Exhibit 10.1

 

Execution Copy

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, dated as of May 6, 2019 (this “Agreement”), by and between MDC
PARTNERS INC., a corporation existing under the laws of Canada (the “Company”),
and FRANK LANUTO (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company wish to employ the Executive on the terms and conditions
hereinafter set forth;

 

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, receipt of which is acknowledged, the parties hereto agree as
follows:

 

1.Employment

 

The Company agrees to employ the Executive during the Term specified in Section
2, and the Executive agrees to accept such employment, upon the terms and
conditions hereinafter set forth.

 

2.Term

 

Subject to the provisions contained in Sections 6 and 7, the Executive's
employment by the Company shall be for a term (the “Term”) commencing as soon as
practicable after the date hereof, but not later than ninety (90) days from the
date hereof (the “Commencement Date”) and continuing for an indefinite period
thereafter unless and until (i) either the Executive shall give to the Company
ninety (90) days advance written notice of resignation (as defined herein)(a
“Notice of Termination”) or (ii) the Company terminates the Executive’s
employment with or without “Cause” (as defined herein). Any Notice of
Termination given by the Executive under this Section 2 shall specify the date
of termination and the fact that the notice is being delivered pursuant to
Section 2 of this Agreement. The Company shall have the right at any time during
such 90-day notice period to relieve the Executive of all or any portion of his
offices, duties and responsibilities and to place him on a paid leave-of-absence
status. The date on which the Executive ceases to be employed by the Company,
regardless of the reason therefore is referred to in this Agreement as the
‘Termination Date”.

 

3.Duties and Responsibilities

 

(a)           Title. During the Term, the Executive shall have the position of
Chief Financial Officer of the Company.

 

(b)           Duties. The Executive shall report directly to the Company’s Chief
Executive Officer (the “MDC Executive”), at such times and in such detail as the
MDC Executive shall reasonably require. Executive shall also have appropriate
reporting responsibilities to the Audit Committee of the Company’s Board of
Directors. The Executive shall perform such duties consistent with his position
as Chief Financial Officer, or as may be reasonably directed by the Chief
Executive Officer of the Company.

 

 

 

 

(c)           Scope of Employment. The Executive's employment by the Company as
described herein shall be full-time and exclusive, and during the Term, the
Executive agrees that he will (i) devote all of his business time and attention,
his reasonable best efforts, and all his skill and ability to promote the
interests of the Company; and (ii) carry out his duties in a competent manner
and serve the Company faithfully and diligently under the direction of the MDC
Executive. Notwithstanding the foregoing, the Executive shall be permitted to
engage in charitable and civic activities and manage his personal passive
investments, provided that such passive investments are not in a company which
transacts business with the Company or its affiliates or engages in business
competitive with that conducted by the Company (or, if such company does
transact business with the Company, or does engage in a competitive business, it
is a publicly held corporation and the Executive's participation is limited to
owning less than 1% of its outstanding shares), and further provided that such
activities (individually or collectively) do not materially interfere with the
performance of his duties or responsibilities under this Agreement.

 

(d)           Office Location. During the Term, the Executive's services
hereunder shall be performed at the offices of the Company in New York, N.Y.,
subject to necessary travel requirements to the Company’s partner agency
locations in order to carry out his duties in connection with his position
hereunder.

 

4.Compensation

 

(a)           Base Salary. As compensation for his services hereunder, during
the Term, the Company shall pay the Executive in accordance with its normal
payroll practices, an annualized base salary of $450,000 (“Base Salary”).

 

(b)           Perquisite Allowance. The Company will pay to the Executive a
perquisite allowance equal to $25,000 per year during the Term (the “Perquisite
Allowance”), to cover the costs of leasing, insuring and maintaining an
automobile and other travel expenses, professional dues as well as other
perquisites, to be paid in accordance with the Company’s normal payroll
practices.

 

(c)           Annual Discretionary Bonus. During the Term, the Executive shall
be eligible to receive an annual discretionary bonus in a target amount equal to
100% of Base Salary, based upon criteria determined by the MDC Executive and the
Compensation Committee, which criteria shall include the Executive’s
performance, the overall financial performance of the Company and such other
factors as the MDC Executive and the Compensation Committee shall deem
reasonable and appropriate (the “Annual Discretionary Bonus”). The Annual
Discretionary Bonus will be paid in accordance with the Company’s normal bonus
payment procedures.

 

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(d)           Initial Cash Bonus Award. The Company shall pay Executive a
one-time bonus in an amount equal to $100,000 (the “Signing Bonus”) within
thirty (30) days after the Commencement Date, subject to applicable withholding
for federal, state and local taxes. Notwithstanding the foregoing, in the event
that Executive resigns without “Good Reason” or is terminated by the Company for
“Cause” prior to December 31, 2019, then Executive shall immediately pay back to
the Company an amount equal to the Signing Bonus. .

 

(e)           Grants under LTIP Plans. Commencing in January 2020, the Executive
shall be eligible to participate in the Company’s LTIP Plans with an annual
target award amount equal to $450,000, with each such award to be made on terms
and conditions no more or less favorable than those of awards made to other
senior executives of the Company.

 

(f)           SARS Inducement Grant. As soon as practicable following the
Commencement Date, the Executive shall receive an award of 450,000 stock
appreciation rights (“SARs”) in respect of the Company’s Class A Shares with (i)
225,000 SARs at an exercise price to be determined by the 10-day average closing
price prior to the Commencement Date and (ii) 225,000 SARs at an exercise price
equal to $5.00, all in accordance with and subject to the terms and conditions
of a separate stock appreciation rights agreement, to be executed and delivered
by the Executive and the Company (the “SAR Agreement”). The SARs granted
pursuant to the SAR Agreement will become vested and exercisable in three equal
installments on each of the first three (3) anniversaries of the Commencement
Date (each such date, a “SAR Vesting Date”), subject to the Executive’s
continued employment with the Company through the applicable SAR Vesting Date.
The SARS Agreement shall provide for accelerated vesting upon a Company “Change
in Control” (as defined in the Company’s 2016 Stock Incentive Plan). To the
extent not yet exercised, any SARs issued shall expire on the fifth anniversary
of the Commencement Date.

 

5.Expenses; Health Benefits

 

(a)           Expenses. The Company agrees to pay or to reimburse the Executive
for all reasonable, ordinary, necessary and documented business or entertainment
expenses incurred during the Term in the performance of his services hereunder
in accordance with the policy of the Company as from time to time in effect. The
Executive, as a condition precedent to obtaining such payment or reimbursement,
shall provide to the Company any and all statements, bills or receipts
evidencing the travel or out-of-pocket expenses for which the Executive seeks
payment or reimbursement, and any other information or materials, as the Company
may from time to time reasonably require.

 

(b)           Benefit Plans. During the Term, the Executive and, to the extent
eligible, his dependents, shall be eligible to participate in and receive all
benefits under any group health plans, welfare benefit plans and programs
provided by the Company to its senior executives and, without duplication, its
employees generally, subject, however, to the generally applicable eligibility
and other provisions of the various plans and programs in effect from time to
time.

 

(c)           Vacation. The Executive shall be entitled to four weeks of
vacation in accordance with the Company's policies, with no right of carry over,
to be taken at such times as shall not materially interfere with the Executive's
fulfillment of his duties hereunder, and shall be entitled to as many holidays,
sick days and personal days as are in accordance with the Company's policy then
in effect generally for its employees.

 

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6.Termination

 

(a)           Termination for Cause. The Company, by direction of the Board of
Directors or the MDC Executive, shall be entitled to terminate the Term and to
discharge the Executive for “Cause” effective upon the giving of written notice
to the Executive. For purposes of this Agreement, the term “Cause” shall mean:

 

(i)            the Executive's willful failure or refusal to materially perform
his duties and responsibilities as set forth in Section 3 hereof (other than as
a result of a Disability pursuant to Section 6(d) hereof), or abide by the
reasonable directives of the MDC Executive, or the failure of the Executive to
devote all of his business time and attention exclusively to the business and
affairs of the Company in accordance with the terms hereof, in each case if such
failure or refusal is not cured (if curable) within 20 days after written notice
thereof to the Executive by the Company;

 

(ii)           the willful and unauthorized misappropriation of the funds or
property of the Company;

 

(iii)          the use of alcohol or illegal drugs, interfering with the
performance of the Executive’s obligations under this Agreement, continuing
after written warning;

 

(iv)          the conviction in a court of law of, or entering a plea of guilty
or no contest to, any felony or any crime involving moral turpitude, dishonesty
or theft;

 

(v)           the material nonconformance with the Company’s policies against
racial or sexual discrimination or harassment, which nonconformance is not cured
(if curable) within 20 days after written notice to the Executive by the
Company;

 

(vi)          the commission in bad faith by the Executive of any act which
materially injures or could reasonably be expected to materially injure the
reputation, business or business relationships of the Company; and

 

(vii)         any breach (not covered by any of the clauses (i) through (vi)
above) of this Agreement, if such breach is not cured (if curable) within 20
days after written notice thereof to the Executive by the Company.

 

Any notice required to be given by the Company pursuant to clause (i), (v) or
(vii) above shall specify the nature of the claimed breach and the manner in
which the Company requires such breach to be cured (if curable). In the event
that the Executive is purportedly terminated for Cause and it is finally
determined that Cause as defined herein was not present, then such purported
termination for Cause shall be deemed a termination without Cause and the
Executive’s rights and remedies will be governed by Section 7(b), in full
satisfaction and in lieu of any and all other or further remedies the Executive
may have under this Agreement.

 

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(b)           Termination by the Executive for Good Reason. Provided that a
Cause event has not occurred, the Executive shall be entitled to terminate this
Agreement and the Term hereunder for Good Reason (as defined below) at any time
during the Term by written notice to the Company not more than 20 days after the
occurrence of the event constituting such Good Reason. For purposes of this
Agreement, “Good Reason” shall be limited to:

 

(i)            a material diminution of the Executive’s position or authority as
set forth in Section 3 hereof, which breach remains uncured (if curable) for a
period of 10 days after written notice of such breach to the Company;

 

(ii)           the Company’s material breach of the compensation and benefits
provisions of Section 4 or Section 5 hereof, which breach remains uncured (if
curable) for a period of 15 days after written notice of such breach to the
Company; or

 

(iii)          following a Change in Control (as defined below), the Executive
not holding the position of Chief Financial Officer of the ultimate parent
entity or other controlling entity resulting from the Change in Control
transaction.

 

Any notice required to be given by the Executive pursuant to this Section 6(b)
shall specify the nature of the circumstance alleged to constitute Good Reason
and the provisions of this Agreement relied upon, and shall specify the date of
termination, which shall not be less than 30 days or more than 60 days following
the date of such notice.

 

(c)           Termination without Cause. The Company, by direction of the Board
or the MDC Executive, shall have the right at any time during the Term to
terminate the employment of the Executive without Cause by giving written notice
to the Executive setting forth a Termination Date.

 

(d)           Termination for Death or Disability. In the event of the
Executive's death, the Termination Date shall be the date of the Executive's
death. In the event the Executive shall be unable to perform his duties
hereunder by virtue of illness or physical or mental incapacity or disability
(from any cause or causes whatsoever) in substantially the manner and to the
extent required hereunder prior to the commencement of such disability and the
Executive shall fail to perform such duties for periods aggregating 120 days,
whether or not continuous, in any continuous period of 360 days (such causes
being herein referred to as “Disability”), the Company shall have the right to
terminate the Executive's employment hereunder as at the end of any calendar
month during the continuance of such Disability upon at least 30 days’ prior
written notice to him.

 

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7.Effect of Termination of Employment.

 

(a)           Termination by the Company for Cause; by Death or Disability; or
pursuant to a Notice of Termination delivered by the Executive pursuant to
Section 2(a)(i) above. In the event of the termination of the employment of the
Executive (1) by the Company for Cause; (2) by reason of death or Disability
pursuant to Section 6(c); or (3) pursuant to a Notice of Termination delivered
by the Executive pursuant to Section 2(a)(i) above, the Executive shall be
entitled to the following payments and benefits (the “Accrued Rights”):

 

(i)            unpaid Base Salary and Perquisite Allowance through, and any
unpaid reimbursable expenses outstanding as of, the Termination Date; and

 

(ii)           all outstanding equity incentive awards (including the Initial
Stock Grant and SARs) shall be treated in accordance with the governing equity
plan and underlying award agreement, except as otherwise provided in Section
4(f) and Section 4(g).

 

In the event of termination of the employment of Executive in the circumstances
described in this Section 7(a), except as expressly provided in this section or
any other accrued benefits or indemnification rights under the Company’s
by-laws, the Company’s other organizational documents, or this Agreement, the
Company shall have no further liability to the Executive or the Executive’s
heirs, beneficiaries or estate for damages, compensation, benefits, severance or
other amounts of whatever nature, directly or indirectly, arising out of or
otherwise related to this Agreement and the Executive’s employment or cessation
of employment with the Company.

 

(b)           Termination by the Company without Cause or Resignation for Good
Reason. In the event of termination by the Company without Cause or resignation
by the Executive for Good Reason, the Executive shall be entitled to the
following payments and benefits:

 

(i)the Accrued Rights as provided in Section 7(a) hereof;

 

(ii)his Annual Discretionary Bonus with respect to the calendar year prior to
the date of termination, when otherwise payable, but only to the extent earned
and approved by the Compensation Committee of the Board but not already paid;
and

 

(iii)an amount equal to Executive’s Base Salary for a period of six (6) months
(the “Severance Amount”). The Severance Amount described in this Section
7(b)(iii), less applicable withholding of any tax amounts, shall be paid by the
Company to the Executive in a cash lump-sum not later than 60 days following the
Termination Date.

 

In the event of termination of this Agreement in the circumstances described in
this Section 7(b), except as expressly provided in this section or any other
accrued benefits or indemnification rights, the Company shall have no further
liability to the Executive or the Executive’s heirs, beneficiaries or estate for
damages, compensation, benefits, severance or other amounts of whatever nature,
directly or indirectly, arising out of or otherwise related to this Agreement
and the Executive’s employment or cessation of employment with the Company.

 

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The Executive shall be under no duty to mitigate damages hereunder. The making
of any severance payments and providing the other benefits as provided in this
Section 7(b) is conditioned upon the Executive signing and not revoking a
customary separation agreement in a form reasonably satisfactory to the Company
and Executive (the “Separation Agreement”). In the event the Executive breaches
any provisions of the Separation Agreement or the provisions of Section 8 of
this Agreement, in addition to any other remedies at law or in equity available
to it, the Company may cease making any further payments and providing the other
benefits provided for in this Section 7(b), without affecting its rights under
this Agreement or the Separation Agreement.

 

(c)           Termination by the Company without Cause following a Change in
Control. If within one (1) year after the closing date of any “Change in
Control” transaction, the Executive’s employment is terminated by the Company
without Cause or he resigns for Good Reason, the Severance Amount shall be
increased to an amount equal to Executive’s Base Salary for a period of nine (9)
months. For the purposes of this Agreement, a “Change in Control” shall be as
defined in the Company’s 2016 Stock Incentive Plan.

 

8.Non-Solicitation/Non-Servicing Agreement and Protection of Confidential
Information

 

(a)       Non-Solicitation/Non-Servicing. The parties hereto agree that the
covenants given in this Section 8 are being given incident to the agreements and
transactions described herein, and that such covenants are being given for the
benefit of the Company. Accordingly, the Executive acknowledges (i) that the
business and the industry in which the Company competes is highly competitive;
(ii) that as a key executive of the Company he has participated in and will
continue to participate in the servicing of current clients and/or the
solicitation of prospective clients, through which, among other things, the
Executive has obtained and will continue to obtain knowledge of the "know-how"
and business practices of the Company, in which matters the Company has a
substantial proprietary interest; (iii) that his employment hereunder requires
the performance of services which are special, unique, extraordinary and
intellectual in character, and his position with the Company places and placed
his in a position of confidence and trust with the clients and employees of the
Company; and (iv) that his rendering of services to the clients of the Company
necessarily required and will continue to require the disclosure to the
Executive of confidential information (as defined in Section 8(b) hereof) of the
Company. In the course of the Executive's employment with the Company, the
Executive has and will continue to develop a personal relationship with the
clients of the Company and a knowledge of those clients' affairs and
requirements, and the relationship of the Company with its established clientele
will therefore be placed in the Executive's hands in confidence and trust. The
Executive consequently agrees that it is a legitimate interest of the Company,
and reasonable and necessary for the protection of the confidential information,
goodwill and business of the Company, which is valuable to the Company, that the
Executive make the covenants contained herein and that the Company would not
have entered into this Agreement unless the covenants set forth in this Section
8 were contained in this Agreement.

 

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Accordingly, the Executive agrees during the Term that he is employed by the
Company and for a period of one (1) years thereafter, he shall not, as an
individual, employee, consultant, independent contractor, partner, shareholder,
or in association with any other person, business or enterprise, except on
behalf of the Company, directly or indirectly, solicit business on behalf of,
render any services to, engage in, guaranty any obligations of, extend credit
to, or have any ownership interest or other affiliation in, any business or
other endeavor, which is engaged in the same business as the Company or its
affiliates.

 

The Executive further agrees that during the Term that he is employed by the
Company and for a period of two (2) years thereafter (such period being referred
to as the "Restricted Period"), he shall not, as an individual, employee,
consultant, independent contractor, partner, shareholder, or in association with
any other person, business or enterprise, except on behalf of the Company,
directly or indirectly, and regardless of the reason for his ceasing to be
employed by the Company:

 

(i)            attempt in any manner to solicit or accept from any client
business of the type performed by the Company or to persuade any client to cease
to do business or to reduce the amount of business which any such client has
customarily done or is reasonably expected to do with the Company, whether or
not the relationship between the Company and such client was originally
established in whole or in part through the Executive’s efforts; or

 

(ii)           employ as an employee or retain as a consultant any person, firm
or entity who is then or at any time during the preceding twelve months was an
employee of or exclusive consultant to the Company, or persuade or attempt to
persuade any employee of or exclusive consultant to the Company to leave the
employ of the Company or to become employed as an employee or retained as a
consultant by any person, firm or entity other than the Company; or

 

(iii)          render to or for any client any services of the type which are
rendered by the Company.

 

As used in this Section 8, the term “Company” shall include any subsidiaries of
the Company and the term “client” shall mean (1) anyone who is a client of the
Company on the Termination Date, or if the Executive's employment shall not have
terminated, at the time of the alleged prohibited conduct (any such applicable
date being called the “Determination Date”); (2) anyone who was a client of the
Company at any time during the one year period immediately preceding the
Determination Date; (3) any prospective client to whom the Company had made a
new business presentation (or similar offering of services) at any time during
the one year period immediately preceding the Termination Date; and (4) any
prospective client to whom the Company made a new business presentation (or
similar offering of services) at any time within six months after the
Termination Date (but only if initial discussions between the Company and such
prospective client relating to the rendering of services occurred prior to the
Termination Date, and only if the Executive participated in or supervised such
discussions). For purposes of this clause, it is agreed that a general mailing
or an incidental contact shall not be deemed a "new business presentation or
similar offering of services" or a "discussion". In addition, "client" shall
also include any clients of other companies operating within the MDC group of
companies to whom the Executive rendered services (including supervisory
services) at any time during the six-month period prior to the Determination
Date. In addition, if the client is part of a group of companies which conducts
business through more than one entity, division or operating unit, whether or
not separately incorporated (a "Client Group"), the term "client" as used herein
shall also include each entity, division and operating unit of the Client Group
where the same management group of the Client Group has the decision making
authority or significant influence with respect to contracting for services of
the type rendered by the Company.

 

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(b)           Confidential Information. In the course of the Executive's
employment with the Company (and its predecessor), he has acquired and will
continue to acquire and have access to confidential or proprietary information
about the Company and/or its clients, including but not limited to, trade
secrets, methods, models, passwords, access to computer files, financial
information and records, computer software programs, agreements and/or contracts
between the Company and its clients, client contacts, client preferences,
creative policies and ideas, advertising campaigns, creative and media
materials, graphic design materials, sales promotions and campaigns, sales
presentation materials, budgets, practices, concepts, strategies, methods of
operation, financial or business projections of the Company and information
about or received from clients and other companies with which the Company does
business. The foregoing shall be collectively referred to as "confidential
information". The Executive is aware that the confidential information is not
readily available to the public and accordingly, the Executive also agrees that
he will not at any time (whether during the Term or after termination of this
Agreement), disclose to anyone (other than his counsel in the course of a
dispute arising from the alleged disclosure of confidential information or as
required by law) any confidential information, or utilize such confidential
information for his own benefit, or for the benefit of third parties. The
Executive agrees that the foregoing restrictions shall apply whether or not any
such information is marked "confidential" and regardless of the form of the
information. The term "confidential information" does not include information
which (i) is or becomes generally available to the public other than by breach
of this provision or (ii) the Executive learns from a third party who is not
under an obligation of confidence to the Company or a client of the Company. In
the event that the Executive becomes legally required to disclose any
confidential information, he will provide the Company with prompt notice thereof
so that the Company may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Section 8(b) to permit a
particular disclosure. In the event that such protective order or other remedy
is not obtained, or that the Company waives compliance with the provisions of
this Section 8(b) to permit a particular disclosure, the Executive will furnish
only that portion of the confidential information which he is legally required
to disclose and, at the Company's expense, will cooperate with the efforts of
the Company to obtain a protective order or other reliable assurance that
confidential treatment will be accorded the confidential information. The
Executive further agrees that all memoranda, disks, files, notes, records or
other documents, whether in electronic form or hard copy (collectively, the
"material") compiled by him or made available to him during his employment with
the Company (whether or not the material constitutes or contains confidential
information), and in connection with the performance of his duties hereunder,
shall be the property of the Company and shall be delivered to the Company on
the termination of the Executive's employment with the Company or at any other
time upon request. Except in connection with the Executive's employment with the
Company, the Executive agrees that he will not make or retain copies or excerpts
of the material; provided that the Executive shall be entitled to retain his
personal files.

 

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(c)           Remedies. If the Executive commits or threatens to commit a breach
of any of the provisions of Sections 8(a) or (b), the Company shall have the
right to have the provisions of this Agreement specifically enforced by any
court having jurisdiction without being required to post bond or other security
and without having to prove the inadequacy of the available remedies at law, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company. In addition, the Company may take all such
other actions and remedies available to it under law or in equity and shall be
entitled to such damages as it can show it has sustained by reason of such
breach.

 

(d)          Acknowledgements. The parties acknowledge that (i) the type and
periods of restriction imposed in the provisions of Sections 8(a) and (b) are
fair and reasonable and are reasonably required in order to protect and maintain
the proprietary interests of the Company described above, other legitimate
business interests and the goodwill associated with the business of the Company;
(ii) the time, scope and other provisions of this Section 8 have been
specifically negotiated by sophisticated commercial parties, represented by
legal counsel, and are given as an integral part of the transactions
contemplated by this Agreement; and (iii) because of the nature of the business
engaged in by the Company and the fact that clients can be and are serviced by
the Company wherever they are located, it is impractical and unreasonable to
place a geographic limitation on the agreements made by the Executive herein.
The Executive specifically acknowledges that his being restricted from
soliciting and servicing clients and prospective clients as contemplated by this
Agreement will not prevent him from being employed or earning a livelihood in
the type of business conducted by the Company. If any of the covenants contained
in Sections 8(a) or (b), or any part thereof, is held to be unenforceable by
reason of it extending for too great a period of time or over too great a
geographic area or by reason of it being too extensive in any other respect, the
parties agree (x) such covenant shall be interpreted to extend only over the
maximum period of time for which it may be enforceable and/or over the maximum
geographic areas as to which it may be enforceable and/or over the maximum
extent in all other respects as to which it may be enforceable, all as
determined by the court or arbitration panel making such determination and (y)
in its reduced form, such covenant shall then be enforceable, but such reduced
form of covenant shall only apply with respect to the operation of such covenant
in the particular jurisdiction in or for which such adjudication is made. Each
of the covenants and agreements contained in this Section 8 (collectively, the
"Protective Covenants") is separate, distinct and severable. All rights,
remedies and benefits expressly provided for in this Agreement are cumulative
and are not exclusive of any rights, remedies or benefits provided for by law or
in this Agreement, and the exercise of any remedy by a party hereto shall not be
deemed an election to the exclusion of any other remedy (any such claim by the
other party being hereby waived). The existence of any claim, demand, action or
cause of action of the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of each Protective Covenant. The unenforceability of any Protective
Covenant shall not affect the validity or enforceability of any other Protective
Covenant or any other provision or provisions of this Agreement.

 

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(e)           Notification of Restrictive Covenants. Prior to accepting
employment with any person, firm or entity during the Restricted Period, the
Executive shall notify the prospective employer in writing of his obligations
pursuant to this Section 8 and shall simultaneously provide a copy of such
notice to the Company (it being agreed by the Company that such notification
required under this Section 8(e) shall not be deemed a breach of the
confidentiality provisions of this Agreement).

 

(f)            Tolling. The temporal duration of the
non-solicitation/non-servicing covenants set forth in this Agreement shall not
expire, and shall be tolled, during any period in which the Executive is in
violation of any of the non-solicitation/non-servicing covenants set forth
herein, and all restrictions shall automatically be extended by the period of
the Executive's violation of any such restrictions.

 

9.Intellectual Property

 

During the Term, the Executive will disclose to the Company all ideas,
inventions and business plans developed by him during such period which relate
directly or indirectly to the business of the Company, including without
limitation, any design, logo, slogan, advertising campaign or any process,
operation, product or improvement which may be patentable or copyrightable. The
Executive agrees that all patents, licenses, copyrights, tradenames, trademarks,
service marks, planning, marketing and/or creative policies and ideas,
advertising campaigns, promotional campaigns, media campaigns, budgets,
practices, concepts, strategies, methods of operation, financial or business
projections, designs, logos, slogans and business plans developed or created by
the Executive in the course of his employment hereunder, either individually or
in collaboration with others, will be deemed works for hire and the sole and
absolute property of the Company. The Executive agrees, that at the Company's
request and expense, he will take all steps necessary to secure the rights
thereto to the Company by patent, copyright or otherwise.

 

10.Indemnification

 

Subject to Section 124 of the Canada Business Corporations Act (as amended or
re-enacted from time to time and including the regulations made pursuant
thereto, the “Act”), the Company shall indemnify and hold harmless, the
Executive and his heirs, executors, administrators and other legal personal
representatives (each, an “Indemnitee”), to the maximum extent permitted by the
Act, from and against (a) any liability and all costs, charges and expenses that
an Indemnitee sustains or incurs in respect of any action, suit or proceeding
that is proposed, threatened or commenced against an Indemnitee for or in
respect of anything done or permitted by the Executive in respect of the
execution of the duties of his office; and (b) all other costs, charges and
expenses that the Executive sustains or incurs in respect of the affairs of the
Company. The Company shall also indemnify the Executive in such other
circumstances to the maximum extent as the Act permits or requires. To the
extent permitted by the Act, the Company will advance or reimburse any expenses,
including reasonable attorneys’ fees, incurred by an Indemnitee in investigating
and defending any actual or threatened action, suit or proceeding for which an
Indemnitee may be entitled to indemnification under this Section 10.

 

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11.Enforceability

 

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.

 

12.Assignment

 

The Company and the Executive agree that the Company shall have the right to
assign this Agreement in connection with any asset assignment of all or
substantially all of the Company’s assets, stock sale, merger, consolidation or
other corporate reorganization involving the Company and, accordingly, this
Agreement shall inure to the benefit of, be binding upon and may be enforced by,
any and all successors and such assigns of the Company. The Company and
Executive agree that Executive's rights and obligations under this Agreement are
personal to the Executive, and the Executive shall not have the right to assign
or otherwise transfer his rights or obligations under this Agreement, and any
purported assignment or transfer shall be void and ineffective, provided that
the rights of the Executive to receive certain benefits upon death as expressly
set forth under Section 7 of this Agreement shall inure to the Executive’s
estate and heirs. The rights and obligations of the Company hereunder shall be
binding upon and run in favor of the successors and assigns of the Company.

 

13.Modification

 

This Agreement may not be orally canceled, changed, modified or amended, and no
cancellation, change, modification or amendment shall be effective or binding,
unless in writing and signed by the parties to this Agreement.

 

14.Severability; Survival; Notice

 

In the event any provision or portion of this Agreement is determined to be
invalid or unenforceable for any reason, in whole or in part, the remaining
provisions of this Agreement shall nevertheless be binding upon the parties with
the same effect as though the invalid or unenforceable part had been severed and
deleted or reformed to be enforceable. The respective rights and obligations of
the parties hereunder shall survive the termination of the Executive's
employment to the extent necessary to the intended preservation of such rights
and obligations.

 

Any notice, request, instruction or other document to be given hereunder by any
party hereto to another party shall be in writing and shall be deemed effective
(a) upon personal delivery, if delivered by hand, or (b) three days after the
date of deposit in the mails, postage prepaid if mailed by certified or
registered mail, or (c) on the next business day, if sent by prepaid overnight
courier service or facsimile transmission (if electronically confirmed), and in
each case, addressed as follows:

 

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If to the Executive:

 

Frank Lanuto

[add address]

 

If to the Company:

 

c/o MDC Partners Inc.

745 Fifth Avenue, 19th Floor

New York, NY 10151

Attention: General Counsel

Fax: (212) 937-4365

 

Any party may change the address to which notices are to be sent by giving
notice of such change of address to the other party in the manner herein
provided for giving notice.

 

15.Applicable Law

 

This Agreement shall be governed by, enforced under, and construed in accordance
with the laws of the State of New York, without regard to the conflict of law
rules thereof.

 

16.No Conflict

 

Except as previously disclosed in writing to the Company, the Executive
represents and warrants that he is not subject to any agreement, instrument,
order, judgment or decree of any kind, or any other restrictive agreement of any
character, which would prevent him from entering into this Agreement or which
would be breached by the Executive upon his performance of his duties pursuant
to this Agreement.

 

17.Entire Agreement; Counterparts

 

This Agreement and the documents referenced herein represent the entire
agreement between the Company and the Executive with respect to the employment
of the Executive by the Company, and all prior term sheets, agreements, plans
and arrangements relating to the employment of the Executive by the Company are
nullified and superseded hereby. This Agreement may be executed in two
counterparts or by pdf.

 

18.Withholdings

 

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.

 

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19.No Strict Construction

 

The language used in this Agreement will be deemed to be the language chosen by
the Company and the Executive to express their mutual intent, and no rule of law
or contract interpretation that provides that in the case of ambiguity or
uncertainty a provision should be construed against the draftsman will be
applied against any party hereto.

 

20.409A Compliance

 

This Agreement is intended to comply, to the extent applicable, with Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) and will be
so interpreted. For purposes of this Agreement, a termination of Executive’s
services on the date of termination shall be determined in a manner consistent
with the rules relating to “separation from service” within the meaning of
Section 409A of the Code and the regulations thereunder. Notwithstanding
anything herein to the contrary, (i) if on the date of termination Executive is
a “specified employee” as defined in Section 409A of the Code, and the deferral
of the commencement of any payments or benefits otherwise payable hereunder as a
result of such termination the Agreement is necessary in order to prevent the
imposition of any accelerated or additional tax under Section 409A of the Code,
then the Company will (A) defer the commencement of the payment of any such
payments or benefits hereunder (without any reduction in such payments or
benefits ultimately paid or provided to Executive) until the date that is six
months following the date of termination (or the earliest date as is permitted
under Section 409A of the Code), and (B) add to such payment or benefit an
interest payment for the six-month period calculated using the short-term
Applicable Federal Rate (monthly compounded) as in effect on the date of
termination under Section 1274(d) of the Internal Revenue Code and (ii) if any
other payments of money or other benefits due to the Executive hereunder could
cause the application of an accelerated or additional tax under Section 409A of
the Code, the parties agree to restructure the payments or benefits to comply
with Section 409A of the Code in a manner which does not diminish the value of
such payments and benefits to the Executive. To the extent any reimbursements or
in-kind benefits due to the Executive under this Agreement constitute “deferred
compensation” under Section 409A of the Code, any such reimbursements or in-kind
benefits shall be paid in a manner consistent with Treas. Reg. Section
1.409A-3(i)(1)(iv). If under this Agreement, an amount is paid in two or more
installments, each installment shall be treated as a “separate payment” within
the meaning of 409A of the Code.

 

*          *          *          *          *

 

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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the day and year first above written.

 

  MDC PARTNERS INC.       By:       Mark Penn,     Chief Executive Officer      
          Frank Lanuto

 

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