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

Grants of Performance Stock Units to Named Executive Officers

On January 13, 2021, upon the recommendation of its Compensation Committee (the "Committee") in an effort to further align management compensation with value creation, the board of directors (the "Board") of BSQUARE Corporation (the "Company") approved performance stock unit awards ("PSUs") to the Company's named executive officers, as defined in Regulation S-K Item 402(a)(3), as follows:





   Recipient                            Title                          Number of PSUs
Ralph Derrickson        Chief Executive Officer and President             300,000
 Chris Wheaton     Chief Financial Officer, Secretary and Treasurer       200,000

The vesting of the PSUs is subject to both stock performance and service conditions. If the volume-weighted average price of the Company's common stock during any 180 calendar day-period in the period beginning on January 5, 2021 and ending on July 4, 2025 equals or exceeds $3.25, $4.25 and $6.25 (each, a "Performance Condition"), then one-third of the PSUs will become eligible to vest at each such price. Vesting is also subject to the recipient's continued employment with the Company through the applicable vesting dates, which occur upon the later of: (i) the date of achievement of the applicable Performance Condition, or (ii) the service vesting date, which service vesting date occurs over a four-year period commencing on January 5, 2021, with 25% of the shares eligible to vest on January 5, 2022 and the remaining shares eligible to vest in equal installments each quarterly anniversary thereafter.

The PSU award eliminates the cash compensation component of the Annual Bonus Plan for the named executives, effective January 1, 2021.

The PSUs are contingent upon the execution by the award recipient of the Company's standard form of Performance Stock Unit Agreement (the "PSU Agreement") for use under the Company's Fourth Amended and Restated Stock Plan (the "Plan"), and will be subject to the terms and conditions of the Plan. A form of the PSU Agreement is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Non-Employee Director Compensation

On January 13, 2021, upon the recommendation of the Committee in an effort to further align director compensation with value creation, the Board revised its non-employee director compensation practices to: (i) cease to award options to new directors and to new chairpersons of the Board, and (ii) provide that all types of restricted stock units ("RSUs") awarded in the future to directors will settle for that number of shares of Company common stock determined by dividing the applicable aggregate dollar amount by the greater of the closing stock price per share of Company common stock on the date of grant or $3.25 per share.

Any such RSU awards will be contingent upon the execution by the award recipient of the Company's revised form of Restricted Stock Unit Agreement (the "RSU Agreement") for use under the Plan and will be subject to the terms and conditions of the Plan. The Company's revised form of RSU Agreement is attached to this Form 8-K as Exhibit 10.2 and incorporated herein by reference.




Item 9.01    Financial Statements and Exhibits.



(d) Exhibits

Exhibit Description 10.1 Form of Performance Stock Unit Agreement 10.2 Form of Restricted Stock Unit Agreement

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BSQUARE CORPORATION

   Date: January 15, 2021 By:   /s/ Christopher Wheaton
                                Christopher Wheaton
                                Chief Financial Officer, Secretary and Treasurer

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