Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective December 1, 2021, HireQuest, Inc. (the “Company”) appointed David S. Burnett, age 55, as its Chief Financial Officer. Mr. Burnett has more than 30 years of financial experience. Immediately prior to joining the Company and since September 2019, Mr. Burnett served as Chief Financial Officer of Ivy Asset Group, LLC an investment bank and alternative credit provider. From April 2017 through December 2021, Mr. Burnett was the owner and Executive Consultant of Accounting Bullpen, a CPA firm serving finance and accounting needs of small businesses. From April 2017 through December 2017, Mr. Burnett served as Interim Chief Financial Officer and Chief Administration Officer of Palmetto Clean Technology. From August 2016 through August 2018, Mr. Burnett served as Chief Financial Officer, and from August 2018 through September 2020, Mr. Burnett served as CEO Consultant for Interlink Electronics, Inc. (Nasdaq:LINK) and affiliated entities. Prior to his work at Interlink, Mr. Burnett was employed in various finance and accounting roles at EnPro Industries, Inc. (NYSE:NPO). Mr. Burnett has also worked at Grant Thornton LLP and PricewaterhouseCoopers LLP. None of the entities that employed Mr. Burnett are parents, subsidiaries, or affiliates of the Company.

There are no arrangements or understandings between Mr. Burnett and any other person pursuant to which Mr. Burnett was selected as Chief Financial Officer other than the Employment Agreement described below. Mr. Burnett does not have any familial relationships with any executive officer or director of the Company. The Company has not engaged in any prior transactions with Mr. Burnett requiring disclosure under Item 404(a) of Regulation S-K.

In connection with Mr. Burnett’s employment and also effective December 1, 2021 (the “Effective Date”), the Company entered into an Executive Employment Agreement by and among the Company, HQ LTS Corporation, a wholly-owned subsidiary of the Company (the “Subsidiary”), and Mr. Burnett (the “Employment Agreement”).

The Employment Agreement provides for Mr. Burnett to serve as the Company’s Chief Financial Officer during an initial term through November 30, 2023 (the “Term”) and to receive an annual base salary of $225,000, payable at periodic intervals in accordance with the Subsidiary’s normal payroll practices. Mr. Burnett 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, 2022 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.

At the next meeting of the Company’s Compensation Committee of the Board of Directors, Mr. Burnett will be 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. Burnett’s employment under certain conditions. Mr. Burnett is also entitled to vacation and other employee benefits in accordance with the Subsidiary’s policies.

Mr. Burnett’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. Burnett 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. Burnett’s expense. If Mr. Burnett’s employment is terminated due to death or disability, Mr. Burnett or his estate is also entitled to an amount equal to the base salary Mr. Burnett 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. Burnett resigns for “good reason” (as each of those terms is defined in the Employment Agreement), Mr. Burnett 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. Burnett’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. Burnett’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. Burnett 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. Burnett’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. Burnett 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.

As of the Effective Date and in connection with Mr. Burnett’s appointment as Chief Financial Officer, Cory Smith will step down as Chief Financial Officer. Mr. Smith will continue his employment with the Company as Chief Accounting Officer pursuant to the terms of his existing employment agreement dated July 15, 2021 and filed with the SEC on July 19, 2021.