RESTRICTED STOCK GRANT AGREEMENT
Execution
Copy
THIS
AGREEMENT,
made as
of August 10, 2007 (the “Grant
Date”),
between MDC Partners Inc. (the “Corporation”), and Xxxxx Xxxx (the “Grantee”).
WHEREAS,
pursuant to an Employment Agreement dated as of July 19, 2007 (the “Employment
Agreement”),
the
Corporation has agreed to employ the Grantee as its Chief Financial Officer,
on
the terms and conditions more specifically set forth in such Employment
Agreement;
WHEREAS,
in connection with the new Employment Agreement, the Human Resources &
Compensation Committee (the “Committee”)
of the
Board of Directors has determined to grant an equity incentive award to the
Grantee in the form of restricted shares of Class A subordinate voting stock
of
the Corporation (“Restricted
Stock”)
as an
inducement to such Grantee’s employment with the Company, subject to the terms,
conditions and limitations provided herein;
NOW,
THEREFORE, the parties hereto agree as follows:
1.
Grant
of Restricted Stock.
1.1
The
Corporation hereby grants to the Grantee, on the terms and conditions set forth
in this Agreement, an amount equal to 35,000 shares of Restricted Stock, as
set
forth under the Grantee's name on the signature page hereto.
1.2
The
Grantee's rights with respect to all the shares of Restricted Stock shall remain
forfeitable at all times prior to the Applicable Lapse Date (as defined
below).
2.
Rights
of Grantee.
Except
as
otherwise provided in this Agreement, the Grantee shall be entitled, at all
times on and after the Grant Date, to exercise all rights of a shareholder
with
respect to the shares of Restricted Stock (whether or not the restrictions
thereon shall have lapsed), other than with respect to those shares of
Restricted Stock which have been forfeited pursuant to Section 3.2 hereof,
including the right to vote the shares of Restricted Stock and, subject to
Section 5 hereof, the right to receive dividends thereon. Prior to the
Applicable Lapse Date, the Grantee shall not be entitled to transfer, sell,
pledge, hypothecate or assign any shares of Restricted Stock (collectively,
the
“Transfer
Restrictions”).
3.
Vesting;
Lapse of Restrictions.
3.1
The
Transfer Restrictions with respect to all the shares of Restricted Stock granted
under this Agreement shall lapse on each of the following dates (each, the
“Applicable
Lapse Date”),
provided the Grantee continues to be serving as an Executive of the Corporation
until each such Applicable Lapse Date:
(a) on
the
first anniversary of the Grant Date, a total of 7,500 Shares shall vest and
the
Transfer Restrictions with respect to such Shares shall lapse;
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(b) on
the
second anniversary of the Grant Date, a total of 7,500 Shares shall vest and
the
Transfer Restrictions with respect to such Shares shall lapse; and
(c) on
the
third anniversary of the Grant Date, the remaining 20,000 Shares shall vest
and
the Transfer Restrictions with respect to such Shares shall lapse.
Notwithstanding
the Transfer Restrictions with respect to all the shares of Restricted Stock
shall lapse, if sooner, on the date of any one of the following “Permitted
Acceleration Events”: (i) the occurrence of a Change in Control (as defined in
the Company’s 2005 Stock Incentive Plan, as amended); or (ii) the Grantee’s
employment is terminated by the Corporation, other than for Cause (as defined
in
the Employment Agreement) or for Good Reason (as defined in the Employment
Agreement). In no event shall the Grantee be vested or otherwise entitled to
more than one hundred percent (100%) of the shares of Restricted Stock granted
pursuant to section 1.1 above.
3.2
Notwithstanding anything in this Agreement to the contrary, upon the resignation
of Grantee for any reason or termination of Grantee’s employment as an executive
of the Corporation for cause (other than due to a Permitted Acceleration Event),
all shares of Restricted Stock in respect of which the Transfer Restrictions
have not previously lapsed in accordance with Section 3.1 hereof shall be
forfeited and automatically transferred to and reacquired by the Corporation
at
no cost to the Corporation, and neither the Grantee nor any heirs, executors,
administrators or successors of such Grantee shall thereafter have any right
or
interest in such shares of Restricted Stock.
4.
Escrow
and Delivery of Shares.
4.1
Certificates (or an electronic "book entry" on the books of the Corporation's
stock transfer agent) representing the shares of Restricted Stock shall be
issued and held by the Corporation (or its stock transfer agent) in escrow
(together with any stock transfer powers which the Corporation may request
of
Grantee) and shall remain in the custody of the Corporation (or its stock
transfer agent) until (i) their delivery to the Grantee as set forth in Section
4.2 hereof, or (ii) their forfeiture and transfer to the Corporation as set
forth in Section 3.2 hereof. The appointment of an independent escrow agent
shall not be required.
4.2 (a)
Certificates
(or an electronic "book entry") representing those shares of Restricted Stock
in
respect of which the Transfer Restrictions have lapsed pursuant to Section
3.1
hereof shall be delivered to the Grantee as soon as practicable following the
Applicable Lapse Date.
(b) The
Grantee, or the executors or administrators of the Grantee's estate, as the
case
may be, may receive, hold, sell or otherwise dispose of those shares of
Restricted Stock delivered to him or her pursuant to this Section 4.2 free
and
clear of the Transfer Restrictions, but subject to compliance with all federal
and state securities laws.
4.3
(a)
Each
stock certificate issued pursuant to Section 4.1 shall bear a legend in
substantially the following form:
THIS
CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS
AND CONDITIONS SET FORTH IN A RESTRICTED STOCK AGREEMENT (THE "AGREEMENT")
BETWEEN THE CORPORATION AND THE REGISTERED OWNER OF THE SHARES REPRESENTED
HEREBY. RELEASE FROM SUCH TERMS AND CONDITIONS SHALL BE MADE ONLY IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT, COPIES OF WHICH ARE ON FILE IN THE OFFICE
OF THE SECRETARY OF THE CORPORATION.
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(b)
As
soon
as practicable following a Applicable Lapse Date, the Corporation shall issue
a
new certificate (or electronic "book entry") for shares of the Restricted Stock
which have become non-forfeitable in relation to such Applicable Lapse Date,
which new certificate (or electronic "book entry") shall not bear the legend
set
forth in paragraph (a) of this Section 4.3 and shall be delivered in accordance
with Section 4.2 hereof.
5.
Dividends.
All
dividends declared and paid by the Corporation on shares of Restricted Stock
shall be deferred until the lapsing of the Transfer Restrictions pursuant to
Section 3.1. The deferred dividends shall be held by the Corporation for the
account of the Grantee until the Applicable Lapse Date, at which time the
dividends, with no interest thereon, shall be paid to the Grantee or her/his
estate, as the case may be. Upon the forfeiture of the shares of Restricted
Stock pursuant to Section 3.2, any deferred dividends shall also be forfeited
to
the Corporation.
6.
No
Right to Continued Retention.
Nothing
in this Agreement shall be interpreted or construed to confer upon the Grantee
any right with respect to continuance as an Executive.
7.
Adjustments
Upon Change in Capitalization.
If, by
operation of Section 10 of the 2005 Stock Incentive Plan, a Grantee who received
a similar award of Restricted Stock pursuant to the 2005 Stock Incentive Plan
were entitled to new, additional or different shares of stock or securities
of
the Corporation or any successor corporation or entity or other property, the
Grantee shall also be entitled to such new, additional or different shares
or
other property which shall thereupon be subject to all of the conditions and
restrictions which were applicable to the shares of Restricted Stock immediately
prior to the event and/or transaction that gave rise to the operation of Section
10 of the 2005 Stock Incentive Plan.
8.
Modification
of Agreement.
Except
as set forth herein, this Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but only by a written
instrument executed by the parties hereto.
9.
Severability.
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
and effect in accordance with their terms.
10.
Governing
Law.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of New York without regard to its conflict
of laws principle, except to the extent that the application of New York law
would result in a violation of the Canadian Business Corporation
Act.
* * * * *
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11.
Successors
in Interest.
This
Agreement shall inure to the benefit of and be binding upon any successor to
the
Corporation. This Agreement shall inure to the benefit of the Grantee's heirs,
executors, administrators and successors. All obligations imposed upon the
Grantee and all rights granted to the Corporation under this Agreement shall
be
binding upon the Grantee's heirs, executors, administrators and successors.
By:
/s/
Xxxxxxxx Xxxxxx
Name:
Xxxxxxxx Xxxxxx
Title:
General Counsel
By:
/s/
Xxxxxxx Xxxxxxxx
Name:
Xxxxxxx Xxxxxxxx
Title:
Chief Accounting Officer
GRANTEE:
By:
/s/
Xxxxx Xxxx
Name:
Xxxxx
Xxxx
Number
of
Shares of Restricted
Stock
Hereby Granted: 35,000
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