If you have any questions or require any assistance with your vote, please contact our proxy solicitation agent Kingsdale Shareholder Services at The Exchange Tower, 130 King Street West, Suite 2950, P.O. Box 361, Toronto, Ontario M5X 1E2, by toll-free telephone in North America at 1-866-228-8614 or by collect call outside North America at 416-867-2272 or by email atcontactus@kingsdaleshareholder.com.
30, 2019.
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.
“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 (“Class B Shares”) (the Class A Shares and the Class B Shares are herein referred to collectively as the “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).
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 maywill not have discretionary authority to vote shares at the
| | | 2017 | | | 2018 | | | 2019 | | |||||||||
As at December 31st | | | | | 1.2530 | | | | | | 1.3462 | | | | | | — | | |
As at March 31st | | | | | 1.3337 | | | | | | 1.2893 | | | | | | 1.3363 | | |
Average for year ended December 31st | | | | | 1.2977 | | | | | | 1.2962 | | | | | | — | | |
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 | — |
As at April 11, 2016,12, 2019, MDC Partners had outstanding51,629,540 73,234,126 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, 95,000 Series 4 Preference Shares, no Series 5 Preference Shares, 50,000 Series 6 Preference Shares and no Series 7 Preference Shares.
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 send proxy materials to beneficial owners. MDC Partners will, upon request, reimburse these institutions for their reasonable charges and expenses incurred in forwarding this proxy material to beneficial owners of shares.
| Mark J. Penn | | | Anne Marie O’Donovan | |
| Charlene Barshefsky | | | Kristen M. O’Hara | |
| Daniel S. Goldberg | | | Desirée Rogers | |
| Bradley J. Gross | | | Irwin D. Simon | |
MDC Partners believes that each nominee 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 below.
Scott L. Kauffman30, 2019:
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 experience 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 80,83, 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 trusteesdirectors of RioCan Real Estate Investment Trust, Chesswood, Income Fund and Telesat, and is a member of the board of directorstrustees of Entertainment One Ltd.RioCan Real Estate Investment Trust and Telesat. 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 directorwill not stand for re-election to the Board who is also a Canadian resident and citizen.
at the upcoming Meeting.
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 Mr. Kramer will not stand 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 bringsre-election 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 regardingat 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.
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 | % |
| | | | | | | | | 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 | | |||||||||||||||
Mark J. Penn | | | | | Direct | | | | | | 14,285,714(6) | | | | | | 10,000,000(6) | | | | | | 11,500,000(6) | | | | | | 29.2% | | |
Charlene Barshefsky | | | | | Direct | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | |
Clare R. Copeland | | | | | Direct | | | | | | 92,678(7) | | | | | | — | | | | | | — | | | | | | * | | |
Daniel S. Goldberg | | | | | Direct | | | | | | 181,990(8) | | | | | | — | | | | | | — | | | | | | * | | |
Bradley J. Gross | | | | | Direct | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | |
Scott L. Kauffman | | | | | Direct | | | | | | 604,357(8) | | | | | | — | | | | | | — | | | | | | * | | |
Lawrence S. Kramer | | | | | Direct | | | | | | 31,990(8) | | | | | | — | | | | | | — | | | | | | * | | |
| | | | | Indirect | | | | | | 30,000(8) | | | | | | — | | | | | | — | | | | | | * | | |
Anne Marie O’Donovan | | | | | Direct | | | | | | 31,990(7) | | | | | | — | | | | | | — | | | | | | * | | |
Kristen M. O’Hara | | | | | Direct | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | |
Desirée Rogers | | | | | Direct | | | | | | 33,810(8) | | | | | | — | | | | | | — | | | | | | * | | |
Irwin D. Simon | | | | | Direct | | | | | | 57,560(8) | | | | | | — | | | | | | — | | | | | | * | | |
David Doft | | | | | Direct | | | | | | 247,485(8) | | | | | | — | | | | | | 50,000 | | | | | | * | | |
| | | | | Indirect | | | | | | 1,500(8) | | | | | | — | | | | | | — | | | | | | * | | |
Mitchell Gendel | | | | | Direct | | | | | | 298,144(8) | | | | | | — | | | | | | 50,000 | | | | | | * | | |
David Ross | | | | | Direct | | | | | | 131,738(8) | | | | | | — | | | | | | 43,000 | | | | | | * | | |
Stephanie Nerlich | | | | | Direct | | | | | | 76,738(7) | | | | | | — | | | | | | 25,000 | | | | | | * | | |
All directors and officers of as a group of | | | | | | | | | | | 16,105,694(6)(7)(8) | | | | | | 10,000,000(6) | | | | | | 11,668,000(6) | | | | | | 31.4% | | |
Stagwell Agency Holdings LLC(9)(10) | | | | | | | | | 14,285,714(10) | | | | | | 10,000,000(10) | | | | | | 10,000,000(10) | | | | | | 29.2% | | | ||
Goldman Sachs(9)(11) | | | | | | | | | | | 7,625(11) | | | | | | 14,778,823(11) | | | | | | 14,778,823(11) | | | | | | 16.8% | | |
Hotchkis and |
| | | | | | | | | | 7,706,094(12) | | | | | | — | | | | | | — | | | | | | 10.5% | | | |||
Indaba Capital Management, | | | | | | | | | | | 4,327,415(13) | | | | | | — | | | | | | — | | | | | | 5.9% | | |
Governance Guidelines, are available free of charge at MDC Partners’ website located athttp://www.mdc-partners.com/#investors/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:Attn: Investor Relations.
which they served in 2018.
| | Director | | | | Audit Committee | | | | Human Resources and Compensation Committee | | | | Nominating and Corporate Governance Committee | | | | Strategic Alternatives Review Committee | | |
| | Irwin D. Simon | | | | | | | | ✓ | | | | Chair | | | | ✓ | | |
| | Charlene Barshefsky | | | | ✓ | | | | | | | | ✓ | | | | | | |
| | Clare R. Copeland | | | | | | | | ✓ | | | | | | | | | | |
| | Daniel S. Goldberg | | | | ✓ | | | | | | | | ✓ | | | | | | |
| | Bradley J. Gross | | | | | | | | | | | | | | | | | | |
| | Scott L. Kauffman | | | | | | | | | | | | | | | | | | |
| | Lawrence S. Kramer | | | | ✓ | | | | Chair | | | | | | | | ✓ | | |
| | Anne Marie O’Donovan | | | | Chair | | | | | | | | ✓ | | | | ✓ | | |
| | Desirée Rogers | | | | | | | | ✓ | | | | ✓ | | | | | | |
| | Mark J. Penn | | | | | | | | | | | | | | | | | | |
Effective asstatements and effectiveness of April 21, 2016, theinternal controls over financial reporting.
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 andCharlene Barshefsky, Daniel Goldberg, Anne Marie O’Donovan.O’Donovan and Desirée Rogers. The Nominating & Corporate Governance Committee’s current charter is available athttp://www.mdc-partners.com/#investors/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 NASDAQNasdaq corporate governance standards.
Effective as of April 21, 2016, the current members of the
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.
forth in the Company’s Corporate Governance Guidelines, which are available free of charge at MDC Partners’ website athttp://www.mdc-partners.com/#investors/investors/corporate-governance. Shareholders or othersother interested parties 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,Mitchell Gendel, EVP, General Counsel, 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.
Employee directors are$100,000, typically vesting on the third anniversary of the grant date.
The following table sets forth the compensation paid to or earned during fiscal year 20152018 by our non-management directors (including for Mr. Kauffman, with respect to his fees and stock awards for his role as an independent director through and until July 20, 2015, the date of his appointment as CEO):
Non-Management Director | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) | | | Option Awards ($) | | | All Other Compensation ($) | | | Total ($) | | |||||||||||||||
Charlene Barshefsky | | | | | — | | | | | | — | | | | | | — | | | | | | N/A | | | | | | —(1) | | |
Clare R. Copeland | | | | | 137,500 | | | | | | 101,108(2) | | | | | | — | | | | | | N/A | | | | | | 238,608 | | |
Daniel S. Goldberg | | | | | 126,000 | | | | | | 101,108(2) | | | | | | — | | | | | | N/A | | | | | | 227,108 | | |
Bradley J. Gross | | | | | — | | | | | | — | | | | | | — | | | | | | N/A | | | | | | — | | |
Mark J. Penn | | | | | — | | | | | | — | | | | | | — | | | | | | N/A | | | | | | —(3) | | |
Lawrence S. Kramer | | | | | 181,250 | | | | | | 101,108(2) | | | | | | — | | | | | | N/A | | | | | | 282,358 | | |
Anne Marie O’Donovan | | | | | 183,000 | | | | | | 101,108(2) | | | | | | — | | | | | | N/A | | | | | | 284,108 | | |
Desirée Rogers | | | | | 96,500 | | | | | | 75,924(2) | | | | | | — | | | | | | N/A | | | | | | 172,424 | | |
Irwin D. Simon | | | | | 252,000 | | | | | | 101,108(2) | | | | | | — | | | | | | N/A | | | | | | 353,108 | | |
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) Ambassador Barshefsky was appointed to the Board on April 8, 2019 and was not paid any compensation in 2018. 20 (2) On January 22, 2018, Mr. Copeland, Mr. Goldberg, Mr. Kramer, Mr. Simon and Ms. O’Donovan each received a grant of 10,990 restricted shares. All of these grants were awarded under the 2016 Stock Incentive Plan. On April 26, 2018, Ms. Rogers received a grant of 9,990 restricted shares. This grant was awarded under the 2011 Stock Incentive Plan. The amount in this table reflects 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 vesting period. For a discussion of the assumptions relating to these valuations, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Stock-Based Compensation” set forth in our annual report on Form 10-K |
Set forth below is a line graph comparing the cumulative total shareholder return of MDC Partners common stock for the last five years to that of the Standard & Poor’s 500 Stock Index, Russell 2000 Index and a peer group of publicly held media, corporate communications and marketing service companies. The graph assumes that, onyear ended December 31, 2010, $1002018. The aggregate number of restricted shares outstanding as of December 31, 2018 for our non-employee directors was investedas follows: 31,990 shares for Mr. Copeland; 31,990 shares for Mr. Goldberg; 31,990 shares for Mr. Kramer; 31,990 shares for Ms. O’Donovan; 9,990 shares for Ms. Rogers; and 31,990 shares for Mr. Simon.
The peer group consists 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 Company and Valassis Communications. Total shareholder return for 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 |
MDC achieved
In our
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.
ForJanuary 2017, we announced that we fully settled 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 suggestedSEC investigation with no finding by the Compensation Committee’s independent compensation consultant, was made upSEC of intentional wrongdoing by any current directors or officers. In addition, we prevailed in having each of the following publicly-held media, corporate communicationsU.S. 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 industryCanadian securities class action litigation claims dismissed, with prejudice (each as described 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 usedgreater detail 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 operationsour Annual Report on Form 10-K for the year ended December 31, 2015 is provided in2018).
“Adjusted EBITDA margin” is equalusing “pay-for-performance” incentive arrangements based solely on the achievement of financial targets and individual performance criteria. The Company failed to achieve the 2018 financial targets established by the Compensation Committee. Accordingly, the Compensation Committee determined not to authorize cash payments to the quotientformer CEO and each other NEO in respect of Adjusted EBITDA (as defined) divided by revenue.
their 2018 financial performance-based cash incentives.
stronger corporate governance initiatives, the Board is currently composed of nine (9) non-management directors and one (1) management director. Accordingly, 90% of the current Board of Directors is comprised of non-management directors, as compared to April 2015.
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.
independent from management and that Mercer’s work has not 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 in executive compensation.
2018.
| ||||||||||||
Compensation Program Elements | | | | Description | | | | How This Element Promotes Company Objectives | | | ||
| | Base Salary | | | | Fixed annual compensation that provides ongoing income. | | | | Intended to be competitive with marketplace. | | |
| | Annual, Short-Term Cash Incentive Awards; Repayment or “Claw-back” Requirements | | | | Opportunity to earn performance-based compensation if the Company achieves financial performance goals, and if the executive achieves individual “key performance indicators” (KPIs). | | | | Motivates and rewards achievement of annual corporate and personal objectives that build shareholder value. Repayment or “claw-back” requirements encourage executive retention. | | |
| | At-Risk Equity Incentive Awards (Restricted Stock) | | | | Opportunity to earn equity incentive awards based upon three-year financial performance vesting terms. | | | | Promotes achievement of key multi-year corporate objectives; the vesting requirements of these incentive awards are designed to motivate executives to achieve goals that align the executive’s interests with shareholders. Long-term vesting promotes executive retention. | | |
| Cash LTIP | | | | Opportunity to earn performance-based compensation if the Company achieves financial performance goals | | | | Grant and vesting requirements of these long-term incentive awards are designed to motivate executives to achieve stretch goals that align the executive’s interests with shareholders, based on |
| ||||||||||||
Severance Payments and Benefits | | | | Payments and benefits upon termination of an executive’s employment in specified circumstances. | | | | Intended to provide assurance of financial security to attract lateral hires and to retain executives, especially in disruptive circumstances, such as a change in control and leadership | | | ||
| | Benefits | | | | Health and welfare benefits. | | | | Fair and competitive programs to provide family health care protection, facilitate recruitment and retention. | | |
| | Perquisites | | | | Limited personal benefits provided as an element of compensation, including a fixed “perquisite allowance” to | | | | Fair and competitive programs to facilitate the recruitment and | | |
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 andhave satisfied his or her 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,
Scott Kauffman: For Mr. Kauffman,not less than $205 million. Therefore, the Compensation Committee considereddetermined to award $0 to the former CEO and other NEOs in respect of their 2018 financial-performance based annual cash incentives. Because the Company’s strongoverall financial performance as well as Mr. Kauffman’s highly effective leadership role in implementingfor 2018 failed to satisfy the Company’s strategic and operating plans. Specifically,financial target established by the Compensation Committee, recognizedthe Compensation Committee did not consider the NEOs’ performance against their individual goals.
David Doft: Mr. Doft implemented significant corporate cost reductions and managed improvements to the Company’s working capital processes in 2015, resulting in achievementaward. Payment of each 2018 EVP Retention Award by the Company was conditioned on continued employment through the successful closing of its cash management targets. In addition, Mr. Doft assisteda significant transaction in 2019, including either a Change of Control of the Company (as defined in the remediationCompany’s 2016 Stock Incentive Plan), or the sale of identified internal control issuesassets with aggregate proceeds to the Company from any such transaction equal to not less than $100 million (each, a “Payment Event”). The Committee will confirm if the payment conditions were satisfied for the 2018 EVP Retention Awards following the successful completion of the sale of Kingsdale and the enforcement of new travel and entertainment policies and proceduresStagwell investment transaction at a premium valuation, among other factors, including the EVPs’ service as part of the Company’s improved corporate governance practices in response to the internal investigation following receipt of the SEC Subpoena. As a result, Mr Doft received an annual cash bonus for 2015 equal to $575,000.
Robert Kantor: Mr. Kantor successfully led 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 Chiefinterim co-Chief Executive Officer following the separation of Crispin Porter & Bogusky, one of the Company’s largest partner agencies. Ms. Senecal effectively led several client pitches at Crispin Porter, and was instrumentalemployment with Mr. Kauffman as CEO announced in helping to win key new accounts and secure several existing client relationships. As a result, Ms. Senecal received an annual cash bonus from the Company for 2015 equal to $750,000.
September 2018.
Comparator Companies. In determining compensation opportunities and payments to executives, the Compensation Committee may, from time to time, review competitive opportunities, payments, practices and performance among a comparator group of companies. Although we do not engage in formal benchmarking of NEO compensation, we intend that, if our named executive officers achieve individual and financial corporate objectives in a given year, they will earn total direct compensation that compares favorably with the total direct compensation earned by executives performing similar functions at comparator companies.
The comparator group of peer marketing service companies is comprised of the following publicly-traded companies: Omnicom; Interpublic Group; IAC/InterActiveCorp; Sinclair Broadcast Group; Clear Channel; John Wiley & Sons; Scholastic Corporation; Lamar Advertising; The New York Times Company; Meredith Corporation; Morningstar; and National CineMedia Inc.
In addition, in September 2018, in connection with the resignation from his position of Chief Executive Officer of the Company, in recognition of Mr. Kauffman’s service to the Company and as inducement for Mr. Kauffman to enter into a release of claims against the Company, we entered into a succession agreement with Mr. Kauffman setting forth the terms of his separation from the Company. Mr. Kauffman’s succession agreement is also described below under the caption “Potential Payments upon Termination or Change-In-Control.”
| | Name and Principal Position | | | | Year | | | Salary ($) | | | Bonus ($)(1) | | | Stock Awards ($)(2) | | | Option Awards/ SARS ($)(3) | | | Non-Equity Incentive Plan Compensation ($)(4) | | | All Other Compensation ($)(5) | | | Total ($)(6) | | | ||||||||||||||||||||||||
| | Scott L. Kauffman, Former Chief Executive Officer | | | | | | 2018 | | | | | | 1,200,000 | | | | | | 0 | | | | | | 1,302,484 | | | | | | 0 | | | | | | 0 | | | | | | 8,036 | | | | | | 2,510,520 | | | |
| | | 2017 | | | | | | 1,200,000 | | | | | | 1,200,000 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 9,953 | | | | | | 2,409,953 | | | | |||||
| | | 2016 | | | | | | 1,200,000 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 8,400 | | | | | | 1,208,400 | | | | |||||
| | David Doft, Executive Vice President and Chief Financial Officer | | | | | | 2018 | | | | | | 650,000 | | | | | | 0 | | | | | | 366,000 | | | | | | 0 | | | | | | 0 | | | | | | 51,408 | | | | | | 1,067,408 | | | |
| | | 2017 | | | | | | 650,000 | | | | | | 650,000 | | | | | | 0 | | | | | | 117,630 | | | | | | 117,664 | | | | | | 52,785 | | | | | | 1,588,079 | | | | |||||
| | | 2016 | | | | | | 650,000 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 119,707 | | | | | | 52,154 | | | | | | 821,861 | | | | |||||
| | Mitchell Gendel, Executive Vice President and General Counsel | | | | | | 2018 | | | | | | 633,333 | | | | | | 0 | | | | | | 366,000 | | | | | | 0 | | | | | | 0 | | | | | | 48,184 | | | | | | 1,047,517 | | | |
| | | 2017 | | | | | | 550,000 | | | | | | 550,000 | | | | | | 0 | | | | | | 117,630 | | | | | | 117,664 | | | | | | 50,207 | | | | | | 1,385,501 | | | | |||||
| | | 2016 | | | | | | 550,000 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 119,707 | | | | | | 49,576 | | | | | | 719,283 | | | | |||||
| | Stephanie Nerlich, Executive Vice President, Talent and Partner Development (6) | | | | | | 2018 | | | | | | 468,116 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 14,505 | | | | | | 482,621 | | | |
| | David Ross, Executive Vice President, Strategy and Corporate Development | | | | | | 2018 | | | | | | 500,000 | | | | | | 0 | | | | | | 274,500 | | | | | | 0 | | | | | | 0 | | | | | | 21,408 | | | | | | 795,908 | | | |
| | | 2017 | | | | | | 495,833 | | | | | | 500,000 | | | | | | 0 | | | | | | 101,162 | | | | | | 117,664 | | | | | | 22,785 | | | | | | 1,237,444 | | | | |||||
| | | 2016 | | | | | | 425,000 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 119,707 | | | | | | 22,154 | | | | | | 566,861 | | | |
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 | | | Perquisite Allowance | | | Health Insurance Premiums | | | Other Perquisites | | | Total | | ||||||||||||
Scott L. Kauffman | | | | | — | | | | | | 8,036 | | | | | | — | | | | | | 8,036 | | |
David Doft | | | | | 30,000 | | | | | | 21,408 | | | | | | — | | | | | | 51,408 | | |
Mitchell Gendel | | | | | 25,000 | | | | | | 23,184 | | | | | | — | | | | | | 48,184 | | |
Stephanie Nerlich | | | | | 8,847 | | | | | | 5,658 | | | | | | — | | | | | | 14,505 | | |
David Ross | | | | | — | | | | | | 21,408 | | | | | | — | | | | | | 21,408 | | |
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 ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||
Scott Kauffman | — | — | — | — | 100,000 | (2) | 1,926,000 | (3) | ||||||||||||||||||||||||||||||||||||
David Doft | 1/26/2015 | 175,000 | 250,000 | 625,000 | 0 | |||||||||||||||||||||||||||||||||||||||
Andre Coste | 1/26/2015 | 175,000 | 250,000 | 625,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Robert Kantor | 1/26/2015 | 175,000 | 250,000 | 625,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Lori Senecal | 1/26/2015 | 350,000 | 500,000 | 1,250,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Miles Nadal(4) | 1/26/2015 | 6,000,000 | 7,500,000 | 15,000,000 | 0 | 0 |
| | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | Equity Grant Date Fair Value of Stock and Option Awards(3) | | |||||||||||||||||||||||||||||||||
Name | | | Grant Date | | | Approval Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | ||||||||||||||||||||||||||||||
(a) | | | (b) | | | | | | | | | (c) | | | (d) | | | (e) | | | | | | | | | (g) | | | (h) | | | (l) | | |||||||||||||||||||||
Scott L. Kauffman | | | | | 1/19/2018 | | | | | | 2/17/2016 | | | | | | | | | | | | | | | | | | | | | | | | 106,761 | | | | | | 142,348 | | | | | | 142,348 | | | | | | 1,302,484 | | |
| | | 2/23/2018 | | | | | | 2/22/2018 | | | | | | 300,000(1) | | | | | | 1,200,000(1) | | | | | | 2,400,000(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
David Doft | | | | | 1/19/2018 | | | | | | 2/17/2016 | | | | | | | | | | | | | | | | | | | | | | | | 30,000 | | | | | | 40,000 | | | | | | 40,000 | | | | | | 366,000 | | |
| | | 2/23/2018 | | | | | | 2/22/2018 | | | | | | 125,000(1) | | | | | | 500,000(1) | | | | | | 1,000,000(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Mitchell Gendel | | | | | 1/19/2018 | | | | | | 2/17/2016 | | | | | | | | | | | | | | | | | | | | | | | | 30,000 | | | | | | 40,000 | | | | | | 40,000 | | | | | | 366,000 | | |
| | | 2/23/2018 | | | | | | 2/22/2018 | | | | | | 125,000(1) | | | | | | 500,000(1) | | | | | | 1,000,000(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Stephanie Nerlich | | | | | 1/19/2018 | | | | | | 2/17/2016 | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 2/23/2018 | | | | | | 2/22/2018 | | | | | | 62,500(1) | | | | | | 250,000(1) | | | | | | 500,000(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
David Ross | | | | | 1/19/2018 | | | | | | 2/17/2016 | | | | | | | | | | | | | | | | | | | | | | | | 22,500 | | | | | | 30,000 | | | | | | 30,000 | | | | | | 274,500 | | |
| | | 2/23/2018 | | | | | | 2/22/2018 | | | | | | 62,500(1) | | | | | | 250,000(1) | | | | | | 500,000(1) | | | | | | |
Mr. Kauffman did not receive any award in 2015
Company.
Mr. Coste currently receivesGendel received an annualized base salary of $575,000,$550,000 in 2017, which was increased to $650,000 effective March 1, 2018 due to his increased scope of responsibilities managing our real estate, human resources and hecompliance departments. He is eligible to receive an annual discretionary bonus in a targetan amount equalup to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Mr. Coste’s individualGendel’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.
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’sGendel’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
For 2015, Ms. Senecal receivedwith 30 days prior written notice of resignation, or if the Company terminates his employment with or without “Cause” (as defined in his employment agreement). Mr. Ross currently receives an annualized base salary of $1,000,000,$500,000 (effective as of January 20, 2017) and washe is eligible to receive an annual discretionary bonus in a targetan amount equalup to 100% of herhis base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Ms. Senecal’sMr. Ross’s performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures. Mr. Ross is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment), and business travel insurance provided by the Company to its senior executives. He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Ross’s employment is terminated under certain circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”
retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Ms. Senecal’sNerlich’s employment is terminated without cause.under certain circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”
On April 25, 2007,
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | | | Option Exercise Price ($) | | | 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) | | | (d) | | | (e) | | ||||||||||||
Scott L. Kauffman | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2) | | | | | | (1) | | | | | | (3) | | | | | | (3) | | |
David Doft | | | | | — | | | | | | 50,000 | | | | | | 6.60 | | | | Feb 1, 2022 | | | | | (2) | | | | | | (1) | | | | | | (3) | | | | | | (3) | | | |||
Mitchell Gendel | | | | | — | | | | | | 50,000 | | | | | | 6.60 | | | | Feb 1, 2022 | | | | | (2) | | | | | | (1) | | | | | | (3) | | | | | | (3) | | | |||
Stephanie Nerlich | | | | | — | | | | | | 25,000 | | | | | | 6.60 | | | | Feb 1, 2022 | | | | | (2) | | | | | | (1) | | | | | | (3) | | | | | | (3) | | | |||
David Ross | | | | | — | | | | | | 43,000 | | | | | | 6.60 | | | | Feb 1, 2022 | | | | | (2) | | | | | | (1) | | | | | | (3) | | | | | | (3) | | |
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 ($) | |||||||||||||||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||
Scott Kauffman | 37,500 | (1) | 5.97 | April 28, 2016 | 117,866 | (1) | 2,560,050 | (1) | ||||||||||||||||||||||||
David B. Doft | — | |||||||||||||||||||||||||||||||
Andre Coste | 17,963 | (2) | 390,156 | (2) | ||||||||||||||||||||||||||||
Robert Kantor | 37,500 | (3) | 814,500 | (3) | ||||||||||||||||||||||||||||
Lori Senecal | 50,000 | (4) | 1,086,000 | (4) | ||||||||||||||||||||||||||||
Miles Nadal | — |
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||
Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | | ||||||||||||
(a) | | | (b) | | | (c) | | | (d) | | | (e) | | ||||||||||||
Scott L. Kauffman | | | | | 0 | | | | | | 0 | | | | | | 103,570 | | | | | | 536,061 | | |
David Doft | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Mitchell Gendel | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Stephanie Nerlich | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
David Ross | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | 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 |
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. Kauffmanrespective award agreements, and will be entitledpro-rated to reflect service through 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.
2018.
$290,124. In the event of termination of Mr. Gendel’s employment agreement following a change of control as of December 31, 2018, a total of (i) 173,476 unvested restricted stock grants would fully vest, with a fair value equal to $452,772, plus (ii) 50,000 SARs would fully vest, with a fair value equal to $130,500.
$2,450,000. Furthermore, Mr. Gendel 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. Gendel is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $23,184 if Mr. Gendel’s employment had terminated as of December 31, 2018.
$118,962. In the event of termination of Ms. Nerlich’s employment agreement following a change of control as of December 31, 2018, a total of (i) 76,738 unvested restricted stock grants would fully vest, with a fair value equal to $200,286, plus (ii) 25,000 SARs would fully vest, with a fair value equal to $62,250.
Pursuant$2,000,000. Furthermore, Mr. Ross will also be allowed to her employment agreement, if MDC terminates Ms. Senecal’s employment without cause, then MDC is requiredcontinue 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 Ms. Senecal severance in an amount equal to her base salary for a period of time commencing onhim the date of termination and ending at the endeconomic equivalent of the twelve (12) month period thereafter. If Ms. Senecal’sbenefits in these plans if Mr. Ross is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $21,408 if Mr. Ross’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. Asas of December 31, 2015, Ms. Senecal had 50,000 unvested restricted stock grants2018.
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 terminated2018, our employee population consisted of approximately 6,100 individuals.
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 fromemployee population at the Company and its affiliates. We believe this consistently applied compensation measure reasonably reflects annual compensation across our employee base. Base salary amounts for employees located outside the United States and compensated in connection with his resignation.
Following an extensive reviewcurrencies other than U.S. dollars were converted to U.S. dollars based on the foreign exchange rates as 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 obligated2018. We annualized the base salary amounts for any permanent employees in the employee population who were employed by us for less than the full fiscal year. We then ranked the resulting base salaries for all the employees in the employee population other than our CEO to repay the remaining balance in three installments, with the last to be paid on December 31, 2017.
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: | — | — | — |
| 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: | | | | | | | | | | | | | | | | | | | |
Not approved by stockholders | | | | | — | | | | | | — | | | | | | — | | |
SARS approved by stockholders | | | | | 250,800(1) | | | | | $ | 6.60(2) | | | | | | 2,878,468(3) | | |
Stock options approved by stockholders | | | | | 111,866(1) | | | | | $ | 4.85(2) | | | | | | 2,878,468(3) | | |
Transaction
On April 25, 2007,
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 purchases of the Aircraft and were legally responsible and have paid for all operating, personnel and maintenance costs associated with the Aircraft’s operations. Payments by third parties to charter the Aircraft from the corporate aircraft management company offset a portion of the costs. Payments by MDC for the business use of the Aircraft by Mr. Nadal were made to the corporate aircraft management company at a fixed hourly rate set forth in the aircraft service agreement between the aircraft management company and entities controlled by Mr. Nadal. In the first and second quarter of 2015, MDC paid a total of $397,767 for the business use of the Aircraft. Promptly following Mr. Nadal’s resignation on July 20, 2015, the Company prohibited the use of private aircraft travel by its directors and executive officers.
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 isformer Chairman and Chief Executive Officer of the Company. His daughter, Sarah Kauffman, has been employed by KBS+F&B (a subsidiary of the Company) since July 2011, and currently acts as Director of Operations, Attention Partners. In 2015,2018, her total compensation, including salary, bonus and other benefits, totaled approximately $125,000.$171,973. 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, is the majority equity owner 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.
2018.
2019.
| | | 2017 | | | 2018 | | ||||||
Audit Fees(1) | | | | $ | 2,796,115 | | | | | $ | 2,648,866 | | |
Tax Fees(2) | | | | $ | 44,075 | | | | | | | | |
Audit Related Fees | | | | | — | | | | | | | | |
All Other Fees | | | | | — | | | | | | | | |
Total | | | | $ | 2,840,190 | | | | | $ | 2,696,984 | | |
|
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 |
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 available to the Company.
The 2016 Incentive Plan authorizes the issuance of awards with respect to 1,500,000 shares of MDC Partners’ Class A Subordinate Voting Shares or any other security into which such shares may be exchanged (“Shares”). This amount represents approximately 2.98% of the Company’s issued and outstanding shares as of March 31, 2016. As of April 1, 2016, the aggregate number of Shares remaining available under the Prior Plan is 428,507. With respect to the shareholder approval of the 2016 Incentive Plan, approximately 1,300,000 Shares will be excluded from voting on the resolution to approve the 2016 Incentive Plan.
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-alone stock appreciation rights (“SARs”) and restricted stock and other stock-based awards (collectively referred to herein as “Incentive Awards”). Incentive Awards may be settled in cash or in Shares. Approximately 6,000 persons are currently eligible to participate in the 2016 Incentive Plan.
Shares issued under the 2016 Incentive Plan may be either authorized 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”) 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 year may not exceed 2% of the Company’s issued and outstanding Shares. 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. There are no other limits on the number of Shares that may be granted under the 2016 Incentive Plan.
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 capitalization 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 under Section 83(b) of the Code to be taxed on restricted stock at the time of grant, in which case subsequent appreciation will be taxable at capital gains rates. A participant generally will not recognize income upon grant of the restricted stock unit. Upon issuance of cash or shares of common stock in settlement of a restricted stock unit award, the participant will recognize ordinary income equal to the fair market value of the common stock underlying such award as of that date.
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.
Scott L. Kauffman
Clare CopelandThe Stagwell Group.
Larry KramerBrown Girl. She is also a director of World Business Chicago, Cradles to Crayons, The Economic Club of Chicago, Conquer Cancer Foundation, Donors Choose and Inspired Entertainment.
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.
Poly Prep Country Day School.
In addition, from time to time, special committees may be established under the direction of the Board when necessary to address specific issues.
EXHIBIT C
This MDC Partners Inc. 2016 Stock Incentive Plan is intended(“MDC” or “the Company”) for use at the Annual and Special Meeting of Shareholders to promote the interests of the Company and its shareholders by providing the employees and consultants of the Company and eligible non-employee directorsbe held on June 4, 2019. I/We, being shareholder/s of MDC, Partners Inc., who are largely responsible for the management, growth and protection of the business of the Company, with incentives and rewards to encourage them to continue in the service of the Company. The Plan is designed to meet this intent by providing such employees, consultants and eligible non-employee directors with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company.
As used in the Plan, the following definitions apply to the terms indicated below:
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the “Subject Person”) becomes the Beneficial Owner of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur.
Subject to adjustment as provided in Section 10 and the following provisions of this Section 3, the maximum number of Class A Shares that may be covered by Incentive Awards granted under the Plan shall not exceed 1,500,000 Class A Shares. Class A Shares issued under the Plan may be either authorized and unissued shares or treasury shares, or both, at the discretion of the Committee. In addition, at the discretion of the Compensation Committee, Class A Shares authorized for issuance under this Plan may be issued to employees of the Company to satisfy the exercise of SARS Awards under the Company’s Stock Appreciation Rights Plan, as amended.
For 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 Share 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 change in the number of Class A Shares outstanding by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or similar corporate change, the maximum aggregate number of Class A Shares with respect to which the Committee may grant Incentive Awards and the maximum aggregate number of Class A Shares with respect to which the Committee may grant Incentive Awards to any individual Participant in any year shall be appropriately adjusted by the Committee. In the event of any change in the number of Class A Shares outstanding by reason of any other similar event or transaction, the Committee may, but need not, make such adjustments in the number and class of Class A Shares with respect to which Incentive Awards may be granted as the Committee may deem appropriate.
Subject to any required action by the shareholders of MDC, in the event of any increase or decrease in the number of issued Class A Shares resulting from a subdivision or consolidation of Class A Shares or the payment of a stock dividend (but only on the Class A Shares), or any other increase or decrease in the number of such shares effected without receipt or payment of consideration by the Company, the Committee shall proportionally adjust the number of Class A Shares subject to each outstanding Incentive Award and the exercise price per Class A Share of each such Incentive Award.
Subject to any required action by the shareholders of MDC, in the event that MDC 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 to 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.
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, no issuance by MDC 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 of Class A Shares subject to any Incentive Award.
No person shall have any rights as a stockholder with respect to any Class A Shares covered by or relating to any Incentive Award granted pursuant to the Plan until the date of the issuance of a stock certificate with respect to such shares. Except as otherwise expressly provided in Section 10 hereof, no adjustment of any Incentive Award shall be made for dividends or other rights for which the record date occurs prior to the date such stock certificate is issued.
Whenever Class A Shares are to be issued upon the exercise of an Option or the grant or vesting of an Incentive Award, MDC shall have the right to require the Participant to remit to MDC in cash an amount sufficient to satisfy federal, state and local withholding tax requirements, if any, attributable to such exercise, grant or vesting prior to the delivery of any certificate or certificates for such shares or the effectiveness of the lapse of such restrictions. In addition, upon the exercise or settlement of any Incentive Award in cash, MDC shall have the right to withhold from any cash payment required to be made pursuant thereto an amount sufficient to satisfy the federal, state and local withholding tax requirements, if any, attributable to such exercise or settlement.
At the election of the Participant, subject to the approval of the Committee, when Class A Shares are to be issued upon the exercise, grant or vesting of an Incentive Award, the Participant may tender to MDC a number of Class A Shares that have been owned by the Participant for at least six months (or such other period as the Committee may determine) having a Fair Market Value at the tender date determined by the Committee to be sufficient to satisfy the federal, state and local withholding tax requirements, if any, attributable to such exercise, grant or vesting but not greater than such withholding obligations. Such election shall satisfy the Participant’s obligations under Section 14(a) hereof, if any.
At the election of the Participant, subject to the approval of the Committee, when Class A Shares are to be issued upon the exercise, grant or vesting of an Incentive Award, MDC shall withhold a number of such shares having a Fair Market Value at the exercise date determined by the Committee to be sufficient to satisfy the federal, state and local withholding tax requirements, if any, attributable to such exercise, grant or vesting but not greater than such withholding obligations. Such election shall satisfy the Participant’s obligations under Section 14(a) hereof, if any.
The Board of Directors may at any time suspend or discontinue the Plan or revise or amend it in any respect whatsoever; provided, however, that without approval 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 issued under the Plan or (ii) materially modify the requirements as to eligibility for participation in the Plan. Nothing herein shall restrict the Committee’s ability to exercise its discretionary authority hereunder pursuant to Section 4 hereof, which discretion may be exercised without amendment to the Plan. No action hereunder may, without the consent of a Participant, reduce the Participant’s rights under any previously granted and outstanding Incentive Award. Nothing herein shall limit the right of the Company to pay compensation of any kind outside the terms of the Plan.
The grant to a Participant of an Option or SAR shall impose no obligation upon such Participant to exercise such Option or SAR.
Upon the death 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 Participant in connection with the grant of the Incentive Award.
The expenses of the Plan shall be paid by MDC. Any proceeds received by MDC in connection with any Incentive Award will be used for general corporate purposes.
The Plan and the rights of all persons under the Plan shall be construed and administered in accordance with the laws of the State of New York, without regard to its conflict of law principles, except to the extent that the application of New York law would result in a violation of the Canadian Business Corporation Act.
The Plan was adopted by the Board of Directors on April 21, 2016, subject to the approval of the Plan by the shareholders of MDC. No grants may be made under the Plan after April 22, 2026.
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 appointsappoint/s as his or her nominee, Mr. Scott Kauffman,Mark J. Penn, 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 ___________________, as proxy of substitution,the undersigned, to attend, act and vote all of the Class A Shares of MDC Partners held by the undersigned for and on behalf of the undersigned in accordance with the below direction (or if no directions have been given, as the proxy sees fit) on all the following matters and any other matter that may properly come before the Annual and Special Meeting of Shareholders of the Company to be held at 10:00 a.m. (Eastern Standard Time) on June 4, 2019, at the annual meetingMDC Partners Innovation Center, 745 Fifth Avenue, Floor 19, New York, NY 10151 (the “Meeting”), and at any and all adjournments or postponements thereof in the same manner, to the same extent and with the same powers as if the undersigned were personally present, with full power of shareholderssubstitution. 27512-9903 Management recommends voting FOR resolutions 1, 2, 3 and 4. Please use a dark black pencil or pen. 1. Election of Directors The nominees proposed by management to act as directors of MDC Partners, to be held on Wednesday, June 1, 2016hold office until successors are elected 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 atthe next annual meeting of MDC Partners, or any adjournment or postponement thereof, or until his successor is otherwise elected, are: FOR WITHHOLD 1. Mark J. Penn 2. Charlene Barshefsky 3. Daniel S. Goldberg 4. Bradley J. Gross 5. Lawrence S. Kramer 6. Anne Marie O’Donovan 7. Desirée Rogers 8. Irwin D. Simon FOR AGAINST WITHHOLD 2. Appointment of Auditors The auditor nomination proposed by management is BDO USA, LLP, to act as auditors of MDC Partners and to authorize the Audit Committee to fix their remuneration. 3. Executive Compensation The recommendation put forth by management is for the approval of a non-binding advisory resolution on the Company’s executive compensation. 4. Adoption of By-law No. 2 The recommendation put forth by management is for the approval of the adoption of the by-law. Under Canadian Securities Law, you are entitled to receive certain investor documents. If you wish to receive such material, please tick the applicable boxes below. I would like to receive quarterly financial statements. I would like to receive future mailings by email at _____________________________. I/We authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect to the manner indicated.Meeting. If no specification is made, the shares represented byvoting instructions are indicated above, this proxyProxy 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:
above, or, if you appoint another proxyholder, as that other proxyholder sees fit. On any amendments or variations proposed or any new business properly submitted before the Meeting, I/We authorize you to vote as you see fit.Print Name(s):________________________ Number of ClassShares Represented:_____________ _________________________________________________________ ___________________ Signature(s) DatePlease sign exactly as your name/s appear on this proxy. Please see reverse for instructions. All proxies must be received by 10:00 a.m. (Eastern Standard Time) on May 31, 2019. The proxy cutoff time may be waived or extended by the chairman of the meeting without notice.
By Internet: www.cstvotemyproxy.com and act for him or her and on his or herbehalf at the Meeting other than the persons designated in this form of proxy. Such right may beexercised by filing in the name of such person in the blank space provided and striking out thenames of management’s nominees in paragraph one. A person appointed as nominee to represent ashareholder need not be a shareholder of MDC Partners. A person appointed as your proxy holdermust be present at the Meeting to vote.2. If the securities are registered in the name of an executor, administrator or trustee, please signexactly as your name appears on this proxy. If the securities are registered in the name of adeceased or other holder, the proxy must be signed by the legal representative with his or her nameprinted below his or her signature, and evidence of authority to sign on behalf of the deceased orother holder must be attached to this proxy.3. Some holders may own securities as both a registered and a beneficial holder; in which case youmay receive more than one Circular and will need to vote separately as a registered and beneficialholder. Beneficial holders may be forwarded either a form of proxy already signed by theintermediary or a voting instruction form to allow them to direct the voting of securities theybeneficially own. Beneficial holders should follow instructions for voting conveyed to them bytheir intermediaries.4. If a security is held by two or more individuals, any one of them present or represented by proxyat the Meeting may, in the absence of the other or others, vote at the Meeting. However, if one ormore of them are present or represented by proxy, they must vote together the number of securitiesindicated on the proxy.All holders should refer to the Proxy Circular for further information regarding completion and useof this proxy and other information pertaining to the Meeting.This proxy is solicited by and on behalf of Management of the Company.How to VoteINTERNET Go to www.astvotemyproxy.com, enter the 13 digit13-digit control number printed on the form of proxy andthis formand follow the instructions on screen;
By Phone: screen.TELEPHONE Use any touch-tone phone, call 1-888-489-5760 (toll-free in North America) andthe United States andCanada), enter the 13 digit13-digit control number printed on this form and follow the form of proxy;
By Email: proxy@canstockta.com:
By Fax: 416-368-2502voiceinstructions. If you vote by telephone, do not return this proxy.MAIL, FAX or1-866-781-3111 (toll-free EMAIL Complete and return your signed proxy in North America);the envelope provided or
By Mail: CST send to:AST Trust Company Attn.(Canada)Attn: Proxy Department, P.O.DepartmentP.O. Box 721, Agincourt, Ontario721Agincourt, ON M1S 0A1.
Any0A1 Alternatively, you may fax your proxy to 416-368-2502 or 1-866-781-3111 (toll free inthe United States and Canada), or scan and email to proxyvote@astfinancial.com.An undated proxy is deemed to be dated on the day it was received by AST.If you wish to receive investor documents electronically in future, please visithttps://ca.astfinancial.com/edelivery to enroll.All proxies must be received by 10:00 a.m. (Eastern Standard Time) on May 31, 2019. Theproxy cut off time may be waived or extended by the chairman of the meeting without notice.Any questions and requests for assistance may be directed to the
Strategic Shareholder Advisorand Proxy Solicitation Agent:
The Exchange Tower130Tower130 King Street West, Suite 2950, P.O. Box 361Toronto, OntarioCanada361Toronto, OntarioCanada M5X 1E2Call1E2Call Toll-Free at: 1-866-228-86141-877-659-1821 within North AmericaCallAmericaCall Collect at: 416-867-2272 outside North AmericaE-mail: contactus@kingsdaleshareholder.comFacsimile:AmericaE-mail: contactus@kingsdaleadvisors.comFacsimile: 416-867-2271
/ Toll 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 shareholderSHARESThis proxy is solicited by the management of MDC Partners Inc. (“MDC” or “the Company”) foruse at the Annual and Special Meeting of Shareholders to be held on June 4, 2019.I/We, being shareholder/s of MDC, hereby nominates, constitutes and appointsappoint/s as his or her nominee, Mr. Scott Kauffman, or failingMark J. Penn, orfailing him, Mr. Mitchell Gendel, or instead of any of the foregoing, (strike out preceding names and print nameprintname of alternative nominee), with full power ___________________, as proxy of substitution,the undersigned, to attend, andactand vote all of the Class B Shares of MDC Partners held by the undersigned for and on behalf of the undersigned in accordance with the below direction (or if no directionshave been given, as the proxy sees fit) on all the following matters and any other matter that mayproperly come before the Annual and Special Meeting of Shareholders of the Company to be heldat 10:00 a.m. (Eastern Standard Time) on June 4, 2019, at the annual meetingMDC Partners Innovation Center,745 Fifth Avenue, Floor 19, New York, NY 10151 (the “Meeting”), and at any and alladjournments or postponements thereof in the same manner, to the same extent and with the samepowers as if the undersigned were personally present, with full power of shareholderssubstitution.27512-9903Management recommends voting FOR resolutions 1, 2, 3 and 4. Please use a dark blackpencil or pen.1. Election of DirectorsThe nominees proposed by management to act as directors of MDC Partners, to be held on Wednesday, June 1, 2016hold office until successors areelected 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 atthe next annual meeting of MDC Partners, or any adjournment or postponement thereof, or until hissuccessor is otherwise elected, are:FOR WITHHOLD1. Mark J. Penn 2. Charlene Barshefsky3. Daniel S. Goldberg4. Bradley J. Gross5. Lawrence S. Kramer6. Anne Marie O’Donovan7. Desirée Rogers8. Irwin D. SimonFOR AGAINST WITHHOLD2. Appointment of AuditorsThe auditor nomination proposed by management is BDOUSA, LLP, to act as auditors of MDC Partners and to authorizethe Audit Committee to fix their remuneration.3. Executive CompensationThe recommendation put forth by management is for theapproval of a non-binding advisory resolution on theCompany’s executive compensation.4. Adoption of By-law No. 2The recommendation put forth by management is for theapproval of the adoption of the by-law.Under Canadian Securities Law, you are entitled to receive certain investor documents. Ifyou wish to receive such material, please tick the applicable boxes below. I would like to receive quarterly financial statements. I would like to receive future mailings by email at _____________________________.I/We authorize you to act in accordance with my/our instructions set out above. I/We herebyrevoke any proxy previously given with respect to the manner indicated.Meeting. If no specification is made, the shares represented byvoting instructions areindicated above, this proxyProxy 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:
above, or, if youappoint another proxyholder, as that other proxyholder sees fit. On any amendments orvariations proposed or any new business properly submitted before the Meeting, I/Weauthorize you to vote as you see fit.Print Name(s):________________________ Number of Class B Shares Represented Hereby:
Notes to Proxy1. This proxy must be signed by a holder or his or her attorney duly authorized in writing. If youare an individual, please sign exactly as your name appears on this proxy. If the holder is acorporation, a duly authorized officer or attorney of the corporation must sign this proxy, |
By Internet: www.cstvotemyproxy.com and if thecorporation has a corporate seal, its corporate seal should be affixed.2. A shareholder has the right to appoint a person to attend and act for him or her and on his or herbehalf at the Meeting other than the persons designated in this form of proxy. Such right may beexercised by filing in the name of such person in the blank space provided and striking out thenames of management’s nominees in paragraph one. A person appointed as nominee to represent ashareholder need not be a shareholder of MDC Partners. A person appointed as your proxy holdermust be present at the Meeting to vote.2. If the securities are registered in the name of an executor, administrator or trustee, please signexactly as your name appears on this proxy. If the securities are registered in the name of adeceased or other holder, the proxy must be signed by the legal representative with his or her nameprinted below his or her signature, and evidence of authority to sign on behalf of the deceased orother holder must be attached to this proxy.3. Some holders may own securities as both a registered and a beneficial holder; in which case youmay receive more than one Circular and will need to vote separately as a registered and beneficialholder. Beneficial holders may be forwarded either a form of proxy already signed by theintermediary or a voting instruction form to allow them to direct the voting of securities theybeneficially own. Beneficial holders should follow instructions for voting conveyed to them bytheir intermediaries.4. If a security is held by two or more individuals, any one of them present or represented by proxyat the Meeting may, in the absence of the other or others, vote at the Meeting. However, if one ormore of them are present or represented by proxy, they must vote together the number of securitiesindicated on the proxy.All holders should refer to the Proxy Circular for further information regarding completion and useof this proxy and other information pertaining to the Meeting.This proxy is solicited by and on behalf of Management of the Company.How to VoteINTERNET Go to www.astvotemyproxy.com, enter the 13 digit13-digit control number printed on the form of proxy andthis formand follow the instructions on screen;
By Phone: screen.TELEPHONE Use any touch-tone phone, call 1-888-489-5760 (toll-free in North America) andthe United States andCanada), enter the 13 digit13-digit control number printed on this form and follow the form of proxy;
By Email: proxy@canstockta.com;
By Fax: 416-368-2502voiceinstructions. If you vote by telephone, do not return this proxy.MAIL, FAX or1-866-781-3111 (toll-free EMAIL Complete and return your signed proxy in North America);the envelope provided or
By Mail: CST send to:AST Trust Company Attn.(Canada)Attn: Proxy Department, P.O.DepartmentP.O. Box 721, Agincourt, Ontario721Agincourt, ON M1S 0A1.
Any0A1 Alternatively, you may fax your proxy to 416-368-2502 or 1-866-781-3111 (toll free inthe United States and Canada), or scan and email to proxyvote@astfinancial.com.An undated proxy is deemed to be dated on the day it was received by AST.If you wish to receive investor documents electronically in future, please visithttps://ca.astfinancial.com/edelivery to enroll.All proxies must be received by 10:00 a.m. (Eastern Standard Time) on May 31, 2019. Theproxy cut off time may be waived or extended by the chairman of the meeting without notice.Any questions and requests for assistance may be directed to the
Strategic Shareholder Advisorand Proxy Solicitation Agent:
The Exchange Tower130Tower130 King Street West, Suite 2950, P.O. Box 361Toronto, OntarioCanada361Toronto, OntarioCanada M5X 1E2Call1E2Call Toll-Free at: 1-866-228-86141-877-659-1821 within North AmericaCallAmericaCall Collect at: 416-867-2272 outside North AmericaE-mail: contactus@kingsdaleshareholder.comFacsimile:AmericaE-mail: contactus@kingsdaleadvisors.comFacsimile: 416-867-2271
/ Toll Free Facsimile: 1-866-545-5580