Description of Securities
Registered under Section 12 of the
Securities Exchange Act of 1934
The following is a brief description of the common stock, par value $.01 per share (the Common Stock), of Mastech Digital, Inc., a Pennsylvania corporation (Mastech Digital, Mastech, the Company, us, our or we), which is the only security of the Company registered under Section 12 of the Securities Exchange Act of 1934, as amended. This summary description is based on the provisions of the Business Corporation Law of 1988 of the Commonwealth of Pennsylvania, as amended (the PBCL), applicable to the Company, and the Companys Amended and Restated Articles of Incorporation (Articles) and Amended and Restated Bylaws (Bylaws). It is not meant to be a complete description of the Common Stock and is qualified in its entirety by reference to the Articles and Bylaws, which are incorporated by reference herein and filed as exhibits to the Companys Annual Report on Form 10-K of which this exhibit forms a part, and to the applicable provisions of the PBCL.
Authorized Capital Stock
Our authorized capital stock under our Articles consists of:
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250,000,000 shares of Common Stock, $.01 par value; and
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20,000,000 shares of Preferred Stock, without par value.
As of December 31, 2019, the following securities were issued and outstanding:
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12,700,660 shares of Common Stock; and
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No shares of Preferred Stock.
Description of Common Stock
Generally, the issued and outstanding shares of Common Stock vote together as a single class. Our Articles provide that our board of directors (Board) be divided into three classes, approximately equal in number, with staggered terms of three (3) years. Cumulative voting is not permitted in the election of directors or otherwise, and no preemptive rights have been granted to any shareholder.
Each share of Common Stock is entitled to one vote on all matters requiring a vote of shareholders and each shareholder is entitled to receive any dividends, in cash, securities or property, as the Board may declare. Pennsylvania law prohibits the payment of dividends or the repurchase of Mastech Digital shares if Mastech Digital is insolvent or would become insolvent after the dividend or repurchase. In the event of our liquidation, dissolution or winding up, either voluntarily or involuntarily, subject to the rights of the holders of any outstanding shares of preferred stock, holders of Common Stock are entitled to share pro-rata in all of our remaining assets available for distribution. Our Common Stock does not have, nor is it subject to, any preemptive or similar rights.
Our Articles authorize the Board, without the approval of our shareholders, to issue shares of preferred stock and to fix by resolution the designations, preferences and relative, participating, optional or other special rights, and such qualifications, limitations or restrictions thereof, including, without limitation, redemption rights, dividend rights, liquidation preferences and conversion or exchange rights of any class or series of preferred stock, and to fix the number of classes or series of preferred stock, the number of shares constituting any such class or series and the voting powers for each class or series.
The authority possessed by the Board to issue preferred stock could potentially be used to discourage attempts by third parties to obtain control of the Company through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly. The Board may issue preferred stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power of the holders of Common Stock. There are currently no agreements or understandings with respect to the issuance of preferred stock, and the Board has no present intention to issue any shares of preferred stock.
Our Articles provide that the approval of 66 2/3% of the outstanding shares of Common Stock is required to either: (i) amend the Bylaws; (ii) remove a director; or (iii) approve any other action for which shareholder approval is required under Subchapters B through F of Chapter 19 (Fundamental Changes) of the PBCL.
Our outstanding shares of Common Stock are listed on the NYSE American under the symbol MHH.
Election and Removal of Directors. Our Board is divided into three classes. The directors in each class serve for a three-year term, one class being elected each year by our shareholders. A vote of at least 66 2/3% of the combined voting power of the then outstanding