UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

 

Check the appropriate box:

MDC PARTNERS INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

MDC PARTNERS INC.
 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN THAT an annual meeting (the “Meeting”) of the shareholders of MDC Partners Inc. (“MDC Partners”, “MDC” or the “Company”) will be held at MDC Partners’ Innovation Centre, 745 Fifth Avenue (19^th Floor), New York, N.Y. on Thursday,Wednesday, June 5, 20147, 2017 at 10:00 a.m. (New York City time) for the following purposes:

The accompanying Proxy Statement and Management Information Circular provide additional information to the matters to be dealt with at the Meeting and is deemed to form part of this notice. Attendance and voting are limited to shareholders of record at the close of business on April 15, 2014.17, 2017. The proxy cut off may be waived or extended by the chairman of the Meeting without notice.

Shareholders who are unable to attend the Meeting in person, are asked to complete, date and sign the enclosed form of proxy and to return it promptly in the envelope provided.

Proxies to be used at the Meeting must be received by CST Trust Company, not later than 10:00 a.m. (Eastern Daylight Time) on TuesdayMonday, June 3, 20145, 2017 (or, if the Meeting is adjourned, not later than 48 hours, excluding Saturdays, Sundays and holidays, preceding the time of such adjourned Meeting). Proxies may be submitted by one of the following alternative methods:

By Internet:  www.cstvotemyproxy.com and enter the 13 digit control number printed on the form of proxy and follow the instructions on screen;
By Phone:  1-888-489-5760 (toll-free in North America) and enter the 13 digit control number printed on the form of proxy:proxy;
By Email:  proxy@canstockta.comproxy@canstockta.com;;
By Fax:  416-368-2502 or1-866-781-3111 (toll-free in North America); or
By Mail:  CST Trust Company, Attn. Proxy Department, P.O. Box 721, Agincourt, Ontario M1S 0A1.

If you have any questions or require any assistance with your vote, please contact our strategic shareholder advisor and proxy solicitation agent, Kingsdale Shareholder ServicesAdvisors 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.comcontactus@kingsdaleadvisors.com.

By Order of the Board of Directors

MITCHELL S. GENDEL
General Counsel and Corporate Secretary

New York, N.Y.
April 25, 201427, 2017

MDC PARTNERS INC.
 
PROXY STATEMENT AND
MANAGEMENT INFORMATION CIRCULAR
 
Annual Meeting of Shareholders
to be held on June 5, 20147, 2017
 
GENERAL PROXY INFORMATION
 
SOLICITATION OF PROXIES

This Proxy Statement and Management Information Circular (the(this “Circular”) is furnished in connection with the solicitation of proxies by the management of MDC Partners Inc. (“MDC Partners,” “MDC” or the “Company”) for use at the annual meeting of shareholders of MDC Partners to be held at the time and place and for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders, and any adjournments or postponements thereof. Such meeting is hereinafter referred to as the “Meeting”. The information contained in this Circular is given as of the date hereof, except as otherwise noted herein. The address of the principal executive office of MDC Partners is 745 Fifth Avenue, 19^th Floor, New York, NY 10151, and its registered address is 45 Hazelton Avenue,33 Draper Street, Toronto, Ontario M5R 2E3.M5V 2M3. This Circular, the accompanying notice and the enclosed form of proxy are expected to first be mailed to shareholders on or about Monday,Friday, April 28, 2014.2017.

Management expects that proxies will be solicited primarily by mail. Employees of MDC Partners or persons retained by MDC Partners for that purpose may also solicit proxies personally or by telephone. Employees who help us in the solicitation will not be specially compensated for those services but they may be reimbursed for their out-of-pocket expenses incurred in connection with the solicitation. If a holder holds his, her or its shares in the name of a bank, broker or other nominee, see “Beneficial Owners” below.

The Company has entered into an agreement with Kingsdale Shareholder Services (“Kingsdale”)Advisors for strategic shareholder advisory and proxy solicitation and advisory services in connection with this solicitation, for which Kingsdale will receive a fee up to $40,000$48,400 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.

MANNER IN WHICH PROXIES WILL BE VOTED

The shares represented by the accompanying form of proxy, if the same is properly executed in favor of Messrs. NadalKauffman and Gendel, the management nominees, and received at the offices of CST Trust Company, Attn: Proxy Department, P.O. Box 721, Agincourt, Ontario M1S 0A1 (the “Transfer Agent”) not later than 10:00 a.m. (Eastern Daylight Time) on Tuesday,Monday, June 3, 20145, 2017 (or, if the Meeting is adjourned, not later than 48 hours, excluding Saturdays, Sundays and holidays, preceding the time of such adjourned Meeting), will be voted or withheld from voting at the Meeting and, subject to Section 152 of theCanada Business Corporations Act, where a choice is specified in respect of any matter to be acted upon, will be voted in accordance with the specifications made. The proxy cut off time may be waived or extended by the Chairman of the Meeting without notice.In the absence of such a specification, to the extent permitted, such shares will be voted (i) FOR the election of each of the sixseven (7) nominees for the Board of Directors of MDC Partners;Partners named in this proxy statement; (ii) FOR the appointment of BDO USA, LLP as auditors of MDC Partners and to authorize the directorsAudit Committee to fix their remuneration; (iii) FOR every ONE YEAR, on an advisory basis, with respect to how frequently a non-binding shareholder vote to approve the compensation paid to the Company’s named executive officers should occur; and (iii)(iv) FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers.

The accompanying form of proxy confers discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the accompanying Notice of Annual Meeting of Shareholders, and with respect to other matters which may properly come before the Meeting. At the date hereof, management knows of no such amendments, variations or other matters.

At any meeting of shareholders (including the 20142017 Annual Meeting of Shareholders), a quorum for the transaction of business will be not less than 33 1/3% of the shares entitled to vote at the meeting, represented either in person or by proxy. Only a shareholder of record at the close of business on April 15, 201417, 2017 (the “record date”) will be entitled to vote, or grant proxies to vote, his or her Class A Subordinate Voting Shares

If the non-registered shareholder does not provide voting instructions to its intermediary, the shares will not be voted on any proposal on which the intermediary does not have discretionary authority to vote. Under current rules, certain intermediaries may not have discretionary authority to vote shares at the Meeting on the proposal relating to the election of directors or the advisory vote on executive compensation. We encourage all

Engagement of Compensation Consultant.  Since 2010,In 2015 and 2016, the Compensation Committee has retained Mercer Human Resource Consulting (“Mercer”), a compensation consulting firm, to provide objective analysis, advice and information to the Compensation Committee, including competitive market data and recommendations related to CEO and other named executive officer compensation. Mercer reports to the Compensation Committee Chairman and has direct access to Compensation Committee members. In 2013,addition to the advice described above, the Compensation Committee engaged Mercer to assist in designing the new 2014 LTIP Plan to enhance pay-for-performance alignment. In accordance with NasdaqNASDAQ listing standards, the Compensation Committee assessed the independence of Mercer and determined that it was independent and its work does not raise any conflict of interest.independent.

Mercer has attended Compensation Committee meetings at the Compensation Committee’s request and has also met with the Compensation Committee in person or by telephone in executive session without management present. In 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.

The decisions madeaggregate amount of fees billed by Mercer for services related to designing the Compensation Committee may reflect factors2016 LTIP awards and considerations other thandetermining compensation for the information and recommendations provided by any consultant.Company’s named executive officers was equal to $16,421 for 2016.

Role of Named Executive Officers in Compensation Decisions: Input from Senior Management.  The Compensation Committee considers input from senior management in making determinations regarding the overall executive compensation program and the individual compensation of the named executive officers. As part of the Company’s annual planning process, the CEO CFO and Vice ChairmanCFO develop targets for the Company’s incentive compensation programs and present them to the Compensation Committee. These targets are reviewed by the Compensation Committee to ensure alignment with the Company’s strategic and annual operating plans, taking into account the targeted year-over-year improvement as well as identified opportunities and risks. Based on performance appraisals, including an assessment of the achievement of pre-established financial and individual “key performance indicators,” the CEO and Vice Chairman recommendrecommends to the Compensation Committee cash and equitylong-term incentive award levels for the Company’s other executive officers. Each year, the CEO and Vice Chairman presentpresents to the Compensation Committee theirhis evaluation of each executive officer’s contribution and performance over the past year, and strengths and

ELEMENTS OF OUR COMPENSATION PROGRAM FOR OUR NAMED EXECUTIVE OFFICERS

The following table details the elements of our compensation program which are designed to achieve our compensation objectives for the named executive officers:

In setting policies and administering the compensation of named executive officers, the Compensation Committee reviews and takes into account all elements of total compensation, benefits and perquisites. The Compensation Committee reviews reports and analyses of executive compensation in consultation with its outside advisers,consultant, including current practices and trends among peer companies and the advertising and marketing services industry.

2016 Base Salaries.  The Compensation Committee reviews base salaries annually or at other times when appropriate. In determining the amount of base salary that each NEO receives, the Compensation Committee reviews the executive’s current compensation, time in position, any change in the executive’s position or responsibilities and the relation of the executive’s position and compensation to those of other executives within the Company and in similar positions at peer companies.

Pay-for-Performance Analysis; Failure to Achieve 2016 Financial Targets.  The Company’s compensation program is designed to reward performance relative to corporate financial performance criteria and individual incentive criteria. The Company’s overall financial performance in 2016 failed to achieve the targets established by the Compensation Committee. Therefore, the Compensation Committee determined to award $0 to the CEO and other NEOs in respect of their financial-performance based cash incentives. The Company’s senior executives are eligible to receive an annual bonus each year in a target amount equal to their base salary if the Company achieves the financial performance targets established by the Compensation Committee and the applicable NEO is determined to have satisfied his or her individual performance 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.

2016 LTIP Equity Incentive Awards.  In 2016, the Compensation Committee determined to award the CEO and each NEO restricted stock grants under the 2011 Stock Incentive Plan, conditioned upon achievement of three (3) year financial performance targets and continued employment pursuant to the terms of an award agreement made under the Plan (the “2016 LTIP Equity Incentive Awards”). Pursuant to the terms of the 2016 LTIP Equity Incentive Awards, the shares of restricted stock granted to our NEOs will vest based upon the Company’s level of achievement of “Actual Cumulative EBITDA” (calculated as described below) over the performance period commencing on January 1, 2016 and ending on December 31, 2018 (the “Performance Period”).

For purposes of the foregoing, “EBITDA” is defined as the Company’s consolidated earnings before interest, taxes, depreciation and amortization, plus any non-cash charges for stock-based compensation which were deducted in the calculation of EBITDA. “Actual Cumulative EBITDA” is defined as the sum of the Company’s actual annual EBITDA for the Company’s 2016, 2017 and 2018 fiscal years, as determined by the Compensation Committee. “Cumulative EBITDA Target” is defined as the sum of the EBITDA targets as set forth in the Company’s annual budget for each of the Company’s 2016, 2017 and 2018 fiscal years, in each case as determined by the Compensation Committee at the beginning of each such fiscal year.

The Compensation Committee chose EBITDA as the financial performance measure under the 2016 LTIP Equity Incentive Awards because it is a key indicator of Company profitability.

On February 17, 2016, the Company issued LTIP Equity Incentive Awards to each of the NEOs in the following target amounts: Scott Kauffman — 142,348 shares; David Doft — 40,000 shares; Mitchell Gendel — 40,000 shares; Robert Kantor — 30,000 shares; and David Ross — 30,000 shares. Each of the foregoing 2016 LTIP Equity Incentive Awards will vest on March 1, 2019, based on the Company’s Actual Cumulative EBITDA as described above. The Compensation Committee sets the EBITDA target for each of 2016, 2017 and 2018 at the beginning of each applicable year at levels the Compensation Committee believes are challenging but reasonably achievable. Under FASB ASC Topic 718, these restricted stock awards do not yet have an established grant date or grant date fair value because the financial performance target, the Cumulative EBITDA Target, is not yet established. As there is not yet a grant date under FASB ASC Topic 718, in accordance with the SEC’s disclosure rules, amounts relating to these awards are not included in the Summary Compensation Table or the Grants of Plan-Based Awards in Fiscal Year 2016 table.

Partial Payout Under 2014 LTIP Awards. In April 2014, the Committee granted to each of the NEOs (other than Mr. Kauffman) awards under the Company’s 2014 Long-Term Cash Incentive Plan (the“2014 LTIP Plan”), with a target value equal to $250,000. These grants vested at the end of the applicable three (3) year measuring period on December 31, 2016. The financial performance criteria were based on the following two specific metrics that are each given 50% weight: (i) three (3) year cumulative EBITDA growth as measured against the approved annual EBITDA targets for such period; and (ii) relative total shareholder return (“TSR”) based on share price appreciation and dividends as compared to a pre-defined comparator group over the same three (3) year period. The Company failed to achieve the 3-year TSR target for these awards, but achieved 3-year cumulative EBITDA of $556.9 million, or approximately 95% of the 3-year cumulative EBITDA target of $581.5 million. Accordingly, the Company made a partial payment to each of the NEOs (other than Mr. Kauffman) in an amount equal to $119,707 under the 2014 LTIP Plan.

Stock Ownership Guidelines.  The Company’s stock ownership guidelines require that each named executive officer own a significant equity stake in the Company during his or hertheir employment. The Compensation Committee believes that stock ownership by senior managers strengthens their commitment to the future of the Company and further aligns their interests with those of our shareholders. Effective March 2006, theThe Board has adopted the following stock ownership guidelines for all officers commensurate with their level of seniorityguidelines: Chief Executive Officer and base salary: Chief ExecutiveFinancial Officer to own stock with a value of at least five (5) times his base salary; Chief Financial Officer, at least four (4) times his base salary; and each other named executive officer, at least three (3) times histheir base salary. An executive must reach his target ownership level within four years after becoming subject to the stock ownership guidelines. Certain equity awards to named executive officers will not be transferable unless and until the grantee satisfies his or her applicable stock ownership requirement. In April 2009, the Compensation Committee amended the stock ownership guidelines to provide that no executive officer may sell any shares of the Company’s stock that he or she owns or

writing to repay the Company a pro-ratapro rata portion of his cash incentive payment if he resigned his employment or his employment was terminated for “cause” prior to December 31, 2016.2018. These letter agreements also encourage long term retention of key executives by the Company.

Business Protection Terms.  The Company’s named executive officers are subject to significant contractual restrictions intended to prevent actions that potentially could harm our business, particularly after termination of employment. These business protections include obligations not to solicit clients or employees, not to disparage us, not to reveal confidential information, and to cooperate with us in litigation. Business protection provisions are included in employment agreements and in connection with compliance with the Company’s Code of Conduct.

Equity Award Grant Policies.  The Board of Directors and the Compensation Committee have adopted policies and procedures governing the granting of any equity incentive awards, including the following:

Comparator Companies.  In determining compensation opportunities and payments to executives, the Compensation Committee may, from time to time, review competitive opportunities, payments, practices and performance among a comparator group of companies. Although we do not engage in formal benchmarking of NEO compensation, we intend that, if our named executive officers achieve individual and financial corporate objectives in a given year, they will earn total direct compensation that compares favorably with the total direct compensation earned by executives performing similar functions at comparator companies. In setting 2013 compensation for the named executive officers, the Compensation Committee did not perform any formal benchmarking using a comparator group of peer companies.

REPORT OF THE HUMAN RESOURCES &
COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Human Resources & Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that appears above. Based on this review and discussion with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s 20132016 Annual Report on Form 10-K for filing with the SEC and OSC.SEC.

The Human Resources & Compensation Committee
Clare R. Copeland (Chairman)
Thomas N. Davidson
Robert J. Kamerschen
Scott L. Kauffman
Michael J.L. KirbyLarry Kramer
Irwin D. Simon

Executive Compensation

This section contains information, both narrative and tabular, regarding the compensation for fiscal 2013, 20122016, 2015, and 20112014 for (i)(1) our principal executive officer; (ii)officer in 2016; (2) our principal financial officer;officer in 2016; and (iii)(3) our three other most highly compensated executive officers who were serving as executive officers as of the end of Fiscal Year 20132016 (collectively, the “NEOs” or the “named executive officers”).

The Summary Compensation Table contains Messrs. Kauffman and Kantor were not NEOs in 2014 and Mr. Ross was not an overview ofNEO in 2014 or 2015; therefore, in accordance with the amounts paid to or earned by our named executive officers duringSEC’s disclosure rules, information regarding compensation for the last three fiscal years. The tables followingyears that those individuals were not NEOs is not included in the Summary Compensation Table — the Grants of Plan-Based Awards Table, Outstanding Equity Awards at Fiscal Year-End table and Option Exercises and Stock Vested Table — contain details of our named executive officers’ recent equity grants, past awards, general holdings, and exercises. Finally, we have included a narrative description of potential severance payments to our named executive officers.below.

SUMMARY COMPENSATION TABLE

Name and Principal Position		Year				Salary ($)				Bonus ($)(1)				Stock Awards ($)								Option Awards ($)				Non-Equity Incentive Plan Compensation ($)				All Other Compensation ($)(4)				Total ($)
														Stock Awards ($)(2)				EVARs ($)(3)
Miles S. Nadal, Chairman Chief Executive Officer and President(5)			2013				1,750,000				14,242,342				4,186,920				0				0				0				500,000				20,679,263
			2012				1,500,000				1,260,735				5,958,343				0				0				0				558,343				9,277,422
			2011				1,500,000				213,068				13,092,218				8,433,000				0				0				559,138				23,797,424
David B. Doft, Chief Financial Officer			2013				412,500				323,947				226,721				0				0				0				53,084				1,016,252
			2012				375,000				120,074				168,489				0				0				0				50,581				714,144
			2011				368,750				148,565				680,907				421,650				0				0				49,372				1,669,243
Stephen Pustil, Vice Chairman(6)			2013				388,312				229,991				227,521				0				0				0				32,696				878,520
			2012				400,240				142,071				266,520				0				0				0				34,757				843,588
Mitchell Gendel, General Counsel and Corporate Secretary			2013				412,500				309,775				225,083				0				0				0				48,084				995,442
			2012				375,000				140,248				249,399				0				0				0				45,581				810,228
			2011				368,750				86,187				638,612				421,650				0				0				44,372				1,559,571
Michael Sabatino Chief Accounting Officer			2013				412,500				420,622				226,721				0				0				0				46,272				1,106,816
			2012				375,000				127,053				277,247				0				0				0				46,822				826,122
			2011				368,750				81,502				691,345				421,650				0				0				45,540				1,608,787

Name and Principal Position						Year				Salary ($)				Bonus ($)(1)				Stock Awards ($)(2)				Option Awards ($)				Non-Equity Incentive Plan Compensation ($)(3)				All Other Compensation ($)(4)				Total ($)
Scott L. Kauffman, Chairman and Chief Executive Officer							2016 2015				1,200,000   500,641				0 800,000				0 1,926,000				0 0				0       0				8,400 34,135				1,208,400 3,260,776
David Doft, Chief Financial Officer							2016 2015 2014				650,000   500,000   441,667				0 575,000 566,375				0         0   142,437				0 0 0				119,707       0       0				52,154 47,687 46,686				821,861 1,122,687 1,197,165
Mitchell Gendel, General Counsel							2016 2015 2014				550,000   500,000   441,667				0 575,000 566,375				0         0   139,915				0 0 0				119,707       0       0				49,576 48,007 45,368				719,283 1,123,007 1,193,325
Robert Kantor, Global Chief Marketing Officer							2016 2015				500,000   500,000				0 600,000				0         0				0 0				119,707       0				40,154 38,367				659,861 1,138,367
David Ross, EVP, Strategy and Corporate Development							2016				425,000				0				0				0				119,707				22,154				566,861

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

We have entered into employment agreements with all of our named executive officers, as described in more detail below.

Miles S. NadalScott L. Kauffman

On May 6, 2013,MDC Partners has an employment agreement with Mr. Kauffman, effective July 20, 2015, pursuant to which Mr. Kauffman serves as our Chief Executive Officer. Mr. Kauffman’s term of employment with the Company entered intois for an amended Management Services Agreement (as amended, the “Services Agreement”) with Miles Nadalindefinite period unless and with Nadal Management Limited to set forth the terms and conditions on which Miles Nadal will continue to provide servicesuntil either Mr. Kauffman gives to the Company as its Chief Executive Officer. The Services Agreement is subject to automatic one-year extensions unless either party gives to the other a 60-daythirty (30) days advance written notice of its intention notresignation or the Company terminates Mr. Kauffman’s employment, with or without “Cause” (as defined in his employment agreement).

Mr. Kauffman received an annualized base salary of $1,100,000 during his term of employment in 2015 (increased to renew. Effective$1,200,000 effective as of January 1, 2013, the annual retainer amount (base salary) under the Services Agreement was increased2016), and he is eligible to $1,750,000. The annual retainer amount was increased to $1,850,000, effective January 1, 2014, given that MDC achieved the contractual EBITDA target growth amount of more than 5% in 2013 compared to 2012. The Services Agreement also provides forreceive an annual incentivediscretionary bonus within a targeted payouttarget amount equal to 100% of 250%his base salary, as determined by the Compensation Committee, based upon Mr. Kauffman’s individual performance, the overall financial performance of the base compensation. For 2013,Company and such other factors as the CompanyBoard shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures. As part of his new employment agreement, Mr. NadalKauffman received a cash incentive paymentgrant of 100,000 shares of MDC restricted stock on August 26, 2015. In 2015, Mr. Kauffman received a monthly perquisite allowance in an amount equal to $2,187,500 in November 2013, and a subsequent cash incentive payment of $2,187,500 on February 21, 2014. Each of these incentive cash payments are subject$6,250; however, commencing January 1, 2016, Mr. Kauffman no longer receives any perquisite allowance. Mr. Kauffman is eligible to repayment if Mr. Nadal resigns or is terminated for cause prior to December 31, 2016. The Company also pays an annual cash payment to Mr. Nadal of $500,000 in respect of retirement benefits, employee health benefits, and perquisites and may,participate in the discretionCompany’s welfare benefit plans and programs including disability and group life (including accidental death and dismemberment insurance). He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Compensation Committee, grant long term equity incentives (or cash) with a targeted grant date value of up to 300% of his then current retainer (base salary). In February 2013 and again in February 2014, the Compensation Committee determined, in light of certain factors (including the Company’s EBITDA achievement) that each of the 2012 CEO LTIP award and the 2013 CEO LTIP Award should be valued at an amount equal to 300% of his then current base retainer amount.

PursuantCompany made available to the amended Services Agreement, the Company further agreed to provide to Mr. Nadal a special bonus of Cdn$10 million upon the first to occur of (i) the average market price of the Company’s Class A Shares is C$30 ($30) per share or more for more than 20 consecutive trading days (measured as of the close of trading on each applicable date) or (ii) a change of controlsenior executives of the Company. This exceptional stock price target, representing an “all time high” price at the time, was achieved on October 24, 2013 and the Company paid Mr. Nadal the amount of this special bonus (U.S. $9.6 million). Following this one-time payment, this special bonus provision of the Services Agreement is terminated and Mr. Nadal will not be entitled to any additional special bonus tied solely to the Company’s Class A share price.

The Services Agreementemployment agreement also provides for severance payments if Mr. Nadal’sKauffman’s employment is terminated under certainspecified circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments Uponupon Termination or Change in Control.” Each of the Company’s agreements with its executives provide for double-trigger requirements in connection with cash payments.

David B. Doft

MDC Partners has an employment agreement with Mr. Doft, effective August 10, 2007 (as amended on August 5, 2010), pursuant to which Mr. Doft serves as our Chief Financial Officer. Mr. Doft’s term of employment is subject to automatic renewal for one-year periods, unless either party gives to the other a 45-day advance written notice of his or its intention not to renew. Mr. Doft currently is entitled to receivereceives an annualized base salary of $412,500 (effective as of January 1, 2013),$650,000 and he is eligible to receive an annual discretionary bonus in ana target amount upequal to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Mr. Doft’s performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures.

Mr. Doft also receives an annual perquisite allowance in an amount equal to $30,000. Mr. Doft is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment), and business travel insurance provided by the Company to its senior executives. He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Doft’s

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. Gendel also receives an annual perquisite allowance in an amount equal to $25,000. Mr. Gendel 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. Gendel’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.”

Michael SabatinoRobert Kantor

MDC Partners has an employment agreement with Mr. Sabatino,Kantor, effective July 6, 2007 (as amended on MarchMay 5, 2011),2014, pursuant to which Mr. SabatinoKantor serves as our Global Chief AccountingMarketing Officer. Mr. Sabatino’sKantor’s current term of employment with the Company is subject to automatic renewal for one-year periods,an indefinite period unless and until either partyMr. Kantor gives to the other a 30-dayCompany six (6) months advance written notice of its intention not to renew.resignation or the Company terminates Mr. Sabatino isKantor’s employment with or without “Cause” (as defined in his employment agreement).

Mr. Kantor currently entitled to receivereceives an annualized base salary of $412,500 (effective as of January 1, 2013),$500,000, and he is eligible to receive an annual discretionary bonus in ana target amount upequal to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Mr. Sabatino’sKantor’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. SabatinoKantor also receives an annual perquisite allowance in an amount equal to $25,000.$18,000. Mr. SabatinoKantor is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment),

The

2016 LTIP Equity Incentive Awards

As discussed above, on February 17, 2016, the Company issued 2016 LTIP Equity Incentive Awards to each of the NEOs in the following table sets forth information regardingtarget amounts: Scott Kauffman — 142,348 shares; David Doft —  40,000 shares; Mitchell Gendel — 40,000 shares; Robert Kantor — 30,000 shares; and David Ross — 30,000 shares. Each of the outstandingforegoing restricted stock grants will vest on March 1, 2019, if the Company achieves the Cumulative EBITDA Target. As discussed above under “Compensation Discussion and Analysis — Elements of our Compensation Program for our Named Executive Officers — 2016 LTIP Equity Incentive Awards,” under FASB ASC Topic 718, these restricted stock awards under our equity incentive plans held by our named executive officers at 2013 fiscal year end.do not yet have an established grant date or grant date fair value because the financial performance target, the Cumulative EBITDA Target, is not yet established.

OUTSTANDING EQUITY AWARDS AT 20132016 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)
Miles S. Nadal																											178,088	(2)			4,543,025	(2)
David B. Doft																											9,683	(1)			247,013	(1)
																											10,959	(2)			279,564	(2)
Stephen Pustil																											15,317	(1)			390,737	(1)
																											11,054	(2)			281,988	(2)
Michael Sabatino																											15,933	(1)			406,451	(1)
																											10,959	(2)			279,564	(2)
Mitchell S. Gendel																											14,333	(1)			365,035	(1)
																											10,766	(2)			274,641	(2)

Name		Stock Awards
		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 Kauffman			108,011	(1)			707,472	(1)				(2)				(2)
David B. Doft												(2)				(2)
Mitchell Gendel												(2)				(2)
Robert Kantor												(2)				(2)
David Ross												(2)				(2)

The following table sets forth information concerning each exercise of stock options, SARs and similar instruments, and each vesting of stock, including restricted stock, restricted stock units and similar instruments, during fiscal year 20122016 for each NEO on an aggregated basis.

OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 20132016

Name		Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($)				Number of Shares Acquired on Vesting (#)				Value Realized on Vesting ($)
(a)		(b)				(c)(1)				(d)				(e)(2)
Miles S. Nadal							57,416,657				1,506,114				37,637,789
Michael C. Sabatino							3,533,330				123,106				2,410,508
David B. Doft							3,533,330				116,435				2,354,031
Mitchell S. Gendel							3,470,906				119,384				2,378,999
Stephen Pustil							3,563,784				118,835				2,374,351

Name

Option Awards

Stock Awards

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

37,500

(1)

622,500

9,855

224,300

David Doft

Robert Kantor

37,500

305,625

Mitchell Gendel

David Ross

37,500

759,000

PENSION BENEFITS IN 2016

We do not provide our NEOs with any defined benefit pension arrangements, andarrangements.

NON-QUALIFIED DEFERRED COMPENSATION IN 2016

We do not maintain any non-qualified deferred compensation plans for our NEOs.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

We have entered into employment agreements with alleach of our named executive officers. Under each of these agreements, we are required to pay severance benefits in connection with certainspecified terminations of employment, including certainspecified terminations in connection with a change in control of the Company. The employment agreements for each NEO and other executives require a “double trigger” for any change in control severance payments. In addition, some of our equity incentive plans provide for the accelerated payment or vesting of awards in connection with certainspecified terminations of employment or a change in control of the Company. The following is a description of the severance, termination and change in control benefits payable to each of our named executive officers pursuant to their respective employment agreements and our equity incentive plans.

Definitions of terms such as “change in control” or “for good reason” vary between agreements, so when a definition is particular to an agreement, it is described for that agreement. For all named executive officers, other than Mr. Nadal, a “change of control” means the closing of a transaction which results in (i)(1) any person(s) or company(ies) acting jointly or in concert owning equity of the Company representing greater than 50% of the voting power of the Company’s outstanding securities, or (ii)(2) the Company selling all or substantially all of its assets (in each instance other than any transfer by the Company or any of its affiliates of their respective interest in the Company to another wholly-owned subsidiary of another MDC Group company). For

Scott L. Kauffman

Pursuant to his employment agreement, if MDC terminated Mr. Nadal, a “change of control” means the occurrence of any of the following: (a) any person(s) or company(ies) acting jointly orKauffman’s employment in concert owning equity of the Company representing greater than 25% of the voting power of the Company’s outstanding securities; (b) the incumbent members of the Board cease to constitute at least  2/3 of the Board of Directors, subject to certain exceptions; (c) the consummation of a merger or restructuring of the Company (subject to certain exceptions); or (d) a liquidation of the Company or the Company selling all or substantially all of its assets (in each instance other than any transfer by the Company to another affiliate of the Company).

Miles S. Nadal

Upon termination of the Services Agreement for2016 without cause, or voluntary termination by Nadal Management Limited,if Mr. Kauffman terminated his employment for good reason, then MDC iswas required to pay the unpaid annual retainer fee (base salary) throughMr. Kauffman a severance payment within 60 days of the date of termination and Nadal Management Limited shall be entitled to all equity incentive awardsof 1.5 times Mr. Kauffman’s then-current base salary plus the amount of his annual discretionary bonus paid or accrued in accordance withrespect of the underlying plans and equity incentive award agreements.

year immediately preceding the termination date. If Mr. Nadal’s services areKauffman’s employment had terminated byunder these circumstances on December 31, 2016, the Company without “cause” or by Nadal Management Limited. for “good reason” (each as defined in the Services Agreement), the Company will make a lump sumaggregate cash payment due to him under the agreement would have been $3,000,000. As of December 31, 2016, Mr. Kauffman had 155,460 unvested restricted stock grants that would vest on termination of his employment agreement, with a fair value equal to three times$1,018,265. In the sumevent of the annual retainer, average bonus amount for the past three years and the benefit/perquisites allowance, as well as a pro-rata bonus for the calendar year in which histermination of Mr. Kauffman's employment terminates, and three years of continued vesting of outstanding equity incentive awards. Payment of such amount is conditioned upon execution of a release acceptable to MDC. The term “good reason” is defined under the Services Agreement to includeagreement following a change of control provided thatas of December 31, 2016, a total of 250,359 unvested restricted stock grants would fully vest, with a fair value equal to $1,639,851.

If Mr. NadalKauffman’s employment is not holdingterminated within one year following the positionclosing of chief executive officera change in control by MDC without cause, or by Mr. Kauffman for good reason, then Mr. Kauffman will be entitled to the same severance payments set forth above. In addition, in the event of the ultimate parent corporation resulting from thea change of control, transaction.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, 20132016 and Mr. Nadal were not holding the position of chief executive officer of the ultimate parent corporation resulting from theKauffman’s employment terminated in connection with that change ofin control, transaction, the aggregate cash severance payment MDC would have paid him under the Services Agreementcontract would be approximately $23.87 million, in accordance with the terms of the amended Services Agreement. In addition, all restricted stock units and options to acquire securities of MDC previously granted to Mr. Nadal would vest and become exercisable and remain outstanding until the third anniversary of the date of termination. As of December 31, 2013, Mr. Nadal had 178,088 RSUs that would vest upon a change of control in accordance with the underlying grant agreements, with a fair value equal to $4,543,025.$3,000,000.

David B. Doft

Pursuant to his employment agreement, if MDC terminates Mr. Doft’s employment without cause, Mr. Doft terminates his employment for good reason, or the company gives a notice of non-renewal of the agreement, then MDC is required to pay Mr. Doft a severance payment within 10 days of the date of termination of one (1) times Mr. Doft’s total remuneration, plus an amount equal to two (2) month’s base salary for each calendar year in which he was employed by the Company, up to a maximum of six (6) months.

in these plans if Mr. Doft is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $23,084$22,154 if Mr. Doft’s employment had terminated as of December 31, 2013.2016. As of December 31, 2013,2016, Mr. Doft had 20,64213,333 unvested restricted stock grants that would vest on termination of his employment agreement, or change of control with a fair value equal to $526,577.$87,333. In the event of termination of Mr. Doft’s employment agreement following a change of control as of December 31, 2016, a total of 40,000 unvested restricted stock grants would fully vest, with a fair value equal to $262,000.

If Mr. Doft’s employment is terminated without cause by the company within one year following the closing of a change in control, by the company without cause, by Mr. Doft for good reason, or by the company giving a notice of non-renewal of the agreement, then Mr. Doft will be entitled to a payment of 1.52.0 times his total remuneration. He will also be eligible to receive a pro-ratapro rata portion of his annual discretionary cash bonus for the year in which his employment terminates. If there had been a change in control of MDC Partners on December 31, 20132016 and Mr. Doft’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $1,473,750.$2,985,000. Furthermore, Mr. Doft will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. Doft is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $23,084$22,154 if Mr. Doft’s employment had terminated as of December 31, 2013.

Stephen Pustil

Pursuant to his employment agreement, if MDC terminates Mr. Pustil’s employment without cause, Mr. Pustil terminates his employment for good reason, or the Company gives a notice of non-renewal of the agreement, then MDC is required to pay Mr. Pustil a severance payment within 10 days of the date of termination of two (2) times Mr. Pustil’s total remuneration. Total remuneration means the sum of his current base salary, plus the highest annual discretionary cash bonus he earned in the three years ending December 31 of the year immediately preceding the date of termination. If Mr. Pustil’s employment had terminated under these circumstances on December 31, 2013, the aggregate cash payment due to him under the agreement would have been Cdn$1,760,000. Furthermore, Mr. Pustil will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans and, to the extent permitted under law, also in all retirement plans, provided however, that if Mr. Pustil becomes entitled to receive coverage and benefits in the same type of plan from another employer, he will no longer be able to participate in these benefit and retirement plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. Pustil is unable to participate in the plans. The aggregate amount of this benefit would have been approximately Cdn$5,701 if Mr. Pustil’s employment had terminated as of December 31, 2013. As of December 31, 2013, Mr. Pustil had 26,371 unvested restricted stock grants that would vest on termination of his employment agreement or change of control, with a fair value equal to $672,724.

If Mr. Pustil’s employment is terminated within one year following the closing of a change in control by the company without cause, by Mr. Pustil for good reason, or by the company giving a notice of non-renewal of the agreement, then Mr. Pustil will be entitled to a payment of two (2) times his total remuneration. He will also be eligible to receive a pro-rata portion of his annual discretionary cash bonus for the year in which his employment terminates. If there had been a change in control of MDC Partners on December 31, 2013 and Mr. Pustil’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 Cdn$1,760,000. Furthermore, Mr. Pustil 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

Michael SabatinoRobert Kantor

Pursuant to his employment agreement, if MDC terminates Mr. Sabatino’sKantor’s employment without cause, Mr. Sabatino terminates his employment for good reason, or the Company gives a notice of non-renewal of the agreement, then MDC is required to pay Mr. SabatinoKantor a severance payment within 10 days ofover the date of termination ofapplicable twelve (12) month severance period, equal to one (1) times Mr. Sabatino’sKantor’s base salary. If Mr. Kantor’s employment had terminated under these circumstances on December 31, 2016, the aggregate cash payment due to him under the agreement would have been $500,000. As of December 31, 2016, Mr. Kantor had 10,000 unvested restricted stock grants that would vest on termination of his employment agreement, with a fair value equal to $65,500. In the event of termination of Mr. Kantor’s employment agreement following a change of control as of December 31, 2016, a total of 30,000 unvested restricted stock grants would fully vest, with a fair value equal to $196,500.

If Mr. Kantor’s employment is terminated within one year following the closing of a change in control by the company without cause, then Mr. Kantor will be entitled to a payment of two (2) times his total remuneration. Total remuneration means the sum of his current base salary, plus the highest annual discretionary cash bonus he earned in the three years ending December 31 of the year immediately preceding the date of termination. He will also be eligible to receive a pro-rata portion of his annual discretionary cash bonus for the year in which his employment terminates. If there had been a change in control of MDC Partners on December 31, 2016 and Mr. Kantor’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $2,200,000.

David Ross

Pursuant to his employment agreement, if MDC terminates Mr. Ross’s employment without cause, or Mr. Ross terminates his employment for good reason, then MDC is required to pay Mr. Ross a severance payment within 10 days of the date of termination of one (1) times Mr. Ross’s total remuneration. Total remuneration means the sum of his then-current base salary plus the highest annual discretionary cash bonus he earned in the three years ending December 31 of the year immediately preceding the date of termination. If Mr. Sabatino’sRoss’s employment had terminated under these circumstances on December 31, 2013,2016, the aggregate cash payment due to him under the agreement would have been $1,037,500.$883,000. Furthermore, Mr. SabatinoRoss will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans and, to the extent permitted under law, also in all retirement plans, provided, however, that if Mr. SabatinoRoss becomes entitled to receive coverage and benefits in the same type of plan from another employer, he will no longer be able to participate in these benefit and retirement plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. SabatinoRoss is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $21,272$22,154 if Mr. Sabatino’sRoss’s employment had terminated as of December 31, 2013.2016. As of December 31, 2013,2016, Mr. SabatinoRoss had 26,89210,000 unvested restricted stock grants that would vest on termination of his employment agreement, or change of control, with a fair value equal to $686,015.$65,500. In the event of termination of Mr. Ross’s employment agreement following a change of control as of December 31, 2016, a total of 30,000 unvested restricted stock grants would fully vest, with a fair value equal to $196,500.

If Mr. Sabatino’sRoss’s employment is terminated within one year following the closing of a change in control by the company without cause, or by Mr. SabatinoRoss for good reason, or by the company giving a notice of

Compensation Committee Interlocks and Insider Participation

Mr. Clare Copeland (Chairman), Mr. Thomas N. Davidson, Mr. Robert J. Kamerschen, Mr. Scott Kauffman, Mr. Michael J.L. KirbyLarry Kramer and Mr. Irwin Simon served on the Human Resources & Compensation Committee of the Board of Directors during 2013.2016. None of the persons who served on the Human Resources & Compensation Committee at the time of such service are, or have been, an employee or officer of the Company or had any relationship requiring disclosure under Item 404 of Regulation S-K. In addition, none of the Company’s executive officers serves, or has served during the last completed fiscal year, as a member of the board of directors or compensation committee of any other entity that has or has had one or more of its executive officers serving as a member of the Company’s Board of Directors.

Securities Authorized for Issuance Underunder Equity Compensation Plans

On May 26, 2005, the Company’s shareholders approved the Company’s 2005 Stock Incentive Plan, which was subsequently amended on June 1, 2007 and on June 2, 2009. The 2005 Stock Incentive Plan authorizes the issuance of awards to employees, officers, directors and consultants of the Company with respect to 6,750,000 shares of MDC Partners’ Class A Shares or any other security in to which such shares shall be exchanged. On May 30,5, 2008, the Company’s shareholders approved the 2008 Key Partner Incentive Plan, which provides for the issuance of 900,000 Class A Shares. On June 1, 2011,5 2012, the Company’s shareholders approved the 2011 Stock Incentive Plan, which provides for the issuance of up to 3,000,000 Class A shares. The SARs Plan was initially adopted and approved effective as of January 1, 2003, and was subsequently amended and restated in 2004, 2006 and 2013.2014. On June 1, 2016, the Company’s shareholders approved the 2016 Stock Incentive Plan, which authorizes the issuance of awards to employees, officers and directors of the Company with respect to 1,500,000 MDC Partners’ Class A Shares.

The following table sets out as at December 31, 20132016 the number of securities to be issued upon exercise of outstanding options and rights, the weighted average exercise price of outstanding options and rights and the number of securities remaining available for future issuance under equity compensation plans.

		Number of Securities to be Issued Upon Exercise of Outstanding Options Warrants and Rights				Weighted Average Exercise Price of Outstanding Options Warrants and Rights				Number of Securities Remaining Available for Future Issuance (Excluding Column (a))				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)				(a)				(b)				(c)
Equity Compensation Plans:
Approved by stockholders:
Approved by stockholders
Share options and restricted stock			1,488,954	(1)		$	6.03				1,434,554	(2)			120,511	(1)		$	5.83	(2)			2,017,872	(3)
Not Approved by stockholders:			—				—				—
Not Approved by stockholders															—				—				—