Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Second Amended and Restated Employment Agreement with Vivek Gupta, Chief Executive Officer and President.
On March 20, 2017, Mastech Digital, Inc. (the Company) entered into a Second Amended and Restated Executive Employment Agreement (the
Gupta Employment Agreement) with Vivek Gupta, the Companys Chief Executive Officer and President. The Gupta Employment Agreement amends and restates the Amended and Restated Executive Employment Agreement, dated as of
April 26, 2016, between the Company and Mr. Gupta in its entirety. The term of the Gupta Employment Agreement commenced on May 1, 2016 and may be terminated by either the Company or Mr. Gupta at any time.
The Gupta Employment Agreement provides that, effective April 1, 2017, Mr. Guptas base salary shall be $362,500 per year, subject to review
and modification annually by the Company. The Gupta Employment Agreement also provides that Mr. Gupta is eligible to earn an annual performance-based cash bonus of $187,500 for the achievement of certain financial and operational targets. These
targets, and the bonus dollars tied to such targets, will be determined by the Companys Board of Directors on an annual basis. Under the Gupta Employment Agreement, Mr. Gupta is also eligible to receive
non-qualified
stock options and other awards pursuant to the Companys Stock Incentive Plan in a manner and amount determined by the Compensation Committee of the Companys Board of Directors.
In the event that Mr. Gupta is terminated with Cause, the Company may immediately cease payment of any further wages, benefits or other
compensation under the Gupta Employment Agreement other than salary and benefits (excluding options) earned through the date of termination. In the event that Mr. Gupta is terminated without Cause or he resigns for Good
Reason (in each case, other than within 12 months following a Change of Control of the Company), he is entitled to a severance equal to 12 months of his last monthly base salary (less appropriate deductions) that is payable by the
Company over a
12-month
period following his termination date, continued coverage under the Companys employee benefits and group health plans in accordance with the Companys severance policy and
payment of his annual performance-based cash bonus target (less appropriate deductions). Mr. Gupta is also entitled, for a
12-month
period following his termination date, to the continued vesting of any
outstanding unvested stock options he held on his termination date. The exercise period for vested options held by Mr. Gupta at the time of his termination will also be extended for a
six-month
period
after the otherwise applicable expiration date, subject to certain restrictions.
In the event that Mr. Gupta is terminated without Cause
or he resigns for Good Reason, in each case within 12 months after a Change of Control of the Company, he is entitled to a lump sum severance payment (less appropriate deductions) equal to two times the sum of (i) his
average base salary for the three years preceding his termination (including the year of termination) and (ii) his average annual performance-based cash bonus received for the three years preceding his termination (including the year of
termination). Mr. Gupta is also entitled to the payment of the premiums required to continue coverage under the Companys employee benefits and group health plans for up to 24 months after his termination, the acceleration in full of the
vesting and/or exercisability of all outstanding equity awards held by Mr. Gupta on his termination date and reimbursement of up to $25,000 for outplacement services. The exercise period for vested options held by Mr. Gupta at the time of
his termination will also be extended for a
six-month
period after the otherwise applicable expiration date, subject to certain restrictions.
Amended and Restated Employment Agreement with John J. Cronin, Jr., Chief Financial Officer.
On March 20, 2017, the Company entered into an Amended and Restated Executive Employment Agreement (the Cronin Employment Agreement) with John
J. Cronin, Jr., the Companys Chief Financial Officer. The Cronin Employment Agreement amends and restates the Executive Employment Agreement, dated March 18, 2009, as amended on January 7, 2013, further amended on March 18, 2013
and further amended on March 20, 2014, between the Company and Mr. Cronin in its entirety. The term of the Cronin Employment Agreement continues from year to year or until Mr. Cronins employment is terminated by either party with or
without cause under certain conditions.
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The Cronin Employment Agreement provides that, effective April 1, 2017, Mr. Cronins base salary
shall be $265,000 per year. The Cronin Employment Agreement also provides that Mr. Cronin is eligible to earn an annual performance-based cash bonus of $150,000 for the achievement of certain financial and operational targets. These targets,
and the bonus dollars tied to such targets, will be determined by the Companys Chief Executive Officer on an annual basis. Under the Cronin Employment Agreement, Mr. Cronin is also eligible to receive
non-qualified
stock options and other awards pursuant to the Companys Stock Incentive Plan.
In the event
that Mr. Cronin is terminated with Cause, the Company may immediately cease payment of any further wages, benefits or other compensation under the Cronin Employment Agreement other than salary and benefits (excluding options) earned
through the date of termination. In the event that Mr. Cronin is terminated without Cause or he resigns for Good Reason (in each case, other than within one year following a Change of Control of the Company),
he is entitled to a severance equal to 12 months of his last monthly base salary (less appropriate deductions) that is payable by the Company over a
12-month
period following his termination date, continued
coverage under the Companys employee benefits and group health plans in accordance with the Companys severance policy and payment of his annual performance-based cash bonus target (less appropriate deductions). Mr. Cronin is also
entitled for a
12-month
period following his termination date to the continued vesting of any outstanding unvested stock options he held on his termination date. The exercise period for vested options held by
Mr. Cronin at the time of his termination will also be extended for a
six-month
period after the otherwise applicable expiration date, subject to certain restrictions.
In the event that Mr. Cronin is terminated without Cause or he resigns for Good Reason, in each case within one year after a
Change of Control of the Company, he is entitled to a lump sum severance payment (less appropriate deductions) equal to two times the sum of (i) his average base salary for the three years preceding his termination (including the
year of termination) and (ii) his average annual performance-based cash bonus received for the three years preceding his termination (including the year of termination). Mr. Cronin is also entitled to the payment of the premiums required
to continue coverage under the Companys employee benefits and group health plans for up to 24 months after his termination and to the acceleration in full of the vesting and/or exercisability of all outstanding equity awards held by
Mr. Cronin on his termination date and reimbursement of up to $25,000 for outplacement services. The exercise period for vested options held by Mr. Cronin at the time of his termination will also be extended for a
six-month
period after the otherwise applicable expiration date, subject to certain restrictions.
The foregoing
descriptions of the Gupta Employment Agreement and the Cronin Employment Agreement do not purport to be complete and are qualified in their entirety by the full text of the Gupta Employment Agreement and the Cronin Employment Agreement, copies of
which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form
8-K
and incorporated herein by reference.