UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
Current
Report Pursuant to Section 13
of
the
Securities Exchange Act of 1934
Date
of
Report (Date Earliest Event reported) — April 27, 2007 (April 27,
2007)
MDC
PARTNERS INC.
(Exact
name of registrant as specified in its charter)
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Canada
(Jurisdiction
of Incorporation)
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001-13718
(Commission
File Number)
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98-0364441
(IRS
Employer Identification No.)
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45
Hazelton Ave., Toronto, Ontario, Canada M5R 2E3
(Address
of principal executive offices and zip code)
(416)
960-9000
(Registrant’s
Telephone Number)
Check
the
appropriate box below if the Form 8−K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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Soliciting
material pursuant to Rule 14a−12 under the Exchange Act (17 CFR
240.14a−12)
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Pre-commencement
communications pursuant to Rule 14d−2(b) under the Exchange Act (17 CFR
240.14d−2(b))
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Pre-commencement
communications pursuant to Rule 13e−4(c) under the Exchange Act (17 CFR
240.13e− 4(c))
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Item
5.02(e) Entry into Material Compensatory Agreement.
On
April
27, 2007, MDC Partners Inc. (the “Company”) entered into a new Management
Services Agreement (the “Agreement”) with Miles Nadal and with Nadal Management,
Inc. to set forth the terms and conditions on which Miles Nadal will continue
to
provide services to the Company as its Chief Executive Officer. Mr. Nadal’s
prior services agreement with the Company was scheduled to expire on October
31,
2007, subject to one-year annual renewals. The Company wished to enter into
a
new agreement and would have been required to give notice of non-renewal of
the
prior services agreement by April 30, 2007, requiring it to pay a termination
fee equal to two times the annual retainer and additional fees under the
original agreement.
The
Agreement has a three-year term with automatic one-year extensions. Pursuant
to
the Agreement, the base compensation for Mr. Nadal’s services will continue
through 2007 at the current rate of $950,000, with annual increases of $25,000
in each of 2008 and 2009. The Agreement also provides for an annual bonus with
targeted payout of up to 250% of the base compensation. The Company will also
make an annual cash payment of $500,000 in respect of retirement benefits,
employee health benefits and perquisites and may, in the discretion of the
Compensation Committee, grant equity incentives with a targeted grant-date
value
of up to 300% of his then current retainer. If Mr. Nadal’s services are
terminated by the Company without “cause” or by Nadal Management, Inc. for “good
reason” (each as defined in the Agreement), the Company will make a lump sum
cash payment equal to three times the sum of the annual retainer, average bonus
amount for the past three years and the benefit/perquisites allowance, as well
as a pro-rata bonus for the calendar year in which his employment terminates,
and three-years of continued vesting of outstanding equity incentive
awards.
In
full
satisfaction and settlement of any obligations the Company may have had as
a
result of the non-renewal of the prior services agreement, and as an incentive
to enter into the Agreement, the Company paid a one-time non-renewal fee of
$3.5
million upon execution of the Agreement. The proceeds from this non-renewal
payment were used to repay an outstanding loan from the Company. In addition,
the proceeds of other amounts that may be paid under the Agreement will be
used
to prepay certain other outstanding loans as follows: (a) $100,000(Cdn) per
year out of any annual bonuses, (b) 1/3 of the after-tax amount of the proceeds
from any equity incentive awards and (c) 1/3 of the after-tax amount of any
severance payments under the Agreement.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed by the undersigned hereunto duly
authorized.
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Date:
April 27, 2007
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MDC
Partners Inc.
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By:
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/s/
Mitchell Gendel
Mitchell
Gendel
General
Counsel & Corporate Secretary
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