshefsky was the United States Trade Representative (“USTR”) and a member of President Clinton’s Cabinet from 1997 to 2001 and Acting and Deputy USTR from 1993 to 1996. As the USTR, she served as chief trade negotiator and principal trade policymaker for the United States and, in both roles, negotiated complex market access, regulatory and investment agreements with virtually every major country in the world. She serves on the boards of directors of the Estee Lauder Companies and the American Express Company, with her term expiring May 2, 2023, and is a member of the board of trustees of the Howard Hughes Medical Institute. She is also a member of the Council on Foreign Relations. Ambassador Barshefsky served on the boards of directors of Intel Corporation from 2004 to 2018 and Starwood Hotels & Resorts from 2004 to 2016. | |
| | | | Qualifications Ambassador Barshefsky’s distinguished record as a policymaker and negotiator, ability to assess regulatory risks, as well as exceptional Board director experience for some of the world’s most respected consumer companies across a range of sectors focused on digital innovation are key qualifications for the Board. Ambassador Barshefsky was designated as a nominee for election as a director of the Company by Stagwell Media pursuant to its rights under the Transaction Agreement. | |
| Bradley J. Gross Age 50 Director Since: March 7, 2017 Committees: Human Resources and Compensation Committee | | | Mr. Gross is a member of our Board of Directors. Mr. Gross previously served as a member of MDC’s Board of Directors since March 7, 2017. Mr. Gross is global co-head of Private Equity within Goldman Sachs Asset Management. He serves as a member of the Asset Management Corporate Investment Committee, the Asset Management Corporate Investment Committee and the Firmwide Retirement Committee. Previously, he was responsible for the Merchant Banking Division’s Technology, Media and Telecommunications investing activities and led the division’s portfolio wide valuation creation efforts. He first joined Goldman Sachs in 1995 as an analyst in the Real Estate Principal Investment Area. He rejoined the firm after business school in 2000 as an associate in the Principal Investment Area. He was named managing director in 2007 and partner in 2012. Mr. Gross serves on the boards of Slickdeals, LLC and Aptos, Inc. Previously, Mr. Gross served on the boards of Americold Realty Trust, Trader Interactive Holdings, and Griffon Corp. Qualifications Mr. Gross brings to the board an exceptional risk management track record, extensive board experience, and technological experience, all of which qualify him for the Board. Mr. Gross was initially designated as a nominee for election as a director of the Company by Goldman Sachs pursuant to its rights as the purchaser of the Series 4 Convertible Preference Shares of MDC and subsequently renominated by the Board. | |
| Wade Oosterman Age 62 Director Since: January 23, 2020 Committees: Chair of Audit Committee | | | Mr. Oosterman is a member of our Board of Directors. Mr. Oosterman previously served as a member of MDC’s Board of Directors since January 23, 2020. Mr. Oosterman is Vice Chairman of Bell Canada, Canada’s largest telecommunications service provider, a position he has held since 2018. Mr. Oosterman is also President of Bell Media, Canada’s largest media company, a position he has held since January 2021. Mr. Oosterman previously served as President of Bell Mobility from 2006 to 2018, as President of Bell Residential Services from 2010 to 2018 and as Chief Brand Officer of Bell Canada, and BCE, from 2006 to 2020. Prior to joining Bell Canada, Mr. Oosterman served as Chief Marketing and Brand Officer for TELUS Corp., and Executive Vice President, Sales and Marketing for TELUS Mobility. In 1987, Mr. Oosterman co-founded Clearnet Communications Inc. and served on its board of directors until the successful sale of Clearnet to TELUS Corp. Mr. Oosterman serves on the boards of directors of Telephone Data Systems Inc., a U.S. telecom provider, and EnStream, a joint venture of the three largest Canadian telecom providers engaged in the business of mobile payments and identity verification. He has also served on the boards of directors of Ingram Micro and Virgin Mobile Canada. Qualifications Mr. Oosterman brings to the board financial acumen, risk assessment and mitigation, and exceptional operations experience. His leadership includes extensive experience in both sell-side and buy-side transactions. | |
| Desirée Rogers Age 63 Director since: April 26, 2018 Committees: Chair of Human Resources and Compensation Committee; Nominating and Corporate Governance Committee | | | Ms. Rogers is a member of our Board of Directors. Ms. Rogers previously served as a member of MDC’s Board of Directors since April 26, 2018. Ms. Rogers is the Chief Executive Officer and Co-Owner of Black Opal, LLC, a masstige makeup and skincare company, a position she has held since June 2019. She served as Chairman of Choose Chicago, the tourism agency for the city of Chicago with over $1 billion in revenue, from 2013 until 2019. At Choose Chicago, Ms. Rogers’ digital marketing leadership resulted in record results of over 57 million visitors in 2018. Ms. Rogers was Chief Executive Officer of Johnson Publishing Company, a publishing and cosmetics firm, from 2010 to 2017. During the period of 2009 to 2010, Ms. Rogers was The White House’s Special Assistant to the President and Social Secretary under the Obama Administration. Ms. Rogers is a member of the boards of directors of World Business Chicago, the Economic Club of Chicago, the Conquer Cancer Foundation, Donors Choose, and Inspired Entertainment Inc., and is formerly a member of the board of directors of Pinnacle Entertainment, Inc. Qualifications Ms. Rogers is a results-oriented business leader, with key digital marketing experience, and brings to the board strong interpersonal, collaborative and diplomatic skills that qualify her for the Board. | |
| Eli Samaha Age 37 Director Since: August 3, 2021 Committees: Audit Committee | | | Mr. Samaha is a member of our Board of Directors. Mr. Samaha has been the Founder and Managing Partner of Madison Avenue Partners, LP, a value-focused investment manager whose partners include leading university endowments, hospital systems, and philanthropic foundations since January 2018. Prior to founding Madison, Mr. Samaha was a Partner at Newtyn Management from January 2012 to December 2017 and held roles at KBS Capital Partners and GSC Group. Qualifications Mr. Samaha’s experience and knowledge in finance, equity and debt investments, and risk management qualify him for the Board. Mr. Samaha was designated as a nominee for election as a director of the Company by Stagwell Media pursuant to its rights under the Transaction Agreement. | |
| Irwin D. Simon Age 64 Director since: April 25, 2013 Committees: Nominating and Corporate Governance Committee; Human Resources and Compensation Committee | | | Mr. Simon is a member of our Board of Directors and serves as Lead Independent Director. Mr. Simon previously served as a member of MDC’s Board of Directors since April 25, 2013. Mr. Simon is Chairman and Chief Executive Officer at Tilray Brands, Inc., a leading global cannabis-lifestyle and consumer packaged goods company traded on Nasdaq. In 2019, Mr. Simon joined and transformed Aphria Inc., a Canadian cannabis Licensed Producer, into a profitable global cannabis company with leading market share brands. At Aphria, Mr. Simon structured a reverse merger and acquisition of Tilray. In 1993, Mr. Simon founded The Hain Celestial Group, Inc., traded on Nasdaq, a leading, global organic and natural products company and served as its Chairman and Chief Executive Officer through 2018. Mr. Simon is also the Executive Chairman of Whole Earth Brands, Inc., a global food company traded on Nasdaq. Mr. Simon previously served on the boards of directors of Barnes & Noble, Inc. and Jarden Corp. In addition, he serves on the board of directors of Tulane University and is a member of the board of trustees at Poly Prep Country Day School. Mr. Simon is also the majority owner of the Cape Breton Eagles, a Quebec Major Junior Hockey League team and co-owner of St. John’s Edge of the National Basketball League of Canada. Qualifications Mr. Simon qualifies for the Board because of his unique perspectives on aspects of advertising and marketing services, as well as extensive operational and entrepreneurial experience. In addition, Mr. Simon possesses a great depth of knowledge and experience regarding the consumer-packaged goods industry and related marketing services that are provided by the Company’s partner firms. | |
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| Rodney Slater Age 68 Director Since: August 2, 2021 Committees: Chair of Nominating and Corporate Governance Committee | | | Secretary Slater is a member of our Board of Directors. Secretary Slater has served as a partner in the law firm Squire Patton Boggs LLP since 2001, practicing in the areas of transportation, infrastructure and public policy. Previously, he served as the U.S. Secretary of Transportation from 1997 to 2001 and as the Administrator of the Federal Highway Administration from 1993 to 1997. Secretary Slater has served as a director of Verizon Communications since 2010 and a director EVgo Inc. since 2021. He also served as a director of Kansas City Southern from 2001 to 2019 and Transurban Group from 2009 to 2018. Qualifications Secretary Slater’s significant leadership and strategic planning experience in the public and private sectors and perspectives on strategic partnerships, risk management, compliance, and legal issues are key qualifications for the Board of Directors. Secretary Slater was designated as a nominee for election as a director of the Company by Stagwell Media pursuant to its rights under the Transaction Agreement. | |
| Brandt Vaughan Age 56 Director Since: August 2, 2021 | | | Mr. Vaughan is a member of our Board of Directors. Mr. Vaughan is Chief Operating Officer and Chief Investment Officer of Ballmer Group, where he manages its operating, public and private equity investing and philanthropic investing across a range of assets, including the Los Angeles Clippers and LA Forum. Prior to joining Ballmer Group in 2014, Mr. Vaughan led enterprise-wide strategic planning and analysis for Microsoft. In addition, he served as Chief Financial Officer for Microsoft’s centralized marketing and business development functions and had a range of financial management roles over a more than decade-long career at Microsoft. Mr. Vaughan is on the boards of directors for One Community and the L.A. Clippers Foundation. Qualifications Mr. Vaughan’s deep experience and knowledge of strategy, finance, and operations are key qualifications for the Board of Directors. Mr. Vaughan was designated as a nominee for election as a director of the Company by Stagwell Media pursuant to its rights under the Transaction Agreement. | |
Total Number of Directors | | | 9 | | |||||||||||||||
| | | Female | | | Male | | | Non-binary | | | Did Not Disclose Gender | | ||||||
Part I: Gender Identity | | | | | | ||||||||||||||
Directors | | | | | 2 | | | | | | 7 | | | | | | | | |
Part II: Demographic Background | | | | | | | | | | | | | | | | | | | |
African American or Black | | | | | 1 | | | | | | 1 | | | | | | | | |
Alaskan Native or Native American | | | | | | | | | | | | | | | | | | | |
Asian | | | | | | | | | | | | | | | | | | | |
Hispanic or Latinx | | | | | | | | | | | | | | | | | | | |
Native Hawaiian or Pacific Islander | | | | | | | | | | | | | | | | | | | |
White | | | | | 1 | | | | | | 5 | | | | | | | | |
Two or more races or ethnicities | | | | | | | | | | | 1 | | | | | | | | |
LGBTQ+ | | | | | | | | | | | | | | | | | | | |
Did not disclose demographic background | | | | | | | | | | | | | | | | | | | |
MDC paid its directors who are not employees of MDC or any of its subsidiaries a $50,000 annual retainer in respect of 2015 (increased to $60,000, effective January 1, 2016). MDC also pays a fee of $2,000 for attendance at any Board or Committee meeting. Fees for director attendance at meetings are limited to two meetings per day. MDC pays an additional retainer for certain positions held by a director: $75,000 for the Presiding Director, $20,000 for the Audit Committee, Chair, $5,000 forHuman Resources and Compensation Committee or Nominating and Corporate Governance Committee of the Board receives an additional cash retainer in the amounts as follows: (i) the chair of the Audit Committee financial expertreceives a cash retainer of $20,000 per year, (ii) the chair of the Human Resources and Compensation Committee receives a cash retainer of $15,000 per year, and (iii) the chair of the Nominating and Governance Committee receives a cash retainer of $15,000 per year (each, a “Committee Chair Retainer”).
Employee directors areour
The following table sets forth the compensation paid to or earned during fiscal year 2015 by our non-management directors (including for Mr. Kauffman, with respect to his fees and stock awards for his role as an independent director through and until July 20, 2015, the date of his appointment as CEO):
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) | | | Total ($) | | |||||||||
Charlene Barshefsky | | | | | 80,000 | | | | | | 151,678(1) | | | | | | 231,678 | | |
Bradley Gross(2) | | | | | — | | | | | | — | | | | | | — | | |
Wade Oosterman | | | | | 100,000 | | | | | | 151,678(1) | | | | | | 251,678 | | |
Desirée Rogers | | | | | 95,000 | | | | | | 151,678(1) | | | | | | 246,678 | | |
Eli Samaha | | | | | 80,000 | | | | | | 151,678(1) | | | | | | 231,678 | | |
Irwin D. Simon | | | | | 155,000 | | | | | | 151,678(1) | | | | | | 306,678 | | |
Rodney Slater | | | | | 90,000 | | | | | | 151,678(1) | | | | | | 241,678 | | |
Brandt Vaughan | | | | | 70,000 | | | | | | 151,678(1) | | | | | | 221,678 | | |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | |||||||||||||||
Clare Copeland | 120,750 | 72,452 | (1) | — | (2) | N/A | 193,202 | |||||||||||||
Scott Kauffman(3) | 230,478 | (4) | 72,452 | (1) | — | (2) | N/A | 302,930 | ||||||||||||
Michael Kirby | 123,250 | 72,452 | (1) | — | (2) | N/A | 195,702 | |||||||||||||
Irwin Simon | 283,103 | (4) | 72,452 | (1) | — | (2) | N/A | 355,555 |
(1) On June 14, 2022, Ms. Barshefsky, Ms. Rogers, Mr. Samaha, Mr. Simon, Mr. Slater and Mr. Vaughan each received a grant of 21,008 restricted shares and Mr. Oosterman received a grant of 21,008 restricted stock units. As of December 31, 2022, these were the only unvested restricted shares and restricted stock units held by our non-management directors. The amounts in this table represent the aggregate grant date fair value of such grants as computed in accordance with FASB Topic 718, excluding the effect of estimated forfeitures during the applicable period. For a discussion of the assumptions relating to these valuations, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates — Stock-Based Compensation” in our Annual Report on Form 10-K for the year ended December 31, 2022. (2) Mr. Gross is not entitled to any compensation for his service on the Board in accordance with the terms of the purchase agreement with Goldman Sachs. Information About the Board and Corporate Governance The Board has established guidelines for determining director independence, and all current directors, with the exception of Mr. Penn, have been determined by the Board to be independent under applicable Nasdaq rules. The Company has also adopted a written Code of Conduct in order to help directors, officers and employees resolve ethical issues in an increasingly complex business environment. The Code of Conduct applies to all directors, officers and employees, including the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer, the General Counsel and any other employee with any responsibility for the preparation and filing of documents with the SEC. The Code of Conduct covers topics including, but not limited to, conflicts of interest, confidentiality of information and compliance with laws. The Code of Conduct also satisfies the requirements for a code of ethics, as defined by Item 406 of Regulation S-K promulgated by the SEC. The Company intends to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding amendments to, or waivers from, certain provisions of the Code of Conduct that apply to its principal executive officer, principal financial officer and principal accounting officer by posting such information on its website, at the address and location specified below. 13 In addition, the Board has adopted a set of Corporate Governance Guidelines as a framework within which the Board and its committees conduct business. The Company’s Corporate Governance Guidelines contain a majority voting policy, which requires a director nominee who receives, in an uncontested election, a number of votes “withheld” that is greater than the number of votes cast “for” his or her election to promptly offer to resign from the Board. The Board will accept the resignation absent exceptional circumstances. Unless the Board decides to reject the offer, the resignation will become effective 60 days after the date of the election. In making a determination whether to reject the offer or postpone the effective date, the Board of Directors will consider all factors it considers relevant to the best interests of the Company. A director who tenders a resignation pursuant to the Corporate Governance Guidelines will not participate in any meeting of the Board at which the resignation is considered. The Company will promptly issue a news release with the Board’s decision. Copies of the charters of the Audit Committee, the Human Resources and Compensation Committee and the Nominating and Corporate Governance Committee, as well the Code of Conduct and Corporate Governance Guidelines, are available free of charge at the Company’s website located at https://www.stagwellglobal.com/investors/corporate-governance. Copies are also available to any shareholder upon written request to One World Trade Center, Floor 65, New York, NY 10007, Attn: Investor Relations. Meetings The Board met or acted by written consent 9 times in 2022. The various Board committees met or acted by written consent the number of times shown in parentheses: Audit Committee (6); Human Resources and Compensation Committee (8); and Nominating and Corporate Governance Committee (3). Each incumbent director that served as a director during 2022 attended 75% or more of the aggregate of the meetings of the Board and each committee on which they served during such period. The Company has a formal policy regarding attendance by directors at its annual meeting of stockholders which states that all directors are expected to attend, provided that a director who is unable to attend such a meeting is expected to notify the Chairman of the Board in advance of any such meeting. Each member of the Board serving as a director at the time of the 2022 annual meeting of stockholders attended the meeting. Membership on Standing Board Committees
14
16
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| | | | The current members of the Nominating and Corporate Governance Committee are: Rodney Slater (Chair), Desirée Rogers and Irwin Simon. | |
| Human Resources and Compensation Committee | | | The Human Resources and Compensation Committee is currently composed of three members. All of the members of the Human Resources and Compensation Committee are considered to be “independent” according to the applicable rules of Nasdaq, and non-employee directors within the meaning of Rule 16b-3 under the Exchange Act. The Human Resources and Compensation Committee makes recommendations to the Board on, among other things, the compensation of senior executives. The Human Resources and Compensation Committee discusses personnel and human resources matters including recruitment and development, management succession and benefits plans and grants awards under the 2016 Stock Incentive Plan. Salary, bonus or other payments for senior management are reviewed and approved by the Human Resources and Compensation Committee. The Human Resources and Compensation Committee may delegate any of its responsibilities to a subcommittee composed of one or more of its members, or to other members of the Board qualified to perform such responsibilities in accordance with the applicable rules of Nasdaq and any other applicable law, as appropriate. The current members of the Human Resources and Compensation Committee are: Desirée Rogers (Chair), Bradley J. Gross and Irwin Simon. For further information about the Human Resources and Compensation Committee’s processes and procedures relating to the consideration of executive compensation, see “Executive Compensation — Compensation Discussion and Analysis.” | |
Set forthChief Executive Officer. All of the Company’s directors, whether members of management or not, have a fiduciary duty to exercise their business judgment in the best interests of the Company. The Board believes separating the roles of Chairman of the Board and Chief Executive Officer would not diminish or augment these fiduciary duties. The Board deliberates and decides, each time it selects a Chairman of the Board, whether the roles should be combined or separate, based upon the then current needs of the Company and the Board. The Board believes that the Company is currently best served by having Mr. Penn hold the positions of both Chairman and Chief Executive Officer, and by having a separate independent director (currently Mr. Simon) serve as “Lead Independent Director.” In the Board’s view, the current leadership structure facilitates strong communication and coordination between management and the Board and enables the Board to adeptly fulfill its risk oversight responsibilities.
| | | Number of Securities to be issued Upon Exercise of Outstanding Options, Warrants and Rights | | | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a)) | | |||||||||
| | | (a) | | | (b) | | | (c) | | |||||||||
Equity compensation plans approved by stockholders:(1) | | | | | 2,991,499(2) | | | | | | 3.23(3) | | | | | | 15,506,533 | | |
Equity compensation plans not approved by stockholders: | | | | | 1,284,420(4) | | | | | | 2.60(3) | | | | | | — | | |
Total | | | | | 4,275,919 | | | | | | 2.86(3) | | | | | | 15,506,533 | | |
The peer group consistsHuman Resources and Compensation Committee value the opinions of Arbitron, Central European Media, Dreamworks Animation, John Wiley & Sons, Lee Enterprises, Morningstar, Scholastic Corporation, EW Scripps, The New York Times Co., Belo Corp., Cumulus Media, Harte-Hanks, Lamar Advertising, Meredith Corporation, National CineMedia, Sinclair Broadcast Group, The McClatchy Companyour stockholders and Valassis Communications. Total shareholder return forwill review and consider the peer group is weighted according to market capitalization at the beginning of each annual period. Note that certain companies within this peer group (including Arbitron, Belo Corp. and Valassis Communications) have recently been acquired and their stock is no longer publicly traded. Accordingly, these acquired entities are included in the peer group but only up through the closing date of the respective acquisition.
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||||||||
MDC Partners | 100.00 | 81.08 | 72.37 | 252.47 | 232.47 | 231.29 | ||||||||||||||||||
S&P 500 Index | 100.00 | 100.00 | 113.40 | 146.97 | 163.71 | 162.52 | ||||||||||||||||||
Russell 2000 Index | 100.00 | 94.55 | 108.38 | 148.49 | 153.73 | 144.95 | ||||||||||||||||||
Peer Group | 100.00 | 87.12 | 98.06 | 183.23 | 159.34 | 185.38 |
| MARK PENN | | | Chairman & Chief Executive Officer | |
| JAY LEVETON | | | President | |
| FRANK LANUTO | | | Chief Financial Officer | |
| RYAN GREENE | | | Chief Operating Officer | |
| VINCENZO DIMAGGIO | | | Chief Accounting Officer | |
In our annual “Say-on-Pay” advisory vote in 2015, approximately 53% of the votes cast voted in favor of our executive compensation program. In response, management and the Board undertookprogram as a concentrated effort to focus on shareholder outreach and solicitation of feedback during the course of 2015 and in the first quarter of 2016. Based on shareholder feedback, and as partresult of the Company’s continuous efforts to implement executive compensation programs that align the interests of management with shareholders, the Board adopted several governance and compensation-related changes.
These governance and compensation initiatives followed a number of senior management changes in 2015, including the replacement of Miles Nadal as CEO following his resignation on July 20, 2015. Through December 31, 2015, Mr. Nadal repaid the Company for the improper expenses for which the Company sought reimbursement, in an aggregate amount of $11,285,000. Mr. Nadal further agreed to repay the Company $10,581,605 in connection with prior cash bonus awards that contained claw-back provisions.
In addition, MDC’s Board and management team implemented several governance and compensation-related remedial measures in response to the matters identified by the SEC review. These measures focused on improved internal controls and corporate governance initiatives. Each of the remedial measures and improved compensation practices summarized below was consistent with the changes suggested by our largest shareholders and identified by Institutional Shareholder Services (ISS) in 2015.
For the three (3) year period ended December 31, 2015, MDC achieved total shareholder return of 219.6%. The average total shareholder return for the same period achieved by MDC’s peer group (as described below) was 64.4%. As a result, MDC significantly outperformed this peer group by 155.2%. The peer group used for these purposes, as suggested by the Compensation Committee’s independent compensation consultant, was made up of the following publicly-held media, corporate communications and marketing services companies: Arbitron, Central European Media, Dreamworks Animation, John Wiley & Sons, Lee Enterprises, Morningstar, Scholastic Corporation, EW Scripps, The New York Times Co., Belo Corp., Cumulus Media, Harte-Hanks, Lamar Advertising, Meredith Corporation, National CineMedia, Sinclair Broadcast Group, The McClatchy Company, and Valassis Communications. These entities were determined to be relevant and appropriate peers given the applicable marketing and/or media industry in which they each operate, as well as their relative enterprise value, revenues and number of employees.
In addition to its total shareholder return performance over the past three (3) years, MDC delivered strong overall financial results for 2015. The Company achieved its financial guidance for 2015, with industry-leading performance across many key metrics. Organic revenue growth outpaced the industry at 7.1%, and Adjusted EBITDA grew by 10.2% with Adjusted EBITDA margins expanding 20 basis points to 14.9%. This financial performance was accomplished while achieving a significant level of net new business wins, which validate the Company’s expansion strategy into emerging areas of growth.
The chart below summarizes the key financial results for 2015 as compared to 2014:
2014 | 2015 | % Change | ||||||||||
Revenue | $ | 1.22 billion | $ | 1.33 billion | 8.4 | % | ||||||
Adjusted EBITDA | $ | 179.4 million | $ | 197.7 million | 10.2 | % | ||||||
Adjusted EBITDA Margin | 14.7% | 14.9% | 20 basis points | |||||||||
Organic Revenue Growth | 7.1 | % | ||||||||||
3-Year Total Shareholder Return – MDC Partners | 219.6% | |||||||||||
3-Year Total Shareholder Return – Peer Group | 64.4% |
As used in this Proxy Statement:
“Adjusted EBITDA” is a non-U.S. GAAP measure that represents operating income (loss) plus depreciation and amortization, stock-based compensation, acquisition deal costs, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, and other items, adjusted for certain items at the discretion of the Compensation Committee. A reconciliation of “Adjusted EBITDA” to the U.S. GAAP reported results of operations for the year ended December 31, 2015 is provided in the Annex to this proxy statement.
“Adjusted EBITDA margin” is equal to the quotient of Adjusted EBITDA (as defined) divided by revenue.
“Organic Revenue Growth” is a non-U.S. GAAP measure that refers to growth in revenues from sources other than acquisitions or foreign exchange impacts.
We firmly believe that the implementation of the foregoing improvements to our governance and compensation practices described above has appropriately addressedALL of our key shareholders’ concerns.
When casting your 2016 Say-on-Pay vote, we encourage you to consider the Company’s financial results in 2015 despite the challenges of the ongoing SEC investigation; the elimination of excessive compensation and perquisite amounts; the Compensation Committee’s commitment to pay-for-performance based on objective financial criteria; the prohibition of pledges and hedging of stock; the enforcement of repayment requirements and claw-back agreements resulting in the recovery of more than $22 million from former senior executives; and our direct and constructive engagement with our shareholders.
PROCESS
In 2015,requirements or will have value only to the Compensation Committee reaffirmed its compensation strategy to appropriately link compensation levels with shareholder value creation by:
The Compensation Committee reviews with management the design and operation of the Company’s performance goals and metrics used in connection with incentive awards and determined that these policies do not provide the Company’s executive officers or other employees with incentive to engage in behavior that are reasonably likely to have a material adverse effect on the Company. As discussed below in greater detail, the principal measures of our business performance to which named executive officer compensation is tied are adjusted EBITDA (as defined below), organic revenue growth and, in the case of equity incentive awards, the value returned to shareholders as measured by stock price appreciation and dividends,increases following the grant date, in addition to continued employment conditions. In limited situations, such as compared to a specified peer group of companies.
Pay Element | | | Description | | | Link to Business & Strategy | |
BASE SALARY | | | • Fixed cash compensation recognizing individual performance, role and responsibilities, leadership skills, future potential and internal pay equity considerations • Set upon hiring or promotion, reviewed as necessary based on the facts and circumstances and adjusted when appropriate | | | • Competitive base salaries help attract and retain key executive talent • Any material adjustments are based on competitive market considerations, changes in responsibilities and individual performance | |
ANNUAL INCENTIVES | | | • Performance-based cash or stock compensation dependent on performance against annually established financial targets and personal performance | | | • Our annual incentives motivate and reward achievement of annual corporate and personal objectives that build shareholder value | |
LONG-TERM INCENTIVES | | | • Opportunity to earn equity long-term incentive awards, subject to continued employment, if the Company achieves financial performance goals (Adjusted EBITDA) over a three (3) year measurement period following the date of grant | | | • Like our annual incentives, our long-term incentives encourage senior leaders to focus on delivering on our key financial metrics, but do not encourage or allow for excessive or unnecessary risk-taking in achieving this aim • The long-term incentives also ensure that executives have compensation that is at risk for longer periods of time and is subject to forfeiture in the event that they terminate their employment • The long-term incentives also motivate executives to remain with the company for long and productive careers built on expertise | |
INDUCEMENT AWARDS / CASH SIGNING BONUSES | | | • One-time awards granted to new executives in the form of SARs, restricted stock and/or cash signing bonuses | | | • Attract talented, experienced executives to join and remain with the Company | |
Our
Engagementawards.
Mercerindependent from management and that Mercer’s work has attendednot raised any conflict of interest.
particular, the Compensation Committee worked with Mercer to structure performance-based annual and long-term incentive programs designed to retain the Company’s executive management team and to motivate them to achieve goals that increase shareholder value. The Compensation Committee sought to ensure that its incentive plans properly align management incentive compensation targets with the performance targets most relevant to shareholders. The Compensation Committee also considered recent trends indetermining executive compensation.
The aggregate amount of fees billed by Mercer for services related to designing the 2015 LTIP awards and determining compensation for the Company’s named executive officers was equal to $61,961 for 2015, and $36,708 for 2014.
The following table detailsidentifies the elementsroles and responsibilities of ourthe Human Resources and Compensation Committee and management in the oversight of the Company’s executive compensation program which are designed to achieve our compensation objectives for the named executive officers:
Human Resources and Compensation Committee | | | |||||
• Sets policies and gives direction to | |||||||
• Engages and oversees the independent compensation consultant, including determining its fees and scope of work • Based upon performance, • Determines the | |||||||
• Reviews succession planning to mitigate the risk of executive departure and to help ensure individual development and bench-strength through different tiers of Company leadership • Evaluates and considers regulatory and legal perspectives on compensation matters, rating agency opinions on executive pay, published investor compensation policies and position parameters, and recommendations of major proxy voting advisory firms • Coordinates with the other committees of the Board to identify, evaluate and address potential compensation risks, where they may exist | | | • Analyzes competitive information supplied by the independent compensation consultant and others in light of the Company’s financial | • Considers how other factors may affect pay decision-making, such as the | |||
• Uses the data and | |
In setting policiesWe provide our NEOs and administering the compensation ofother executives with base salaries that we believe enable us to hire and retain individuals in a competitive environment and to reward individual performance and contribution to our overall
Name | | | Base Salary Effective January 1, 2022 | | |||
Mark Penn, Chief Executive Officer | | | | $ | 1,060,000 | | |
Jay Leveton, President | | | | $ | 725,000 | | |
Frank Lanuto, Chief Financial Officer | | | | $ | 625,000 | | |
Ryan Greene, Chief Operating Officer | | | | $ | 575,000 | | |
Vincenzo DiMaggio, Chief Accounting Officer | | | | $ | 450,000 | | |
Pay-for-Performance Analysis; Achievement of 2015 Financial Targets.The Company’s compensation program is designed to reward performance relative to corporate financial performance criteria and individual incentive criteria.performance. In 2022, each NEO was eligible to earn an annual bonus in an amount equal to a percentage of his base salary plus a potential discretionary adjustment for exceptional performance. The Company’s overall financial performance for 2015 exceeded the financial targets established by theHuman Resources and Compensation Committee. Specifically, the Company’s 2015 financial performance of Adjusted EBITDA ($197.7 million as reported) exceeded the Company’s baseline Adjusted EBITDA target. The Compensation Committee also determined that the Company achieved certain other financial and strategic goals in 2015, including industry-leading organic revenue growth of 7.1%; a significant reduction in corporate expenses; the integration of accretive acquisitions and transactions that expanded and diversified the Company’s portfolio with a strong mobile development platform (Y Media Labs); the successful extension of partnership relationships with key founding partners at several operating agencies; and significant new client wins despite the challenges of the ongoing SEC investigation. The Compensation Committee’s executive compensation decisions in 2015 aligned with this exceptional financial and operational performance.
Calculation of 2015 Annual Incentive Awards; Individual Performance Metrics. In determining the 2015 annual incentive awards to be paid to each of the named executive officers, following the conclusion of fiscal 2015 the Compensation Committee reviewed actual financial and individual performance relative to individual incentive criteria. The Company does not apply a formula or use a pre-determined weighting when comparing overall performance against the various individual objectives, and no single objective is material in determining individual awards. However,In determining the Compensation Committee assessed each executive’s individual performance to determine2022 annual incentive awards, the actual bonus incentive award payable to Mr. KauffmanHuman Resources and each named executive officer, including the following:
Scott Kauffman: For Mr. Kauffman, the Compensation Committee considered the Company’s strong2022 and 2021 Adjusted EBITDA. The Committee also considered that the Company achieved certain other financial and strategic goals and continued new business and operational success following the Business Combination. Based on this exceptional financial and operational performance, the Human Resources and Compensation Committee determined that each of the NEO’s performed at a level that warranted annual incentive compensation at 100% of target value. However, the Human Resources and Compensation Committee determined that it was in the best interests of the Company to compensate the NEOs in the form of additional equity incentives that vest after one year of additional service to the Company, rather than paying cash bonuses for 2022. Accordingly, on February 23, 2023, the Human Resources and Compensation Committee awarded shares of restricted stock in the following amounts: Mr. Penn — 177,951; Mr. Leveton — 90,843; Mr. Lanuto — 72,493; Mr. Greene — 65,816; Mr. DiMaggio — 34,339. Similarly, for 2021 the Human Resources and Compensation Committee determined that it was in the best interests of the Company to compensate Mr. Penn and Mr. Leveton in the form of additional equity incentives rather than paying cash bonuses, to pay a cash bonus to Mr. Lanuto of $446,250, representing 75% of his annual bonus target, and to further compensate him in the form of an additional equity incentive, and to similarly compensate Mr. Greene and Mr. DiMaggio. Accordingly, on February 28, 2022, the Human Resources and Compensation Committee awarded shares of restricted stock in the following amounts: Mr. Penn — 161,765; Mr. Leveton — 47,794; Mr. Lanuto — 21,875; Mr. Greene — 6,596; Mr. DiMaggio — 8,272. These shares of restricted stock vested on February 28, 2023. With respect to Mr. Lanuto, in 2021 the Human Resources and Compensation Committee also acknowledged his efforts, working at the direction of the Special Committee of the Board, in completing the Business Combination and awarded him an additional cash bonus of $400,000.
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($)(1) | | | Stock Awards ($)(2) | | | Option Awards ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) | | |||||||||||||||||||||
Mark Penn, Chief Executive Officer and Chairman | | | | | 2022 | | | | | | 1,060,000 | | | | | | — | | | | | | 5,388,179 | | | | | | — | | | | | | 296,559 | | | | | | 6,744,738 | | |
| | | 2021 | | | | | | 833,333 | | | | | | 2,310,000 | | | | | | 3,572,040 | | | | | | 3,455,000 | | | | | | 1,862,648 | | | | | | 12,033,021 | | | ||
| | | 2020 | | | | | | 750,000 | | | | | | 825,000 | | | | | | 134,673 | | | | | | — | | | | | | 86,008 | | | | | | 1,795,681 | | | ||
Jay Leveton, President | | | | | 2022 | | | | | | 725,000 | | | | | | — | | | | | | 1,379,188 | | | | | | — | | | | | | 16,359 | | | | | | 2,120,547 | | |
| | | 2021 | | | | | | 275,437 | | | | | | 325,000 | | | | | | 745,620 | | | | | | — | | | | | | 7,027 | | | | | | 1,353,084 | | | ||
Frank Lanuto, Chief Financial Officer | | | | | 2022 | | | | | | 625,000 | | | | | | — | | | | | | 1,216,967 | | | | | | | | | | | | 31,723 | | | | | | 1,873,690 | | |
| | | 2021 | | | | | | 508,333 | | | | | | 1,242,250 | | | | | | 797,640 | | | | | | — | | | | | | 263,091 | | | | | | 2,811,314 | | | ||
| | | 2020 | | | | | | 450,000 | | | | | | 495,000 | | | | | | 23,087 | | | | | | — | | | | | | 42,857 | | | | | | 1,010,944 | | | ||
Ryan Greene, Chief Operating Officer | | | | | 2022 | | | | | | 575,000 | | | | | | — | | | | | | 436,783 | | | | | | — | | | | | | 7,091 | | | | | | 1,018,874 | | |
Vincenzo DiMaggio, Chief Accounting Officer | | | | | 2022 | | | | | | 450,000 | | | | | | — | | | | | | 257,085 | | | | | | — | | | | | | 25,840 | | | | | | 732,925 | | |
Name | | | Perquisite Allowance ($)(a) | | | Health Benefits ($)(b) | | | Long-term Disability Insurance Premiums ($) | | | Airfare ($)(c) | | | Total ($) | | |||||||||||||||
Mark Penn | | | | | — | | | | | | 26,721 | | | | | | 513 | | | | | | 269,325 | | | | | | 296,559 | | |
Jay Leveton | | | | | — | | | | | | 16,134 | | | | | | 225 | | | | | | — | | | | | | 16,359 | | |
Frank Lanuto | | | | | 12,500 | | | | | | 18,710 | | | | | | 513 | | | | | | — | | | | | | 31,723 | | |
Ryan Greene | | | | | — | | | | | | 6,866 | | | | | | 225 | | | | | | — | | | | | | 7,091 | | |
Vincenzo DiMaggio | | | | | — | | | | | | 25,327 | | | | | | 513 | | | | | | — | | | | | | 25,840 | | |
Name | | | Estimated Possible Payouts Under Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units(2) | | | Grant Date Fair Value of Stock and Option Awards ($)(3) | | ||||||||||||||||||||||||
| Grant Date | | | Threshold (#) | | | Target (#)(1) | | | Maximum (#) | | |||||||||||||||||||||||
Mark Penn | | | | | 2/28/22 | | | | | | | | | | | | | | | | | | | | | 161,765 | | | | | | 1,231,032 | | |
| | | 8/15/22 | | | | | | 444,773 | | | | | | 593,031 | | | | | | | | | | | | | | | 4,157,147 | | | ||
Jay Leveton | | | | | 2/28/22 | | | | | | | | | | | | | | | | | | | | | 47,794 | | | | | | 363,712 | | |
| | | 8/15/22 | | | | | | 108,645 | | | | | | 144,861 | | | | | | | | | | | | | | | 1,015,476 | | | ||
Frank Lanuto | | | | | 2/28/22 | | | | | | | | | | | | | | | | | | | | | 21,875 | | | | | | 166,469 | | |
| | | 8/15/22 | | | | | | 112,392 | | | | | | 149,857 | | | | | | | | | | | | | | | 1,050,498 | | | ||
Ryan Greene | | | | | 2/28/22 | | | | | | | | | | | | | | | | | | | | | 6,596 | | | | | | 50,196 | | |
| | | 8/15/22 | | | | | | 41,361 | | | | | | 55,148 | | | | | | | | | | | | | | | 386,587 | | | ||
Vincenzo DiMaggio | | | | | 2/28/22 | | | | | | | | | | | | | | | | | | | | | 8,272 | | | | | | 62,950 | | |
| | | 8/15/22 | | | | | | 20,770 | | | | | | 27,694 | | | | | | | | | | | | | | | 194,135 | | |
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||
Name (a) | | | Number of Securities Underlying Unexercised SARs (#) Exercisable(1)(2) (b) | | | Number of Securities Underlying Unexercised SARs (#) Unexercisable(2) (c) | | | SAR Exercise Price ($) (d) | | | SAR Expiration Date (e) | | | Number of Shares or Units of Stock that Have Not Vested (#)(3) (f) | | | Market Value of Shares or Units of Stock that Have Not Vested ($)(4) (g) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)(5) (h) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(4) (i) | | ||||||||||||||||||||||||
Mark Penn | | | | | 1,500,000 | | | | | | | | | | | | 2.19 | | | | | | 3/18/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 500,000 | | | | | | 1,000,000 | | | | | | 8.27 | | | | | | 12/14/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 710,816 | | | | | | 4,414,167 | | | | | | 1,005,031 | | | | | | 6,241,243 | | | ||
Jay Leveton | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 47,794 | | | | | | 296,801 | | | | | | 230,861 | | | | | | 1,433,647 | | |
Frank Lanuto | | | | | 225,000 | | | | | | | | | | | | 2.91 | | | | | | 6/10/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 225,000 | | | | | | | | | | | | 5.00 | | | | | | 6/10/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 115,998 | | | | | | 720,348 | | | | | | 241,857 | | | | | | 1,501,932 | | | ||
Ryan Greene | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,596 | | | | | | 40,961 | | | | | | 96,148 | | | | | | 597,079 | | |
Vincenzo DiMaggio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 39,963 | | | | | | 248,170 | | | | | | 46,694 | | | | | | 289,970 | | |
Year | | | Summary Compensation Table Total for PEO ($)(1) | | | Compensation Actually Paid to PEO ($)(2) | | | Average Summary Compensation Table Total for Non-PEO NEOs $(3) | | | Average Compensation Actually Paid to Non-PEO NEOs ($)(4) | | | Value of Initial Fixed $100 Investment Based On: | | | Net Income (thousands) ($)(7) | | | Adjusted EBITDA (thousands) ($)(8) | | |||||||||||||||||||||||||||
| Total Shareholder Return ($)(5) | | | Peer Group Total Shareholder Return ($)(6) | | ||||||||||||||||||||||||||||||||||||||||||||
2022 | | | | | 6,744,738 | | | | | | 2,879,657 | | | | | | 1,436,509 | | | | | | 1,107,663 | | | | | | 223.38 | | | | | | 87.57 | | | | | | 65,842 | | | | | | 451,118 | | |
2021 | | | | | 12,033,021 | | | | | | 17,568,768 | | | | | | 3,522,493 | | | | | | 4,033,069 | | | | | | 311.87 | | | | | | 144.32 | | | | | | 35,920 | | | | | | 253,652 | | |
2020 | | | | | 1,795,681 | | | | | | 1,509,786 | | | | | | 1,311,866 | | | | | | 1,232,962 | | | | | | 90.29 | | | | | | 127.97 | | | | | | (207,197) | | | | | | 177,332 | | |
Year | | | Reported Summary Compensation Table Total for Current PEO ($)(a) | | | Reported Summary Compensation Table Value of Current PEO Equity Awards ($)(b) | | | Adjusted Value of Current PEO Equity Awards ($)(c) | | | Compensation Actually Paid to Current PEO ($) | | ||||||||||||
2022 | | | | | 6,744,738 | | | | | | 5,388,179 | | | | | | 1,523,098 | | | | | | 2,879,657 | | |
2021 | | | | | 12,033,021 | | | | | | 7,027,040 | | | | | | 12,562,787 | | | | | | 17,568,768 | | |
2020 | | | | | 1,795,681 | | | | | | 134,673 | | | | | | (151,222) | | | | | | 1,509,786 | | |
Year | | | Year End Fair Value of Equity Awards Granted to Current PEO in the Year ($) | | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards at FYE Granted to Current PEO in Prior Years ($) | | | Fair Value as of Vesting Date of Equity Awards Granted to Current PEO in the Year and Vested in the Year ($) | | | Change in Fair Value of Equity Awards Granted to Current PEO in Prior Years that Vested in the Year ($) | | | Fair Value at the End of the Prior Year of Equity Awards of Current PEO that Failed to Meet Vesting Conditions in the Year ($) | | | Total Adjusted Value of Equity Awards of Current PEO ($) | | ||||||||||||||||||
2022 | | | | | 4,687,283 | | | | | | (2,924,185) | | | | | | — | | | | | | (240,000) | | | | | | — | | | | | | 1,523,098 | | |
2021 | | | | | 7,437,040 | | | | | | 3,382,154 | | | | | | — | | | | | | 1,815,000 | | | | | | (71,407) | | | | | | 12,562,787 | | |
2020 | | | | | 359,703 | | | | | | (310,925) | | | | | | — | | | | | | (200,000) | | | | | | — | | | | | | (151,222) | | |
Year | | | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($)(a) | | | Average Reported Summary Compensation Table Value of Non-PEO NEO Equity Awards ($)(b) | | | Average Non-PEO NEO Adjusted Value of Equity Awards ($)(c) | | | Average Compensation Actually Paid to Non-PEO NEOs ($) | | ||||||||||||
2022 | | | | | 1,436,509 | | | | | | 822,506 | | | | | | 493,660 | | | | | | 1,107,663 | | |
2021 | | | | | 3,522,493 | | | | | | 514,420 | | | | | | 1,024,996 | | | | | | 4,033,069 | | |
2020 | | | | | 1,311,866 | | | | | | 111,388 | | | | | | 32,484 | | | | | | 1,232,962 | | |
Year | | | Average Year End Fair Value of Equity Awards Granted to the Non-PEO Named Executive Officers in the Year ($) | | | Average Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards at FYE Granted to the Non-PEO Named Executive Officers in Prior Years ($) | | | Average Fair Value as of Vesting Date of Equity Awards Granted to the Non-PEO Named Executive Officers in the Year and Vested in the Year ($) | | | Average Change in Fair Value of Equity Awards Granted to the Non-PEO Named Executive Officers in Prior Years that Vested in the Year ($) | | | Average Fair Value at the End of the Prior Year of Equity Awards to the Non-PEO Named Executive Officers that Failed to Meet Vesting Conditions in the Year ($) | | | Adjusted Average Value of Equity Awards to the Non-PEO Named Executive Officers ($) | | ||||||||||||||||||
2022 | | | | | 717,406 | | | | | | (223,746) | | | | | | — | | | | | | — | | | | | | — | | | | | | 493,660 | | |
2021 | | | | | 514,420 | | | | | | 193,266 | | | | | | — | | | | | | 366,285 | | | | | | (48,975) | | | | | | 1,024,996 | | |
2020 | | | | | 169,693 | | | | | | (52,677) | | | | | | — | | | | | | (60,207) | | | | | | (24,325) | | | | | | 32,484 | | |
David Doft: Mr. Doft implemented significant corporate cost reductionsthe product of 1.5 times the sum of (a) his then-current base salary and managed improvements(b) the amount of his annual discretionary bonus paid in respect of the year immediately prior to the date of termination; and (iv) 12 months of reimbursement for COBRA premiums.
Name | | | Cash Severance ($) | | | Healthcare Benefits ($) | | | Value of Additional Vested Equity Awards ($)(1) | | | Total ($) | | ||||||||||||
Mark Penn | | | | | 4,406,000 | | | | | | 26,721 | | | | | | 6,268,852 | | | | | | 10,701,573 | | |
Jay Leveton | | | | | 362,500 | | | | | | — | | | | | | 704,394 | | | | | | 1,066,894 | | |
Frank Lanuto | | | | | 312,500 | | | | | | — | | | | | | 1,151,415 | | | | | | 1,463,915 | | |
Ryan Greene | | | | | 287,500 | | | | | | — | | | | | | 221,772 | | | | | | 509,272 | | |
Vincenzo DiMaggio | | | | | 337,500 | | | | | | 11,664 | | | | | | 334,036 | | | | | | 683,200 | | |
Robert Kantor: Mr. Kantor successfully ledSARs exceeded the Company’s new business initiatives, and significantly surpassed targeted performance goals with several global account wins across the Company’s agency network. Mr. Kantor also oversaw the development and roll-out of an online collaboration tool among the Company’s partner agencies to generate new and organic client account activity. As a result, Mr. Kantor received an annual cash bonus for 2015 equal to $600,000.
Andre Coste: In 2015, Mr. Coste transitioned to the role of Chief Operating Officer, and worked closely with senior executives at the Company’s largest partner agencies to achieve targeted performance goals. He helped implement improvements to the Company’s operations and budgeting processes, and assisted in several partner agencies’ global expansion initiatives in 2015. Mr. Coste received an annual cash bonus from the Company for 2015 equal to $500,000.
Lori Senecal: Ms. Senecal successfully transitioned to the operational role of Global Chief Executive Officer of Crispin Porter & Bogusky, oneclosing price of the Company’s largest partner agencies. Ms. Senecal effectively led several client pitches at Crispin Porter,Class A common stock on December 31, 2022.
Name | | | Cash Severance ($) | | | Healthcare Benefits ($) | | | Value of Additional Vested Equity Awards ($)(1) | | | Total ($) | | ||||||||||||
Mark Penn(2) | | | | | 4,406,000 | | | | | | 26,721 | | | | | | 10,655,410 | | | | | | 15,088,131 | | |
Jay Leveton | | | | | 362,500 | | | | | | — | | | | | | 1,730,448 | | | | | | 2,092,948 | | |
Frank Lanuto | | | | | 468,750 | | | | | | — | | | | | | 2,222,280 | | | | | | 2,691,030 | | |
Ryan Greene | | | | | 287,500 | | | | | | — | | | | | | 638,040 | | | | | | 925,540 | | |
Vincenzo DiMaggio | | | | | 337,500 | | | | | | 11,664 | | | | | | 538,140 | | | | | | 887,304 | | |
Name | | | Value of Additional Vested Equity Awards ($)(1) | | |||
Mark Penn | | | | | 10,655,410 | | |
Jay Leveton | | | | | 1,730,448 | | |
Frank Lanuto | | | | | 2,222,280 | | |
Ryan Greene | | | | | 638,040 | | |
Vincenzo DiMaggio | | | | | 538,140 | | |
Stock Ownership Guidelines. The100% of the target number of shares included in each of the LTIP Awards. For Mr. Penn, does not include 1,000,000 unvested SARs that vest on death or disability because the $8.27 base price of the SARs exceeded the closing price of the Company’s Class A common stock ownership guidelines requireon December 31, 2022.
fullest extent permitted by law.
Employment Agreements. The Company has employment or services agreements with the CEO and all of the other named executive officers. These agreements formalize the terms of the employment relationship, and assure the executive of fair treatment during employment and in the event of termination while requiring compliance with restrictive covenants. Employment agreements promote complete documentation and understanding of employment terms, including strong protections for our business.
Claw-back Agreements. In connection with the payment of cash incentive amounts to the CEO and each of the other named executive officers for 2015, the Company required that each agree in writing to repay the Company a pro rata portion of his cash incentive payment if he resigned his employment or his employment was terminated for “cause” prior to December 31, 2017. These agreements also encourage long term retention of key executives by the Company.
Equity Award Grant Policies. The Board of Directors and the Compensation Committee have adopted policies and procedures governing the granting of any equity incentive awards, including the following:
Comparator Companies. In determining compensation opportunities and payments to executives, the Compensation Committee may, from time to time, review competitive opportunities, payments, practices and performance among a comparator group of companies. Although we do not engage in formal benchmarking of NEO compensation, we intend that, if our named executive officers achieve individual and financial corporate objectives in a given year, they will earn total direct compensation that compares favorably with the total direct compensation earned by executives performing similar functions at comparator companies.
Retirement Programs. The Company offers each U.S.-based executive the opportunity to make individual contributions to a broad-based 401(k) Plan administered by the Company and generally available to the Company’s U.S. employees. However, the Company does not make or match any employee contributions to the 401(k) Plan for the Company’s employees. The Company does not provide any other specific retirement or pension benefits for its named executive officers.
Severance Policies. We provide severance protection to our named executive officers in employment agreements, as detailed below under the caption “Potential Payments upon Termination or Change-In-Control.” As discussed above, this protection is designed to be fair and competitive to aid in attracting and retaining experienced executives. We believe that the protection we provide, including the level of severance payments and post-termination benefits, is appropriate.
Section 162(m). Pursuant to Section 162(m), publicly-held corporations are prohibited from deducting compensation paid to the named executive officers except the Chief Financial Officer, as of the end of the fiscal year, in excess of $1 million, unless the compensation is “performance-based.” Although the Compensation Committee considers the impact of Section 162(m) when making its compensation determinations, the Compensation Committee has determined that its need for flexibility in designing an effective compensation plan to meet our objectives and to respond quickly to marketplace needs has outweighed its need to maximize the deductibility of its annual compensation. The Compensation Committee reviews this policy from time to time.
The Human Resources & Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that appears above. Based on this review and discussion with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s 2015 Annual Report on Form 10-K for filing with the SEC.
The Human Resources & Compensation CommitteeClare R. Copeland (Chairman)Michael J.L. KirbyIrwin D. Simon
This section contains information, both narrative and tabular, regarding the compensation for fiscal 2015, 2014, and 2013 for (1) each person who served as our principal executive officer in 2015; (2) our principal financial officer in 2015; and (3) our three other most highly compensated executive officers who were serving as executive officers as of the end of 2015 (collectively, the “NEOs” or the “named executive officers”). In 2015, Miles Nadal served as CEO from January 1, 2015 until his resignation on July 20, 2015. Scott Kauffman has served as our CEO since July 20, 2015.
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||||||||||
Scott L. Kauffman, Chairman and Chief Executive Officer(4) | 2015 | 500,641 | 800,000 | 1,926,000 | 0 | 0 | 34,135 | 3,260,776 | ||||||||||||||||||||||||
David Doft, Chief Financial Officer | 2015 | 500,000 | 575,000 | 0 | 0 | 0 | 47,687 | 1,122,687 | ||||||||||||||||||||||||
2014 | 441,667 | 566,375 | 142,437 | 0 | 0 | 46,686 | 1,197,165 | |||||||||||||||||||||||||
2013 | 412,500 | 812,500 | 226,721 | 0 | 0 | 53,084 | 1,504,805 | |||||||||||||||||||||||||
Andre Coste, Chief Operating Officer | 2015 | 575,000 | 500,000 | 0 | 0 | 0 | 76,045 | 1,151,045 | ||||||||||||||||||||||||
Robert Kantor, Chief Marketing Officer | 2015 | 500,000 | 600,000 | 0 | 0 | 0 | 38,367 | 1,138,367 | ||||||||||||||||||||||||
Lori Senecal, President and CEO, The MDC Partner Network(5) | 2015 | 1,000,000 | 750,000 | 0 | 0 | 0 | 133,628 | 1,883,628 | ||||||||||||||||||||||||
2014 | 924,000 | 350,000 | 1,115,000 | 0 | 0 | 205,281 | 2,594,281 | |||||||||||||||||||||||||
Miles S. Nadal, Former Chairman, Chief Executive Officer and President | 2015 | 1,539,000 | 0 | 0 | 0 | 0 | 375,000 | 1,914,000 | ||||||||||||||||||||||||
2014 | 1,850,000 | 9,625,000 | 2,314,530 | 0 | 0 | 926,005 | 14,715,535 | |||||||||||||||||||||||||
2013 | 1,750,000 | 24,057,294 | 4,186,920 | 0 | 0 | 554,172 | 30,548,386 |
Name | Perquisite Allowance | Housing Relocation Allowance | Health Insurance Premiums | Other Perquisites | Total | |||||||||||||||
Scott Kauffman | 34,135 | — | 34,135 | |||||||||||||||||
David Doft | 30,000 | 17,687 | 47,687 | |||||||||||||||||
Andre Coste | 50,000 | 17,687 | 8,358 | (a) | 76,045 | |||||||||||||||
Robert Kantor | 18,000 | 20,367 | 38,367 | |||||||||||||||||
Lori Senecal | 24,000 | 89,261 | 20,367 | 133,628 | ||||||||||||||||
Miles Nadal | 375,000 | — | 375,000 |
Name | Grant Date(1) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Equity Awards | |||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||
Scott Kauffman | — | — | — | — | 100,000 | (2) | 1,926,000 | (3) | ||||||||||||||||||||||||||||||||||||
David Doft | 1/26/2015 | 175,000 | 250,000 | 625,000 | 0 | |||||||||||||||||||||||||||||||||||||||
Andre Coste | 1/26/2015 | 175,000 | 250,000 | 625,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Robert Kantor | 1/26/2015 | 175,000 | 250,000 | 625,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Lori Senecal | 1/26/2015 | 350,000 | 500,000 | 1,250,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Miles Nadal(4) | 1/26/2015 | 6,000,000 | 7,500,000 | 15,000,000 | 0 | 0 |
Mr. Kauffman did not receive any award in 2015 under the 2014 LTIP Plan because he was a non-employee director at the time grants were made to other senior executives.
We have entered into employment agreements with all of our named executive officers, as described in more detail below.
MDC Partners has an employment agreement with Mr. Kauffman, effective July 20, 2015, pursuant to which Mr. Kauffman serves as our Chief Executive Officer. Mr. Kauffman’s term of employment with the Company is for an indefinite period unless and until either Mr. Kauffman gives to the Company thirty (30) days advance written notice of resignation or the Company terminates Mr. Kauffman’s employment, with or without “Cause” (as defined in his employment agreement).
Mr. Kauffman received an annualized base salary of $1,100,000 during his term of employment in 2015 (increased to $1,200,000 effective as of January 1, 2016), and he is eligible to receive an annual discretionary bonus in a target amount equal to 100% of his base salary, as determined by the Compensation Committee, based upon Mr. Kauffman’s individual performance, the overall financial performance of the Company and such other factors as the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures. As part of his new employment agreement, Mr. Kauffman received a grant of 100,000 shares of MDC restricted stock on August 26, 2015. In 2015, Mr. Kauffman received a monthly perquisite allowance in an amount equal to $6,250; however, commencing January 1, 2016, Mr. Kauffman no longer receives any perquisite allowance. Mr. Kauffman is eligible, but in 2015 declined to participate, in the Company’s welfare benefit plans and programs including disability and group life (including accidental death and dismemberment insurance). He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Kauffman’s employment is terminated under specified circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”
MDC Partners has an employment agreement with Mr. Doft, effective August 10, 2007 (as amended on August 5, 2010), pursuant to which Mr. Doft serves as our Chief Financial Officer. Mr. Doft’s term of employment is subject to automatic renewal for one-year periods, unless either party gives to the other a 45-day advance written notice of his or its intention not to renew. Mr. Doft currently is entitled to receive an annualized base salary of $500,000 (increasing to $650,000 effective as of January 1, 2016), and he is eligible to receive an annual discretionary bonus in a target amount equal to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Mr. Doft’s performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures.
Mr. Doft also receives an annual perquisite allowance in an amount equal to $30,000. Mr. Doft is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment) and business travel insurance provided by the Company to its senior executives. He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Doft’s employment is terminated under specified circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”
MDC Partners has an employment agreement with Mr. Coste, effective August 8, 2013, pursuant to which Mr. Coste currently serves as our Chief Operating Officer. Mr. Coste’s term of employment with the Company is for an indefinite period unless and until either Mr. Coste gives to the Company three (3) months advance written notice of resignation or the Company terminates Mr. Coste’s employment with or without “Cause” (as defined in his employment agreement).
Mr. Coste currently receives an annualized base salary of $575,000, and he is eligible to receive an annual discretionary bonus in a target amount equal to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Mr. Coste’s individual performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures.
Mr. Coste also receives an annual perquisite allowance in an amount equal to $50,000. Mr. Coste is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment) and business travel insurance provided by the Company to its senior executives. He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. In addition, Mr. Coste is entitled to receive reimbursement for airplane travel costs for him and his family to visit France once per year, and up to $2,500 for the preparation of U.S. tax returns. The employment agreement also provides for severance payments if Mr. Coste’s employment is terminated under specified circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”
MDC Partners has an employment agreement with Mr. Kantor, effective May 5, 2014, pursuant to which Mr. Kantor serves as our Chief Marketing and Business Development Officer. Mr. Kantor’s current term of employment with the Company is for an indefinite period unless and until either Mr. Kantor gives to the Company six (6) months advance written notice of resignation or the Company terminates Mr. Kantor’s employment with or without “Cause” (as defined in his employment agreement).
Mr. Kantor currently receives an annualized base salary of $500,000, and he is eligible to receive an annual discretionary bonus in a target amount equal to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Mr. Kantor’s individual performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures.
Mr. Kantor also receives an annual perquisite allowance in an amount equal to $18,000. Mr. Kantor is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment) and business travel insurance provided by the Company to its senior executives. He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Kantor’s employment is terminated under certain circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”
From May 2015 to December 31, 2015, Lori Senecal held the dual titles of President and Chief Executive Officer of The MDC Partner Network and Chief Executive Officer of the Company’s subsidiary, Crispin Porter & Bogusky (“CPB”). As of January 1, 2016, Ms. Senecal assumed the exclusive role as Global Chief Executive Officer of CPB, and no longer served as an executive officer of the Company after December 31, 2015.
For 2015, Ms. Senecal received an annualized base salary of $1,000,000, and was eligible to receive an annual discretionary bonus in a target amount equal to 100% of her base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Ms. Senecal’s performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures. Ms. Senecal also receives an annual perquisite allowance in an amount equal to $24,000. In addition, in 2015 Ms. Senecal was paid a housing allowance of $89,261 in connection with the relocation of her residence to Boulder, Colorado, where CPB’s headquarters are located. Ms. Senecal is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment) and business travel insurance provided by the Company to its senior executives. She is also entitled to participate in the
retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Ms. Senecal’s employment is terminated without cause. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”
On April 25, 2007, the Company entered into a Management Services Agreement (as amended and restated on May 6, 2013, the “Services Agreement”) with Miles Nadal and Nadal Management, Inc. to set forth the terms and conditions on which Miles Nadal previously provided services to the Company as its Chief Executive Officer. In connection with Mr. Nadal’s resignation on July 20, 2015, the Company and Mr. Nadal terminated the Services Agreement and entered into a separation agreement (the “Separation Agreement”), dated as of July 20, 2015. Pursuant to the Separation Agreement, Mr. Nadal agreed, among other things, to (1) repay to the Company $1,877,000 in connection with specified amounts paid to or for the benefit of Mr. Nadal and an affiliate; (2) repay to the Company $10,581,605 in connection with cash bonus awards previously paid to Mr. Nadal, with such repayments to be made in five installments, with the last to be paid on December 31, 2017; and (3) customary non-disparagement and confidentiality obligations, reaffirmation of restrictive covenants, and an intellectual property rights assignment. During the period of January 1, 2015 through and including the termination of his employment on July 20, 2015, Mr. Nadal was paid his pro-rated base retainer and perquisite allowance in an aggregate amount equal to $1,914,000. Mr. Nadal was not paid any incentive or severance under the Separation Agreement.
The following table sets forth information regarding the outstanding awards under our equity incentive plans held by our named executive officers at 2015 fiscal year end.
Name | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($) | |||||||||||||||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||
Scott Kauffman | 37,500 | (1) | 5.97 | April 28, 2016 | 117,866 | (1) | 2,560,050 | (1) | ||||||||||||||||||||||||
David B. Doft | — | |||||||||||||||||||||||||||||||
Andre Coste | 17,963 | (2) | 390,156 | (2) | ||||||||||||||||||||||||||||
Robert Kantor | 37,500 | (3) | 814,500 | (3) | ||||||||||||||||||||||||||||
Lori Senecal | 50,000 | (4) | 1,086,000 | (4) | ||||||||||||||||||||||||||||
Miles Nadal | — |
The following table sets forth information concerning each exercise of stock options, SARs and similar instruments, and each vesting of stock, including restricted stock, restricted stock units and similar instruments, during 2015 for each NEO on an aggregated basis.
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||
Scott L. Kauffman | 9,804 | 250,688 | ||||||||||||||
David B. Doft | 5,650 | 143,623 | ||||||||||||||
Andre Coste | — | |||||||||||||||
Robert Kantor | — | |||||||||||||||
Lori Senecal | — | |||||||||||||||
Miles S. Nadal | 91,810 | 2,333,810 |
We do not provide our NEOs with any defined benefit or defined contribution pension arrangements, andarrangements.
We have entered into employment agreements with eachThere is currently no indebtedness owed to the Company by any of our nameddirectors or executive officers. Under these agreements, we are requiredofficers, and there was no such indebtedness owed to pay severance benefits in connection with specified terminationsus since January 1, 2022. The Company’s Corporate Governance Guidelines prohibit the Company from making any personal loans or extensions of employment, including specified terminations in connection with a change in controlcredit to directors or executive officers of the Company. The employment agreements for each NEO
Definitions of terms such as “change in control” or “for good reason” vary between agreements, so when a definition is particular to an agreement, it is described for that agreement. For all named executive officers, a “change of control” means the closing of a transaction which results in (1) any person(s) or company(ies) acting jointly or in concert owning equity of the Company representing greater than 50% of the voting power of the Company’s outstanding securities, or (2) the Company selling all or substantially all of its assets (in each instance other than any transfer by the Company or any of its affiliates of their respective interest in the Company to another wholly-owned subsidiary of another MDC Group company).
Pursuant to his employment agreement, if MDC terminated Mr. Kauffman’s employment in 2015 without cause, or if Mr. Kauffman terminated his employment for good reason, then MDC was required to pay Mr. Kauffman a severance payment within 60 days of the date of termination of one (1) times Mr. Kauffman’s base salary plus the accrued amount of his annual discretionary bonus as of the termination date. If Mr. Kauffman’s employment had terminated under these circumstances on December 31, 2015, the aggregate cash payment due to him under the agreement would have been $1,100,000. As of December 31, 2015, Mr. Kauffman had 117,866 unvested restricted stock grants that would vest on termination of his employment agreement or change of control, with a fair value equal to $2,560,050.
If Mr. Kauffman’s employment is terminated within one year following the closing of a change in control by MDC without cause, or by Mr. Kauffman for good reason, then Mr. Kauffman will be entitledAdjusted EBITDA to the same severance payments set forth above. In addition, in the event of a change of control, the Compensation Committee may in its sole discretion determine to make an additional payment to Mr. Kauffman. If there had been a change in control of MDC Partners on December 31, 2015 and Mr. Kauffman’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $1,100,000.
Pursuant to his employment agreement, if MDC terminates Mr. Doft’s employment without cause, Mr. Doft terminates his employment for good reason, or the company gives a notice of non-renewal of the agreement, then MDC is required to pay Mr. Doft a severance payment within 10 days of the date of termination of one (1) times Mr. Doft’s total remuneration, plus an amount equal to two (2) month’s base salary for each calendar year in which he was employed by the Company, up to a maximum of six months. Total remuneration means the sum of his current base salary, his perquisite allowance, plus the highest annual discretionary cash bonus he earned in the three years ending December 31 of the year immediately preceding the date of termination. If Mr. Doft’s employment had terminated under these circumstances on December 31, 2015, the aggregate cash payment due to him under the agreement would have been $1,592,500. Furthermore, Mr. Doft will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans and, to the extent permitted under law, also in all retirement plans, provided however, that if Mr. Doft becomes entitled to receive coverage and benefits in the same type of plan from another employer, he will no longer be able to participate in these benefit and retirement plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. Doft is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $17,687 if Mr. Doft’s employment had terminated as of December 31, 2015.
If Mr. Doft’s employment is terminated without cause by the company within one year following the closing of a change in control, by Mr. Doft for good reason, or by the company giving a notice of non-renewal of the agreement, then Mr. Doft will be entitled to a payment of 2.0 times his total remuneration. He will also be eligible to receive a pro rata portion of his annual discretionary cash bonusU.S. GAAP Operating income for the year in which his employment terminates. If there had been a change in control of MDC Partners onended December 31, 2015 and Mr. Doft’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $2,685,000. Furthermore, Mr. Doft will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. Doft2022 is unable to participateprovided in the plans. The aggregate amount of this benefit would have been approximately $17,687 if Mr. Doft’s employment had terminated as of December 31, 2015.
Pursuant to his employment agreement, if MDC terminates Mr. Coste’s employment without cause, then MDC is required to pay Mr. Coste a severance payment over the applicable twelve (12) month severance period, equal to one (1) times Mr. Coste’s base salary. If Mr. Coste’s employment had terminated under these circumstancesCompany’s Annual Report on December 31, 2015, the aggregate cash payment due to him under the agreement would have been $575,000. As of December 31, 2015, Mr. Coste had 17,963 unvested restricted stock grants that would vestForm 10-K filed on termination of his employment agreement or change of control, with a fair value equal to $390,156.
If Mr. Coste’s employment is terminated within one year following the closing of a change in control by the company without cause, then Mr. Coste will be entitled to a payment of 1.5 times his then-current base salary. He will also be eligible to receive a pro-rata portion of his annual discretionary cash bonus for the year in which his employment terminates. If there had been a change in control of MDC Partners on December 31, 2015March 6, 2023.
Pursuant to his employment agreement, if MDC terminates Mr. Kantor’s employment without cause, then MDC is required to pay Mr. Kantor a severance payment over the applicable twelve (12) month severance period, equal to one (1) times Mr. Kantor’s base salary. If Mr. Kantor’s employment had terminated under these circumstances on December 31, 2015, the aggregate cash payment due to him under the agreement would have been $500,000. As of December 31, 2015, Mr. Kantor had 37,500 unvested restricted stock grants that would vest on termination of his employment agreement or change of control, with a fair value equal to $814,500.
If Mr. Kantor’s employment is terminated within one year following the closing of a change in control by the company without cause, then Mr. Kantor will be entitled to a payment of 1.5 times his total remuneration (increasing to 2.0 times his total remuneration effective May 26, 2016). Total remuneration means the sum of his current base salary, plus the highest annual discretionary cash bonus he earned in the three years ending December 31 of the year immediately preceding the date of termination. He will also be eligible to receive a pro-rata portion of his annual discretionary cash bonus for the year in which his employment terminates. If there had been a change in control of MDC Partners on December 31, 2015 and Mr. Kantor’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $1,412,062.
Pursuant to her employment agreement, if MDC terminates Ms. Senecal’s employment without cause, then MDC is required to pay Ms. Senecal severance in an amount equal to her base salary for a period of time commencing on the date of termination and ending at the end of the twelve (12) month period thereafter. If Ms. Senecal’s employment had terminated under these circumstances on December 31, 2015, the aggregate cash payment due to her under the agreement would have been $1,000,000. As of December 31, 2015, Ms. Senecal had 50,000 unvested restricted stock grants that would vest on termination of her employment agreement or change of control, with a fair value equal to $1,086,000.
If Ms. Senecal’s employment is terminated by the company without cause within one year following the closing of a change in control, then Ms. Senecal will be entitled to a payment of two (2) times her base salary. She will also be eligible to receive a pro rata portion of her annual discretionary cash bonus for the year in which her employment terminates. If there had been a change in control of MDC Partners on December 31, 2015 and Ms. Senecal’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid her under the contract would be $2,000,000.
On July 20, 2015, Mr. Nadal resigned from his position as CEO and from his position as a member and Chairman of the Board of Directors. Mr. Nadal did not receive any severance or other compensation payments from the Company in connection with his resignation.
Following an extensive review of perquisites and payments made by the Company on behalf of Mr. Nadal during the period 2009 through 2014, Mr. Nadal repaid the Company for the expenses for which the Company sought reimbursement, in an aggregate amount of $11,285,000. These payments included medical expenses, travel and commutation expenses, charitable donations and other expenses that lacked appropriate substantiation, over a six (6) year period.
In addition, Mr. Nadal further agreed to repay the Company $10,581,605 in connection with repayment obligations pursuant to prior incentive/retention agreements. Through December 31, 2015, Mr. Nadal has paid $2.5 million of this amount, and is obligated to repay the remaining balance in three installments, with the last to be paid on December 31, 2017.
Mr. Clare Copeland (Chairman), Mr. Scott Kauffman (prior to his appointment as CEO on July 20, 2015), Mr. Michael J.L. Kirby
On May 26, 2005,Committee of the Board
The following table sets out as at December 31, 2015 the number of securities to be issued upon exercise of outstanding options and rights, the weighted average exercise price of outstanding options and rights and the number of securities remaining available for future issuance under equity compensation plans.
Number of Securities to be Issued Upon Exercise of Outstanding Options Warrants and Rights | Weighted Average Exercise Price of Outstanding Options Warrants and Rights | Number of Securities Remaining Available for Future Issuance (Excluding Column (a)) | ||||||||||
(a) | (b) | (c) | ||||||||||
Equity Compensation Plans: | ||||||||||||
Approved by stockholders: | ||||||||||||
Share options and restricted stock | 122,357 | (1) | $ | 5.28 | (2) | 1,123,772 | (3) | |||||
Not Approved by stockholders: | — | — | — |
There is currently no indebtedness owed to MDC by any of MDC’s Directors, executive officers or senior officers, and there was no such indebtedness owed to MDC as of December 31, 2015. The Company’s Corporate Governance Guidelines prohibit the Company from making any new personal loans or extensions of credit to Directors or executive officers of the Company.
MDC holds directors’ and officers’ liability insurance policies that are designed to protect MDC Partners and its directors and officers against any legal action which may arise due to wrongful acts on the part of directors and/or officers of MDC. The policies are written for a limit of $70 million, subject to a corporate deductible up to $250,000 per securities-related claims and up to $100,000 per other indemnifiable claims. In respect of the fiscal year ended December 31, 2015, the cost to MDC of maintaining the policies was $688,525. The twelve-month premium cost2022.
In reviewing related party transactions, the Audit Committee will consider all relevant facts and circumstances, including, among others:
ThePersons
On April 25, 2007, the Company entered into a Management Services Agreement (as amended and restated on May 6, 2013, the “Services Agreement”) with Miles Nadal and with Nadal Management, Inc. to set forth the terms and conditions on which Miles Nadal previously provided services to the Company as its Chief Executive Officer. In connection with Mr. Nadal’s resignation on July 20, 2015, the Company and Mr. Nadal terminated the Services Agreement and entered into a separation agreement (the “Separation Agreement”), dated as of July 20, 2015. Pursuant to the Separation Agreement, Mr. Nadal agreed, among other things, to: (i) repay to the Company $1,877,000 in connection with certain amounts paid to or for the benefit of Mr. Nadal and an affiliate; (ii) repay to the Company $10,581,605 in connection with amounts required to be repaid pursuant to cash bonus awards previously paid to Mr. Nadal, with such repayments to be made in five installments, with the last to be paid on December 31, 2017; and (iii) customary non-disparagement and confidentiality obligations, reaffirmation of restrictive covenants, and an intellectual property rights assignment. Mr. Nadal was not paid any compensation payments or severance under the Separation Agreement.
Beginning in 2014 and during the first six months of 2015, MDC chartered for business purposes an airplane and helicopter (together, the “Aircraft”) owned by entities controlled by Mr. Nadal and leased to an independent corporate aircraft management company. Entities controlled by Mr. Nadal paid for the purchasesDirector Affiliation
From May 2015 to December 31, 2015, Lori Senecal held the dual titles of President and Chief Executive Officer of The MDC Partner Network and Chief Executive Officer of Partner Firm Crispin Porter & Bogusky (“CPB”). As of January 1, 2016, Ms. Senecal assumed the exclusive role as Global Chief Executive Officer of CPB. Ms. Senecal’s husband, William Grogan, has been employed by the Company since July 1, 2015 as President of Global Accounts. In 2015, Mr. Grogan’s total compensation from the Company and its affiliate (kbs+), including salary, bonus, and other benefits, totaled approximately $943,000. His compensation is commensurate with that of his peers.
Scott Kauffman is Chairman and Chief Executive Officer of the Company. His daughter, Sarah Kauffman, has been employed by KBS+ since July 2011, and currently acts as Director of Operations, Attention Partners. In 2015, her total compensation, including salary, bonus and other benefits, totaled approximately $125,000. Her compensation is commensurate with that of her peers.
In 2015, Union Advertising Canada LP (“Union”), a Partner Firm, provided certain website development and related marketing services to each of Peerage Realty Partners (“Peerage”) and Peerage’s subsidiary, Baker Real Estate Incorporated (“Baker”). Miles Nadal, the Company’s former CEO,Mark Penn is the majority equity ownerCEO and Chairman of Peerage and Baker. The amount of fees paid by each of Peerage and Baker to Union in respect of these services in 2015 was $130,662, which fees were customary for these types of services.
Other than as described above, no director, officer, principal shareholder or proposed nominee for election as a director of MDC and no associate or affiliate of the foregoing persons has or has had any material interest, direct or indirect, in any transaction since the beginning of MDC’s last completed fiscal year or in any proposed transaction which, in either such case, has materially affected or will materially affect MDC.
The Audit Committee is responsible for assisting the Board in serving as an oversight to MDC Partners’ accounting, auditing, financial reporting, internal control and legal compliance functions. The Audit Committee has implemented procedures to ensure that during the course of each fiscal year, it devotes the attention that it deems necessary or appropriate to each of the matters assigned to it under its charter including, whenever appropriate, meeting in executive sessions with MDC Partners’ independent auditors without the presence of MDC Partners’ management.
Management is responsible for the financial reporting process, including the system of internal controls, for the preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and for the report on the Company’s internal control over financial reporting. The Company’s independent auditors are responsible for auditing those financial statements and expressing an opinion as to their conformity with GAAP and for opining on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee’s responsibility is to oversee and review the financial reporting process and to review and discuss the status and completed copy of management’s report on the Company’s internal control over financial reporting.
The Audit Committee reviewed and discussed with management and BDO USA, LLP management’s assessment of the Company’s internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, including the matters more fully disclosed in Item 9A (Controls and Procedures) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.
In overseeing the preparation of MDC Partners’ financial statements, the Audit Committee met with both management and MDC Partners’ outside auditors to review and discuss all financial statements prior to their issuance and to discuss significant accounting issues. Management advised the Audit Committee that all financial statements were prepared in accordance with GAAP, and the Audit Committee discussed the statements with both management and the outside auditors.
With respect to MDC Partners’ outside auditors, the Audit Committee, among other things, discussed with BDO USA, LLP matters relating to its independence, and received from BDO USA, LLP written disclosures and a letter from BDO USA, LLP as required by the applicable requirements of the Public Company Accounting Oversight Board. The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed by PCAOB Standard No. 16, “Communications with Audit Committee,” as amended, which includes, among other items, matters related to the conduct of the annual audit of MDC Partners’ financial statements.
On the basis of their reviews and discussions, the Audit Committee recommended to the Board that the Board approve (and the Board has approved) the inclusion of MDC Partners’ audited financial statements in MDC Partners’ Annual Report on Form 10-K for the fiscal year ended December 31, 2015, for filing with the Securities and Exchange Commission and the Canadian Securities Administrators.
Effective April 1, 2006 the Company engaged BDO USA, LLP (“BDO USA”) as its independent registered public accounting firm. The decision to engage BDO USA was made by the Audit Committee of the Board of Directors and the Board of Directors of the Company and is also the manager of the Stagwell Group LLC.
| | | Voting Shares Beneficially Owned(1) | | |||||||||||||||||||||||||||
Name | | | Class A Shares | | | Class A % | | | Class C Shares | | | Class C % | | | Total Voting Power %(5) | | |||||||||||||||
Mark Penn – Direct(2) | | | | | 3,817,924 | | | | | | 2.9% | | | | | | | | | | | | | | | | | | 1.3% | | |
– Indirect(3) | | | | | 14,197,837 | | | | | | 10.9% | | | | | | 160,909,058 | | | | | | 100% | | | | | | 60.1% | | |
Charlene Barshefsky(4) | | | | | 119,264 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Bradley Gross | | | | | — | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Wade Oosterman(5) | | | | | 83,256 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Desirée Rogers(4) | | | | | 118,226 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Eli Samaha – Direct(4) | | | | | 46,008 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
– Indirect(6) | | | | | 7,147,662 | | | | | | 5.5% | | | | | | | | | | | | | | | | | | 2.5% | | |
Irwin Simon(4) | | | | | 134,219 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Rodney Slater(4) | | | | | 46,008 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Brandt Vaughan(4) | | | | | 99,508 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Jay Leveton(7) | | | | | 484,285 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Frank Lanuto(8) | | | | | 1,055,604 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Ryan Greene(9) | | | | | 216,370 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
Vincenzo DiMaggio(10) | | | | | 176,383 | | | | | | * | | | | | | | | | | | | | | | | | | * | | |
All directors and officers as a group (14 persons) – Direct(11) | | | | | 6,513,619 | | | | | | 4.9% | | | | | | | | | | | | | | | | | | 2.2% | | |
– Indirect(3)(6) | | | | | 21,345,499 | | | | | | 16.4% | | | | | | 160,909,058 | | | | | | 100% | | | | | | 62.5% | | |
The Stagwell Group LLC(3) | | | | | 14,197,837 | | | | | | 10.9% | | | | | | 160,909,058 | | | | | | 100% | | | | | | 60.1% | | |
Goldman Sachs(12) | | | | | 16,980,553 | | | | | | 13.0% | | | | | | | | | | | | | | | | | | 5.8% | | |
Hotchkis and Wiley Capital Management LLC(13) | | | | | 19,083,810 | | | | | | 14.6% | | | | | | | | | | | | | | | | | | 6.5% | | |
The Audit Committee’s current charter is appended to this Circular as Exhibit A.
Audit Committeeshares beneficially owned does not exceed one percent of the BoardAnne Marie O’Donovan (Chair)Michael KirbyLarry KramerClare CopelandIrwin Simon
Subject to the action of the shareholders, upon recommendation of the Audit Committee, the Board has recommended to the shareholders the appointment of BDO USA, LLP, independent registered public accountants, to audit and report on the consolidated financial statements of MDC Partners for the fiscal year ending December 31, 2016 and to perform such other services as may be required of them. BDO USA, LLP has served as independent public accountants for MDC Partners since April 1, 2006. The Board has directed that management submit the appointment of the auditors for approval by the shareholders at the Meeting. Representatives of BDO USA, LLP are expected to be present at the meeting, will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate shareholder questions.
Unless otherwise instructed,noted, the Company believes that all persons named in the accompanying proxy (provided the same is duly executed in their favor and is duly deposited) intend to vote FOR the appointment of BDO USA, LLP, independent registered public accountants, as auditors of MDC Partners, to hold office until the close of the next annual meeting of shareholders of MDC Partners, at a remuneration to be fixed by the directors of MDC Partners.
In addition to retaining BDO USA, LLP to audit MDC Partners’ consolidated financial statements for 2014 and 2015, the Company retained BDO USA, LLP to provide advisory, auditing and consulting services in 2014 and 2015. These services included audit services, audit-related services, tax services and other services. The following tables set forth the aggregate fees billed to MDC Partners by BDO USA, LLP for professional services in fiscal years 2014 and 2015:
2014 | 2015 | |||||||
Audit Fees(1) | $ | 2,240,753 | $ | 2,164,259 | ||||
Tax Fees(2) | 41,847 | — | ||||||
Audit Related Fees(3) | 21,040 | 894,309 | ||||||
All Other Fees | — | — | ||||||
Total | $ | 2,303,640 | $ | 3,058,568 |
All fees listedtable above have been pre-approvedsole voting power and dispositive power with respect to all shares beneficially owned by them. For purposes of computing the Audit Committee. The Audit Committee has, however, delegated to the Chairmanpercentage of the Audit Committee the authority to pre-approve permitted non-audit services (as such services are definedoutstanding shares held by the Sarbanes-Oxley Act of 2002) provided that (i) the aggregate estimated amount of such fees will not exceed $25,000 and (ii) the Chairman of the Audit Committee reports any pre-approval so granted at the next scheduled meeting of the Audit Committee.
The Audit Committee Charter provides for the Audit Committee to establish the auditors’ fees. Such feeseach person or group named above, we have been based upon the complexity of the mattersincluded restricted shares in question and the time incurred by the auditors.
The Board has adopted, subject to stockholder approval, the 2016 Stock Incentive Plan (the “2016 Incentive Plan”), a copy of which is annexed hereto asExhibit C. The purpose of the 2016 Incentive Plan is to promote the interests of MDC Partners and its shareholders by providing incentives to the non-employee directors and employees of the Company and its subsidiaries who are largely responsible for the management, growth and protection of the business of the Company. The 2016 Incentive Plan is designed to meet this intent by providing such employees and eligible non-employee directors with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company.
The Board adopted the 2016 Incentive Plan as a replacement for the Company’s 2011 Stock Incentive Plan, as amended, which was approved by shareholders on June 1, 2011 (the “Prior Plan”). The 2016 Incentive Plan contains terms and conditions that reflect developments in corporate governance and other rules and regulations since the adoption of the Prior Plan and is designed to replenish the number of shares availableoutstanding as of April 19, 2023. In addition, for purposes of computing the percentage of outstanding shares held by each person or group named above, any shares which that person or group has the right to acquire within 60 days of April 19, 2023, is deemed to be outstanding, but is not deemed to be outstanding for the Company.
The 2016 Incentive Plan authorizespurpose of computing the issuancepercentage ownership of awards with respect toany other person or group.
The material terms of the 2016 Incentive Plan are summarized below. The summary is not intended to be a complete description of the terms of the 2016 Incentive Plan. The full text of the 2016 Incentive Plan is attached hereto as Exhibit C. In the event of any inconsistency between the summary set forth below and the terms of the 2016 Incentive Plan, the terms of the 2016 Incentive Plan will govern.
The 2016 Incentive Plan provides for the grant to non-employee directors and employees of the Company and, at the discretion of any of the foregoing persons and subject to any required regulatory approvals and conditions, any personal holding company controlled by such person, of non-qualified stock options (“Options”), tandem and stand-alonevested stock appreciation rights (“SARs”).
Shares issued under the 2016 Incentive Plan may be either authorizedWiley Capital Management, LLC (“Hotchkis and unissued Shares or treasury Shares. In addition to the limit on the aggregate number of Shares that are authorized to be issued pursuant to the 2016 Incentive Plan described above, the maximum number of Shares that may be covered by Incentive Awards granted to any single participant in the 2016 Incentive Plan (a “Participant”Wiley”) in any fiscal year shall not exceed 300,000 Shares (representing significantly less than 1% of the current issued and outstanding Shares of the Company), prorated on a daily basis for any fiscal year that is shorter than 365 days, and the aggregate equity awards that may be issued under the 2016 Incentive Plan to executive officers in a given fiscal yearwhich information may not exceed 2%be current as of April 19, 2023, and (ii) an additional 2,000,000 shares of Class A Common Stock purchased in an underwritten public offering on March 14, 2023. The address of Hotchkis and Wiley is 601 S. Figueroa Street, 39th Fl, Los Angeles, CA 90017.
In no event shall any new Incentive Award granted under the 2016 Stock Incentive Plan vest or otherwise become payable earlier than one (1) year following the date on which it is granted, other than upon the occurrence of a permitted acceleration event.
Any new Incentive Award granted under the 2016 Stock Incentive Plan that is subject to time-based vesting terms and conditions shall not become fully and immediately vested and exercisable solely as a result of the occurrence of a change of control, absent a termination of employment without cause or for good reason following any such change of control. In addition, any new Incentive Award granted under the 2016 Stock Incentive Plan that is subject to performance-based vesting terms and conditions shall not become fully and immediately vested and exercisable solely as a result of the occurrence of change of control, absent a termination of employment without cause or for good reason following any such change of control and shall be adjusted on a pro-rata basis as determined by the Committee.
In no event will any new Incentive Awards be issued in substitution for outstanding Incentive Awards previously granted to Participants, and no repricing of Incentive Awards is permitted at any time under any circumstances, unless the shareholders of the Company expressly approve such substitution or repricing.
The 2016 Incentive Plan will be administered by the Human Resources & Compensation Committee of the Company’s Board, or such other committee as the Board shall appoint from time to time (the “Committee”). The Committee shall from time to time designate those persons who shall be granted Incentive Awards and the amount, type and other terms and conditions of such Incentive Awards. All of the powers and responsibilities of the Committee under the 2016 Incentive Plan may be delegated by the Committee, in writing, to any subcommittee thereof. In addition, the Committee may from time to time authorize a committee consisting of one or more Directors to grant Incentive Awards to persons who are not “executive officers” of the Company (within the meaning of such term pursuant to Rule 16a-1 of the Exchange Act), subject to such restrictions and limitations as the Committee may specify.
The Committee will have full authority to administer the 2016 Incentive Plan, including authority to interpret and construe any provision of the 2016 Incentive Plan and the terms of any Incentive Award issued under it and to adopt such rules and regulations for administering the 2016 Incentive Plan, as it may deem necessary. On or after the date of grant of an Incentive Award under the 2016 Incentive Plan, the Committee may (i) extend the term of any Incentive Award, including, without limitation, extending the period following a termination of a Participant’s employment during which any Incentive Award may remain outstanding, (ii) waive any conditions to the exercisability or transferability of any Incentive Award or (iii) provide for the payment of dividends or dividend equivalents with respect to any Incentive Award. Decisions of the Committee shall be final and binding on all Participants. No member of the Committee shall be liable for any action, omission or determination relating to the 2016 Incentive Plan, and MDC Partners indemnifies and holds harmless each member of the Committee and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the 2016 Incentive Plan has been delegated against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Committee) arising out of any action, omission or determination relating to the 2016 Incentive Plan, unless, in either case, such action, omission or determination was taken or made by such member, director or employee in bad faith and without reasonable belief that it was in the best interests of the Company.
The number and type of Incentive Awards that will be granted in the future under the 2016 Incentive Plan, or that would have been granted had the 2016 Incentive Plan been in effect during the Company’s last fiscal year, are not determinable.
Options. Each Option shall entitle the holder thereof to purchase a specified number of Shares. The exercise price of each Option will be equal to at least 100% of the fair market value of a Share on the date on which the Option is granted. “Fair Market Value” means, as of the applicable date of determination, the closing sales price of the Shares on the immediately preceding business day as reported on the principal
securities exchange on which such Shares are then listed or admitted to trading. Options will have terms that do not exceed ten years and will have vesting periods of at least one year, except that vesting may occur in less than one year in the event that certain performance conditions attached to the Option (or with respect to other Incentive Awards) are satisfied, there is an increase or decrease in the number of issued Shares resulting from a subdivision or consolidation or the payment of a stock dividend on the Shares or any other increase or decrease in the number of such Shares effected without receipt or payment of consideration by the Company, a merger, consolidation, dissolution or liquidation of MDC Partners, or there is a termination of the employment of a Participant other than for cause or voluntary resignation prior to retirement (“Permitted Acceleration Events”). Each Option shall be subject to earlier termination, expiration or cancellation as provided in the 2016 Incentive Plan or in the agreement evidencing such Option.
Tandem Stock Appreciation Rights. The Human Resources & Compensation Committee of the Company’s Board, or such other committee as the Board shall appoint from time to time, which administers the 2016 Incentive Plan, may grant, in connection with any Option, a tandem SAR (“Tandem SAR”). The exercise price per Share of any Tandem SAR will be equal to at least 100% of the fair market value of a Share on the date on which the Tandem SAR is granted, except that the exercise price of a Tandem SAR that is granted after the grant of the related Option may be less than such amount if it is at least equal to the exercise price of the related Option. In general, the exercise of a Tandem SAR by a Participant entitles the Participant to an amount (in cash, Shares or a combination of cash and Shares), with respect to each Share subject thereto, equal to the excess of the fair market value of a Share on the exercise date over the exercise price of the Tandem SAR. The exercise of a Tandem SAR with respect to a number of Shares causes the cancellation of its related Option with respect to an equal number of Shares, and the exercise, cancellation or expiration of an Option with respect to a number of Shares causes the cancellation of its related Tandem SAR with respect to an equal number of Shares.
Stand-Alone Stock Appreciation Rights. The Committee may grant SARs that do not relate to Options (“Stand-Alone SARs”). The exercise price per Share of any Stand-Alone SAR will be at least 100% of the fair market value of a Share on the date on which the Stand-Alone SAR is granted. In general, the exercise of a Stand-Alone SAR by a Participant entitles the Participant to an amount (in cash, Shares or a combination of cash and Shares), with respect to each Share subject thereto, equal to the excess of the fair market value of a Share on the exercise date over the exercise price of the Stand-Alone SAR.
Other Stock Based Awards. The Committee may grant equity-based or equity-related Incentive Awards other than Options and SARs in such amounts and subject to such terms and conditions as the Committee determines. Each such Incentive Award may (i) involve the transfer of actual Shares, either at the time of grant or thereafter, or payment in cash or otherwise of amounts based on the value of Shares, (ii) be subject to performance-based and/or service-based conditions and (iii) be in the form of phantom stock, restricted stock, restricted stock units, performance shares, or share-denominated performance units. No such Incentive Award will vest or otherwise become payable earlier than three years following the date on which it is granted, other than upon the occurrence of a Permitted Acceleration Event.
Performance Based Compensation. The Committee may grant Incentive Awards that are intended to qualify under the requirements of Section 162(m) of the Tax Code as “qualified performance-based compensation.”
The performance goals upon which the payment or vesting of any Incentive Award (other than Options and SARs) that is intended to so qualify will relate to one or more of the following performance measures: revenue growth, achievement of EBITDA targets, operating income, operating cash flow, net income, earnings per share, cash earnings per share, return on sales, return on assets, return on equity, return on invested capital and total shareholder return. In the event that the requirements of Section 162(m) and the regulations thereunder change to permit Committee discretion to alter the performance measures, the Committee will have discretion to make such changes. Performance periods may be equal to or longer than, but not less than, one fiscal year of the Company. Within 90 days after the beginning of a performance period, and in any case before 25% of the performance period has elapsed, the Committee shall establish (a) performance goals and
objectives for the Company for such performance period, (b) target awards for each Participant, and (c) schedules or other objective methods for determining the applicable performance percentage to be applied to each such target award.
The measurement of any performance measure may exclude the impact of charges for restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring items, and the cumulative effects of accounting changes, each as defined by generally accepted accounting principles and as identified in the Company’s audited financial statements, including the notes thereto. Any performance measures may be used to measure the performance of the Company or a subsidiary as a whole or any business unit of the Company or any subsidiary or any combination thereof, as the Committee may deem appropriate, or any of the above performance measures as compared to the performance of a group of comparator companies, or a published or special index that the Committee, in its sole discretion, deems appropriate.
Adjustments Upon Changes in Capitalization. The 2016 Incentive Plan provides for an adjustment in the number of Shares available to be issued under the 2016 Incentive Plan, the number of Shares subject to Incentive Awards and the exercise prices of certain Incentive Awards upon a change in the capitalizationcontrol of the Company, a stock dividend or split, a merger, consolidation, combination or exchange of Shares and certain other similar events.
Tax Withholding. The 2016 Incentive Plan provides that Participants may elect to satisfy certain federal income tax withholding requirements by remitting to the Company cash or, subject to certain conditions, Shares or by instructing the Company to withhold Shares payable to the Participant.
Assignment and Transfer. Options and SARs may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant.
Amendment. The Board may at any time suspend or discontinue the 2016 Incentive Plan or revise or amend it in any respect whatsoever, except that, in general, no revision or amendment may, without the approval of shareholders of the Company, (i) increase the number of Shares that may be issued under the Plan or (ii) materially modify the requirements as to eligibility for participation in the 2016 Incentive Plan. No action may, without the consent of the Participant, reduce the Participant’s rights under any previously granted and outstanding Incentive Award.
Term of the Plan. No grants may be made under the 2016 Incentive Plan after April 22, 2026.
The following is a summary of the principal U.S. federal income tax consequences generally applicable to the Company and to participants upon the grant and exercise of Incentive Awards under the Plan under the now applicable provisions of the Code and the regulations thereunder.
Tax Consequences to a Participant. In general, a participant will not be deemed to receive any income nor will he be taxed upon grant of an Option or SAR. Generally, a participant will have ordinary income upon exercise of an Option in an amount equal to the excess of the fair market value on the date of exercise of the shares purchased over the exercise price paid upon exercise. A participant generally will not recognize income at the time a restricted stock award is granted. When the restrictions lapse and the stock vests, the participant will recognize ordinary income equal to the fair market value of the common stock as of that date (less the amount he or she paid for the stock, if any). A participant may make a special election underCompany.
If the participant surrenders previously-owned shares in payment of any or all of the exercise price of an Option, the shares received upon exercise of such Option equal in number to the previously-owned shares so surrendered would have the tax basis and capital gain holding period applicable to such surrendered shares. The additional shares received upon exercise would have a tax basis equal to the amount taxable as ordinary income upon such exercise (as described in the immediately preceding paragraph) plus the cash paid on exercise (if any) and a new capital gain holding period commencing on the date following the date of exercise.
Tax Consequences to the Company. As a general matter, the Company or an affiliate of the Company that employs a participant will be entitled to take a deduction in an amount equal to the amount of ordinary income recognized by the participant at the time the participant recognizes ordinary income in respect of Incentive Awards. For example, with respect to an Option or SAR, the grant and vesting do not have tax consequences to the Company. The Company or an affiliate of the Company that employs a participant generally will be entitled to a federal income tax deduction in an amount equal to the amount of compensation income, taxable as ordinary income, recognized by the participant as a result of the exercise of an Option or SAR in the year of recognition by the participant, subject to any applicable limitations under Section 162(m) of the Internal Revenue Code.
The resolution approving the 2016 Incentive Plan requires a simple majority of the votes cast at the Meeting, excluding approximately 1,300,000 votes of insiders of the Company who are entitled to participate in the 2016 Incentive Plan and their associates. Broker non-votes are not permitted to be voted on this matter. The resolution is also subject to acceptance by NASDAQ. The Board therefore seeks your approval and support for the following resolution:
THAT the 2016 Incentive Plan of the Company, which authorizes the issuance of 1,500,000 Class A Subordinate Voting Shares of the Company, is hereby approved; and
THAT any director or executive officer of the Company be and is hereby authorized to notify and/or to seek approval of NASDAQ if required, of the approval of the 2016 Stock Incentive Plan and to do all such acts and things and to execute and file such other documents, whether under the corporate seal of the Company or otherwise, that may be necessary or desirable to give effect to this resolution.
The guiding principles of the Company’s compensation policies and decisions include aligning each executive’s compensation with our business strategy and the interests of our shareholders and providing incentives needed to attract, motivate and retain key executives who are important to our long-term success. Consistent with this philosophy, a significant portion of the total incentive compensation for each of our executives is directly related to the Company’s earnings and to other performance factors that measure our progress against the goals of our strategic and operating plans, as well as performance against our peers.
Shareholders are urged to read the Compensation Discussion and Analysis section of this Proxy Statement, as well as the Summary Compensation Table and other related compensation tables and narrative, which discuss how our compensation design and practices reflect our compensation philosophy. The Compensation Committee and the Board of Directors believe that our compensation design and practices are effective in implementing our guiding principles.
In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a matter of good corporate governance, we are asking shareholders to approve the following advisory resolution at the 2016 Annual Meeting of Shareholders:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion contained in this Proxy Statement, is hereby APPROVED.”
This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board of Directors. Although non-binding, the Board of Directors and the Compensation Committee value the opinions of our shareholders and will review and consider the voting results when making future decisions regarding our executive compensation program. The Company currently intends to hold such votes annually. The next such vote will be held at the Company’s 2017 Annual Meeting of Shareholders.
Under Section 16(a) of the Exchange Act, each person serving as a director or executive officer during the Company’s directors, executive officerslast fiscal year and any persons holding 10% or more of the common stock are required to report their ownership of common stock and any changes in that ownership to the SEC within a prescribed period of time and to furnish the Company with copies of such reports. To the Company’s knowledge, based solely upon a review of copies of such reports received by the Company which were filed with the SEC for the fiscal year ended December 31, 2015,2021, and upon written representations from such persons that no other reports were required, the Company has been advised that all reports required to be filed under Section 16(a) have been timely filed with the SEC.
SEC except for the Forms 4 for Mark Penn filed on August 17, 2022 and December 30, 2022, each with respect to the exchange by Stagwell Media LP and Stagwell Friends and Family LLC of Class C Common Stock for Class A copyCommon Stock and the subsequent distribution of the Class A Common Stock.
| | | 2021 | | | 2022 | | ||||||
Audit Fees(1) | | | | $ | 7,430,000 | | | | | | 7,578,036 | | |
Audit-Related Fees(2) | | | | | ― | | | | | | 545,000 | | |
Tax Fees(3) | | | | $ | 3,077,910 | | | | | | 2,034,208 | | |
All Other Fees(4) | | | | $ | 3,958 | | | | | | 2,063 | | |
Total | | | | $ | 10,511,868 | | | | | | 10,159,307 | | |
Under certain circumstances, stockholders are entitled to present proposals at stockholder meetings. The 2017 Annual Meeting of Stockholders is expected to be held on or about June 2, 2017. In accordance with the rules established by the SEC, any shareholder proposal submitted pursuant to Rule 14a-8 of the Exchange Act (“Rule 14a-8”) intended to be included in the proxy materials for the 2017 Annual Meeting of Stockholders must be received by the Secretary of the Company, 745 Fifth Avenue, 19th Floor, New York, NY 10151, by December 23, 2016, in a form that complies with the Company’s Bylaws and applicable requirements. Any proposal submitted after December 23, 2016, will not be considered timely for the purposes of Rule 14a-8.
Moreover, unless a shareholder who wishes to present a proposalvote at the Annual Meeting outsidewill be required to ratify the processesselection of Rule 14a-8 has submitted suchPwC as the Company’s independent registered public accounting firm. Holders of proxies solicited by this Proxy Statement will vote the proxies received by them as directed on the proxy card or, if no direction is made, then “For” approval of this proposal. Abstentions will be counted toward the tabulation of votes cast on this proposal to us by the close of business on March 8, 2017, subject to applicable rules, weand will have discretionary authoritythe same effect as negative votes.
ManagementDirectors knows of no matter to come before the Meeting other than the matters referred to in the accompanying Notice. If any matters which are not now known should properly come before the Meeting, the accompanying proxy instrument will be voted on such matters in accordance with the best judgment of the person voting it.
The contents and sending of this Proxy Statement and Management Information Circular have been approved by the Board as of the date hereof.
Mitchell S. Gendel
of Directors
EXHIBIT
2023 EMPLOYEE STOCK PURCHASE PLAN
The Committee’sPlan’s purpose is to provide assistance to the Board in fulfilling its fiduciary obligations and oversight responsibilities with respect to (1) the integrity of the Corporation’s financial statements, (2) the Corporation’s compliance with legal and regulatory requirements, (3) the independent auditor’s qualifications and independence, and (4) the performance of the Corporation’s internal audit function and independent auditors. The Committee will also prepare the report that SEC rules require to be included in the Corporation’s annual proxy statement.
The Committee is directly responsible for the appointment (subject to shareholder approval), compensation, retention and oversight of the work of the Corporation’s independent auditor engaged for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for the Corporation. In accordance with the requirements of the Sarbanes-Oxley Act of 2002, the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules promulgated thereunder by the Securities and Exchange Commission (the “SEC”) and the rules of the Nasdaq, the independent auditor must report directly to the Committee and is accountable to the Committee (as representatives of the shareholders of the Corporation). The Committee’s oversight responsibilities include the authority to approve all audit engagement fees and terms, as well as all permitted non-audit engagements and resolution of disagreements between management and the independent auditor regarding financial reporting.
It is the objective of the Committee to maintain free and open means of communications among the Board, the independent auditor, internal audit and the financial and senior management of the Corporation.
Each member of the Committee shall be an “independent” director within the meaning of Section 10A(m)(3) of the Exchange Act, Rule 10A-3(b)(1) thereunder, and Nasdaq Marketplace Rule 4200(a)(15) subject to applicable exceptions.
All members of the Committee must be able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement. At least one member of the Committee shall be an “audit committee financial expert” as defined in Item 16A of SEC Form 20-F and at least one member shall have accounting or related financial experience as required under applicable Nasdaq rules.
The Committee shall ensure that the Corporation provides to applicable regulatory authorities any required certification relating to adequacy of this Charter and composition of the Committee.
In carrying out its duties and responsibilities, the Committee’s policies and procedures should remain flexible, so that it may be in a position to best react or respond to changing circumstances or conditions. While there is no “blueprint” to be followed by the Committee in carrying out its duties and responsibilities, the following should be considered within the authority of the Committee (it being understood that the Committee may diverge from such matters as considered appropriate given the circumstances):
The Committee shall meet with such frequency and at such intervals as it shall determine is necessary to carry out its duties and responsibilities. As part of its purpose to foster open communications, the Committee shall meet at least quarterly with management, internal audit and the Corporation’s independent auditor in separate executive sessions to discuss any matters that the Committee or each of these groups or persons believe should be discussed privately. The Chairman should work with the Chief Financial Officer, General Counsel and management to establish the agendas for Committee meetings. The Committee, in its discretion, may ask members of management or others to attend its meetings (or portions thereof) and to provide pertinent information as necessary. The Committee shall maintain minutes of its meetings and records relating to those meetings and the Committee’s activities and provide copies of such minutes to the Board.
The Committee shall have the authority to engage independent counsel and other advisors as it determines necessary to carry out its duties and responsibilities. The Corporation shall provide for appropriate funding, as determined by the Committee, for payment of any compensation (i) to any independent auditor engaged for the purpose of rendering or issuing an audit report or related work or performing other audit, review or attest services for the Corporation, and (ii) to any independent advisors employed by the Committee.
The charter shall be (1) published in the Corporation’s annual report or information circular once every three years or following a material amendment to it; or (2) be posted in an up-to-date format on the Corporation’s web site. The Committee should review and reassess annually the adequacy of this Charter as required by the applicable rules of Nasdaq.
While the Committee has the duties and responsibilities set forth in this Charter, the Committee is not responsible for planning or conducting the audit or for determining whether the Corporation’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. Management has the responsibility for preparing the financial statements and implementing internal controls and the independent auditor have the responsibility of auditing the financial statements. Similarly, it is not the responsibility of the Committee to resolve disagreements, if any, between management and the independent auditor or to ensure that the Corporation complies with all laws and regulations.
EXHIBIT B
The directors of MDC Partners Inc. consider good corporate governance to be central to the effective and efficient operation of the Company. The business of the Company is supervised by its Board of Directors, directly and through its committees. The Canadian Securities Administrators require disclosure on an annual basis of the Company’s corporate governance practices in accordance with Form 58-101 — Disclosure of Corporate Governance Practices. The Company’s corporate governance practices are set out below.
In determining whether a particular director is independent, the Board examines the factual circumstances in the context of that particular year. The Board proposed for election in this Circular is composed of five (5) members, all of whom are considered to be independent directors with the exception of Mr Kauffman, who is a member of management. The following directors of MDC Partners also serve as directors (or senior executive officers) of companies that are reporting issuers (or the equivalent) in Canada or the U.S.:
Scott L. Kauffman: currently serves as the Chairman and Chief Executive Officer. He is also Chairman of several venture-backed internet companies.
Clare Copeland: currently serves as Vice Chairman of Falls Management Company. He is also a trustee of RioCan Real Estate Investment Trust, Chesswood Income Fund, and Telesat, and a director of Entertainment One Ltd.
Larry Kramer: currently serves as Chairman and Interim Chief Executive Officer of The Street Inc. He is also a director of Gannett and a trustee at both Syracuse University and Harvard Business School Publishing.
Anne Marie O’Donovan: currently serves as President and director of O’Donovan Advisory Services Ltd. She is also a director of Indigo Books & Music Inc.
Irwin D. Simon: currently serves as President, Chief Executive Officer and director of The Hain Celestial Group.
All independent directors frequently meet at the beginning or end of each regularly scheduled quarterly Board or Committee meeting without non-independent directors and management present. The Board has access to information independent of management through MDC Partners’ auditor who reports to the Audit Committee. The specific responsibilities of the Board include reviewing and approving all major strategic decisions, including any change in the strategic direction of MDC Partners and acquisitions and/or divestitures and other matters (such as guarantees) in excess of $5 million; reviewing and approving annual budgets, including capital expenditure plans; reviewing and approving operating results for each quarter and year to date. As part of its ongoing activities, the Board regularly receives and comments upon reports of management as to the performance of MDC Partners’ business and management’s expectations. The Board is therefore of the view that the appropriate structures and procedures are in place to ensure that it can function independent of management.
Effective as of July 20, 2015, the Board appointed Mr. Irwin Simon as the Presiding Director of the Board. Mr. Simon is independent.
The Board of Directors recently adopted a set of Corporate Governance Guidelines as a framework within which the Board and its Committees will conduct its business. A copy of the Guidelines is available free of charge at MDC Partners’ website athttp://www.mdc-partners.com/#investors/corporate-governance.
The Company’s bylaws and the Charters of each Board committee provide a detailed description of the roles and responsibilities of the Board (including the Chairman), management and each committee of the Board and their respective chairs.
The primary functions of the CEO are to lead the management of our businesses and affairs in accordance with the Company’s strategic plan and operating and capital budgets, as approved by the Board.
The Board has developed a written position description and mandate, which sets forth the CEO’s key responsibilities. These responsibilities include the following: (a) develop and recommend to the Board a long-term strategy and vision for the Company that leads to creation of shareholder value; (b) develop and recommend to the Board annual business plans and budgets that support the Company’s long-term strategy; (c) consistently strive to achieve the Company’s financial and operating goals and objectives; and (d) develop the corporate and partner management teams and succession plans.
The Human Resources & Compensation Committee (described below) is responsible for establishing, monitoring and evaluating objectives and standards of performance for the Chief Executive Officer and other executive officers on an annual basis. Salary, bonus, loans or other payments for the benefit of the Chief Executive Officer must be reviewed and approved by the Human Resources & Compensation Committee. Related party expenses for services rendered and in the nature of expense reimbursement must also be approved by the Human Resources & Compensation Committee.
New directors to MDC Partners have generally been executives with extensive business experience and directorship responsibilities on the boards of other public and private institutions. Orientation for these individuals is provided through a review of past Board materials and other private and public documents concerning MDC Partners. In addition, Board members are encouraged to attend (at the cost and expense of the Company) continuing education programs identified by the Nominating and Corporate Governance Committee each year to ensure that they maintain the skills necessary for them to meet their obligations as directors.
The Company has adopted a Code of Conduct, which applies to all directors, officers (including the Company’s Chief Executive Officer and Chief Financial Officer) and employees of the Company and its subsidiaries. The Code of Conduct was adoptedDesignated Companies in orderacquiring a stock ownership interest in the Company, and to help directors, officerssuch employees provide for their future security and employees resolve ethical issues. The Code of Conduct covers topics including, but not limited to conflicts of interest, confidentiality of information and compliance with laws. The Company’s policy isencourage them to not permit any waiver of the Code of Conduct for any director or executive officer, except in extremely limited circumstances. The Board, through the Audit Committee, monitors and assesses and claims alleged under the Code of Conduct. Any waiver of this Code of Conduct for directors or officers of the Company must be approved by the Company’s Board of Directors. Amendments to and waivers of the Code of Conduct will be publicly disclosed as required by applicable laws, rules and regulations. The Code of Conduct is available free of charge on the Company’s website athttp://www.mdc-partners.com, or by writing to MDC Partners Inc., 745 Fifth Avenue, 19th Floor, New York, NY 10151, Attention: Investor Relations.
The Nominating and Corporate Governance Committee is composed of three (3) members, all of whom are considered to be independent. The Nominating and Corporate Governance Committee is responsible for reviewing and making recommendations to the full Board with respect to developmentsremain in the area of corporate governance and the practices of the Board. The Nominating and Corporate Governance Committee
is also responsible for evaluating the performance of the Board as a whole and for reporting to the Board with respect to appropriate candidates for nominations to the Board. The current members of the Nominating and Corporate Governance Committee are Irwin Simon (Chairman), Larry Kramer and Anne Marie O’Donovan. The Nominating and Corporate Governance Committee’s current charter is available athttp://www.mdc-partners.com/#/corporate_info/committees. The Company will disclose any amendments to, or waivers of, the charter on its website atwww.mdc-partners.com in accordance with applicable law and the requirements of the NASDAQ corporate governance standards.
The Nominating and Corporate Governance Committee identifies, selects and recommends to the Board individuals qualified to serve both on the Board and on Board committees, including persons suggested by shareholders and others. In identifying candidates for nominations to the Board, the Nominating and Corporate Governance Committee seeks to maintain at all times a Board with a diverse range of experience, talent, expertise and background appropriate for the business of the Company. The Nominating and Corporate Governance Committee does not require any specific minimum qualifications or specific qualities or skills, but reviews each person’s qualifications on the whole, including a candidate’s particular experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate in the context of the needs of the Board. Following that review, the Nominating and Corporate Governance Committee then selects nominees and recommends them to the Board for election by the shareholders or appointment by the Board, as the case may be. The Nominating and Corporate Governance Committee also reviews the suitability of each Board member for continued service as a director when that member’s term expires or that member experiences a significant change in status (for example, a change in employment). The Nominating and Corporate Governance Committee has not implemented any particular additional policies or procedures with respect to suggestions received from shareholders with respect to Board or committee nominees.
Pursuant to its charter, the Nominating and Corporate Governance Committee may conduct or authorize investigations or studies into matters with its scope of responsibilities and may retain, at the Company’s expense, such independent counsel or other consultants or advisers at it may deem necessary from time to time. The Nominating and Corporate Governance Committee has the sole authority to retain or terminate any search firm to be used to identify director candidates, including the sole authority to approve its fees and retention terms, with the Company bearing the cost of such fees.
The Board believes that the need to have experienced directors who are familiar with the business of the Company must be balanced with the need for fresh perspectives and a proactive approach. The Board has not adopted formal director term limits or other mechanisms of board renewal, in part, because the imposition of director term limits on a board implicitly discounts the value of experience and continuity among board members and runs the risk of excluding experienced and potentially valuable board members as a result of an arbitrary determination. In addition, imposing this restriction means the Board would lose the contributions of longer serving directors who have developed a deeper knowledge and understanding of the Company over time. The Board does not believe that long tenure impairs a director’s ability to act independently of management.
The Company has not adopted a written policy relating to the identification and nomination of women directors to the Company’s board of directors but rather has an informal, unwritten policy. The Company generally considers diversity of race, ethnicity, gender, age, cultural background and professional experience in evaluating candidates for board membership. As evidence of this approach, the Board nominated Ms. O’Donovan to join the Board in 2016.
In identifying and nominating candidates for election or re-election to the board of directors, the Board considers the level of representation of women on the board, in addition to the competencies, skills and personal and other diverse qualities required for new directors in order to add value to the Company in light of opportunities and risks facing the Company. Selection of female candidates to the board will be, in part, dependent upon the pool of female candidates with the necessary skills, knowledge and experience. The ultimate decision will be based on merit and contribution the chosen candidate will bring to the board.
In appointing executive officers to the management team, the Company considers the level of representation of women in executive officer positions, and also takes into account the following factors: the competencies, skills and personal and other diverse qualities required for new executive officers in order to add value to the Company in light of opportunities and risks facing the Company.
The Company has not adopted a target for women on the board of directors because the Company does not believe that any director nominee should be chosen nor excluded because of gender. In selecting a director nominee, such as recently appointed Ms. O’Donovan, the Nominating and Corporate Governance Committee focuses on skills, expertise and background that would complement the existing Board. Directors will be recruited based on their ability and potential for meaningful contributions.
Similarly, the Company has not adopted a target for women in executive officer positions because the Company does not believe that any candidate for an executive officer position should be chosen nor excluded because of gender. In selecting candidates, the Company considers the skills, expertise and background that would complement the existing management team. Executive officers will be recruited based on their ability and contributions.
As of the date of this Proxy Statement and Management Information Circular, (i) there is one woman on the Company’s Board of Directors, representing 16.7% of the directors and (ii) six (6) of the Company’s executive officers are women, representing 30% of the Company’s executive officers.
The Human Resources & Compensation Committee is composed of four members, all of whom are considered to be independent. The Human Resources & Compensation Committee makes recommendations to the Board on, among other things, the compensation of senior executives. The Human Resources & Compensation Committee discusses personnel and human resources matters including recruitment and development, management succession and benefits plans and grants awards under the 2011 Stock Incentive Plan, the 2005 Stock Incentive Plan and the SARs Plan. Salary, bonus or other payments for the benefit of senior management are reviewed and approved by the Human Resources & Compensation Committee. The Human Resources & Compensation Committee reviews the compensation of members of the Board on an annual basis and makes recommendations to the Board. The Board considers their remuneration appropriate given the time commitment, risk and responsibilities associated with the position. The current members of the Human Resources & Compensation Committee are Clare Copeland (Chairman), Larry Kramer, Anne Marie O’Donovan and Irwin Simon. The Human Resources & Compensation Committee’s current charter is available athttp://www.mdc-partners.com/#investors/corporate-governance. The Company will disclose any amendments to, or waivers of, the charter on its website atwww.mdc-partners.com in accordance with applicable law and the requirements of the NASDAQ corporate governance standards.
The Board conducts its business through meetings of the Board and three standing committees: the Audit Committee, the Human Resources & Compensation Committee and the Nominating and Corporate Governance Committee. Copies of the charters of these committees are available, free of charge at MDC Partners’ website located athttp://www.mdc-partners.com/#investors/corporate-governance.
In addition, from time to time, special committees may be established under the direction of the Board when necessary to address specific issues.
The Nominating and Corporate Governance Committee is responsible for developing and recommending standards of performance of the Board, its committees and the individual directors through administration of an annual questionnaire. It is the responsibility of the Nominating and Corporate Governance Committee to assess the effectiveness of the Board as a whole and the committees of the Board. Participation of directors is expected at all Board and committee meetings. Directors are asked to notify MDC Partners if they are unable to attend, and attendance at meetings is duly recorded.
EXHIBIT C
This MDC Partners Inc. 2016 Stock Incentive Plan is intended to promote the interestsemployment of the Company and its shareholders by providingSubsidiaries.
Code and that it will operate the Plan in accordance with such requirements (such date, the “
Section 423 Effective Date”), Offerings shall be deemed to be under the Section 423 Component unless otherwise designated by the Administrator at or prior to the time of such Offering. Unless the Plan is amended pursuant to Section 7.5 hereof, the operative terms of the Plan as in effect on the Effective Date will remain the same on and after the Section 423 Effective Date.Reserved
. Subject to adjustment as provided in SectionFor purposes of the preceding paragraph, Class A Shares covered by Incentive Awards shall only be counted as used to the extent they are actually issued and delivered to a Participant (or such Participant’s permitted transferees as described in the Plan) pursuant to the Plan. For purposes of clarification, in accordance with the preceding sentence if Class A Shares are withheld to satisfy any tax withholding requirement in connection with an Other Stock-Based Award only the shares issued (if any), net of the shares withheld, will be deemed delivered for purposes of determining the number of Class A Shares that are available for delivery under the Plan.
Subject to adjustment as provided in Section 10, the maximum number of Class A Shares that may be covered by Incentive Awards granted under the Plan to any single Participant in any fiscal year of the Company shall not exceed 300,000 shares, prorated on a daily basis for any fiscal year of the Company that is shorter than 365 days.
In no event shall any new Incentive Awards be issued in substitution for outstanding Incentive Awards previously granted to Participants, nor shall any repricing (within the meaning of US generally accepted accounting practices or any applicable stock exchange rule) of Incentive Awards issued under the Plan be permitted at any time under any circumstances, in each case unless the shareholders of the Company expressly approve such substitution or repricing.
The Committee shall limit annual grants of equity awards under this Plan to executive officers of the Company to an aggregate amount equal to not more than two percent (2%) of the number of issued and outstanding shares of the Company’s capital stock at the beginning of the Company’s fiscal year. In addition, each independent Director shall not receive Incentive Awards (including option grants) with a current market value in excess of $150,000 or option grants with a current market value in excess of $100,000 in any given fiscal year.
In no event shall any new Incentive Award granted under this Plan vest or otherwise become payable earlier than one (1) year following the date on which it is granted, other than upon the occurrence of a Permitted Acceleration Event.
Any new Incentive Award granted under this Plan that is subject to time-based vesting terms and conditions shall not become fully and immediately vested and exercisable solely as a result of the occurrence of a Change of Control, absent a termination of employment without cause or for good reason following any such Change of Control. Any new Incentive Award granted under this Plan that is subject to performance-based vesting terms and conditions shall not become fully and immediately vested and exercisable solely as a result of the occurrence of a Change of Control, absent a termination of employment without cause or for good reason following any such Change of Control and shall be adjusted on a pro-rata basis as determined by the Committee.
The Plan shall be administered by a Committee of the Board of Directors consisting of two or more persons, each of whom qualify as non-employee directors (within the meaning of Rule 16b-3 promulgated under Section 16 of the Exchange Act), and as “outside directors” within the meaning of Treasury Regulation Section 1.162-27(e)(3). The Committee shall, consistent with the terms of the Plan, from time to time designate those who shall be granted Incentive Awards under the Plan and the amount, type and other terms and conditions of such Incentive Awards. All of the powers and responsibilities of the Committee under the Plan may be delegated by the Committee, in writing, to any subcommittee thereof. In addition, the Committee may from time to time authorize a committee consisting of one or more Directors to grant Incentive Awards to persons who are not “executive officers” of MDC (within the meaning of Rule 16a-1 under the Exchange Act), subject to such restrictions and limitation as the Committee may specify. In addition, the Board of Directors may, consistent with the terms of the Plan, from time to time grant Incentive Awards to Directors.
The Committee shall have full discretionary authority to administer the Plan, including discretionary authority to interpret and construe any and all provisions of the Plan and the terms of any Incentive Award (and any agreement evidencing any Incentive Award) granted thereunder and to adopt and amend from time to time such rules and regulations for the administration of the Plan as the Committee may deem necessary or appropriate. Without limiting the generality of the foregoing, (i) the Committee shall determine whether an authorized leave of absence, or absence in military or government service, shall constitute termination of employment and (ii) the employment of a Participant with the Company shall be deemed to have terminated for all purposes of the Plan if such person is employed by or provides services to a Person that is a Subsidiary of the Company and such Person ceases to be a Subsidiary of the Company, unless the Committee determines otherwise. Decisions of the Committee shall be final, binding and conclusive on all parties.
On or after the date of grant of an Incentive Award under the Plan, the Committee may (i) extend the term of any such Incentive Award, including, without limitation, extending the period following a termination of a Participant’s employment during which any such Incentive Award may remain outstanding, (ii) waive any conditions to the exercisability or transferability, as the case may be, of any such Incentive Award or (iii) provide for the payment of dividends or dividend equivalents with respect to any such Incentive Award.
No member of the Committee shall be liable for any action, omission, or determination relating to the Plan, and MDC shall indemnify and hold harmless each member of the Committee and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Committee) arising out of any action, omission or determination relating to the Plan, unless, in either case, such action, omission or determination was taken or made by such member, director or employee in bad faith and without reasonable belief that it was in the best interests of the Company.
The Persons who shall be eligible to receive Incentive Awards pursuant to the Plan shall be those Directors and employees of the Company, including any person or company engaged to provide ongoing management or consulting services for the Company and, at the discretion of any of the foregoing persons, and subject to any required regulatory approvals and conditions, a personal holding company controlled by such person, whom the Committee shall select from time to time. All Incentive Awards granted under the Plan shall be evidenced by a separate written agreement entered into by the Company and the recipient of such Incentive Award.
The Committee may from time to time grant Options, subject to the following terms and conditions:
The exercise price per Class A Share covered by any Option shall be not less than 100% of the Fair Market Value of a Class A Shareacquired on the date on which such Option is granted.
The agreement evidencing the award of each Option shall specify the consequences with respect to such Option of the termination of the employment, service as a director or other relationship between the Company and the Participant holding the Option.
The Committee may from time to time grant SARs, subject to the following terms and conditions:
SARs may be granted on a stand-alone basis or in tandem with an Option. Tandem SARs may be granted contemporaneously with or after the grant of the Options to which they relate. SARs may be settled in Class A Shares or in cash.
The exercise price per Class A Share covered by any SAR shall be not less than 100% of the Fair Market Value of a Class A Share on the date on which such SAR is granted; provided, however that the exercise price of an SAR that is tandem to an Option and that is granted after the grant of such Option may have an exercise price less than 100% of the Fair Market Value of a Class A Share on the date on which such SAR is granted provided that such exercise price is at least equal to the exercise price of the related Option.
The exercise of an SAR with respect to any number of Class A Shares prior to the occurrence of a Change in Control shall entitle the Participant to (i) a cash payment, for each such share, equal to the excess of (A) the Fair Market Value of a Class A Share on the effective date of such exercise over (B) the per share exercise price of the SAR, (ii) the issuance or transfer to the Participant of the greatest number of whole Class A Shares which on the date of the exercise of the SAR have an aggregate Fair Market Value equal to such excess or (iii) a combination of cash and Class A Shares in amounts equal to such excess, as determined by the Committee. The exercise of an SAR with respect to any number of Class A Shares upon or after the occurrence of a Change in Control shall entitle the Participant to a cash payment, for each such share, equal to the excess of (i) the greater of (A) the highest price per share of Class A Shares paid in connection with such Change in Control
and (B) the Fair Market Value of Class A Shares on the effective date of exercise over (ii) the per share exercise price of the SAR. Such payment, transfer or issuance shall occur as soon as practical, but in no event later than five business days, after the effective date of exercise.
The agreement evidencing the award of each SAR shall specify the consequences with respect to such SAR of the termination of the employment, service as a director or other relationship between the Company and Participant holding the SAR.
The Committee may grant equity-based or equity-related awards not otherwise described herein in such amounts and subject to such terms and conditions as the Committee shall determine. Without limiting the generality of the preceding sentence, each such Other Stock-Based Award may (i) involve the transfer of actual Class A Shares to Participants, either at the time of grant or thereafter, or payment in cash or otherwise of amounts based on the value of Class A Shares, (ii) be subject to performance-based and/or service-based conditions, (iii) be in the form of phantom stock, restricted stock, restricted stock units, performance shares, or share-denominated performance units and (iv) be designed to comply with applicable laws of jurisdictions other than the United States.
The performance goals upon which the payment or vesting of any Incentive Award (other than Options and SARs) to a Covered Employee that is intended to qualify as Performance-Based Compensation depends shall relate to one or more of the following Performance Measures: revenue growth, achievement of EBITDA targets, operating income, operating cash flow, net income, earnings per share, cash earnings per share, return on sales, return on assets, return on equity, return on invested capital and total shareholder return.
Performance Periods may be equal to or longer than, but not less than, one fiscal year of the Company. Within 90 days after the beginning of a Performance Period, and in any case before 25% of the Performance Period has elapsed, the Committee shall establish (a) performance goals and objectives for the Company for such Performance Period, (b) target awards for each Participant, and (c) schedules or other objective methods for determining the applicable performance percentage to be applied to each such target award.
The measurement of any Performance Measure(s) may exclude the impact of charges for restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring items, and the cumulative effects of accounting changes, each as defined by generally accepted accounting principles and as identified in the Company’s audited financial statements, including the notes thereto. Any Performance Measure(s) may be used to measure the performance of the Company or a Subsidiary as a whole or any business unit of the Company or any Subsidiary or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Measures as compared to the performance of a group of comparator companies, or a published or special index that the Committee, in its sole discretion, deems appropriate.
Nothing in this Section 9 is intended to limit the Committee’s discretion to adopt conditions with respect to any Incentive Award that is not intended to qualify as Performance-Based Compensation that relate to performance other than the Performance Measures.
In the event that the requirements of Section 162(m) and the regulations thereunder change to permit Committee discretion to alter the Performance Measures without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining shareholder approval.
In the event of any changeCapitalization, Dissolution, Liquidation, Merger or Asset Sale.
Capitalization
. Subject to any required action by theSubject to any required actionconsideration.” Such adjustment shall be made by the shareholders of MDC,Administrator, whose determination in the event that MDCrespect shall be the surviving corporation in any merger or consolidation (except a merger or consolidation as a result of which the holders of Class A Shares receive securities of another corporation), each Incentive Award outstanding on the date of such merger or consolidation shall pertain tofinal, binding and apply to the securities which a holder of the number of Class A Shares subject to such Incentive Award would have received in such merger or consolidation.
In the event of (i) a dissolution or liquidation of MDC, (ii) a sale of all or substantially all of MDC’s assets, (iii) a merger or consolidation involving MDC in which MDC is not the surviving corporation or (iv) a merger or consolidation involving MDC in which MDC is the surviving corporation but the holders of Class A Shares receive securities of another corporation and/or other property, including cash, the Committee shall, in its absolute discretion, have the power to:
In the event of any change in the capitalization of MDC or corporate change other than those specifically referred to in paragraphs (b), (c) or (d), the Committee may, in its absolute discretion, make such adjustments in the number and class of shares subject to Incentive Awards outstanding on the date on which such change occurs and in such other terms of such Incentive Awards as the Committee may consider appropriate to prevent dilution or enlargement of rights.
conclusive. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of MDC or any other corporation. Except as expressly provided in the Plan,herein, no issuance by MDCthe Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Class A Sharesshares of Common Stock subject to any Incentive Award.
No personnew Exercise Date (the “
Whenever Class A Shares are6.2. Termination of Eligibility. Upon a Participant’s ceasing to be issuedan Eligible Employee, for any reason, such Participant’s Option for the applicable Offering Period shall automatically terminate, the Participant shall be deemed to have elected to withdraw from the Plan, and any balance on such Participant’s Plan Account shall be paid to such Participant or, in the case of the Participant’s death, to the person or persons entitled thereto pursuant to applicable law, within 30 days after such cessation of being an Eligible Employee, without any interest thereon (except as may be required by applicable local laws). If a Participant transfers employment from the Company or any Designated Company participating in the Section 423 Component to any Designated Company participating in the Non-Section 423 Component, such transfer shall not be treated as a termination of employment, but the Participant shall immediately cease to participate in the Section 423 Component; however, any contributions made for the Offering Period in which such transfer occurs shall be transferred to the Non-Section 423 Component, and such Participant shall immediately join the then-current Offering under the Non-Section 423 Component upon the same terms and conditions in effect for the Participant’s participation in the Section 423 Component, except for such modifications otherwise applicable for Participants in such Offering. A Participant who transfers employment from any Designated Company participating in the Non-Section 423 Component to the Company or any Designated Company participating in the Section 423 Component shall not be treated as terminating the Participant’s employment and shall remain a Participant in the Non-Section 423 Component until the earlier of (i) the end of the current Offering Period under the Non-Section 423 Component, or (ii) the Grant Date of the first Offering Period in which the Participant is eligible to participate following such transfer. Notwithstanding the foregoing, the Administrator may establish different rules to govern transfers of employment between companies participating in the Section 423 Component and the Non-Section 423 Component, consistent with the applicable requirements of Section 423 of the Code. A Participant who transfers employment from any Designated Company participating in the Section 423 Component or the Non-Section 423 Component to an Affiliate and Subsidiary that is not a Designated Company shall be deemed to have elected to withdraw from the Plan, and any balance on such Participant’s Plan Account shall be paid to such Participant or, in the case of the Participant’s death, to the person or persons entitled thereto pursuant to applicable law, within 30 days after such cessation of being an Eligible Employee, without any interest thereon (except as may be required by applicable local laws).
At the election of the Participant, subject toSubsidiary, without the approval of the Committee, when Class A Shares arestockholders of the Company.
At the electiongeneral funds of the Company free of any trust or other restriction and may be used for any corporate purpose (except as may be required by applicable local laws). No interest shall be paid to any Participant subject toor credited under the Plan (except as may be required by applicable local laws).
The Board of Directors may at any time suspend or discontinue12-month period (or, if earlier, the Plan or revise or amend it in any respect whatsoever; provided, however, that without approvallast date of the shareholders no revision or amendment shall except as provided in Section 10 hereof, (i) increase the number of Class A Shares that may be issuedInitial Offering Period), all Options previously granted under the Plan shall thereupon terminate and be canceled and become null and void without being exercised.
The grant to a Participantor assume Options otherwise than under the Plan in connection with any proper corporate purpose, including, but not
Upon the deathassumption of a Participant, outstanding Incentive Awards granted to such Participant may be exercised only by the executors or administrators of the Participant’s estate or by any person or persons who shall have acquired such right to exercise by will or by the laws of descent and distribution. No transfer by will or the laws of descent and distribution of any Incentive Award, or the right to exercise any Incentive Award, shall be effective to bind MDC unless the Committee shall have been furnished with (a) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the transfer and (b) an agreement by the transferee to comply with all the terms and conditions of the Incentive Award that are or would have been applicable to the Participant and to be bound by the acknowledgements made by the Participantoptions in connection with the grantacquisition, by purchase, lease, merger, consolidation or otherwise, of the Incentive Award.
The expensesthe participation in the Plan by any individual who is then subject to Section 16 of the Exchange Act shall be subject to any additional limitations set forth in any applicable exemption rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Plan shall be paiddeemed amended to the extent necessary to conform to such applicable exemptive rule.
TheSection 409A as “short-term deferrals” within the meaning of Treasury Regulation Section 1.409A-1(b)(4). Notwithstanding any provision of the Plan was adoptedto the contrary, if the Administrator determines that any Option granted under the Plan may be or become subject to Section 409A or that any provision of the Plan may cause an Option granted under the Plan to be or become subject to Section 409A, the Administrator may adopt such amendments to the Plan and/or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions as the Administrator determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, either through compliance with the requirements of Section 409A or with an available exemption therefrom.
THIS PROXY IS SOLICITED BY THE MANAGEMENT OF MDC PARTNERS INC. (“MDC PARTNERS”) FOR USE AT THE ANNUAL MEETING OF THE SHAREHOLDERS TO BE HELD ON JUNE 1, 2016.
The undersigned, a shareholder of MDC Partners, hereby nominates, constitutes and appoints as his or her nominee Mr. Scott Kauffman, or failing him, Mr. Mitchell Gendel, or instead of any of the foregoing (strike out preceding names and print name of alternative nominee), them,with full power of substitution and power to attend andact alone, as proxies to vote all of the Class A Shares of MDC Partners held byshares ofCommon Stock which the undersigned for and on behalf of the undersignedwould be entitled to vote if personally present andacting at the annual meetingAnnual Meeting of shareholdersStockholders of MDC PartnersStagwell Inc., to be held on Wednesday, June 1, 201614, 2023at 11:30 a.m. at MDC’s Innovation Centre, 745 Fifth Avenue,One World Trade Center, Floor 65 New York, N.Y. commencing at 10:00 a.m. (New York City time) (the “Meeting”)NY 10007, and at any adjournmentanyadjournments or postponementpostponements thereof, in the manner indicated. If no specification is made, the shares represented by this proxy willas follows:(Continued and to be votedFOR each of the matters specified below:
I HEREBY REVOKE ANY PRIOR PROXY OR PROXIES IN FAVOR OF THE NOMINEE. WITH RESPECT TO AMENDMENTS OR VARIATIONS TO ANY MATTER IN THE NOTICE OF MEETING AND ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING, I HEREBY CONFER DISCRETIONARY AUTHORITY ON THE PERSON WHO VOTES AND ACTS ON MY BEHALF HEREUNDER TO VOTE WITH RESPECT TO AMENDMENTS OR VARIATIONS TO THE ABOVE MATTERS AND ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, AS HE OR SHE THINKS FIT. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ON ANY VOTE OR BALLOT CALLED.
DATED this day of , 2016.
PRINT NAME:
Signature of Registered Shareholder:
Number of Class A Shares Represented Hereby:
By Internet: www.cstvotemyproxy.com and enter the 13 digit control number printed on the form of proxy and follow the instructions on screen;
By Phone: 1-888-489-5760 (toll-free in North America) and enter the 13 digit control number printed on the form of proxy;
By Email: proxy@canstockta.com:
By Fax: 416-368-2502 or1-866-781-3111 (toll-free in North America); or
By Mail: CST Trust Company, Attn. Proxy Department, P.O. Box 721, Agincourt, Ontario M1S 0A1.
Any questions and requests for assistance may be directed to theProxy Solicitation Agent:
The Exchange Tower130 King Street West, Suite 2950, P.O. Box 361Toronto, OntarioCanada M5X 1E2Call Toll-Free at: 1-866-228-8614 within North AmericaCall Collect at: 416-867-2272 outside North AmericaE-mail: contactus@kingsdaleshareholder.comFacsimile: 416-867-2271Toll Free Facsimile: 1-866-545-5580
THIS PROXY IS SOLICITED BY THE MANAGEMENT OF MDC PARTNERS INC. (“MDC PARTNERS”) FOR USE AT THE ANNUAL MEETING OF THE SHAREHOLDERS TO BE HELD ON JUNE 1, 2016.
The undersigned, a shareholder of MDC Partners, hereby nominates, constitutes and appoints as his or her nominee Mr. Scott Kauffman, or failing him, Mr. Mitchell Gendel, or instead of any of the foregoing (strike out preceding names and print name of alternative nominee), with full power of substitution, to attend and vote all of the Class B Shares of MDC Partners held by the undersigned for and on behalf of the undersigned at the annual meeting of shareholders of MDC Partners to be held on Wednesday, June 1, 2016 at MDC’s Innovation Centre, 745 Fifth Avenue, New York, N.Y. commencing at 10:00 a.m. (New York City time) (the “Meeting”) and at any adjournment or postponement thereof in the manner indicated. If no specification is made, the shares represented by this proxy will be votedFOR each of the matters specified below:
I HEREBY REVOKE ANY PRIOR PROXY OR PROXIES IN FAVOR OF THE NOMINEE. WITH RESPECT TO AMENDMENTS OR VARIATIONS TO ANY MATTER IN THE NOTICE OF MEETING AND ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING, I HEREBY CONFER DISCRETIONARY AUTHORITY ON THE PERSON WHO VOTES AND ACTS ON MY BEHALF HEREUNDER TO VOTE WITH RESPECT TO AMENDMENTS OR VARIATIONS TO THE ABOVE MATTERS AND ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, AS HE OR SHE THINKS FIT. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ON ANY VOTE OR BALLOT CALLED.
DATED this day of , 2016.
PRINT NAME:
Signature of Registered Shareholder:
Number of Class B Shares Represented Hereby:
By Internet: www.cstvotemyproxy.com and enter the 13 digit control number printed on the form of proxy and follow the instructions on screen;
By Phone: 1-888-489-5760 (toll-free in North America) and enter the 13 digit control number printed on the form of proxy;
By Email: proxy@canstockta.com;
By Fax: 416-368-2502 or1-866-781-3111 (toll-free in North America); or
By Mail: CST Trust Company, Attn. Proxy Department, P.O. Box 721, Agincourt, Ontario M1S 0A1.
Any questions and requests for assistance may be directed to theProxy Solicitation Agent:
The Exchange Tower130 King Street West, Suite 2950, P.O. Box 361Toronto, OntarioCanada M5X 1E2Call Toll-Free at: 1-866-228-8614 within North AmericaCall Collect at: 416-867-2272 outside North AmericaE-mail: contactus@kingsdaleshareholder.comFacsimile: 416-867-2271Toll Free Facsimile: 1-866-545-5580