Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On November 14, 2022, Michael Fleishman became the Chief Executive Officer of
Mastech InfoTrellis, Inc. ("Mastech InfoTrellis"), Mastech Digital, Inc.'s (the
"Company") wholly owned subsidiary. Prior to the effective date, he entered into
an Executive Employment Agreement on October 26, 2022 with Mastech InfoTrellis
and Mastech Digital Data, Inc. ("Mastech Digital Data"). The term of
Mr. Fleishman's employment may be terminated by the Company or Mr. Fleishman
with or without Cause or for any or no reason.
The Employment Agreement provides that, effective November 14, 2022,
Mr. Fleishman'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. Fleishman is eligible to earn an annual performance-based cash bonus of
$300,000 (the "Target Bonus") for the achievement of certain financial and
operational targets. 75% of the Target Bonus is guaranteed and the remaining 25%
shall be based upon meeting certain key performance indicators. 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. The key performance indicators will be
determined by Mr. Fleishman and the Compensation Committee. Under the Employment
Agreement, Mr. Fleishman also received an award of a non-qualified stock option
to purchase 300,000 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.
In the event that Mr. Fleishman 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 and benefits (excluding
options) earned through the date of termination (the "Accrued Obligations"). In
the event that Mr. Fleishman 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 a portion of his Target Bonus dependent upon the term of employment, with 50%
being paid out if termination occurs before Mr. Fleishman completes 12 months of
employment and 100% being paid out if termination occurs after Mr. Fleishman
completes 12 months of employment (less appropriate deductions). Mr. Fleishman
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 and granted under the Company's Stock Incentive Plan. The
exercise period for vested options held by Mr. Fleishman 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. Fleishman 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 Target Bonus
received for the three years preceding his termination (not including the year
of termination). Mr. Fleishman 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. Fleishman on his termination date and reimbursement of up to $25,000 for
outplacement services. The exercise period for vested options held by
Mr. Fleishman at the time of his termination will be accelerated in full,
effective as of Mr. Fleishman'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 7.01 Regulation FD Disclosure.
On November 14, 2022, the Company issued a press release announcing the
appointment of Mr. Fleishman as the Chief Executive Officer of Mastech
InfoTrellis, Inc. A copy of the press release is included as Exhibit 99.1 and is
incorporated herein by reference.
The information contained in this Item 7.01 and Exhibit 99.1 shall not be deemed
filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liability of that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, except as shall be expressly set forth by specific reference in such
a filing.
Item 9.01 Financial Statements and Exhibits.
(d) The following exhibits are furnished with this Form 8-K:
Exhibit
No. Description
10.1 Executive Employment Agreement, dated as of October 26, 2022,
between Mastech InfoTrellis, Inc., Mastech Digital Data, Inc., and
Michael Fleishman.
99.1 Press Release issued by Mastech Digital, Inc. on November 14, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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