MDC PARTNERS INC (Form: 8-K, Received: 06/07/2021 07:00:09)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 4, 2021

MDC PARTNERS INC.

(Exact name of Registrant as Specified in Its Charter)

Canada

001-13718

98-0364441

(State or Other Jurisdiction
of Incorporation)

(Commission

File Number)

(I.R.S. Employer
Identification No.)

One World Trade Center, Floor 65, New York, NY 10007
(Address of principal executive offices and zip code)

(646) 429-1800
(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:

x	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Subordinate Voting Shares, no par value	MDCA	NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 1.01

Entry into a Material Definitive Agreement

Transaction Agreement Amendment

As previously announced, MDC Partners Inc. (“MDC”) and Stagwell Media LP (“Stagwell”) entered into a transaction agreement, dated as of December 21, 2020 (the “Transaction Agreement”), by and among MDC, Stagwell, New MDC LLC and Midas Merger Sub 1 LLC providing for, among other things, the combination of MDC with certain subsidiaries of Stagwell (the “Transaction”, and following the Transaction, the combined company is referred to herein as the “Combined Company”). On June 4, 2021, MDC and Stagwell entered into an amendment (the “Amendment”) to the Transaction Agreement, pursuant to which MDC and Stagwell have agreed to modify certain provisions of the Transaction Agreement to reflect, among other things, that:

At least two of the directors Stagwell is entitled to appoint (the “Stagwell Directors”) to the Combined Company board of directors (the “Combined Company Board”) pursuant to the Transaction Agreement shall be independent in accordance with SEC and NASDAQ independence rules applicable to a NASDAQ-listed company that is not a controlled company pursuant to NASDAQ rules (“SEC/NASDAQ Independence Rules”);

From and after the second annual meeting following the closing of the Transaction (the “Post-Closing Governance Period”), for so long as (a) Stagwell has nominated a majority of the directors constituting the Combined Company Board, or (b) Stagwell has the contractual right to appoint a majority of the Combined Company Board, Stagwell shall ensure that (i) at least two of the Stagwell Directors or their successors shall be independent in accordance with SEC/NASDAQ Independence Rules and (ii) a majority of the Combined Company Board shall be independent in accordance with SEC/NASDAQ Independence Rules;

From and after the Post-Closing Governance Period, for so long as Stagwell and its affiliates collectively beneficially own more than 10% of the then-issued and outstanding voting securities of the Combined Company, a majority of the Combined Company Board shall be independent in accordance with SEC/NASDAQ Independence Rules;

For so long as Stagwell and its affiliates collectively beneficially own 30% or more of the then-issued and outstanding voting securities of the Combined Company, Stagwell and the Combined Company shall cause each director of the Combined Company, as a condition to his or her nomination to the Combined Company Board, to agree to tender his or her resignation to the Combined Company Board if such director receives more “withhold” votes than “for” votes from shareholders other than Stagwell and its affiliates in an uncontested election in which Stagwell and its affiliates collectively beneficially own 30% or more of the then-issued and outstanding voting securities of the Combined Company, which resignation shall be effective sixty days after the date of the election unless the Combined Company Board elects to reject such resignation; and

The Combined Company shall cause all of the members of the Combined Company’s Audit Committee, Compensation Committee and Nominating & Corporate Governance Committee to be independent in accordance with SEC and NASDAQ independence rules applicable to such committees of a NASDAQ-listed company that is not a controlled company pursuant to NASDAQ rules.

A copy of the Amendment is filed as Exhibit 2.1 hereto and incorporated by reference herein. The foregoing description of the Amendment is qualified in its entirety by reference thereto.

Item 5.02(d)

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On June 7, 2021, MDC announced that Stagwell has named the four director designees it intends to nominate to the board of directors of the Combined Company pursuant to the terms of the Transaction Agreement: Paul Richardson, former CFO and Member of the Board of Directors of WPP; Rodney Slater, former U.S. Secretary of Transportation; Brandt Vaughan, Chief Operating Officer and Chief Investment Officer of the Ballmer Group; and Charlene Barshefsky, former U.S. Trade Representative, who is currently an independent director of MDC.

Further information about each designee is below:

Paul Richardson, age 63, is a business executive who served as Group Finance Director (Chief Financial Officer) and member of the Board of Directors of WPP plc from 1996 until his retirement in May 2020. During his tenure at WPP, Mr. Richardson was responsible for the company’s worldwide functions in finance, information technology, procurement, property, treasury, taxation, internal audit and sustainability. Mr. Richardson was also an independent director of WPP AUNZ from 1999 to 2020. Mr. Richardson is a chartered accountant and fellow of the Association of Corporate Treasurers. Mr. Richardson’s deep industry experience and knowledge of strategy, finance, and operations are key qualifications for the Combined Company Board. Mr. Richardson resides in New York, New York.

Rodney Slater, age 66, is a partner in the law firm Squire Patton Boggs LLP since 2001 practicing in the areas of transportation, infrastructure and public policy. Previously, Secretary Slater served as the U.S. Secretary of Transportation from 1997 to 2001 and as the Administrator of the Federal Highway Administration from 1993 to 1997. Secretary Slater has served as a director of Verizon Communications since 2010 and as a director of Kansas City Southern since 2001. He also served as a director of Transurban Group from 2009 to 2018 and Atkins plc from 2011 to 2014. Secretary Slater is also expected to join the board of directors of EVgo upon the closing of its previously announced business combination with Climate Change Crisis Real Impact I Acquisition Corporation. Secretary Slater’s significant leadership and strategic planning experience in the public and private sectors and perspectives on strategic partnerships, risk management, compliance, and legal issues are key qualifications for the Combined Company Board. Secretary Slater resides in Washington, D.C.

Brandt Ashley Vaughan, age 54, is Chief Operating Officer and Chief Investment Officer of Ballmer Group, where he manages its operating, public and private equity investing and philanthropic investing across a range of assets including the Los Angeles Clippers and LA Forum. Prior to joining Ballmer Group in 2014, Mr. Vaughan led enterprise-wide strategic planning and analysis for Microsoft. In addition, he served as Chief Financial Officer for Microsoft’s centralized marketing and business development functions and had a range of financial management roles over a more than decade-long career at Microsoft. Mr. Vaughan is on the Board of Directors for One Community, Second Spectrum and the L.A. Clippers Foundation. Mr. Vaughan’s deep experience and knowledge of strategy, finance, and operations are key qualifications for the Combined Company Board. Mr. Vaughan resides in Seattle, Washington.

Charlene Barshefsky, age 70, has been a member of MDC’s board of directors since 2019 and is Chair of Parkside Global Advisors, a position she has held since April 2021. Prior to this, she was a Senior International Partner at WilmerHale, a multinational law firm based in Washington, D.C., from 2001 through March 2021. At WilmerHale, Ambassador Barshefsky advised multinational corporations on their market access, regulatory, investment and acquisition strategies in major markets across the globe. Prior to joining WilmerHale, Ambassador Barshefsky was the United States Trade Representative (USTR) and a member of President Clinton’s Cabinet from 1997 to 2001 and Acting and Deputy USTR from 1993 to 1996. As the USTR, she served as chief trade negotiator and principal trade policymaker for the United States and, in both roles, negotiated complex market access, regulatory and investment agreements with virtually every major country in the world. Ambassador Barshefsky serves on the boards of directors of the American Express Company and the Estee Lauder Companies and is a member of the board of trustees of the Howard Hughes Medical Institute. She is also a member of the Council on Foreign Relations. Ambassador Barshefsky served on the boards of directors of Intel Corporation from 2004 to 2018 and Starwood Hotels & Resorts from 2004 to 2016. Ambassador Barshefsky’s distinguished record as a policymaker and negotiator, ability to assess regulatory risks, as well as exceptional Board director experience for some of the world’s most respected consumer companies across a range of sectors focused on digital innovation are key qualifications for the Combined Company Board. Ambassador Barshefsky resides in Washington, D.C.

Each of Mr. Richardson, Secretary Slater and Mr. Vaughn are expected to receive compensation commensurate with the compensation of MDC’s existing non-management directors.

Item 7.01

Regulation FD Disclosure.

In connection with ongoing discussions between the Special Committee of the Board of Directors of MDC (the “Special Committee”) and Stagwell, on June 6, 2021, Stagwell delivered a letter (the “Stagwell Letter”) to the Special Committee in which Stagwell stated that it would consider certain further amendments to the terms of the Transaction Agreement as described therein. The Special Committee, in consultation with its outside legal counsel and financial advisors, is carefully reviewing and considering the Stagwell Letter to determine the course of action that it believes is in the best interests of MDC and its shareholders. There can be no assurance that the Stagwell Letter will result in further amendments to the Transaction Agreement or that the Transaction will be consummated on the terms described in the Stagwell Letter. The full text of the Stagwell Letter is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

On June 7, 2021, MDC issued a press release announcing MDC’s entry into the Amendment and that Stagwell has named the four director designees it intends to nominate to the Combined Company Board pursuant to the Transaction Agreement. The full text of the press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.

The information in this Item 7.01, Exhibit 99.1 and Exhibit 99.2 is being furnished under Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of such section, nor shall such exhibit be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act.

In addition, MDC is announcing that, upon the completion of the Transaction, it intends to change its name to Stagwell Inc.

Cautionary Statement Regarding Forward-Looking Statements

This communication may contain certain forward-looking statements (collectively, “forward-looking statements”) within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended and Section 21E of the U.S. Exchange Act and the United States Private Securities Litigation Reform Act of 1995, as amended, and “forward-looking information” under applicable Canadian securities laws. Statements in this document that are not historical facts, including statements about MDC’s or Stagwell’s beliefs and expectations and recent business and economic trends, constitute forward-looking statements. Words such as “estimate,” “project,” “target,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “create,” “intend,” “could,” “should,” “would,” “may,” “foresee,” “plan,” “will,” “guidance,” “look,” “outlook,” “future,” “assume,” “forecast,” “focus,” “continue,” or the negative of such terms or other variations thereof and terms of similar substance used in connection with any discussion of current plans, estimates and projections are subject to change based on a number of factors, including those outlined in this section. Such forward-looking statements may include, but are not limited to, statements related to: future financial performance and the future prospects of the respective businesses and operations of MDC, Stagwell and the combined company; information concerning the Transaction; the anticipated benefits of the Transaction; the likelihood of the Transaction being completed; the anticipated outcome of the Transaction; the tax impact of the Transaction on MDC and shareholders of MDC; the timing of the shareholder meeting to approve the Transaction (the “Special Meeting”); the shareholder approvals required for the Transaction; regulatory and stock exchange approval of the Transaction; and the timing of the implementation of the Transaction. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement, including the risks identified in our filings with the Securities Exchange Commission (the “SEC”).

These forward-looking statements are subject to various risks and uncertainties, many of which are outside MDC’s control. Important factors that could cause actual results and expectations to differ materially from those indicated by such forward-looking statements include, without limitation, the risks and uncertainties set forth under the section entitled “Risk Factors” in the registration statement on Form S-4 filed on February 8, 2021, and as amended on March 29, 2021, April 21, 2021 and April 30, 2021 (the “Form S-4”), under the section entitled “Risk Factors” in the proxy statement/prospectus on Form 424B3 filed on May 10, 2021 (together with the Form S-4, the “Proxy Statement/Prospectus”), under the caption “Risk Factors” in MDC’s Annual Report on Form 10-K for the year-ended December 31, 2020 under Item 1A and under the caption “Risk Factors” in MDC’s Quarterly Report on Form 10-Q for the quarter-ended March 31, 2021 under Item 1A. These and other risk factors include, but are not limited to, the following:

•

an inability to realize expected benefits of the Transaction or the occurrence of difficulties in connection with the Transaction;

•

adverse tax consequences in connection with the Transaction for MDC, its operations and its shareholders, that may differ from the expectations of MDC or Stagwell, including that future changes in tax law, potential increases to corporate tax rates in the United States and disagreements with the tax authorities on MDC’s determination of value and computations of its tax attributes may result in increased tax costs;

•

the occurrence of material Canadian federal income tax (including material “emigration tax”) as a result of the Transaction;

•

the impact of uncertainty associated with the Transaction on MDC’s and Stagwell’s respective businesses;

•

direct or indirect costs associated with the Transaction, which could be greater than expected;

•

the risk that a condition to completion of the Transaction may not be satisfied and the Transaction may not be completed; and

•

the risk of parties challenging the Transaction or the impact of the Transaction on MDC’s debt arrangements.

You can obtain copies of MDC’s filings under its profile on SEDAR at www.sedar.com, its profile on the SEC’s website at www.sec.gov or its website at www.mdc-partners.com. MDC does not undertake any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as expressly required by law. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement.

Additional Information and Where to Find It

In connection with the Transaction, MDC and New MDC filed with the SEC the Proxy Statement/Prospectus. This communication is not a substitute for the Proxy Statement/Prospectus or any other document MDC may file with the SEC in connection with the Transaction.

INVESTORS AND SECURITYHOLDERS OF MDC ARE URGED TO READ CAREFULLY THE PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION IN ITS ENTIRETY (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY DOCUMENTS WHICH ARE INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION. You may obtain, free of charge, copies of the Proxy Statement/Prospectus and other relevant documents filed by MDC or New MDC with the SEC, at the SEC’s website at www.sec.gov. In addition, investors and securityholders are able to obtain free copies of the Proxy Statement/Prospectus and other relevant documents filed by MDC or New MDC with the SEC and from MDC’s website at http://www.mdc-partners.com.

The URLs in this announcement are intended to be inactive textual references only. They are not intended to be active hyperlinks to websites. The information on such websites, even if it might be accessible through a hyperlink resulting from the URLs or referenced herein, is not and shall not be deemed to be incorporated into this announcement. No assurance or representation is given as to the suitability or reliability for any purpose whatsoever of any information on such websites.

No Offer or Solicitation

This communication does not constitute an offer to buy or exchange, or the solicitation of an offer to sell or exchange, any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This communication is not a substitute for any prospectus, proxy statement or any other document that MDC or New MDC may file with the SEC in connection with the Transaction. No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted.

No offering of securities shall be made except by means of a prospectus meeting the requirements of the U.S. Securities Act of 1933, as amended. The Transaction and distribution of this document may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. No offering of securities will be made directly or indirectly, in or into any jurisdiction where to do so would be inconsistent with the laws of such jurisdiction.

Participants in the Solicitation

MDC, New MDC and their respective directors and executive officers and other members of management and employees, may be deemed to be participants in the solicitation of proxies from MDC’s shareholders with respect to the approvals required to complete the Transaction. More detailed information regarding the identity of these potential participants, and any direct or indirect interests they may have in the Transaction, by security holdings or otherwise, is set forth in the Proxy Statement/Prospectus filed with the SEC. Information regarding MDC’s directors and executive officers is set forth in the definitive proxy statement on Schedule 14A filed by MDC with the SEC on May 10, 2021, in the Annual Report on Form 10-K filed by MDC with the SEC on March 16, 2021, as amended on April 27, 2021 and in the Quarterly Report on Form 10-Q filed by MDC with the SEC on May 10, 2021. Additional information regarding the interests of participants in the solicitation of proxies in respect of the Special Meeting is included in the Proxy Statement/Prospectus filed with the SEC. These documents are available to the shareholders of MDC free of charge from the SEC’s website at www.sec.gov and from MDC’s website at www.mdc-partners.com.

You must not construe the contents of this document as legal, tax, regulatory, financial, accounting or other advice, and you are urged to consult with your own advisors with respect to legal, tax, regulatory, financial, accounting and other consequences of the Transaction, the suitability of the Transaction for you and other relevant matters concerning the Transaction.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

2.1	Amendment No. 1 to the Transaction Agreement, dated as of June 4, 2021
99.1	Letter from Stagwell Media, LP to the Chair of the Special Committee of the Board of Directors of MDC Partners, Inc., dated as of June 6, 2021
99.2	Press release, dated as of June 7, 2021, of MDC Partners Inc.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 7, 2021

	MDC Partners Inc.

	By:	/s/ David Ross
		David Ross
		Executive Vice President and General Counsel

Exhibit 2.1

AMENDMENT NO. 1

TO THE TRANSACTION AGREEMENT

AMENDMENT NO. 1, dated as of June 4, 2021 (this “Amendment No. 1”), to the Transaction Agreement, dated as of December 21, 2020 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), by and among Stagwell Media LP, a Delaware limited partnership (“Stagwell”), MDC Partners Inc., a Canadian corporation, which shall domesticate to the State of Delaware and become a Delaware corporation prior to the Closing (as defined in the Agreement) in accordance with the terms of the Agreement (“MDC”), New MDC LLC, a Delaware limited liability company and wholly-owned subsidiary of MDC (“New MDC”), and Midas Merger Sub 1 LLC, a Delaware limited liability company and wholly-owned subsidiary of New MDC (“Merger Sub” and, together with Stagwell, MDC and New MDC, the “Parties”).

WHEREAS, the Parties wish to amend the Agreement;

WHEREAS, the MDC Special Committee (as defined in the Agreement) has unanimously recommended to the MDC Board that MDC amend the Agreement, and the MDC Board, acting upon the unanimous recommendation of the MDC Special Committee, has unanimously (with Mark Penn, Charlene Barshefsky and Bradley Gross abstaining from voting or participating in any deliberations with respect thereto), approved the execution, delivery and performance by MDC of this Amendment No. 1; and

WHEREAS, pursuant to Section 11.09 of the Agreement, the Agreement may be amended pursuant to an instrument in writing signed on behalf of each of the Parties (in the case of MDC, acting upon the recommendation of the MDC Special Committee).

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

Definitions. Unless otherwise defined herein or amended hereby, capitalized terms used herein which are defined in the Agreement shall have the meanings ascribed to them in the Agreement.

Post-Closing New MDC Board and Committee Representation. Section 7.15 of the Agreement is hereby amended and restated to read in its entirety as follows:

(a)

Prior to the consummation of the MDC Merger, MDC shall cause all directors, other than the three (3) MDC directors to be identified by the MDC Special Committee following the date hereof but prior to the Closing (such persons, the “Continuing Independent Directors”), Bradley Gross and Mark Penn, to resign and shall take all requisite action such that each of Paul Richardson, Rodney Slater, Brandt Vaughan and Charlene Barshefsky (such persons (or, if they are unwilling or unable to serve, replacements designated by Stagwell in writing), together with their respective successors or replacements determined in accordance with this Agreement, the “Stagwell-Nominated Directors”), at least two (2) of whom shall be independent in accordance with SEC and NASDAQ independence rules applicable to service on the board of directors of a NASDAQ-listed company that is not a controlled company pursuant to NASDAQ rules (“Controlled Company”) (“SEC/NASDAQ Independent”, and such directors, together with their respective successors or replacements determined in accordance with this Agreement, the “Independent Stagwell-Nominated Directors”), be appointed to the board of directors of New MDC (the “New MDC Board”) (effective as of Closing), to serve until their respective successors are duly elected and qualified or until each such director’s earlier death, resignation or removal.

(b)

Subject to the fiduciary duties of the New MDC Board, New MDC shall cause the Continuing Independent Directors and the Independent Stagwell-Nominated Directors to be nominated as part of New MDC’s proposed slate of directors at the next two annual meetings of New MDC stockholders following the Closing (the “Post-Closing Governance Period”); provided, that if any such Continuing Independent Director or Independent Stagwell-Nominated Director is unwilling or unable to continue serving as a director of New MDC for any reason, then a replacement SEC/NASDAQ Independent nominee shall be selected (i) in the case of any such Continuing Independent Director, by the remaining Continuing Independent Directors then in office (or if no Continuing Independent Directors are then in office, by the SEC/NASDAQ Independent directors then serving on the New MDC Board), and (ii) in the case of any such Independent Stagwell-Nominated Director, by Stagwell (subject to such replacement being SEC/NASDAQ Independent). From and after the Post-Closing Governance Period, (x) for so long as (1) Stagwell has nominated directors constituting a majority of the New MDC Board or (2) Stagwell has the contractual right to appoint a majority of the New MDC Board, Stagwell shall ensure that (A) at least two (2) of the Stagwell-Nominated Directors shall be SEC/NASDAQ Independent and (B) a majority of the New MDC Board shall be SEC/NASDAQ Independent, and (y) for so long as Stagwell and its Affiliates collectively Beneficially Own more than 10% of the then-issued and outstanding voting securities of New MDC, a majority of the New MDC Board shall be SEC/NASDAQ Independent.

(c)

For so long as Stagwell and its Affiliates collectively Beneficially Own 30% or more of the then-issued and outstanding voting securities of New MDC, Stagwell and New MDC shall, as a condition to being nominated to the New MDC Board, cause each member of the New MDC Board to enter into an agreement setting forth that if (i) such member of the New MDC Board is a nominee to the New MDC Board (excluding, for the avoidance of doubt, any such nominee serving as CEO of New MDC at such time) and such nominee receives, in an uncontested election (an “Election”), a number of votes “withheld” from his or her election that is greater than the number of votes cast “for” the election of such nominee, excluding for this purpose any votes cast “for” or “withheld” in the election of such nominee by Stagwell or its Affiliates, and (ii) as of the applicable record date for such Election, Stagwell and its Affiliates collectively Beneficially Owned 30% or more of the then-issued and outstanding voting securities of New MDC, then such Person shall tender his or her resignation from his or her position as a director of the New MDC Board (a “Resignation”). In such event, the New MDC Board shall evaluate such director’s Resignation and determine its response in accordance with its fiduciary duties. Unless the New MDC Board decides to reject such Resignation or to postpone the effective date of such Resignation, such Resignation shall become effective sixty (60) days after the date of the applicable Election. In making a determination whether to reject the Resignation or postpone the effective date of the Resignation, the New MDC Board shall consider all factors it considers relevant to the best interests of New MDC. In the event a director tenders a Resignation pursuant to this Section 7.15(c), New MDC shall not permit such director to participate in the portion of any meeting of the New MDC Board during which the vote on his or her Resignation occurs. New MDC agrees that it shall issue a news release reasonably promptly following the New MDC Board's decision with respect to any such Resignation. In the event a director’s Resignation is accepted in accordance with this Section 7.15(c), (x) if such director is a Continuing Independent Director or was otherwise nominated or appointed by the SEC/NASDAQ Independent directors on the New MDC Board pursuant to the proviso set forth in Section 7.15(b)(i), the resulting vacancy shall be filled by the remaining Continuing Independent Directors then in office (or if no Continuing Independent Directors are then in office, by the SEC/NASDAQ Independent directors then serving on the New MDC Board), (y) if such director is a Stagwell-Nominated Director or was otherwise nominated or appointed by Stagwell pursuant to this Section 7.15, the resulting vacancy shall be filled by Stagwell (provided at least two (2) of the Stagwell-Nominated Directors are SEC/NASDAQ Independent), and (z) if such director was nominated or appointed by Goldman Sachs pursuant to any rights Goldman Sachs may have pursuant to the terms of any shares of preferred stock of New MDC, the resulting vacancy shall be filled by Goldman Sachs.

(d)

Subject to the fiduciary duties of the New MDC Board, New MDC shall cause all of the members of New MDC’s Audit Committee, Compensation Committee and Nominating & Corporate Governance Committee to be independent in accordance with the SEC and NASDAQ independence rules applicable to such committee of non-Controlled Companies. The composition of all other committees of the New MDC Board will be determined by the post-Closing New MDC Board.

Other Post-Closing Governance Matters. Section 7.16 of the Agreement is hereby amended and restated to read in its entirety as follows:

Section 7.16      Other Post-Closing Governance Matters. The parties hereby agree that, for so long as (x) Stagwell and its Affiliates collectively Beneficially Own more than 10% of the then-issued and outstanding voting securities of New MDC, (y) Stagwell has nominated directors constituting a majority of the New MDC Board, or (z) Stagwell has the contractual right to appoint a majority of the New MDC Board:

(a)       any related-party transaction by and between New MDC or any of the MDC Subsidiaries, on the one hand, and Stagwell or its Affiliates (other than New MDC and the MDC Subsidiaries), on the other hand, will require the approval of a majority of the independent directors then-serving on the New MDC Board; provided, that, for the avoidance of doubt, any amendment or modification of (i) solely to the extent they relate to any right, power or preference unique to Stagwell or its Affiliates (other than New MDC and the MDC Subsidiaries), the New MDC Certificate of Incorporation or the New MDC Bylaws; (ii) any Ancillary Agreement; or (iii) this Agreement, including Section 7.15 and this Section 7.16, shall each be considered such a related-party transaction; and

(b)       any proposed business combination following the Closing by and between New MDC, on the one hand, and Stagwell or any of its Affiliates (other than New MDC and any of the MDC Subsidiaries), on the other hand, shall require (i) approval from a “majority of the minority” of New MDC stockholders, and (ii) the creation of a special committee of the post-Closing New MDC Board comprised solely of independent and disinterested directors with authority similar to that of the MDC Special Committee. For the avoidance of doubt, the foregoing requirement shall not apply to any business combination solely among direct or indirect Subsidiaries (other than OpCo) of New MDC. (c) For purposes of this Section 7.16, “Beneficially Owns” shall mean the beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of Stagwell, but shall expressly exclude any shares held directly by any of its limited partners.

(c)       For purposes of Section 7.15 and this Section 7.16, “Beneficially Owns” shall mean beneficial ownership (as defined in Rule 13d-3 under the Exchange Act), but with respect to Stagwell, shall expressly exclude any shares held directly by any of its limited partners that are not Affiliates of Stagwell.

Effectiveness. This Amendment No. 1 shall become effective as of the date first written above (the “First Amendment Effective Date”).

Reference to and Effect on the Agreement.

(e)

On or after the First Amendment Effective Date, each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import referring to the Agreement shall mean and be a reference to the Agreement as amended by this Amendment No. 1.

(f)

Except as amended hereby, the provisions of the Agreement are and shall remain in full force and effect.

Miscellaneous. The provisions of Sections 11.01 (Notices), 11.02 (Interpretations), 11.03 (Governing Law; Jurisdiction; Specific Performance; Waiver of Jury Trial), 11.04 (Counterparts; Electronic Transmission of Signatures), 11.05 (Assignment; No Third-Party Beneficiaries), 11.07 (Severability), 11.08 (Entire Agreement) and 11.09 (Amendment) of the Agreement shall apply mutatis mutandis to this Amendment No. 1.

[Remainder of this page intentionally left blank. Signature page follows.]

IN WITNESS WHEREOF, the Parties have duly entered into this Amendment No. 1 as of the date first written above.

	MDC PARTNERS INC.

	By:	/s/ David Ross
	Name:	David Ross
	Title:	Executive Vice President and General Counsel

	STAGWELL MEDIA LP
	By:	The Stagwell Group LLC, its General Partner

	By:	/s/ Mark Penn
	Name:	Mark Penn
	Title:	Manager

	NEW MDC LLC

	By:	/s/ David Ross
	Name:	David Ross
	Title:	Executive Vice President and General Counsel

	MIDAS MERGER SUB 1 LLC

	By:	/s/ David Ross
	Name:	David Ross
	Title:	Executive Vice President and General Counsel

Signature Page – Amendment No. 1 to the Transaction Agreement

Exhibit 99.1

Private & Confidential Communication

FOR DISCUSSION PURPOSES ONLY

June 6, 2021

Irwin Simon
Chair of the Special Committee of the MDC Board of Directors
MDC Partners, Inc.
One World Trade Center, Floor 65
New York, NY 10007

Re:

Non-binding Proposal for Potential Modification of the Definitive Transaction Agreement.

Dear Irwin:

There has been public discussion from one or more shareholders that they are dissatisfied with the “split” between Stagwell investors and existing MDC Partners shareholders. We believe that the Independent Special Committee did a thorough evaluation and held detailed negotiations that produced a fair outcome, as the Committee has explained publicly. As your Committee has reiterated, this deal offers significant and lasting benefits to MDC shareholders including an improved balance sheet, greater scale, expanded growth and new digital marketing opportunities. The market has received this deal with a huge increase in shareholder value since proposed from nearly $1 to closing on Friday at $5.

Nevertheless, sometimes for the sake of expediency, it makes sense to depart from what is fair and reasonable to overcome the practical considerations that might slow us down. Consequently, we have consulted internally and with our investors to provide you with an indication of modifications that Stagwell might reasonably accept if it moved the deal to a prompt and speedy conclusion with unquestioned and broadened support. We are willing to go the extra mile here in the best interests of the company and its employees who have waited patiently for this combination and whose futures hang in the balance.

We suggest that we would consider a deal in which 1) Stagwell would give up 20 million common shares from those allotted at closing; and 2) Stagwell would abate, along with Goldman Sachs, one year of accretion in the preferred shares of Series 4 and Series 6 starting at closing. This will take the so-called equity split to approximately 70/30.

At the $5 per share close on Friday June 4, 2021, this represents $100 million in value that Stagwell is indicating a willingness to give up plus the nearly $15 million benefit to the shareholders from abatement of accretion by Stagwell and Goldman Sachs.

Give Up of 20 Million Common Shares. The proposal would adjust the current split including all shares and SARS as follows:

	MDC%	MDC Shares	New Stagwell	TOTAL

Current:	27.4%	81.5	216.1	297.6

After Mod:	29.4%	81.5	196.1	277.6

One Year Abatement to Preferred Accretion Shareholders of both series of preferred shares would agree to abate any accretion over the next year. As a result, the Series 4 Preferred Shares are expected to forego accretion worth $8.9 million, and the Series 6 Preferred Shares are expected to forego accretion worth $5.7 million through the end of the accretion period. This amounts to $14.6 million of total forgone accretion for Stagwell and Goldman equivalent to 2.9 million shares based on their $5.00 strike price. Please see the chart below for further detail on the impact of this accretion abatement, including on the compounding on the shares that otherwise would be earned:

($’s and shares in millions)
Without Abatement	Q2’20	Q1’24
Series 4 Liquidation Preference	103.73	124.01
Series 6 Liquidation Preference	59.98	74.58
Total	163.71	198.58

With Abatement
Series 4 Liquidation Preference	103.73	115.13
Series 6 Liquidation Preference	59.98	68.90
Total	163.71	184.02

Difference in Totals (Lost Accretion)	0.00	14.56
/ Strike Price		$5.00
Share Impact of Abatement		2.91

The accretion benefit is 2.9 million shares over the next few years and provides an additional benefit to the equity split in favor of existing MDC shareholders of approximately 0.3%. Together with the give up of 20 million shares, this brings MDC’s equity split to approximately 30%.

Net Debt Adjustment Given Seasonality. Given the well-known seasonal and transitory cash flows that affect advertising businesses such as Stagwell and MDC Partners (and with this closing time generally being the low point of the cash cycle after employee bonuses, taxes and interest payments), Stagwell will also request as part of this package to raise the closing net debt threshold $25 million to $285 million from $260 million. In addition to these seasonal trends, Stagwell’s pass-thru media float has been reduced by several clients switching in the last month to direct payment to Google; such changes affect pass-thru float but not fees or overall relationships.

We believe that the impact of the sum of these changes is an obvious and material improvement for MDC shareholders and hope that the prospect of these possible changes will enable this deal to close successfully and on time. I have no authority to offer anything beyond this potential shift and Stagwell has no intention under any circumstances to provide any additional time for the closing and will hold the Committee to its prompt meeting requirements.

	Very truly yours,

	STAGWELL MEDIA, LP

	By:
	Name: Mark Penn
	Title: Managing Partner

Exhibit 99.2

FOR:	MDC Partners Inc.	CONTACT:	Michaela Pewarski
	One World Trade Center, FL. 65		MDC Partners
	New York, NY 10007		646 429 1812
			mpewarski@MDC-Partners.com

MDC Partners (MDCA) Announces Stagwell Media’s Intended Designees to Board of Directors Including Two New Independent Directors

Company Also Enhances Minority Shareholder Protections

New York, NY, June 7, 2021 (NASDAQ: MDCA) – MDC Partners Inc. (“MDC Partners” or the “Company”) announced today that it has received notice from Stagwell Media LP (“Stagwell”) providing its intended designees to the Board of Directors upon the closing of the combination transaction between MDC and Stagwell (the “Transaction”). It also announced that it has entered into an amendment to its transaction agreement (the “Transaction Agreement”) with Stagwell which provides increased protection to MDC minority shareholders, including a requirement that the Board of Directors of the combined company be majority independent.

Stagwell has designated Paul Richardson, former CFO and Member of the Board of Directors of WPP, and Rodney Slater, former U.S. Secretary of Transportation, to serve as independent directors of MDC upon the consummation of the Transaction. In addition, Brandt Vaughan, Chief Operating Officer and Chief Investment Officer of the Ballmer Group will be designated to serve on the Board.

Ambassador Charlene Barshefsky, who was initially nominated by Stagwell in April 2019 and already serves on the Board as an independent director, will continue to serve on the Board.

Irwin Simon, Presiding Director of MDC Partners and Chair of the Special Committee of MDC Partners’ Board of Directors commented, “Both Paul and Rodney are proven, high-caliber leaders with deep experience and extremely relevant, but diverse, perspectives that will serve us well as we accelerate our global growth strategy. The addition of Brandt along with Charlene’s continued participation on the Board further demonstrate the important role this Board will play guiding strategy, ensuring accountability and focusing management on delivering strong financial and operating results.”

As previously announced, pursuant to the Transaction Agreement, the Board of Directors of the combined company will consist of nine members, including Mark Penn and Bradley Gross. Three independent directors on the Board, to be announced by MDC in the coming weeks, will continue as directors of the combined company, and the combined company will cause those continuing directors to be nominated for election at the company’s next two annual meetings. In addition to Mr. Penn continuing as a director, Stagwell will be entitled to designate four directors to serve on the Board (two of which are required to be independent) as described above. Goldman Sachs will also continue to be entitled to designate one director to serve on the Board, and has currently designated Mr. Gross.

About Stagwell’s new Board of Directors designees:

Paul Richardson brings 27 years of exceptional experience in advertising and marketing having served as a Board Member, CFO and Director of Treasury for WPP Group. In his role, he was responsible for the Group’s worldwide functions in finance, information technology, procurement, property, treasury, taxation, internal audit and corporate responsibility. He is a chartered accountant and fellow of the Association of Corporate Treasurers. He has significant Board experience having served a non-executive director of CEVA Group plc, Chime Communications PLC and STW Communications Group Limited in Australia, the last two being companies associated with WPP Group.

Secretary Rodney Slater is currently a Partner with Squire Patton Boggs, one of the nation’s leading law firms. As U.S. Secretary of Transportation under President Bill Clinton, Secretary Slater passed several historic legislative initiatives over his tenure. Under his leadership, the federal transportation budget doubled and in the department’s "best in government" strategic and performance plans, the scope and definition of transportation was expanded to include a focus on safety, mobility and access, economic development and trade, the environment and national security. Secretary Slater is one of the leaders of Squire Patton Boggs practice in Corporate Compliance Advice, ensuring best-business practices for various companies. He is chairman of the Board of Directors of the Squire Patton Boggs Foundation, which promotes the role of public service and pro bono work in the practice of law and the development of public policy. Additionally, Secretary Slater is a founding partner of the Washington DC Nationals Baseball team and Chair Emeritus of the Washington DC Nationals Youth Baseball Academy. He is also an NCAA Silver Anniversary Recipient (2002) for football.

Brandt Ashley Vaughan is Chief Operating Officer and Chief Investment Officer of Ballmer Group, where he manages its operating, public and private equity investing and philanthropic activities across a range of assets including the Los Angeles Clippers and LA Forum. Prior to joining Ballmer Group in 2014, he led enterprise-wide strategic planning and analysis for Microsoft. In addition, he served as Chief Financial Officer for Microsoft’s centralized marketing and business development functions and had a range of financial management roles over a more than decade-long career at Microsoft. He is on the Board of Directors for One Community, Second Spectrum and the L.A. Clippers Foundation.

MDC Partners also announced that, based on input from shareholders and in anticipation of becoming a controlled company following the completion of the Transaction, the Company and Stagwell have agreed to amend certain governance provisions of the Transaction Agreement. These amendments further ensure that the combined company’s minority shareholders will have meaningful representation, and that independent directors will have a significant voice, on the Board of Directors.:

The Board of Directors will have a majority of independent directors (as defined under applicable NASDAQ and SEC rules);

The membership of the Audit Committee, Compensation Committee and Nominating & Governance Committee will be comprised entirely of independent directors; and

Any director who receives more “withhold” votes than “for” votes from the minority shareholders (i.e. shareholders other than Stagwell and its affiliates) must tender his or her resignation to the Board of Directors.

Mr. Simon added, “These governance-related amendments are another important step as we work to complete this transaction that has and, we believe, will continue to create value for all MDC shareholders. We’ve listened to our shareholders and made changes that reflect our commitment to strong governance, respect for minority shareholders and director independence.”

About MDC Partners Inc.

MDC Partners is one of the most influential marketing and communications networks in the world. As “The Place Where Great Talent Lives,” MDC Partners is celebrated for its innovative advertising, public relations, branding, digital, social and event marketing agency partners, which are responsible for some of the most memorable and effective campaigns for the world’s most respected brands. By leveraging technology, data analytics, insights and strategic consulting solutions, MDC Partners drives creative excellence, business growth and measurable return on marketing investment for over 1,700 clients worldwide. For more information about MDC Partners and its partner firms, visit our website at mdc-partners.com, sign up for investor-related updates and alerts, and follow us on LinkedIn.