SERVICE-BASED AND FINANCIAL PERFORMANCE-BASED RESTRICTED STOCK UNIT GRANT AGREEMENTEquity Incentive Plan Agreement |
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2007
Form
of RSU Agreement
SERVICE-BASED
AND FINANCIAL PERFORMANCE-BASED
RESTRICTED
STOCK UNIT GRANT AGREEMENT
THIS
AGREEMENT,
made as
of the ___ day of November, 2007 (the “Grant
Date”),
between MDC Partners Inc., a Canadian corporation (the “Corporation”),
and
________________ (the “Grantee”).
WHEREAS,
the Corporation has adopted the 2005 Stock Incentive Plan (the “Plan”)
for
the purpose of providing employees
and consultants of the Corporation and eligible non-employee
directors
of the
Corporation’s Board of Directors a proprietary interest in pursuing the
long-term growth, profitability and financial success of the Corporation (except
as otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the same definitions set forth in the Plan).
WHEREAS,
the Human Resources & Compensation Committee (the “Committee”)
of the
Board of Directors has determined that it is in the best interests of the
Corporation to make the financial performance-based award set forth herein,
which award will vest in part based on the Grantee’s continued service to the
Company through the applicable vesting date, and in part based upon achievement
by the Corporation of specified financial growth targets during the calendar
years 2007 - 2009.
WHEREAS,
pursuant to the Plan, the Committee has determined to grant an Other Stock-Based
Award to the Grantee in the form of restricted units (“Restricted
Stock Units”)
of
Class A subordinate voting shares (the “Class
A Shares”),
subject to the terms, conditions and limitations provided herein, including
achievement of financial performance targets, and in the Plan;
NOW,
THEREFORE, the parties hereto agree as follows:
1. Grant
of Restricted Stock Unit.
1.1 The
Corporation hereby grants to the Grantee, on the terms and conditions set forth
in this Agreement, the number of Restricted Stock Units set forth under the
Grantee's name on the signature page hereto and in accordance with Section
1.2
(the “2007
RSU Award”).
Each
Restricted Stock Unit issued as part of the 2007 RSU Award shall represent
the
right to receive one issued and outstanding share of the Class A Shares of
the
Corporation, but shall be subject to the restrictions, conditions and other
terms set forth in this Agreement and in the Plan.
1.2 The
Grantee's
rights with respect to all the Class A Shares underlying the 2007 RSU Award
shall not vest and will remain forfeitable at all times prior to the Vesting
Date (as defined below). At any time, reference to the 2007 RSU Award shall
be
deemed to be a reference to the Restricted Stock Units granted under Section
1.1
that have neither vested nor been forfeited pursuant to the terms of this
Agreement.
1.3 This
Agreement shall be construed in accordance with, and subject to, the terms
of
the Plan (the provisions of which are incorporated herein by
reference).
2. Rights
as Holder of Restricted Stock Units;
Non-Transferability.
With
respect to the 2007 RSU Award, the Grantee shall have no rights as a stockholder
of the Corporation (including the right to vote or receive dividends) with
respect to any Class A Shares of the Corporation until the date of issuance
to
the Grantee of a certificate or other evidence of ownership representing such
Class A Shares in settlement thereof. In addition, dividend equivalents will
not
be paid or payable with respect to the 2007 RSU Award subject to this Agreement.
Prior
to
the Vesting Date, the Grantee shall not be entitled to transfer, sell, pledge,
hypothecate or assign any portion of the 2007 RSU Award (collectively, the
“Initial Transfer
Restrictions”).
Subsequent to the Vesting Date, the Grantee may only transfer, sell, pledge,
hypothecate or assign shares of Stock issued in satisfaction of the RSU Award
in
accordance with Section 3.5 of this Agreement (the “Stock
Ownership Transfer Restrictions”).
3. Vesting;
Lapse of Restrictions.
3.1 Service
Based Award.
The
Initial Transfer Restrictions with respect to 34% of the 2007 RSU Award (the
“Service
Based Award”)
shall
lapse on the third (3rd)
anniversary of the Grant Date (the “Vesting
Date”)
so long
as the Grantee continues to be serving as an employee of the Corporation on
such
Vesting Date; provided,
that
the 2007 RSU Award shall vest, and the Initial Transfer Restrictions with
respect to the 2007 RSU Award shall lapse, if sooner, on the date of any one
of
the following “Permitted Acceleration Events” (also a Vesting Date): (i) the
occurrence of a Change in Control (as defined in Section 3.4 below); (ii) the
Grantee’s employment is terminated by the Corporation other than for “cause” or
for “good reason” (as such term is defined in the Grantee’s underlying
employment agreement); (iii) the Grantee’s death or disability; or (iv)
retirement at or after age 62 with the approval of the Committee.
3.2 Performance
Based Award.
(a) Organic
Growth Target Award.
In the
event that the Corporation achieves an Organic Growth Performance Factor of
at
least 25% as of [December 31, 2009], then the Initial Transfer Restrictions
will
lapse with respect to 33% of the 2007 RSU Award (the “Organic
Growth Target Award”)
on
[March 15, 2010] (the “Vesting
Date”)
so long
as the Grantee continues to be employed by the Corporation on such Vesting
Date.
In the event that the Organic Growth Performance Factor is more than 1% but
less
than 25%, then the Initial Transfer Restrictions will lapse with respect to
a
pro-rata portion of the Organic Growth Target Award on the Vesting Date
determined based on the ratio the actual level of achievement of the Organic
Growth Performance Factor bears to 25%, so long as that the Grantee continues
to
be employed by the Corporation on such Vesting Date.
(b) Stock
Price Target Award.
In the
event that the Corporation achieves a Stock Price Performance Factor of at
least
15% as of [December 31, 2009], then the Initial Transfer Restrictions will
lapse
with respect to 33% of the 2007 RSU Award (the “Stock
Price Target Award”)
on
[March 15, 2010] (the “Vesting
Date”)
so long
as the Grantee continues to be employed by the Corporation on such Vesting
Date.
In the event that the Stock Price Performance Factor is more than 1% but less
than 15%, then the Initial Transfer Restrictions will lapse with respect to
a
pro-rata portion of the Stock Price Target Award on the Vesting Date, determined
based on the ratio the actual level of achievement of the Stock Price
Performance Factor bears to 15%, so long as the Grantee continues to be employed
by the Corporation on such Vesting Date.
2
(c) Notwithstanding
anything to the contrary set forth above, the Initial Transfer Restrictions
shall lapse with respect to the Organic Growth Target Award and the Stock Price
Target Award on the occurrence of a Permitted Acceleration Event. In addition,
in the event the Grantee (i) is terminated by the Corporation without Cause
or
(ii) dies or becomes Disabled, as defined below, the number of Restricted Stock
Units under the Performance Based Award in which the Grantee shall vest on
any
Vesting Date shall be the product of (a) the number of Restricted Stock Units
under the 2007 RSU Award that would otherwise vest in accordance with Section
3.2(a) and 3.2(b) hereof on such date, if any and (b) a fraction, the numerator
of which shall be the number of full months of service completed by the Grantee
prior to his or her termination without Cause, death or Disability, as
applicable and after the Grant Date, and the denominator of which shall be
(x)
in the case of vesting as a result of achievement of the Organic Growth
Performance Factor or the Stock Price Performance Factor, the number of months
in the relevant performance period, as set forth in Section 3.4 hereof, or
(y)
in the case of a Permitted Acceleration Event as defined in Section 3.1, the
number of full months from the Grant Date to the applicable Vesting Date. Any
portion of the Performance Based Award that does not and, as a result of the
application of this Section 3.2(c) cannot, vest shall be forfeited and
automatically transferred to and reacquired by the Corporation at no cost to
the
Corporation, and neither the Grantee nor any heirs, executors, administrators
or
successors of such Grantee shall thereafter have any right or interest in such
Restricted Stock Units.
3.3 General
Termination Provisions.
Notwithstanding anything in this Agreement to the contrary, upon any termination
of a Grantee for Cause [or the resignation by the Grantee of his or her
employment without “good reasonR
