The board of MDC Partners has approved a one-time "retention incentive" award for five senior executives of the company that is conditional on continued employment through the successful closing of a significant transaction in 2019, according to an SEC filing Friday evening.
MDC Partners said in September that it was exploring potential strategic alternatives that could include the sale of the agency holding company, whose portfolio includes 72andSunny, Anomaly, Assembly and Doner.
The filing said that on Dec. 11, the Human Resources and Compensation Committee of MDC's board of directors approved the awards for executives with the exception of outgoing CEO Scott Kauffman. Exec VP and chief financial officer David Doft and Exec VP and general counsel Mitchell Gendel will receive awards of $650,000. David Ross, Exec VP of strategy and corporate development, will receive an award of $500,000. The amounts are equal to the "applicable executive's respective target annual bonus award for 2018."
Payment of the awards is conditional on continued employment "through the successful closing of a significant transaction in 2019," which would include a change in control of the company or the sale of assets, direct investment or "a capital markets offering with aggregate proceeds to the company from any such transaction equal to not less than $100 million," the filing says.
"An executive will forfeit the 2018 Retention Award in the event that he or she resigns without good reason or is terminated for cause prior to a Payment Event," the filing says.
MDC shares closed Friday at $2.90, down five cents for the day. MDC traded around $10 at the beginning of the year.
Representatives from MDC Partners did not immediately respond to a request for comment.
In late November, MDC Partners shareholder FrontFour — which says it owns 5.1 percent of the holding company — in an SEC filing "stressed the importance of shareholder representation" on the board to better align its perspectives with that of MDC's shareholders "particularly at this critical juncture." FrontFour claims MDC's board has rejected its requests.
MDC currently has a market cap--total value of its shares--of about $170 million.
Contributing: Bradley Johnson