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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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Third Amended and Restated Employment Agreement with Vivek Gupta, Chief Executive Officer and President.
On March 21, 2018, Mastech Digital, Inc. (the Company) entered into a Third 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 Second Amended and Restated Executive Employment Agreement, dated as of
March 20, 2017, between the Company and Mr. Gupta in its entirety. The term of the Gupta Employment Agreement commenced on March 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, 2018, Mr. Guptas base salary shall be $410,000 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 $250,000 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 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.
Second Amended and Restated Employment Agreement with John J. Cronin, Jr., Chief
Financial Officer.
On March 21, 2018, the Company entered into a Second 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 Amended and Restated Executive Employment Agreement, dated March 20, 2017, 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.
The Cronin Employment Agreement provides that, effective April 1, 2018, Mr. Cronins base salary shall be $300,000 per year. The Cronin
Employment Agreement also provides that Mr. Cronin is eligible to earn an annual performance-based cash bonus of $170,000 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 also received an award of a non-qualified stock option to purchase 50,000 shares of the
Companys common stock, vesting in five equal annual installments beginning on the first anniversary of the March 21, 2018 grant date, and is eligible to receive non-qualified stock options and other awards, in each case pursuant to the
Companys Stock Incentive Plan.
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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.