Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 31, 2021, HireQuest, Inc. (the "Company") entered into an Executive
Employment Agreement effective September 1, 2021 (the "Effective Date") by and
among the Company, HQ LTS Corporation, a wholly-owned subsidiary of the Company
(the "Subsidiary"), and John McAnnar, the Company's Chief Legal Officer, Vice
President, and Corporate Secretary (the "Employment Agreement").
The Employment Agreement provides for Mr. McAnnar to continue serving as the
Company's Chief Legal Officer, Vice President, and Corporate Secretary during an
initial term through August 31, 2023 (the "Term") and to receive an annual base
salary of $210,000, payable at periodic intervals in accordance with the
Subsidiary's normal payroll practices. Mr. McAnnar will be eligible for (i) a
discretionary bonus with respect to each fiscal year beginning with the fiscal
year ending December 31, 2021 in the Compensation Committee's sole discretion,
and (ii) a performance bonus beginning with the fiscal year ended December 31,
2021 of up to 50% of his base salary, subject to approval by the Compensation
Committee, upon achieving various tiered goals for improvement in year over year
sales, accounts receivable turns, workers' compensation loss ratio, and
maintenance of core staff payroll.
Mr. McAnnar was granted 10,000 shares of restricted common stock of the Company
pursuant to the HireQuest, Inc. 2019 Equity Incentive Plan, subject to the terms
and conditions of the plan (the "Restricted Shares"). The Restricted Shares vest
according to the following schedule: 50% on the second anniversary of the
Effective Date, and 6.25% per fiscal quarter for each of the first eight fiscal
quarters occurring thereafter subject to accelerated vesting upon termination of
Mr. McAnnar's employment under certain conditions. Mr. McAnnar is also entitled
to vacation and other employee benefits in accordance with the Subsidiary's
Mr. McAnnar's employment can be terminated at any time for cause or without
cause subject to 60 days' notice. If the employment is terminated for cause or
due to death or disability, Mr. McAnnar or his estate will receive any unpaid
base salary plus an amount equal to the base salary, accrued and unpaid bonuses,
reimbursable expenses, and continued health care benefits at Mr. McAnnar's
expense. If Mr. McAnnar's employment is terminated due to death or disability,
Mr. McAnnar or his estate is also entitled to an amount equal to the base salary
Mr. McAnnar would have earned in the sixty day period following his death or
permanent disability, the limited death, disability, and income continuation
benefits provided under any applicable plan, and pro-rata vesting of the
Restricted Shares calculated as if his restricted stock had vested monthly.
If the employment is terminated by the Company without "cause" or Mr. McAnnar
resigns for "good reason" (as each of those terms is defined in the Employment
Agreement), Mr. McAnnar is entitled to receive any unpaid base salary plus
accrued paid time off or vacation, pro-rated payment of the performance bonus,
an amount equal to Mr. McAnnar's base salary for a period equal to one month for
every year of total employment by the Company or its affiliates up to a maximum
of six months, reimbursable expenses, continued health care benefits at Mr.
McAnnar's expense, and pro-rata vesting of the Restricted Shares calculated as
if his restricted stock had vested monthly. If the employment terminates due to
non-renewal of the agreement, Mr. McAnnar is entitled to receive any unpaid base
salary plus accrued paid time off or vacation, pro-rated payment of the
performance bonus, and 50% of the Restricted Shares shall immediately vest.
If a "change of control" (generally defined in the Employment Agreement at the
50% level) occurs prior to the end of the Term, the agreement is extended
automatically for a one-year renewal period beginning on the date of the change
of control (a "Post-Change of Control Renewal Period"). If Mr. McAnnar's
employment is terminated during the Post-Change of Control Renewal Period, he is
entitled to a one-time, lump-sum severance payment equal to 150% of his base
salary then in effect, and all restrictions on outstanding equity awards,
including the Restricted Shares, will lapse such that Mr. McAnnar will be fully
vested in such awards.
The foregoing description of the Employment Agreement does not purport to be
complete and is qualified in its entirety by reference to the Employment
Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K
and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
10.1 Employment Agreement dated September 1, 2021 by and among HQ LTS
Corporation, HireQuest, Inc., and John McAnnar
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