Document:

Unassociated Document

Exhibit 10.2

EMPLOYMENT AGREEMENT

AGREEMENT dated as of June 28, 2011 (this “Agreement”) by and between MDC PARTNERS INC., a corporation existing under the laws of Canada (the “Company”), and DAVID DABILL (the “Executive”).

WITNESSETH:

WHEREAS, the Company wishes to employ the Executive and the Executive wishes to accept such employment, upon the terms and conditions hereinafter set forth;

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

1.           Employment

The Company agrees to employ the Executive during the Term specified in paragraph 2, and the Executive agrees to accept such continued 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 commencing on June 28, 2011 and shall continue for an indefinite period thereafter (the “Term”) unless and until either (i) the Executive gives to the Company three (3) months advance written notice of resignation (a “Notice of Termination”) or (ii) the Company terminates the Executive’s employment 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 three (3) month 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 Administrative Officer of the Company.

  

  

  

(b)           Duties.  The Executive shall report directly to the Company’s Chief Executive Officer or his designee (the "MDC Executive"), at such times and in such detail as the MDC Executive shall reasonably require.   The Executive shall perform such duties consistent with his position as Chief Administrative Officer, or as may be directed by the Chief Executive Officer of the Company, including without limitation those duties and responsibilities outlined on Exhibit A hereto.

(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, which shall be within a twenty five (25) mile radius of New York, NY, subject to necessary travel requirements to the Company’s offices in Toronto, Canada and other MDC Group company 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 $500,000 (“Base Salary”), subject to periodic review by the Human Resources & Compensation Committee of the Board of Directors of the Company to determine appropriate increases, if any, in accordance with the Company’s practices and policies for other senior executives.

(b)           Restricted Stock Grant.  As soon as practicable following commencement of Executive’s employment with the Company, the Executive shall receive an award of 20,000 restricted shares of the Company’s Class A subordinate voting shares in accordance with and subject to the terms and conditions of a separate restricted stock agreement to be executed and delivered by the Executive and MDC Partners Inc. (the “Initial Stock Grant”).  The shares of stock issued in connection with the Initial Stock Grant shall be subject to a 3-year cliff vesting condition (with accelerated vesting upon termination without cause or upon a change of control), but will not be subject to any financial performance vesting conditions or to any contractual holding period.

  

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(c)           Annual Discretionary Bonus.  During the Term, the Executive shall be eligible to receive an annual discretionary bonus in an amount equal to up to 100% of the then current 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 amount of the Annual Discretionary Bonus shall be pro rated (50%) in respect of calendar year 2011. The Annual Discretionary Bonus will be paid in accordance with the Company’s normal bonus payment procedures, and may be paid in the form of equity incentive awards.

 (c)           Participation in Equity Incentive Programs.  The Executive shall also be eligible to ongoing participation in all current and future equity incentive plans of the Company, including but not limited to potential awards of stock options, stock appreciation rights and/or awards of restricted shares of the Company.

5.           Expenses; Fringe 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 (including without limitation, disability, group life (including accidental death and dismemberment) and business travel insurance 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)           Retirement Plans.  During the Term, the Executive shall be eligible to participate in all retirement plans and programs (including without limitation any profit sharing plan) provided by the Company to its senior executives generally 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.  In addition, during the Term, the Executive shall be eligible to receive fringe benefits and perquisites in accordance with the plans, practices, programs and policies of the Company from time to time in effect which are made available to the senior executives of the Company generally and, without duplication, to its employees generally.

(d)           Vacation.  The Executive shall be entitled to four weeks 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 Compensation Committee, 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 failure or refusal to materially perform his duties and responsibilities as set forth in paragraph 3 hereof (other than as a result of a Disability (as defined in paragraph 6(d) hereof), provided that the Executive or a representative on his behalf has provided notice to the Company not more than 20 days following the onset of Executive’s illness or physical or mental incapacity or disability) 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 10 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 10 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;

(vii)        the resignation by the Executive on his own initiative (other than pursuant to a termination by the Executive for "Good Reason" (as defined in paragraph 6(b) hereof); or

(viii)       any breach (not covered by any of the clauses (i) through (vii) above) of paragraphs 8, 9, 11 and 24, if such breach is not cured (if curable) within 10 days after written notice thereof to the Executive by the Company.

  

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Any notice required to be given by the Company pursuant to clause (i), (v) or (viii) 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 a court determines that Cause as defined herein was not present, then such purported termination for Cause shall be deemed a termination without Cause pursuant to paragraph 6(c) and the Executive's rights and remedies will be governed by paragraph 7(b), in full satisfaction and in lieu of any and all other or further remedies the Executive may have under this Agreement.

(b)           Termination for Good Reason.  Provided that a Cause event has not occurred and has not been cured (if curable), 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 breach by the Company of a material provision of this Agreement, which breach remains uncured (if curable) for a period of 20 days after written notice of such breach from the Executive to the Company (such notice to specify the nature of the claimed breach and the manner in which the Executive requires such breach to be cured); (ii) relocation of the Executive’s principal office to a location more than 25 miles outside New York, N.Y.; or (iii) the Company’s failure to pay any compensation or benefits, as set forth in paragraphs 4 or 5, which action is not reversed within 10 days after written notice of the breach from the Executive to the Company.  In the event that the Executive purportedly terminates his employment for Good Reason and a court determines that Good Reason as defined herein was not present, then such purported termination for Good Reason shall be deemed a termination for Cause pursuant to paragraph 6(a)(vii) and the Executive’s rights and remedies will be governed by paragraph 7(a), in full satisfaction and in lieu of any and all other or further remedies the Executive may have under this Agreement.

(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 Date of Termination.

(d)           Termination for Death or Disability.  In the event of the Executive's death, the Date of Termination 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 the Executive without Good Reason; by Death or Disability; or pursuant to a Notice of Termination delivered by the Executive pursuant to paragraph 2 above.  In the event of the termination of the employment of the Executive (1) by the Company for Cause; (2) by the Executive without Good Reason; (3) by reason of death or Disability pursuant to paragraph 6(d); or (4) pursuant to a Notice of Termination delivered by the Executive pursuant to paragraph 2 above, the Executive shall be entitled to the following, subject to any appropriate offsets, as permitted by applicable law, for debts or money due and payable by the Executive to the Company or an affiliate thereof (collectively, “Offsets”):

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

(ii)          all benefits, if any, that had accrued to the Executive through the Date of Termination under the plans and programs described in paragraphs 5(b) and (c) above, or any other applicable plans and programs in which he participated as an employee of the Company, in the manner and in accordance with the terms of such plans and programs; it being understood that any and all rights that the Executive may have to severance payments by the Company shall be determined and solely based on the terms and conditions of this Agreement and not based on the Company's severance policy then in effect, if any.

In the event of termination of the employment of Executive in the circumstances described in this paragraph 7(a), except as expressly provided in this paragraph, 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, provided that the foregoing shall not apply to any outstanding indemnification obligations of the Company in respect of the Executive’s good faith actions in his capacity as a member, director or officer thereof arising on or prior to the Date of Termination (“Outstanding Indemnification Obligations”).

(b)           Termination by the Company without Cause; by the Company pursuant to a Notice of Termination delivered pursuant to paragraph 2 above; or by the Executive for Good Reason.  In the event of a termination (1) by the Company without Cause; or (2) by the Executive for Good Reason, the Executive shall be entitled to the following payments and benefits, subject to any Offsets:

	
  

	
(i)

	
a severance payment (the “Severance Amount”) in an amount equal to his applicable Base Salary compensation when otherwise payable for a period commencing on the Termination Date and ending on the later to occur of (A) July 1, 2012 or (B) the end of the six (6) month period immediately following the Termination Date (the "Severance Period").  The Severance Amount described in this Section 7(b)(i), less applicable withholding of any tax amounts,  shall be paid by the Company to the Executive not later than 10 business days after the applicable Date of Termination;

  

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(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 not already paid;

	
  

	
(iii)

	
eligibility for a pro-rata portion of his Annual Discretionary Bonus with respect to the calendar year in which the Date of Termination occurs, when otherwise payable, (such pro-rata amount to be equal to the product of (A) the amount of the Annual Discretionary Bonus for such calendar year, times (B) a fraction,  (x) the numerator of which shall be the number of calendar days commencing January 1 of such year and ending on the Date of Termination, and (y) the denominator of which shall equal 365;

	
  

	
(iv)

	
unpaid Base Salary through, and any unpaid reimbursable expenses outstanding as of, the Date of Termination;

	
  

	
(v)

	
all benefits, if any, that had accrued to the Executive through the Date of Termination under the plans and programs described in paragraphs 5(b) and (c) above, or any other applicable benefit plans and programs in which the Executive participated as an employee of the Company, in the manner and in accordance with the terms of such plans and programs; it being understood that any and all rights that the Executive may have to severance payments by the Company shall be determined and solely based on the terms and conditions of this Agreement (without duplication) and not based on the Company's severance policy then in effect, if any;

	
  

	
(vi)

	
continued participation on the same basis in the plans and programs set forth in paragraph 5(b) and to the extent permitted under applicable law, paragraph 5(c) (such benefits collectively called the "Continued Plans") in which the Executive was participating on the Date of Termination (as such Continued Plans are from time to time in effect at the Company) for a period to end on the earlier of (A) the six (6) month anniversary of the Date of Termination and (B) the date on which the Executive is eligible to receive coverage and benefits under the same type of plan of a subsequent employer; provided, however, if the Executive is precluded from continuing his participation in any Continued Plan, then the Company will be obligated to pay his the economic equivalent of the benefits provided under the Continued Plan in which he is unable to participate, for the period specified above, it being understood that the economic equivalent of a benefit foregone shall be deemed the lowest cost in New York, N.Y. that would be incurred by the Executive in obtaining such benefit himself on an individual basis.

  

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In the event of termination of this Agreement in the circumstances described in this paragraph 7(b), except as expressly provided in this paragraph, 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, provided that the foregoing shall not apply to any Outstanding Indemnification Obligations.

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 paragraph 7(b) is conditioned upon the Executive signing and not revoking a separation agreement in a form reasonably satisfactory to the Company (the "Separation Agreement").  In the event the Executive breaches any provisions of the Separation Agreement or the provisions of paragraph 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 paragraph 7(b), without affecting its rights under this Agreement or the Separation Agreement.

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 paragraph 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 paragraph 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 paragraph 8 were contained in this Agreement.  Accordingly, the Executive agrees that during the period that he is employed by the Company and for a period of eighteen (18) months 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:

  

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(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 paragraph 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 Date of Termination, 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 Date of Termination; 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 Date of Termination (but only if initial discussions between the Company and such prospective client relating to the rendering of services occurred prior to the Date of Termination, and only if the Executive participated in or supervised such discussions).  For purposes of this Section 8, it is further agreed that (A) a “client” shall be limited to those entities or persons in which the Executive played a significant role in rendering or providing services; and (B) 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 paragraph 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 paragraph 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 his or made available to his 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 paragraphs 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 paragraphs 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 paragraph 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 his from being employed or earning a livelihood in the type of business conducted by the Company.  If any of the covenants contained in paragraphs 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 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 paragraph 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.

(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 paragraph 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 paragraph 8(e) shall not be deemed a breach of the confidentiality provisions of this Agreement).

  

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(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 his 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.         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.

11.         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 paragraph 7(a) 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.

  

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12.         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, and approved in writing by the MDC Executive.

13.         Severability; Survival

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, specifically paragraphs 7, 8, 9, 10, 11, 12, 13, 14, 15, 18, 23 and 24.

14.         Notice

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:

	
If to the Executive:

	  
	
Mr. David Dabill

	
105 Fifth Avenue, Apt 7-C

	
New York, NY  10003

	  
	
If to the Company:

	  
	
c/o MDC Partners Inc.

	
950 Third Avenue

	
New York, NY  10022

	
Attention:  Chief Financial Officer

	
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.

  

13

  

15.         Applicable Law

This Agreement shall be governed by, enforced under, and construed in accordance with the laws of the State of New York, NY applicable therein.

16.         No Conflict

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 his 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

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 agreements (including, without limitation, the Original Employment Agreement), plans and arrangements relating to the employment of the Executive by the Company are nullified and superseded hereby.

18.         [Intentionally omitted]

19.         Headings

The headings contained in this Agreement are for reference purposes only, and shall not affect the meaning or interpretation of this Agreement.

20.         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.

21.         Counterparts

This Agreement may be executed in two counterparts or by facsimile transmission, both of which taken together shall constitute one instrument.

22.         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.

  

14

  

23.         Publicity

Subject to the provisions of the next sentence, no party to this Agreement shall issue any press release or other public document or make any public statement relating to this Agreement or the matters contained herein without obtaining the prior approval of the Company and the Executive.  Notwithstanding the foregoing, the foregoing provision shall not apply to the extent that the Company is required to make any announcement relating to or arising out of this Agreement by virtue of applicable securities laws or other stock exchange rules, or any announcement by any party pursuant to applicable law or regulations.

24.         Non- Disparagement

Following the date hereof, the Executive and the Company shall each use their reasonable best efforts not to disparage, criticize or make statements to the detriment of the other.

*                      *                      *                      *                      *

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

	
MDC PARTNERS INC.

	  
	  	  
	
By:

	/s/ Barbara Creagh, Executive Vice President	  
	  	  
	            /s/	  
	
David Dabill

	  

 

  

15Unassociated Document

Exhibit 10.3

 

AGREEMENT OF SETTLEMENT AND RELEASE

 

B E T W E E N:

 

MDC PARTNERS INC.

(hereinafter referred to as “MDC”)

 

- and -

 

ROBERT DICKSON

(hereinafter referred to as “Dickson”)

 

WHEREAS, Dickson ceased to be employed with MDC on June 1, 2011;

 

AND WHEREAS, Dickson and MDC are parties to an Employment Agreement dated December June 26, 2002, as amended on November 20, 2007 (the “Employment Agreement”);

 

AND WHEREAS, the parties have agreed to resolve and settle in full all claims of any kind that could be or could have been raised by Dickson under any federal or provincial law or under any statute or contract or tort law or otherwise, against MDC and its partners, subsidiaries, affiliates, unincorporated divisions, successors or assigns, or against any past or present director, officer, agent, shareholder or individual now or previously employed by or representing any of them;

 

NOW THEREFORE, the parties agree as follows:

 

1.           MDC shall pay to a company to be incorporated and promptly identified in writing by Dickson, the sum of One Million Three Hundred Ninety-Seven Thousand One Hundred Dollars ($1,397,100)(the “Consulting Payment”). The Consulting Payment shall be paid in equal monthly instalments (in arrears) plus HST during the twenty-four (24) month period beginning effective June 1, 2011, and continuing through and until May 31, 2013 (the “Consulting Period”). Dickson’s company shall provide appropriate invoices with respect to each of the above Consulting Payments.  Payment of the remaining unpaid Consulting Payment(s), if any, will be accelerated and due promptly following any “Change of Control” (as defined in the Employment Agreement) of MDC or upon the death of Dickson.

 

2.           During the Consulting Period, Dickson shall provide reasonable consulting services to MDC, as requested by MDC.  The consulting services (the “Consulting Services”) to be performed by Dickson shall include, without limitation, (i) assisting MDC in connection with any operating or transitional matters and (ii) facilitating the transition of Dickson’s responsibilities.  During the Consulting Period, Dickson shall report directly to Miles Nadal or another person designated by Mr. Nadal in his discretion, at such times and in such detail as shall reasonably be required recognizing that he is no longer an employee of MDC and in any event it is not expected that such services after the August 31, 2011, will require the expenditure of any material time. In any event, such Consulting Services will terminate upon the closing of any Change of Control of MDC.  Except for the Separation Payment provided for in Section 1 hereof, Dickson shall not be entitled to any additional compensation or payment of any other amounts for providing Consulting Services to MDC.  MDC agrees to reimburse Dickson for all reasonable travel expenses incurred in connection with the Consulting Services.

 

  

  

  

3.           MDC agrees that Dickson shall be entitled to the benefit of any Officers and Directors Insurance coverage consistent with the terms and conditions of the insurance policy for any matters which arose on or before June 1, 2011 and the benefit of any bylaws and indemnities of MDC available to him as an officer of MDC for acts arising before June 1, 2011.

 

4.           All monetary amounts referred to herein shall be in Canadian funds and shall be subject to withholding of taxes and other deductions required by law or as agreed to, in writing, between the parties.

 

5.           MDC acknowledges that Dickson has 46,908 restricted stock units and 64,014 Stock Appreciation Rights (“SARs”) outstanding and not vested as of June 1, 2011 (collectively, the “Unvested Equity Awards”).  The Unvested Equity Awards shall continue to vest in accordance with their underlying terms and conditions until May 31, 2013, on the same basis as if Dickson’s term of employment had continued until May 31, 2013 except for the 5000 restricted stock units granted January 26, 2011 which shall fully vest on May 31, 2013.   Notwithstanding the foregoing, the parties agree that Dickson shall have no further right to receive any future grants of equity incentive award(s) pursuant to that certain letter agreement between MDC and Dickson dated January 26, 2011 (the “EVAR Letter Agreement”), relating to a potential grant of up to 45,000 restricted stock units.  Effective as of the date hereof, the EVAR Letter Agreement shall be deemed terminated and cancelled. Upon any exercise of any outstanding SARs, MDC shall satisfy the exercise by issuance of MDC stock.  Attached to this agreement is a schedule showing the exercise periods applicable to the SARs.

 

6.           Dickson agrees to notify MDC in writing not less than three (3) business days prior to any open-market sale of MDC’s Class A shares.

 

7.           MDC shall continue to pay the premiums for health benefits for a maximum period of one year from June 1, 2011 until May 31, 2012, or until such earlier time as Dickson obtains alternative employment, whichever occurs earlier.

 

8.           Dickson undertakes and agrees to abide by the terms set forth in the attached confidentiality and non-solicitation agreement.

 

9.           Dickson agrees and undertakes to resign as an officer and/or director of MDC and any other companies to which he has been appointed either as an officer and/or director. By the execution of these Minutes of Settlement, Dickson acknowledges that he shall have so resigned and agrees to cooperate in executing any required documents.

 

10.         Dickson agrees not to, either directly or indirectly, publish or disclose the contents of this agreement or any terms thereof, in any manner whether in writing or orally, to any individual or entity (except for any one from whom Dickson obtains professional advice or his immediate family regarding this agreement) directly or indirectly, whether individually or by or through any agent, representative, attorney or other person.

 

  

- Page 2 -

  

11.         The parties agree that this agreement may not be used as evidence by either of them in any action or proceeding except one in which one of the parties alleges a breach of this agreement.

 

12.         In consideration for the payments and other promises contained in this agreement, Dickson agrees to execute the attached full and final Release, as well as the attached Confidentiality and Non-solicitation Agreement.

 

13.         This agreement and the terms hereof supersede and replace all prior discussions and/or agreements made between the parties, whether oral or written, and shall constitute the entire agreement between the parties with respect to all matters contemplated by this agreement and the parties hereto do not rely upon or regard as material, any representations or writings whatsoever not incorporated into and made a part of this agreement.  This agreement shall not be amended, altered or modified except in writing signed by the parties.

 

*                         *                      *

 

THIS AGREEMENT may be executed in counterparts, all of which together shall constitute a single, original instrument.

 

HAVING READ AND UNDERSTOOD THE RELEASE, CONSULTED COUNSEL OR VOLUNTARILY ELECTED NOT TO CONSULT COUNSEL, AND HAVING HAD SUFFICIENT TIME TO CONSIDER WHETHER TO ENTER INTO THIS AGREEMENT, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AND RELEASE AS OF THE DAY AND YEAR FIRST WRITTEN BELOW.

 

DATED this 6th day of June, 2011.

 

	  	  	
MDC Partners Inc.

	  
	Per:	  /s/
	
Name: Mitchell Gendel

	
Title: General Counsel

	
I have the authority to bind the corporation

 

	  /s/	  	  /s/
	
Witness

	  	
Robert Dickson

  

- Page 3 -

  

RELEASE AND INDEMNITY

 

IN CONSIDERATION of the attached Agreement of Settlement and Release dated June 6, 2011, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, I ROBERT DICKSON, for myself, my heirs, executors, administrators and assigns, hereby release and forever discharge MDC PARTNERS INC. and its parent, subsidiaries, affiliates, unincorporated divisions, predecessors, successors and assigns, and all of their past and present officers, directors, representatives, agents, shareholders and employees (collectively the "Releasees") from any and all claims, demands, causes of action, fees and liabilities of any kind whatsoever, whether known or unknown, which I ever had, now have or may have hereafter against any of them, by reason of any actual or alleged act, omission, transaction, practice, conduct, occurrence or other matter whatsoever up to and including the date on which this agreement becomes effective .  Without limiting the generality of the foregoing, this instrument shall release the Releasees from any claim arising out of or in any way relating to my employment or the cessation thereof, including but not limited to all claims that could have been raised under the Employment Standards Act of Ontario, 2000 as amended, the Human Rights Code of Ontario, as amended, Workplace Safety and Insurance Act, Occupational Health and Safety Act, including but not limited to any claim for commissions, vacation pay, overtime pay, health benefits, RSUs, bonuses, payment under any bonus or other compensation plan and any other compensation of any kind whatsoever under any federal or provincial law, by statute, regulation, contract or tort law, or and that I have not been subjected to any unequal treatment contrary to the Ontario Human Rights Code.

 

AND FOR THE SAID CONSIDERATION I further agree not to make any claim or demand or commence, maintain or prosecute any action, cause or proceeding for damages, compensation, loss or any relief whatsoever against the said Releasees in respect of any cause, matter or thing whatsoever arising out of or in consequence of my employment or the termination of my employment with the Releasees.  I further agree that this Release shall operate conclusively as an estoppel in the event of any such claim, action or proceeding and may be pleaded accordingly.

 

AND FOR THIS CONSIDERATION I further agree to indemnify and save harmless the Releasees from any and all claims or demands under the Income Tax Act of Canada and/or the Income Tax Act of the Province of Ontario and/or under the Employment Insurance Act of Canada, in respect of any failure on the part of the Releasees to withhold income tax and/or any amounts previously paid to me by Social Development Canada on account of employment insurance benefits received from the said consideration any interest or penalties relating to same, and further, to indemnify the Releasees for any costs or expenses it may incur in defending such claims or demands.

 

NOTWITHSTANDING THE FOREGOING, this Release shall not apply to any actions, causes of action, claims and demands which I may have relating to the failure or the refusal of the Releasees to comply with the terms of settlement as agreed upon.

 

AND I HEREBY DECLARE that I fully understand the terms of this settlement and have received or was afforded the opportunity to receive independent legal advice prior to executing this document and that I voluntarily accept the consideration offered for the purpose of making full and final compromise and settlement of all claims as aforesaid.

 

  

- Page 4 -

  

AND I HEREBY AGREE AND UNDERTAKE to resign as an officer and/or director from any companies referred to above and shall execute any documentation required for such purpose.

 

IT IS UNDERSTOOD AND AGREED that I hereby undertake and agree not to disclose the facts of this settlement or agreement or the terms thereof to any third party without the written consent of the Releasees, except persons from whom I receive professional advice, my immediate family or as required by law.  I also hereby undertake and agree that I will not make any disparaging remarks against the Releasees.

 

THIS RELEASE AND INDEMNITY shall be deemed to have been made in and shall be construed in accordance with the laws of the Province of Ontario.

 

THIS RELEASE AND INDEMNITY shall enure to the benefit of and be binding upon the undersigned, the Releasees and their respective heirs, executors, administrators, legal personal representatives, successors and assigns.

 

IT IS UNDERSTOOD AND AGREED that the giving of the aforesaid consideration is deemed to be no admission whatsoever of liability on the part of the Releasees.

 

IN WITNESS WHEREOF I have hereunto set my hand and seal at    this 6th day of June, 2011.

 

	
SIGNED, SEALED AND DELIVERED

	  	  
	
in the presence of

	  	  
	  /s/	  	  /s/
	
Witness

	
  

	
Robert Dickson

  

- Page 5 -

  

Confidentiality and Non-Solicitation Agreement

 

Confidentiality and Non-Solicitation Agreement, dated as of June 6, 2011, between MDC Partners Inc. (together with its affiliates, “MDC”) and Robert Dickson (the “Dickson”).

 

In consideration of the Agreement of Settlement and Release between Dickson and MDC dated the date hereof, the parties hereto agree as follows:

 

1.           Non-Disclosure of Confidential Information.

(a)           Dickson acknowledges that, in the course of his employment, he was provided with information which is confidential or proprietary in nature, as to MDC or its clients relating to their business affairs, property, methods of operation or other data (the “Confidential Information”), and that, the goodwill afforded to MDC depends upon, MDC and its employees keeping such information confidential.  Dickson acknowledges that MDC would be irreparably damaged if the Confidential Information were disclosed to or utilized on behalf of others.  Therefore, Dickson agrees that, he will not at any time, disclose to any person or use any Confidential Information, or permit any person to examine and/or make copies of any documents which contain or are derived from Confidential Information, whether prepared by Dickson or otherwise coming into Dickson’s possession or control without the prior written permission of MDC.

 

(b)           Dickson agrees that, upon the request of MDC, Dickson shall deliver to MDC all documents, papers or other material in his possession or under his control, together with any reproductions thereof, that may contain or be derived from Confidential Information, together with all documents, notes or other work product which is connected with or derived from Dickson’s services to MDC whether or not such material is at the date hereof in Dickson’s possession.  Dickson agrees that he shall have no proprietary interest in any work product developed or used by Dickson and arising out of his employment by MDC. Dickson shall, from time to time as may be requested by MDC, do all things which may be necessary to establish or document MDC’s ownership of any such work product.  In furtherance of the foregoing, Dickson hereby irrevocably appoints each executive officer of Dickson as his attorney-in-fact, with power of substitution, to perform any obligation to Dickson hereunder.

 

2.           Non-Solicitation Agreement.

 

(a)           Dickson shall not, for a period of two (2) years commencing June 1, 2011 and until May 31, 2013:

 

	
  

	
i.

	
solicit any business from (either directly or indirectly or through corporate entities) with any customer or client of MDC or any person or firm which has contacted or been contacted by MDC as a potential customer or client of MDC, provided that any such customer or client or prospective customer or client was a customer, client or documented prospect within the preceding 12 months (each, a “Client”);

  

- Page 6 -

  

 

	
  

	
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 MDC or any of its affiliates, or persuade or attempt to persuade any employee of MDC or any of its affiliates to leave the employ of MDC or to become employed as an employee or retained as a consultant by any person, firm or entity other than MDC;

 

	
  

	
iii.

	
render to or for any Client any services of the type which are rendered by MDC or any of its affiliate to such client; and

	
  

	
iv.

	
interfere with, or attempt to interfere with, business relationships (whether formed before or on the date of this Agreement) between MDC and any Clients, suppliers or partners.

 

3.           Intellectual Property.  Dickson agrees that all materials created or modified by him during his term of employment and any materials required in the performance of duties and responsibilities for MDC, including, without limitation, all works of authorship, inventions, processes, ideas, methods, concepts and other tangible and intangible materials (collectively, “Work Product”), shall be "work for hire" and that the MDC shall be the exclusive owner of the Work Product and all intellectual property rights associated with the Work Product, including all trademarks, patents or copyrights contained therein.  To the extent any Work Product does not qualify as "work for hire", Dickson hereby assigns ownership of all such Work Product to MDC and agrees to take all reasonable measures, at MDC expense, to perfect such rights in MDC.  Dickson hereby appoints MDC as his attorney-in-fact with the limited power to execute assignments of such Work Product.

 

4.           Miscellaneous.   This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, executors, successors and assigns. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.  This Agreement may be modified only by an instrument in writing signed by both parties hereto.  Any notice to be given under this Agreement shall be sufficient if it is in writing and is sent by certified or registered mail to Dickson at his residence address as the same appears on the books and records of MDC or to MDC at its principal office, attention General Counsel, or as otherwise directed by MDC, from time to time.

 

*                      *                      *                      *

 

  

- Page 7 -

  

IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the date first above written.

 

	  	
MDC Partners Inc.

	  	  
	  	
By:

	  /s/ 
	  	
Name: Mitchell Gendel

	  	
Title: General Counsel

 

	
ACKNOWLEDGED AND AGREED:

	  
	  /s/ 
	
Robert Dickson

  

- Page 8 -

  

Schedule of Outstanding SARS

 

	
  

	
1.

	
Grant of 188,276 SARS (“Base Price” = US$3.72) on February 12, 2009.  Of this amount, 124,262 SARS are vested as of the date hereof and may be exercised prior to May 31, 2013.  The remaining balance of 64,014 SARS shall vest on February 12, 2012, in accordance with their respective terms, and may be exercised beginning February 12, 2012 and continuing until May 31, 2013.

 

	
  

	
2.

	
Grant of 10,000 SARS (“Base Price” = US$8.95) on April 28, 2006.   Such SARS are fully vested as of the date hereof and may be exercised prior to May 31, 2013.

 

  

- Page 9 -

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