Mastech Digital Announces New Employee Inducement Grant Under NYSE American Listed Company Guide Rule Sec. 711

Rhea-AI Summary

Mastech Digital (NYSE AMERICAN: MHH) has granted 702,358 non-qualified stock options to its new President and CEO, Nirav Patel, effective January 6, 2025. The options will vest over multiple conditions, including time-based and performance-based criteria.

The vesting schedule includes annual portions of 87,795 shares over four years, plus additional performance-based vesting tied to market capitalization targets: 175,589 shares when reaching $300M, 87,795 shares at $450M, and 87,795 shares at $600M market cap.

The grant serves as a material inducement to Patel joining the company as CEO and was made in accordance with NYSE American Listed Company Guide Rule Sec. 711. The options include provisions for acceleration and forfeiture in case of employment termination or company change of control.

Positive

• Structured CEO compensation package aligned with company growth targets
• Performance-based vesting tied to significant market cap milestones ($300M, $450M, $600M)
• Long-term retention incentive with 4-year vesting schedule

Negative

• Potential shareholder dilution from 702,358 new stock options

PITTSBURGH, Jan. 7, 2025 /PRNewswire/ -- Mastech Digital, Inc. (the 'Company') (NYSE AMERICAN: MHH), a leading provider of Digital Transformation Services, today announced that the Company made an award of non-qualified stock options to purchase up to 702,358 shares of the Company's common stock to its new President and Chief Executive Officer, Nirav Patel, effective on his start date, January 6, 2025 (the "Effective Date"). The award was made pursuant to the Company's previously announced Executive Employment Agreement with Mr. Patel, and as a material inducement to him joining the Company as its President and Chief Executive Officer.

Subject to the terms of the underlying stock option agreement, the stock options will vest in accordance with the following schedule:

(i)   87,795 shares will vest on the one-year anniversary of the Effective Date;
(ii)   87,795 shares will vest on the second-year anniversary of the Effective Date;
(iii)  87,795 shares will vest on the third-year anniversary of the Effective Date;
(iv)  87,794 shares will vest on the four-year anniversary of the Effective Date;
(v)  175,589 shares will vest on the first date during Mr. Patel's term of employment that the Company's Quarterly Average Market Capitalization (as defined in the stock option agreement) is greater than $300,000,000;
(vi)  87,795 shares will vest on the first date during Mr. Patel's term of employment that the Company's Quarterly Average Market Capitalization is greater than $450,000,000; and
(vii)  87,795 shares will vest on the first date during Mr. Patel's term of employment that the Company's Quarterly Average Market Capitalization is greater than $600,000,000.

The options are subject to acceleration and forfeiture in the event of the termination of Mr. Patel's employment and/or the consummation of a 'Change of Control' of the Company, in each case in accordance with the terms of the stock option agreement.

This award was granted as a material inducement to employment in accordance with the NYSE American Listed Company Guide Rule Sec. 711.

About Mastech Digital

Mastech Digital, Inc. (NYSE American: MHH) is a leading provider of Digital Transformation Services. The company specializes in delivering high-quality technology talent and innovative solutions that help businesses drive digital transformation and harness the power of data and analytics. Mastech Digital operates globally, with headquarters in Pittsburgh, PA, and delivery centers in North America and India.

For more information, visit www.mastechdigital.com.

Forward-Looking Statements:

Certain statements contained in this release are forward-looking statements based on management's expectations, estimates, projections, and assumptions.  Words such as "expects," "anticipates," "plans," "believes," "scheduled," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements, which include but are not limited to projections of and statements regarding the Company's ability to generate revenues, earnings, and cash flow.  These statements are based on information currently available to the Company and it assumes no obligation to update the forward-looking statements as circumstances change.  These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict.  Therefore, actual future results and trends may differ materially from what is forecasted in forward-looking statements due to a variety of factors, including, without limitation, the level of market demand for the Company's services, the highly-competitive market for the types of services offered by the Company, the impact of competitive factors on profit margins, market and general economic conditions that could cause the Company's customers to reduce their spending for its services, the Company's ability to create, acquire and build new lines of business, to attract and retain qualified personnel, reduce costs and conserve cash, the extent to which the Company's business is adversely affected by the impacts of the COVID-19 pandemic or any other pandemics or outbreaks disrupting day-to-day activities and other risks that are described in more detail in the Company's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2023.

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SOURCE Mastech Digital, Inc.

FAQ

How many stock options did Mastech Digital (MHH) grant to new CEO Nirav Patel?

Mastech Digital granted 702,358 non-qualified stock options to new CEO Nirav Patel, effective January 6, 2025.

What are the market capitalization targets for MHH CEO's stock options vesting?

The market capitalization targets are $300 million (175,589 shares), $450 million (87,795 shares), and $600 million (87,795 shares).

What is the time-based vesting schedule for MHH CEO's stock options?

The time-based vesting occurs annually over four years, with approximately 87,795 shares vesting each year starting January 6, 2026.

When do Nirav Patel's MHH stock options begin vesting?

The first time-based vesting occurs on January 6, 2026, one year after the effective date, with performance-based vesting occurring when market cap targets are met.

What happens to MHH CEO's stock options in case of a change of control?

The stock options are subject to acceleration and forfeiture provisions in case of a change of control, according to the terms of the stock option agreement.