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OPTION CANCELLATION AGREEMENT
This OPTION CANCELLATION AGREEMENT (this “Agreement”) is entered into effective
as of May 31, 2018 by and between BG Staffing, Inc., a Delaware corporation (the
“Company”), and L. Allen Baker, Jr. (the “Optionee”).
RECITALS
WHEREAS, Optionee is the holder of certain options to purchase common stock, par
value $0.01 per share, of the Company as described on Exhibit A hereto (the
“Options”). The Options were granted pursuant to the Company’s 2013 Long-Term
Incentive Plan, as amended (the “Plan”); and

WHEREAS, the Company and the Optionee have agreed to the cancellation and
termination of the Options pursuant to the terms of this Agreement.

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Optionee hereby agree as follows:
1.Option Payment. In exchange for the cancellation and termination of the
Options as set forth in Section 2 of this Agreement, the Company will pay to
Optionee an aggregate amount equal to (a) the product of (1) $18.00 multiplied
by (2) the number of shares underlying the Options, minus (b) the aggregate
exercise price of the Options. Such payment will be paid in the form of cash by
the Company’s regular payroll process and will be subject to applicable federal,
state, and local withholding taxes. The payments Optionee receives for the
cancellation and termination of the Options will be taxable compensation to
Optionee and reported in accordance with applicable law. All withholding taxes
will be withheld and remitted to the appropriate taxing authority and such
remittance will be deemed a payment of amounts owed to Optionee under this
Agreement.
2.    Cancellation and Termination. Effective as of the date hereof: (a) all of
the Options are hereby automatically and irrevocably cancelled and terminated in
exchange for the consideration described in Section 1 of this Agreement, and
such Options are of no further force and effect; and (b) except as expressly
provided herein, no party shall have any further rights, duties, liabilities, or
obligations whatsoever related to the Options (including under the Plan or any
option agreement).
3.    Release. Optionee, for himself, and his heirs, administrators, successors,
and assigns, does hereby irrevocably release the Company and its subsidiaries
and their respective successors, assigns, and past, present, and future
directors, officers, employees, shareholders, partners, members, managers,
attorneys, representatives, and agents from any claim, demand, proceeding, cause
of action, order, obligation, contract, agreement, debt, or liability
whatsoever, whether known or unknown, foreseeable or unforeseeable, liquidated
or unliquidated, both at law and equity, with respect to the Options (including
under the Plan or any option agreement), which may currently exist or may exist
in the future; provided, however, that, without limiting the foregoing, nothing
contained herein shall operate to release any obligation of the Company to
Optionee arising under this Agreement.
4.    Representations and Warranties. The Optionee represents and warrants to
the Company that: (a) the Optionee owns the Options beneficially and of record,
free and clear of any liens, claims, restrictions, security interests, or other
encumbrances; (b) that the grant date(s), number of shares subject to the
Options, and option price per share as set forth on Exhibit A are true, correct,
and complete in all respects; (c) the Optionee has all requisite power,
authority, and capacity to execute, deliver, and perform this

 

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Agreement; (d) no authorization, consent, or approval of any person or entity is
required to be obtained or made by Optionee in connection with the execution and
delivery of this Agreement; and (e) this Agreement is the valid and binding
obligation of Optionee.
5.    Review of Agreement. Optionee acknowledges and agrees: (a) that he is
voluntarily executing this Agreement, that Optionee has carefully read and fully
understands all aspects thereof, and that Optionee has been advised to consult
with an attorney prior to executing this Agreement, and that Optionee has either
done so or knowingly waived such right; and (b) that the Company has not made
any representation to the Optionee regarding the tax implications of the
transactions contemplated hereby and that Optionee has relied upon Optionee’s
own advisors for any tax advice relevant to such transactions.
6.    Waiver of Notice. Optionee hereby waives any notice or other requirements
relating to termination and cancellation of the Options that may be set forth in
the Plan, any option agreements, or any other agreement relating to the Options.
7.    Further Assurances. Optionee agrees to execute, acknowledge, and deliver
such documents and to take such actions as are reasonably requested to carry out
the intent of this Agreement.
8.    Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
hereby and supersedes all prior representations, warranties, agreements,
arrangements, and understandings relating thereto.
9.    Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of Delaware, without regard to the principles of conflicts of law.
10.    Amendment; Waiver. Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed, in
the case of an amendment, by the parties hereto, in the case of a waiver, by
each party against whom the waiver is to be effective.
11.    Assignment. Neither this Agreement nor any of the rights, interests, or
obligations hereunder may be assigned by any party, whether by operation of law
or otherwise, without the express written consent of the other parties hereto.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the parties and their respective
successors, heirs, legal representatives, and permitted assigns.
12.    Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
13.    Counterparts. This Agreement may be executed in any number of
counterparts, and each of these shall be deemed an original and all of which,
taken together, constitute the same Agreement. Delivery of an executed
counterpart by facsimile or email is equally as effective as delivery of an
original executed counterpart.
[Signature page follows.]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
effective as of the date first written above.

                            
BG STAFFING, INC.

By: /s/ Dan Hollenbach
Name: Dan Hollenbach
Title: CFO & Secretary

/s/ L. Allen Baker, Jr.
L. Allen Baker, Jr.

By her signature below, the spouse of the individual entering in this Option
Cancellation Agreement with BG Staffing, Inc. acknowledges that she has read
this Option Cancellation Agreement and is familiar with the terms and provisions
stated herein, and agrees to be bound by all of its terms and conditions.

/s/ Debra L. Baker
Name: Debra L. Baker

 
[Option Cancellation Agreement]

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EXHIBIT A

Cancelled Options

Grant Date
Number of Options Subject to this Agreement
Exercise Price
February 6, 2014
32,000
$6.25
February 6, 2014
70,000
$6.25
February 6, 2014
170,271
$6.25
June 9, 2015
12,617
$11.00