11. Share Capital

The authorized share capital of the Company is as follows:

(a) Authorized Share Capital

Series 4 Convertible Preference Shares

A total of 95,000, non-voting convertible preference shares, all of which were issued and outstanding as of December 31, 2017. See Note 12 of the Notes to the Consolidated Financial Statements included herein for further information. There were no such shares issued and outstanding as of December 31, 2016.

Class A Shares

An unlimited number of subordinate voting shares, carrying one vote each, entitled to dividends equal to or greater than Class B shares, convertible at the option of the holder into one Class B share for each Class A share after the occurrence of certain events related to an offer to purchase all Class B shares.

Class B Shares

An unlimited number, carrying 20 votes each, convertible at any time at the option of the holder into one Class A share for each Class B share.

Preferred A Shares

An unlimited number, non-voting, issuable in series.

(b) Employee Stock Incentive Plan

On May 26, 2005, the Company’s shareholders approved the Company’s 2005 Stock Incentive Plan (the “2005 Incentive Plan”). The 2005 Incentive Plan authorizes the issuance of awards to employees, officers, directors and consultants of the Company with respect to 3,000,000 shares of MDC Partners’ Class A Subordinate Voting Shares or any other security into which such shares shall be exchanged. On June 1, 2007 and on June 2, 2009, the Company’s shareholders approved a total additional authorized Class A Shares of 3,750,000 to be added to the 2005 Incentive Plan for a total of 6,750,000 authorized Class A Shares. In addition, the plan was amended to allow shares under this plan to be used to satisfy share obligations under the Stock Appreciation Rights Plan (the “SARS” Plan”). On May 30, 2008, the Company’s shareholders approved the 2008 Key Partner Incentive Plan, which provides for the issuance of 900,000 Class A Shares. On June 1, 2011, the Company’s shareholders approved the 2011 Stock Incentive Plan, which provides for the issuance of up to 3,000,000 Class A Shares. In June 2013, the Company’s shareholders approved an amendment to the SARS Plan to permit the Company to issue shares authorized under the SARS Plan to satisfy the grant and vesting awards under the 2011 Stock Incentive Plan. On June 1, 2016, the Company’s shareholders approved the 2016 Stock Incentive Plan, which provides for the issuance of up to 1,500,000 Class A shares.

The following table summarizes information about time based and financial performance-based restricted stock and restricted stock unit awards granted under the 2005 Incentive Plan, 2008 Key Partner Incentive Plan, 2011 Stock Incentive Plan and 2016 Stock Incentive Plan:



	Performance Based Awards				Time Based Awards
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Balance at December 31, 2014	86,030		$	23.14	916,141		$	16.36
Granted	80,000		21.76		191,155		20.42
Vested	(68,067	)	25.21		(297,794	)	12.35
Forfeited	—		—		(35,000	)	21.69
Balance at December 31, 2015	97,963		$	19.61	774,502		$	18.71
Granted	10,000		14.00		392,500		12.53
Vested	(17,963	)	10.02		(380,367	)	16.02
Forfeited	—		—		(46,000	)	20.39
Balance at December 31, 2016	90,000		$	20.90	740,635		$	16.71
Granted	—		—		358,000		8.98
Vested	(90,000	)	20.90		(277,050	)	19.62
Forfeited	—		—		(36,500	)	14.15
Balance at December 31, 2017	—		$	—	785,085		$	12.28

The total fair value of restricted stock and restricted stock unit awards, which vested during the years ended December 31, 2017, 2016 and 2015 was $7,316, $6,272 and $5,394, respectively. In connection with the vesting of these awards, the Company included in the taxable loss the amounts of $3,500, $5,429 and $4,678 in 2017, 2016 and 2015, respectively. At December 31, 2017, the weighted average remaining contractual life for time based awards was 1.62 years. At December 31, 2017, the fair value of all restricted stock and restricted stock unit awards was $7,655. The term of these awards is three years with vesting up to three years. At December 31, 2017, the unrecognized compensation expense for these awards was $4,696 and will be recognized through 2019. At December 31, 2017, there were 579,748 awards available to grant under all equity plans.

In addition, the Company awarded restricted stock and restricted stock unit awards of which 1,433,921 awarded shares were outstanding as of December 31, 2017. The vesting of these awards is contingent upon the Company meeting a cumulative three year earnings target and continued employment through the vesting date. Once the Company defines the earnings target, the grant date is established and the Company will record the compensation expense over the vesting period.

Prior to adoption of the 2005 Incentive Plan, the Company’s Prior 2003 Plan provided for grants of up to 2,836,179 options to employees, officers, directors and consultants of the Company. All the options granted were for a term of five years from the date of the grant and vest 20% on the date of grant and a further 20% on each anniversary date. In addition, the Company granted 802,440 options, on the privatization of Maxxcom, with a term of no more than 10 years from initial date of grant by Maxxcom and vest 20% in each of the first two years with the balance vesting on the third anniversary of the initial grant.

Information related to share option transactions grant under all plans over the past three years is summarized as follows:



	Options Outstanding			Options Exercisable			Non Vested Options
	Number Outstanding	Weighted Average Price per Share		Number Outstanding	Weighted Average Price per Share
Balance at December 31, 2014	112,500	$	5.70	112,500	$	5.70	—
Vested	—	—		—	—		—
Granted	—	—		—	—		—
Exercised	37,500	4.72		—	—		—
Expired and canceled	—	—		—	—		—
Balance at December 31, 2015	75,000	$	5.28	75,000	$	5.28	—
Vested	—	—		—	—		—
Granted	—	—		—	—		—
Exercised	37,500	5.97		—	—		—
Expired and canceled	—	—		—	—		—
Balance at December 31, 2016	37,500	$	5.83	37,500	$	5.83	—
Vested	—	—		—	—		—
Granted	—	—		—	—		—
Exercised	37,500	5.83		—	—		—
Expired and canceled	—	—		—	—		—
Balance at December 31, 2017	—	$	—	—	$	—	—

For options exercised during 2017, 2016 and 2015, the Company received cash proceeds of nil, nil and $224, respectively. The Company did not receive any windfall tax benefits. The intrinsic value of options exercised during 2017, 2016 and 2015 was $125, $471 and $471, respectively. At December 31, 2017, the unrecognized compensation expense of all options was nil.

During 2017, the Compensation Committee of the Board of Directors approved a SAR’s compensation program for senior officers and directors of the Company. SAR’s granted in 2017 have a term of up to five years. Awards vest on the third anniverary of the grant date. SAR’s granted and outstanding are as follows:



	SARs Outstanding			SARs Exercisable				Non Vested SARs
	Number Outstanding	Weighted Average Price per Share		Number Outstanding		Weighted Average Price per Share
Balance at December 31, 2016	—	$	—	$	—	$	—	—
Vested	—	—		—		—		—
Granted	327,500	6.60		—		—		327,500
Exercised	—	—		—		—		—
Expired and canceled	—	—		—		—		—
Balance at December 31, 2017	327,500	$	6.60	—		$	—	327,500

At December 31, 2017, the unrecognized compensation expense of all SARs was $535.

The Company has reserved a total of 3,126,254 Class A shares in order to meet its obligations under various conversion rights, warrants and employee share related plans. At December 31, 2017 there were 579,748 shares available for future option and similar grants.