Document:

Exhibit 10.1

 

 

MDC
Partners Inc.

 

Execution
Copy

 

September 9, 2018

Scott L. Kauffman

MDC Partners Inc.

745 Fifth Ave.

New York, NY 10151

 

Re: Succession
Agreement            

 

Dear Scott,

 

This
letter agreement (“Agreement”) sets forth the terms and conditions of the succession of your employment and
service as Chairman and Chief Executive Officer of MDC Partners Inc., a Canadian corporation (the “Company”).
Reference is made to your Employment Agreement with the Company, dated as of August 25, 2015 (the “Employment Agreement”).
Capitalized terms used in this Agreement that are not defined herein have the meanings set forth in the Employment Agreement.

 

1.      Succession
of Employment.

 

(a)      Your
employment with the Company will terminate, and you will resign from your position as Chairman and Chief Executive Officer of the
Company, and from all other offices with the Company and its affiliates, on the Succession Date. For purposes hereof, the “Succession
Date” shall mean the earlier to occur of December 31, 2018 and the date immediately prior to the first date of service
of a new Chief Executive Officer of the Company, as appointed by the Company’s Board of Directors (the “Board”).
During any period of employment prior to the Succession Date, you will continue in your position as Chairman and Chief Executive
Officer and perform the duties of such office, and you agree to assist the Board in the identification and hiring of a successor
Chief Executive Officer during this period. Prior to the termination of your employment, except as provided herein, you will continue
to have the duties and responsibilities, and be subject to the covenants and obligations, set forth in the Employment Agreement
and, following the termination of your employment, you will be subject to the covenants and obligations set forth herein. You shall
be entitled to receive your Base Salary and participate in employee benefit plans (in accordance with Section 5(b) of the Employment
Agreement) through the date of the termination of your employment. You will not be eligible to receive an annual bonus in respect
of the 2018 calendar year nor to be granted any long-term incentive awards after the date hereof. In addition, you shall remain
eligible to receive a discretionary payment described in Section 7(c) of the Employment Agreement. You will not be entitled to
any payments or benefits under the Employment Agreement except as specifically provided herein or as incorporated herein by reference,
and you hereby waive and release any claims for such payments or benefits.

 

(b)      In
the event that, prior to the Succession Date, your employment is terminated on account of death, Disability, termination without
Cause, or termination for Good Reason as provided in Section 6 of the Employment Agreement, your rights to separation payments
and benefits shall be the same as those set forth in this Agreement, and the date of such termination shall be treated as the Succession
Date for all purposes hereunder; provided that the matters contemplated by, or resulting from execution of, this Agreement shall
not constitute the basis for a termination for Good Reason. Upon any termination of your employment prior to the Succession Date
as a termination for Cause or a termination without Good Reason, as defined in the Employment Agreement and modified herein, you
will not be entitled to any separation payments or benefits other than the Accrued Rights described in Section 5 below, no Succession
Date shall occur for purposes of this Agreement, and the terms of this Agreement and any other agreement with the Company or its
affiliates providing for separation payments or benefits shall be null and void.

 

    	 	1	 

     

    

 

2.     Continued
Board Service.

 

Following
the Succession Date (if any), subject to any right of removal pursuant to the Company’s organizational documents or applicable
law, and your right to resign from such position, you will continue as a member of the Board for a period to continue through the
end of the current term on or about June 6, 2019, and you hereby agree not to stand for reelection from the Board at the end of
such period unless you and the Board agree to an extension of such period. You will receive compensation for your service as a
member of the Board following the Succession Date, in the same amounts as paid to the independent members of the Board, provided
that you shall not serve on any Committees of the Board.

 

3.      Succession
Payments and Benefits. 

 

In
consideration of your obligations under this Agreement (including the covenants in Section 7 and Section 8 hereof), upon and
subject to your separation from service on the Succession Date, you will be entitled to a cash separation payment equal to $3,600,000,
payable in a single lump sum (subject to applicable tax withholdings) within sixty (60) days following the Succession Date.
Notwithstanding the foregoing, you shall not be entitled to receive any of the payments in this Section 3 or Section 4
unless you execute and deliver to the Company the Release of Claims in the form of Exhibit A hereto, and you do not revoke such
Release of Claims, within the time periods specified therein. In the event that a new Chief Executive Officer has not been appointed
by the Board by December 31, 2018, and you and the Board do not mutually agree to the continuation of your service as Chief Executive
Officer and the terms and conditions thereof, your employment will terminate as of such date and you will be entitled to the separation
payments and benefits provided under this Section 3 and Section 4 hereof, subject to the terms thereof.

 

4.      Long-Term
Incentive Awards; Incentive/Retention Agreement. 

 

The
long-term incentive awards set forth on Exhibit B hereto (the “LTIP Awards”) shall remain subject to the
terms and conditions set forth in the applicable award agreements, including without limitation applicable provisions in each LTIP
Award for pro-rated vesting upon termination without Cause and applicable provisions related to the occurrence of a Change in Control
during any period of employment; provided that a termination of your employment on the Succession Date shall be deemed a termination
without Cause with respect to the LTIP Awards. You acknowledge that you shall not have any rights to any long-term incentive awards
following termination of your employment other than the LTIP Awards identified on Exhibit B. If no Succession Date occurs, the
LTIP Awards shall be subject to the terms and conditions set forth in the applicable award agreements.

 

    	 	2	 

     

    

  

For
the avoidance of doubt, during any period of employment with the Company, you shall continue to vest under any Restricted Stock
Grant Award and any other compensation award issued to you by the Company or its affiliates pursuant to the terms and conditions
set forth in the applicable award agreements. 

 

In
addition, the terms and conditions of that certain Incentive/Retention Agreement between you and the Company, dated as of February
23, 2018, shall continue to remain in effect until the Succession Date. 

 

5.      Accrued
Rights. 

 

Upon
the termination of your employment, you will be entitled to (i) the earned but unpaid Base Salary payments in accordance with
the Employment Agreement and (ii) payment of any unreimbursed business expenses in accordance with the Company’s current
Travel & Entertainment Policy.

 

6.      Indemnification
and Insurance.

 

You
will continue to remain eligible for indemnification under the Company’s By-laws. You will also continue to be covered by
any past, current or future Company Director and Officer Liability Insurance program to the same extent as then-current officers
and directors of the Company.

 

7.     Cooperation.

 

You
agree that, following the termination of your employment, at the Company’s request, you shall assist and advise the Company
as reasonably necessary in any investigation which may be performed by the Company or any government agency and any litigation
in which the Company may become involved. Such assistance shall include you making yourself reasonably available for interviews
by the Company or its counsel, deposition and/or court appearances at the Company’s request. The Company shall use its reasonable
efforts to schedule such assistance at mutually convenient times and places, taking into account any employment constraints that
you may have. The Company shall reimburse you for reasonable expenses incurred by you at the Company’s request, consistent
with the Company’s practices applicable to you during your employment. To the maximum extent permitted by law, you agree
that you will notify the Company’s General Counsel if you are contacted by any person contemplating or maintaining any claim
or legal action against the Company, or by any agent or attorney of such person, within three business days of such contact. Nothing
in this Section 7, however, requires you to act against your own legal interests.

 

    	 	3	 

     

    

 

8.      Restrictive
Covenants.

 

(a)      Confidentiality,
Non-Competition and Non-Solicitation Covenants; Intellectual Property. You acknowledge and agree that the provisions of Section
8 and Section 9 of the Employment Agreement shall remain in full force and effect in accordance with the terms thereof, and that
you are in compliance and shall continue to comply with such covenants prior to and following termination of your employment for
the time periods specified therein. 

 

(b)       In
addition, Section 8(b) of the Employment Agreement (Confidential Information) is hereby amended by adding the following subclauses
to the end of such clause:

 

(i)
Defend Trade Secrets Act. Executive is hereby notified, in accordance with the Defend Trade Secrets Act of 2016, 18 U.S.C.
 § 1833(b), that: (i) an individual shall not be held criminally or civilly liable under any federal or state trade secret
law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official, or to an
attorney, solely for the purpose of reporting or investigating a suspected violation of law; (ii) an individual shall not be held
criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a
complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (iii) an individual
who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to
the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document
containing the trade secret under seal and does not disclose the trade secret except pursuant to court order.

 

(ii)
Whistleblower. Notwithstanding anything herein to the contrary, nothing in this Agreement shall: (i) prohibit Executive
from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with
the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley
Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation; or (ii) require notification
or prior approval by the Company of any reporting described in clause (i).

 

(c)       Non-Disparagement.
You covenant and agree that you shall not disparage or direct others to disparage the Company or any of its affiliates, or any
of their past, present or future employees, officers, directors, products or services, and the Company covenants and agrees that
it shall instruct its directors and officers not to disparage or make defamatory statements about you. For purposes of this Section 8(c),
the term “disparage” includes, without limitation, comments or statements to the press, to the Company’s or its
affiliate’s employees (other than in the good faith performance of duties to the Company) or to any individual or entity
with whom the Company or its affiliates has a business relationship (including, without limitation, any vendor, supplier, customer
or distributor) or any public statement that would intentionally have a material adverse effect on, in any manner and as applicable:
(i) the conduct of any business by the Company or you, as applicable, or its or your affiliates (including, without limitation,
any business plans or prospects), or (ii) the business reputation of the Company or you, as applicable, or its or your affiliates
(including for the Company, any officer, director or employee of the Company or its affiliates). Notwithstanding the foregoing,
nothing in this Section 8(c) shall prevent the Company or you from making any truthful statement to the extent, but only to
the extent (i) such statement is made in connection with any proceeding (regardless of whether between you and the Company)
or in the course of any regulatory or administrative inquiry, review or investigation or other proceeding that may be conducted
by a government agency, or (ii) required by law, legal process or by any court, arbitrator, mediator or administrative or
legislative body (including any committee thereof) with apparent jurisdiction over you. 

 

    	 	4	 

     

    

 

(d)      Public
Announcement. Prior to the date hereof, the Company has provided you with final versions of all press releases and public communications
to be issued by the Company related to the separation of your employment.

 

9.      
Tax Withholding.

 

The
Company shall deduct or withhold, or require you to remit to the Company, the minimum statutory amount to satisfy federal, state
or local taxes required by law or regulation to be withheld with respect to any benefit provided hereunder.

 

10.      Entire
Agreement.

 

This
Agreement constitutes the entire agreement between you and the Company with regard to the subject matter hereof and, effective
as of the date hereof, supersedes the Employment Agreement, except as specifically provided herein (including, without limitation,
Section 8 of this Agreement). For the purposes of determining your rights and benefits under all other agreements between you and
the Company, your termination of employment on the Succession Date shall be deemed to be a termination without Cause by the Company.
In the event that any one or more of the provisions of this Agreement are held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remainder of the Agreement shall not in any way be affected or impaired thereby. No waiver by
either party of any breach by the other party of any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of any other provision or condition at the time or at any prior or subsequent time.

 

11.      Notices.

 

All
notices given hereunder shall be given in writing, shall specifically refer to this Agreement and shall be personally delivered
or sent by telecopy, facsimile or other electronic transmission or by registered or certified mail, return receipt requested, at
the address set forth below or at such other address as may hereafter be designated by notice given in compliance with the terms
hereof: 

 

	If to you:	 	To your address as set forth in the Company’s records.
	 	 
	If to the Company:	 	MDC Partners Inc.
	 	 	745 Fifth Avenue
	 	 	New York, New York 10151
	 	 	Attn: General Counsel

 

    	 	5	 

     

    

 

If
notice is mailed, such notice shall be effective upon mailing, or if notice is personally delivered or sent by telecopy, PDF or
other electronic transmission, it shall be effective upon receipt.

 

12.      Successors
and Assigns.

 

This
Agreement is intended to bind and inure to the benefit of and be enforceable by you, the Company and your and the Company’s
respective heirs, successors and assigns, except that you may not assign your rights or delegate your obligations hereunder without
the prior written consent of the Company. The Company agrees to cause any person or entity that succeeds to the interest of the
Company (regardless of whether such succession does or does not occur by operation of law) by reason of the sale of all or a portion
of the Company’s stock, a merger, consolidation or reorganization involving the Company or, unless the Company otherwise
elects in writing, a sale of the assets of the business of the Company (or portion thereof) in which you perform a majority of
your services to assume this Agreement.

 

13.      Section
409A.

 

The
intent of the parties is that payments and benefit under this Agreement comply with or be exempt from Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”) and, accordingly, to the maximum extent permitted,
this Agreement shall be interpreted to be in compliance therewith or exempt therefrom, as applicable. A termination of employment
shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are
considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such
termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior
to a “separation from service” would violate Section 409A. Any payment hereunder constituting “nonqualified
deferred compensation” within the meaning of Section 409A will be paid on the day that is six months plus one day after
your separation from service, after applying the exemption for short-term deferrals of compensation in accordance with Section 409A.
All expenses or other reimbursements as provided herein shall be payable in accordance with the Company’s policies in effect
from time to time, but in any event any reimbursements that are non-qualified deferred compensation subject to Section 409A
of the Code shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were
incurred by you. No such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses
eligible for reimbursement in any other taxable year and the right to reimbursement or in-kind benefits shall not be
subject to liquidation or exchanged for another benefit. For purposes of Section 409A, your right to receive any installment
payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever
a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made
within thirty days following the date of termination”), the actual date of payment within the specified period shall be within
the sole discretion of the Company. Nothing contained in this Agreement shall constitute any representation or warranty by the
Company regarding compliance with Section 409A.

 

    	 	6	 

     

    

 

14.      Choice
of Law.

 

This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles
of conflict of laws thereof.

 

15.      Arbitration.

 

Any
dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. This arbitration
shall be held in New York City and except to the extent inconsistent with this Agreement, shall be conducted in accordance with
the Expedited Employment Arbitration Rules of the American Arbitration Association then in effect at the time of the arbitration,
and otherwise in accordance with principles which would be applied by a court of law or equity. The arbitrator shall be acceptable
to both you and the Company. If the parties cannot agree on an acceptable arbitrator, the dispute shall be held by a panel of three
arbitrators one appointed by each of the parties and the third appointed by the other two arbitrators.

 

16.      Counterparts.

 

This
Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

 

 

*                *                *                *                *

 

Please acknowledge your acceptance of the
terms of this Agreement by signing and dating this letter agreement as indicated below.

 

	 	Sincerely,	 
	 	 	 
	 	MDC PARTNERS INC.	 
	 	 	 	 
	 	By:	/s/ Mitchell Gendel	 
	 	  	Name:  Mitchell Gendel	 
	 	 	Title:    General Counsel	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Scott L. Kauffman	 
	 	 	Scott L. Kauffman	 

 

    	 	7	 

     

    

Exhibit
A

Release
of Claims

 

(i)      I,
Scott L. Kauffman, in consideration of and subject to the performance by MDC Partners Inc. (together with its subsidiaries, the
 “Company”), of its material obligations under the Succession Agreement with the Company, dated September 9, 2018 (the
 “Agreement”), do hereby release and forever discharge, as of the date hereof, the Company and its affiliates and its
and all of their respective present and former directors, officers, agents, representatives, employees, successors, assigns and
direct or indirect owners (collectively, the “Released Parties”) to the extent provided below. Defined terms used herein
that are not otherwise defined shall have the meanings set forth in the Agreement.

 

(ii)      I
have agreed that I will not receive the payments and benefits specified in Section 3 and Section 4 of the Agreement unless
I execute this Release of Claims and do not revoke it within the time period permitted hereafter or breach this Release of Claims.
I also acknowledge and represent that I have received all payments and benefits that I am entitled to receive (as of the date hereof)
by virtue of employment with the Company, other than as provided in the Agreement.

 

(iii)      Except
as provided in paragraph (v) below, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns)
release and forever discharge the Company and the other Released Parties from any and all claims, lawsuits, controversies, actions,
causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary
damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity,
both past and present (through the date of this General Release) and whether known or unknown, suspected, or claimed against the
Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have,
which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but
not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 967, as amended (including the Older Workers Benefit Protection
Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993;
the Civil Rights Act of 1866, as amended; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income
Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts;
or under any other federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation
or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures
of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim
for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively
referred to herein as the “Claims”); provided that the foregoing release shall not extend to, and in no event shall
the “Claims” which are being released hereunder include, (a) any rights to reimbursement or indemnification in
my capacity as an officer, director or employee of the Company or any of its Subsidiaries under the governing documents of the
Company or such Subsidiary, any reimbursement or indemnification agreement with the Company, any insurance policy or applicable
law, in accordance with the terms thereof, as a matter of law, or otherwise, or under any power that the Company may have to indemnify
me or hold me harmless, (b) my rights to payments or benefits due under Section 3 and Section 4 of the Agreement,
(c) my rights as a stockholder of the Company or (d) my rights to enforce the terms of this Release of Claims. 

 

    	 	8	 

     

    

 

(iv)      I
represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph
iii above.

 

(v)      I
agree that this Release of Claims does not waive or release any rights or claims that I may have under the Age Discrimination in
Employment Act of 1967 which arise after the date I execute this Release of Claims. I acknowledge and agree that my separation
from employment with the Company shall not serve as the basis for any claim or action (including, without limitation, any claim
under the Age Discrimination in Employment Act of 1967).

 

(vi)      In
signing this Release of Claims, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims
hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according
to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding
any state statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims),
if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver
is an essential and material term of this Release of Claims and that without such waiver the Company would not have agreed to the
terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or in the
event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this Release of
Claims shall serve as a complete defense to such Claims. I further agree that I am not aware of any pending charge or complaint
of the type described in paragraph (iii) as of the execution of this Release of Claims.

 

(vii)      I
agree that neither this Release of Claims, nor the furnishing of the consideration for this Release of Claims, shall be deemed
or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct.

 

(viii)      I
agree that I will forfeit all amounts payable by the Company pursuant to Section 3 and Section 4 of the Agreement if
I challenge the validity of this Release of Claims. I also agree that if I violate this General Release by suing the Company or
the other Released Parties, I will return all payments received by me pursuant to the Agreement.

 

(ix)      Whenever
possible, each provision of this Release of Claims shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Release of Claims is held to be invalid, illegal or unenforceable in any respect under arty applicable
law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other
jurisdiction, but this Release of Claims shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision had never been contained herein.

 

    	 	9	 

     

    

 

BY SIGNING THIS RELEASE
OF CLAIMS, I REPRESENT AND AGREE THAT:

 

(a)      I
HAVE READ IT CAREFULLY;

 

(b)      I
UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION
IN EMPLOYMENT ACT OF 1967, AS AMENDED; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS
WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

(c)      I
VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

I HAVE BEEN ADVISED TO
CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT
TO DO SO OF MY OWN VOLITION; I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE OF CLAIMS SUBSTANTIALLY IN
ITS FINAL FORM ON September 9, 2018, TO CONSIDER IT AND THE CHANGES MADE SINCE THE FINAL VERSION OF THIS RELEASE OF CLAIMS
ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

 

(d)      [omitted]

 

(e)      I
UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE OF CLAIMS TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME
EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;

 

(f)      I
HAVE SIGNED THIS RELEASE OF CLAIMS KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT
TO IT; AND

 

(g)      I
AGREE THAT THE PROVISIONS OF THIS RELEASE OF CLAIMS MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN
WRITING SIGNED BY A REPRESENTATIVE OF THE COMPANY AND BY ME.

 

 

 

DATE: September 9, 2018

 

 

/s/
Scott L. Kauffman________

Scott
L. Kauffman

 

 

 

 

    	 	10	 

     

    

 

Exhibit B

 

 

 

	Type of Award	Grant Date	Vesting Date	Award Description
	Financial-Performance Restricted Stock Grant Agreement (2016)	2/17/2016	12/31/18	142,348 Class A Shares
	Financial-Performance Restricted Stock Grant Agreement (2017)	1/31/2017	12/31/19	300,000 Class A Shares
	Financial-Performance Restricted Stock Grant Agreement (2018)	2/28/2018	12/31/20	128,342 Class A Shares
	2018 LTIP Award Agreement	2/23/2018	3/1/2021 (Applicable Payment Date)	LTIP cash target amount equal to $1,200,000Exhibit 10.1

[ONEMAIN LETTERHEAD]

September 8, 2018

Jay N. Levine

OneMain Holdings, Inc.

One Station Place, Ste. 304

Stamford, CT  06902

Resignation and Service on

the Board of Directors of OneMain Holdings, Inc.

Dear Jay:

The Board of Directors (the “Board”) of OneMain Holdings, Inc. (the “Company”) has received your notice that you have decided to resign from your position as the Company’s President and Chief Executive Officer (and, more generally, as an employee of the Company) and as a member of the Executive Committee of the Board effective as of September 8, 2018 (the “Effective Date”), but that you desire to retain your role as the Chairman of the Board and a member of the Compliance Committee of the Board.  The Company also desires for you to retain your role as the Chairman of the Board and as a member of the Compliance Committee on the terms set forth in this letter agreement.  Your compensation as of the Effective Date is subject to the approval of the Company’s Compensation Committee and the terms and conditions set forth in this letter agreement.

Fees.  In consideration of your services as a nonemployee Chairman of the Board, you will be paid an aggregate annual fee of $500,000 (“Annual Director Fee”), half of which (i.e., $250,000) is payable in cash (the “Annual Cash Director Fee”) and the other half of which (i.e., $250,000) is payable in the form of an equity award under the terms of the Amended and Restated 2013 Omnibus Incentive Plan or another long-term incentive plan maintained by the Company (the “Incentive Plan”) (such portion of the Annual Director Fee, the “Annual Equity Director Fee”).  For 2018, the Annual Director Fee will be prorated using the Effective Date as the starting date.  The Annual Cash Director Fee will be paid to you in equal installments not less frequently than quarterly at the same time that cash fees are generally paid to other members of the Board.  The Annual Equity Director Fee will be paid to you in the form of restricted stock units under the Incentive Plan (or another form of equity under the Incentive Plan that is awarded to other members of the Board) and will be subject to the same vesting and other terms and conditions as are applicable to the annual equity awards granted to other members of the Board (including execution of an agreement similar to that executed by other members of the Board).  The number of shares subject to such award will be determined based on the closing price of the Company’s common stock on the grant date (or, if such date is not a business day, on the last business day preceding such date).  In connection with your service as a non-executive Chairman of the Board as of the Effective Date and for the remainder of 2018, you will be entitled to a restricted stock unit award with a grant date value of $78,082.19 (which represents a pro rata portion of your Annual Equity Director Fee for 2018 starting on the Effective Date), which will vest on January 2, 2019 subject to your continued service to the Company on the Board through such date.   The Annual Director Fee will be compensation for all services that you perform as a director and Chairman of the Board, including for service on Board committees, and is in lieu of compensation paid to directors generally unless specifically authorized by the Board.

 

Your service on the Board is subject to termination on the same terms and conditions as are generally applicable to other members of the Board.  You specifically acknowledge that you remain subject to applicable “insider trading” policies for the purchase and sale of Company securities.

Duties.  In addition to your duties as Chairman and member of the Board, from time to time at the request of the Board or the Company’s Chief Executive Officer (“CEO”), you shall render consultation, advice, information and assistance concerning matters related to the Company, its subsidiaries and the financial services industry, including, but not limited to, customer, investor and regulator relations, industry practices, the Company’s prior practices and other matters as reasonably requested by the Board or the CEO.  You agree to honor any such reasonable requests for your services and you agree to devote reasonable time and your best efforts, skill, and attention to the diligent performance of your duties as requested by the Company.  In rendering any such services, you are free to arrange your own time, pursuits, and schedule and to determine the specific manner in which your services will be performed, but you agree to use your best efforts to accommodate the scheduling requirements and the work of the Company, including attendance at Board and relevant committee meetings.  The Company agrees that it will provide you with the support of a secretarial assistant (who may also provide services to other members of the Board or employees of the Company), an office at the Company’s offices and a Company email address for so long as you remain the Chairman of the Board.

Benefits.  You acknowledge and agree that as of the Effective Date you will no longer be an employee of the Company and as a result, you will no longer be eligible for any benefit programs, plans, arrangements or policies made available to employees; provided, however, that you will remain eligible to participate in any benefit programs, plans, arrangements or policies made available to other members of the Board and former employees, subject to the terms and conditions generally applicable to such benefit programs.

 

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Taxes.  You acknowledge your separate responsibility for all federal and state withholding income taxes, Federal Insurance Contribution Act taxes, and workers’ compensation and unemployment compensation taxes, if applicable.  You and the Company both agree that you are properly classified as an independent contractor of the Company as of the Effective Date.

Non-Competition.   You will not, during your service with the Company, provide consultative services to, own, manage, operate, join, control, be employed by, participate in, or be connected in a business venture with, any business, individual, partner, firm, corporation, or other entity that directly competes with the Company or any of its subsidiaries in the business of direct consumer non-real estate finance and credit insurance anywhere in the United States.

You will not, during the twelve (12) month period following the notice of termination of your services by you or the Company for any reason or no reason, provide consultative services to, own, manage, operate, join, control, be employed by, participate in, or be connected with, any business, individual, partner, firm, corporation, or other entity that directly competes with the Company or any of its subsidiaries in the business of direct consumer non-real estate finance and credit insurance anywhere in the United States.

Notwithstanding the foregoing, the following shall not be deemed a violation of this letter agreement:  the “beneficial ownership” by you, either individually or as a member of a “group” (as such terms are used in Rule 13d of the general rules and regulations under the Securities Exchange Act of 1934) of stock, but not more than five percent (5%) of the voting stock, of any public company.

Non-Solicitation.    You will not, directly or indirectly, during your service with the Company and for twelve (12) months following the effective date of the termination of your services by you or the Company for any reason or no reason, either (x) solicit or encourage to leave the employment of the Company, any of its subsidiaries or any of their respective affiliates, any employee, consultant, independent contractor or other service provider thereof (or knowingly assist any other person in so soliciting, encouraging, enticing or inducing), or hire any person who has left the employment of, or has ceased providing services to, the Company, any of its subsidiaries or any of their respective affiliates during the immediately preceding six-month period without the prior written consent of the Company or (y) disrupt, damage, impair or interfere with business of the Company or any of its subsidiaries by raiding Company or any of its subsidiaries employees.

You will not, directly or indirectly, while you are a member of the Board and for twelve (12) months following the effective date of the termination of your services by you or the Company for any reason or no reason, whether for your own account or for the account of any other person, firm, corporation or other business organization, directly, or indirectly by assisting others, intentionally interfere with the relationship of the Company, any of its subsidiaries or any of their respective affiliates, or endeavor to entice away from the Company, any of its subsidiaries or any of their respective affiliates, any clients or customers of the Company, any of its subsidiaries or any of their respective affiliates.

 

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Enforcement.  If you commit a breach of, or are about to commit a breach of, any of the provisions in the Non-Competition or Non-Solicitation sections of this agreement above, the Company shall have the right to have such provisions specifically enforced by any court having equity 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.

Entire Agreement.  This letter agreement embodies the entire agreement and understanding of the parties hereto with regard to the matters described herein, and supersedes any and all prior and/or contemporaneous agreements and understandings, oral or written, between the parties regarding your services (including the Employment Agreement made and entered into as of September 30, 2013 by and between you and Springleaf Finance Inc. (the “Employment Agreement”)), but not including the Indemnification Agreement made and entered into as of June 25, 2018 by and between you and the Company, which you and the Company agree will survive this Letter Agreement.  You further agree that, as of the Effective Date, the Employment Agreement will be deemed to be terminated by mutual consent, and you will not be entitled any additional compensation or benefits under the Employment Agreement, including any severance under Section 6 of the Employment Agreement.  Notwithstanding the foregoing, the parties agree that Sections 7(a), (b) and (e) will remain in effect.

Counterparts.  This letter agreement may be executed in two or more counterparts (including via facsimile or .pdf file), each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.  This letter agreement may be executed by the Company by affixing the facsimile or other electronic signature of a duly authorized officer or director of Parent and the use of such a facsimile or other electronic signature shall have the same validity and effect as the use of a signature affixed by hand.

We look forward to having you remain as the Chairman of the Board, and to the future success of our businesses.

If the foregoing is consistent with your understanding, please sign both duplicate originals of this letter agreement and keep one duplicate original for your records.

 

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Very truly yours,

	 
	 	 	 
	 	
ONEMAIN HOLDINGS, INC.

	 
	 	 	 
	 	
By:

	
/s/ Roy A. Guthrie

	 

	 	
Name:

	
Roy A. Guthrie

	 	
Title:

	
Member of the Board

	
Acknowledged and Agreed:

	 
	 	 
	
/s/ Jay N. Levine

	 
	
Jay N. Levine

	 

 

 

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