Stagwell Inc S-4, filed Aug 31, 2020

Stagwell Inc (STGW)

S-4 2020-08-31

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	Canada*			7311			98-0364441
	(State or Other Jurisdiction of Incorporation)			(Primary Standard Industrial Classification Code Number)			(I.R.S. Employer Identification Number)

	Large accelerated Filer ☐			Accelerated filer ☒
	Non-accelerated Filer ☐			Smaller reporting company ☒
	Emerging growth company ☐


Title of Each Class of Securities to be Registered	Amount to be Registered(1)		Proposed Maximum Offering Price per Share			Proposed Maximum Aggregate Offering Price			Amount of Registration Fee(4)
Class A Common Stock		75,375,875		$	2.02		$	152,259,268(2)		$	19,763.25
Class B Common Stock		3,743		$	-2.54(3)		$	0		$	0
Total		75,379,618					$	152,259,268		$	19,763.25

	Additional Information
	Cautionary Statement Regarding Forward-Looking Statements					1
	Information Contained in Proxy Statement/Prospectus					4
	Notice Regarding Tax Consequences of U.S. Domestication					4
	Defined Terms					5
	Questions and Answers About the U.S. Domestication and the Meeting					6
	U.S. Federal Income Tax Considerations for MDC Canada Shareholders					12
	U.S. Federal Income Tax Considerations					13
	Summary					19
	The Meeting					19
	Required Shareholder Approval					19
	The U.S. Domestication					20
	Information Concerning the Company					20
	Recommendation of the MDC Board					21
	Overview					21
	Reasons for the U.S. Domestication					22
	Risk Factors					25
	Effect of the U.S. Domestication on the Company Incentive Awards					25
	Effect of the U.S. Domestication on the Company Debt					25
	Dissenting Shareholder Rights					26
	Accounting Treatment of the U.S. Domestication					26
	Certain Canadian Federal Income Tax Considerations					26
	Certain U.S. Federal Income Tax Considerations					26
	Comparison of Shareholder Rights					27
	Risk Factors					28
	Risks Relating to the Company’s Business					28
	Risks Relating to MDC US					28
	Risks Relating to the U.S. Domestication					30
	Selected Historical Consolidated Financial Data of the Company					38
	Unaudited Pro Forma Condensed Consolidated Financial Information					39
	Voting Information					45
	Voting Shares and Principal Holders					45
	Record Date and Entitlement to Vote					45
	Required Shareholder Approval					46
	Quorum					46
	Proxy Voting					46
	Transfer Agent					46
	Registered Shareholder Voting					47
	Beneficial Shareholder Voting					48
	The U.S. Domestication					50
	Recommendation of the MDC Board					50
	Overview					50

	Reasons for the U.S. Domestication					52
	Effect of the U.S. Domestication on the Company Incentive Awards					55
	Effect of the U.S. Domestication on the Company Debt					56
	Required Shareholder Approval					56
	Application of Canadian Securities Laws — Multilateral Instrument 61-101					57
	Related Party Transaction					57
	Dissenting Shareholder Rights					58
	Accounting Treatment of the U.S. Domestication					60
	Description of the Company					61
	General and Corporate Structure					61
	Directors and Officers of MDC US					61
	Director and Executive Compensation					61
	Corporate Governance of MDC US					61
	Audit Committee of MDC US					61
	Market Price and Trading Volume of MDC Canada Class A Common Shares					61
	Interest of Informed Persons in Material Transactions					62
	Legal Proceedings					62
	Prior Sales					62
	Certain Canadian Federal Income Tax Considerations					63
	U.S. Federal Income Tax Considerations for MDC Canada Shareholders					70
	Description of Capital Stock					76
	General					76
	Common Stock					76
	Preferred Stock					77
	Annual Stockholder Meetings					78
	Anti-Takeover Effects of Provisions of the MDC US Certificate of Incorporation and MDC US Bylaws and Delaware Law					78
	Business Combinations Involving Interested Stockholders					80
	Limitations of Liability and Indemnification Matters					81
	Uncertificated Shares					81
	Stock Exchange Listing					81
	Auditor, Registrar and Transfer Agent					81
	Comparison of Stockholder Rights					82
	Share Ownership of Certain Beneficial Owners and Management and Directors of MDC Canada					107
	Availability of Reports and Other Information					112
	Incorporation by Reference					112
	Approval					115
	Glossary					116
	Appendix A Section 190 of the CBCA					A-1
	Appendix B Certificate of Domestication					B-1
	Appendix C MDC US Certificate of Incorporation					C-1
	Appendix D MDC US Bylaws					D-1
	Appendix E Form of Proxy					E-1

	Period End		Average(1)		Low		High
Six months ended June 30, 2020 (C$ per US$)		1.3628		1.3651		1.2970		1.4496
Year ended December 31, (C$ per US$)
2019		1.2988		1.3269		1.2988		1.3600
2018		1.3642		1.2957		1.2128		1.3642

	Six Months Ended June 30			Six Months Ended June 30			Years Ended December 31,
	2020			2019			2019			2018			2017			2016			2015
	(Dollars in Thousands, Except per Share Data)
Operating Data
Revenues		$	587,420		$	690,921		$	1,415,803		$	1,475,088		$	1,513,779		$	1,385,785		$	1,326,256
Operating income		$	29,427		$	39,123		$	79,460		$	1,434		$	130,903		$	48,431		$	72,110
Net income (loss)		$	4,302		$	7,649		$	10,903		$	(118,222)		$	256,461		$	(44,208)		$	(20,119)
Stock-based compensation included in income (loss)			4,109		$	6,606		$	31,040		$	18,416		$	24,350		$	21,003		$	17,796
Net income (loss) per Share
Basic
Net income (loss) attributable to MDC Partners Inc. common shareholders		$	(0.09)		$	(0.02)		$	(0.25)		$	(2.42)		$	3.71		$	(0.96)		$	(0.58)
Diluted
Net income (loss) attributable to MDC Partners Inc. common shareholders		$	(0.09)		$	(0.02)		$	(0.25)		$	(2.42)		$	3.70		$	(0.96)		$	(0.58)
Cash dividends declared per share			—			—			—			—			—			0.63			0.84
Financial Position Data
Total assets		$	1,705,452		$	1,798,649		$	1,828,306		$	1,600,950		$	1,694,547		$	1,573,791		$	1,577,625
Total debt		$	922,537		$	914,092		$	887,630		$	954,107		$	883,119		$	936,436		$	728,883
Redeemable noncontrolling interests		$	36,710		$	42,635		$	36,973		$	51,546		$	62,886		$	60,180		$	69,471
Deferred acquisition consideration		$	39,252		$	58,243		$	75,220		$	83,695		$	122,426		$	229,564		$	347,104

				Pro Forma Adjustment
	MDC Partners Inc. (Historical)			Income Tax Adjustment (Note 2)			MDC Partners Inc. Pro Forma
ASSETS
Cash and cash equivalents		$	85,483			—		$	85,483
Accounts receivable, less allowance for doubtful accounts			359,306			—			359,306
Expenditures billable to clients			19,426			—			19,426
Other current assets			66,318			—			66,318
Total Current Assets			530,533			—			530,533
Fixed assets, at cost, less accumulated depreciation			70,787			—			70,787
Right-of-use assets – operating leases			238,230			—			238,230
Goodwill			706,946			—			706,946
Other intangible assets, net			48,904			—			48,904
Deferred tax assets			82,696			(3,222)			79,474
Other assets			27,356			—			27,356
Total Assets		$	1,705,452		$	(3,222)		$	1,702,230
Current Liabilities:
Accounts payable		$	148,349			—		$	148,349
Accruals and other liabilities			264,572			—			264,572
Advance billings			136,196			—			136,196
Current portion of lease liabilities – operating leases			38,377			—			38,377
Current portion of deferred acquisition consideration			36,655			—			36,655
Total Current Liabilities			624,149			—			624,149
Long-term debt			922,537			—			922,537
Long-term portion of deferred acquisition consideration			2,597			—			2,597
Long-term lease liabilities – operating leases			267,559			—			267,559
Other liabilities			36,503			—			36,503
Total Liabilities			1,853,345			—			1,853,345
Redeemable Noncontrolling Interests			36,710			—			36,710
Shareholders’ Deficit:
Convertible preference shares, 145,000 authorized, issued and outstanding			152,746			—			152,746
Common stock and other paid-in capital			98,234			—			98,234
Accumulated deficit			(480,368)			(3,222)			(483,590)
Accumulated other comprehensive (loss) income			4,627			—			4,627
MDC Partners Inc. Shareholders’ Deficit			(224,761)			(3,222)			(227,983)
Noncontrolling interests			40,158			—			40,158
Total Shareholders’ Deficit			(184,603)			(3,222)			(187,825)
Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Deficit		$	1,705,452		$	(3,222)		$	1,702,230

				Proforma Adjustments
	MDC Partners Inc. (Historical)			Foreign Exchange Adjustment (Note 3a i)			Income Tax Adjustment (Note 3a ii)			MDC Partners Inc. (Proforma)
Revenue:
Services		$	587,420		$	—		$	—		$	587,420
Operating Expenses:
Cost of services sold			388,325			—			—			388,325
Office and general expenses			132,563			—			—			132,563
Depreciation and amortization			18,105			—			—			18,105
Impairment and other losses			19,000			—			—			19,000
			557,993			—			—			557,993
Operating income			29,427			—			—			29,427
Other Income (Expenses):
Interest expense and finance charges, net			(31,553)			—			—			(31,553)
Foreign exchange gain (loss)			(9,415)			7,150			—			(2,265)
Other, net			22,218			—			—			22,218
			(18,750)			7,150			—			(11,600)
Income (loss) before income taxes and equity in earnings of non-consolidated affiliates			10,677			7,150			—			17,827
Income tax expense (benefit)			5,577			—			1,403			6,980
Income before equity in earnings of non-consolidated affiliates			5,100			7,150			(1,403)			10,847
Equity in earnings (losses) of non-consolidated affiliates			(798)			—			—			(798)
Net income			4,302			7,150			(1,403)			10,049
Net income attributable to the noncontrolling interest			(3,892)			—			—			(3,892)
Net income (loss) attributable to MDC Partners Inc.			410			7,150			(1,403)			6,157
Accretion on and net income allocated to convertible preference shares			(6,949)			—			—			(6,949)
Net income (loss) attributable to MDC Partners Inc. common shareholders		$	(6,539)		$	7,150		$	(1,403)		$	(792)
Basic EPS – Net income (loss) attributable to MDC Partners Inc. common shareholders		$	(0.09)								$	(0.01)
Diluted EPS – Net income (loss) attributable to MDC Partners Inc. common shareholders		$	(0.09)								$	(0.01)
Basic – Weighted Average Number of Common Shares Outstanding:			72,463,058									72,463,058
Diluted – Weighted Average Number of Common Shares Outstanding:			72,463,058									72,463,058

				Proforma Adjustments
	MDC Partners Inc. (Historical)			Foreign Exchange Adjustment (Note 3b i)			Income Tax Adjustment (Note 3b ii)			MDC Partners Inc. (Proforma)
Revenue:
Services		$	1,415,803		$	—		$	—		$	1,415,803
Operating Expenses:
Cost of services sold			961,076			—			—			961,076
Office and general expenses			328,339			—			—			328,339
Depreciation and amortization			38,329			—			—			38,329
Impairment and other losses			8,599			—			—			8,599
			1,336,343			—			—			1,336,343
Operating income			79,460			—			—			79,460
Other Income (Expenses):
Interest expense and finance charges, net			(64,942)			—			—			(64,942)
Foreign exchange gain (loss)			8,750			(9,832)			—			(1,082)
Other, net			(2,401)			—			—			(2,401)
			(58,593)			(9,832)			—			(68,425)
Income (loss) before income taxes and equity in earnings of non-consolidated affiliates			20,867			(9,832)			—			11,035
Income tax expense (benefit)			10,316			—			(1,443)			8,873
Income before equity in earnings of non-consolidated affiliates			10,551			(9,832)			1,443			2,162
Equity in earnings (losses) of non-consolidated affiliates			352			—			—			352
Net income			10,903			(9,832)			1,443			2,514
Net income attributable to the noncontrolling interest			(16,156)			—			—			(16,156)
Net income (loss) attributable to MDC Partners Inc.			(5,253)			(9,832)			1,443			(13,642)
Accretion on and net income allocated to convertible preference shares			(12,304)			—			—			(12,304)
Net income (loss) attributable to MDC Partners Inc. common shareholders		$	(17,557)		$	(9,832)		$	1,443		$	(25,946)
Basic EPS – Net income (loss) attributable to MDC Partners Inc. common shareholders		$	(0.25)								$	(0.38)
Diluted EPS – Net income (loss) attributable to MDC Partners Inc. common shareholders		$	(0.25)								$	(0.38)
Basic – Weighted Average Number of Common Shares Outstanding:			69,132,100									69,132,100
Diluted – Weighted Average Number of Common Shares Outstanding:			69,132,100									69,132,100

Month	High Price (US$)		Low Price (US$)		Closing Price (US$)
August 2019		2.62		2.05		2.35
September 2019		3.09		2.26		2.82
October 2019		3.18		2.61		3.13
November 2019		3.43		2.21		2.33
December 2019		2.84		2.11		2.78
January 2020		2.85		2.26		2.27
February 2020		2.53		1.93		2.51
March 2020		2.61		1.02		1.45
April 2020		1.51		1.01		1.43
May 2020		1.55		1.06		1.32
June 2020		2.88		1.10		2.08
July 2020		2.30		1.93		2.21
August 2020 (through August 21)		2.33		1.92		2.02

			MDC Canada			MDC US
Authorized Capital Stock			MDC Canada’s articles of amalgamation authorize MDC Canada to issue an unlimited number of Class A Subordinate Voting Shares, Class B Shares, and non-voting Preference Shares, issuable in series, of which 5,000 Series 1 Preference Shares, 700,000 Series 2 Preference Shares, an unlimited number of Series 3 Preference Shares, 95,000 Series 4 Preference Shares, an unlimited number of Series 5 Preference Shares, 50,000 Series 6 Preference Shares, and an unlimited number of Series 7 Preference Shares have been designated.			The MDC US Certificate of Incorporation will authorize MDC US to issue 3,000,000,000 shares consisting of (1) 1,250,000,000 shares of Class A Common Stock, par value $0.001 per share, (2) 1,250,000,000 shares of Class B Common Stock, par value $0.001 per share, and (3) 500,000,000 shares of Preferred Stock, par value $0.001 per share. The DGCL authorizes the MDC US Board to issue Common Stock and Preferred Stock up to the authorized number of shares of Common Stock and Preferred Stock, respectively, without stockholder approval, and the MDC US Certificate of Incorporation will authorize the MDC US Board to create new series of Preferred Stock and designate the powers, preferences, rights, qualifications, limitations and restrictions thereof without stockholder approval. Simultaneously with the filing of the MDC US Certificate of Incorporation, MDC US will file with the Secretary of State of the State of Delaware (i) the Certificate of Designation of the MDC US Series 4 Shares, which will designate 95,000 shares of Preferred Stock as MDC US Series 4 Shares, (ii) the Certificate of Designation of the MDC US

	MDC Canada	MDC US
		Series 5 Convertible Preferred Shares, which will designate 45,000,000 shares of Preferred Stock as MDC US Series 5 Convertible Preferred Shares, (iii) the Certificate of Designation of the MDC US Series 6 Shares, which will designate 50,000 shares of Preferred Stock as MDC US Series 6 Shares, and (iv) the Certificate of Designation of the MDC US Series 7 Convertible Preferred Shares, which will designate 20,000,000 shares of Preferred Stock as MDC US Series 7 Convertible Preferred Shares.
Dividends	Under the CBCA, a corporation may pay a dividend by issuing fully paid shares of such corporation or may pay in money or property. If shares of a corporation are issued in payment of a dividend, the declared amount of the dividend stated as an amount of money shall be added to the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend. Under the CBCA, a corporation shall not declare or pay a dividend if there are reasonable grounds for believing: (a) that the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or (b) the realizable value of such corporation’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes. The decision whether or not to pay dividends and the amount of any such dividends is subject to the discretion of the MDC Board.	Under the DGCL, a Delaware corporation may, subject to restrictions in its certificate of incorporation, pay dividends out of the corporation’s surplus or, if there is no surplus, from its net profits for the fiscal year in which the dividend is declared and/or for the immediately preceding fiscal year. Dividends out of net profits may not be paid when the capital of a Delaware corporation has diminished to an amount less than the aggregate amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets. The decision whether or not to pay dividends and the amount of any such dividends is subject to the discretion of the MDC US Board and the existence of legally available funds. If the MDC US Board declares a dividend on the MDC US Class A Common Shares, it shall declare a dividend on the MDC US Class B Common Shares in an amount equal to or, in its discretion, lesser per share than on the MDC US Class A Common Shares, and if the MDC US Board declares a dividend on the MDC US Class B Common Shares, it shall

	MDC Canada	MDC US
		declare a dividend on the MDC US Class A Common Shares in an amount equal to or, in its discretion, greater per share than on the MDC US Class B Common Shares. The MDC US Board will regularly evaluate any proposed dividend payments of MDC US and DGCL requirements in respect of surplus and net profits, as applicable. If dividends are declared by the Company, holders of MDC US Preferred Shares will be entitled to receive dividends in cash or in kind in an amount equal to the dividends that would be made on a number of MDC US Class A Common Shares that such MDC US Preferred Shares could be converted into on the applicable record date for such dividends. Holders of MDC US Preferred Shares will additionally be entitled to receive dividends upon the consummation of certain extraordinary transactions, in an amount that accumulates interest at a rate of 7% per annum, which rate shall increase 1% on each anniversary of certain extraordinary transactions.
Voting Rights	The CBCA provides that, in general, the holders of at least one class of shares of a corporation are entitled to receive notice of and vote at each meeting of shareholders. Each MDC Canada Class A Common Share entitles its holder to one vote on all matters on which holders of MDC Canada Class A Common Shares are entitled to vote, each MDC Canada Class B Common Share entitles its holder to twenty votes on all matters on which holders of MDC Canada Class B Common Shares are entitled to vote and MDC Canada Preferred Shareholders are not entitled to	The DGCL provides that each stockholder is entitled to one vote for each share of capital stock held by such stockholder, unless otherwise provided in the corporation’s certificate of incorporation. The MDC US Certificate of Incorporation will provide that each MDC US Class A Common Share will entitle its holder to one vote, and each MDC US Class B Common Share will entitle its holder to twenty votes, on each matter voted upon by the holders of Common Stock. The MDC US Board will be authorized by the Certificate of Incorporation to determine the voting power of any series of Preferred Stock that

	MDC Canada	MDC US
	vote unless as otherwise provided under applicable law.	MDC US creates. Except when another standard is required by the DGCL or the MDC US Certificate of Incorporation or MDC US Bylaws in specified circumstances, the vote of holders of a majority of the voting power of the shares present in person or represented by proxy at a meeting at which a quorum is present shall constitute the act of the stockholders.
Number of Directors and Size of Board	The CBCA provides that the board of directors of a distributing corporation shall consist of not fewer than three directors, at least two of whom are not officers or employees of the corporation or its affiliates. MDC Canada is a distributing corporation under the CBCA and MDC Canada’s articles of amalgamation provide that the number of directors will be not less than three or more than 20. The exact number of directors within these limits will be fixed from time to time by resolution of the board of directors. The MDC Board currently consists of 7 members.	The DGCL provides that the board of directors of a Delaware corporation must consist of one or more directors, with the precise number thereof from time to time fixed by or in the manner provided by the bylaws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number of directors shall be made only by amendment of the certificate of incorporation. The MDC US Certificate of Incorporation will provide that the number of directors will be determined from time to time by the MDC US Board. Upon the consummation of the U.S. Domestication, it is expected that the MDC US Board will consist of 7 members.
Director Qualifications	The CBCA requires that all directors be individuals, of sound mind, not less than the age of 18 and not have the status of bankrupt. Further, according to the CBCA, 25% of the directors of a Canadian corporation must be Canadian residents.	The DGCL requires that directors of Delaware corporations be natural persons. The MDC US Bylaws will also provide that, to be eligible for election as a director, the person must be nominated by or at the direction of the MDC US Board or any committee thereof, by MDC US stockholders pursuant to the advance notice bylaw summarized below or pursuant to the proxy access bylaw also summarized below. Pursuant to the MDC US Bylaws, no person shall qualify

	MDC Canada	MDC US
		US and may pursue or acquire such corporate opportunity for itself or direct such opportunity to another person. In addition, Exempted Persons will be expressly permitted to act in their own best interest, and will be under no obligation to take any action in their capacity as a director of MDC US that prefers the interest of MDC US over their own self-interest. Exempted Persons will further be expressly permitted to use information they acquired as a director of MDC US that enhanced their knowledge and understanding of the industries in which MDC US operates in making investment or voting decisions relating to non-MDC entities or securities. By becoming a stockholder in MDC US by virtue of the U.S. Domestication, you will be deemed to have received notice of these provisions of the MDC US Certificate of Incorporation.
Limitation on Liability of Directors	According to the CBCA, no provision in a contract, the articles, by-law or a resolution relieves a director or officer of a corporation from the duty to act in accordance with the CBCA or the regulations thereunder or relieves them from liability for a breach thereof. Any such duty or liability will be alleviated only to the extent that a unanimous shareholder agreement restricts the powers of the directors to manage, or supervise the management of, the business and affairs of the corporation. Under the CBCA, a corporation may indemnify certain persons associated with the corporation against all reasonably incurred costs, charges, and expenses, including settlement amounts or judgments in respect of any proceeding in which such	The MDC US Certificate of Incorporation will limit the liability of the directors of MDC US to the fullest extent permitted by the DGCL for monetary damages for breaches of fiduciary duty. Consequently, MDC US directors will not be personally liable to MDC US or any stockholder for monetary damages for breach of fiduciary duty as a director, except: (1) for any breach of the director’s duty of loyalty to MDC US or its stockholders; (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (3) for willful or negligent payment of unlawful dividends or stock purchases or redemptions; or (4) for any transaction from which the director derived an improper personal benefit.

			MDC Canada			MDC US
			individual is involved because of his or her association with the corporation. Persons capable of being indemnified in such a manner include current and former directors or officers, persons who act or acted at the corporation’s request as a director or officer, or an individual acting in a similar capacity, of another entity. In order to qualify for indemnification such director or officer must: • have acted honestly and in good faith with a view to the best interests of the corporation; and • in the case of a criminal or administrative action or proceeding enforced by a monetary penalty, have had reasonable grounds for believing that his or her conduct was lawful. A corporation may, if the person meets the conditions above and it is approved by a court, also indemnify the person in respect of an action by or on behalf of the corporation. If a person meets the conditions above and was not judged by the court or other competent authority to have committed any fault or omitted to do anything that individual ought to have done, that person is entitled to be indemnified by the corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defense of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual’s association with the corporation. MDC Canada’s by-law provides that MDC Canada shall indemnify, subject to the provisions of the CBCA, a			Under Section 145 of the DGCL, a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation (or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. In the case of an action brought by or in the right of a corporation, the corporation may indemnify any person who was or is a party or is threatened to be made a party to any such threatened, pending or completed action by reason of the fact that the person is or was a director, officer, employee or agent of the corporation (or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) only against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests

	MDC Canada	MDC US
	• an arrangement where there is a court order permitting a shareholder to dissent; and • a “going private” transaction or a “squeeze-out” transaction. A shareholder is not entitled to dissent if an amendment to the articles is effected by a court order approving reorganization or if an amendment to the articles is effected by a court order made in connection with an oppression remedy.	In addition, if immediately before a merger, consolidation or similar transaction, shares subject to appraisal rights were listed on a national securities exchange, the Court of Chancery of the State of Delaware will dismiss any appraisal proceeding as to all holders of shares who are otherwise entitled to appraisal unless: (1) the total number of shares entitled to appraisal exceeds 1% of outstanding shares of the class or series eligible for appraisal; (2) the value of consideration provided in the transaction for such shares exceeds $1 million; or (3) the merger was approved pursuant to section 253 or 267 of the DGCL.
Oppression Remedy	The CBCA gives a “complainant” such as a shareholder the right to bring a court action against a corporation where conduct has occurred that is oppressive, unfairly prejudicial or that unfairly disregards the interests of any security holder, creditor, director or officer. The oppression remedy provides the court with very broad and flexible powers to intervene in corporate affairs to protect shareholders and other complainants. While conduct that is a breach of fiduciary duties of directors, or that is contrary to the legal right of a complainant, will normally trigger the court’s jurisdiction under the oppression remedy, the exercise of that jurisdiction does not depend on a finding of a breach of those legal and equitable rights.	The DGCL does not contain a statutory “oppression” remedy; however, stockholders may bring equitable claims against persons owing them fiduciary duties for breach of fiduciary duty.
Inspection of Corporate Records	Under the CBCA, shareholders, creditors and their representatives, after giving the required notice, may examine certain of the records of a corporation and financial statements of certain of its	Under the DGCL, any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for

			MDC Canada			MDC US
						provision of the DGCL, the Certificate of Incorporation or the By-Laws of the Company (as each may be amended form time to time), (e) any action asserting a claim governed by the internal affairs doctrine or (f) any other action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL. The exclusive forum provision does not purport to apply to suits brought to enforce a duty or liability created by the U.S. Securities Act or the U.S. Exchange Act, or any rules or regulations promulgated thereunder, or any other claim for which the United States federal courts have exclusive jurisdiction.

	MDC Canada	MDC US
		for service as a director (i) if such person is not at least 21 years of age, (ii) if such person is party to any compensatory or financial agreement with any third party in connection with his candidacy or service as a director of the MDC US unless disclosed to the MDC US, and (ii) unless such person agrees to submit upon election an irrevocable resignation effective upon (x) such person’s failure to receive a majority of the votes cast in an uncontested election and (y) the acceptance of such resignation by the MDC US Board. In addition, the MDC US Bylaws will provide that, to be eligible for election as a director, a stockholder nominee must deliver to the Secretary of MDC US: (i) a questionnaire with respect to his or her background, qualifications and independence; (ii) a written representation regarding, among other things, voting commitments to third parties and adherence to corporate governance guidelines; and (iii) written consent to being named as a nominee for director. (such deliveries collectively, the “Nominee Deliveries”).
Election of Directors	The CBCA provides that directors will be elected by ordinary resolution passed at a meeting of the shareholders called for that purpose.	The DGCL provides that an annual meeting will be held for the election of directors unless directors are elected by written consent in lieu thereof. The DGCL provides that directors may be elected by written consent in lieu of an annual meeting if the written consent is unanimous unless all of the directorships to which directors could be elected at an annual meeting are vacant. The MDC US Bylaws will provide that, except as summarized in the following paragraph, directors shall be elected by a majority of votes cast

	MDC Canada	MDC US
		with respect to the director at any meeting for the election of directors at which quorum is present. If in any such election, any director nominee for the MDC US Board receives a greater number of “against” votes than votes “for” election, then he or she shall offer to tender his or her resignation. In that event, the MDC US Board will decide whether to accept the resignation or reject the resignation and seek to address the underlying cause(s) of the majority-withheld vote within 90 days following certification of the election results. However, if, as of a date that is 14 days in advance of the date MDC US files its definitive proxy statement with the SEC, the number of nominees exceeds the number of directors to be elected, directors shall be elected by a plurality of votes represented at any meeting for the election of directors at which a quorum is present.
Term of Directors	The CBCA provides that a director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of shareholders following the director’s election. The CBCA provides that it is not necessary that all directors elected at a meeting of shareholders hold office for the same term. MDC Canada’s directors are elected to one-year terms expiring at the next annual shareholders’ meeting following election. MDC Canada’s articles of amalgamation do not provide for staggered terms or a classified board.	The DGCL provides that directors of a Delaware corporation hold office until their successors are elected and qualified or until their earlier resignation or removal. MDC US’s directors will be elected to one-year terms expiring at the next annual stockholders’ meeting following election. The MDC US Certificate of Incorporation and MDC US Bylaws will not provide for staggered terms or a classified board as permitted by the DGCL.
Removal of Directors	The CBCA provides that the shareholders of a corporation may, by an ordinary resolution passed by a majority of votes cast	The DGCL provides, and MDC US Certificate of Incorporation will provide, that, except for any directors elected by the holders of

	MDC Canada	MDC US
	by the shareholders who voted in respect of that resolution at a special meeting, remove any director or directors from office if the number of votes cast in favor of the director’s removal is greater than the product of the number of directors required by the articles and the number of votes cast against the motion. Where the holders of any class or series of shares of a Canadian corporation have an exclusive right to elect one or more directors, a director so elected may only be removed by an ordinary resolution at a meeting of the shareholders of that class or series.	shares of any series of Preferred Stock pursuant to any certificate establishing the terms of such series, any one or more directors or the entire MDC US Board may be removed, with or without cause, by the holders of a majority of voting power of the shares then entitled to vote at an election of directors.
Filling of Board Vacancies	The CBCA provides that, subject to any right of the shareholders (or class of shareholders) to fill a vacancy among the directors, as set forth in the articles, a vacancy among the directors may be filled by a vote of the shareholders or by a quorum of directors except when the vacancy results from an increase in the number or the minimum or maximum number of directors or from a failure to elect the number or minimum number of directors provided for in the articles. Under MDC Canada’s by-law, if a quorum of the board remains in office, MDC Board may fill a vacancy in the board, except a vacancy resulting from (i) an increase in the number of directors otherwise than by a resolution of the directors, or in the maximum number of directors, or from (ii) a failure to elect the number of directors required to be elected at any meeting of the shareholders. Each director appointed or elected to fill a vacancy holds office for the unexpired term of their predecessor. The CBCA also provides that the directors may appoint additional	The DGCL provides that, unless otherwise provided in the certificate of incorporation or bylaws, vacancies and newly created directorships may be filled by a majority vote of the directors then in office, even if the number of directors then in office is less than a quorum. Delaware common law also gives stockholders power to fill vacancies, unless the corporation’s certificate of incorporation or bylaws provide otherwise. The MDC US Certificate of Incorporation will provide that any vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote, as a single class, may be filled solely by the affirmative vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director or, if not so filled, by the stockholders at the next annual meeting thereof.

	MDC Canada	MDC US
	directors who shall hold office for the term expiring not later than the close of the next annual meeting of the shareholders, but the total number of directors so appointed may not exceed one-third of the number of directors elected at the previous annual meeting of the shareholders.
Board Quorum and Vote Requirements	Under the CBCA, subject to the articles or by-law of a corporation, a majority of the number of directors or minimum number of directors required by the articles constitutes a quorum at any meeting of directors, and, notwithstanding any vacancy among the directors, a quorum of directors may exercise all the powers of the directors. Under MDC Canada’s by-law, the presence of two-fifths the number of directors constitutes a quorum. At all MDC Board meetings every question is decided by a majority of the votes cast thereon. In the case of an equality of votes, the chairman of the meeting is not entitled to a second or casting vote.	Under the MDC US Bylaws, the presence of a majority of the total number of whole MDC US Board will constitute a quorum. The vote of a majority of the directors present at any meeting at which a quorum is present will constitute an act of the MDC US Board. Under the DGCL, directors are also permitted to act by unanimous written consent signed by all of the members of the board of directors or of any committee thereof, as applicable.
Annual Meetings of Stockholders	Under the CBCA, the directors of a Canadian corporation shall call an annual meeting of the shareholders not later than 18 months after the Canadian corporation comes into existence and subsequently not later than 15 months after holding the last preceding annual meeting but no later than six months after the end of the corporation’s preceding financial year.	The MDC US Bylaws will provide that an annual meeting of stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly be considered at the meeting, shall be held on such date and at such time as the MDC US Board fixes. Under the DGCL, subject to certain statutory exceptions, if MDC US does not designate a date for an annual meeting to elect directors within the 13-month period following its last annual meeting, the Court of Chancery may summarily order a meeting to be held upon the application of any stockholder or

	MDC Canada	MDC US
		director.
Quorum for Stockholder Meetings	Under the CBCA, unless the by-law otherwise provide, a quorum of shareholders is present at a meeting of shareholders, irrespective of the number of persons actually present at the meeting, if the holders of a majority of the shares entitled to vote at the meeting are present in person or represented by proxy. Under MDC Canada’s by-law, a quorum is present at a meeting of shareholders if not less than 33 1∕3% of the shared entitled to vote at the meeting are present in person or represented by proxy.	Under the MDC US Bylaws, subject to certain statutory exceptions, the holders of 33 1∕3% of the voting power of all outstanding shares of stock entitled to vote at the meeting of stockholders, present in person or represented by proxy, will constitute a quorum for the transaction of business at such meeting. The stockholders may continue to transact business at the meeting even if quorum is subsequently broken.
Notice of Annual and Special Meetings of Stockholders	Under the regulations of the CBCA and MDC Canada’s by-law, notice of the date, time and place of a meeting of shareholders must be given not less than 21 days and not more than 60 days prior to the meeting to each director, auditor and to each shareholder entitled to vote at the meeting.	Under the DGCL and MDC US’s Bylaws, except as otherwise required by the DGCL in certain circumstances, notice of any meeting of stockholders must be sent not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at the meeting as of the record date for determining the stockholders entitled to notice of the meeting. Under the DGCL and the MDC US Bylaws, attendance of a stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends such meeting for the express purpose of objecting, at the beginning of the meeting, that the meeting is not lawfully called or convened.
Calling Special Meetings of Stockholders	The CBCA provides that the directors of a Canadian corporation may at any time call a special meeting of the shareholders. The CBCA also provides that holders of not less than 5% of the issued shares of a corporation that carry the right to vote at a	The DGCL provides that special meetings may be called by the board of directors or by such persons as may be authorized by the certificate of incorporation or by the bylaws. The MDC US Bylaws will provide that special meetings of MDC US stockholders, for any

	MDC Canada	MDC US
	meeting sought to be held may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition. Upon meeting the technical requirements set out in the CBCA for making such a requisition, the directors of the corporation must call a meeting of shareholders. If they do not call a meeting within 21 days after receiving the requisition, any shareholder who signed the requisition may call the special meeting. MDC Canada’s by-law provides that the board of directors, the Chairman of the board, Vice Chairman of the board if he is a director, the Managing Director if he is a director, the President if he is a director, and a Vice President if he is a director shall have power to call a special meeting of shareholders at any date and time.	purpose, may be called at any time by the Chairman of the Board or the MDC US Board by majority vote. As required by the DGCL, business transacted at all special meetings of MDC US stockholders is confined to the purposes stated in the notice.
Notice of Stockholder Nominations and Proposals	The CBCA provides that a registered or beneficial holder of shares entitled to be voted at an annual meeting of shareholders may submit notice to the corporation of any matter that the person proposes to raise at the meeting, which is referred to as a “proposal,” and discuss at the meeting any matter in respect of which the person would have been entitled to submit a proposal. To be eligible to submit a proposal a registered or beneficial shareholder: (1) must be, for at least the six-month period immediately before the day on which the shareholder submits the proposal, the registered holder or the beneficial owner of at least: (a) 1% of the total outstanding voting shares of the corporation, as of the day on which the shareholder submits a proposal; or (b) the number of	The DGCL does not contain any limits on or requirements for stockholders to nominate directors or propose business for annual meetings. The MDC US Bylaws will provide the manner in which stockholders may give notice of director nominations and other business (that is a proper matter for stockholder action under the DGCL) to be brought before an annual meeting as well as to nominate candidates for election at a special meeting called for the purpose of director elections. In general, a stockholder may nominate a director in connection with an annual or special meeting or bring other business before an annual meeting if that stockholder (i) gives timely written notice of the nomination or other business to MDC US’s Secretary and otherwise complies with the requirements set forth in

			MDC Canada			MDC US
			voting shares whose fair market value, as determined at the close of business on the day before the shareholder submits the proposal to the corporation, is at least C$2,000; or (2) must have the support of persons who in the aggregate, and including or not including the person that submits the proposal, have been, for at least the six-month period immediately before the day on which the shareholder submits the proposal, the registered holder or the beneficial owners of at least: (a) 1% of the total outstanding voting shares of the corporation, as of the day on which the shareholder submits a proposal; or (b) the number of voting shares whose fair market value, as determined at the close of business on the day before the shareholder submits the proposal to the corporation, is at least C$2,000. A proposal may include nominations for the election of directors if the proposal is signed by one or more holders of shares representing in the aggregate not less than 5% of the shares or 5% of the shares of a class of shares of the corporation entitled to vote at the meeting to which the proposal is to be presented, but this does not preclude nominations made at a meeting of shareholders. A proposal submitted by notice to the corporation must include the name and address of the person making the proposal and of the person’s supporters, if applicable; and the number of shares held or owned by the person and the person’s supporters, if applicable, and the date the shares were acquired. If the corporation solicits proxies it shall set out its proposals in the management proxy circular or			the MDC US Bylaws, (ii) is a stockholder of record on the date the stockholder gives notice and on the date of the meeting and (iii) is entitled to vote at the meeting. To be timely in the case of an annual meeting, a stockholder’s notice must be delivered to MDC US’s executive offices not less than 90 nor more than 120 days prior to the first anniversary of the prior year’s annual meeting. However, in the event that the date of the annual meeting is more than 30 days before or 60 days after the anniversary date, the stockholder’s notice must be delivered not earlier than 120 days prior to such annual meeting and not later than the later of 90 days prior to such annual meeting and 10 days after the day on which public announcement of the date of such meeting is first made. To be timely in the case of a special meeting called for the purpose of electing directors, a stockholder’s notice of director nomination must be delivered to MDC US’s executive offices not earlier than 90 days prior to such special meeting and not later than the later of 60 days prior to such special meeting and 10 days following the date on which public announcement of the date of the special meeting at which the directors are to be elected is first made by MDC US. In either case, the adjournment, postponement or deferral of a meeting of stockholders shall not commence a new time period for purposes of the notice described above. To be in proper form, the stockholder’s notice must set forth, among other things: • the name and address of

			MDC Canada			MDC US
			attach the proposals thereto. If so requested by the person who submits a proposal, the corporation shall include in the management proxy circular or attach to it a statement in support of the proposal by the person and the name and address of the person. The statement and the proposal must together not exceed 500 words.			record and information regarding the interests in securities of MDC US of: (i) the nominating stockholder; or (ii) any beneficial owner or any person that controls, or is controlled by, or is under common control with the nominating stockholder or beneficial owner (a “Stockholder Associated Person”); • as to director nominations, all information relating to such a nominee that would be required to be disclosed in solicitations of proxies for election of directors in an election contest subject to Section 14 of the U.S. Exchange Act; all direct or indirect compensation and other material monetary agreements between or among the nominating stockholder, any Stockholder Associated Person and the proposed nominee; and the Nominee Deliveries; • as to business other than nomination of directors, a description of the business desired to be brought before the meeting; the text of the proposal (including the text of any resolutions proposed for consideration and, if any resolution proposed for consideration includes the amending of the MDC US Bylaws, the language of the proposed amendment); any material interest in conducting such business at the meeting; and a description of all arrangements between or among the stockholder and any Stockholder Associated Person or other persons in connection with the proposal.

	MDC Canada	MDC US
		Proxy Access: The MDC US Bylaws will also permit a stockholder, or a group of up to 20 stockholders, owning at least 3% of MDC US’s outstanding Common Stock continuously for at least three years to nominate and include in MDC US’s proxy materials for an annual meeting, director nominees constituting up to the greater of two individuals or 20% (rounding down) of the MDC US Board, provided that any nominating stockholders and nominees satisfy certain requirements specified in the MDC US Bylaws, including with respect to form of notice and timely delivery. To be timely, a stockholder or group of stockholders must deliver notice to MDC US’s executive offices not less than 120 nor more than 150 days prior to the first anniversary of the filing date of MDC US’s definitive proxy statement for the prior year’s annual meeting of stockholders. However, in the event that the date of the annual meeting is more than 30 days before or 60 days after the first anniversary of the prior year’s annual meeting, notice must be delivered not earlier than 150 days prior to such annual meeting and not later than the later of 120 days prior to such annual meeting and 10 days after the day on which public announcement of the date of such meeting is first made. The adjournment, postponement or deferral of an annual meeting shall not commence a new time period for purposes of the notice described above.
Stockholder Action by Written Consent	The CBCA and MDC Canada’s by-law provide that a resolution in writing signed by all the	The DGCL provides that, unless otherwise provided in a corporation’s certificate of

	MDC Canada	MDC US
	shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders. A resolution in writing dealing with all matters required by the CBCA to be dealt with at a meeting of shareholders, and signed by all the shareholders entitled to vote at that meeting, satisfies all the requirements of the CBCA relating to meetings of shareholders.	incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. The MDC US Certificate of Incorporation will provide that stockholders are not permitted to take action by written consent.
Amendment of Governing Documents	Under the CBCA, an amendment of the articles of a corporation generally requires the approval of not less than two-thirds of the votes cast by shareholders who voted in respect of that resolution. The CBCA further provides that, unless the articles, by-law or a unanimous shareholder agreement otherwise provide, the directors may, by resolution, make, amend or repeal any by-law that regulates the business or affairs of the corporation. When the directors amend or repeal a by-law, they are required to submit the change to the shareholders at the next meeting. In addition, under the CBCA, an amendment to the articles of a corporation would (unless the articles otherwise provide in the case of an amendment referred to in paragraphs (a), (b) and (e)) require the approval of a class of securities voting separately if: (a) increase or decrease any maximum number of authorized shares of such class, or increase any maximum number of	Under the DGCL, amendments to a Delaware corporation’s certificate of incorporation must be approved by a resolution of the board of directors declaring the advisability of the amendment, and, subject to limited exceptions, by the affirmative vote of a majority of the voting power of the outstanding shares entitled to vote thereon. If an amendment would increase or decrease the number of authorized shares of a class of stock, increase or decrease the par value of the shares of a class of stock or alter or change the powers, preferences or other special rights of a class of outstanding shares so as to affect the class adversely, then a majority of the voting power of the shares of that class also must approve the amendment, voting as a separate class, whether or not entitled to vote thereon by the certificate of incorporation. The DGCL also permits a Delaware corporation to include a provision in its certificate of incorporation requiring a greater proportion of voting power to

			MDC Canada			MDC US
			authorized shares of a class having rights or privileges equal or superior to the shares of such class; (b) effect an exchange, reclassification or cancellation of all or part of the shares of such class; (c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of such class and, without limiting the generality of the foregoing, (i) remove or change prejudicially rights to accrued dividends or rights to cumulative dividends, (ii) add, remove or change prejudicially redemption rights, (iii) reduce or remove a dividend preference or a liquidation preference, or (iv) add, remove or change prejudicially conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of a corporation, or sinking fund provisions; (d) increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of such class; (e) create a new class of shares equal or superior to the shares of such class; (f) make any class of shares having rights or privileges inferior to the shares of such class equal or superior to the shares of such class; (g) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of such class; or (h) constrain the issue, transfer or ownership of the shares of such class or change or remove such constraint.			approve a specified amendment. The DGCL also provides that the number of authorized shares of a class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the corporation irrespective of the foregoing if provided in the certificate of incorporation. The MDC US Certificate of Incorporation will provide that it may be amended in accordance with the DGCL. In addition, the MDC US Certificate of Incorporation provides that the number of authorized shares of Preferred Stock and Common Stock may be increased or decreased (but not below the number of shares thereof outstanding) by the affirmative vote of holders of a majority in voting power of the stock of the corporation entitled to vote thereon, voting as a single class, irrespective of the provisions in Section 242(b)(2) of the DGCL. The MDC US Certificate of Incorporation will authorize the MDC US Board to adopt, amend or repeal the MDC US Bylaws. In addition to any requirements of law, the affirmative vote of the holders of at least a majority of the combined voting power of the then outstanding shares of all classes and series of capital stock of MDC US entitled generally to vote, voting together as a single class, shall be required for stockholders to adopt, amend, alter or repeal any provision of the MDC US Bylaws. Under the DGCL, unless a corporation’s charter specifies otherwise, a class of securities is entitled to a separate vote on an amendment that would increase or decrease the aggregate number

	MDC Canada	MDC US
		of authorized shares of such class, increase or decrease the par value of the shares of such class, or alter or change the powers, preferences, or special rights of the shares of such class so as to affect them adversely.
Fiduciary Duties	The CBCA requires directors and officers of a corporation, in exercising their powers and discharging their duties, to act honestly and in good faith with a view to the best interests of the corporation and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. When acting with a view to the best interest of the corporation, the directors and officers of the corporation may consider but are not limited to, the following factors: (a) the interests of shareholders, employees, retirees and pensioners, creditors, consumers and governments; (b) the environment; and (c) the long-term interests of the corporation.	Directors of Delaware corporations have common law fiduciary duties, which generally consist of duties of loyalty and care. Under Delaware law, the duty of care requires that directors inform themselves, prior to making a business decision, of all material information reasonably available to them. The duty of loyalty requires that directors act in good faith, not out of self-interest and in a manner which the directors believe to be in the best interests of the corporation and its stockholders.
Corporate Opportunity Waiver	A doctrine of Canadian common law prohibits an officer or director of a corporation from diverting a business opportunity presented to, or otherwise rightfully belonging to, the corporation to himself or to any of his affiliates.	Exempted Persons will not have any duty to refrain from (i) engaging directly or indirectly in the same or similar business activities or lines of business as MDC US, (ii) doing business with any potential or actual customer or supplier of MDC US, or (iii) employing or otherwise engaging any officer or employee of MDC US. In the event that any Exempted Person acquires knowledge of a potential transaction or matter which may be a corporate opportunity for itself or another person and MDC US, the Company will not have any expectancy in the corporate opportunity, and no Exempted Person will have any duty to communicate or offer the corporate opportunity to MDC

			MDC Canada			MDC US
			director or an officer of MDC Canada, his or her heirs, executors and all legal personal representatives from and against any liability and all costs, charges and expenses that he or she sustains or incurs in respect of any action, suit or proceeding that is proposed or commenced against him or her for or in respect of anything done or permitted by him or her in respect of the execution of the duties of his or her office and all other costs, charges and expenses that he or she sustains or incurs in respect of the affairs of MDC Canada.			of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent the appropriate court finds that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. The DGCL further provides that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as director, officer, employee or agent of another entity or enterprise, against any liability asserted against such person and incurred by such person in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability. The MDC US Bylaws will provide that its directors and officers will be indemnified by MDC US to the fullest extent authorized by Delaware law as it now exists or may in the future be amended, against all expenses, liabilities and loss incurred in connection with their service as a director or officer on behalf of the corporation. The MDC US Bylaws will provide that, to the fullest extent not prohibited by applicable law, MDC US shall pay the expenses (including attorneys’ fees) incurred by a director or officer of MDC US, and may pay the expenses incurred by any employee or agent of MDC US, in defending any action, suit or proceeding in advance of its final

	MDC Canada	MDC US
		disposition; provided, that if required by law, such payment of expenses in advance of the final disposition of the action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the person to repay all amounts advanced if it is ultimately determined that such person is not entitled to be indemnified by MDC US.
Merger Vote	The CBCA provides that the directors of an amalgamating corporation must submit the amalgamation agreement for approval at a meeting of the shareholders of the corporation. An amalgamation agreement is adopted when shareholders of each amalgamating corporation approve the amalgamation by not less than two-thirds of the votes cast in person or by proxy on the resolution.	The DGCL provides that, subject to certain exceptions, the adoption of a merger agreement requires the approval of a majority of the voting power of the outstanding stock of the corporation entitled to vote thereon. No vote of stockholders of a corporation is required to approve (1) the merger of the corporation with or into another corporation that owns 90% or more of the common stock of the corporation pursuant to a specific provision of the DGCL, (2) the merger of the corporation into a direct or indirect wholly-owned subsidiary of the corporation in a “holding company reorganization” meeting certain requirements, (3) in a merger in which the stock of the corporation remains outstanding, the certificate of incorporation is not amended in any respect and the corporation issues less than 20% of its stock, and (4) a merger following a tender offer in which the holders of sufficient shares that, absent the provision, would be entitled to adopt the merger agreement, tender their shares into the tender offer and those stockholders who do not tender (subject to certain statutory exceptions) receive the same consideration in the merger as those who tendered in the tender offer.

			MDC Canada			MDC US
Anti-Takeover Provisions			The CBCA does not contain a comparable provision to Section 203 of the DGCL. However, certain Canadian securities regulatory authorities, including the Ontario Securities Commission, have addressed related party transactions in Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions (“MI 61-101”). In a related party transaction, among other things, an issuer acquires or transfers an asset or treasury securities, or assumes or transfers a liability, from or to a related party in one or any combination of transactions. A related party is defined in the policies to include directors, senior officers and holders of at least 10% of the issuer’s voting securities. MI 61-101 requires detailed disclosure in the proxy material sent to security holders in connection with a related party transaction. In addition, subject to certain exceptions, the policies require the proxy material to include a formal valuation of the subject matter of the related party transaction and any non-cash consideration and a summary of the valuation. The policies also require that the shareholders of the issuer, other than the related party and its affiliates, separately approve the transaction.			Section 203 generally prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years following the date that such person became an interested stockholder, unless (i) the board of directors of the corporation has approved, prior to the time the person became an interested stockholder, either the business combination or the transaction that resulted in the person becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in the person becoming an interested stockholder, the person owns at least 85% of the corporation’s voting stock (excluding shares owned by directors who are also officers and shares owned by employee stock plans in which participants do not have the right to determine confidentially whether shares subject to the plan will be tendered in a tender or exchange offer) or (iii) after the person or entity becomes an interested stockholder, the business combination is approved by the board of directors and authorized at a meeting of stockholders by the affirmative vote of at least 66-2/3% of the outstanding voting stock not owned by the interested stockholder. Generally, a “business combination” is defined to include a merger, consolidation, a sale of assets and other transactions resulting in a financial benefit to the interested stockholder and an “interested stockholder” is a person that owns (or is an affiliate or associate of the corporation and within the prior three years did own) 15% or more of a corporation’s voting stock, and the affiliates and associates of

	MDC Canada	MDC US
		any such person. Section 203 provides that these restrictions do not apply if, among other things, the corporation’s certificate of incorporation contains a provision expressly electing not to be governed by Section 203. The MDC US Certificate of Incorporation will opt out of Section 203.
Appraisal Rights	The CBCA provides that shareholders of a Canadian corporation entitled to vote on certain matters are entitled to exercise dissent rights and be paid for the fair value of the shares in respect of which the shareholder dissents. For this purpose, there is no distinction made between listed and unlisted shares. Dissent rights exist when there is a vote upon matters such as: • any amalgamation with another corporation (other than with certain affiliated corporations); • an amendment to the corporation’s articles of amalgamation to add, change or remove any provisions restricting the issue, transfer or ownership of shares; • an amendment to the corporation’s articles of amalgamation to add, change or remove any restriction upon the business or businesses that the corporation may carry on; • a continuance under the laws of another jurisdiction; • a sale, lease or exchange of all or substantially all the property of the corporation other than in the ordinary course of business;	Under the DGCL, a stockholder of a Delaware corporation who does not vote in favor of certain mergers and who is entitled to demand and has properly demanded appraisal of his shares in accordance with the requirements of Section 262 of the DGCL is entitled to appraisal of the fair value of his shares by the Court of Chancery of the State of Delaware in connection with certain mergers. The DGCL does not confer appraisal rights, however, if the Delaware corporation’s stock is either listed on a national securities exchange or held of record by more than 2,000 holders unless the holders of such shares are not required to accept for their stock in such merger anything other than: (1) shares of the corporation surviving or resulting from the merger or consolidation, or depository receipts representing shares of the surviving or resulting corporation; (2) shares of any other corporation, or depository receipts representing shares of the other corporation, that are or at the effective time of the merger or consolidation will be listed on a national securities exchange or held of record by more than 2,000 holders; (3) cash in lieu of fractional shares or fractional depositary receipts; or (4) any combination of the foregoing.

	MDC Canada	MDC US
	subsidiary bodies corporate during usual business hours and take copies of extracts free of charge.	any proper purpose the corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom.
Shareholders’ Agreement	MDC Canada is not party to any investors’ rights, stockholders’ or voting agreement with respect to its securities.	Upon consummation of U.S. Domestication, MDC US will not be party to any investors’ rights, stockholders’ or voting agreement with respect to shares of Common Stock.
Exclusive Forum	Under the CBCA, the rights of shareholders to obtain certain remedies, including with respect to derivative actions, oppression claims and dissent rights, may only be pursued in certain specified Canadian courts. Likewise, an application to a court in respect of various matters related to the subject corporation, including with respect to reorganizations, plans of arrangements, rights to indemnity and creditors rights, may be made to certain specified Canadian courts.	The MDC US Certificate of Incorporation will provide that, unless MDC US consents in writing to the selection of an alternative forum, and subject to applicable jurisdictional requirements, the Court of Chancery of the State of Delaware will be the exclusive forum (or if the Court of Chancery of the State of Delaware lacks jurisdiction, then another court of the State of Delaware or, if no court of the State of Delaware has jurisdiction, then the United States District Court for the District of Delaware) for: (a) any derivative action or proceeding brought on behalf of MDC US, (b) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee or stockholder of MDC US to MDC US or MDC US’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL (or any successor provision thereto) or as to which the DGCL (or any successor provision thereto) confers jurisdiction on the Court of Chancery of the State of Delaware, (d) any action or proceeding asserting a claim against the Company or any current or former director, officer or other employee of the Company arising pursuant to any

	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 Rights Exercisable Currently or Within 60 Days(3)		Class A Shares Underlying All Options, Warrants or Similar Right(s4)		Class A Shares
Mark J. Penn		Direct		602,500(6)		500,000		1,500,000		1.4%
		Indirect		14,400,714(7)		496,645(7)		11,230,285(7)		19.6%
Charlene Barshefsky		Direct		73,256(6)						*
Asha Daniere		Direct		—				23,256(8)		*
Bradley J. Gross		Direct		—						*
Wade Oosterman		Direct		35,000				23,256(8)		*
Desirée Rogers		Direct		72,218(6)						*
Irwin D. Simon		Direct		88,211(6)						*
Jonathan B. Mirsky		Direct		331,750(6)		83,334		250,000		*
Frank P. Lanuto		Direct		199,000(6)		150,000		450,000		*
David C. Ross		Direct		424,690(6)		43,000		43,000		*
Vincenzo DiMaggio		Direct		78,333(6)						*
All directors and officers of MDC as a group (11 persons)				16,305,672		1,272,979		13,519,797		22.9%
Stagwell Agency Holdings LLC(9)				14,440,714(7)		496,645(7)		11,230,285(7)		19.6%
Goldman Sachs(9)				7,625(10)		14,778,823(10)		14,778,823(10)		16.4%
Hotchkis and Wiley Capital Management LLC(9)				8,962,457(11)						11.9%
Indaba Capital Fund, L.P.(9)				7,759,958(12)						10.3%

Canadian Filings
Annual Report on Form 10-K for the fiscal year ended December 31, 2019, dated March 5, 2020
Revised Annual Report on Form 10-K for the fiscal year ended December 31, 2019, dated April 29, 2020
Audited annual consolidated financial statements as of December 31, 2019 and 2018 and for the three years ended December 31, 2019, including the notes thereto and the auditor’s report thereon.
MD&A for the year ended December 31, 2019
MD&A for the three-month period ended March 31, 2020
MD&A for the six-month period ended June 30, 2020
Proxy Statement for 2020 Annual and Special Meeting of MDC Shareholders on Schedule 14A, dated May 26, 2020

SEC Filings			Date Filed
Annual Report on Form 10-K for the fiscal year ended December 31, 2019			March 5, 2020 and amended on April 29, 2020
Quarterly Report on Form 10-Q for the three months ended March 31, 2020			May 11, 2020
Quarterly Report on Form 10-Q for the six months ended June 30, 2020			August 10, 2020
Current Reports on Form 8-K			January 24, 2020
			February 27, 2020
			April 29, 2020
			May 15, 2020
			June 1, 2020
			June 26, 2020
			June 29, 2020
			July 15, 2020
			August 6, 2020
			August 31, 2020
Proxy Statement for 2020 Annual Meeting of MDC Shareholders on Schedule 14A			May 26, 2020