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7. Stock Based Compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Employee Stock Incentive Plan

In December 2019, our Board approved the 2019 HireQuest, Inc. Equity Incentive Plan (the “2019 Plan”). Subject to adjustment in accordance with the terms of the 2019 Plan, no more than 1,500,000 shares of common stock are available in the aggregate for the grant of awards under the 2019 Plan. No more than 1,000,000 shares may be issued in the aggregate pursuant to the exercise of incentive stock options. In addition, no more than 250,000 shares may be issued in the aggregate to any employee or consultant, and no more than 50,000 shares may be issued in the aggregate to any non-employee director in any twelve-month period. Shares of common stock available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company in any manner. The 2019 Plan was approved by our shareholders in June 2020 and became effective as of that date.

In September 2019, our Board approved a share purchase match program to encourage ownership and further align the interests of key employees and directors with those of our shareholders. Under this program, we will match 20% of any shares of our common stock purchased on the open market by or granted in lieu of cash compensation to key employees and directors up to $25,000 in aggregate value per individual within any calendar year. These shares vest on the second anniversary of the date on which the matched shares were purchased if the individual is still employed by the Company and certain other vesting criteria are met. During the first quarter 2021, we issued approximately 4,000 shares valued at approximately $61,000 under this program. During the first quarter 2020, we issued approximately 22,000 shares valued at approximately $147,000 under this program.

In the quarter ended March 31, 2021, we issued 8,166 shares of restricted common stock pursuant to the 2019 Plan valued at approximately $82,000 to members of our Board of Directors for their services in lieu of cash compensation. Of these, 6,805 shares vested equally over the following three months. The remaining 1,361 shares were issued pursuant to our share purchase match program. Also in the first quarter 2021, we issued 1,200 shares of restricted common stock to certain Board members and employees pursuant to our share purchase match program valued at approximately $12,000.

In 2020, we issued 81,943 shares of restricted common stock pursuant to the 2019 Plan valued at approximately $539,000 to members of our Board of Directors for their services in lieu of cash compensation. Of these, 61,868 shares vested equally over the following three months. The remaining 20,075 shares were issued pursuant to our share purchase match program.

Also in 2020, we issued 25,000 shares of restricted common stock to an employee pursuant to the 2019 Plan valued at approximately $179,000 for services, and to encourage retention. These shares vest over four years, with 50% vesting on September 11, 2021, and 6.25% vesting each quarter thereafter for the next eight quarters. Also in 2020, we issued 1,742 shares of restricted common stock to certain employees pursuant to our share purchase match program valued at approximately $12,000.

The following table summarizes our restricted stock outstanding at December 31, 2020, and changes during the three months ended March 31, 2021.

	Shares			Weighted average grant date price
Non-vested, December 31, 2020		283,456		$	7.18
Granted		9,366			10.03
Vested		(6,805	)		10.03
Non-vested, March 31, 2021		286,017			7.22

Stock options that were outstanding at Command Center were deemed to be issued on the date of the Merger. Outstanding awards continue to remain in effect according to the terms of the Command Center 2008 Plan, the Command Center 2016 Plan, and the corresponding award documents. There were approximately 15,000 stock options vested at March 31, 2021 and December 31, 2020.

The following table summarizes our stock options outstanding at December 31, 2020, and changes during the three months ended March 31, 2021:

	Number of shares underlying options		Weighted average exercise price per share		Weighted average grant date fair value
Outstanding, December 31, 2020		17,082	$	6.10	$	3.36
Granted		-		-		-
Outstanding, March 31, 2021		17,082		6.10		3.36

The following table summarizes our non-vested stock options outstanding at December 31, 2020, and changes during the three months ended March 31, 2021:

	Number of shares underlying options		Weighted average exercise price per share		Weighted average grant date fair value
Non-vested, December 31, 2020		2,188	$	5.50	$	3.05
Vested		-		-		-
Non-vested, March 31, 2021		2,188		5.50		3.05

The following table summarizes information about our outstanding stock options, and reflects the intrinsic value recalculated based on the closing price of our common stock of $17.25 at March 31, 2021:

	Number of shares underlying options		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Outstanding		17,082	$	6.10		5.43	$	202,582
Exercisable		14,894		6.18		5.16		164,839

At March 31, 2021, there was unrecognized stock-based compensation expense totaling approximately $659,000 relating to non-vested options and restricted stock grants that will be recognized over the next 2.4 years.