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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Appointments of Chief
Financial Officer and Chief Accounting Officer
On May 6, 2020, the board
of directors (the “Board”) of Atlas Technical Consultants, Inc. (the “Company”) announced a series of
leadership appointments, including those discussed below.
Walter Powell, currently
the Company’s Chief Financial Officer, has been appointed to serve instead as the Chief Accounting Officer of the Company,
effective May 11, 2020. David D. Quinn Sr., currently the Company’s Executive Vice President, Corporate Affairs, has been
appointed to replace Mr. Powell as Chief Financial Officer of the Company, effective May 11, 2020.
Messrs. Quinn and Powell’s
full biographies and, to the extent applicable, the information required by Item 404(a) of Regulation S-K, are included in the
Company’s registration statement on Form S-1, filed by the Company with the Securities and Exchange Commission on April
20, 2020 (the “Registration Statement”). Messrs. Quinn and Powell’s compensation is also described in the Registration
Statement.
There are no arrangements
or understandings between either of Messrs. Quinn or Powell and any other persons pursuant to which they were appointed
as Chief Accounting Officer and Chief Financial Officer, respectively. Neither Mr. Powell nor Mr. Quinn has any relationships
requiring disclosure under Item 401(d) of Regulation S-K or has any direct or indirect material interests in any transaction requiring
disclosure under Item 404(a) of Regulation S-K.
Entry into Amended and
Restated Employment Agreement with Walter Powell
Effective as of May 11,
2020, the Company entered into an amended and restated employment agreement with Mr. Powell in his capacity as Chief Accounting
Officer (the “Powell Employment Agreement”). The term of Mr. Powell’s employment under the Powell Employment
Agreement commenced on May 11, 2020 and continues until May 11, 2023 unless otherwise terminated. After the initial three-year
term, the term of Mr. Powell’s employment is automatically extended for subsequent one-year periods unless either party
provides written notice of non-renewal at least 60 days prior to the expiration of the then-current initial term or renewal term.
Under the terms of the Powell
Employment Agreement, Mr. Powell (i) receives an annualized base salary of $330,000 (the “Powell Base Salary”); (ii)
is eligible to receive an annual bonus with a target opportunity of 50% of the then-current Powell Base Salary (the “Powell
Target Bonus”), with the actual amount to be determined based on financial metrics to be decided by the Board; (iii) is
eligible to receive annual equity grants pursuant to the Company’s long term incentive plan; and (iv) is entitled to a monthly
car allowance of $1,400.
If Mr. Powell’s employment
under the Employment Agreement is terminated due to his death or permanent disability, by the Company without “Cause”
or by Mr. Powell for “Good Reason” (both terms as defined in the Powell Employment Agreement), he will be entitled
to (i) all accrued but unpaid Powell Base Salary, unreimbursed expenses and other accrued obligations under the Company’s
employee plans through the date of termination (the “Powell Accrued Obligations”); (ii) an amount equal to 100% of
the then-current Powell Base Salary, payable in equal installments over twelve months in accordance with the Company’s payroll
practices; (iii) a pro-rata bonus for the year of termination, calculated based on actual performance; and (iv) in the case of
a termination by the Company without “Cause” or by Mr. Powell for “Good Reason” only, (x) continuation
of health benefits under COBRA at the same cost applicable to active employees of the Company for up to 12 months and (y) accelerated
vesting of equity awards that would have vested in the one-year period immediately following the date of such termination (with
any unvested performance-based awards deemed achieved based on the greater of actual and target performance) (items (i) through
(iv), collectively, the “Powell Severance”). If the Powell Employment Agreement is terminated by the Company without
“Cause” or by Mr. Powell for “Good Reason” within the 90 days prior to, or two-year period following,
a Change in Control (as defined in the Powell Employment Agreement), he will be entitled to receive (i) the Powell Severance;
and (ii) accelerated vesting of all outstanding equity awards (with any unvested performance-based awards deemed achieved based
on the greater of actual and target performance). If the Powell Employment Agreement is terminated by Mr. Powell without Good
Reason or by the Company for Cause, he will be entitled to only the Powell Accrued Obligations, and if the agreement is terminated
due to non-renewal by either party, Mr. Powell will receive the Powell Accrued Obligations and accelerated vesting of equity awards
that would have vested in the one-year period immediately following the date of such termination (with any unvested performance-based
awards deemed achieved based on the greater of actual and target performance). Notwithstanding the above, any payments to Mr.
Powell following the termination of the Employment Agreement are contingent on Mr. Powell signing and not revoking a release of
claims and compliance with the terms of the Powell Employment Agreement.
The Powell Employment Agreement
also includes perpetual confidentiality, work product and non-disparagement covenants, as well as non-competition and non-interference
covenants that apply during employment and for a period of 12 months following the termination of Mr. Powell’s employment,
except for certain terminations following a Change in Control (as defined in the Powell Employment Agreement), in which case the
non-interference covenants continue to apply for 24 months following the termination of Mr. Powell’s employment.
The foregoing description of the Powell Employment Agreement
does not purport to be complete and is qualified in its entirety by the full text of the Powell Employment Agreement, which will
be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending June 30, 2020.
Entry into Employment Agreement with David D. Quinn
Sr.
Effective as of May 11, 2020, the Company entered into
an employment agreement with Mr. Quinn in his capacity as Chief Financial Officer (the “Quinn Employment Agreement”).
The term of Mr. Quinn’s employment under the Quinn Employment Agreement commenced on May 11, 2020 and continues until May
11, 2023 unless otherwise terminated. After the initial three-year term, the term of Mr. Quinn’s employment is automatically
extended for subsequent one-year periods unless either party provides written notice of non-renewal at least 60 days prior to the
expiration of the then-current initial term or renewal term.
Under the terms of the Quinn Employment Agreement, Mr.
Quinn (i) receives an annualized base salary of $370,000 (the “Quinn Base Salary”); (ii) is eligible to receive an
annual bonus with a target opportunity of 75% of the then-current Quinn Base Salary (the “Quinn Target Bonus”), with
the actual amount to be determined based on financial metrics to be decided by the Board; (iii) is eligible to receive annual equity
grants pursuant to the Company’s long term incentive plan; and (iv) is entitled to a monthly car allowance of $1,400.
If Mr. Quinn’s Employment Agreement is terminated due to his
death or permanent disability, by the Company without “Cause” or by him for “Good Reason” (both terms as
defined in the Quinn Employment Agreement), he will be entitled to (i) all accrued but unpaid Quinn Base Salary, unreimbursed expenses
and other accrued obligations under the Company’s employee plans through the date of termination (the “Quinn Accrued
Obligations”); (ii) an amount equal to 100% of the then-current Quinn Base Salary, payable in equal installments over twelve
months in accordance with the Company’s payroll practices; (iii) a pro-rata bonus for the year of termination, calculated
based on actual performance; and (iv) in the case of a termination by the Company without “Cause” or by Mr. Quinn for
“Good Reason” only, (x) continuation of health benefits under COBRA at the same cost applicable to active employees
of the Company for up to 12 months and (y) accelerated vesting of equity awards that would have vested in the one-year period immediately
following the date of such termination (with any unvested performance-based awards deemed achieved based on the greater of actual
and target performance) (items (i) through (iv), collectively, the “Quinn Severance”). If the Quinn Employment Agreement
is terminated by the Company without “Cause” or by Mr. Quinn for “Good Reason” within the 90 days prior
to, or two-year period following, a Change in Control (as defined in the Quinn Employment Agreement), he will be entitled to receive
(i) the Quinn Severance; and (ii) accelerated vesting of all outstanding equity awards (with any unvested performance-based awards
deemed achieved based on the greater of actual and target performance). If the Quinn Employment Agreement is terminated by Mr.
Quinn without Good Reason or by the Company for Cause, he will be entitled to only the Quinn Accrued Obligations, and if the agreement
is terminated due to non-renewal by either party, Mr. Quinn will receive the Quinn Accrued Obligations and accelerated vesting
of equity awards that would have vested in the one-year period immediately following the date of such termination (with any unvested
performance-based awards deemed achieved based on the greater of actual and target performance). Notwithstanding the above, any
payments to Mr. Quinn following the termination of the Employment Agreement are contingent on Mr. Quinn signing and not revoking
a release of claims and compliance with the terms of the Quinn Employment Agreement.
The Quinn Employment Agreement also includes perpetual
confidentiality, work product and non-disparagement covenants, as well as non-competition and non-interference covenants that apply
during employment and for a period of 12 months following the termination of Mr. Quinn’s employment, except for certain terminations
following a Change in Control (as defined in the Quinn Employment Agreement), in which case the non-interference covenants continue
to apply for 24 months following the termination of Mr. Quinn’s employment.
The foregoing description of the Quinn Employment Agreement
does not purport to be complete and is qualified in its entirety by the full text of the Quinn Employment Agreement, which will
be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending June 30, 2020.