Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding the beneficial ownership of the Class A Shares of MDC outstanding as of April 16, 2018 by each beneficial owner of more than five percent of such shares, by each of the directors and named executive officers of MDC and the current nominees for Board election and by all current directors and executive officers of MDC as a group.

						Number of Voting Shares Beneficially Owned, or Over Which Control or Direction is Exercised (1)												Approximate Percentage of Class (5)
Name		Type of Shareholding				Class A Subordinate Voting Shares (2)				Class A Shares Underlying Options, Warrants or Similar Right Exercisable Currently or Within 60 Days (3)				Class A Shares Underlying All Options, Warrants or Similar Right (4)				Class A Shares
Scott L. Kauffman			Direct				796,941	(6)			—				—				1.3	%
Clare R. Copeland			Direct				96,054	(7)			—				—					*
Daniel S. Goldberg			Direct				181,990	(6)			—				—					*
Bradley J. Gross			Direct				—				—				—					*
Larry S. Kramer			Direct				31,990	(6)			—				—					*
			Indirect				30,000	(6)			—				—					*
Anne Marie O’Donovan			Direct				31,990	(7)			—				—					*
Desirée Rogers			—				—				—				—					*
Irwin D. Simon			Direct				57,560	(6)			—				—					*
David Doft			Direct				306,580	(6)			—				50,000					*
			Indirect				1,500	(6)			—				—					*
Mitchell Gendel			Direct				328,144	(6)			—				50,000					*
Robert Kantor			Direct				208,574	(6)			—				43,000					*
David Ross			Direct				161,738	(6)			—				43,000					*
All directors and officers of MDC as a group of 12 persons							2,233,061	(6) (7)			—				186,000				3.7	%
Goldman Sachs (8) (9)							12,890	(9)			9,500,000	(9)			9,500,000	(9)			13.7	% (9)
FMR LLC (8) (10)							6,885,512				—				—				11.5	%
Invesco Ltd. (8) (11)							4,877,520				—				—				8.2	%

According to the schedule: Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. According to the schedule: Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees.

Information about the Board and Corporate Governance

The Board oversees the management of the business and affairs of MDC Partners as required by Canadian law. The Board conducts its business through meetings of the Board and three standing committees: the Audit Committee, the Human Resources & Compensation Committee and the Nominating and Corporate Governance Committee.

The Board has established guidelines for determining director independence, and all current directors, with the exception of Mr. Kauffman and Mr. Gross, have been determined by the Board to be independent under applicable NASDAQ rules and the Board’s governance principles, and applicable Canadian securities laws within the meaning of National Instrument 58-101 — Disclosure of Corporate Governance Practices.

MDC Partners has also adopted a written Code of Conduct in order to help directors, officers and employees resolve ethical issues in an increasingly complex business environment. The Code of Conduct applies to all directors, officers and employees, including the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Operating Officer, the General Counsel and any other employee with any responsibility for the preparation and filing of documents with the Securities and Exchange Commission. The Code of Conduct covers topics including, but not limited to, conflicts of interest, confidentiality of information and compliance with laws. The Code of Conduct also satisfies the requirements for a code of ethics, as defined by Item 406 of Regulation S-K promulgated by SEC. In addition, the Board of MDC Partners adopted a set of Corporate Governance Guidelines as a framework within which the Board and its committees conduct business.

The Company’s Corporate Governance Guidelines contain a majority vote provision, which requires a director nominee who receives, in an uncontested election, a number of votes “withheld” that is greater than the number of votes cast “for” his or her election to promptly offer to resign from the Board. The Board shall accept the resignation absent exceptional circumstances. Unless the Board decides to reject the offer, the resignation shall become effective 60 days after the date of the election. In making a determination whether to reject the offer or postpone the effective date, the Board of Directors shall consider all factors it considers relevant to the best interests of the Company. A director who tenders a resignation pursuant to this Policy will not participate in any meeting of the Board at which the resignation is considered. The Company will promptly issue a news release with the Board’s decision.

Copies of the charters of the Audit Committee, the Human Resources & Compensation Committee and the Nominating and Corporate Governance Committee, as well the Code of Conduct and Corporate Governance Guidelines, are available free of charge at MDC Partners’ website located at http://www.mdc-partners.com/investors/corporate-governance . Copies are also available to any shareholder upon written request to 745 Fifth Avenue, 19 ^th Floor, New York, NY 10151, Attn: Investor Relations.

Meetings

The Board held nine (9) meetings in 2017. All current members of the Board who served as directors during 2017 attended each Board meeting during the period in which they served in 2017.

The various Board committees met the number of times shown in parentheses: Audit Committee (5); Human Resources & Compensation Committee (5); and Nominating & Corporate Governance Committee (1). Each incumbent director that served as a director during 2017 attended all meetings of all Board committees on which they served during such period. MDC has a formal policy regarding attendance by directors at its annual general meetings of shareholders which states that all directors are expected to attend, provided that a director who is unable to attend such a meeting is expected to notify the Chairman of the Board in advance of any such meeting. All seven (7) members of the Board that served as directors during 2017 attended the 2017 annual meeting of shareholders.

Committees of the Board

The Board currently has three standing committees: the Audit Committee, the Human Resources & Compensation Committee and the Nominating & Corporate Governance Committee. In December 2014, the Board also formed the Special Committee, composed of Scott Kauffman and Irwin Simon, to oversee the production of documents and review issues related to the SEC investigation. The SEC investigation is now complete and resolved. Accordingly, the Special Committee is no longer active. The terms of reference and mandate for each committee of the Board are summarized below.

Audit Committee

The Audit Committee is currently composed of three members, all of whom are considered to be “independent” according to the applicable rules of NASDAQ, the Securities and Exchange Commission and applicable Canadian laws. The Audit Committee reviews all financial statements, annual and interim, intended for circulation to shareholders and reports upon these to the Board. In addition, the Board may refer to the Audit Committee on matters and questions relating to the financial position of MDC Partners and its affiliates. The Audit Committee is also responsible for overseeing and reviewing with management and the independent auditor the adequacy and effectiveness of the Company’s accounting and internal control policies and procedures; risk oversight matters; reviewing with management its compliance with prescribed policies, procedures and internal controls; and reviewing with management and the independent auditor their reports on internal controls, as presented in Item 9A (Controls and Procedures) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. While the Audit Committee has the duties and responsibilities set forth above, the Audit Committee is not responsible for planning or conducting the audit or for determining whether the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. Management has the responsibility for preparing the financial statements and implementing internal controls and evaluating their effectiveness, and the independent auditor has the responsibility of auditing the financial statements and effectiveness of internal controls over financial reporting.

As of April 16, 2018, the current members of the Audit Committee are: Anne Marie O’Donovan (Chairperson), Daniel Goldberg and Larry Kramer. The Board has determined that Ms. O’Donovan qualifies as an “audit committee financial expert” under the Sarbanes-Oxley Act of 2002 and applicable NASDAQ and Securities and Exchange Commission regulations. In addition, each of the members of the Audit Committee is “financially literate” as required by applicable Canadian securities laws. The Audit Committee’s current charter is appended hereto as Exhibit A and is available at http://www.mdc-partners.com .

Nominating & Corporate Governance Committee

The Nominating & Corporate Governance Committee is composed of three (3) members, all of whom are considered to be “independent” according to the applicable rules of NASDAQ and the Securities and Exchange Commission and by applicable Canadian securities laws. The Nominating & Corporate Governance Committee is responsible for reviewing and making recommendations to the full Board with respect to developments in the area of corporate governance and the practices of the Board. The Nominating & Corporate Governance Committee is also responsible for evaluating the performance of the Board as a whole and for reporting to the Board with respect to appropriate candidates for nominations to the Board. The current members of the Nominating & Corporate Governance Committee are: Irwin Simon (Chairman), Daniel Goldberg and Anne Marie O’Donovan. The Committee’s current charter is available at http://www.mdc-partners.com/investors/corporate-governance. The Company will disclose any amendments to, or waivers of, the charter on its website at www.mdc-partners.com in accordance with applicable law and the requirements of the NASDAQ corporate governance standards.

Human Resources & Compensation Committee

As of April 16, 2018, the current members of the Human Resources & Compensation Committee (the “ Compensation Committee ”) are: Clare Copeland (Chairman), Larry Kramer and Irwin Simon. All of the members of the Compensation Committee are considered to be “independent” according to the applicable rules of NASDAQ and the Securities and Exchange Commission and applicable Canadian securities laws, and outside directors within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and non-employee directors within the meaning of Rule 16b-3 under the Exchange Act. The Compensation Committee makes recommendations to the Board on, among other things, the compensation of senior executives. The Compensation Committee discusses personnel and human resources matters including recruitment and development, management succession and benefits plans and grants awards under the SARs Plan, the 2016 Stock Incentive Plan and the 2008 Key Partners Incentive Plan (each as defined below). Salary, bonus or other payments for the benefit of senior management are reviewed and approved by the Compensation Committee. From 2015 through 2018, the Compensation Committee engaged Mercer Human Resource Consulting LLC to review and evaluate the Company’s executive compensation levels, and to make recommendations for compensation of the Company’s executive officers based on comparable industry levels, which recommendations have been implemented by the Compensation Committee. The Compensation Committee’s current charter is available at http://www.mdc-partners.com/investors/corporate-governance. The Company will disclose any amendments to the charter on its website at www.mdc-partners.com in accordance with applicable law and the requirements of the NASDAQ corporate governance standards.

Board Leadership, Executive Sessions and Communications with the Board

Presently, Mr. Kauffman, our Chief Executive Officer, is also the Chairman of the Board. The Board does not require the separation of the offices of Chairman of the Board and Chief Executive Officer. All of the Company’s directors, whether members of management or not, have a fiduciary duty to exercise their business judgment in the best interests of the Company. The Board believes separating the roles of Chairman of the Board and Chief Executive Officer would not diminish or augment these fiduciary duties. The Board deliberates and decides, each time it selects a Chairman of the Board, whether the roles should be combined or separate, based upon the then current needs of the Company and the Board. The Board believes that the Company is currently best served by having Mr. Kauffman hold each of these positions, and by having a separate independent director (currently Mr. Simon) serve as “ Presiding Director. ” In the Board’s view, the current leadership structure facilitates strong communication and coordination between management and the Board and enables the Board to adeptly fulfill its risk oversight responsibilities.

Non-employee directors frequently meet in executive sessions without management in conjunction with each regularly scheduled Board meeting. The Company’s Presiding Director has the primary responsibility to preside over these sessions of the Board. The current Presiding Director is Irwin Simon; he was appointed to that position effective July 20, 2015. Additional information about the role of the Presiding Director is set forth in the Company’s Corporate Governance Guidelines, which are available free of charge at MDC Partners’ website at http://www.mdc-partners.com/investors/corporate-governance . Shareholders or other interested parties who wish to communicate with the Presiding Director or any other member of the Board may do so by mail or courier, to MDC Partners Inc., c/o Matt Chesler, VP, Investor Relations and Finance, 745 Fifth Avenue, 19 ^th Floor, New York, NY 10151. To facilitate a response, in appropriate circumstances, shareholders are asked to provide the following information: (i) their name; (ii) an address, telephone number, fax number and e-mail address at which they can be reached; and (iii) the number of shares or aggregate principal amount of debt that they hold, and the date those securities were acquired.

The Board has extensive involvement in the oversight of risk management related to us and our business. The Board accomplishes this oversight both directly and through its committees, each of which assists the Board in overseeing a part of our overall risk management and regularly reports to the Board. The Audit Committee represents the Board by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial controls and our compliance with legal and regulatory requirements. Through its regular meetings with management, including the finance, legal and compliance and risk management functions, the Audit Committee reviews and discusses all significant areas of our business and summarizes for the Board all areas of risk and the appropriate mitigating factors. The Human Resources & Compensation Committee considers, and discusses

with management, management’s assessment of certain risks, including whether any risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on us. The Nominating & Corporate Governance Committee oversees and evaluates programs and risks associated with Board organization, membership and structure and corporate governance. In addition, our Board receives periodic detailed operating performance reviews from management.

With respect to cybersecurity risk oversight, our Board of Directors and our Audit Committee receive periodic reports from the appropriate managers on the primary cybersecurity risks facing the Company and the measures the Company is taking to mitigate such risks. In addition to these periodic reports, our Board of Directors and our Audit Committee receive updates from management as to changes to the Company’s cybersecurity risk profile or significant newly identified risks.

Director Nominations

The Nominating and Corporate Governance Committee identifies, selects and recommends to the Board individuals qualified to serve both on the Board and committees, including persons suggested by shareholders and others. While the Board has not adopted a formal policy for diversity in identifying director nominees, the Nominating and Corporate Governance Committee seeks to maintain at all times a Board with a diverse range of experience, talent, expertise and background appropriate for the business of the Company. Beginning in 2017, Spencer Stuart, a leadership consulting firm, conducted an extensive search for qualified nominees, resulting in the recommendation of Ms. O’Donovan, Mr. Kramer and Mr. Goldberg. In April 2018, the Company’s internal recruiting department identified an extensive list of potential candidates to join the Board. From that list of potential candidates, the Chairman, the Presiding Director and the Nominating and Governance Committee determined to nominate Desirée Rogers, who was subsequently appointed to the Board on April 26, 2018. The Nominating and Corporate Governance Committee does not require any specific minimum qualifications or specific qualities or skills, but reviews each person’s qualifications on the whole, including a candidate’s particular experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate in the context of the needs of the Board. Following that review, the Nominating and Corporate Governance Committee then selects nominees and recommends them to the Board for election by the shareholders or appointment by the Board, as the case may be. The Nominating and Corporate Governance Committee also reviews the suitability of each Board member for continued service as a director when that member’s term expires or that member experiences a significant change in status (for example, a change in employment). The Nominating and Corporate Governance Committee has not implemented any particular additional policies or procedures with respect to suggestions received from shareholders with respect to Board or committee nominees.

Pursuant to its charter, the Nominating and Corporate Governance Committee may conduct or authorize investigations or studies into matters within its scope of responsibilities and may retain, at the Company’s expense, such independent counsel or other consultants or advisers as it may deem necessary from time to time. The Nominating and Corporate Governance Committee has the sole authority to retain or terminate any search firm to be used to identify director candidates, including the sole authority to approve its fees and terms, with the Company bearing the cost of such fees.

In addition, Mr. Gross was nominated by Goldman Sachs pursuant to its rights in connection with the purchase of the Series 4 Preference Shares.

Mr. Kauffman is not entitled to receive any separate or additional compensation in connection with his services on the Board. Mr. Gross, the nominee director of Goldman Sachs, also does not receive any compensation for his services on the Board.

The following table sets forth the compensation paid to or earned during fiscal year 2017 by our non-management directors:

DIRECTOR COMPENSATION FOR FISCAL YEAR 2017

Non-Management Director		Fees Earned or Paid in Cash ($)				Stock Awards ($)				Option Awards ($)				All Other Compensation ($)				Total ($)
Clare R. Copeland			105,000				103,200	(1)			—				N/A				208,200
Daniel S. Goldberg			94,000				103,200	(1)			—				N/A				197,200
Bradley J. Gross			—				—				—				N/A				—
Larry S. Kramer			96,000				103,200	(1)			—				N/A				199,200
Anne Marie O’Donovan			119,000				103,200	(1)			—				N/A				222,200
Desirée Rogers (2)			—				—				—				N/A				—
Irwin D. Simon			182,000				103,200	(1)			—				N/A				285,200

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (or “ CD&A ”) section outlines our compensation philosophy and describes the material components of our executive compensation practices for Mr. Kauffman (our CEO), David Doft (our CFO) and our other named executive officers (or “ NEO s”).

EXECUTIVE SUMMARY

In 2017, the Compensation Committee reaffirmed its commitment to adhere to our “pay-for-performance” requirements, and determined to pay annual incentive awards based upon the Company’s achievement of specified financial targets in 2017. In 2016, the Company did not pay any performance bonus to the CEO or NEOs given the Company’s failure to achieve its 2016 financial performance targets.

Continued Improvements to Governance and Compensation Practices in Response to Shareholder Feedback:

Our annual “Say-on-Pay” advisory vote in 2017 continued to improve substantially, as approximately 98% of votes cast were voted in favor of our executive compensation program, as compared to only 53% in respect of 2015.

In response to the disappointing 2015 voting results, management and the Board undertook a concentrated effort to focus on shareholder outreach and solicitation of feedback in 2016 and 2017. Based on shareholder feedback, and as part of the Company’s continuous efforts to implement executive compensation programs that align the interests of management with our shareholders, the Board adopted several governance and compensation-related changes in 2016 and 2017.

In addition, MDC’s Board and management team implemented several governance and compensation-related remedial measures focused on improved internal controls and corporate governance initiatives. Each of the remedial measures and improved compensation practices summarized below, together with other initiatives adopted in 2017, were consistent with the changes suggested by our largest shareholders. Importantly, in January 2017, we announced that we fully settled the SEC investigation with no finding by the SEC of intentional wrongdoing by any current directors or officers, and we prevailed in having the U.S. securities class action litigation dismissed, with prejudice (each as described in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2017).

We firmly believe that the implementation of the foregoing improvements to our governance and compensation practices described above has appropriately addressed all of our key shareholders’ concerns.

to the advice described above, the Compensation Committee engaged Mercer to assist in designing the new LTIP Plan to enhance pay-for-performance alignment. In accordance with NASDAQ listing standards and SEC regulations, the Compensation Committee assessed the independence of Mercer and determined that it was independent from management and that Mercer’s work has not raised any conflict of interest.

Mercer has attended Compensation Committee meetings at the Compensation Committee’s request and has also met with the Compensation Committee in executive session without management present. In particular, the Compensation Committee worked with Mercer to structure performance-based annual and long-term incentive programs designed to retain the Company’s executive management team and to motivate them to achieve goals that increase shareholder value. The Compensation Committee sought to ensure that its incentive plans properly align management incentive compensation targets with the performance targets most relevant to shareholders. The Compensation Committee also considered recent trends in executive compensation.

The aggregate amount of fees billed by Mercer for services related to designing the LTIP awards and determining compensation for the Company’s named executive officers was equal to approximately $37,000 for 2017.

Role of Named Executive Officers in Compensation Decisions: Input from Senior Management.   The Compensation Committee considers input from senior management in making determinations regarding the overall executive compensation program and the individual compensation of the named executive officers. As part of the Company’s annual planning process, the CEO and CFO develop targets for the Company’s incentive compensation programs and present them to the Compensation Committee. These targets are reviewed by the Compensation Committee to ensure alignment with the Company’s strategic and annual operating plans, taking into account the targeted year-over-year improvement as well as identified opportunities and risks. Based on performance appraisals, including an assessment of the achievement of pre-established financial and individual “key performance indicators,” the CEO recommends to the Compensation Committee cash and long-term incentive award levels for the Company’s other executive officers. Each year, the CEO presents to the Compensation Committee his evaluation of each executive officer’s contribution and performance over the past year, and strengths and development needs and actions for each of the executive officers. The Compensation Committee exercises its discretionary authority and makes the final decisions regarding the form of awards, targets, award opportunities and payout value of awards. No executive officer participates in discussions relating to his or her own compensation.

In setting policies and administering the compensation of named executive officers, the Compensation Committee reviews all elements of total compensation, benefits and perquisites. The Compensation Committee reviews reports and analyses of executive compensation in consultation with its outside consultant, including current practices and trends among peer companies and the advertising and marketing services industry.

2017 Base Salaries.   The Compensation Committee reviews base salaries annually or at other times when appropriate. In determining the amount of base salary that each NEO receives, the Compensation Committee reviews the executive’s current compensation, time in position, any change in the executive’s position or responsibilities and the relation of the executive’s position and compensation to those of other executives within the Company and in similar positions at peer companies. Effective January 2017, the Committee determined to increase Mr. Ross’ annual base salary to $500,000 per year based upon his expanded scope of responsibilities on strategic initiatives.

2017 INCENTIVE AWARDS: FINANCIAL AND INDIVIDUAL PERFORMANCE METRICS

Pay-for-Performance Analysis; Achievement of 2017 Financial Targets.   The Company’s compensation program is designed to reward performance relative to corporate financial performance criteria and individual incentive criteria. The Company’s overall financial performance for 2017 exceeded the financial targets established by the Compensation Committee.

Specifically, the Company’s 2017 financial performance of Adjusted EBITDA exceeded the Company’s baseline Adjusted EBITDA target ($203.4 million). The Compensation Committee also determined that the Company achieved certain other financial and strategic goals in 2017, including deleveraging the Company’s balance sheet through the successful completion of a capital markets transaction with Goldman Sachs for its $95 million convertible preferred financing; a further significant reduction in corporate expenses; the successful launch of a new data analytics platform with Gale Partners and Zero & One; and the successful extension of partnership relationships with key founding partners at several operating agencies. The Compensation Committee’s executive compensation decisions in 2017 aligned with this financial and operational performance.

Calculation of 2017 Annual Incentive Awards; Individual Performance Metrics.   In 2017, each NEO was eligible to earn an annual incentive award in an amount equal to his base salary. In determining the 2017 annual incentive awards to be paid to each of the named executive officers, following the conclusion of fiscal 2017 the Compensation Committee reviewed actual financial and individual performance relative to individual incentive criteria. The Company does not apply a formula or use a pre-determined weighting when comparing overall performance against the various individual objectives, and no single objective is material in determining individual awards. However, the Compensation Committee assessed each executive’s individual

performance to determine the actual bonus incentive award payable to Mr. Kauffman and each named executive officer, including the following:

Scott Kauffman :  For Mr. Kauffman, the Compensation Committee considered the Company’s strong financial performance, as well as Mr. Kauffman’s effective leadership role in implementing the Company’s strategic and operating plans. Specifically, the Compensation Committee recognized that Mr. Kauffman successfully led the capital markets transaction with Goldman Sachs for its $95 million investment in 2017, together with several strategic initiatives, including the launch of a new data analytics platform and the further reduction of corporate expenses. Mr. Kauffman therefore received an annual bonus for 2017 equal to $1,200,000.

David Doft :  Mr. Doft implemented significant corporate cost reductions and managed improvements to the Company’s working capital processes in 2017, resulting in achievement by the Company of its cash management targets. In addition, Mr. Doft was instrumental in the successful capital markets transaction with Goldman Sachs. As a result, Mr. Doft received an annual cash bonus for 2017 equal to $650,000.

Mitchell Gendel :  Mr. Gendel effectively managed all legal matters for the Company, including the successful resolution of the SEC’s ongoing investigation in 2017 and the settlement of other legal claims. In addition, Mr. Gendel effectively managed the Company’s Human Resources department, leading negotiations for several new executive employment and termination agreements and a new health benefit plan; managed the Real Estate department, executing office lease efficiencies in several key markets; and assisted in the remediation of identified internal control issues as part of the Company’s improved corporate governance practices. As a result, Mr. Gendel received an annual cash bonus for 2017 equal to $550,000.

Robert Kantor :  Mr. Kantor successfully led the Company’s new business initiatives, and significantly surpassed targeted performance goals with several global account wins across the Company’s agency network. As a result, Mr. Kantor received an annual cash bonus for 2017 equal to $500,000.

David Ross :  Mr. Ross successfully led the Company’s corporate development initiatives, driving parts of a strategic plan that included launching the Company’s data-at-the center offering, implementing long-term management retention incentives at several of the Company’s key agencies, and divesting certain identified non-core assets. As a result, Mr. Ross received an annual cash bonus for 2017 equal to $500,000.

2017 LTIP Equity Incentive Awards.   In 2017, the Compensation Committee determined to award the CEO and each NEO restricted stock grants under the 2016 Stock Incentive Plan. Vesting for these awards is conditioned upon achievement of three (3) year financial performance targets and continued employment pursuant to the terms of an award agreement made under the Plan (the “2017 LTIP Equity Incentive Awards”). Pursuant to the terms of the 2017 LTIP Equity Incentive Awards, the shares of restricted stock granted to our NEOs will vest based upon the Company’s level of achievement of “Actual Cumulative EBITDA” (calculated as described below) over the performance period commencing on January 1, 2017 and ending on December 31, 2019 (the “Performance Period”).

In addition, in order to more closely align the interests of our NEOs with those of our shareholders by tying a portion of their compensation to the market value of our Class A Shares, the Committee determined to award each of the NEOs (other than Mr. Kauffman) an amount equal to approximately 20% of their LTIP incentive award in the form stock appreciation rights (SARs). These SARs grants vest on the third anniversary of the grant date and expire on January 31, 2022, subject to continued employment through such date, and will reward management only to the extent that the underlying Class A shares of the Company appreciate above the exercise price on the date of grant.

For purposes of the foregoing LTIP restricted stock awards, “EBITDA” is defined as the Company’s consolidated earnings before interest, taxes, depreciation and amortization, plus any non-cash charges for stock-based compensation which were deducted in the calculation of EBITDA. “Actual Cumulative EBITDA” is defined as the sum of the Company’s actual annual EBITDA for the Company’s 2017, 2018 and 2019 fiscal years, as determined by the Compensation Committee. “Cumulative EBITDA Target” is defined as the sum of the EBITDA targets as set forth in the Company’s annual budget for each of the Company’s 2017, 2018 and 2019 fiscal years, in each case as determined by the Compensation Committee at the beginning of each such fiscal year.

The Compensation Committee chose EBITDA as the financial performance measure under the 2017 LTIP restricted stock awards because it is a key indicator of Company profitability.

On January 31, 2017, the Company issued LTIP Equity Incentive Awards to each of the NEOs in the following target amounts: Scott Kauffman — 300,000 shares; David Doft — 80,000 shares; Mitchell Gendel — 80,000 shares; Robert Kantor — 70,000 shares; and David Ross — 70,000 shares. Each of the foregoing 2017 LTIP Equity Incentive Awards will vest on March 1, 2020, based on the Company’s Actual Cumulative EBITDA as described above. The Compensation Committee sets the EBITDA target for each of 2017, 2018 and 2019 at the beginning of each applicable year at levels the Compensation Committee believes are challenging but reasonably achievable. Under FASB ASC Topic 718, these restricted stock awards do not yet have an established grant date or grant date fair value because the financial performance target, the Cumulative EBITDA Target, is not yet established. As there is not yet a grant date under FASB ASC Topic 718, in accordance with the SEC’s disclosure rules, amounts relating to these awards are not included in the Summary Compensation Table or the Grants of Plan-Based Awards in Fiscal Year 2017 table.

In addition, on January 31, 2017, the Company granted SARs awards to the NEOs other than Mr. Kauffman in respect of a number of our Class A Shares as follows: Mr. Doft — 50,000 shares; Mr. Gendel — 50,000 shares; Mr. Kantor — 43,000 shares; and Mr. Ross — 43,000 shares.

Partial Payout Under 2015 Cash LTIP Awards.   In January 2015, the Committee granted to each of the NEOs (other than Mr. Kauffman) awards under the Company’s 2014 Long-Term Cash Incentive Plan, with a target value equal to $250,000. These grants vested at the end of the applicable three (3) year measuring period on December 31, 2017. The financial performance criteria were based on the following two specific metrics that are each given 50% weight: (i) three (3) year cumulative EBITDA growth as measured against the approved annual EBITDA targets for such period; and (ii) relative total shareholder return (“TSR”) based on share price appreciation and dividends as compared to a pre-defined comparator group over the same three (3) year period. The Company failed to achieve the 3-year TSR target for these awards, but the Company did achieve a portion of the 3-year cumulative EBITDA of $580.1 million, or approximately 94% of the 3-year cumulative EBITDA target. Accordingly, the Company made a partial payment to each of the NEOs (other than Mr. Kauffman) in March 2018 in an amount equal to $117,664 in respect of the 2015 Cash LTIP Awards.

Stock Ownership Guidelines.   The Company’s stock ownership guidelines require that each named executive officer own a significant equity stake in the Company during their employment. The Compensation Committee believes that stock ownership by senior managers strengthens their commitment to the future of the Company and further aligns their interests with those of our shareholders. The Board has adopted the following stock ownership guidelines: Chief Executive Officer and Chief Financial Officer to own stock with a value of at least four (4) times his base salary; and each other named executive officer, at least three (3) times their base salary. An executive must reach his target ownership level within four years after becoming subject to the stock ownership guidelines. As of December 31, 2017, the CEO and all other named executive officers were in full compliance with the Company’s stock ownership guidelines.

Prohibition of Pledging or Hedging of the Company’s Stock.   The Board has adopted policies to prohibit any pledge or hedging of the Company’s stock by officers and directors of the Company. Currently, no stock is pledged or hedged by any of the Company’s directors or officers.

Employment Agreements.   The Company has employment or services agreements with the CEO and all of the other named executive officers. These agreements formalize the terms of the employment relationship, and assure the executive of fair treatment during employment and in the event of termination while requiring compliance with restrictive covenants. Employment agreements promote complete documentation and understanding of employment terms, including strong protections for our business.

Claw-back Agreements.   In connection with the payment of cash incentive amounts to the CEO and each of the other named executive officers in respect of 2017, the Company required that each agree in writing to repay the Company a pro rata portion of his cash incentive payment if he resigned his employment or his employment was terminated for “cause” prior to December 31, 2019. These agreements also encourage long term retention of key executives by the Company.

Business Protection Terms.   The Company’s named executive officers are subject to significant contractual restrictions intended to prevent actions that potentially could harm our business, particularly after termination of employment. These business protections include obligations not to solicit clients or employees, not to disparage us, not to reveal confidential information, and to cooperate with us in litigation. Business protection provisions are included in employment agreements and in connection with compliance with the Company’s Code of Conduct.

Equity Award Grant Policies.   The Board of Directors and the Compensation Committee have adopted policies and procedures governing the granting of any equity incentive awards, including the following:

Comparator Companies.   In determining compensation opportunities and payments to executives, the Compensation Committee may, from time to time, review competitive opportunities, payments, practices and performance among a comparator group of companies. Although we do not engage in formal benchmarking of NEO compensation, we intend that, if our named executive officers achieve individual and financial corporate objectives in a given year, they will earn total direct compensation that compares favorably with the total direct compensation earned by executives performing similar functions at comparator companies.

Retirement Programs.   The Company offers each U.S.-based executive the opportunity to make individual contributions to a broad-based 401(k) Plan administered by the Company and generally available to the Company’s U.S. employees. However, the Company does not make or match any employee contributions to the 401(k) Plan for the Company’s employees. The Company does not provide any other specific retirement or pension benefits for its named executive officers.

Severance Policies.   We provide severance protection to our named executive officers in employment agreements, as detailed below under the caption “Potential Payments upon Termination or Change-In-Control.” As discussed above, this protection is designed to be fair and competitive to aid in attracting and retaining experienced executives. We believe that the protection we provide, including the level of severance payments and post-termination benefits, is appropriate.

Section 162(m).   Pursuant to Section 162(m), publicly-held corporations are prohibited from deducting compensation paid to the named executive officers except the Chief Financial Officer, as of the end of the fiscal year, in excess of $1 million, unless the compensation is “performance-based.” Although the Compensation Committee considers the impact of Section 162(m) when making its compensation determinations, the Compensation Committee has determined that its need for flexibility in designing an effective compensation plan to meet our objectives and to respond quickly to marketplace needs has outweighed its need to maximize the deductibility of its annual compensation. The Compensation Committee reviews this policy from time to time.

As used in this Proxy Statement:

“ Adjusted EBITDA ” is a non-U.S. GAAP measure that represents operating income (loss) plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, and other items, adjusted for certain items at the discretion of the Compensation Committee. A reconciliation of “Adjusted EBITDA” to the U.S. GAAP reported results of operations for the year ended December 31, 2017 is provided in the Annex to this proxy statement.

REPORT OF THE HUMAN RESOURCES &
COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Human Resources & Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that appears above. Based on this review and discussion with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s 2017 Annual Report on Form 10-K for filing with the SEC.

The Human Resources & Compensation Committee
Clare R. Copeland (Chairman)
Larry Kramer
Irwin D. Simon

Executive Compensation

This section contains information, both narrative and tabular, regarding the compensation for fiscal 2017, 2016, and 2015 for (1) our principal executive officer in 2017; (2) our principal financial officer in 2017; and (3) our three other most highly compensated executive officers who were serving as executive officers as of the end of 2017 (collectively, the “ NEOs ” or the “ named executive officers ”). Mr. Ross was not a NEO in 2015; therefore, in accordance with the SEC’s disclosure rules, information regarding compensation for the year that this individual was not a NEO is not included in the table below.

SUMMARY COMPENSATION TABLE

Name and Principal Position						Year				Salary ($)				Bonus ($) (1)				Stock Awards ($) (2)				Option Awards/ SARS ($) (3)				Non-Equity Incentive Plan Compensation ($) (4)				All Other Compensation ($) (5)				Total ($) (6)
Scott L. Kauffman, Chairman and Chief Executive Officer							2017 2016 2015				1,200,000 1,200,000   500,641				1,200,000        0   800,000				0 0 1,926,000				0      0       0				0 0 0				9,953 8,400 34,135				2,409,953 1,208,400 3,260,776
David Doft, Chief Financial Officer							2017 2016 2015				650,000   650,000 500,000				650,000 0 575,000				0 0 0				117,630      0 0				117,664 119,707 0				52,785 52,154 47,687				1,588,079 821,861 1,122,687
Mitchell Gendel, General Counsel							2017 2016 2015				550,000 550,000 500,000				550,000 0 575,000				0 0 0				117,630 0 0				117,664 119,707 0				50,207 49,576 48,007				1,385,501 719,283 1,123,007
Robert Kantor, Global Chief Marketing Officer							2017 2016 2015				500,000 500,000 500,000				500,000 0 600,000				0 0 0				101,162 0 0				117,664 119,707 0				66,093 40,154 38,367				1,284,919 659,861 1,138,367
David Ross, EVP, Strategy and Corporate Development							2017 2016				495,833 425,000				500,000 0				0 0				101,162 0				117,664 119,707				22,785 22,154				1,237,444 566,861

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

We have entered into employment agreements with all of our named executive officers, as described in more detail below.

Scott L. Kauffman

MDC Partners has an employment agreement with Mr. Kauffman, effective July 20, 2015, pursuant to which Mr. Kauffman serves as our Chief Executive Officer. Mr. Kauffman’s term of employment with the Company is for an indefinite period unless and until either Mr. Kauffman gives to the Company thirty (30) days advance written notice of resignation or the Company terminates Mr. Kauffman’s employment, with or without “Cause” (as defined in his employment agreement).

Mr. Kauffman received an annualized base salary of $1,100,000 during his term of employment in 2015 (increased to $1,200,000 effective as of January 1, 2017), and he is eligible to receive an annual discretionary bonus in a target amount equal to 100% of his base salary, as determined by the Compensation Committee, based upon Mr. Kauffman’s individual performance, the overall financial performance of the Company and such other factors as the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures. As part of his new employment agreement, Mr. Kauffman received a grant of 100,000 shares of MDC restricted stock on August 26, 2015. In 2015, Mr. Kauffman received a monthly perquisite allowance in an amount equal to $6,250; however, commencing January 1, 2017, Mr. Kauffman no longer receives any perquisite allowance. Mr. Kauffman is eligible to participate in the Company’s welfare benefit plans and programs including disability and group life (including accidental death and dismemberment insurance). He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Kauffman’s employment is terminated under specified circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”

David Doft

MDC Partners has an employment agreement with Mr. Doft, effective August 10, 2007 (as amended on August 5, 2010), pursuant to which Mr. Doft serves as our Chief Financial Officer. Mr. Doft’s term of employment is subject to automatic renewal for one-year periods, unless either party gives to the other a 45-day advance written notice of his or its intention not to renew. Mr. Doft currently receives an annualized base salary of $650,000 and he is eligible to receive an annual discretionary bonus in a target amount equal to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Mr. Doft’s performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures.

Mr. Doft also receives an annual perquisite allowance in an amount equal to $30,000. Mr. Doft is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment) and business travel insurance provided by the Company to its senior executives. He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Doft’s employment is terminated under specified circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”

Mitchell Gendel

MDC Partners has an employment agreement with Mr. Gendel, effective July 6, 2007 (as amended on March 5, 2011), pursuant to which Mr. Gendel serves as our General Counsel and Corporate Secretary. Mr. Gendel’s term of employment is subject to automatic renewal for one-year periods, unless either party gives to the other a 30-day advance written notice of its intention not to renew. Mr. Gendel received an annualized base salary of $550,000 in 2017, which was increased to $650,000 effective March 1, 2018 due to his increased scope of responsibilities. He is eligible to receive an annual discretionary bonus in an amount up to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee,

based upon Mr. Gendel’s performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures. Mr. Gendel also receives an annual perquisite allowance in an amount equal to $25,000. Mr. Gendel is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment), and business travel insurance provided by the Company to its senior executives. He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Gendel’s employment is terminated under certain circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments Upon Termination or Change in Control.”

Robert Kantor

MDC Partners has an employment agreement with Mr. Kantor, effective May 5, 2014, pursuant to which Mr. Kantor serves as our Global Chief Marketing Officer. Mr. Kantor’s current term of employment with the Company is for an indefinite period unless and until either Mr. Kantor gives to the Company six (6) months advance written notice of resignation or the Company terminates Mr. Kantor’s employment with or without “Cause” (as defined in his employment agreement).

Mr. Kantor received an annualized base salary of $500,000 in 2017, which was increased to $550,000 effective March 1, 2018 due to his increased scope of responsibilities. He is eligible to receive an annual discretionary bonus in a target amount equal to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Mr. Kantor’s individual performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures.

Mr. Kantor also receives an annual perquisite allowance in an amount equal to $18,000. Mr. Kantor is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment) and business travel insurance provided by the Company to its senior executives. He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Kantor’s employment is terminated under certain circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments upon Termination or Change in Control.”

David Ross

MDC Partners has an amended and restated employment agreement with Mr. Ross, effective February 27, 2017, pursuant to which Mr. Ross serves as our Executive Vice President, Strategy and Corporate Development. Mr. Ross’s term of employment is for an indefinite term, unless and until either Mr. Ross provides the Company with 30 days prior written notice of resignation, or if the Company terminates his employment with or without “Cause” (as defined in his employment agreement). Mr. Ross currently receives an annualized base salary of $500,000 (effective as of January 20, 2017) and he is eligible to receive an annual discretionary bonus in an amount up to 100% of his base salary, as recommended by our CEO and determined by the Compensation Committee, based upon Mr. Ross’s performance, the overall financial performance of the Company and such other factors as our CEO and the Board shall deem reasonable and appropriate, to be paid in accordance with our normal bonus payment procedures. Mr. Ross is eligible to participate in any welfare benefit plans and programs including disability, group life (including accidental death and dismemberment), and business travel insurance provided by the Company to its senior executives. He is also entitled to participate in the retirement plans and benefits in accordance with the plans or practices of the Company made available to the senior executives of the Company. The employment agreement also provides for severance payments if Mr. Ross’s employment is terminated under certain circumstances. The amount and circumstances giving rise to these severance payments are discussed in further detail under the heading “Potential Payments Upon Termination or Change in Control.”

2017 LTIP Equity Incentive Awards

On January 31, 2017, the Company issued LTIP Equity Incentive Awards to each of the NEOs in the following target amounts: Scott Kauffman — 300,000 shares; David Doft — 80,000 shares; Mitchell Gendel — 80,000 shares; Robert Kantor — 70,000 shares; and David Ross — 70,000 shares. Each of the foregoing 2017 LTIP Equity Incentive Awards will vest on March 1, 2020, based on the Company’s Actual Cumulative EBITDA as described above. The Compensation Committee sets the EBITDA target for each of 2017, 2018 and 2019 at the beginning of each applicable year at levels the Compensation Committee believes are challenging but reasonably achievable. Under FASB ASC Topic 718, these restricted stock awards do not yet have an established grant date or grant date fair value because the financial performance target, the Cumulative EBITDA Target, is not yet established. As there is not yet a grant date under FASB ASC Topic 718, in accordance with the SEC’s disclosure rules, amounts relating to these awards are not included in the Summary Compensation Table or the Grants of Plan-Based Awards in Fiscal Year 2017 table.

In addition, the Committee determined to award each of the NEOs (other than Mr. Kauffman) an amount equal to approximately 20% of their LTIP incentive award in the form stock appreciation rights (SARS). As such, SARS awards were granted in respect of the following numbers of our Class A shares: David Doft — 50,000 shares; Mitchell Gendel — 50,000 shares; Robert Kantor — 43,000 shares; and David Ross — 43,000 shares. These grants vest on the third anniversary of the grant date and expire on January 31, 2022, and will reward management only to the extent that the underlying Class A shares of the Company appreciate above the exercise price on the date of grant. These SARS may be settled upon exercise in cash or stock at the option of the Company.

OUTSTANDING EQUITY AWARDS AT 2017 FISCAL YEAR-END

		Option Awards																Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable				Number of Securities Underlying Unexercised Options (#) Unexercisable				Option Exercise Price ($)				Option Expiration Date				Number of Shares or Units of Stock that Have Not Vested (#)				Market Value of Shares or Units of Stock that Have Not Vested ($)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)
(a)																		(b)				(c)				(d)				(e)
Scott L. Kauffman			—				—				—				—				103,570	(1)			1,009,808	(1)				(2)				(2)
David Doft			—				50,000				6.60				Feb 1, 2022												(2)				(2)
Mitchell Gendel			—				50,000				6.60				Feb 1, 2022												(2)				(2)
Robert Kantor			—				43,000				6.60				Feb 1, 2022												(2)				(2)
David Ross			—				43,000				6.60				Feb 1, 2022												(2)				(2)

This table also does not reflect the 2016 LTIP Equity Incentive Awards that were made on February 17, 2016 and are subject to performance conditions. The 2016 LTIP Equity Incentive Awards will vest on March 1, 2019, if the Company achieves the Cumulative EBITDA Target during the period of January 1, 2017 – December 31, 2019. Under FASB ASC Topic 718, these restricted stock awards do not yet have an established grant date fair value because the financial performance target, the Cumulative EBITDA Target is not yet established.

The following table sets forth information concerning each exercise of stock options, SARs and similar instruments, and each vesting of stock, including restricted stock, restricted stock units and similar instruments, during 2017 for each NEO on an aggregated basis.

OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2017

Name		Option Awards								Stock Awards
		Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($)				Number of Shares Acquired on Vesting (#)				Value Realized on Vesting ($)
(a)		(b)				(c)				(d)				(e)
Scott L. Kauffman			0				0				4,441				37,304
David Doft			0				0				0				0
Mitchell Gendel			0				0				0				0
Robert Kantor			0				0				0				0
David Ross			0				0				0				0

PENSION BENEFITS IN 2017

We do not provide our NEOs with any defined benefit pension arrangements.

NON-QUALIFIED DEFERRED COMPENSATION IN 2017

We do not maintain any non-qualified deferred compensation plans for our NEOs.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

We have entered into employment agreements with each of our named executive officers. Under these agreements, we are required to pay severance benefits in connection with specified terminations of employment, including specified terminations in connection with a change in control of the Company. The employment agreements for each NEO and other executives require a “double trigger” for any change in control severance payments. In addition, some of our equity incentive plans provide for the accelerated payment or vesting of awards in connection with specified terminations of employment or a change in control of the Company. The following is a description of the severance, termination and change in control benefits payable to each of our named executive officers pursuant to their respective employment agreements and our equity incentive plans.

Definitions of terms such as “change in control” or “for good reason” vary between agreements, so when a definition is particular to an agreement, it is described for that agreement. For all named executive officers, a “change of control” means the closing of a transaction which results in (1) any person(s) or company(ies) acting jointly or in concert owning equity of the Company representing greater than 50% of the voting power of the Company’s outstanding securities, or (2) the Company selling all or substantially all of its assets (in each instance other than any transfer by the Company or any of its affiliates of their respective interest in the Company to another wholly-owned subsidiary of another MDC Group company).

Scott L. Kauffman

Pursuant to his employment agreement, if MDC terminated Mr. Kauffman’s employment in 2017 without cause, or if Mr. Kauffman terminated his employment for good reason, then MDC was required to pay Mr. Kauffman a severance payment within 60 days of the date of termination of 1.5 times Mr. Kauffman’s then-current base salary plus the amount of his annual discretionary bonus paid or accrued in respect of the year immediately preceding the termination date. If Mr. Kauffman’s employment had terminated under these circumstances on December 29, 2017, which was the last business day of 2017, the aggregate cash payment due to him under the agreement would have been $1,800,000. As of December 29, 2017, Mr. Kauffman had 298,469 unvested restricted stock grants that would vest on termination of his employment agreement, with a fair value equal to $2,910,070. In the event of termination of Mr. Kauffman’s employment agreement following a change of control as of December 29, 2017, a total of 545,918 unvested restricted stock grants would fully vest, with a fair value equal to $5,322,701.

If Mr. Kauffman’s employment is terminated within one year following the closing of a change in control by MDC without cause, or by Mr. Kauffman for good reason, then Mr. Kauffman will be entitled to the same severance payments set forth above. In addition, in the event of a change of control, the Compensation Committee may in its sole discretion determine to make an additional payment to Mr. Kauffman. If there had been a change in control of MDC Partners on December 29, 2017 and Mr. Kauffman’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $3,000,000.

David Doft

Pursuant to his employment agreement, if MDC terminates Mr. Doft’s employment without cause, Mr. Doft terminates his employment for good reason, or the company gives a notice of non-renewal of the agreement, then MDC is required to pay Mr. Doft a severance payment within 10 days of the date of termination of one (1) times Mr. Doft’s total remuneration, plus an amount equal to two (2) month’s base salary for each calendar year in which he was employed by the Company, up to a maximum of six (6) months. Total remuneration means the sum of his current base salary, his perquisite allowance, plus the highest annual discretionary cash bonus he earned in the three years ending December 31 of the year immediately preceding the date of termination. If Mr. Doft’s employment had terminated under these circumstances on December 29, 2017, the aggregate cash payment due to him under the agreement would have been $1,571,375. Furthermore, Mr. Doft will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans and, to the extent permitted under law, also in all retirement plans, provided however, that if Mr. Doft becomes entitled to receive coverage and benefits in the same type of plan from another employer, he will no longer be able to participate in these benefit and retirement plans. We will be obligated to pay him the economic equivalent of the benefits

in these plans if Mr. Doft is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $22,154 if Mr. Doft’s employment had terminated as of December 29, 2017. As of December 29, 2017, Mr. Doft had 53,332 unvested restricted stock grants that would vest on termination of his employment agreement, with a fair value equal to $520,000. In the event of termination of Mr. Doft’s employment agreement following a change of control as of December 29, 2017, a total of (i) 120,000 unvested restricted stock grants would fully vest, with a fair value equal to $1,170,000, plus (ii) 50,000 SARs would fully vest, with a fair value equal to $157,500.

If Mr. Doft’s employment is terminated without cause by the company within one year following the closing of a change in control, by Mr. Doft for good reason, or by the company giving a notice of non-renewal of the agreement, then Mr. Doft will be entitled to a payment of 2.0 times his total remuneration. He will also be eligible to receive a pro rata portion of his annual discretionary cash bonus for the year in which his employment terminates. If there had been a change in control of MDC Partners on December 29, 2017 and Mr. Doft’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $2,492,750. Furthermore, Mr. Doft will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. Doft is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $22,785 if Mr. Doft’s employment had terminated as of December 29, 2017.

Mitchell Gendel

Pursuant to his employment agreement, if MDC terminates Mr. Gendel’s employment without cause, Mr. Gendel terminates his employment for good reason, or the Company gives a notice of non-renewal of the agreement, then MDC is required to pay Mr. Gendel a severance payment within 10 days of the date of termination of one (1) times Mr. Gendel’s total remuneration, plus an amount equal to six (6) month’s base salary. Total remuneration means the sum of his current base salary, his perquisite allowance, plus the highest annual discretionary cash bonus he earned in the three years ending December 31 of the year immediately preceding the date of termination. If Mr. Gendel’s employment had terminated under these circumstances on December 29, 2017, the aggregate cash payment due to him under the agreement would have been $1,416,375. Furthermore, Mr. Gendel will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans and, to the extent permitted under law, also in all retirement plans, provided, however, that if Mr. Gendel becomes entitled to receive coverage and benefits in the same type of plan from another employer, he will no longer be able to participate in these benefit and retirement plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. Gendel is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $24,576 if Mr. Gendel’s employment had terminated as of December 29, 2017. As of December 29, 2017, Mr. Gendel had 53,332 unvested restricted stock grants that would vest on termination of his employment agreement, with a fair value equal to $520,000. In the event of termination of Mr. Gendel’s employment agreement following a change of control as of December 29, 2017, a total of (i) 120,000 unvested restricted stock grants would fully vest, with a fair value equal to $1,170,000, plus (ii) 50,000 SARs would fully vest, with a fair value equal to $157,500.

If Mr. Gendel’s employment is terminated within one year following the closing of a change in control by the company without cause, by Mr. Gendel for good reason, or by the company giving a notice of non-renewal of the agreement, then Mr. Gendel will be entitled to a payment of two (2) times his total remuneration. He will also be eligible to receive a pro-rata portion of his annual discretionary cash bonus for the year in which his employment terminates. If there had been a change in control of MDC Partners on December 29, 2017 and Mr. Gendel’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $2,282,750. Furthermore, Mr. Gendel will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. Gendel is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $25,207 if Mr. Gendel’s employment had terminated as of December 29, 2017.

Robert Kantor

Pursuant to his employment agreement, if MDC terminates Mr. Kantor’s employment without cause, then MDC is required to pay Mr. Kantor a severance payment over the applicable twelve (12) month severance period, equal to one (1) times Mr. Kantor’s base salary. If Mr. Kantor’s employment had terminated under these circumstances on December 29, 2017, the aggregate cash payment due to him under the agreement would have been $500,000. As of December 29, 2017, Mr. Kantor had 43,333 unvested restricted stock grants that would vest on termination of his employment agreement, with a fair value equal to $422,500. In the event of termination of Mr. Kantor’s employment agreement following a change of control as of December 29, 2017, a total of (i) 100,000 unvested restricted stock grants would fully vest, with a fair value equal to $975,000, plus (ii) 43,000 SARs would fully vest, with a fair value equal to $135,450.

If Mr. Kantor’s employment is terminated within one year following the closing of a change in control by the company without cause, then Mr. Kantor will be entitled to a payment of two (2) times his total remuneration. Total remuneration means the sum of his current base salary, plus the highest annual discretionary cash bonus he earned in the three years ending December 31 of the year immediately preceding the date of termination. He will also be eligible to receive a pro-rata portion of his annual discretionary cash bonus for the year in which his employment terminates. If there had been a change in control of MDC Partners on December 29, 2017 and Mr. Kantor’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $2,200,000.

David Ross

Pursuant to his employment agreement, if MDC terminates Mr. Ross’s employment without cause, or Mr. Ross terminates his employment for good reason, then MDC is required to pay Mr. Ross a severance payment within 10 days of the date of termination of one (1) times Mr. Ross’s total remuneration. Total remuneration means the sum of his then-current base salary plus the highest annual discretionary cash bonus he earned in the three years ending December 31 of the year immediately preceding the date of termination. If Mr. Ross’s employment had terminated under these circumstances on December 29, 2017, the aggregate cash payment due to him under the agreement would have been $958,000. Furthermore, Mr. Ross will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans and, to the extent permitted under law, also in all retirement plans, provided, however, that if Mr. Ross becomes entitled to receive coverage and benefits in the same type of plan from another employer, he will no longer be able to participate in these benefit and retirement plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. Ross is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $22,785 if Mr. Ross’s employment had terminated as of December 29, 2017. As of December 29, 2017, Mr. Ross had 43,333 unvested restricted stock grants that would vest on termination of his employment agreement, with a fair value equal to $422,500. In the event of termination of Mr. Ross’s employment agreement following a change of control as of December 29, 2017, a total of (i) 100,000 unvested restricted stock grants would fully vest, with a fair value equal to $975,000, plus (ii) 43,000 SARs would fully vest, with a fair value equal to $135,450.

If Mr. Ross’s employment is terminated within one year following the closing of a change in control by the company without cause, or by Mr. Ross for good reason, then Mr. Ross will be entitled to a payment of two (2) times his total remuneration. He will also be eligible to receive a pro-rata portion of his annual discretionary cash bonus for the year in which his employment terminates. If there had been a change in control of MDC Partners on December 29, 2017 and Mr. Ross’s employment terminated in connection with that change in control, the aggregate cash severance payment MDC would have paid him under the contract would be $1,916,000. Furthermore, Mr. Ross will also be allowed to continue participating for one year after termination on the same basis as before he was terminated in all benefit plans. We will be obligated to pay him the economic equivalent of the benefits in these plans if Mr. Ross is unable to participate in the plans. The aggregate amount of this benefit would have been approximately $22,785 if Mr. Ross’s employment had terminated as of December 29, 2017.

CEO Pay Ratio Disclosure

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K (“ Item 402(u )”), the Company is providing the following reasonable estimate of the ratio of the median of the annual base salary compensation of all of our employees (except Scott L. Kauffman, our Chairman and Chief Executive Officer (“CEO”)), to the annual total compensation of Mr. Kauffman, calculated in a manner consistent with Item 402(u). For 2017, our last completed fiscal year:

Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual base salary compensation of all of our employees except our CEO was approximately 30:1. The ratio of the annual base salary compensation of our CEO to the median of the annual base salary compensation of all of our employees except our CEO was approximately 15:1.

We determined that, as of December 31, 2017, our employee population consisted of approximately 5,500 individuals.

To identify our “median employee” from this employee population, we obtained from our internal compensation system base salary amounts for 2017 with respect to each employee in the employee population at the Company and its affiliates. We believe this consistently applied compensation measure reasonably reflects annual compensation across our employee base. Base salary amounts for employees located outside the United States and compensated in currencies other than U.S. dollars were converted to U.S. dollars based on the foreign exchange rates as of December 31, 2017. We annualized the base salary amounts for any permanent employees in the employee population who were employed by us for less than the full fiscal year. We then ranked the resulting base salaries for all the employees in the employee population other than our CEO to determine our median employee.

327,500 shares reserved for Stock Appreciation Rights, 1,224,356 shares reserved for Restricted Stock and Restricted Stock Units, as well as 1,328,781 restricted shares with future vesting contingent upon the Company achieving a cumulative three-year earnings target and continued employment through the vesting date. There were 184,682 shares remaining available for future issuance.

The following table sets out as at December 31, 2017 the number of securities to be issued upon exercise of outstanding options and rights, the weighted average exercise price of outstanding options and rights and the number of securities remaining available for future issuance under equity compensation plans.

		Number of Securities to be Issued Upon Exercise of Outstanding Options Warrants and Rights				Weighted Average Exercise Price of Outstanding Options Warrants and Rights				Number of Securities Remaining Available for Future Issuance (Excluding Column (a))
		(a)				(b)				(c)
Equity Compensation Plans:
Approved by stockholders
Share options and restricted stock			447,000	(1)		$	6.60	(2)			579,748	(3)
Not Approved by stockholders			—				—				—

Indebtedness of Directors, Executive Officers and Senior Officers

There is currently no indebtedness owed to MDC by any of MDC’s Directors, executive officers or senior officers, and there was no such indebtedness owed to MDC as of December 31, 2017. The Company’s Corporate Governance Guidelines prohibit the Company from making any new personal loans or extensions of credit to Directors or executive officers of the Company.

Insurance

MDC holds directors’ and officers’ liability insurance policies that are designed to protect MDC Partners and its directors and officers against any legal action which may arise due to wrongful acts on the part of directors and/or officers of MDC. The policies are written for a current limit of $70 million, subject to a corporate deductible up to $1,000,000 per indemnifiable claims. In respect of the fiscal year ended December 31, 2017, the cost to MDC of maintaining the policies was $1,024,999. The twelve-month premium cost of the current policy, effective from August 1, 2017 until July 31, 2018, is equal to $804,578.

Review and Approval of Related Party Transactions

The Board has adopted a written Related Party Transactions Policy to assist it in reviewing, approving and ratifying related party transactions. The Related Party Transactions Policy provides that all related party transactions covered by the policy must be approved in advance by the Audit Committee, except that any ordinary course transaction in which an operating subsidiary of the Company derives revenue from a related party may be approved on an annual basis by the Audit Committee. To facilitate compliance with this policy, Directors and executive officers of the Company must notify the Company’s General Counsel and CFO as soon as reasonably practicable about any potential related party transaction. If the Company’s General Counsel and CFO determine that the transaction constitutes a related party transaction, the transaction will be referred to the Audit Committee for its consideration. The Audit Committee will be provided with full details of the proposed related party transaction, including: the terms and conditions of the proposed transaction; the business purpose of the transaction; and the benefits to the Company and to the relevant related party.

In reviewing related party transactions, the Audit Committee will consider all relevant facts and circumstances, including, among others:

Generally, the Related Party Transactions Policy applies to any transaction that would be required by the SEC to be disclosed in which the Company was or is proposed to be, a participant and in which a “Related Party” had, has or will have a direct or indirect material interest. The policy also applies to any amendment or modification to an existing Related Party Transaction, regardless of whether such transaction has previously been approved.

Related Party Transaction

The Company engaged in the following related party transaction in 2017, which was reviewed and approved by the Audit Committee in accordance with the Related Party Transactions Policy described above:

Employee Relationship

Scott L. Kauffman is Chairman and Chief Executive Officer of the Company. His daughter, Sarah Kauffman, has been employed by KBS (a subsidiary of the Company) since July 2011, and currently acts as Director of Operations, Attention Partners. In 2017, her total compensation, including salary, bonus and other benefits, totaled approximately $155,000. Her compensation is commensurate with that of her peers.