þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-0656684
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(State of Incorporation)
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(I.R.S. Employer Identification Number)
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5850 Granite Parkway, Suite 730, Plano, Texas
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75024
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of Exchange on Which Registered
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Common Stock, par value $0.01 per share
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NYSE MKT LLC
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller Reporting Company
þ
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Page
No.
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PART III
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PART IV
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•
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Our Class I director is L. Allen Baker, Jr., and the term of such director will expire at the 2018 annual meeting of stockholders;
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•
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Our Class II directors are Richard L. Baum, Jr. and Paul A. Seid, and the term of each director will expire at the 2016 annual meeting of stockholders; and
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•
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Our Class III directors are C. David Allen, Jr. and Douglas E. Hailey, and the term of each director will expire at the 2017 annual meeting of stockholders.
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Name
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Age
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Position
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|
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L. Allen Baker, Jr.
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66
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President and Chief Executive Officer
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Dan Hollenbach
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60
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Chief Financial Officer and Secretary
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•
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L. Allen Baker, Jr., our President and Chief Executive Officer;
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•
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Dan Hollenbach, our Chief Financial Officer and Secretary; and
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•
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Michael A. Rutledge, who served as our Chief Financial Officer and Secretary until August 2015.
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Name and
Principal Position |
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Year
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Salary ($)
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Bonus ($)
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Stock
Awards ($) (*) |
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Option
Awards ($) (*) |
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Non-equity
incentive plan compensation ($) |
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Non-qualified
deferred compensation earnings ($) |
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All Other
Compensation ($) |
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Total ($)
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L. Allen Baker, Jr.(1)
President and Chief Executive Officer
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2015
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$325,000
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$278,750
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(2)
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$—
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$54,814
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$—
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$—
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$19,733
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(3)
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$678,297
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2014
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$325,000
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$32,500
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(4)
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$509
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$929,683
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$—
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$—
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$20,925
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(5)
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$1,308,617
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|
|
|
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Michael A. Rutledge
Chief Financial Officer and Secretary
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2015
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$142,152
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$—
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|
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$—
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$—
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$—
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$—
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$57,106
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(6)
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$199,258
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|
2014
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$210,000
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$—
|
|
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$549
|
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$149,568
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$—
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$—
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$20,134
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(7)
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$380,251
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|
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Dan Hollenbach
Chief Financial Officer and Secretary
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2015
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$76,729
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$17,500
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$—
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$119,921
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$—
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$—
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$19,863
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(8)
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$234,013
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|
2014
|
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$—
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$—
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|
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$—
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$—
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$—
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$—
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$—
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|
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$—
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(*)
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The amounts reflects the dollar amounts recognized for financial statement reporting purposes in accordance with FASB ASC Topic 718. The assumptions used in the calculation of these amounts are included in Note 13 Share-based Compensation to the audited consolidated financial statements included in the Original Form-K.
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(1)
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Mr. Baker also serves on our board of directors, but does not receive additional compensation to do so.
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(2)
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Includes $178,750 of
2015
bonus was earned in
2015
and $100,000 discretionary bonus paid in
2015
.
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(3)
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Includes $11,750 representing matching 401(k) contributions made by us and $7,983 in medical benefits.
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(4)
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2014
bonus was earned in
2014
and paid in
2015
.
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(5)
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Includes $11,750 representing matching 401(k) contributions made by us and $9,175 in medical benefits.
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(6)
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Includes $5,525 representing matching 401(k) contributions made by us, $11,062 in medical benefits, and $40,519 in relation to his amended separation agreement effective August 24, 2015.
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(7)
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Includes $20,099 in medical benefits and $35 of other perquisites.
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(8)
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Includes $19,825 in taxable moving expenses and $38 of other perquisites.
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•
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at least 85% of the approved adjusted EBITDA budget for the fiscal year, then Mr. Baker receives a cash bonus in an amount equal to 10% his annual base salary for the applicable employment period in which the calendar year ends (or such greater amount as decided by our board of directors);
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•
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at least 95% of the approved adjusted EBITDA budget for the fiscal year, then Mr. Baker receives a cash bonus in an amount equal to 25% of his annual base salary for the applicable employment period in which the calendar year ends (or such other greater amount as decided by our board of directors);
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•
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at least 100% of the approved adjusted EBITDA budget for the fiscal year, then Mr. Baker receives a cash bonus in an amount equal to 40% of his annual base salary for the applicable employment period in which the calendar year ends (or such other greater amount as decided by our board of directors); and
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•
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at least 110% of the approved adjusted EBITDA budget for the fiscal year, then Mr. Baker receives a cash bonus in an amount equal to 55% of his annual base salary for the applicable employment period in which the calendar year ends (or such other greater amount as decided by our board of directors).
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Name
(*)
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Option Awards
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||||||||||
Grant date
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Number of securities underlying unexercised options (#) exercisable
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Number of securities underlying unexercised options (#) unexercisable
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Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)
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Option exercise price ($)
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Option expiration date
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||||||
(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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L. Allen Baker, Jr.
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06/09/2015
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6,000
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24,000
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(1)
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—
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$
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11.00
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06/09/2025
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|
02/06/2014
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170,271
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—
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(2)
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—
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$
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6.25
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02/06/2024
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02/06/2014
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17,402
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—
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(2)
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—
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$
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12.50
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02/06/2024
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02/06/2014
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28,000
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42,000
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(3)
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—
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$
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6.25
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02/06/2024
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02/06/2014
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32,000
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48,000
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(4)
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—
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$
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6.25
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02/06/2024
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|
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Dan Hollenbach
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10/27/2015
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13,000
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52,000
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(5)
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—
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$
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11.07
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10/27/2025
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(*)
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Michael A. Rutledge held no options at
December 27, 2015
.
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(1)
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Nonqualified stock options vested one-fifth on June 9, 2015 and the remainder of the options vest in four equal annual increments beginning on June 9, 2016.
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(2)
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Nonqualified stock options vested in full on the date of grant
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(3)
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Nonqualified stock options vested one-fifth on February 6, 2014 and the remainder of the options vest in four equal annual increments beginning on February 6, 2015.
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(4)
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Incentive stock options vested one-fifth on February 6, 2014 and the remainder of the options vest in four equal annual increments beginning on February 6, 2015.
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(5)
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Incentive stock options vested one-fifth on October 27, 2015 and the remainder of the options vest in four equal annual increments beginning on October 27, 2016.
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Name
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Board Member
($)
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Audit Committee ($)
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Compensation Committee
($) |
Nominating & Governance Committee ($)
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Chairman of the Board
($)
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Total
($) |
||||||||||||
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C. David Allen, Jr.
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$
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15,000
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$
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5,000
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$
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5,000
|
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$
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—
|
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$
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—
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$
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25,000
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Richard L. Baum, Jr.
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$
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15,000
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$
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5,000
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$
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15,000
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$
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15,000
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$
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—
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$
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50,000
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Douglas E. Hailey
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$
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15,000
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$
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30,000
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$
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—
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$
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5,000
|
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$
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—
|
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$
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50,000
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Paul A. Seid
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$
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15,000
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$
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—
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$
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5,000
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$
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5,000
|
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$
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—
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$
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25,000
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Name
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Fees earned or paid in cash
($) |
Stock awards
($) |
Option awards
($) (*) |
Non-equity incentive plan
compensation ($) |
Nonqualified deferred
compensation earnings ($) |
All other compensation
($) |
Total
($) |
||||||||||||||
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C. David Allen, Jr.
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$
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25,000
|
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$
|
—
|
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$
|
6,852
|
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$
|
—
|
|
$
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—
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$
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—
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$
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31,852
|
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Richard L. Baum, Jr.
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$
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50,000
|
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$
|
—
|
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$
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6,852
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
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$
|
56,852
|
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Douglas E. Hailey
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$
|
50,000
|
|
$
|
—
|
|
$
|
6,852
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
56,852
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|
Paul A. Seid
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$
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25,000
|
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$
|
—
|
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$
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6,852
|
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$
|
—
|
|
$
|
—
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|
$
|
—
|
|
$
|
31,852
|
|
*
|
The amounts reflects the dollar amounts recognized for financial statement reporting purposes in accordance with FASB ASC Topic 718. The assumptions used in the calculation of these amounts are included in Note 13 Share-based Compensation to the audited consolidated financial statements included in the Original Form-K.
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•
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each person, or group of affiliated persons, known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
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•
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each of our named executive officers and directors; and
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•
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all our executive officers and directors as a group.
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Name of Beneficial Owner
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Shares of
Common Beneficially Stock Owned |
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Percent of
Common Stock Beneficially Owned |
||
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Dan Hollenbach
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|
13,000
|
(1)
|
|
*
|
|
L. Allen Baker, Jr.
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472,192
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(2)
|
|
6.1
|
%
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Douglas E. Hailey
|
|
108,519
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(3)
|
|
1.5
|
%
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Richard L. Baum, Jr.
|
|
81,596
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(4)
|
|
1.1
|
%
|
C. David Allen, Jr.
|
|
5,250
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(5)
|
|
*
|
|
Paul A. Seid
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|
75,147
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(6)
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1.0
|
%
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All executive officers and directors as a group (6 total)
|
|
755,704
|
|
|
9.8
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%
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Micheal A. Rutledge
|
|
20,050
|
|
|
*
|
|
Michael N. Taglich
(9)
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|
621,534
|
(7)
|
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8.4
|
%
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Robert F. Taglich
(9)
|
|
474,867
|
(8)
|
|
6.4
|
%
|
*
|
Less than 1%.
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(1)
|
Includes 13,000 shares of common stock issuable upon exercise of stock options.
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(2)
|
Includes 289,673 shares of common stock issuable upon exercise of stock options and 182,519 shares of common stock held by a trust.
|
(3)
|
Includes 16,748 shares of common stock issuable upon exercise of stock options.
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(4)
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Includes 5,250 shares of common stock issuable upon exercise of stock options, 65,111 shares of common stock held by a private investment company controlled by Mr. Baum, and 5,388 shares of common stock held by a family trust.
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(5)
|
Includes 5,250 shares of common stock issuable upon exercise of stock options.
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(6)
|
Includes 5,250 shares of common stock issuable upon exercise of stock options.
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(7)
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Includes 41,870 shares of common stock held by a private investment company controlled by Mr. Taglich, 10,000 shares of common stock held by a partnership 50% controlled by Mr. Taglich, 63,433 shares of common stock registered in the name of an individual third party but over which Mr. Taglich has voting and investment control, 34,777 shares of common stock issuable upon exercise of warrants to purchase shares of common stock, and 12,204 shares of common stock held by Mr. Taglich as custodian for third parties.
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(8)
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Includes 220 shares of common stock registered in the name of an individual third party but over which Mr. Taglich has voting and investment control, 10,000 shares of common stock held by a partnership 50% controlled by Mr. Taglich, 31,257 shares of common stock issuable upon exercise of warrants to purchase shares of common stock, and 4,950 shares of common stock held by Mr. Taglich as custodian for third parties.
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(9)
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The address of Michael N. Taglich and Robert F. Taglich is c/o Taglich Brothers, Inc., 790 New York Avenue, Suite 209, Huntington, New York 11743.
|
•
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the nature of the related person’s interest in the transaction;
|
•
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the material terms of the transaction, including the amount involved and type of transaction;
|
•
|
the importance of the transaction to the related person and to the Company;
|
•
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whether the transaction would impair the judgment of a director or executive officer to act in our best interest and the best interest of our stockholders; and
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•
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any other matters the Audit Committee deems appropriate.
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|
2015
|
|
2014
|
||||
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Audit Fees
(1)
|
|
$
|
237,962
|
|
|
$
|
177,236
|
|
Audit-Related Fees
(2)
|
|
121,735
|
|
|
27,117
|
|
||
Tax Fees
|
|
—
|
|
|
—
|
|
||
All Other Fees
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
359,697
|
|
|
$
|
204,353
|
|
(1)
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Audit fees consist principally of fees for the audit of our consolidated financial statements, review of our interim consolidated financial statements and services related to our acquisitions.
|
(2)
|
These fees consist principally of fees related to the preparation of SEC registration statements and U.S. Department of Labor filings.
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(2)
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Financial Statement Schedules
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(3)
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Exhibits
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BG STAFFING, INC.
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By:
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/s/ L. Allen Baker, Jr.
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Name: L. Allen Baker, Jr.
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|
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Title: President and Chief Executive Officer
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Exhibit No.
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Description
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2.1
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Asset Purchase Agreement, dated as of May 28, 2013, by and among LTN Staffing, LLC, InStaff Holding Corporation and InStaff Personnel, LLC (incorporated by reference from the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on October 10, 2013)
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2.2
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Asset Purchase Agreement, dated as of December 3, 2012, by and among BG Staffing, LLC, American Partners, Inc., Thomas Leonard, Justin Franks, Ronald Wnek, and LTN Acquisition, LLC (incorporated by reference from the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on October 10, 2013)
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2.3
|
|
Asset Purchase Agreement, dated as of February 23, 2015, between BG Finance and Accounting, Inc., BG Staffing, Inc., D&W Talent, LLC and Willis Group, LLC (incorporated by reference from the registrant’s Form 8-K filed on February 27, 2015)
|
2.4*
|
|
First Amendment to Asset Purchase Agreement, dated as of December 15, 2015, among BG Finance and Accounting, Inc., D&W Talent, LLC and Willis Group, LLC
|
2.5
|
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Asset Purchase Agreement, dated as of September 28, 2015, between BG Staffing, LLC, as Buyer, Vision Technology Services, Inc., Vision Technology Services, LLC and VTS-VM, LLC, collectively, as Sellers, and M. Scott Cerasoli and Robert Troska, Collectively, as the Selling Persons (incorporated by reference from the registrant’s Form 8-K filed on September 30, 2015)
|
2.6*
|
|
Second Amendment to Asset Purchase Agreement, dated as of March 9, 2016, among BG Finance and Accounting, Inc., D&W Talent, LLC and Willis Group, LLC
|
3.1
|
|
Certificate of Incorporation of BG Staffing, Inc. (incorporated by reference from Amendment No. 2 to the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on November 4, 2013)
|
3.2
|
|
Bylaws of BG Staffing, Inc. (incorporated by reference from Amendment No. 2 to the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on November 4, 2013)
|
4.1
|
|
Form of Common Stock Certificate (incorporated by reference from Amendment No. 1 to the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on October 28, 2013)
|
10.1**
|
|
Employment Agreement, dated as of December 3, 2012, between BG Staff Services, Inc. and Thomas Leonard (incorporated by reference from the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on October 10, 2013)
|
10.2**
|
|
Employment Agreement, dated as of May 28, 2013, between B G Staff Services, Inc. Beth Garvey (incorporated by reference from the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on October 10, 2013)
|
10.3**
|
|
BG Staffing, Inc. 2013 Long-Term Incentive Plan (incorporated by reference from the registrant’s registration statement on Form S-8 (File No. 333-193014) filed on December 20, 2013)
|
10.4**
|
|
Form of Nonqualified Stock Option Agreement (Vested Options) (incorporated by reference from the registrant’s Form 8-K filed on February 12, 2014)
|
10.5**
|
|
Form of Incentive Stock Option Agreement (incorporated by reference from the registrant’s Form 8-K filed on February 12, 2014)
|
10.6**
|
|
Form of Nonqualified Stock Option Agreement (incorporated by reference from the registrant’s Form 8-K filed on February 12, 2014)
|
10.7**
|
|
Form of Indemnification Agreement for Directors and Executive Officers (incorporated by reference from the registrant’s Form 8-K filed on February 4, 2014)
|
10.8
|
|
Amended and Restated Securities Purchase Agreement, dated as of May 28, 2013, among LTN Acquisition, LLC, LTN Staffing, LLC, BG Staffing, LLC, BG Personnel Services, LP, BG Personnel, LP, and B G Staff Services Inc., and Legg Mason SBIC Mezzanine, L.P., Brookside Pecks Capital Partners, L.P. and Brookside Mezzanine Fund II, L.P. (incorporated by reference from the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on October 10, 2013)
|
10.9
|
|
First Amendment to Amended and Restated Securities Purchase Agreement and Other Documents, dated as of November 1, 2013, by and among LTN Acquisition, LLC, LTN Staffing, LLC, BG Staffing, LLC, BG Personnel Services, LP, BG Personnel, LP, and B G Staff Services Inc., and Legg Mason SBIC Mezzanine, L.P., Brookside Pecks Capital Partners, L.P. and Brookside Mezzanine Fund II, L.P. (incorporated by reference from Amendment No. 2 to the registrant’s registration statement on Form S-1 (File No. 333-191683) filed on November 4, 2013)
|
10.10
|
|
Second Amendment to Amended and Restated Securities Purchase Agreement and Other Documents, dated as of January 29, 2014, by and among BG Staffing, Inc., BG Staffing, LLC, BG Personnel Services, LP, BG Personnel, LP, and B G Staff Services Inc., and Legg Mason SBIC Mezzanine, L.P., Brookside Pecks Capital Partners, L.P. and Brookside Mezzanine Fund II, L.P. (incorporated by reference from the registrant’s Form 8-K filed on February 4, 2014)
|
10.11
|
|
Securities Purchase Agreement, dated as of December 10, 2014, by and between BG Staffing, Inc. and the investors set forth on the signature pages thereto (incorporated by reference from the registrant’s Form 8-K filed on December 11, 2014)
|
10.12
|
|
Form of Warrant to Purchase Common Stock issued by BG Staffing, Inc. to designees of Taglich Brothers, Inc. in connection with private placement (incorporated by reference from the registrant’s Form 8-K filed on December 11, 2014)
|
10.13
|
|
Form of Subscription Agreement between BG Staffing, Inc. and the investors party thereto (incorporated by reference to the registrant’s Current Report on Form 8-K filed May 5, 2015)
|
10.14
|
|
Placement Agent Agreement, dated May 4, 2015, between BG Staffing, Inc., Taglich Brothers, Inc., and National Securities Corporation (incorporated by reference to the registrant’s Current Report on Form 8-K filed May 5, 2015)
|
10.15
|
|
Credit Agreement, dated as of August 21, 2015, among BG Staffing, Inc., as borrower, the lenders from time to time party thereto, and Texas Capital Bank, National Association, as administrative agent, swing line lender, sole lead arranger, and sole book runner (incorporated by reference from registrant’s Form 8-K filed August 25, 2015)
|
10.16
|
|
Senior Subordinated Credit Agreement, dated as of August 21, 2015, among BG Staffing, Inc., as borrower, the lenders from time to time party thereto, and Patriot Capital III SBIC, L.P., as administrative agent (incorporated by reference from registrant’s Form 8-K filed August 25, 2015)
|
10.17**
|
|
Separation Agreement, dated as of August 24, 2015, between BG Staffing, Inc., the Company, and Michael A. Rutledge (incorporated by reference to the Registrant’s Form 10-Q filed on November 2, 2015)
|
10.18**
|
|
Amendment to Separation Agreement, dated as of August 28, 2015, between BG Staffing, Inc. and Michael A. Rutledge (incorporated by reference to the Registrant’s Form 10-Q filed on November 2, 2015)
|
10.19**
|
|
Employment Agreement, entered into October 27, 2015 to be effective as of August 24, 2015, between BG Staffing, Inc. and Dan Hollenbach (incorporated by reference to the Registrant’s Form 10-Q filed on November 2, 2015)
|
10.20**
|
|
Executive Employment Agreement, entered into January 26, 2016 to be effective as of December 28, 2015, between B G Staff Services, Inc. and L. Allen Baker, Jr. (incorporated by reference from registrant’s Form 8-K filed February 1, 2016)
|
21.1***
|
|
List of Subsidiaries of the Registrant
|
23.1***
|
|
Consent of Independent Registered Public Accounting Firm (Whitley Penn LLP)
|
31.1*
|
|
Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)
|
31.2*
|
|
Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)
|
32.1†
|
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS***
|
|
XBRL Instance Document
|
101.SCH***
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL***
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF***
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB***
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE***
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
**
|
Management contract or compensatory plan or arrangement.
|
***
|
Previously filed.
|
†
|
Previously furnished. This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
|
(i)
|
$600,000 of the Year One Payment will be paid by Buyer to Seller on or before December 29, 2015, and the remainder of the Year One Payment, if any, less the agreed sum of $29,000, shall be paid by Buyer to Seller within 60 days after February 21, 2016;
|
(ii)
|
the Year Two Payment will be paid by Buyer to Seller within 60 days after February 19, 2017; and
|
(iii)
|
the Year Three Payment will be paid by Buyer to Seller within 60 days after February 25, 2018;
|
|
BUYER:
BG Finance and Accounting, Inc.
By:
/s/ L. Allen Baker, Jr.
Name: L. Allen Baker, Jr.
Title: President and CEO
|
|
BG STAFFING:
BG Staffing, Inc.
By:
/s/ L. Allen Baker, Jr.
Name: L. Allen Baker, Jr.
Title: President and CEO
|
|
SELLER:
D&W Talent, LLC
By:
/s/ Mark Willis
Name: Mark Willis
Title: President
|
|
SELLING PERSON:
Willis Group, LLC
By:
/s/ Mark Willis
Name: Mark Willis
Title: President
|
|
|
(i)
|
$600,000 of the Year One Payment will be paid by Buyer to Seller on or before December 29, 2015, and $1,000,000 of the Year One Payment will be paid by Buyer to Seller on or before March 10, 2016, and the remainder of the Year One Payment, if any, less the agreed sum of $47,000, shall be paid by Buyer to Seller within 60 days after February 21, 2016;
|
(ii)
|
the Year Two Payment, if any, will be paid by Buyer to Seller within 60 days after February 19, 2017; and
|
(iii)
|
the Year Three Payment, if any, will be paid by Buyer to Seller within 60 days after February 25, 2018;
|
|
BUYER:
BG Finance and Accounting, Inc.
By:
/s/ L. Allen Baker, Jr.
Name: L. Allen Baker, Jr.
Title: President and CEO
|
|
BG STAFFING:
BG Staffing, Inc.
By:
/s/ L. Allen Baker, Jr.
Name: L. Allen Baker, Jr.
Title: President and CEO
|
|
SELLER:
D&W Talent, LLC
By:
/s/ Mark Willis
Name: Mark Willis
Title: President
|
|
SELLING PERSON:
Willis Group, LLC
By:
/s/ Mark Willis
Name: Mark Willis
Title: President
|
|
|
Date:
|
April 25, 2016
|
/s/ L. Allen Baker, Jr.
|
|
|
L. Allen Baker, Jr.
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date:
|
April 25, 2016
|
/s/ Dan Hollenbach
|
|
|
Dan Hollenbach
|
|
|
Chief Financial Officer and Secretary
|
|
|
(Principal Financial Officer)
|