Exhibit 10.2
 
MDC PARTNERS INC.
 

 
January 26, 2011 [form]         
 
[name of Grantee]
 
 
MDC Partners Inc.
950 Third Avenue
New York, N.Y.  10022
 
Dear ________,
 
Reference is made to the 2005 Stock Incentive Plan (as amended, the “Plan”)
maintained by MDC Partners Inc., a Canadian corporation (the
“Corporation”).  Capitalized terms used in this Letter Agreement and not defined
herein will have the same definitions as set forth in the Plan.
 
1.  Agreement to Make EVARS Grants.  Pursuant to the terms and conditions of
this Letter Agreement and the Plan, as the same may be amended from time to
time, the Corporation agrees to grant ___________ (the “Grantee”) Extraordinary
Equity Value Appreciation Restricted Stock Awards (the “EVARS”) covering up to
_____ Class A Shares during the period from January 1, 2011 through December 31,
2013 (the “Grant Period”).
 
The Grantee will immediately be granted an initial 10% of the EVARS award, or
_____Class A shares of restricted stock, subject to vesting on December 31,
2013.  The Grantee will also receive up to an additional _______ Class A shares
during the Grant Period, subject to the achievement of the performance targets
described below and Grantee’s continued employment as of the applicable grant
date for any EVARS.
 
The EVARS are designed to closely align the interests of the Corporation’s
management with our shareholders, and to reward members of the management team,
such as the Grantee, for extraordinary shareholder value creation based on
objective financial performance measures.  The future grant of the EVARS is
conditioned on the Corporation’s achievement of extraordinary equity value
appreciation over the next three years.
 
2.  Terms and Conditions of EVARS.  Each EVAR granted to the Grantee during the
Grant Period will represent the right to receive one issued and outstanding
Class A Share on December 31, 2013, which will be the “Settlement Date” for the
EVARS that are granted during the Grant Period, subject to the Grantee’s
compliance with the terms and conditions set forth herein and in the grant
agreement that will be issued at the time any EVARS are granted (the “Grant
Agreement”).  The Grant Agreement will set forth the settlement provisions
applicable to the EVARS, including the consequences of a termination of the
Grantee’s employment prior to the Settlement Date, and will be substantially
consistent with the form attached hereto as Exhibit A.
 

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3.  Stock Price Targets.  The actual number of EVARS to be granted to the
Grantee during the Grant Period will be determined based on the level of
achievement of the following stock price targets (the “Stock Price Targets”):
 
 
·
If the 15-day weighted average trading price on Nasdaq of the Class A Shares
equals or exceeds $20.00 at any time during the Grant Period, the Corporation
will award the Grantee ____ EVARS.

 
 
·
If the 15-day weighted average trading price on Nasdaq of the Class A Shares
equals or exceeds $22.75 at any time during the Grant Period, the Corporation
will award the Grantee _____ EVARS.

 
 
·
If the 15-day weighted average trading price on Nasdaq of the Class A Shares
equals or exceeds $26.25 at any time during the Grant Period, the Corporation
will award the Grantee ____ EVARS.

 
Notwithstanding the foregoing, in no event will the Grantee be eligible to
receive in any one fiscal year of the Corporation grants of an aggregate number
of EVARS that, taken together with any other Incentive Awards to be granted to
the Grantee under the Plan in such fiscal year, exceed any then-applicable
limits set forth in the Plan (including availability of additional Class A
Shares), as determined by the Committee (the “Plan Limits”).  If, as a result of
the Plan Limits, the Committee determines in its sole discretion that it may not
grant the Grantee the full number of EVARS otherwise issuable in a fiscal year
based on the level of achievement of the Stock Price Targets, the Corporation
may in its sole and absolute discretion: (1) amend the terms of this Letter
Agreement to defer the grant date of one or more EVARS, provided that in no
event will any such deferral extend to a date that occurs after the Settlement
Date; or (2) amend the terms of this Letter Agreement to provide the Grantee
with a cash-settled award of equivalent value to the EVARS that were earned but
not granted, payable on the Settlement Date.
 
4.  Effect of Change of Control during Grant Period.  Subject to the Grantee’s
continued employment or provision of consulting services to the Corporation,
immediately prior to a Change in Control in which the acquisition price for the
Class A Shares equals or exceeds $22.75 per share, the Corporation will grant
the Grantee the maximum number of EVARS set forth herein that remain ungranted
at such time.  Settlement of all EVARS granted in connection with the Change in
Control, together with any previously granted EVARS, will be accelerated to the
occurrence of such Change in Control if and to the extent such Change in Control
qualifies as a “change in the ownership of a corporation”, “change in the
effective control of a corporation” or “change in the ownership of a substantial
portion of the corporation’s assets” as defined under Section 409A of the Code
and, if not, settlement of all such EVARS will take place on the originally
scheduled Settlement Date; provided that in no event will the EVARS be subject
to forfeiture following such Change in Control, regardless of whether the
Grantee’s employment with the Corporation (or any acquiror or successor)
continues following such Change in Control.
 

 
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           5.   Termination of Employment prior to end of Grant Period or
Settlement Date.
 
     (a)  In the event the Grantee is terminated by the Corporation for “Cause”
or resigns without “Good Reason” (as defined in an applicable employment
agreement) prior to the end of the Grant Period, then the Grantee shall forfeit
any right to receive a future grant of EVARS pursuant to a Grant Agreement.
 
     (b)  In the event the Grantee is terminated by the Corporation without
Cause, resigns due to Good Reason (if applicable), or dies or becomes Disabled
prior to the end of the Grant Period, then immediately prior to such termination
of employment, the Corporation will award the Grantee a number of EVARS equal to
(i) _______ minus (ii) the number of EVARS previously granted to the Grantee or
his estate (the EVARS granted pursuant to this paragraph, the “Conditional
EVARS”).  The grant of the Conditional EVARS will be made pursuant to a grant
agreement prepared by the Corporation under the Plan.  Following the grant of
the Conditional EVARS, the Grantee will not be entitled to receive any
additional grants of any other EVARS under this Letter Agreement, regardless of
whether any Stock Price Targets are achieved.  The form grant agreement issued
in connection with the grant of Conditional EVARS will specify the Stock Price
Target that relates to one or more tranches of the Conditional EVARS.  A pro
rata portion of the Conditional EVARS may vest following the Grantee’s
termination of employment, as follows:  upon achievement of the applicable Stock
Price Target (if any) following the Grantee’s termination of employment but
prior to December 31, 2013, the portion of the Conditional EVARS that will vest
shall be equal to the product of (i) _______  and (ii) a fraction, the numerator
of which shall be the number of full months of service completed by the Grantee
during the Grant Period prior to his or her termination without Cause, death or
Disability, as applicable prior to the date of Stock Price Target achievement,
and the denominator of which shall be thirty-six (36).  The portion of any
Conditional EVARS that relate to a Stock Price Target and do not vest upon
achievement of such Stock Price Target pursuant to the pro ration formula will
be forfeited on such date.  Any Conditional EVARS that have not vested as of
December 31, 2013 will be forfeited by the Grantee on such date.

 
*                                *                      *
 
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Please confirm your agreement with this Letter Agreement by signing below.

 
Sincerely,
           
MDC Partners Inc.
           
By:
 
   
Name: Michael Sabatino
   
Title: Chief Accounting Officer
                   
MDC Partners Inc.
           
By:
  
   
Name: Mitchell Gendel
   
Title: General Counsel
 

Acknowledged and agreed:

  
 

[Grantee]

 

 

 
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