Re: Separation Agreement, General Release and Age Discrimination in Employment Act Release
Execution
Copy
July
23,
2007
Xx.
Xxxxxx Xxxxx
c/o
MDC
Partners Inc.
000
Xxxxx
Xxxxxx
New
York,
N.Y. 10022
Re: Separation
Agreement, General Release and Age
Discrimination
in Employment Act Release
Dear
Xx.
Xxxxx:
1. Your
employment with MDC Partners Inc. (the “Company”)
pursuant to the Employment Agreement between the Company and you dated August
25, 2004, as amended on March 6, 2006 (the “Employment
Agreement”),
shall
terminate effective as of the close of business on July 23, 2007 (the
“Termination
Date”).
You
hereby confirm the cessation of your employment as of the Termination Date
from
any position you held as an employee, officer, or Manager of the Company or
any
Company operating within the MDC Group of companies (the “Group”).
This
Agreement will become effective on the Effective Date (as defined in paragraph
12 hereof) only if not
revoked
by you as permitted under paragraph 12 hereof.
2. The
Company agrees to pay you the following severance compensation and benefits
in
accordance with and in full satisfaction of its obligations under paragraph
7(b)
of the Employment Agreement:
(a)
a
cash payment in the aggregate amount of one million one hundred fifty thousand
dollars ($1,150,000), subject to applicable withholding taxes, which represents
your Base Salary and Perquisite Allowance that would otherwise have been payable
to you during the 24 Month Severance Period (as such term is defined in
paragraph 7(b)(i) of the Employment Agreement) if your employment with the
Company had continued during such period, which cash payment
will be paid to you as follows: (i) two hundred eighty seven thousand five
hundred ($287,500), which you and the Company believe in good faith qualifies
as
“involuntary separation pay” within the meaning of Section 409A of the Internal
Revenue Code of 1986 (as amended), will be paid to you in a lump sum on the
Effective Date and (ii) eight hundred sixty two thousand five hundred ($862,500)
will be paid to you in approximately equal installments in accordance with
the
Company’s customary payroll practices as in effect on the Termination Date,
commencing on the six-month anniversary of the Termination Date (the
“Severance
Commencement Date”)
and
continuing through the eighteenth month following the Severance Commencement
Date, unless earlier terminated in accordance with the provisions of paragraph
7(b) of the Employment Agreement;
(b) a
pro-rata portion of your annual discretionary bonus with respect to 2007, which
will be paid to you in 2008 on the date such bonus would otherwise have been
paid to you had your employment with the Company continued (such pro-rata amount
to be equal to the product of (A) the amount of the annual discretionary bonus
for 2007, times (B) a fraction, (x) the numerator of which is 205, which is
the
number of calendar days commencing January 1 of 2007 and ending on the
Termination Date, and (y) the denominator of which is 365);
(c) any
unpaid reimbursable expenses outstanding as of the Date of Termination, plus
those expenses referred to in paragraph 3 below, to be paid within thirty (30)
days of your request for reimbursement and/or payment;
(d) all
benefits, if any, that had accrued to you through the Date of Termination under
the plans and programs described in paragraphs 5(b) and (c) of your Employment
Agreement, or any other applicable benefit plans and programs in which you
participated as an employee of the Company, in the manner and in accordance
with
the terms of such plans and programs; it being understood that any and all
rights that you may have to severance payments by the Company shall be
determined and solely based on the terms and conditions of the Employment
Agreement and not based on the Company's severance policy then in effect, if
any;
(e) continued
participation on the same basis in the plans and programs set forth in paragraph
5(b) and to the extent permitted under applicable law, paragraph 5(c) of your
Employment Agreement (such benefits collectively called the “Continued
Plans”)
in
which you were participating on the Termination Date (as such Continued Plans
are from time to time in effect at the Company), until the earlier of (x) the
second anniversary of the Termination Date or (y) the date, or dates, you are
eligible to receive coverage and benefits under the same type of plan of a
subsequent employer (either such date, the “Benefit
Termination Date; provided,
however, if you are precluded from continuing your participation in any
Continued Plan, then the Company will pay you quarterly in arrears the economic
equivalent of the benefits provided under the Continued Plan in which you are
unable to participate, for the period specified above, plus an amount equal
to
the tax, if any, payable by you thereon, it being understood that the economic
equivalent of a benefit foregone shall be deemed the lowest cost in the State
of
New York that would be incurred by you in obtaining such benefit yourself on
an
individual basis;
(f) you
will
be entitled to such vesting and acceleration of shares of MDC Restricted Stock,
MDC Stock Options and MDC SARs as is specified in accordance with the terms
and
conditions of each respective MDC Partners Inc. Restricted Stock Unit Agreement
dated as of August 25, 2004 (the “RSU
Agreement”),
Memorandum of Agreement dated as of August 25, 2004 (also referred to as the
“MDC
Stock Option Agreement”),
and
MDC Partners Inc. Stock Appreciation Rights Agreement dated as of August 25,
2004 (the “SARs Agreement”). Schedule 1 to this Agreement sets forth the number
of shares and exercise price (in U.S. dollars) of each outstanding Option and
SAR held by you as of the Termination Date. For purposes of clarification,
you
and the Company agree that with respect to the Financial Performance-Based
Restricted Shares granted to you in 2006, the number of full months of service
completed by you prior to the Termination Date for the relevant service period
is nineteen (19) and with respect to the Financial Performance-Based Restricted
Shares granted to you in 2007, the number of full months of service competed
by
you prior to the Termination Date for the relevant service period is seven
(7).
On the Effective Date, you will receive a cash payment equal to the value of
17,000 Shares (as such term is defined in the RSU Agreement), with such value
determined in accordance with the valuation methodology set forth in Section
5
of the RSU Agreement, except that “Nasdaq” will be substituted for all
references to the “Toronto Stock Exchange” and the date this Agreement is signed
by both parties (July 23, 2007), will
be
substituted for all references to the “Release Date”, such payment subject to
applicable withholding taxes, to be issued to you under the RSU Agreement as
the
offer and sale to you of those Shares has not been registered with the U.S.
Securities and Exchange Commission by the Company; and
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(g) To
the
extent permitted by the terms of the policy, the Company will cooperate with
you
to permit you to transfer the life insurance policy referred to in Section
14 of
the Employment Agreement, provided that there is no cost incurred by the Company
in connection with such transfer.
3. Within
sixty (60) days of the Effective Date you shall submit to the Company your
reimbursement request in accordance with Company policy for any unpaid business
or entertainment expenses incurred by you through the Termination Date in
respect of which you are entitled to be reimbursed under Company policy referred
to in paragraph 2(c) above. The Company will also reimburse you for your legal
fees and expenses incurred in connection with the termination of your employment
and the negotiation of this Agreement, up to a maximum of $40,000, subject
to
applicable withholding taxes.
4. From
and
after the Termination Date, except for such rights under this Agreement, you
shall no longer be entitled to receive any further payments, compensation or
other monies (including severance compensation) from the Company or any of
its
affiliates or to receive any of the benefits or participate in any benefit
plan
or program of the Company or any of its affiliates, including without
limitation, any salary payment, bonus payment, severance payment, salary
continuation payment, accrued vacation or unused personal days and expense
reimbursements or other benefits referred to in the Employment Agreement.
5. You
hereby acknowledge and affirm your obligations under the provisions of paragraph
8 of the Employment Agreement.
6. Notwithstanding
your termination of employment as provided in this Agreement, the parties hereto
agree that the provisions of paragraphs 8 through 26 of the Employment Agreement
shall survive such termination.
7. (a) You,
for
yourself, your heirs, executors,
administrators,
agents,
representatives, successors and assigns, hereby irrevocably and unconditionally
release the Company and its affiliates, and each of their respective employees,
shareholders, agents, officers, directors, attorneys, representatives,
successors and assigns of the Company and its affiliates (collectively, the
"Releasees"),
from
any and all charges,
complaints, claims, liabilities, obligations, promises, agreements, causes
of
action, rights, costs, losses, debts and expenses of any nature whatsoever,
known or unknown, (collectively, “Claims”),
which
you, your heirs, executors, administrators,
representatives,
successors and assigns ever had, now have or hereafter may have (either directly
or indirectly, derivatively or in any other representative capacity) by reason
of any matter, fact or cause whatsoever from the beginning of time to the date
of this Agreement, including without limitation, any and all claims based
upon or arising out of your Employment Agreement, your employment with the
Company or your termination of employment with the Company.
This
release of claims includes all claims arising under Title VII of the Civil
Rights Act of 1964,
3
the
Civil Rights Act of 1991, the Age Discrimination in Employment Act
(“ADEA”),
the Americans with Disabilities Act, the Family and Medical Leave Act, the
New
York Executive Law, the New York City Human Rights Law, and all other labor
and
anti-discrimination laws and any other purported restriction on an employer’s
right to terminate the employment of an employee. This release also covers
any
claims alleging personal damages, wrongful discharge, or any other claim,
including those based on contract or tort, whether founded in common law or
otherwise.
This
release shall not apply or release any claims with respect to any of your rights
arising or preserved under the terms of this Agreement or your rights to
indemnification as an officer and director of the Company.
(b) You
represent that you have not filed or permitted to be filed against the Company
(or the other Releasees), individually or collectively, any lawsuits and you
covenant and agree that you will not do so at any time hereafter with respect
to
the subject matter of this Agreement and claims released pursuant to this
Agreement (including, without limitation, any claims relating to the termination
of your employment), except as may be necessary to enforce this Agreement,
to
obtain benefits described in or granted under this Agreement, or to seek a
determination of the validity of the waiver of your rights under the
ADEA.
(c) You
agree
to cooperate with the Company and its counsel in connection with any
investigations, administrative proceedings or litigation relating to any matter
in which you were involved or of which you had knowledge as a result of your
employment with the Company in accordance with paragraph 24(c) of the Employment
Agreement. The Company reaffirms its obligations under said paragraph 24(c).
(d) You
agree
that you will not encourage or voluntarily cooperate with any other current
or
former employee of the Company (or their affiliates) or any other potential
plaintiff, to commence any legal action or make any claim against the Company
(or any affiliate) in respect of such person’s employment or termination of
employment with or by the Company (or any affiliate thereof) or
otherwise.
(e) You
agree
that on and after the Termination Date you will not apply or seek employment
with the Company or any of its affiliates at any location or facility, and
you
hereby waive and release any right to be considered for such
employment.
(f) This
Agreement does not constitute an admission by the Company or you of any
violation of any federal, state, or local law or any contractual or other
obligations, or of any wrongdoing whatsoever.
(g) To
the
extent permitted by the terms of the current directors’ and officers’ liability
policy (as it may be renewed from time to time), the Company will continue
to
cover you under its current directors’ and officers’ (D&O) liability
insurance policy as long as there is no additional cost incurred by the Company
in connection with such continued coverage; provided, that, in no event will
such continued coverage extend beyond six (6) years following the Termination
Date.
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8. For
good
and valuable consideration, the Company, on its behalf and on behalf of each
of
its affiliates and their respective successors and assigns, hereby irrevocably
and unconditionally release you from any and all Claims which any of them ever
had, now have or hereafter may have (either directly or indirectly, derivatively
or in any other representative capacity) by reason of any matter, fact or cause
from the beginning of time to the date of this Agreement arising out of your
performance of duties as an employee or officer of the Company or another member
of the Group or your termination of employment with the Company, except if
a
Claim arises out of your fraudulent conduct, your misappropriation or
embezzlement of funds, or any other unlawful conduct; provided, however, the
foregoing release shall not apply to or release any rights of the Company under
the terms of this Agreement.
9. Intentionally
Omitted.
10. In
the
event of a breach of the terms of this Agreement by any party as determined
by
the arbitrator and/or court of competent jurisdiction described in paragraph
19
of the Employment Agreement, the non-breaching party shall be entitled to all
damages allowed under applicable law as awarded by such arbitrator and/or court.
11. (a) As
used
in this Agreement (i) "affiliate"
of any
Person (as defined below) shall mean any Person that directly, or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with such Person, and (ii) a "Person"
shall
mean or include an individual, a company, a limited liability company, a
corporation or any other form of business entity.
(b) All
prior
negotiations and discussions between the parties with respect to the subject
matter hereof are merged into this Agreement. No representations by or on behalf
of any party were made or relied upon except as set forth herein. This Agreement
may not be changed, amended or modified, except by a writing signed by the
party
affected by such change, amendment or modification.
(c) The
Company may withhold from any amounts payable under this Agreement such federal,
state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(d) In
the
event any provision of this Agreement is found to be void and unenforceable
by a
court or other tribunal of competent jurisdiction, the remaining provisions
of
this Agreement shall nevertheless be binding upon the parties hereto with the
same effect as though the void or unenforceable part had been severed and
deleted or reformed to be enforceable.
(e) This
Agreement will be governed by and construed in accordance with the laws of
the
State of New York without application of conflict of law
provisions.
(f) The
failure of any party at any time to require performance by another party of
any
provision hereunder shall in no way affect the right of that party thereafter
to
enforce the same, nor shall it affect any other party's right to enforce the
same, or to enforce any of the other provisions in this Agreement; nor shall
the
waiver by any party of the breach of any provision hereof be taken or held
to be
a waiver of any subsequent breach of such provision or as a waiver of the
provision itself. This Agreement shall be binding upon, and inure to the benefit
of, you and your heirs, executors, administrators, successors and assigns,
and
MDC Partners, the Company and their respective successors and assigns.
5
12. You
acknowledge that you have read this Agreement in its entirety, fully understand
its meaning and are executing this Agreement voluntarily and of your own free
will with full knowledge of its significance. You acknowledge and warrant that
you have had the opportunity to consider for 21 days the terms and provisions
of
this Agreement and that you have been advised by the Company to consult with
an
attorney prior to executing this Agreement. You shall have the right to revoke
this Agreement for a period of seven (7) days following your execution of this
Agreement by giving written notice of such revocation to the Company in
accordance with the notice provision set forth in the Employment Agreement.
This
Agreement shall not become effective until the eighth day following your
execution of it (the“Effective
Date”).
Accordingly,
if you revoke this Agreement as permitted herein, this Agreement shall become
null and void ab initio.
IN
WITNESS WHEREOF,
the
parties hereto have set their hands as of the date first above set
forth.
| MDC Partners Inc. | ||
| |
|
|
| By: | ||
|
Name:
|
||
|
Title:
|
||
|
Xxxxxx
Xxxxx
|
||
Dated:
_________________________
6
July
23,
2007
Board
of
Directors
000
Xxxxx
Xxxxxx
New
York,
NY 10022
Re: Resignation
The
undersigned hereby resigns as a director of the Board of Directors of MDC
Partners Inc., and all of its affiliates, effective as of the date
hereof.
| |
|
Very
truly yours, |
|
Xxxxxx
Xxxxx
|
||
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