Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On March 28, 2022, Mastech Digital, Inc. (the "Company"), through its
wholly-owned subsidiaries Mastech InfoTrellis, Inc. ("Mastech InfoTrellis") and
Mastech Digital Data, Inc. ("Mastech Digital Data"), entered into an Executive
Employment Agreement with Ganeshan Venkateshwaran (the "Employment Agreement"),
appointing Mr. Venkateshwaran as Mastech InfoTrellis's Chief Executive Officer.
The term of Mr. Venkateshwaran's employment will commence on April 4, 2022, and
may be terminated by the Company or Mr. Venkateshwaran with or without Cause or
for any or no reason.
The Employment Agreement provides that, effective April 4, 2022,
Mr. Venkateshwaran's base salary shall be $550,000 per year, subject to review
and modification annually by the Company. The Employment Agreement also provides
that Mr. Venkateshwaran is eligible to earn an annual performance-based cash
bonus of $450,000 for the achievement of certain financial and operational
targets. These targets, and the bonus dollars tied to such targets, will be
determined by the Compensation Committee of the Company's Board of Directors
(the "Compensation Committee") on an annual basis. Under the Employment
Agreement, Mr. Venkateshwaran also received an award of a non-qualified stock
option to purchase 400,000 shares of the Company's common stock pursuant to the
Company's Stock Incentive Plan and is also eligible to receive non-qualified
stock options and other awards pursuant to the Company's Stock Incentive Plan in
a manner and amount determined by the Compensation Committee. The Employment
Agreement further provides that if the Company completes a "Spin-Off" where it
distributes all equity securities of Mastech InfoTrellis or Mastech Digital Data
to the Company's shareholders and the market capitalization of the spun-off
entity immediately following the completion of this "Spin-Off" is not less than
$300 million, Mr. Venkateshwaran will be granted restricted stock in the
spun-off entity. The amount of this restricted stock grant is calculated based
on the market capitalization of the spun-off entity.
In the event that Mr. Venkateshwaran is terminated with "Cause", the Company may
immediately cease payment of any further wages, benefits or other compensation
under the Employment Agreement other than salary, wages and benefits (excluding
options) earned through the date of termination (the "Accrued Obligations"). In
the event that Mr. Venkateshwaran is terminated without "Cause" or he resigns
for "Good Reason" (in each case, other than within 12 months following a "Change
of Control" involving the Company, Mastech InfoTrellis or Mastech Digital Data),
he is entitled to all Accrued Obligations earned through the date of
termination, 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 Company's
employee benefits and group health plans in accordance with the Company's
severance policy and payment of 100% of his annual performance-based cash bonus
target (less appropriate deductions). Mr. Venkateshwaran 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. Venkateshwaran 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. Venkateshwaran is terminated without "Cause" or he resigns
for "Good Reason", in each case within 12 months after a "Change of Control"
involving the Company, Mastech InfoTrellis or Mastech Digital Data, he is
entitled to all Accrued Obligations earned through the date of termination, 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 (not including the year of termination). Mr. Venkateshwaran is also
entitled to the payment of the premiums required to continue coverage under the
Company's 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. Venkateshwaran on his termination date
and reimbursement of up to $25,000 for outplacement services. The exercise
period for vested options held by Mr. Venkateshwaran at the time of his
termination will be accelerated in full, effective as of Mr. Venkateshwaran's
final day of employment.
The foregoing descriptions of the Employment Agreement does not purport to be
complete and is qualified in its entirety by the full text of the Employment
Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on
Form 8-K and incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) The following exhibit is furnished with this Form 8-K:
Exhibit
No. Description
10.1 Executive Employment Agreement, dated as of March 28, 2022, between
Mastech InfoTrellis, Inc., Mastech Digital Data, Inc., and Ganeshan
Venkateshwaran.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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