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PIA MERCHANDISING SERVICES, INC.
19900 MacArthur Boulevard, Suite 900
Irvine, California 92612

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14AINFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☒ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☐ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material under § 240.14a-12
SPAR Group, Inc.
(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):
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☐ Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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☐ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1998

TO THE STOCKHOLDERS OF PIA MERCHANDISING SERVICES, INC.
To Be Held August 31, 2020
To the Stockholders of SPAR Group, Inc.:

The 1998 Annual
You are invited to attend a Special Meeting of Stockholders (the "1998 Annual Meeting"“Special Meeting”) of PIA Merchandising Services,SPAR Group, Inc. (the "Company", a Delaware corporation ("SGRP" or "PIA"the "Corporation"), which will be held virtually (See Novel Coronavirus (COVID-19) Outbreak, below) on Monday, August 31, 2020, at 10:12:00 a.m.PM (noon), Pacific Time, on Tuesday, May 12, 1998 atEastern Time. You are invited to attend the Special Meeting virtually or by proxy (but not in person). The Sutton Place Hotel, 4500
MacArthur Boulevard, Newport Beach, California 92660,Special Meeting is being held for the following purposes:

1. To elect seven Directors of the Company to serve during the
ensuing year and until their successors are elected and
qualified.

2. To approve an amendment to the 1995 Stock Option Plan to increase
the number of shares that may be issued pursuant to such Plan
from 1,000,000 to 1,300,000.

3. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the year ending December 31,
1998.

4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.

1. To consider and vote on the stockholder proposal to increase the size of the Board by one additional director if no vacancy then exists on the Board and to elect James R. Brown Sr. as a Director of SGRP to serve until the next annual meeting of stockholders and until his successor is elected and qualified (See Proposal 1, below).
2. To adjourn or postpone the meeting.
The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. Only the stockholders of record at the close of business on March 13, 1998July 6, 2020 will be entitled to notice of and to vote at the 1998 AnnualSpecial Meeting or any adjournment or postponement thereof.

A copy of the Company's Annual Report to Stockholders and Form 10-K for
the fiscal year ended December
By Order of the Board of Directors
/s/James R. Segreto
James R. Segreto
Secretary, Treasurer and Chief Financial Officer
July 17, 2020
White Plains, New York
IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE special STOCKHOLDERS MEETING TO BE HELD VIRTUALLY ON AUGUST 31 1997 is being mailed with this Notice but is
not to be considered part of the proxy soliciting material.

By Order of the Board of Directors

CATHY L. WOOD
Secretary
April 1, 1998
Irvine, California

, 2020: THE PROXY STATEMENTIS AVAILABLE AT investors.sparinc.com/sec-filings. YOU ARE URGED TO VOTE UPON THE MATTERS PRESENTED AND TO SIGN, DATE AND RETURN PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.PROVIDED, OR CAST YOUR PROXY VOTES BY TELEPHONE OR INTERNET, AS PROVIDED IN THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD. IT IS IMPORTANT FOR YOU TO BE REPRESENTED AT THE MEETING. PROXIES ARE REVOCABLE AT ANY TIME AND THE EXECUTION OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ARE VIRTUALLY PRESENT AT THE MEETING. REQUESTS FOR ADDITIONAL COPIES OF PROXY MATERIALS SHOULD BE ADDRESSED TO CATHY L. WOOD, EXECUTIVE VICE PRESIDENT,MR. JAMES R. SEGRETO, SECRETARY, TREASURER AND CHIEF FINANCIAL OFFICER, AND SECRETARY, AT THE OFFICES OF THE COMPANY, 19900 MACARTHUR BOULEVARD,CORPORATION: SPAR GROUP, INC., 333 WESTCHESTER AVENUE, SOUTH BUILDING, SUITE 900, IRVINE,
CALIFORNIA 92718.

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PIA MERCHANDISING SERVICES,204, WHITE PLAINS, NEW YORK 10604.
SPAR GROUP, INC.
19900 MACARTHUR BOULEVARD, SUITE 900
IRVINE, CALIFORNIA 92718

333 Westchester Avenue
South Building, Suite 204
White Plains, New York 10604
PROXY STATEMENT
1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 12, 1998

SpecialMeeting of Stockholders
To Be Held On August 31, 2020
GENERAL INFORMATION
This Proxy Statement (this "Proxy Statement") is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board""Board") of PIA Merchandising Services,SPAR Group, Inc., a Delaware corporation (the "Company"("SGRP" or the "Corporation", and together with its subsidiaries, "SPAR Group" or the "Company"), for use at the 1998 AnnualSpecial Meeting of Stockholders (the "1998 Annual Meeting") to be held virtually (See Novel Coronavirus (COVID-19) Outbreak, below) on Tuesday, May 12, 1998Monday, August 31, 2020, at 10:12:00 a.m.PM (noon), PacificEastern Time at The Sutton Place Hotel, 4500 MacArthur
Boulevard, Newport Beach, California 92660, and any adjournment or postponement
thereof.(the "Special Meeting"). This Proxy Statement and the form of proxy to be utilized at the 1998
AnnualSpecial Meeting were mailed or delivered to the stockholders of the CompanySGRP on or about July 17, 2020, as filed on July 17, 2020, with the SEC.
First Special Meeting and Proxy Coding Error
This Proxy Statement concerns the Special Meeting to be held on August 31, 2020. A prior special meeting of SGRP’s stockholders was scheduled and adjourned to April 8, 1998.

MATTERS30, 2020, which included, among its proposals, a proposal that is identical to the proposal that will be voted on at the Special Meeting (the “Prior Proposal”) (i.e., a stockholder proposal to increase the size of the Board by one additional director if no vacancy then exists on the Board and to elect James R. Brown Sr. as a Director of SGRP to serve until the next annual meeting of stockholders and until his successor is elected and qualified) (the "First Special Meeting"). For more information respecting the First Special Meeting, see SGRP's Definitive Proxy Statement and Information Statement (the "First Special Meeting Proxy/Information Statement"), each filed with the Securities and Exchange Commission (the "SEC") on April 3, 2020, and SGRP's Definitive Proxy Statement and Information Statement (the "2020 Annual Meeting Proxy/Information Statement") for the Annual Meeting of SGRP’s stockholders held on May 13, 2020 (the “2020 Annual Meeting”), filed, respectively, with the SEC on May 1, 2020 and May 4, 2020. Among other proposals submitted to stockholders at the First Special Meeting, the Prior Proposal did not pass. See SGRP’s Current Report on Form 8-K respecting the First Special Meeting voting results as filed with the SEC on May 4, 2020 (the "First Special Meeting Report").
At approximately 12:15 PM, Eastern Time, on April 30, 2020, the polls (i.e., voting period) closed for the First Special Meeting (the "Poll Closing"). See the First Special Meeting Report respecting the meeting voting results.
On or around May 1, 2020, long after the Poll Closing, Mr. Robert G. Brown contacted Computershare, Inc. and Computershare Trust Company, N.A, ("Computershare"), SGRP’s transfer agent and proxy tabulator for its stockholder meetings, and Broadridge Financial Solutions, Inc. ("Broadridge"), a proxy service provider to various brokerage houses, demanding a recalculation of the voting results of the First Special Meeting. However, neither Computershare nor Broadridge calculated any votes for the First Special Meeting, which were tallied by the Corporation after the proxies were voted by the proxy agent at the First Special Meeting. See the First Special Meeting Report.
Mr. Robert G. Brown claimed to Computershare and Broadridge that the stockholder votes on a proposal to consider and grant authority to the Board to increase the size of the Board without further stockholder action if the Board deems it reasonably necessary for majority board independence under Nasdaq rules (the “Nasdaq Board Expansion Proposal”) were tabulated incorrectly because proxies representing 2,935,178 SGRP shares were delivered by Broadridge (the "Broadridge Proxies") with specific instructions to vote "NO" on the Nasdaq Board Expansion Proposal. However, the Broadridge Proxies did not give specific instructions on any other proposal, and accordingly Delaware law required the proxy agent to vote the Broadridge Proxies on the other proposals in accordance with the default instructions in the proxy reflecting the recommendations of the Board as disclosed under the QUORUM AND VOTING REQUIREMENTS caption in the First Special Meeting Proxy/Information Statement (the "Default Instructions"), which included the instruction to vote "NO" on the Prior Proposal.
After Mr. Robert G. Brown contacted it, Broadridge contacted the New York Stock Exchange (“NYSE”) (even though SGRP shares are listed on Nasdaq) regarding the NYSE’s guidance. Broadridge subsequently confirmed to the Corporation on May 18, 2020, that, since the proposal was a non-routine matter, giving specific instructions on the Nasdaq Board Expansion Proposal under the NYSE rules (which they nevertheless apply) would have been a coding error by it on its submission of the Broadridge Proxies to Computershare (the "Coding Error"). The Corporation accepts Broadridge's opinion regarding its Coding Error in the Broadridge Proxies respecting the Nasdaq Board Expansion Proposal.
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The Nasdaq Board Expansion Proposal would have been defeated whether or not Broadridge had given instructions to vote "NO", "YES" or "ABSTAIN" on such proposal as it did. A change in its instructions likewise would not have affected the outcome of any other proposal, including the rejection of the Prior Proposal, as Delaware law would still have required the proxy agent to vote the Broadridge Proxies on the other proposals in accordance with the Default Instructions. Had the Broadridge Proxies not been returned at all, the Prior Proposal would likely have instead passed. Alternatively, had the Broadridge Proxies been returned with all blanks, the proxy agent would have been required by Delaware law to vote the Broadridge Proxies on the other proposals in accordance with the Default Instructions, and the Prior Proposal would still have been rejected.
On May 4, 2020, Computershare contacted the Corporation to inform the Corporation of the possible Coding Error and confirm whether the Corporation would accept new, corrected Broadridge Proxies. The Corporation instructed Computershare that it cannot accept any changed proxies after the Poll Closing.
Delaware General Corporation Law Section 231(c) provides [Emphasis added]:
"The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery upon application by a stockholder shall determine otherwise."
On May 1, 2020, the Corporation received an email from Mr. Robert G. Brown demanding a recalculation of the voting results of the First Special Meeting. Mr. Robert G. Brown has requested that the Corporation permit Broadridge to change the Broadridge Proxies, for Computershare to accept the Broadridge changes and retabulate all of the First Special Meeting proxies, for the Corporation to reopen the polls and recount the First Special Meeting votes, whether or not the Corporation receives such a Delaware Court Order. Mr. Robert G. Brown also has demanded that, as a result, Mr. James R. Brown Sr. be immediately seated as a director on the Board.
After review of this issue, consultation with several outside counsel and discussion with the entities responsible for oversight of the voting process, the Corporation believes that the Coding Error was not a calculation error that can be remedied simply by correcting a typographical, mathematical or similar error. All votes that were cast (including the Broadridge Proxies) were voted by the proxy agent in accordance with the proxies and their specific instructions and Default Instructions and counted correctly. Rather, a change in the Broadridge Proxies for Broadridge to "correct" its Coding Error would require the submission of new, corrected proxies—after the Poll Closing —for the Broadridge Proxies. The Corporation believes that, under Delaware law, once voting on a stockholder meeting has been closed, the Corporation cannot accept new or changed proxies unless ordered to do so by the Delaware Chancery Court. The Corporation has not yet received such an order and accordingly cannot yet accept new proxies as it relates to the Broadridge Proxies and the Nasdaq Board Expansion Proposal.
Request for the Special Meeting
On May 28, 2020, SGRP electronically received delivery of a Written Request of Stockholders from Robert G. Brown, SP/R, Inc. Defined Benefit Pension Trust (the "Trust"), which is a trust for the benefit (in part) of Robert G. Brown and controlled by Robert G. Brown's children as its trustees, and Innovative Global Technologies, LLC, of which Robert G. Brown is a trustee (collectively, with Robert G. Brown and the Trust, the "Brown Group"). In it, the Brown Group requested the Special Meeting be called in order to consider and vote upon Proposal 1 (see below) (the “Special Meeting Request”). The Brown Group owns and shares voting power respecting 6,156,918 SGRP shares, or approximately 29.3% of the 21,000,919 outstanding SGRP Shares outstanding on May 28, 2020, which exceeds the minimum ownership threshold of 20% required by SGRP's By-Laws to call a special meeting of SGRP's stockholders (which threshold was 25% prior to the Brown Group requested changes approved by SGRP's stockholders on May 13, 2020). William H. Bartels did not participate in the Special Meeting Request. For further information on the Special Meeting Request, See Proposal 1 below.
Novel Coronavirus (COVID-19) Outbreak
In compliance with the orders of the applicable authorities as a result of the Novel Coronavirus (COVID-19) outbreak, the stockholders of SGRP will NOT be permitted to attend the Special Meeting in person, but they will still be able to attend by proxy or vote electronically as described in this Proxy Statement. Details regarding virtual attendance will be posted on SGRP's website, sparinc.com, under the Investor Relations Tab.
MATTER TO BE CONSIDERED
The 1998 AnnualSpecial Meeting has been called to consider and vote (1) elect seven Directorson the stockholder proposal to increase the size of the CompanyBoard by one additional director if no vacancy then exists on the Board and to elect James R. Brown Sr. as a Director of SGRP to serve duringuntil the ensuing yearnext annual meeting of stockholders and until their successors arehis successor is elected and qualified (See Proposal 1, below) and (2) approve an amendment to adjourn or postpone the 1995 Stock Option Plan to
increase the number of shares that may be issued pursuant to such Plan from
1,000,000 to 1,300,000, (3) ratify the appointment of Deloitte & Touche LLP as
the Company's independent auditors for the year ending December 31, 1998 and (4)
transact such other business as may properly come before the meeting or any
adjournment or postponement thereof.

meeting.
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RECORD DATE AND VOTING
The Board has fixed the close of business on March 13, 1998July 6, 2020 as the record date (the "Record Date""Record Date") for the determination of stockholders entitled to vote at the 1998 AnnualSpecial Meeting and any adjournment or postponement thereof. As of the Record Date, there were 21,108,352 shares outstanding 5,392,558 shares of the Company'sSGRP's common stock, $.01$0.01 par value (the "Common Stock""Common Stock"), and there were no shares outstanding of SGRP's series "A" preferred stock, $0.01 par value (the "Preferred Stock").
QUORUM AND VOTING REQUIREMENTS
Previously, Section 2.07 of the Restated By-Laws (as defined below) provided that the removal of any director from the Board requires the affirmative vote of a majority of all shares entitled to vote (the "Original Director Removal Standard"), which absolute majority also is required by Delaware law, and provided that the election of any director to the Board requires the affirmative vote of a majority of the votes cast (the "Original Director Election Standard"). Pursuant to the Delaware Settlement (see INTEREST OF CERTAIN PERSONS IN THE MATTERS TO BE ACTED UPON - Prior Actions of the Majority Stockholders and their Control Group and Related Delaware Settlement, below), Robert G. Brown, a substantial stockholder of SGRP and former Executive Chairman and current director of the Corporation, and William H. Bartels, a substantial stockholder of the Corporation and current Vice Chairman and director of the Corporation, but who retired as an employee of SGRP as of January 1, 2020 (see Bartels' Retirement and Director Compensation, below) (collectively, the "Majority Stockholders") previously agreed to the Original Director Removal Standard and Original Director Election Standard.
However, the Majority Stockholders proposed an amendment to the Original Director Removal Standard (which amendment was approved by SGRP's stockholders on May 13, 2020), despite the fact that the Majority Stockholders had previously agreed to the Original Director Removal Standard pursuant to the Delaware Settlement. The amendment to the Original Director Removal Standard provides that any director may be removed by a majority of votes cast at a stockholders meeting where a quorum is met (the "Amended Director Removal Standard"), even though less than the votes of a majority. The Amended Director Removal Standard potentially allows for the removal of a director if even only a single share voted for such removal and the remaining shares neglected to vote on such removal. Based on advice provided by Delaware counsel, SGRP management believes this amendment runs contrary to Delaware law, which provides that any such director removal requires a "majority of shares entitled to vote" standard.
Counsel has advised SGRP, and the Governance Committee agrees, that the Amended Director Removal Standard is inconsistent with Delaware law. SGRP will comply with all applicable law and not give effect to the Amended Director Removal Standard unless ordered by a court to do so as provided in Section 2.11 of the Restated By-Laws.
The Majority Stockholders also proposed an amendment to the Original Director Election Standard (which amendment was described in the 2020 Annual Meeting Proxy/Information Statement and was approved by SGRP's stockholders on May 13, 2020), despite the fact that the Majority Stockholders had previously agreed to the Original Director Election Standard pursuant to the Delaware Settlement. The amendment to the Original Director Election Standard provides that any director may be elected only by the affirmative vote of a majority of all stockholders (the "Amended Director Election Standard"), even though a majority of votes cast at a meeting at which a quorum is present vote to elect such director. This is essentially a supermajority requirement requiring more than a majority of the votes cast making it easier for holders of a significant number of shares to block an election. However, the May revisions to the Amended Director Election Standard would (if applied) only require a majority of votes cast at director elections requested by stockholders at a special meeting, making it easier for holders of a significant number of shares to approve an election held at a special meeting of SGRP’s stockholders (the "Amended Director Election Exception").
As described in the 2020 Annual Meeting Proxy/Information Statement: (i) Counsel has advised SGRP that having different election requirements for the election of directors in special meetings violates Delaware law by having differing voting standards for the same class of stock; and (ii) SGRP will comply with all applicable law and not give effect to the inconsistent Amended Director Election Exception in a special election unless ordered by a court to do so.
Each stockholder of record is entitled to one vote for each share of Common Stock on any matter coming before the Special Meeting. The holders of record of a majorityat least one-half of the outstanding shares of Common Stock entitled to vote at the Special Meeting (10,554,177 shares) must be present at the Special Meeting (virtually or by proxy) and will constitute a quorum for the transaction of business at the 1998
AnnualSpecial Meeting. As to all matters, each stockholder is entitled to one vote for
each shareShares of Common Stock held. Abstentionsentitled to vote and broker non-votesrepresented by properly executed, returned and unrevoked proxies, including shares with respect to which votes are countedwithheld or abstentions are cast or shares that are "broker non-votes" (as discussed below), will be considered present at the Special Meeting for purposes of determining a quorum.
Brokers holding shares of Common Stock for beneficial owners in "street name" must vote those shares according to any specific instructions they receive from the presence or absencebeneficial owner of the shares. However, brokers have discretionary authority to vote on "routine" proposals, (e.g., the vote to ratify the selection of the independent registered accounting firm), which means that a broker may vote on behalf of a quorumbeneficial owner for such "routine" proposals in the transactionbroker's discretion if the beneficial owner does not provide specific instructions to the broker. However, in the case of business. The Director nominees who receive the greatest numberSpecial Meeting, the proposal to be voted on by SGRP's stockholders of votesrecord is a "non-routine" proposal. Therefore, a broker may not vote on the proposal at the 1998 AnnualSpecial Meeting unless it receives specific instructions from the beneficial owner. A "broker non-vote" occurs when a broker does not vote on a particular proposal because the broker does not have discretionary voting authority for that particular proposal and has not received specific instructions from the beneficial owner or otherwise does not vote. Under applicable rules, if you hold your shares through a broker and do not instruct your broker how to vote with respect to each of the proposals to be voted on at the Special Meeting, your broker may not vote with respect to any such proposals.
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In accordance with the Restated By-Laws, votes cast for any proposal do not include abstentions, non-votes (including broker non-votes) or inconclusive votes (i.e., no box clearly checked, multiple boxes checked, and the like) respecting any candidate or matter.
As described above respecting the Amended Director Election Exception (which the Corporation will not apply), the affirmative vote of a majority of all stockholders virtually or by proxy will be elected to the Board of the Company.
Stockholders are not entitled to cumulate votes. Votes against a candidate and
votes withheld have no legal effect. In matters other thanrequired for the election of Directors,James R. Brown Sr. to serve as a director. Votes withheld and abstentions are not counted as votes against in tabulations"FOR" or "AGAINST" the director nominee and will have no effect on the outcome of the vote's
cast on proposals presented to stockholders, whereas broker non-votes are not
counted for purposeselection other being excluded from the number of determining whether a proposal has been approved.

affirmative votes cast.
All proxies whichthat are properly completed, signed and returned (or registered, completed, authenticated and submitted if by telephone or internet) prior to the 1998 AnnualSpecial Meeting will be voted. Any proxy givenvoted in accordance with the directions made thereon or, in the absence of directions, against the stockholder proposal to increase the size of the Board by one additional director if no vacancy then exists on the Board and to elect James R. Brown Sr. to serve as a stockholderDirector (See Proposal 1, below).
In accordance with the Restated By-Laws, no proposals or matters other than those specifically described above are permitted to come before the Special Meeting. If any other matters or motions are attempted to be presented at the Special Meeting, they will be ruled out of order and denied. It is the intention of the persons named in the accompanying form of Proxy to vote Proxies in accordance with their judgment on those matters or motions to the greatest extent permitted by applicable law, including any matter dealing with the conduct of the Special Meeting.
Proxies may be revoked at any time before it is exercised,prior to their exercise (1) by filing withwritten notification to the

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3 Secretary of the Company an instrument revoking it,SGRP at SGRP's principal executive offices located at 333 Westchester Avenue, South Building, Suite 204, White Plains, New York 10604, (2) by delivering a duly executed proxy bearing a later date, or (3) by the stockholder virtually attending the 1998
AnnualSpecial Meeting and voting his or her shares electronically.
PROXY STATEMENT PROPOSAL
YOU HAVE A VOTE, WE ARE ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED TO SEND US A PROXY WITH RESPECT TO THE FOLLOWING PROPOSAL TO BE VOTED UPON AT THE SPECIAL MEETING.
PROPOSAL 1 — STOCKHOLDER PROPOSAL TO INCREASE THE SIZE OF THE BOARD BY ONE ADDITIONAL DIRECTOR IF NO VACANCY THEN EXISTS ON THE BOARD AND TO ELECT JAMES R. BROWN SR. AS A DIRECTOR
Background
On May 28, 2020, SGRP electronically received delivery of a Written Request of Stockholders from the Brown Group. In it, the Brown Group requested that this special meeting of SGRP's stockholders be called in person.

order to consider and vote upon the increase of the size of the Board by one director if no vacancy exists and the appointment to the Board of James R. Brown Sr. as a director. The Brown Group owns and shares voting power which exceeds the minimum ownership threshold of 20% required by the Restated By-Laws to call a special meeting of SGRP's stockholders.
The Brown Group also called for the First Special Meeting to consider (among other things), at the Brown Group's request, the appointment to the Board of James R. Brown Sr. as a Director, but that proposal was not approved, and Mr. James R. Brown Sr. is not currently a SGRP director. For more information respecting the First Special Meeting and voting results, see the First Special Meeting Proxy/Information Statement and the First Special Meeting Report.
James R. Brown Sr. is the brother of Robert G. Brown, who was Chairman and a director and officer of SGRP through May 3, 2018, is a significant stockholder of SGRP, is part of a 13D control group, and who again became a director on April 24, 2020, pursuant to the written consents of the Brown Group and Mr. William H. Bartels (see Information in Connection with Appointment of Robert G. Brown as a Director and Background in Proposal 1 in the First Special Meeting Proxy/Information Statement). Mr. James R. Brown Sr. also is the father of director Peter W. Brown, who joined the Board of SGRP in May 2018 to represent the Brown family interests (see Determining Independence and Re-determining Status of Messrs. Mayer and Lazaretosin the Annual Meeting Proxy/Information Statement and THE BOARD OF DIRECTORS OF THE CORPORATION in the First Special Meeting Proxy/Information Statement).
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Since there is no presumption of independence under the applicable Nasdaq rules or the Charter of the Governance Committee (see Determining Independence and Re-determining Status of Messrs. Mayer and Lazaretos in Proposal 1 in the First Special Meeting Proxy/Information Statement), in the event James R. Brown Sr. is elected as a director, James R. Brown Sr. will be considered non-independent unless and until determined otherwise by the Governance Committee (if ever). SGRP expects the Governance Committee and the independent directors of the Board to determine that James R. Brown Sr. would not be independent pursuant to applicable Nasdaq rules and the Governance Committee Charter.
SGRP currently has six independent directors out of ten, and thus the Board has a majority of independent directors. The independent directors are Arthur B. Drogue, R. Eric McCarthey, Jeffrey A. Mayer, Arthur H. Baer, Panagiotis "Panos" Lazaretos and Igor Novgorodtsev. However, SGRP received notice from Messrs. Drogue and McCarthey that they will each retire as directors of SGRP, effective August 1, 2020 (the "Retirements").
Accordingly, if: (1) the vacancies created by the Retirements are not filled by new independent directors, (2) James R. Brown Sr. is appointed as a director at this Special Meeting as requested by the Brown Group and (3) the Governance Committee determines that James R. Brown Sr. is not independent, then SGRP will only have four independent directors out of nine on the Board, and therefore, SGRP will no longer have a majority independent Board as required by applicable Nasdaq rules. Alternatively, if SGRP appoints two independent directors to fill the vacancies created by the Retirements and James R. Brown is elected as a non-independent director, SGRP will have six out of eleven independent directors in compliance with applicable Nasdaq rules on director independence. The Governance Committee is continuing to identify potential independent director candidates to fill the vacancies that will be created by the Retirements. See SGRP's Current Report on Form 8-K, filed with the SEC on May 12, 2020, for further information regarding the SGRP's risk of future violations of the applicable Nasdaq rules on director independence.
This is a two-part stockholder proposal to first increase the size of the Board by one additional director if no vacancy then exists on the Board, and then to elect James R. Brown Sr. as a Director of SGRP to serve until the next annual meeting of stockholders and until his successor is elected and qualified.
James R. Brown Sr. retired in 2015 from his position as Labor Counsel for the Public Massachusetts Community College System, a system comprised of fifteen individual colleges. James R. Brown Sr. represented the community college system in labor and other areas of law, including serving as chief spokesperson and negotiator during collective bargaining contract negotiations, impact bargaining, grievance hearings, and arbitrations at the American Arbitration Association. He represented the community colleges before administrative agencies in both state and appellate courts and advised on labor and employee matters including discipline and appointments. James R. Brown Sr. also advised the community colleges regarding business contracts, compliance with the commonwealth's ethics' and public records' laws, and campus safety. James R. Brown Sr. served in his position as Labor Counsel since 1997. Prior to that, James R. Brown Sr. was a part-time labor and employment consultant to individual public higher education community colleges as well as Boston State University. James R. Brown Sr. received a BS in Finance and an MBA from Boston University. James R. Brown Sr. received a JD from New England Law-Boston.
In absence of instructions to the contrary, proxies covering shares of Common Stock will be voted against the election of the nominee.
The nominee has consented to being named in this Proxy Statement as a nominee for Director and has agreed to serve as a Director of SGRP if elected. In the event the nominee for election as Director should become unavailable to serve, it is intended that votes will be cast, pursuant to the enclosed proxy, for such substitute nominee as may be nominated by SGRP. Management has no present knowledge that the person named will be unable to serve.
No arrangement or understanding exists between the nominee and any other person or persons pursuant to which any nominee was or is to be selected as a Director or nominee.
The number of Directors on the Board is fixed at ten directors as of the date of this Proxy Statement, but may be increased to eleven directors at the Special Meeting (See Board Size, below).
Messrs. Drogue, McCarthey, Mayer, Baer, Novgorodtsev and Olivier do notsupport this proposal. Mr. Bartels, Mr. Peter Brown and Mr. Lazaretos abstained. Mr. Robert G. Brown supports this proposal.
a majority of THE BOARD OF DIRECTORS and the goVernance cobmmittee each RECOMMENDS YOU VOTE "AGAINST" the proposal and nominee identified above.
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THE BOARD OF DIRECTORS OF THE CORPORATION
The Board is responsible for overseeing the management, policies and direction of the Corporation and its subsidiaries (collectively, the "Company"), both directly and through its committees (see "Corporate Governance" below). The current members of the Board and the nominee for election to the Board are set forth below:
Name Age Position with SPAR Group, Inc.
Arthur B. Drogue 74 Chairman of the Board
Christiaan M. Olivier 55 Chief Executive Officer, President and Director
William H. Bartels 75 Vice Chairman and Director
Arthur H. Baer (1) 73 Director and Chairman of the Audit Committee
R. Eric McCarthey (2) 64 Director
Peter W. Brown 38 Director
Jeffrey A. Mayer (1) 68 Director and Chairman of the Governance Committee
Panagiotis ("Panos") N. Lazaretos (3) 47 Director
Robert G. Brown 76 Director
Igor Novgorodtsev (1) TBD Director and Chairman of the Compensation Committee
James R. Brown Sr. 73 Nominee
(1) Member of the Governance, Compensation and Audit Committees
(2) Member of the Audit Committee until August 1, 2020
(3) Member of the Compensation Committee
Arthur B. Drogue has served as a Chairman of the Board of SGRP for the past 16 months and has been an independent Director of the company since January 2013. He has previously served as the Lead Director, as the Chairman of the Governance Committee of SGRP since and as Chairman of the Special Subcommittee of the Audit Committee. Mr. Drogue also previously served as a member of SGRP’s Audit Committee and Compensation Committee. Mr. Drogue has earned the Board Fellow distinction in the National Association of Corporate Directors (a/k/a NACD) having completed the Board Professional and Board Masters courses. Mr. Drogue was Senior Vice President of Sales and Customer Development for the America's at Unilever during 2009 and 2010. Prior to that, he led Unilever's U.S. Sales and Customer Development organization through eight years of outstanding growth and earnings success while merging six separate companies into one of the U.S.'s preeminent consumer packaged goods companies with over $12 billion in annual sales. His previous professional experience includes senior management positions at Best Foods, Nabisco, Northeastern Organization (a/k/a NEO), and General Mills. Mr. Drogue also has held positions on several corporate and industry boards and has received numerous awards for his achievements. He has served on the board of GS1 U.S., has served as Chairman of the Global Marketing Committee of the Consumer Goods Forum (previously named CIES), has served as Chairman of the Board of Apollo Foods, has served as an Operating Partner at Raptor Consumer Fund, and in addition to his board service at SGRP, he has served on the board of J.M. Global Holdings, serves as Chairman of the Board of Demers Foods, serves on the board of Ruiz Foods chairing the Governance committee and serves on the Audit committee. Mr. Drogue is also a founding partner of The Resource Team, a consulting practice focusing on the consumer package goods industry. The Board concluded that Mr. Drogue should be a director of the Corporation because of his extensive experience as a director and senior manager of companies in the retail industry. Mr. Drogue will retire as director of SGRP effective August 1, 2020.
Christiaan M. Olivier serves as the Chief Executive Officer, President and a Director of SGRP and has held such positions since his appointment as Chief Executive Officer of SGRP on September 5, 2017. With over 25 years as a retail executive he has successfully led global organizations bringing positive transformation in the areas of strategy, business development, sales, marketing, client service and operations. His ability to unite groups and executives have continually grown revenue and client base within each company he has served. Prior to joining SGRP, Mr. Olivier served as President of Retail Activation with the Omnicom Group, during his tenure there he considerably increased new business. Before that, he was President at Advantage Sales and Marketing. Mr. Olivier was also Chief Executive Officer at the Smollan Group, a sales and marketing service firm located in South Africa. The Board concluded that Mr. Olivier should be a director of the Corporation because he serves as the Chief Executive Officer of the Corporation and because of his extensive experience in senior management in retail marketing and services.
William H. Bartels serves as Vice Chairman and a Director of SGRP and has held these positions since July 8, 1999 (the effective date of the Merger). He retired as an employee of the Company as of January 1, 2020 (in accordance with the actions of SGRP's Compensation Committee on January 22, 2020). See Bartels' Retirement and Director Compensation, below. Mr. Bartels most recently led the Company's domestic M&A activity, expanding SPAR's presence and building relationships throughout the industry. Recently, he located and assisted in the acquisition of Resource Plus and their affiliated marketing service and related technology and fixture manufacturing companies. Prior to the Merger, he served as Vice Chairman, Secretary, Treasurer and Senior Vice President of the SPAR Marketing Companies (a business he co-founded) since 1967. From 1967 to 1999, he was responsible for sales and marketing of the SPARLINE technology and its related consulting business for evaluating trade promotion spending and strategies for the top tier of CPG companies, domestic and international. He gained industry wide recognition for SPARLINE (which ceased being a Company product and became a related party product in 1999) as reported through numerous industry publications, while negotiating partnerships with research companies in the U.K and Australia for using the system. He has spoken at conferences in the U.S., Europe, and South America such as: Advertising Research Foundation, Promotion Marketing Association of America, European Society of Marketing Research, Advertising Age and American Management Association. When SPAR began its marketing service business, Mr. Bartels again assumed a business development role and was individually responsible for signing a significant portion of SPAR's customer revenue.
6
R. Eric McCarthey joined the Board of SGRP as of November 2015, became the Chairman of the Governance Committee effective March 1, 2020, served as the Chairman of the Audit Committee from May 2016 through February 1, 2020, and served as a member of the Compensation and Governance Committees and the Special Subcommittee of the Audit Committee through May 28, 2020. Mr. McCarthey is a member of the Audit Committee. Mr. McCarthey is currently CEO of Shelty-Viking Capital Group, LLC, a private equity holding company with principal ownership in various firms. He is a past Chairman of the Atlanta chapter of National Association of Corporate Directors. Mr. McCarthey had a 30-year career with The Coca-Cola Company and was most recently Senior Vice President, Global Commercial/Customer Strategic Planning & Execution. He had served in several global leadership roles throughout his career with The Coca-Cola Company. Mr. McCarthey also serves on the boards of two privately held companies, Interra International, where he is Chairman of the Strategy Committee and Saulsbury Industries, where he is Chairman of the Governance Committee. He had previously served on the boards of Standard Register as Chairman of the Strategy Committee until the company was sold in 2016 and Global Imaging as Chairman of the Audit Committee until the company was sold in 2007. The Board concluded that Mr. McCarthey should be a director of the Corporation because of his extensive experience in senior management and financial matters in retail marketing and services. Mr. McCarthey will retire as director of SGRP effective August 1, 2020.
Mr. Jeffrey A. Mayer joined the Board of SGRP in January 2019 and is the Chairman of the Compensation and Governance Committees and serves as a member of the Audit Committee. Mr. Mayer has had a long career as an entrepreneur and executive in the energy industry. Since 2018 Mr. Mayer has served as the executive chairman of Oasis Charger Corporation, the manufacturer and distributor of the Juice Bar EV charger systems. Since 2011 Mr. Mayer founded and served as Present and CEO of Soluxe Inc., and chairman of its subsidiaries, Solomon Energy Inc. Solomon Energy Advisors LLC, and Solomon Community Solar LLC. Since 2015 Mr. Mayer served as advisor to and venture partner of Oak Investment Partners. In addition to SPAR Group, he is a member of the Boards of Directors of Photobucket Corp. and Tomorrow Energy Inc. He serves on a number of not-for-profit boards including Kingsley Trust Association and Social Venture Partners of Connecticut. In 1999 Mr. Mayer founded, and through 2011 served as CEO and President of, and chairman or a member of the Board of, MXenergy, Inc., which was an SEC reporting entity. From 1993 through 1999, Mr. Mayer served as a managing director of AIG Trading Corporation and Sempra Energy Trading Company and as President of AIG Securities Corporation and AIG Clearing Corporation. From 1999 through 2005, Mr. Mayer served as a member of the Risk Oversight Committee of Northeast Utilities and consultant to Northeast Utilities and to Chicago Board of Trade Clearing Corporation. From 1987 through 1993, Mr. Mayer served as a Vice President of Goldman Sachs & Co., and from 1984 through 1987, Mr. Mayer served as the chief counsel of the J. Aron Commodities Division of Goldman Sachs & Co. From 1979 through 1983 Mr. Mayer served as an attorney with Barrett Smith Schapiro Simon & Armstrong in New York, NY. Mr. Mayer is a graduate of Yale University (B.A. 1973) and New York University (L.L.B. 1978). The Board concluded that Mr. Mayer should be a director of the Corporation because of his experience as a director of an SEC reporting entity, extensive management experience and legal expertise.
Arthur H. Baer serves as a Director of SGRP, became the Chairman of the Audit Committee effective February 1, 2020, serves as a member of the Audit, Compensation and Governance Committees and the Special Subcommittee of the Audit Committee, and has done so since September 3, 2019. He was a Legislator in Columbia County, New York until 2015 and previously served as the Chairman of the Board of Supervisors from January 2008 to December 2009 and as County Executive during the same period. Mr. Baer was Dean of the College of Business and Administration at Drexel University in Philadelphia from 1993 to 1996. For 20 years (from 1998 through August of 2018), he was also a Director and Audit Committee Chair for Seneca Foods, Inc., a multi-billion dollar international food company. Mr. Baer's business background also includes experience in managing businesses, senior leadership development and the evaluation of strategic opportunities and challenges. He was President of Hudson Valley Publishing from 2003 to 2008 and also held the position from 1998 to 1999. He was President of Arrow Electronics Europe from 2000 to 2002 and President of XYAN Inc. from 1996 to 1998. Mr. Baer has also served as a senior executive at Standard Brands, Northwest Industries, and Cablevision Systems. He holds a B.A. and M.B.A. from Columbia University. The Board concluded that Mr. Baer should be a director of the Corporation because of his extensive experience in senior management and financial matters and the evaluation of strategic opportunities and challenges.
Peter W. Brown joined the Board of SGRP in May 2018, served as a Board Observer to the Corporation's Board of Directors from 2014 through December 2016, serves as a director of the Corporation's Brazilian subsidiary, SPAR BSMT and owns EILLC (which owns 10% of SPAR BSMT). (See Transactions with Related Persons, Promoters and Certain Control Persons - International Related Party Services, below). He also has served as a director of Business Ideas Provider, LTD, since 2012, and represented SAS as a director of Affinity Insurance, LTD, since 2013. Mr. Peter Brown received a BS from the University of Massachusetts's School of Natural Science and an MBA from the University of Massachusetts's Isenberg School of Management.
7
Panagiotis ("Panos") N. Lazaretos. Mr. Lazaretos joined the SGRP Board on December 10, 2019, when his appointment under the Written Consents became effective (see Appointment and Election of Panagiotis ("Panos") N. Lazaretos as a Director, in the Annual Meeting Proxy/Information Statement). Mr. Lazaretos serves as a member of the Compensation Committee. Mr. Lazaretos has over 15 years of international business development experience focusing on retail service operations and on Central and Eastern Europe, Russia, the Middle East and North Africa. Mr. Lazaretos is a co-founder and significant shareholder of and since November 2017 has been the Chief Executive Officer and Chairman of the Board of Directors of Thenablers, Inc., a non-operational international business development organization that will be focused on the design and execution of new market strategies for its clients. Robert G. Brown, William H. Bartels and a number of their related parties are investors in Thenablers (although they collectively own less than one-half percent of the Thenablers outstanding stock). According to its most recent SEC Filings, Thenablers, Inc. is a development-stage company and has recorded no revenue through June 30, 2019. From time to time, Mr. Lazaretos has provided consulting services to SPAR InfoTech, Inc., an affiliate of the Corporation owned by Robert G. Brown, who retired as the Chairman and an officer and director of SGRP on May 3, 2018, and who is part of a control group with Mr. Bartels and others. February 2017 to June 2019, Mr. Lazaretos was a Director of Business Development at Sales Service International. From June 2013 to November 2016, Mr. Lazaretos was a Regional Director for Field Marketing Services for Adecco Group. From June 2002 to May 2013, Mr. Lazaretos was a Vice President of International Operations for SGRP where he worked from Greece and helped SGRP's President of International Operations and Chief Executive Officer in dealing with SGRP's largely autonomous joint venture subsidiaries and related expansions. From July 1999 to June 2002, Mr. Lazaretos was a Director of Technology at SGRP, and held the same position with one of its pre-merger predecessors from June 1997 to July 1999, where he began his career and helped them transition from a paper process to a web-based data collection and reporting platform. In May 1997, Mr. Lazaretos received a BS in Computer Science from the State University of New York, New York, at New Paltz, and from 1999 to 2001 attended MBA classes focused on information technology at Pace University.
Robert G. Brown rejoined theBoard as a director on April 24, 2020, pursuant to the written consents of the Brown Group and Mr. Bartels. (See the First Special Meeting Proxy/Information Statement). Mr. Brown served as director of SGRP from July 8, 1999, the effective date of the merger of SPAR Marketing Force, Inc., and related companies, a business he co-founded (the "SPAR Companies"), with PIA Merchandising Services, Inc. (the "Merger") creating SPAR Group Inc., until his retirement on May 3, 2018. Mr. Robert G. Brown served as the non-executive Chairman of SGRP from 2012 through such retirement, as the Executive Chairman and an Officer of SGRP from 2008 through 2012, and as the Executive Chairman, Chief Executive Officer and President of SGRP from July 8, 1999, through 2008. Prior to the Merger in 1999, Mr. Robert G. Brown served as the Chairman, President and Chief Executive Officer of the SPAR Companies since certain of its predecessors were formed in 1979.
Igor Novgorodtsev was appointed to the Board as a director on May 28, 2020 and serves as a member of the Audit, Compensation and Governance Committees. He is the CEO and founder of FlashAlert, low-latency market news service, and Managing Director of Lares Capital LLC, an investment fund. He also has served in several technology leadership roles at Bank of New York Mellon, Bridgewater Associates, and Intercontinental Stock Exchange. Mr. Novgorodtsev received a MS in Mechanical Engineering from SUNY at Buffalo and MBA from NYU Stern School of Business.
DIRECTOR NOMINEE
James R. Brown Sr. retired in 2015 from his position as Labor Counsel for the Public Massachusetts Community College System, a system comprised of fifteen individual colleges. Mr. Brown represented the community college system in labor and other areas of law, including serving as chief spokesperson and negotiator during collective bargaining contract negotiations, impact bargaining, grievance hearings, and arbitrations at the American Arbitration Association. He represented the community colleges before administrative agencies in both state and appellate courts and advised on labor and employee matters including discipline and appointments. Mr. Brown also advised the community colleges regarding business contracts, compliance with the commonwealth's ethics' and public records' laws, and campus safety. Mr. Brown served in his position as Labor Counsel since 1997. Prior to that, Mr. Brown was a part-time labor and employment consultant to individual public higher education community colleges as well as Boston State University. James R. Brown Sr. received a BS in Finance and an MBA from Boston University. Mr. Brown received a JD from New England Law-Boston.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Prior Actions of the Majority Stockholders and their Control Group and Related Delaware Settlement
On June 1, 2018, June 29, 2018, July 5, 2018, August 6, 2018 and January 25, 2019, the Majority Stockholders each filed an amended Schedule 13D with the Securities and Exchange Commission (the "SEC"), in which they each acknowledged that they "may be deemed to comprise a 'group' within the meaning of (the Securities Exchange Act of 1934)" and "may act in concert with respect to certain matters", including various listed items. Pursuant to those Schedule 13D filings, the Majority Stockholders have acted as a control group and adopted written consents to unilaterally, and without the participation of SGRP's Board, Governance Committee or other stockholders, endeavoring to: approve the selection, appointment and election of Mr. Jeffrey A. Mayer as a director of SGRP; remove Lorrence T. Kellar as an independent director of SGRP; and change the then-current By-Laws of SGRP in order to (among other things) remove authority from the Board through new supermajority requirements and stockholder only approvals (the "Proposed Amendments"), which the Governance Committee believed weakened the Board's independence, and which were contested by SGRP and ultimately concluded in a negotiated settlement that included Mayer's appointment, Mr. Kellar's forced retirement, and the adoption of SGRP's Amended and Restated By-Laws on January 18, 2019 (the "Delaware Settlement"). See Part I, Item 3 -- Legal Proceedings - RELATED PARTIES AND RELATED PARTY LITIGATION,in the 2019 Annual Report. Pursuant to the Delaware Settlement, the parties agreed to amend and restate SGRP's then-current By-Laws (the "2019 Restated By-Laws") with negotiated changes to the Proposed Amendments that preserved the current roles of the Governance Committee and Board in the location, evaluation, and selection of candidates for director and in the nominations of those candidates for the annual stockholders' meeting and appointment of those candidates to fill Board vacancies other than those under a stockholder written consent making a removal and appointment. See 2019 Restated By-Laws, below.
8
Mr. Robert G. Brown and his companies are and have been involved in a number of material adverse claims and actions against the Company. On March 6, 2020, Robert G. Brown sent an email communication demanding payment to SBS from the Company of $1,707,374. At SGRP's March 2020 Board meeting, Mr. Bartels was requested by an independent director to compile a list of claims that he and Mr. Brown believe are owed by the Company. On March 17, 2020, that list was given to the Audit Committee Chairman and included additional claims, net of an anticipated reduction, totaling approximately $1.3 million, bringing their total claims to approximately $3 million. The Company has completely rejected these unfounded and unsubstantiated claims, and believes it was released from all such claims by SBS in the SBS bankruptcy reorganization. See Domestic Related Party Services, SBS Bankruptcy and Settlement, and March 2020 Claim, below. See also Infotech Litigation and Settlement, below.
EXECUTIVES AND OFFICERS OF THE CORPORATION
Set forth in the table below are the names, ages and offices held by all Executives and Officers of the Corporation as of December 31, 2019. For biographical information regarding Christiaan M. Olivier, see The Board of Directors of the Corporation, above.
Name Age Position with SPAR Group, Inc. (1)(2)
Christiaan M. Olivier 55 Chief Executive Officer, President and a Director
James R. Segreto 71 Chief Financial Officer, Secretary and Treasurer
Kori G. Belzer 54 Chief Operating Officer
Gerard Marrone 57 Chief Revenue Officer
Steven J. Adolph 53 President International
(1) Under the Corporation's Restated By-Laws and the resolutions of the Board, each of the following individuals have been designated as both an "Executive" and an "Officer" of the Corporation except as otherwise noted below. An Executive is generally an executive officer of the Corporation and part of its senior management.
(2) Each named individual is an "at will" employee of the Company. Their nominal terms as Executives and Officers are for one year, lasting from one annual stockholders meeting to the next. However, see Potential Severance Payments upon a Change-In-Control and Termination, below.
James R. Segreto serves as Chief Financial Officer, Secretary and Treasurer of SGRP and has done so since December 14, 2007. Prior to his current position, Mr. Segreto served as Vice President and Controller of SGRP since July 8, 1999, the effective date of the Merger. Mr. Segreto served as Chief Financial Officer for Supermarket Communications Systems, Inc. from 1992 to 1997 and LM Capital, LLP from 1990 to 1992. Prior to 1992, he served as Controller of Dorman Roth Foods, Inc.
Kori G. Belzer serves as the Chief Operating Officer of SGRP and has done so since January 1, 2004. From 2000 through 2003, Ms. Belzer served as the Chief Operating Officer of SPAR Administrative Services, Inc. (then known as SPAR Management Services, Inc.) ("SAS"), and SPAR Business Services, Inc. (then known as SPAR Marketing Services, Inc.), each an affiliate of SGRP (see Transactions with Related Persons, Promoters and Certain Control Persons, below). From 1997 to 2000, Ms. Belzer served as Vice President Operations of SAS and as Regional Director of SAS from 1995 to 1997. Prior to 1995, she served as Client Services Manager for SPAR/Servco, Inc.
9
Gerard (Gerry) Marrone joined SPAR Group, Inc. as SVP Sales & Marketing in January 2017 and was promoted to Chief Revenue Officer in December of the same year. As Chief Revenue Officer he oversees all revenue generation and marketing activities for the company. He is responsible for strategic growth initiatives and expansion of the domestic business. His role includes seeking and leading strategic alliances and joint ventures and he is responsible for developing capabilities and best practices within the sales and marketing function that will be shared and implemented across the organization and the international network.
Steven J. Adolph serves as the President International of SGRP and has done so since June 21, 2016. Prior to his current position, Mr. Adolph served in several executive roles including: President of Kalamazoo Outdoor Gourmet, CEO Asia/Pacific for Invacare, Vice President International for SentrySafe and Vice-President Asia/Pacific for Equal/NutraSweet. Mr. Adolph graduated Magna Cum Laude from Duke University and has an MBA with distinction from the Kellogg School of Management at Northwestern University.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of the Company'sSGRP's Common Stock as of March 1, 199830 2020, by: (i) each person (or group of affiliated persons) who is known by the CompanySGRP to own beneficially more than 5% of the Company'sSGRP's Common Stock;Stock; (ii) each of the Company's
directors;SGRP's directors and nominee for director; (iii) each of the executive officers namedNamed Executive Officers in the Summary Compensation Table;Table; and (iv) the Company'sSGRP's directors and executive officersExecutives as a group. Except as indicated in the footnotes to this table, the persons named in the table, based on information provided by such persons, have sole voting and sole investment power with respect to all shares of Common Stockcommon stock shown as beneficially owned by them, subject to community property laws where applicable.
Title of Class Name and Address of Beneficial Owner Number of Shares
Beneficially Owned See
Note # Percentage
Common Shares William H. Bartels (1) 11,445,611 (2) 54.2%
Common Shares Christiaan M. Olivier (1) 304,390 (3) 1.4%
Common Shares Arthur B. Drogue (1) 64,000 (4) *
Common Shares R. Eric McCarthey (1) 44,000 (5) *
Common Shares Jeffrey A. Mayer (1) 30,000 (6) *
Common Shares Peter W. Brown (1) 155,210 (7) *
Common Shares James R. Segreto (1) 171,251 (8) *
Common Shares Kori G. Belzer (1) 206,745 (9) *
Common Shares Gerard Marrone (1) 40,260 (10) *
Common Shares Steven J. Adolph (1) 102,500 (11) *
Common Shares Arthur H. Baer [____TBD______] (12) *
Common Shares Panagiotis ("Panos") N. Lazaretos [______TBD____] (13) *
Common Shares Igor Novgorodtsev [_____TBD_____] (14) *
Common Shares James R. Brown Sr. [____TBD______] (15) *
Common Shares Robert G. Brown
123 Sunesta Cove Drive
Palm Beach Gardens, FL 33418 11,445,611 (2) 54.2%
Common Shares Whittier Holdings, Inc.
100 Liberty Street, Suite 890
Reno, NV 89501 1,105,455 (17) 5.24%
Common Shares All Executives and Directors 12,712,399 - 60.2%
AMOUNT OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENTAGE
- ------------------------------------ ------------------ ----------

Riordan, Lewis & Haden(1) 1,637,151 (2) 30.2
300 S. Grand* Less than 1%
(1) The address of such owners is c/o SPAR Group, Inc. 333 Westchester Avenue, 29th Floor
Los Angeles, California 90071

Clinton E. Owens 734,720 (3) 13.1
c/o PIA Merchandising Services, Inc.
19900 MacArthur Boulevard,South Building, Suite 900
Irvine, California 92718

Heartland Advisors, Inc. 1,124,200 204, White Plains, New York 10604.
(2) These shares are owned beneficially by a control group consisting of Mr. William H. Bartels, Mr. Robert G. Brown, and SP/R Defined Benefit Pension Trust ("SP/R Trust") for the benefit of Mr. Robert G. Brown and his children. Mr. Bartels owns 5,288,693 of those shares or 25.1% and Mr. Robert G. Brown owns 5,047,293 of those shares and the SP/R Trust owns 1,109,625 of those shares for a total of 29.2%.
(3) Mr. Olivier's beneficial ownership includes 296,250 shares issuable upon exercise of options.
(4) 20.8
790 North Milwaukee Street
Milwaukee, Wisconsin 53202

California Community Foundation 484,872 Mr. Drogue's beneficial ownership includes 60,000 shares issuable upon exercise of options.
(5) 8.9
606 S. Olive Street, Suite 2400
Los Angeles, California 90014

Terry R. Peets Mr. McCarthey's beneficial ownership includes 40,000 *

Michael J. Skinner 3,703 shares issuable upon exercise of options.
(6) *

Edwin J. Werner 14,071 Mr. Mayer's beneficial ownership includes 30,000 shares issuable upon exercise of options.
(7) *

Jay F. Smyre 5,500 Mr. Peter Brown's beneficial ownership includes 67,500 shares issuable upon exercise of options.
(8) *

Larry M. Dorr 137,476 Mr. Segreto's beneficial ownership includes 171,250 shares issuable upon exercise of options.
(9) 2.5

Roy L. Olofson -- *

John A. Colwell 65,359 Ms. Belzer's beneficial ownership includes 193,750 shares issuable upon exercise of options.
(10) 1.2

Patrick C. Haden 1,639,651 Mr. Marrone's beneficial ownership includes 40,000 shares issuable upon exercise of options.
(11) 30.2

Joseph H. Coulombe 15,810 Mr. Adolph's beneficial ownership includes 102,500 shares issuable upon exercise of options.
(12) *

Edwin E. Epstein 14,459 Mr. Baer's beneficial ownership includes [______TBD______]
(13) *

J. Christopher Lewis 1,639,651 Mr. Lazaretos's beneficial ownership includes [______TBD______]
(14) 30.2

All directors Mr. Novgorodtsev's beneficial ownership includes [_____TBD_______]
(15) Mr. Brown Sr.'s beneficial ownership includes [_____TBD_______]
(16) Percentage ownership is based on the total number of shares of Common Stock outstanding (21,108,352 shares) and executive officersthe number of shares of Common Stock beneficially owned (including Common Stock currently obtainable under vested options, indirectly owned through retirement plans and beneficially owned by certain family members) by such person or group, in each case as a 2,673,249 45.7
group
(12 persons)
of March 30, 2020.

* Less
10
Transactions with Related Persons, Promoters and Certain Control Persons
SGRP's policy respecting approval of transactions with related persons, promoters and control persons is contained in the SPAR Group Code of Ethical Conduct for its Directors, Executives, Officers, Employees, Consultants and other Representatives Amended and Restated (as of) March 15, 2018 (the "Ethics Code"). The Ethics Code is intended to promote and reward honest, ethical, respectful and professional conduct by each director, executive, officer, employee, consultant and other representative of any of SGRP and its subsidiaries (together with SGRP, the "Company") and each other Covered Person (as defined in the Ethics Code) in his or her position with the Company anywhere in the world, including (among other things) serving each customer, dealing with each vendor and treating each other with integrity and respect, and behaving honestly, ethically and professionally with each customer, each vendor, each other and the Company. Article II of the Ethics Code specifically prohibits various forms of self-dealing (including dealing with relatives) and collusion and Article V of the Ethics Code generally prohibits each "Covered Person" (including SGRP's officers and directors) from using or disclosing the Confidential Information of the Company or any of its customers or vendors, seeking or accepting anything of value from any competitor, customer, vendor, or other person relating to doing business with the Company, or engaging in any business activity that conflicts with his or her duties to the Company, and directs each "Covered Person" to avoid any activity or interest that is inconsistent with the best interests of the SPAR Group, in each case except for any "Approved Activity" (as such terms are defined in the Ethics Code). Examples of violations include (among other things) having any ownership interest in, acting as a director or officer of or otherwise personally benefiting from business with any competitor, customer or vendor of the Company other than 1%pursuant to any Approved Activity. Approved Activities include (among other things) any contract with an affiliated person (each an "Approved Affiliate Contract") or anything else disclosed to and approved by SGRP's Board of Directors (the "Board"), its Governance Committee or its Audit Committee, as the case may be, as well as the ownership, board, executive and other positions held in and services and other contributions to affiliates of SGRP and its subsidiaries by certain directors, officers or employees of SGRP, any of its subsidiaries or any of their respective family members. The Company's senior management is generally responsible for monitoring compliance with the Ethics Code and establishing and maintaining compliance systems, including those related to the oversight and approval of conflicting relationships and transactions, subject to the review and oversight of SGRP's Governance Committee as provided in clause IV.11 of the Governance Committee's Charter, and SGRP's Audit Committee as provided in clause I.2(l) of the Audit Committee's Charter. The Governance Committee and Audit Committee each consist solely of independent outside directors (see Domestic Related Party Services, International Related Party Services, SBS Bankruptcy, Settlement and March 2020 Claim, Summary of Certain Related Party Transactions, Infotech Litigation and Settlement, Affinity Insurance, and Other Related Party Transactions and Arrangements, below).
SGRP's Audit Committee has the specific duty and responsibility to review and approve the overall fairness and terms of all material related-party transactions. The Audit Committee receives affiliate contracts and amendments thereto for its review and approval (to the extent approval is given), and these contracts are periodically (often annually) again reviewed, in accordance with the Audit Committee Charter, the Ethics Code, the rules of the Nasdaq Stock Market LLC ("Nasdaq"), and other applicable law to ensure that the overall economic and other terms will be (or continue to be) no less favorable to the Company than would be the case in an arms-length contract with an unrelated provider of similar services (i.e., its overall fairness to the Company, including pricing, payments to related parties, and the ability to provide services at comparable performance levels). (1) SharesThe Audit Committee periodically reviews all related party relationships and transactions described below.
11
Domestic Related Party Services:
SPAR Business Services, Inc. ("SBS"), SPAR Administrative Services, Inc. ("SAS"), and SPAR InfoTech, Inc. ("Infotech"), have provided services from time to time to the Company and are related parties and affiliates of SGRP, but are not under the control or part of the consolidated Company. SBS is an affiliate because it is owned by RVM/PIA, a California limited partnership managed by
Riordan, Lewis & Haden ("RLH").

-3-

4
(2) Includes 29,729 shares issuable upon exercise of certain warrants to
purchase Common StockSBS LLC which in turn is beneficially owned by RLH.

(3) Includes 498,394 shares heldRobert G. Brown. SAS is an affiliate because it is owned by Clinton E.William H. Bartels and Mary Ann Owens as
Trusteescertain relatives of The Owens Family Trust dated June 20, 1994, 9,300 shares
heldRobert G. Brown or entities controlled by Clinton E. Owens as Trusteethem (each of whom are considered affiliates of the Welch TrustCompany for Marcia
Browningrelated party purposes). Infotech is an affiliate because it is owned principally by Robert G. Brown. Mr. Robert G. Brown and 227,026 shares issuable uponMr. Bartels (the "Majority Stockholders") (see below), are members of a 13D control group and founders of SGRP, Mr. Robert G. Brown was Chairman and an officer and director of SGRP through May 3, 2018 (when he retired), and became a director again on April 24, 2020, pursuant to the exercisewritten consents of options which
are exercisablethe Brown Group and Mr. Bartels. Mr. Bartels was and continues to be Vice Chairman and a director of SGRP, but retired as an employee of SGRP as of January 1, 2020 (seeBartels' Retirement and Director Compensation, below). Mr. Robert G. Brown and Mr. Bartels also have been and are stockholders, directors and executive officers of various other affiliates of SGRP. See Note 8 to the Company's Consolidated Financial Statements - Commitments and Contingencies – Legal Matters, and SBS Bankruptcy, Settlement and March 2020 Claimand Infotech Litigation and Settlement, below.
The Company executes its domestic field services through the services of field merchandising, auditing, assembly and other field personnel (each a "Field Specialist"), substantially all of whom are provided to the Company and engaged by independent third parties and located, scheduled, deployed and administered domestically through the services of local, regional, district and other personnel (each a "Field Administrator"), and substantially all of the Field Administrators are in turn are employed by other independent third parties.
Due to (among other things) the adverse determination in 2016 in the Clothier case (as defined below) that SBS had misclassified its employees as independent contractors and the ongoing proceedings against SBS (which could have had a material adverse effect on SBS's ability to provide future services needed by the Company), SBS' continued higher charges and expense reimbursement disputes, and the Company's identification of an experienced independent third party company (the "Independent Field Vendor") who would provide comparable services on substantially better terms, the Company terminated the services of SBS effective July 27, 2018, and the Company has engaged that Independent Field Vendor to replace those field services previously provided by SBS (other than in California). The Company similarly terminated SAS and has engaged another independent third party company to replace those administrative services formerly provided by SAS, effective August 1, 2018 (the "Independent Field Administrator").
On May 7, 2018, the Company gave a termination notice to SAS specifying July 31, 2018, as the end of the Service Term under (and as defined in) SAS Agreement signed in 2016. The Company has reached a non-exclusive agreement with an independent third party vendor to provide substantially all of the domestic Independent Field Administrators used by the Company.
Although SAS has not provided or been authorized to perform any services to the Company after their terminations described above effective on or before July 31, 2018. While SAS has apparently continued to operate for its own benefit and/or the winding down of its operations, the Company has determined that it is not obligated to reimburse any post-termination expense. However, in the spirit of settlement, the Company had offered to reimburse SAS $237,500 for claimed transition expenses to be offset by $226,000 owed by SAS to the Company, for a net payment to SAS of $11,500. SAS has not accepted the Company's offer.
The Company expects that SBS and SAS may use every available means to attempt to collect reimbursement from the Company for the foreseeable future for all of their post-termination expense, including repeated litigation. See Note 8 to the Company's Consolidated Financial Statements - Commitments and Contingencies -- Legal Matters and SBS Bankruptcy, Settlement and March 2020 Claim, below.
Any claim by Robert G. Brown, William H. Bartels, SBS, SAS, any other related party or any third party that the Company is somehow liable for any judgment or similar amount imposed against SBS or SAS or any other related party, any judicial determination that the Company is somehow liable for any judgment or similar amount imposed against SBS or SAS or any other related party, or any increase in the Company's use of employees (rather than the services of independent contractors provided by third parties) to perform Field Specialist services domestically, in each case in whole or in part, could have a material adverse effect on the Company or its performance or condition (including its assets, business, clients, capital, cash flow, credit, expenses, financial condition, income, legal costs liabilities, liquidity, locations, marketing, operations, prospects, sales, strategies, taxation or other achievement, results or condition), whether actual or as planned, intended, anticipated, estimated or otherwise expected. See Note 8 to the Company's Consolidated Financial Statements - Commitments and Contingencies -- Legal Matters, below.
Current material and potentially material legal proceedings impacting the Company are described in Note 8 to the Company's Consolidated Financial Statements - Commitments and Contingencies - Legal Matters, below. These descriptions are based on an independent review by the Company and do not reflect the views of SBS, its management or its counsel. Furthermore, even though SBS was solely responsible for its operations, methods and legal compliance, in connection with any proceedings against SBS, SBS continues to claim that the Company is somehow liable to reimburse SBS for its expenses in those proceedings. The Company does not believe there is any basis for such claims and would defend them vigorously.
12
Infotech sued the Company in New York seeking reimbursement for approximately $190,000 respecting alleged lost tax benefits and other expenses it claims to have incurred in connection with SGRP's acquisition of its Brazilian subsidiary and previously denied on multiple occasions by both management and SGRP's Audit Committee, whose approval was required because Infotech is a related party. Infotech also threatened to sue the Company in Romania for approximately $900,000 for programming services allegedly owed to the Company's former Romanian subsidiary (sold at book value to Infotech in 2013) and not provided to Infotech, for which the Company vigorously denies liability. The Company and Infotech settled this matter. See Note 8 to the Company's Consolidated Financial Statements - Commitments and Contingencies - Legal Matters, below.
Peter W. Brown was appointed as a Director on the Board as of May 3, 2018, replacing Mr. Robert G. Brown upon his retirement from the Board and Company at that date. He is not considered independent because Peter Brown is an affiliate and related party respecting SGRP and was proposed by Mr. Robert G. Brown to represent the Brown family interests. He worked for and is a stockholder of SAS (see above) and certain of its affiliates, he is the nephew of Mr. Robert G. Brown, he is a director of SPAR Brasil Serviços de Merchandising e Tecnologia S.A., a Brazilian corporation and SGRP subsidiary ("SPAR BSMT") and owns Earth Investments LLC, ("EILLC"), which owns 10% interest in the SGRP's Brazilian subsidiary. Mr. Robert G. Brown is a significant stockholder of SGRP, and member of a 13D control group, SGRP's former Chairman and director of SGRP, and a future director of SGRP) and became a director again on April 24, 2020, pursuant to the written consents of the Brown Group and Mr. Bartels.
National Merchandising Services, LLC ("NMS"), is a consolidated domestic subsidiary of the Company and is owned jointly by SGRP through its indirect ownership of 51% of the NMS membership interests and by National Merchandising of America, Inc. ("NMA"), through its ownership of the other 49% of the NMS membership interests. Mr. Edward Burdekin is the Chief Executive Officer and President and a director of NMS and also is an executive officer and director of NMA. Ms. Andrea Burdekin, Mr. Burdekin's wife, is the sole stockholder and a director of NMA and a director of NMS. NMA is an affiliate of the Company but is not under the control of or consolidated with the Company. Mr. Burdekin also owns 100% of National Store Retail Services ("NSRS"). Since September 2018, NSRS provided substantially all of the domestic merchandising specialist field force used by NMS. For those services, NMS agrees to reimburse NSRS the total costs for providing those services and to pay NSRS a premium equal to 1.0% of its total cost.
Also, NMS leases office and operational space that is owned personally by Mr. Burdekin. The lease expense is $2,000 a month. While there is no formal signed agreement, there is no expected change to the arrangement.
On August 10, 2019, NMS, to protect continuity of its Field Specialist nationwide, petitioned for bankruptcy protection under chapter 11 of the United States Bankruptcy Code in the U.S. District for Nevada (the "NMS Chapter 11 Case"), and as a result, the claims of NMS' creditors must now generally be pursued in the NMS Chapter 11 Case. On August 11, 2019, NSRS and Mr. Burdekin also filed for reorganization in the NMS Chapter 11 Case NMS is part of the consolidated Company. Currently the Company believes that the NMS Chapter 11 Case is not likely to have a material adverse effect on the Company, and the Company's ownership of and involvement in NMS is not likely to change as a result of the NMS Chapter 11 Case or any resulting NMS reorganization.
Resource Plus of North Florida, Inc. "Resource Plus", is a consolidated domestic subsidiary of the Company and is owned jointly by SGRP through its indirect ownership of 51% of the RPI membership interests and by Mr. Richard Justus through his ownership of the other 49% of the RPI membership interests. Mr. Justus has a 50% ownership interest in RJ Holdings which owns the buildings where RPI is headquartered and operates. Both buildings are subleased to RPI.
SBS Bankruptcy, Settlement and March 2020 Claim
On November 23, 2018, SBS petitioned for bankruptcy protection under chapter 11 of the United States Bankruptcy Code in the U.S. District for Nevada (the "SBS Chapter 11 Case"). On March 18, 2019, the Company filed claims in the SBS Chapter 11 Case seeking reimbursement for $378,838 for SMF's funding of the Affinity Security Deposits and $12,963 for SMF's funding of the field payment checks that would have otherwise bounced, and $1,839,459 for indemnification of SGRP for its settlement (see below) of the Clothier class action case in California ("Clothier") and legal costs and an unspecified amount for indemnification of SGRP for the Hogan action (see below) and other to be discovered indemnified claims.
On August 6, 2019, SGRP, and its subsidiaries SPAR Marketing Force, Inc. ("SMF"), a Nevada corporation, and SPAR Assembly & Installation, Inc., f/k/a SPAR National Assembly Services, Inc., a Nevada corporation, submitted to the U.S. District Court in Nevada (the "Bankruptcy Court") their Compromise and Settlement Agreement, dated July 26, 2019 (the "Settlement Agreement"), with SBS, a Nevada corporation formerly known as SPAR Marketing Services, Inc., debtor and debtor-in-possession, and SBS, LLC, a Nevada limited liability company. The Settlement Agreement was submitted in the SBS Chapter 11 Case. Pursuant to the Settlement Agreement, the Company settled its claims for (among other things) indemnification from SBS in Clothier and the Rodgers class action case in Texas ("Rodgers").
13
On August 6, 2019, the Bankruptcy Court approved the Settlement Agreement and the SBS reorganization pursuant to SBS' First Amended Chapter 11 Plan of Reorganization, as amended by the Settlement Agreement (the "Plan of Reorganization"). Pursuant to its Plan of Reorganization, SBS also settled its potential liability in the Clothier and Rodgers cases, but the Company believes that Robert G. Brown and William H. Bartels were not released from Clothier, any related case or Rodgers. See Note 8 to the Company's Consolidated Financial Statements in the Commitments and Contingencies --Legal Proceedings -- SBS Bankruptcy, Settlement and March 2020 Claim, SBS Clothier Litigations, and SBS Rodgers Litigation, below. In the Settlement Agreement, except for the carve out described in the next paragraph, SBS completely released the Company from all obligations that may be owed to SBS.
On August 6, 2019, with the support of (among others) the Clothier and Rodgers plaintiffs and the Company, the Court approved the SBS Settlement Agreement and the SBS Reorganization pursuant to the SBS Plan (as defined in the SBS Settlement Release). The SBS Settlement Agreement provides for a mutual release of claims (including the SBS Claims and the SGRP Claims, as defined therein), except for the following:
(i) the Company’s $2.2 million in claims were settled for $174,097.34 payable by SBS over 24 monthly installments of $7,254.06 per month starting January 1, 2020, and without any interest (collectively, the "Discounted Claim Payments"), as such terms are defined in the SBS Settlement Agreement and the Company accrued $174,097 for the Discounted Claim Payments; and
(ii) SMF will become exercisablepay to SBS the Proven Unpaid A/R (as defined in the SBS Settlement Agreement) upon its determination (as described below).
In the SBS Settlement Agreement, the parties agreed to have a third party financial and accounting services firm, independently determine the Proven Unpaid A/R based on parameters set forth in the SBS Settlement Agreement. In the SBS Settlement Agreement, the parties will accept the determination of Rehmann as final and binding, and all other claims and amounts are released. Rehmann has determined that the Company had paid all amounts due to SBS and that the Proven Unpaid A/R equals zero.
The Company has recorded the total settlement amount of $174,097 as of December 31, 2019. This settlement amount is payable in 24 equal monthly payments of $7,254 starting January 1, 2020. To date SBS is in default of the first six payments totaling $43,524 and formal default notices have been sent to SBS. SBS has responded and claimed an offset respecting its undocumented and unproven claims. As of this date the Company believes these SBS payments must ultimately be paid by SBS and will continue to evaluate its collectability from SBS and establish reserves as appropriate.
On March 6, 2020, Robert G. Brown on behalf of SBS sent an email communication to Arthur B. Drogue, to which he copied Arthur H. Baer, demanding payment of $1,707,374 to SBS from SMF SGRP pursuant to (among other things) the SBS Settlement Agreement (the "March 2020 Claim"). The Company has reviewed the March 2020 Claim in detail (although Brown has provided no backup or proof) and the Company strongly disagrees that any such amount is owed. The Company believes that the robust and comprehensive mutual releases and other provisions in the SBS Settlement Agreement provide valuable relief from such claims and potential future claims and litigation by SBS respecting the Company's past involvement with SBS, including the March 2020 Claim. However, Robert G. Brown, president, director and indirect owner of SBS, since and notwithstanding the Court's approval of the SBS Settlement Agreement, has continued to make unproven and undocumented claims that amounts that were fully released pursuant to the SBS Settlement Agreement and approved by the bankruptcy court are nevertheless due to SBS from the Company, and the Company strongly disagrees. The Company is prepared to take action in Nevada Bankruptcy Court by reopening the SBS bankruptcy case and petitioning official settlement of this matter. Since all such claims have been completely released by SBS (with Mr. Robert G. Brown's approval), the Company owes nothing and has not accrued anything respecting Mr. Robert G. Brown's renewed claims. Mr. Robert G. Brown is significant stockholder of SGRP, and member of a 13D control group, SGRP's former Chairman and director of SGRP, and became a director again on April 24, 2020, pursuant to the written consents of the Brown Group and Mr. Bartels.
At SGRP's March 2020 Board meeting, Mr. Bartels was requested by an independent director to compile a list of unproven and undocumented claims that he and Mr. Brown believe are owed by the Company. On March 17, 2020, that list was given to the Audit Committee Chairman and included additional claims, net of an anticipated reduction, totaling approximately $1.3 million, bringing their total claims to approximately $3 million. The Company has completely rejected these claims, and believes it was released from all such claims by SBS in the SBS bankruptcy reorganization.
On August 6, 2019, the Bankruptcy Court approved the Settlement Agreement and the SBS reorganization pursuant to SBS' First Amended Chapter 11 Plan of Reorganization, as amended by the Settlement Agreement (the "Plan of Reorganization"). Pursuant to its Plan of Reorganization, SBS also settled its potential liability in the Clothier and Rodgers cases, but the Company believes that Robert G. Brown and William H. Bartels were not released from Clothier, any related case or Rodgers. See Note 8 to the Company's Consolidated Financial Statements in the Commitments and Contingencies --Legal Proceedings -- SBS Bankruptcy, Settlement and March 2020 Claim, SBS Clothier Litigations, and SBS Rodgers Litigation, below. In the Settlement Agreement, except for the carve out described in the next paragraph, SBS completely released the Company from all obligations that may be owed to SBS.
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On August 6, 2019, with the support of (among others) the Clothier and Rodgers plaintiffs and the Company, the Court approved the SBS Settlement Agreement and the SBS Reorganization pursuant to the SBS Plan (as defined in the SBS Settlement Release). The SBS Settlement Agreement provides for a mutual release of claims (including the SBS Claims and the SGRP Claims, as defined therein), except for the following:
(i) the Company’s $2.2 million in claims were settled for $174,097.34 payable by SBS over 24 monthly installments of $7,254.06 per month starting January 1, 2020, and without any interest (collectively, the "Discounted Claim Payments"), as such terms are defined in the SBS Settlement Agreement and the Company accrued $174,097 for the Discounted Claim Payments; and
(ii) SMF will pay to SBS the Proven Unpaid A/R (as defined in the SBS Settlement Agreement) upon its determination (as described below).
In the SBS Settlement Agreement, the parties agreed to have a third party financial and accounting services firm, independently determine the Proven Unpaid A/R based on parameters set forth in the SBS Settlement Agreement. In the SBS Settlement Agreement, the parties will accept the determination of Rehmann as final and binding, and all other claims and amounts are released. Rehmann has determined that the Company had paid all amounts due to SBS and that the Proven Unpaid A/R equals zero.
The Company has recorded the total settlement amount of $174,097 as of December 31, 2019. This settlement amount is payable in 24 equal monthly payments of $7,254 starting January 1, 2020. To date SBS is in default of the first six payments totaling $43,524 and formal default notices have been sent to SBS. SBS has responded and claimed an offset respecting its undocumented and unproven claims. As of this date the Company believes these SBS payments must ultimately be paid by SBS and will continue to evaluate its collectability from SBS and establish reserves as appropriate.
On March 6, 2020, Robert G. Brown on behalf of SBS sent an email communication to Arthur B. Drogue, to which he copied Arthur H. Baer, demanding payment of $1,707,374 to SBS from SMF SGRP pursuant to (among other things) the SBS Settlement Agreement (the "March 2020 Claim"). The Company has reviewed the March 2020 Claim in detail (although Brown has provided no backup or proof) and the Company strongly disagrees that any such amount is owed. The Company believes that the robust and comprehensive mutual releases and other provisions in the SBS Settlement Agreement provide valuable relief from such claims and potential future claims and litigation by SBS respecting the Company's past involvement with SBS, including the March 2020 Claim. However, Robert G. Brown, president, director and indirect owner of SBS, since and notwithstanding the Court's approval of the SBS Settlement Agreement, has continued to make unproven and undocumented claims that amounts that were fully released pursuant to the SBS Settlement Agreement and approved by the bankruptcy court are nevertheless due to SBS from the Company, and the Company strongly disagrees. The Company is prepared to take action in Nevada Bankruptcy Court by reopening the SBS bankruptcy case and petitioning official settlement of this matter. Since all such claims have been completely released by SBS (with Mr. Robert G. Brown's approval), the Company owes nothing and has not accrued anything respecting Mr. Robert G. Brown's renewed claims. Mr. Robert G. Brown is significant stockholder of SGRP, and member of a 13D control group, SGRP's former Chairman and director of SGRP, and became a director again on April 24, 2020, pursuant to the written consents of the Brown Group and Mr. Bartels.
At SGRP's March 2020 Board meeting, Mr. Bartels was requested by an independent director to compile a list of unproven and undocumented claims that he and Mr. Brown believe are owed by the Company. On March 17, 2020, that list was given to the Audit Committee Chairman and included additional claims, net of an anticipated reduction, totaling approximately $1.3 million, bringing their total claims to approximately $3 million. The Company has completely rejected these claims, and believes it was released from all such claims by SBS in the SBS bankruptcy reorganization.
The Infotech Settlement Agreement requires the Company to make payments totaling $275,000 in four installments: (i) $75,000 following Court approval (which Payment has already been made); (ii) $75,000 within 30 days following discontinuance of the Infotech Action (which was discontinued on October 30, 2019); (iii) $75,000 within 60 days following discontinuance of March 1, 1998.

(4) All information regarding share ownershipthe Infotech Action; and (iv) $50,000 within 90 days following discontinuance of the Infotech Action.
The Company believes that the robust and comprehensive mutual releases in the Infotech Settlement Agreement provide valuable relief from potential future claims and litigation by Infotech respecting the Company's past involvement with Infotech in the Brazilian and Romanian transactions.
International Related Party Services:
SGRP Meridian (Pty), Ltd. ("Meridian") is taken froma consolidated international subsidiary of the Company and furnished in
reliance uponis owned 51% by SGRP and 23% by FRIEDSHELF 401 Proprietary Limited (owned by Mr. Brian Mason and Mr. Garry Bristow, until June 2019, when it was sold to Lindicom) and 26% by Lindicom Proprietary Limited. Mr. Mason is President and a director and Mr. Bristow is an officer and director of Meridian. Mr. Mason is also an officer and director and 50% shareholder of Merhold Property Trust ("MPT"). Mr. Mason and Mr. Bristow are both officers and directors and both own 50% of Merhold Cape Property Trust ("MCPT"). Mr. Mason and Mr. Bristow are officers and owners of Merhold Holding Trust ("MHT") which provides similar services like MPT. MPT owns the Schedule 13G (Amendment No. 2), dated February 2,
1998, filed by Heartland Advisors, Inc.

(5) Includes 66,666 shares issuable upon exercisebuilding where Meridian is headquartered and also owns 20 vehicles, all of a warrant to purchase
Common Stock.

(6) Includes 2,703 shares issuable upon the exercise of options, which are exercisable assubleased to Meridian. MCPT provides a fleet of or will become exercisable within 60 days172 vehicles to Meridian under a 4 year lease program.
15
SPAR Todopromo is a consolidated international subsidiary of March 1,
1998.

(7) Includes 12,838 shares issuable upon the exerciseCompany and is owned 51% by SGRP and 49% by the following individuals: Mr. Juan F. Medina Domenzain, Juan Medina Staines, Julia Cesar Hernandez Vanegas, and Jorge Medina Staines. Mr. Juan F. Medina Domenzain is an officer and director of options,SPAR Todopromo and is also majority shareholder (90%) of CONAPAD ("CON") which are
exercisable as of, or will become exercisable within 60 days of March 1,
1998.

(8) Includes 500 shares issuable uponsupplied administrative and operational consulting support to SPAR Todopromo in 2016.
Mr. Juan F. Medina Domenzain ("JFMD"), partner in SPAR Todopromo, leased a warehouse to SPAR Todopromo. The lease expires on December 31, 2020.
SPAR Brasil Serviços de Merchandising e Tecnologia S.A., a Brazilian corporation ("SPAR BSMT" is owned 51% by the exercise of options, which are
exercisable as of, or will become exercisable within 60 days of March 1,
1998.

(9) Includes 93,920 shares issuable upon the exercise of options, which are
exercisable as of, or will become exercisable within 60 days of March 1,
1998.

(10) Includes 59,054 shares issuable upon the exercise of options, which are
exercisable as of, or will become exercisable within 60 days of March 1,
1998.

(11) Includes 1,637,151 sharesCompany, 39% by JK Consultoria Empresarial Ltda.-ME, a Brazilian limitada ("JKC"), and 10% by Earth Investments, LLC, a Nevada limited liability company ("EILLC").
JKC is owned by RLH. Mr. Haden,Jonathan Dagues Martins, a Brazilian citizen and resident ("JDM") and his sister, Ms. Karla Dagues Martins, a Brazilian citizen and resident. JDM is the Chief Executive Officer and President of each SPAR Brazil company pursuant to a Management Agreement between JDM and SPAR BSMT dated September 13, 2016. JDM also is a director of SPAR BSMT. Accordingly, JKC and JDM are each a related party respecting the Company. EILLC is owned by Mr. Peter W. Brown, a citizen and resident of the USA ("PWB") and a director of SPAR BSMT and SGRP and nephew of Robert G. Brown. Mr. Robert G. Brown is significant stockholder of SGRP, and member of a 13D control group, SGRP's former Chairman and director of SGRP, and became a director again on April 24, 2020, pursuant to the written consents of the Brown Group and Mr. Bartels. Accordingly, PWB and EILLC are each a related party respecting the Company.
SPAR BSMT has contracted with Ms. Karla Dagues Martins, a Brazilian citizen and resident and JDM's sister and a part owner of SPAR BSMT, to handle the labor litigation cases for SPAR BSMT and its subsidiaries. These legal services are being provided to them by Ms. Martins' company, Karla Martins Sociedade de Advogados ("KMSA"). Accordingly, Mr. Jonathan Dagues Martins and Ms. Karla Dagues Martins are each an affiliate and a related party respecting the Company.
Summary of Certain Related Party Transactions:
The following costs of affiliates were charged to the Company (in thousands):
Three Months Ended
March 31,
2020 2019
Services provided by affiliates:
National Store Retail Services (NSRS) 1,342 125
Office lease expenses (Mr. Burdekin) 6 -
Office lease expenses (RJ Holdings) 173 102
Office and vehicle lease expenses (MPT) 16 16
Vehicle rental expenses (MCPT) 299 290
Office and vehicle rental expenses (MHT) 73 64
Consulting and administrative services (CON) 12 37
Legal Services (KMSA) 23 22
Warehousing rental (JFMD) 13 12
Sparfacts 31 -
Total services provided by affiliates $ 1,988 $ 668
Due to affiliates consists of the following (in thousands): March 31, December 31,
2020 2019
Loans from local investors:(1)
Australia $ 410 $ 467
Mexico 623 623
Brazil 139 139
China 2,217 2,271
South Africa 399 635
Resource Plus 531 531
Total due to affiliates $ 4,319 $ 4,666
(1) Represent loans from the local investors into the Company's subsidiaries (representing their proportionate share of working capital loans). The loans have no payment terms and are due on demand and as such have been classified as current liabilities in the Company's consolidated financial statements.
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Affinity Insurance:
In addition to the above, through August 1, 2018, SAS purchased insurance coverage from Affinity Insurance, Ltd. ("Affinity") for worker compensation, casualty and property insurance risk for itself, for SBS on behalf of Field Specialists that require such insurance coverage (if they do not provide their own), and for the Company. SAS owns a minority (less than 1%) of the common stock in Affinity. Based on informal arrangements between the parties, the Affinity insurance premiums for such coverage were ultimately charged (through SAS) for their fair share of the costs of that insurance to SMF, SAS (which then charges the Company) and SBS. Since August 1, 2018, the new independent vendor providing the Company's Field Administrators also is a member of and provided such insurance through Affinity for itself and on behalf of the Field Specialists that require such insurance coverage (if they do not provide their own), and the Company is obtaining its own such insurance through Affinity (in which the Company is also now a member).
The Company also advanced money to SAS to prepay Affinity insurance premiums (which in the case of workers compensation insurance are a percentage of payroll). The Company had advanced approximately $226,000 to SAS for the 2018-2019 Affinity plan year based on estimates that assumed SBS and SAS would be providing services to the Company for the full plan year. However, the Company terminated them and they ceased providing SAS' services by August 2018, so that insurance was required for only one month's payroll. Upon completion of the Affinity audit for the Affinity 2018-2019 plan year, the Company anticipates that SAS should receive a premium refund from Affinity of approximately $150,000 and will be obligated to repay that amount to the Company.
Bartels' Retirement and Director Compensation
William H. Bartels retired as an employee of the Company as of January 1, 2020. However, he will continue to serve as Vice Chairman and a member of SGRP's Board of Directors (the "Board"), positions he has held since July 8, 1999.
Effective as of January 18, 2020, SGRP's Governance Committee proposed and unanimously approved the following benefits for the five year period commencing January 1, 2020, and ending December 31, 2024 (the "Five Year Period"), for Mr. Bartels in connection with his retirement: (a) retirement payments of $100,000 per year ("Retirement Compensation"); (b) the then applicable regular non-employee director fees ("Regular Fees"), currently $55,000 per year, and a supplemental Board fee of $50,000 per year ("Supplemental Fees"); and (c) the same medical, dental, eye and life insurance benefits he received as of December 31, 2019, under an arrangement whereby Mr. Bartels shared part of the cost of Medicare and supplemental health benefits, currently valued at approximately $15,588 per year ("Medical Benefits"); in each case paid in accordance with SGRP's payroll schedule and policies, and payable whether or not Mr. Bartels remains a director of SGRP for any reason.
The Retirement Compensation, Regular Fees and Supplemental Fees that remain unpaid during the Five Year Period: (i) shall be accelerated and paid to Mr. Bartels (or his heirs or assigns) in full upon the sale to a third party of a majority of the SGRP Shares or all or substantially all of SGRP's assets; and (ii) shall survive and be payable in full to his heirs and assigns in the event of the death of Mr. Bartels.
Based on current rates and benefits, the aggregate value of such compensation, fees and benefits payable to Mr. Bartels will be approximately $220,558 per year and a total of $1,102,940 for the Five Year Period. Such compensation, fees and benefits (in whole or in part) may be deemedextended beyond the Five Year Period in the discretion of the Board. The Company recognized $583,000 of retirement benefit expense during the three-month period ended March 31, 2020, representing the present value of the future payments due Mr. Bartels.
In the event of any future business transaction involving Mr. Bartels and SGRP for which Bartels may receive additional compensation as mutually agreed at the time of or in connection with such transaction, which under applicable law also will require approval of SGRP's Audit Committee as a related party payment or transaction (as Mr. Bartels will still be a related party if he is then a director or significant stockholder), such retirement compensation, fees or benefits will not offset, replace or limit any such additional approved transactional compensation payable to Mr. Bartels.
Mr. Bartels is one of the founders and a significant stockholder of SGRP (holding approximately 25.1% of the SGRP Shares). He also is part of a control group holding a majority of the SGRP Shares with Robert G. Brown (together with Mr. Bartels), which group most recently acted to (1) unilaterally select, appoint and elect Panagiotis ("Panos") N. Lazaretos to serve on the board of directors of SGRP, effective on December 10, 2019, and unilaterally select, appoint and elect Robert G. Brown to serve on the board of directors of SGRP, effective as of the Brown Effective Time (see Information In Connection With Appointment Of Robert G. Brown As A Director, above).
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Other Related Party Transactions and Arrangements:
In July 1999, SMF, SBS and SIT entered into a perpetual software ownership agreement providing that each party independently owned an undivided share votingof and investment powerhas the right to unilaterally license and exploit certain portions of the Company's proprietary scheduling, tracking, coordination, reporting and expense software (the "Co-Owned Software") are co-owned with SBS and Infotech and each entered into a non-exclusive royalty-free license from the Company to use certain "SPAR" trademarks in the United States (the "Licensed Marks"). As a result of the SBS Chapter 11 Case, SBS' rights in the Co-Owned Software and Licensed Marks are assets of SBS' estate, subject to sale or transfer in any court approved reorganization or liquidation. See Note 8 to the Company's Consolidated Financial Statements - Commitments and Contingencies -- Legal Matters, Related Party Litigation and SBS Bankruptcy, below.
Through arrangements with the Company, SBS (owned by Mr. Bartels and Mr. Brown), SAS (owned by Mr. Bartels and family members of Mr. Robert G. Brown), and other companies owned by Mr. Brown participate in various benefit plans, insurance policies and similar group purchases by the Company, for which the Company charges them their allocable shares of the costs of those group items and the actual costs of all items paid specifically for them. All such transactions between the Company and the above affiliates are paid and/or collected by the Company in the normal course of business.
CORPORATE GOVERNANCE
Board Structure, Leadership and Risk Oversight
The Board is responsible for overseeing the management, policies and direction of the Corporation and its subsidiaries, both directly and through its committees (as described below), pursuant to the authority conferred by the Corporation's Restated By-Laws, charters and policies and by applicable law. The Board's responsibilities include (without limitation) the appointment and oversight of the Company's executive officers. The Board also is actively involved in the oversight of risks that could affect the Company, both directly and through its committees with respect to allthe most significant risks facing the Company (including material strategic, market or operational risks). Pursuant to their respective charters, the Board has established and delegated various oversight and other responsibilities to the Audit Committee (and its Special Subcommittee), the Compensation Committee, and the Governance Committee, as such sharescommittees are defined and more fully described below under the headings "Audit Committee and its Special Subcommittee", "Compensation Committee" and "Governance Committee".
The Board's independent directors (Messrs. Baer, Drogue, McCarthey, Mayer, Lazaretos and Novgorodtsev) meet regularly as a general partner of RLH. No other person, other
than J. Christopher Lewis, a directoran independent body and provide leadership through their industry experience and knowledge and the actions of the Company, has voting power
or investment power with respect to such shares. Also includes 2,500
shares issuable upon the exercise of an option heldindependent committees they chair, and by Mr. Haden, which
is exercisablehaving its second largest stockholder and Chief Executive Officer as of, or will become exercisable within 60 days of March
1, 1998.

(12) Includes 5,405 shares held by Joseph H. Coulombe as Trustee of The
Coulombe Family Trust dated July 26, 1980 and 10,405 shares issuable
upon the exercise of options, which are exercisable as of, or will
become exercisable within 60 days of March 1, 1998.

(13) Includes 10,405 shares issuable upon the exercise of options, which are
exercisable as of, or will become exercisable within 60 days of March 1,
1998.

(14) Includes 1,637,151 shares owned by RLH. Mr. Lewis, a directormembers of the Company, may be deemed to share voting and investment power with respect
to all such shares as a general partner of RLH. No other person, other
than Patrick C. Haden, a director of the Company,Board. The Board also has voting power or
investment power with respect to such shares. Also includes 2,500 shares
issuable upon the exercise of an option held by Mr. Lewis, which is
exercisable as of, or will become exercisable within 60 days of March 1,
1998.

PROPOSAL 1 - ELECTION OF DIRECTORS

Seven Directors are to be elected at the 1998 Annual Meeting to serve
until the next Annual Meeting of Stockholders and until their respective
successors have been elected and qualified. In the absence of instructions to
the contrary, proxies covering shares of Common Stock will be voted in favor of
the election of the persons listed below. In the event that any nomineeestablished separate positions for
election as Director should become unavailable to serve, it is intended that
votes will be cast, pursuant to the enclosed proxy, for such substitute nominee
as may be nominated

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by the Company. Management has no present knowledge that any of the persons
named will be unavailable to serve.

No arrangement or understanding exists between any nominee and any other
person or persons pursuant to which any nominee was or is to be selected as a
Director or nominee. None of the nominees has any family relationship to any
other nominee or to any executive officer of the Company.

INFORMATION CONCERNING NOMINEES TO BOARD OF DIRECTORS

Information is set forth below concerning the nominees for election as
Directors. Each nominee has consented to being named in this Proxy Statement as
a nominee for Director and has agreed to serve as a Director if elected.

NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------

Clinton E. Owens 53 Chairman of the Board and Director

Terry R. Peets 56 Chief Executive Officer, President and Director

Patrick W. Collins 69 Director

John A. Colwell 47 Director

Joseph H. Coulombe(2) 67 Director

Patrick C. Haden(1)(2) 45 Director

J. Christopher Lewis 42 Director

(1) Member of the Compensation Committee.

(2) Member of the Audit Committee.

Mr. Owens has been the Chairman of the Company since its acquisition in
August 1988,Board (the "Chairman"), which is a non-executive position, for the Lead Director of the Board (the "Lead Director"), and served asfor SGRP's Chief Executive Officer until August 1997. Mr. Owens
has over 30 years experience in(who also is its President), which the merchandising servicesBoard believes better enables the Chairman to focus his efforts on long term strategic governance and packaged goods
industries. Mr. Owens previously has served as Senior Vice President of Salesplanning for the Company, the Lead Director (who also its Chairman) to provide Board leadership and Marketing of Coca Cola Foods,facilitate meaningful communications between the Board and has also served in variousthe Company's management, positions with RJR Foods and Procter & Gamble, among others.

Mr. Peets joined PIA in August 1997 asthe Chief Executive Officer Presidentto focus his time and Director.energy on managing the Company's sales and operations. The Board believes this leadership structure has enhanced its ability to effectively carry out its responsibilities on behalf of the Corporation's stockholders as well as its oversight of the Company's management and overall corporate governance. Mr. Peets servedArthur B. Drogue is the Corporation's Chairman of the Board, and Mr. Christiaan M. Olivier is the Company's Chief Executive Officer and President.
To assist the Board and its Committees in their respective oversight roles, the Company's Chief Executive Officer brings members of the Company's management from various business or administrative areas into meetings of the Board or applicable Committee from time to time to make presentations, answer questions and provide insight to the members, including insights into areas of potential risk. Each Committee endeavors to satisfy its responsibilities through: (i) its receipt and review of regular reports directly from officers responsible for oversight of particular risks within the Company, (ii) direct communications by the Committee or its Chairman with the Corporation's senior management, (iii) independent principal accountants (in the case of the Audit Committee) and counsel respecting such matters and related risks, (iv) its executive sessions, (v) its reports (generally through its Chairman) to the full Board respecting the Committee's considerations and (vi) if applicable, actions and recommendations regarding such matters and risks as Executive Vice Presidentdeemed appropriate.
Risk oversight is conducted primarily through the Audit Committee, but also is conducted through the Compensation Committee or Governance Committee, as applicable. The Audit Committee is responsible for overseeing the accounting, auditing and financial reporting and disclosure principles, policies, practices and controls of the Company and regularly considers (among other things) financial, reporting, internal control, related party, legal and other issues and related risks and uncertainties material to the Company. The Vons
CompaniesCompensation Committee is responsible for overseeing and regularly considers the performance and compensation of the executives, director compensation and the other compensation, equity incentive, related policies, and benefits of the Company. The Governance Committee is responsible for overseeing and regularly considers the finding, vetting and nomination of directors and committee members for the Board and senior Executives for SGRP, and the content and application of the Ethics Code, corporate documents and governance policies and practices.
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The Audit Committee, its Special Committee, the Compensation Committee and the Governance Committee each consist solely of independent outside directors. Mr. Arthur H. Baer is Chairman of the Audit Committee, Mr. Jeffrey A. Mayer is Chairman of the Governance Committee and Mr. Igor Novgorodtsev is Chairman of the Compensation.
Board Meetings
The Board meets regularly to receive and discuss operating and financial reports presented by management of SGRP and its advisors. During the year ended December 31, 2019, the Board held four regular meetings in person and eight special meetings by telephone. Each incumbent Director is required to attend 75% of the board meetings. In 2019, all incumbent members attended at least 75% of the meetings.
Board Size
The current Board size has been fixed at ten directors as of the date of this Proxy Statement, but may be increased to eleven directors at the Special Meeting. The Board size can only be changed by the action of the stockholders pursuant to the Restated By-Laws (see below), which could be in a written consent.
Board Committees
From time to time the Board may establish permanent standing committees and temporary special committees to assist the Board in carrying out its responsibilities. Under the Restated By-Laws (see below), a "super majority" vote of at least 75% of all SGRP directors is now required for any new committee, change in any committee, or appointment to or removal from 1995 to April 1997. Prior to joining Vons, Mr. Peets served in
various sales, marketingany committee (meaning any such Board action brought before a Board consisting of eight directors can be blocked by any three directors). Currently, SGRP has three permanent standing committees; the Audit Committee, the Compensation Committee and operation roles as Senior Vice President for Ralphs
Grocery Company from 1977 to 1994, until he was named Executive Vice President
in 1994. Mr. Peets also serves as a director of Supermarkets Online, a division
of Catalina Marketing Corporation, a provider of in-store electronic marketing
services.

Mr. Collins served as Chief Operating Officer of Ralphs Grocery Company
for 18 years, 17 of which he served and Presidentthe Governance Committee and one yeartemporary Special Subcommittee of the Audit Committee as Vice Chairman.
Mr Collins also servesnoted below. An audit committee is required by the Nasdaq Stock Market, Inc. ("Nasdaq"), the SEC, and applicable law. While SGRP is not similarly required to have either a compensation committee or governance committee, certain responsibilities assigned to these committees in their respective charters are required to be fulfilled by independent directors by Nasdaq Rules or SEC Rules. Each of the charters for those Committees requires that all of its members be independent directors.
The standing committees of the Board are the Audit Committee of the Board (the "Audit Committee"), the Compensation Committee of the Board (the "Compensation Committee"), the Governance Committee of the Board (the "Governance Committee"), and the special subcommittee of the Audit Committee (the "Special Subcommittee"), as a directorprovided in the Corporation's Restated By-Laws and their respective charters (see Limitation of Catalina Marketing Corporation, a
providerLiability and Indemnification Matters, below).
Audit Committee
The Audit Committee assists the Board in fulfilling its oversight responsibilities respecting the accounting, auditing and financial reporting and disclosure principles, policies, practices and controls of in-store electornic marketing services,the Company, the integrity of the Company's consolidated financial statements, the audits of the financial statements of the Company and New Bristol Farms, Inc.,
a gourmet food grocery chain.

Mr. Colwell has been a memberthe Company's compliance with legal and regulatory requirements and disclosure. The specific functions and responsibilities of the Audit Committee are set forth in the written Amended and Restated Charter of the Audit Committee of the Board of Directors of SPAR Group, Inc., dated (as of) May 18, 2004 (the "Audit Charter"), approved and recommended by the Company
since March 1991,Audit Committee and Governance Committee and adopted by the Board on May 18, 2004. The Audit Committee also is given specific functions and responsibilities by and is subject to Nasdaq Rules, SEC Rules, the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"), and other applicable law, which are reflected in the Audit Charter. You can obtain and review a current copy of the Audit Charter on the Company's web site (www.sparinc.com), which is posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab. The Audit Charter was amended and restated to reflect the evolution of the Audit Committee's expanding responsibilities, the adoption of Sarbanes-Oxley, and changes in Nasdaq Rules, SEC Rules, securities laws and other applicable law pertaining to all audit committees. The Audit Committee reviews and reassesses the Audit Charter annually and recommends any needed changes to the Board for approval. The Audit Committee's most recent review was in November of 2019, when it determined no changes were then needed in the Audit Charter.
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The Audit Committee (among other things and as more fully provided in the Audit Charter):
(a) Serves as an independent and objective party to monitor the Company's financial reporting process and internal accounting and disclosure control system and their adequacy and effectiveness;
(b) Is directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company (hereinafter referred to as the "Company's Independent Accountants");
(c) Resolves disagreements between the Company's senior management and the Company's Independent Accountants regarding financial reporting;
(d) Communicates directly with the Company's Independent Accountants;
(e) Reviews and appraises the audit efforts of the Company's Independent Accountants, including the plans for and scope of the audit, the audit procedures to be utilized and results of the audit;
(f) Provides an open avenue of communication among the Company's Independent Accountants, the Company's financial and senior management and the Board;
(g) Reviews and approves, in advance, all non-audit services to be performed by the Company's Independent Accountants, either individually or through policies and procedures for particular types of services to be performed within specified periods;
(h) Reviews the performance, qualifications and independence of the Company's Independent Accountants;
(i) Reviews the financial reports and other financial information provided by SGRP to any governmental body or the public;
(j) Encourages continuous improvement of, and fosters adherence to, the Company's accounting controls, disclosure controls, risk management and similar policies, procedures and practices at all levels;
(k) Reviews and approves the overall fairness of all material related-party transactions; and
(l) May retain independent counsel, accountants or others to assist it in the conduct of an investigation or such other action as the Audit Committee may otherwise determine as necessary to carry out its duties under its Charter and applicable law, the fees and expenses of all of which will be paid by the Corporation.
The Audit Committee currently servesconsists of Messrs. Baer (its Chairman), Mayer, McCarthey, and Novgorodtsev each of whom has been determined by the Governance Committee and the Board to meet the independence requirements for Audit Committee members under Nasdaq Rules and SEC Rules. Mr. McCarthey is retiring effective August 1, 2020. In connection with his reelection as a consultantDirector at the 2020 Annual Meeting, the Governance Committee and the Board re-determined that Mr. Baer was qualified to PIA. From February
1997 through August 1997, he servedbe the "Audit Committee financial expert" as interim Vice Chairmanrequired by Nasdaq Rules, SEC Rules and other applicable law.
During the year ended December 31, 2019, the Audit Committee met four times in regular meetings in person and nine times in special meetings by telephone. All incumbent members attended at least 75% of the Board. Mr.
Colwell is sole proprietor of a consultingmeetings.
Compensation Committee
The Compensation Committee assists the Board in fulfilling its oversight responsibilities respecting the performance and interim management firm bearing
his

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name, and President of Facility Development Corporation. Since 1991, he has
served as a Managing Director of Lineberger & Co., a private equity investment
firm. From November 1991 through February 1997, he was Senior Vice President of
River City Plastics, Inc., a manufacturer of polyvinyl chloride pipe.

Mr. Coulombe has been a membercompensation of the Board of Directorsexecutives and the other compensation, equity incentive and related policies of the Company, since May 1993. Mr. Coulombe isthrough which the founderCompany endeavors to attract, motivate and former Chief Executive Officer
of Trader Joe's,retain the executive talent needed to optimize stockholder value in a specialty food grocery chain that was founded in 1958. Mr.
Coulombe sold Trader Joe's in 1979competitive environment while facilitating the business strategies and remained the Chief Executive Officer of
Trader Joe's until January 1989. From February 1995 to April 1995, Mr. Coulombe
served as President and Chief Executive Officer of Sport Chalet, and served as a
director of Sport Chalet from February 1993 to June 1994. From February 1994 to
January 1995, Mr. Coulombe served as Chief Executive Officer of Provigo Corp.,
the Northern California subsidiary of Provigo Inc., of Montreal. From June 1992
to January 1994, Mr. Coulombe served as a memberlong-range plans of the BoardCompany. The specific functions and responsibilities of Directors of
Imperial Bank, a subsidiary of Imperial Bancorp. From March 1992 to October
1992, Mr. Coulombe served as Executive Vice President of Pacific Enterprises in
charge of Thrifty Corporation, and also served as Co-Chairman of Thrifty
Corporation. From June 1989 through March 1992, Mr. Coulombe acted as an
independent business consultant. Mr. Coulombe also serves as a director of Cost
Plus World Market, a home furnishings store chain, and New Bristol Farms, Inc.,
a gourmet food grocery chain.

Mr. Haden became a member of the Board of Directors of the
Company in August 1988 in connection with PIA's acquisition. Since 1987, Mr.
Haden has been a general partner of Riordan, Lewis & Haden, a Los Angeles based
partnership, which invests in management buy-out and venture capital
transactions. Mr. Haden also serves as a director of Tetra Tech, Inc., an
environmental engineering and consulting firm, Data Processing Resources
Corporation, a provider of information technology specialty staffing services,
and several privately held companies.

Mr. Lewis has been a member of the Board of Directors of the Company
since April 1997. Since 1982, Mr. Lewis has been a general partner of Riordan,
Lewis & Haden. Mr. Lewis also serves as a director of Tetra Tech, Inc., an
environmental engineering and consulting firm, Data Processing Resources
Corporation, a provider of information technology specialty staffing services,
Steven Myers & Associates, a proposal management and consultant firm, California
Beach Restaurants, Inc., an owner and operator of restaurants, and several
privately-held companies.

THE BOARD OF DIRECTORS

COMMITTEES

The standing committees of the Board of Directors (the "Board") are the
Audit Committee (the "Audit Committee") and the Compensation Committee (the
"Compensation Committee"). PIA does not have a standing nominating committee or
any committee performingare set forth in the functions thereof.

The Audit Committee, which presently consists of Messrs. Haden and
Coulombe, met once during 1997. The Audit Committee makes recommendations
concerning the engagement of independent public accountants; reviews with the
independent public accountants the plans for and scope of the audit, the audit
procedures to be utilized and results of the audit; approves the professional
services provided by the independent public accountants; reviews the
independence of the independent public accountants; and reviews the adequacy and
effectiveness of the Company's internal accounting controls.

The Compensation Committee, which presently consists of Messrs. Haden
and Epstein, met twice during 1997. The Compensation Committee determines
compensation for the Company's executive officers and administers the Company's
stock incentive plans. See "Reportwritten Charter of the Compensation Committee of the Board of Directors.Directors of SPAR Group, Inc., dated (as of) May 18, 2004 (the "

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Neither memberCompensation Charter"), approved and recommended by the Compensation Committee and Governance Committee and adopted by the Board on May 18, 2004. The Compensation Committee also is given specific functions and responsibilities by and is subject to Nasdaq Rules, SEC Rules, Sarbanes-Oxley and other applicable law. You can obtain and review a current copy of the Compensation Charter on the Company's web site (www.sparinc.com), which is posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab. The Compensation Charter was adopted to reflect the evolution of the Compensation Committee's informal responsibilities, the adoption of Sarbanes- Oxley, and changes in Nasdaq Rules, SEC Rules, securities laws and other applicable law pertaining to compensation committees. The Compensation Committee reviews and reassesses the Compensation Charter annually and recommends any needed changes to the Board for approval. The Compensation Committee's most recent review was at any time duringin November of 2019, when it determined no changes were then needed in the Compensation Charter.
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The Compensation Committee (among other things and as more fully provided in the Compensation Charter):
(a) Oversees the existing and proposed compensation plans, policies and practices of the Company, and reviews and recommends to the Board any necessary or desirable changes or additions to any such plan, policy or practice, all in order to (i) attract and retain quality directors, executives and employees, (ii) provide total compensation competitive with similar companies, (iii) reward and reinforce the attainment of the Company's performance objectives, and (iv) align the interests of SGRP's directors and the Company's executives and employees with those of SGRP's stockholders (the "Company's Compensation Objectives");
(b) Reviews the Company's existing and proposed Compensation Objectives from time to time and recommends to the Board any necessary or desirable changes or additions to such objectives;
(c) Reviews the performance of and establishes the compensation for the Company's senior executives;
(d) Oversees the Company's stock option, stock purchase and other benefit plans and severance policies, and reviews and recommends to the Board any necessary or desirable changes or additions to any such plan, policy or practice; and
(e) May retain independent counsel, accountants or others to assist it in the conduct of an investigation or such other action as the Compensation Committee may otherwise determine as necessary to carry out its duties under its Charter and applicable law, the fees and expenses of all of which will be paid by the Corporation.
The Compensation Committee currently consists of Messrs. Mayer (its Chairman), Baer, Lazaretos and Novgorodtsev, all of whom are non-employees of the Company and have been determined by the Governance Committee and the Board to be independent directors in accordance with Nasdaq Rules and SEC Rules.
During the year ended December 31, 1997 or at any other time an officer or employee of2019, the Company. No executive officer of the Company serves asCompensation Committee met four times in regular meetings in person and once in a member of the Board of
Directors or compensation committee of any other entity, which has one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee.

MEETINGS AND REMUNERATION

During 1997, the Board held six meetings and took various actionsspecial meeting by written consent. Eachtelephone. All incumbent Directormembers attended at least 75% of the aggregatemeetings.
Governance Committee
The Governance Committee assists the Board in fulfilling its oversight responsibilities respecting the nomination of (i)directors and committee members for the total numberBoard and the corporate documents and governance policies and practices of meetings heldthe Corporation. The specific functions and responsibilities of the Governance Committee are set forth in the written Charter of the Governance Committee of the Board of Directors of SPAR Group, Inc., Dated (as of) May 18, 2004 (the "Governance Charter"), approved and recommended by the Governance Committee and adopted by the Board during 1997on May 18, 2004. The Governance Committee also is given specific functions and (ii)responsibilities by and is subject to the total number of meetings held by all committeesNasdaq Rules, SEC Rules, Sarbanes-Oxley, and other applicable law, which are reflected in the Governance Charter. You can obtain and review a current copy of the Board during that period
withinGovernance Charter on the Company's web site (www.sparinc.com), which heis posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab. The Governance Charter was a Director or member of such committeeadopted to reflect the evolution of the Board. Each
Director is electedGovernance Committee's informal responsibilities, the adoption of Sarbanes-Oxley, and changes in Nasdaq Rules, SEC Rules, securities laws, and other applicable law pertaining to hold office untilgovernance committees. The Governance Committee reviews and reassesses the next annual meetingGovernance Charter, Nomination Policy and Ethics Code (as such terms are defined below), as well as the By-Laws of stockholdersthe Corporation and until his respective successor is electedthe other Committee Charters, annually and qualified.

recommends any needed changes to the Board for approval. The Governance Committee's most recent review was in November of 2019, when it determined no changes were then needed in the Governance Charter, Nomination Policy, Ethics Code, and the By-Laws of the Corporation and the other Committee Charters.
The Governance Committee (among other things and as more fully provided in the Governance Charter):
(a) Oversees the identification, vetting and nomination of candidates for directors and senior Executives of SGRP and the selection of committee members, reviews their qualifications (including outside director independence) and recommends any proposed nominees to the Board;
(b) Oversees SGRP's organizational documents and policies and practices on corporate governance and recommends any proposed changes to the Board for approval;
(c) Oversees the 'Ethics Code and other internal policies and guidelines and monitors the Corporation's enforcement of them and incorporation of them into the Corporation's culture and business practices; and
(d) May retain independent counsel, accountants or others to assist it in the conduct of an investigation or such other action as the Governance Committee may otherwise determine as necessary to carry out its duties under its Charter and applicable law, the fees and expenses of all of which will be paid by the Corporation.
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The Governance Committee currently consists of Messrs. Mayer (its Chairman), Baer and Novgorodtsev, all of whom are non-employees of the Company and have been determined by the Governance Committee and the Board to be independent directors in accordance with Nasdaq Rules and SEC Rules.
During the year ended December 31, 1997,2019, the Governance Committee met four times in regular meetings in person, and nine times in special meetings by telephone. All incumbent members attended at least 75% of the meetings.
Special Subcommittee
In addition, in order to (among other things) assist the Board and the Audit Committee in connection with an overall review of the Company's related party transactions and certain worker classification-related litigation matters, in April 2017, the Board formed a special subcommittee of the Audit Committee (the "Special Subcommittee") to (among other things) review the structure, documentation, fairness, conflicts, fidelity, appropriateness, and practices respecting each of the relationships and transactions discussed in the description of the Company's Transactions with Related Persons, Promoters and Certain Control Persons in this Proxy Statement. The Special Subcommittee had commenced and finalized that review with the assistance of special auditors and counsel (currently counsel is still being retained by such Subcommittee). See Item 1A - Risk Factors –Risks Related to the Company's Significant Stockholders and Potential Voting Control and Conflicts, and Part I, Item 3 - Legal Proceedings -- RELATED PARTIES AND RELATED PARTY LITIGATION, in the 2019 Annual Report.
The Special Subcommittee currently consists of Messrs. Drogue (its Chairman), McCarthey, and Baer, each of whom has been determined by the Governance Committee and the Board to meet the independence requirements for Audit Committee members under Nasdaq Rules and SEC Rules.
During the year ended December 31, 2019, the Special Subcommittee met seven times in special meetings by telephone. All incumbent members attended at least 75% of the meetings.
The Company paidis currently unable to Messrs.
Coulombepredict the remaining duration and Epstein an aggregatefinal results of $6,000this review by the Special Subcommittee.
Director Nominations: Experience, Integrity, Diversity and $24,750, respectively,other Criteria
The Governance Committee oversees the identification, vetting and nomination of candidates for servicesdirectors and the selection of committee members, the review of their qualifications (including outside director independence), and recommends any proposed nominees to the Board in accordance with the Governance Charter and with the SPAR Group, Inc. Statement of Policy Regarding Director Qualifications and Nominations dated as of May 18, 2004 (the "Nomination Policy"), as approved and recommended by the Governance Committee and adopted by the Board on May 18, 2004. You can obtain and review a current copy of this policy on the Company's web site (www.sparinc.com), which is posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab.
The Nomination Policy, applicable law and exchange rules require that a majority of the directors of the Board and all members of the Company'sAudit Committee (and its Special Subcommittee), Compensation Committee and Governance Committee satisfy the independence requirements applicable to Audit Committee members under the applicable Nasdaq Rules and SEC Rules. Each of the Audit Charter, Compensation Charter and Governance Charter also contain the same requirements that all of their respective members satisfy such independence requirements.
The Nomination Policy identifies numerous characteristics believed important by the Board for any nominee for director and provides that each nominee for director should possess as many of them as practicable. These desirable characteristics include (among other things) the highest professional and personal ethics and integrity, sufficient time and attention to devote to Board and as consultants,Committee duties and responsibilities, strong relevant business and industry knowledge and contacts, and business and financial sophistication, common sense and wisdom, the contribution to the diversity of perspectives in the Board and its Committees, and the ability to make informed judgments on a wide range of issues, the ability and willingness to exercise and express independent judgments, and the apparent ability and willingness to meet or exceed the Board's performance expectations. The Nomination Policy specifically recognizes the desirability of ethnic, racial, gender and geographic diversity for the Board but does not specify any metrics for evaluating potential candidates in that regard. However, the Governance Committee takes all relevant factors (including such diversity) into account when identifying and evaluating candidates for Board membership.
Performance expectations for each director have also reimbursed Messrs. Coulombe and Epsteinbeen established by the Board in the Nomination Policy, including (among other things) the director's regular preparation for, certain expenses in connection with
their attendance at Board and committee meetings. Messrs. Hadenparticipation in all meetings (including appropriate questioning), support and Lewis
received no compensation for their services as directors. In addition, Mr
Colwell received a salaryadvice to management in his areas of $16,667 per month. Commencingexpertise, maintenance of focus on April 1, 1998, Mr
Colwell will receive a salarythe Board's agenda, understanding the business, finances, plans and strategies of $50,000 annually for consulting services. Mr
Colwell is also entitled to receive a success fee payableCompany, professional and collegial interaction, acting in the event certain
transactions are completed by the Company.

1995 Stock Option Plan for Nonemployee Directors. The Company adopted
its 1995 Stock Option Plan for Nonemployee Directors in December 1995 (the
"Nonemployee Directors Plan"). The purpose of the Nonemployee Directors Plan is
to promote thebest interests of the Company and itsthe stockholders, by strengtheningand compliance with the Company's abilityEthics Code.
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Candidates for vacant positions on the Board may be suggested to attract and retain the services of experienced and
knowledgeable nonemployee directors. The Nonemployee Directors Plan provides for
the grant of non-qualified stock options only. A reserve of 100,000 sharesGovernance Committee from time to time by its members or by officers or other directors of the Company's Common Stock has been established for issuance underCorporation. The Governance Committee generally will consider recommending the Nonemployee Directors Plan. Eachre-nomination of Messrs. Haden, Coulombe, Epsteinincumbent directors in accordance with the Nomination Policy, provided that they continue to satisfy the applicable personal characteristic criteria and Lewis
holds an optionperformance expectations. The Nomination Policy reflects the Board's belief that qualified incumbent directors are generally uniquely positioned to purchase 1,500 sharesprovide stockholders the benefit of Common Stock under the Nonemployee
Directors Plan that will become exercisable on the datecontinuity of the 1998 Annual
Meeting if the optionee is reelectedleadership and seasoned judgment gained through experience as a director of SGRP, and that the Company.value of these benefits may outweigh many other factors. However, the Governance Committee is not required to recommend to the Board the nomination of any eligible incumbent director for re-election (see Stockholder Communications - Submission of Stockholder Proposals and Director Nominations, below).
In considering the potential director nominee slate (including incumbent directors) to recommend to the Board, the Nomination Policy directs the Governance Committee to take into account: (i) the benefits of incumbency, as noted above; (ii) any perceived needs of Board, any Committee or the Company at the time for business contacts, skills or experience or other particular desirable personal characteristics; (iii) the collegiality of Board members; (iv) the need for independent directors or financial experts under that Policy or applicable law for the Board or its Committees; (v) any other requirements of applicable law or exchange rules; and (vi) the desirability of ethnic, racial, gender and geographic diversity. The Nonemployee Directors Plan is administeredGovernance Committee will consider proposed nominees from any source, including those properly submitted by stockholders (see Stockholder Communications - Submission of Stockholder Proposals and Director Nominations, below).
However, a majority of the stockholders may, and from time to time have, elected directors by written consent without following the policies and procedures described above and without the review or participation of the Governance Committee or its independent directors.
The nominee for director was required to complete and submit an officers' and directors' questionnaire as part of the process for making director nominations and preparation of this Proxy Statement.
The ten directors, nine of which were elected as directors at the 2020 Annual Meeting, were approved and nominated by the Board. The nine directors elected at the 2020 Annual Meeting were incumbents, although that is the first year that Mr. Mayer and Mr. Peter Brown were nominees at an annual stockholder's meeting. Mr. Lazaretos and Mr. Robert G. Brown were appointed to the Board by the Written Consent Actions submitted by the Majority Stockholders, which became effective on December 10, 2019, and April 24, 2020, respectively. Mr. Igor Novgorodtsev was appointed to the Board effective on May 28, 2020. Based on each director’s and director nominee’s respective officers' and directors' questionnaires, as required by the Nominations Policy and the committee charters, the Governance Committee and Board each determined that, under Nasdaq Rules and SEC Rules:(i): Mr. Igor Novgorodtsev, Mr. Arthur H. Baer, Mr. Arthur B. Drogue, Mr. R. Eric McCarthey, Mr. Mayer and Mr. Lazaretos are independent directors; and (ii) Messrs. Arthur H. Baer and R. Eric McCarthey are each an "audit committee financial expert" under SEC Rules, as required by such rules and the Audit Charter.
2019 Restated By-Laws
On January 18, 2019, the Corporation settled the By-Laws Action (the "Delaware Settlement") between SGRP and the Majority Stockholders. See Note 6 to the Company's Compensation Committee. Each memberConsolidated Financial Statements - Commitments and Contingencies -- Legal Matters – Delaware Litigation Settlement in the 2019 Annual Report.
In the By-Laws Action, the Corporation had sought to invalidate the proposed amendments to SGRP's then-current By-Laws put forth in a written consent by the Majority Stockholders (the "Proposed Amendments") because the Board's Governance Committee believed that the Proposed Amendments would have negatively impacted all stockholders (particularly minority stockholders) by (among other things) weakening the independence of the Company's Board of Directors who is
not otherwise an employee or officerthrough new supermajority requirements, eliminating the Board's independent majority requirement, and subjecting various functions of the Company or any subsidiaryBoard respecting vacancies on the Board to the prior approval of the Company (each an "Eligible Director") is eligible to participate in the
Nonemployee Directors Plan. Directors who are consultantsholders of but not otherwise
employees or officers of, the Company are Eligible Directors.

Under the Nonemployee Directors Plan, an option to purchase 1,500 shares
of Common Stock is granted to each Eligible Director immediately following each
annual meeting of stockholders of the Company. Each option vests and becomes
exercisable in full at the next annual meeting of stockholders, provided that
the optionee is reelected as a director of the Company. The maximum term of
options granted under the Nonemployee Directors Plan is ten years and one day,
subject to earlier termination following an optionee's cessation of service with
the Company.

The exercise price of stock options granted under the Nonemployee
Directors Plan will be the fair market valuemajority of the Common Stock (i.e., the Majority Stockholders), and thus also potentially reducing the representation of SGRP's minority stockholders. See Note 6 to the Company's Consolidated Financial Statements - Commitments and Contingencies -- Legal Matters – Delaware Litigation Settlement in the 2019 Annual Report.
As part of the Settlement, on January 18, 2019, the Governance Committee and Board accepted certain of the Proposed Amendments of the Majority Stockholders with negotiated changes and clarifications, and adopted the Amended and Restated By-Laws of SPAR Group, Inc. (the "Restated By-Laws"). A current copy of the Restated By-Laws is posted and available to stockholders and the public on the date of
grant. The exercise price is immediately payable upon exerciseCorporation's web site (www.sparinc.com).
In Restated By-Laws the negotiated changes to the Proposed Amendments preserved the current roles of the option.
Such payment may be madeGovernance Committee and Board in cash, by check orthe location, evaluation, and selection of candidates for director and in such other formthe nominations of lawful
consideration (including promissory notes or sharesthose candidates for the annual stockholders meeting and appointment of Common Stock then held)
as the Compensation Committee may approve from timethose candidates to time.

Options grantedfill Board vacancies (other than those under the Nonemployee Directors Plan are
non-transferable except to immediate family members, a trust for their benefit
or a partnership in which such family members are the only partners. Such

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8
options generally expire three months after the termination of any optionee's
service to the Company. In general, if an optionee is permanently disabled or
dies during his service to the Company, such option may be exercised up to six
months after such disability or death; provided, however, that the Compensation
Committee may in its discretion extend the period for up to five years, provided
that such extension does not extend the period during which the option may be
exercised beyond the original term of the option.

Upon the dissolution or liquidation of the Company or upon any
reorganization, merger or consolidation in which the Company does not survive,
the Nonemployee Directors Plan and each outstanding option granted thereunder
shall terminate; provided, that each optionee to whom no substitute option has
been tenderedwritten consent by the surviving corporation will haveMajority Stockholders making a removal and appointment, which is unchanged).
23
The Restated By-Laws now also include the right to exercise in
whole or in part any unexpired option or options issued to him, without regard
to the vesting provisions thereof.

following:
● Any vacancy that results from the death, retirement or resignation of a director that remains unfilled by the directors for more than 90 days may be filled by the stockholders. But see Proposal 6, of the 2020 Annual Meeting Proxy/Information Statement, which was approved and eliminates the period during which the Board has the exclusive right to fill such vacancies.
● Certain stockholder proposals may now be made up to the 90th day prior to the first anniversary of the preceding year's Annual Meeting.
● The Board size can only be changed by the stockholders (as provided in such Proposed Amendments).
● The section requiring majority Board independence has been removed (as provided in such Proposed Amendments).
● The By-Laws now require that each candidate for director sign a written irrevocable letter of resignation and retirement effective upon such person failing to be re-elected by the required majority stockholder vote.
● A "super majority" vote of at least 75% of all directors is now required for any of the following (as provided in such Proposed Amendments):
o Issuance of more than 500,000 shares of stock (other than under the Corporation's stock compensation plans);
o Issuance of any preferred stock;
o Declaration of any non-cash dividend on the shares of capital stock of the Corporation;
o By-Laws modification;
o Formation or expansion of the authority of any Committee or subcommittee; or
o Appointment or removal of any Committee director.
Limitation of Liability and Indemnification Matters
The Board of Directors may amend or modify the Nonemployee Directors
Plan and outstanding options at any time, including but not limited to
accelerating the time at which an option may be exercised, provided that no such
amendment or modification may adversely affect the rights and obligations of the
participants with respect to their outstanding options without their consent.
The Nonemployee Directors Plan will terminate in December 2005, unless sooner
terminated by the Board.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The Company'sCorporation's Certificate of Incorporation, limitsas amended, eliminates the liability of all directors to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a company will not be personally liableCorporation and its stockholders for monetary damages for breachbreaches of their fiduciary duties as directors to the maximum extent such liability can be eliminated or limited under the Delaware General Corporation Law, as amended (the "DGCL"), which applies to the Corporation as a Delaware corporation. The DGCL permits a certificate of incorporation to include a provision eliminating such personal liability of its directors, and such elimination is effective under the DGCL, except forthat such liability currently may not be eliminated or limited under the DGCL (i) for any breach of their duty of loyalty to the companyCorporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of dividends or unlawful stock repurchases or redemption'sredemptions as provided in Section 174 of the Delaware
General Corporation Law,DGCL, or (iv) for any transaction from which the director derived an improper personal benefit.
The Company's BylawsRestated By-Laws (unchanged in this regard by the latest restatement) provide that the Company shallCorporation must indemnify each of its current and former directors, executive officers and directorsother designated persons (including those serving its affiliates in such capacities at the Corporation's request), and may in the Board's discretion indemnify itsthe other current and former officers, employees and other agents of the Company, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding against them in such capacity to the fullest extent permitted by law.DGCL. The Company's BylawsRestated By-Laws also permit itprovide that the Corporation must advance the expenses (including attorneys' fees) actually and reasonably incurred by any such person in defending any such action, suit or proceeding, subject to securesuch person's agreement to the extent required by the DGCL under the circumstances to reimburse the Corporation if such person is not entitled to indemnification. The Restated By-Laws and these mandatory indemnification provisions were approved and recommended by the Governance Committee and adopted by the Board of Directors of the Corporation in order to conform to the current practices of most public companies and to attract and maintain quality candidates for its directors and management, and are included in the Restated By-Law (see above). A current copy of the Restated By-Laws is posted and available to stockholders and the public on the Corporation's web site (www.sparinc.com).
Section 145 of the DGCL provides that the Corporation (as a Delaware corporation) has the power to indemnify under various circumstances anyone who is or was serving as a director, officer, employee or agent of the Corporation or (at its request) another corporation, partnership, joint venture, trust or other enterprise, which includes indemnification against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), but only if (i) such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation, (ii) in the case of any criminal action or proceeding, such person had no reasonable cause to believe his or her conduct was unlawful, and (iii) in the case of any suit by or in the right of the Corporation in which the person is adjudged to be liable to the Corporation, the applicable court determines such person is nevertheless fairly and reasonably entitled to such indemnification under the circumstances. Section 145 of the DGCL also permits the Corporation to pay or advance the expenses (including attorneys' fees) actually and reasonably incurred by any such person in defending any such action, suit or proceeding, and requires that the Corporation indemnify such person for such unpaid expenses upon a successful defense of such action, suit or proceeding.
24
The Company maintains director and officer liability insurance on behalfthat (subject to deductibles, maximums and exceptions) covers most liabilities arising out of the acts or omissions of any officer, director, employee or other agentcovered person, both for any
liability arising outthe benefit of his or her actions in such capacity,the Company and the direct benefit of its directors and officers, regardless of whether the BylawsRestated By-Laws or DGCL Section 145 would permit indemnification.indemnification of the matters covered by such insurance. The Company maintains directorRestated By-Laws (and DGCL Section 145) expressly permit the Corporation to secure such insurance and officer liabilityexpressly provide that their respective indemnification provisions are not exclusive of any other rights to which the indemnified party may be entitled, including such insurance.
At present, except for demands for advancement of legal fees related to the Delaware action by Messrs. Brown and Bartels, there is no pending litigationaction, suit or proceeding involving any director, officer, employee or agent of the Company in such capacity in which indemnification will be required or permitted. See Advancement Claims in Part I, Item 3 -- Legal Proceedings -- RELATED PARTIES AND RELATED PARTY LITIGATION, in the 2019 Annual Report.
The Company is not aware of any pending or threatened litigationaction, suit or proceeding whichthat may result in a claim for such indemnification. -8-

9
EXECUTIVE OFFICERS, COMPENSATION AND OTHER INFORMATION

EXECUTIVE OFFICERS

Set forth inHowever, please see the table below are the names, ages2019 Annual Report, Item IA Risk Factors -- Potential Conflicts with Affiliates and current offices
held by all executive officers of the Company.

NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------

Terry R. Peets 53 Chief Executive Officer, President and Director

Cathy L. Wood 50 Executive Vice President, Chief Financial Officer and
Secretary

Michael J. Skinner 44 Executive Vice President - Sales and Client
Development

John R. Bain 51 Senior Vice President - Operations

Mark J. Hallsman 43 Senior Vice President - Human Resources

Jay F. Smyre 44 Senior Vice President - General Manager

Executive officers of the Company are elected by and serve at the
discretion of the Board. None of the executive officers has any family
relationship to any nominee for Director or to any other executive officer of
the Company. Set forth below is a brief description of the business experience
for the previous five years of all executive officers except Mr. Peets. See
"Information Concerning Nominees to Board of Directors."

Ms. Wood joined PIA in August 1997 as Executive Vice President, Chief
Financial Officer and Secretary. Ms. Wood served as Vice President and Chief
Financial Officer of Giant Group Ltd., a NYSE listed company specializing in
acquisitions, from 1995 to 1997. From 1989 to 1995, Ms. Wood served in various
capacities at Wherehouse Entertainment, Inc. prior to being named Senior Vice
President and Chief Financial Officer in 1993. From 1972 to 1989, Ms. Wood
served in various credit and lending positions at Mellon Bank, N.A., including
from 1982 to 1989, Vice President of Consumer Products and Retail Credit
Analysis.

Mr. Skinner joined PIA in February 1995 as Senior Vice President --
Marketing, and was named Executive Vice President--Sales and Client Development
in February 1996. From August 1992 to February 1995, Mr. Skinner served as
President and Chief Executive Officer of Winterbrook Corp., a manufacturer and
marketer of beverages. Winterbrook Corp. filed a petition under the federal
bankruptcy laws during 1996. From August 1987 until August 1992, Mr. Skinner
served as Vice President -- Marketing of Shasta Beverages, Inc., a manufacturer
and marketer of soft drinks.

Mr. Bain joined the Company in November 1997 as Senior Vice President of
Operations. Mr. Bain served as Executive Vice President of Shasta Beverages in
the Western Division from October 1995 to November 1997. Before joining Shasta
Beverages, Mr. Bain served as Vice President of Sales and Marketing for
Casablanca Food Company, and Divisional Vice President for Continental Baking
Company, from 1992 to 1994. From 1989 to 1992, Mr Bain served as Division Vice
President, Coca Cola Enterprises. From 1981 to 1989, Mr Bain served in various
capacities at Pepsico Inc.

Mr. Hallsman joined PIA in August 1993 as Vice President - Human
Resources and became a Senior Vice President in December 1995. From September
1985 to August 1993, Mr. Hallsman served as Director, Human Resources of Con-Way
Western Express, a provider of short-haul trucking services.

Mr. Smyre joined PIA in January 1996 as Vice President-General Manager,
and was named Senior Vice President-General Manager in December 1997. Prior to
joining PIA, Mr. Smyre served in a variety of sales and marketing positions at
the Coca Cola/Minute Maid Company from 1981 to 1994 until he was named Vice
President of Strategic Sales in 1995.

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10
COMPENSATION

The following table sets forth all compensation received for services
renderedRisks Related to the Company in's Significant Stockholders and Potential Voting Control and Conflicts and Part I Item 3, -- Legal Proceedings -- RELATED PARTIES AND RELATED PARTY LITIGATION.
Ethics Codes
SGRP has adopted codes of ethical conduct applicable to all capacities for the three years ended December 31,
1997 by (i) each of the Company's Chief Executive Officers during 1997, (ii)
each of the other four most highly compensated executiveits directors, officers of the Company
who were servingand employees, as executive officers at December 31, 1997,approved and (iii) two other
individuals who were executive officers of the Company during the last year and
whose salary and bonus would have placed them in the group of the four most
highly compensated executive officers, but were not so included because they
were not executive officers of the Company at December 31, 1997 (collectively,
the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
NAME AND PRINCIPAL YEAR ENDED ------------------------- UNDERLYING ALL OTHER
POSITIONS DECEMBER 31 SALARY ($)(1) BONUS ($) OPTIONS (#) COMPENSATION ($)(2)
----------- ------------- --------- ------------ ------------------

Terry R. Peets(3)............. 1997 $111,757 $ -- 250,000 $ 10,675
Chief Executive 1996 -- -- -- --
Officer, President, 1995 -- -- -- --
and Director

Clinton E. Owens(4)........... 1997 400,000 -- -- 34,557
Chairman 1996 400,000 50,000 -- 36,820
1995 407,840 10,000 -- 22,673

John A. Colwell(5)............ 1997 200,000 -- 62,500 4,000
Director/Consultant 1996 83,333 -- 5,000 --
1995 -- -- -- --

Michael J. Skinner............ 1997 175,000 -- 54,000 3,500
Executive Vice 1996 168,750 12,500 54,000(6) 3,084
President-- Sales and 1995 125,214 -- 5,405 --
Client Development

Edwin J. Werner(7)............ 1997 189,583 -- -- 3,792
Vice Chairman 1996 157,500 10,000 40,540 1,983
1995 138,667 -- 5,405 --

Jay F. Smyre (8).............. 1997 142,500 -- 25,000 --
Senior Vice President 1996 110,000 25,000 -- --
--General Manager 1995 -- -- -- --

Larry M. Dorr(9).............. 1997 171,375 -- -- 3,428
Senior Vice President 1996 177,000 18,000 -- 3,393
--Non Foods 1995 177,000 25,000 -- 3,490

Roy L. Olofson(10)............ 1997 176,026 -- -- 3,167
Executive Vice President and 1996 81,438 -- 100,000 --
Chief Financial Officer 1995 -- -- -- --

(1) For the year ended December 31, 1995, includes $9,240 and $6,980
deferred at the election of Messrs. Owens and Dorr, respectively; for
the year ended December 31, 1996, includes $109,500, $21,768, $14,500
and $25,248 deferred at the election of Messrs. Owens, Dorr, Skinner and
Werner, respectively; and for the year ended December 31, 1997, includes
$2,500, $95,833, $14,000, $8,000, $98,792, $25,706 and $6,333 deferred
at the election of Messrs. Peets, Owens, Skinner, Colwell, Werner, Dorr
and Olofson respectively, pursuant to the Company's 401(k) Plan and
Deferred Compensation Arrangement. See "-- Compensation Plans -- 401(k)
Plan" and "-- Deferred Compensation Arrangement."

(2) Consists of contributions to the 401(k) Plan maderecommended by the Company on
behalf of each of Messrs. Peets, Owens, Skinner, Colwell, Werner, DorrGovernance Committee and Olofson, respectively. Also includes an aggregate of $4,236 in

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insurance premiums paid by the Company on behalf of Mr. Peets during the
year ended December 31, 1997 for certain life insuranceAudit Committee and disability
insurance policies of which Mr. Peets is the sole beneficiary. Also
includes an aggregate of $18,826, $29,820 and $14,891 in insurance
premiums paid by the Company on behalf of Mr. Owens during the years
ended December 31, 1995, 1996 and 1997, respectively, for certain life
and disability insurance policies of which Mr. Owens is the sole
beneficiary.

(3) Mr. Peets was named Chief Executive Officer and President in August
1997.

(4) Mr. Owens also served as Chief Executive Officer until August 1997.

(5) Mr. Colwell became a consultant on January 1, 1998.

(6) This option was cancelled in December 1997.

(7) Mr. Werner retired from the Company as of January 26, 1998.

(8) Mr. Smyre was named Senior Vice President -- General Manager in December
1997.

(9) Mr. Dorr was named Senior Vice President - Non Foods in October 1997.

(10) Mr. Olofson resigned from the Company as of June 10, 1997.

Mr. Peets entered into an employment agreement with the Company on June
25, 1997. Such agreement is terminable by the Company at any time, subject,
among other things, to severance payments as provided in the employment
agreement. From June 25, 1997 through August 10, 1997, Mr. Peets received a
fixed salary of $1,200 per day. Thereafter, throughout the term of the
employment agreement, Mr. Peets will receive a fixed salary of $20,834 per
month, subject to annual reviewadopted by the Board, in accordance with Nasdaq Rules and SEC Rules. These codes of conduct (collectively, the "Ethics Code") consist of: (1) the SPAR Group Code of Ethical Conduct for possible increases, with a
minimum increase tiedits Directors, Executives, Officers, Employees, Consultants and other Representatives Amended and Restated (as of) March 15, 2018 (the "Restated Ethical Code"); and (2) Statement of Policy Regarding Personal Securities Transactions in SGRP Stock and Non-Public Information, as amended and restated on May 1, 2004, and as further amended through March 10, 2011. Both Committees were involved because general authority over the Ethics Codes shifted from the Audit Committee to the Los Angeles-Long Beach-Anaheim, consumer price
index. Mr. Peets is also entitled to a yearly bonus of up to 100% of his base
salary based uponGovernance Committee with the Company achieving certain operating income targets.

The Company currently has no employment contracts with anyadoption of the Named
Executive Officers other than Mr. Peets. As described belowcommittee charters on May 18, 2004. However, the Audit Committee retained the express duty to review and approve the overall fairness of all material related-party transactions. You can obtain and review current copies of such code and policy on the Company's web site (www.sparinc.com), which are posted and available to stockholders and the public under "--
the Investor Relations tab and Corporate Governance sub-tab.
STOCK-BASED COMPENSATION PLANS
Compensation Plans," under certain circumstances,Policy
The Corporation believes that its compensation packages should (i) attract and retain quality directors, executives and employees, (ii) provide total compensation competitive with similar companies, (iii) reward and reinforce the exercisability of options
granted to the Named Executive Officers may be accelerated in the event of a
merger.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information regarding each grant of stock
options made during the year ended December 31, 1997 to eachattainment of the Named
Executive Officers. No stock appreciation rights ("SARs") were granted during
such period to such persons.

INDIVIDUAL GRANTS(1)
--------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF PERCENT OF ASSUMED ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO TERM(2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION --------------------------
GRANTED (#) IN PERIOD(%) PRICE ($/SH) DATE 5% ($) 10% ($)
----------- ------------- ------------ ---------- ------- ---------

Terry R. Peets ........... 250,000 26.6 5.75 06/25/07 905,000 2,290,000

Clinton E. Owens ......... -- -- -- -- -- --

John A. Colwell .......... 12,500 1.3 5.25 12/16/07 41,250 104,625
50,000 5.3 5.62 04/15/07 176,500 448,000

Michael J. Skinner ....... 54,000(3) 5.8 5.25 12/16/07 178,200 451,980

Edwin J. Werner .......... -- -- -- -- -- --

Jay F. Smyre ............. 23,000 2.5 5.25 12/16/07 75,900 192,510
2,000 .2 5.62 04/15/07 7,060 17,920

Larry M. Dorr ............ -- -- -- -- -- --

Roy L. Olofson ........... -- -- -- -- -- --

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12
(1) All options are nonqualified stock optionsCorporation's performance objectives, and were granted under(iv) align the Company's 1995 Stock Option Plan. Such options, except Mr. Colwell's
grantinterests of 50,000 stock options, vest over four year periods at an annual
rateits directors, executives and employees with those of 25% beginning on the first anniversary of the date of grant. Mr.
Colwell's grant of 50,000 stock options vested at the date of grant.

(2) The potential realizable value is determined by multiplying the exercise
price per share by the stated annual appreciation rate compounded
annually for the term of the option (ten years), subtracting the
exercise price per share from the product, and multiplying the remainder
by the number of options granted. The actual value realized may be
greater or less than the potential realizable values set forth in the
table. No gain to the optionee is possible unless the stock price
increases over the option term, which will benefit all stockholders.

(3) This option replaces an option covering 54,000 shares that was granted
in March 1996 and cancelled in December 1997.

AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES

The following table sets forth the number and value of the exercisable
and unexercisable options held by each of the Named Executive Officers at
December 31, 1997. None of the Named Executive Officers exercised any options
during the fiscal year ended December 31, 1997.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(1)
----------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------

Terry R. Peets ... -- 250,000 -- --

Clinton E. Owens . 227,026 -- 263,998 --

John A. Colwell .. 59,054 16,554 -- --

Michael J. Skinner 2,703 56,702 -- --

Edwin J. Werner .. 12,838 33,107 -- --

Jay F. Smyre ..... -- 25,000 -- --

Larry M. Dorr .... 93,920 3,378 36,000 --

Roy L. Olofson ... -- -- -- --

(1) Value is determined by subtracting the exercise price from the fair
market value of $5.00 per shareits stockholders (the closing price for the Company's
Common Stock as reported on the NASDAQ National Market as of December
31, 1997) and multiplying the remainder by the number of underlying
shares of Common Stock.

COMPENSATION PLANS

1990 Stock Option Plan. The Company's 1990 Stock Option Plan became
effective in June 1990 (as amended through February 1997, the "1990 Option
Plan""Corporation's Compensation Objectives"). The purpose of the 1990 Option Plan and of granting options to specified
employees and directors of the Company pursuant thereto is to assist such
persons in acquiring shares of Common Stock of the Company and thereby
benefiting directly from the Company's growth, development and financial
success. The 1990 Option Plan provides for the grant of non-qualified stock
options only. The Company has authorized 810,811 shares of Common Stock for
issuance upon the exercise of options granted under the 1990 Option Plan. As of
December 31, 1997, there were 617,986 options outstanding under the 1990 Plan at
a weighted average exercise price of $6.42 per share, and 66,986 shares of
Common Stock had been issued upon exercise of options at a weighted average
price of $6.09 per share. In December 1995, the Board determined that no further
option grants would be made under the 1990 Option Plan.

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13
The 1990 Option Plan is administered by the Company's Compensation
Committee. The Compensation Committee has discretion to determine, among other
things, which eligible individuals are to receive option grants,oversees the number of
shares subject to each such grant,existing and the vesting schedule to be in effect for
the option grant. The maximum term of options granted under the 1990 Option Plan
is ten yearsproposed compensation plans, policies and one week, subject to earlier termination following an
optionee's cessation of service with the Company.

The exercise price of stock options granted under the 1990 Option Plan
must be equal to at least 85%practices of the fair market value of the stock subjectCorporation, reviews and recommends to the option on the date of grant. The purchase price is payable immediately upon
the exercise of the option. Such payment may be made in cash, by checkBoard any necessary or indesirable changes or additions to any such other form of lawful consideration (including promissory notesplan, policy or shares of
Common Stock then held) as the Board of Directors of the Company may approve
from timepractice, and reviews and approves all director and executive officer compensation, to time.

Options granted under the 1990 Option Plan are non-transferable except
to immediate family members, trusts for their benefit or a partnership in which
such family members are the only partners. Such options generally expire three
months after the termination of an optionee's service to the Company. In
general, if an optionee is permanently disabled or dies during his or her
service to the Company, such option may be exercised up to one year following
such disability or death.

Upon the dissolution or liquidation of the Company or upon any
reorganization, merger or consolidation in which the Company does not survive,
the 1990 Option Plan and each outstanding option granted thereunder terminates;
provided, that each optionee to whom no substitute option has been tendered by
the surviving corporation has the right to exercise in whole or in part any
unexpired option or options issued to him or her, without regard to the vesting
provisions thereof.

The Board of Directors may amend or modify the 1990 Option Plan and
outstanding options at any time, including but not limited to accelerating the
time at which an option may be exercised, provided that no such amendment or
modification may adversely affect the rights and obligations of the participants
with respect to their outstanding options or unvested shares without their
consent.

1995 Stock Option Plan. The Company's 1995 Stock Option Plan became
effective in December 1995 (as amended through February 1997, the "1995 Option
Plan"). The purpose of the 1995 Option Plan and of granting options to specified
employees, consultants and directors of the Company pursuant thereto is to
assist such persons in acquiring shares of Common Stock of the Company and
thereby benefiting directly from the Company's growth, development and financial
success. The 1995 Option Plan provides for the grant of either incentive or
non-qualified stock options to employees, outside directors and consultants of
the Company. A reserve of 1,000,000 shares of the Company's Common Stock has
been established for issuance under the 1995 Option Plan. As of December 31,
1997, there were 882,865 options outstanding under the 1995 Plan at a weighted
average exercise price of $6.05 per share, and 2,000 shares of Common Stock had
been issued upon exercise of options at a weighted average price of $9.81 per
share.

The 1995 Option Plan is administered by the Company's Compensation
Committee. The Compensation Committee has discretion to determine, among other
things, which eligible individuals are to receive option grants, the number of
shares subject to each such grant, and the vesting schedule to be in effect for
the option grant. The vesting of all options granted pursuant to the 1995 Option
Plan may be based upon the Company's attaining of specified performance criteria
and/or may also be based on the passage of time. The maximum term of options
granted under the 1995 Option Plan is ten years, except in the case of incentive
stock options granted to greater than ten percent stockholders of the Company,
for which the term is five years, and subject in all cases to earlier
termination following an optionee's cessation of service with the Company. The
exercise price of non-qualified stock options granted under the 1995 Option Plan
must be equal to at least 85% of the fair market value of the Common Stock
subject to the option on the date of grant. The exercise price of incentive
stock options granted under the 1995 Option Plan must be equal to at least the
fair market value of the Common Stock subject to the option on the date of
grant, or 110% of such fair market value with respect to options granted to
greater than ten percent stockholders of the Company. The Compensation Committee
determines the fair market value of the Common Stock underlying each option
using a formula specified in the 1995 Option Plan. The purchase price

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14
is payable immediately upon the exercise of the option. Such payment may be made
in cash, by check or in such other form of lawful consideration (including
shares of Common Stock then held) as the Compensation Committee may approve from
time to time.

Options granted under the 1995 Option Plan are non-transferable except
to immediate family members, trusts for their benefit or a partnership in which
such family members are the only partners. Such options generally expire three
months after the termination of an optionee's service to the Company. In
general, if an optionee is permanently disabled or dies during his or her
service to the Company, such option may be exercised up to six months following
such disability or death.

Upon the dissolution or liquidation of the Company or upon any
reorganization, merger or consolidation in which the Company does not survive,
the 1995 Option Plan and each outstanding option granted thereunder shall
terminate; provided, that each optionee to whom no substitute option has been
tendered by the surviving corporation shall have the right to exercise in whole
or in part any unexpired option or options issued to him or her, without regard
to the vesting provisions thereof.

The Board of Directors may amend or modify the 1995 Option Plan and
outstanding options at any time, including but not limited to accelerating the
time at which an option may be exercised, provided that no such amendment or
modification may adversely affect the rights and obligations of the participants
with respect to their outstanding options or unvested shares without their
consent. Generally, no amendment of the 1995 Option Plan may, without the
approval of the Company's stockholders, (i) modify the class of individuals
eligible to receive incentive stock options, (ii) increase the number of shares
available for issuance, except in the event of certain changes to the Company's
capital structure, or (iii) modify the 1995 Option Plan such that it failsendeavor to meet the requirementsCorporation's Compensation Objectives.
The Corporation believes that the interests of Rule 16b-3its executives should be closely aligned with those of the Securities Exchange Act of 1934, as
amended.its stockholders. The 1995 Option Plan will terminate in December 2005, unless sooner
terminated by the Board.

See "Proposal 2 -- Amendment of 1995 Stock Option Plan."

Employee Stock Purchase Plan. On February 17, 1997, the Company adopted
an Employee Stock Purchase Plan ("ESP Plan"). The ESP Plan allows employees of
the Company to purchase Common Stock at a discount, without having to pay any
commissions on the purchases. The maximum amount that any employee can
contribute to the Purchase Plan per quarter is $6,250, and the total number of
sharesCorporation's executive compensation program has three primary elements, which are reserved byfixed base salaries, annual performance-based bonuses and long-term equity incentive awards. In balancing these elements, the Company for purchase under the Purchase Plan is
200,000.

401(k) Plan. The PIA Savings and Retirement 401(k) Plan (the "401(k)
Plan") covers all Company employees that do not participate in the pension plans
described below. An employee may electCorporation endeavors to defer, in the form of Company
contributions to the 401(k) Plan on his or her behalf, up to 15% of the total
compensation that would otherwise be paid to the employee, not to exceed the
amount allowed by applicable Internal Revenue Service guidelines. In addition,
the Company makes matching contributions to the 401(k) Plan each year equal to
50% of the participant's elective contributions (not to exceed 4% of the total
compensation) for such year, and may also make additional contributions to the
401(k) Plan for one or more plan years to be allocated to eligible participants
in proportion to their total compensation (including deferred salary
contributions) for the year. Contributions are allocated to each employee's
individual account and are invested in a variety of mutual funds according to
the directions of the employee. Employee contributions are fully vested and
non-forfeitable at all times. Company matching contributions vest over five
years.

Deferred Compensation Arrangement. The Deferred Compensation Arrangement
("DCA") permits a certain group of highly compensated employees who are
designated by the Board of Directors to defer the receipt of some or all of
their compensation until a subsequent year. Participants are not subject to
income tax on the amount of their contributions to the DCA ("Deferrals"), but
those amounts are subject to federal employment taxes. The Company will
generally make matching contributions on behalf of the contributions made by
participants to the DCA and participants will gain a vested interest in the
matching contributions, to the same extent as under the 401(k) Plan.
Participants always have a fully vested right to their Deferrals. Although no
amounts are set aside by the Company to pay the benefits under the DCA, a trust
has been established to

-14-

15
"informally" fund the benefits under the DCA. Participants can direct the manner
in which the amounts held on their behalf under the DCA are invested. Although
the DCA is not a tax-qualified retirement plan, under certain circumstances, a
participant's Deferrals may be transferred to the 401(k) Plan. A participant's
benefit under the DCA will be paid in either a lump sum or in installments, as
elected by the participant.

Exec-U-Care Plan. Under the Exec-U-Care Plan (the "Exec-U-Care Plan"),
the Company provides the Chairman and certain other officers of the Company up
to $100,000 supplemental medical coverage in addition to the standard medical
coverage offered to such persons generally by the Company. The Exec-U-Care Plan
requires that the employees covered thereunder have a primary medical insurance
plan which meets certain minimum standards of coverage; the Exec-U-Care Plan
then covers the deductible and certain other expenses not paid for by the basic
medical insurance plan.

Pension Plans. Certain of the Company's employees are covered by
union-sponsored, collectively bargained, multi-employer pension plans. The
Company has no current intention of withdrawing from any of these plans.

Incentive Compensation Plan. The Company has established its Incentive
Compensation Plan (the "Incentive Plan") for the compensation of its employees
and executives. All payments under the Incentive Plan are contingent on the
Company achieving its corporate profit goals, the Company's operating divisions
achieving their profit goals, the employee achieving his/her expected
performance level, and approval by the Board of Directors of the Company.

KEY MAN LIFE INSURANCE

The Company currently maintains term life insurance policies in the
aggregate amount of $4.5 million on the life of Mr. Owens under which the
Company is the beneficiary.

-15-

16
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS

The Compensation Committee of the Board is comprised of Messrs. Haden
and Epstein, two non-employee directors, who administer the Company's executive
compensation programs and policies. The Company's executive compensation
programs are designed to attract, motivate and retain the executive talent
needed to optimize stockholder value in a competitive environment. The programs
are intended to support the goal of increasing stockholder value while
facilitating the business strategies and long-range plans of the Company.

The following is the Compensation Committee's report submitted to the
Board addressing the compensation of the Company's executive officers for 1997.

COMPENSATION POLICY

The Company's executive compensation policy is (i) designed to establishstrike an appropriate relationship between executive pay andbalance among the Company'sCorporation's annual performance, its long-term growth objectives, and its ability to attract and retain qualified executive officers;officers and (ii)the expense of such compensation. The Corporation believes it should compensate executives for their individual work and achievements, which it endeavors to do through the salaries and individual discretionary bonuses described below. In addition, the Corporation rewards executives for their contributions to the Corporation's achievement of short-term business objectives and operational and performance goals, through the annual cash and stock-based incentive bonuses described below. Grants of restricted stock, stock options and other stock-based awards under the Corporation's 2018 Stock Compensation Plan (described below) are incentives for each executive to make long-term contributions to the value of the Corporation. The Corporation considers all elements of compensation when determining the total salaries and incentives for its executives, but once determined for a particular year such elements are generally independent of each other (e.g. salary will not be affected by the size of bonuses or value of stock-based awards).
25
Determining Compensation
Each year the Compensation Committee receives compensation recommendations for base salary, bonuses and possible stock-based awards for its non-CEO executives from the Corporation's Chief Executive Officer, and carefully reviews and (to the extent they deem appropriate) adjusts them before approving them. These recommendations are developed by management through employee evaluations, development of business goals and input from its executives. The Corporation also provides a stock purchase plan, 401(k) plan, healthcare plan and certain other benefits to all of the Company's employees (including its executives). In addition, certain executives are party to severance agreements discussed below. The Corporation believes that it pays competitive compensation packages that allow it to attract and retain quality executives.
In setting base salaries, the Corporation considers individual performance (including the satisfaction of duties and accomplishment of previously established short-term and long-term objectives) and various subjective criteria (including initiative, dedication, growth, leadership and contributions to overall department and corporate performance). Non-executive officer salaries and salary increases are recommended by the Corporation's Chief Executive Officer and reviewed and approved by the Compensation Committee.
The Corporation's executive officers are eligible for annual cash and stock-based award bonuses based upon their individual performance, the Corporation's achievements of certain specific operating results or increases in stockholder value and they also may receive a discretionary amount based on the beliefoverall contribution of the officer to the Corporation during the year. During or before the beginning of each year the Corporation's Chief Executive Officer and the Compensation Committee establish bonus criteria for each of those officers based principally on the Corporation's achievement of specific performance goals during the year. The type of goal, thresholds and awards may vary among the executives based on their specific area of expertise and responsibilities. However, each goal is specifically designed to generate additional profit, increase revenue or otherwise increase stockholder value. Ranges are generally specified for the goals with corresponding cash and stock-based award bonuses specified for achievement. If a specified level for a goal is achieved, as determined by the Corporation and reviewed by the Compensation Committee, the applicable executives are entitled to the corresponding cash and stock-based award bonuses. All executive officer bonus plans are recommended by the Corporation's Chief Executive Officer and reviewed and approved by the Compensation Committee.
The Company believes that it is desirable to align the interests of its directors, executives, employees and consultants with those of its stockholders through their ownership of shares of Common Stock issued by SGRP ("SGRP Shares"). Although the Company does not require its directors, executives, should be closely aligned withemployees or consultants to own SGRP Shares, the Company's
stockholders. The Compensation Committee attemptsCompany believes that it can help achieve this objective (i) by providing long term equity incentives through the issuance to achieve these goalsits eligible directors, executives, employees or consultants of options to purchase SGRP Shares and other stock-based awards, which it believes it has done pursuant to the 2008 Plan and the 2018 Plan (as defined below), and (ii) by integrating competitive annual base salaries with (i) annualfacilitating the purchase of SGRP Shares by all of its eligible executives, employees and consultants who elect to participate in its Employee or Consultant Stock Purchase Plans (as defined below). In particular, the Company believes that granting stock-based awards ("Awards") (including restricted SGRP Shares, stock options to purchase SGRP Shares (either incentive bonusesor nonqualified), and restricted stock units, stock appreciation rights and other awards based on corporate performanceSGRP Shares) to such directors, executives, employees and individual contribution, and (ii) stock
options through the 1995 Plan. The Compensation Committee believes that cash
compensation in the form of salary and performance-based incentive bonuses
provides Company executives with short term rewards for success in operations,
and that long-term compensation through the award of stock optionsconsultants encourages growth in management stocktheir ownership of SGRP Shares, which in turn leads to the expansion of management'stheir stake in the long-term performance and success of the Company. The Compensation
Committee considers all elements of compensation
SGRP has granted stock option and the compensation policy
when determining individual components of pay.

EXECUTIVE COMPENSATION COMPONENTS

As discussed below, the Company's executive compensation package is
primarily comprised of three components: base salary, annual incentive bonuses
andrestricted stock options.

Base Salary. In establishing base salary levels for executive officer
positions, the Committee and the Company's Chief Executive Officer, consider
levels of compensation at comparable companies, levels of responsibility and
internal issues of consistency and fairness. In determining the base salary of a
particular executive, the Committee and the Chief Executive Officer consider
individual performance, including the accomplishment of short- and long-term
objectives, and various subjective criteria including initiative, contribution
to overall corporate performance and leadership ability. The Compensation
Committee reviews executive officer salaries annually and exercises its judgment
based on all the factors described above. No specific formula is applied to
determine the weight of each criteria.

Annual Incentive Bonuses. For 1997, the Company's executive officers
were eligible for annual bonuses based upon recommendations made by the Chief
Executive Officer based upon their individual performance and the Company's
achievement of certain operating results. Amounts of individual awards were
based principally upon the results of the Company's financial performance during
the year. The amount of awards for senior officers were within guidelines
established by the Committee and the Chief Executive Officer as a result of
their review of total compensation for senior management of peer companies. The
actual amount awarded, within these guidelines, was determined principally by
the Committee's and the Chief Executive Officer's assessment of the individual's
contributionAwards to the Company's overall financial performance. Consideration was
also given to such factors such as the individual's successful completion of a
special projecteligible directors, officers and any significant increase or decrease in the level of the
participant's ability to discharge the responsibilities of his position. No
bonuses were paid to executive officers in 1997.

-16-

17
For 1998, the Compensation Committee has approved the 1998 Incentive
Compensation Plan (the "ICP") which is based upon the Company's 1998 Business
Plan (the "Business Plan"). Under the ICP, 75% of the specified bonuses will be
payable in the event the Company meets its earnings per share goal, as specified
in the Plan,employees and earnings per share in the fourth quarter of 1998 satisfy the
specified goal; and 100% of the specified bonuses will be payable in the event
the Company meets it earnings per share goal, as specified in the Plan, and
earnings per share in the fourth quarter of 1998 satisfy the specified goal. In
the event bonuses are payable under the ICP, the Company will then determine
whether the executive officer met his or her previously established annual
performance goal. An executive officer's failure to achieve this goal will
disqualify that officer from earning payment under the ICP.

Stock Options. Stock options encourage and reward effective management
which results in long-term corporate financial success, as measured by stock
price appreciation. Stock options covering 631,500 shares were granted to the
executive officers of the Company and stock options covering 300,825 shares were
granted to other employees of the Company during 1997 under the 1995 Plan. The
number of options that each executive officer or employee was granted was based
primarily on the executive's or employee's ability to influence the Company's
long-term growth and profitability. The Compensation Committee believes that
option grants afford a desirable long-term compensation method because they
closely ally the interests of management with stockholder value and that grants
of stock options are the best way to motivate executive officers to improve
long-term stock market performance. The vesting provisions of options granted
under the 1995 Plan are designed to encourage longevity of employment with the
Company and generally extend over a four-year period.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

The Compensation Committee believes that its current Chief Executive
Officer, Terry R. Peets provides valuableconsultants providing services to the Company and that his
compensation should therefore be competitive with that paid to executives at
comparable companies. In addition, the Compensation Committee believes that an
important portion of his compensation should be based on Company performance.
Mr. Peets' base salary and bonus are determinedpurchase SGRP Shares pursuant to his employment
agreement,SGRP's 2018 Stock Compensation (the "2018 Plan"), and SGRP's 2008 Stock Compensation Plan (as amended, the "2008 Plan"). SGRP's stockholders approved and adopted the 2018 Plan in May 2018 and the 2008 Plan in May 2008, as described under "Executive Officers, Compensationthe successor to various predecessor stock option plans (including the 2018 Plan and Other
Information." In 1997, Mr. Peets' base salary was $111,757 and he did not
receive2008 Plan, each a bonus for his performance in 1997.

Mr. Owens served as Chief Executive Officer from January 1 through
August, 1997. The factors which the Compensation Committee considered in setting
his annual base salary were his individual performance and pay practices of peer
companies relating to executives of similar responsibility. Mr. Owens' annual
base salary for 1997 was $400,000 and he did not receive a bonus for his
performance in 1997.

INTERNAL REVENUE CODE SECTION 162(M)

Under Section 162(m) of the Internal Revenue Code (the "Code""Prior Plan"), the
amount of compensation paid to certain executives that is deductible with respect to all new Awards granted, and an amendment to the Company's corporate taxes is limited2008 Plan in May 2009, permitting the discretionary repricing of existing awards. SGRP also has granted stock options that continue to $1,000,000 annually. It
isbe outstanding under the current policyPrior Plans. Awards granted under each Prior Plan shall continue to be governed by such Prior Plan and such Prior Plan shall continue in full force and effect for that purpose for so long as any such Awards are outstanding. New Awards could not be, and were not, issued under the 2018 Plan or any other Prior Plan after the end of its final term (which ended on May 31, 2019, in the case of the Compensation Committee to maximize, to the extent
reasonably possible, the Company's ability to obtain a corporate tax deduction
for compensation paid to executive officers of the Company to the extent
consistent with the best interests of the Company and its stockholders.

COMPENSATION COMMITTEE

Patrick C. Haden
Edwin E. Epstein

-17-

COMPANY PERFORMANCE

The following graph shows a comparison of cumulative total returns for
the Company, the NASDAQ Stock Market (U.S. Companies) Index and the NASDAQ
Stocks (SIC 7380-7389 U.S. Companies) Miscellaneous Business Services Index for
the period during which the Company's Common Stock has been registered under
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")2018 Plan). The graph assumes that the value of an investment in Common Stock and in
each such index was $100 on February 29, 1996 (the date the Company's Common
Stock was registered under the Exchange Act), and that all dividends have been
reinvested.

The comparison in the graph below is based on historical data and is not
intended to forecast the possible future performance of the Company's Common
Stock.

COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
PIA, NASDAQ STOCK MARKET (U.S. COMPANIES)
AND THE NASDAQ STOCKS (SIC 7380-7389 U.S. COMPANIES)
MISCELLANEOUS BUSINESS SERVICES INDEX

Company Market Peer
Date Index Index Index
---------- ------- ------- -------

12/31/92 -- 61.230 51.288
1/29/93 -- 62.972 51.637
2/26/93 -- 60.623 49.321
3/31/93 -- 62.378 49.586
4/30/93 -- 59.716 47.485
5/28/93 -- 63.281 45.122
6/30/93 -- 63.572 46.399
7/30/93 -- 63.648 50.680
8/31/93 -- 66.937 48.705
9/30/93 -- 68.931 50.951
10/29/93 -- 70.479 53.922
11/30/93 -- 68.379 51.483
12/31/93 -- 70.286 52.678
1/31/94 -- 72.419 52.964
2/28/94 -- 71.743 52.653
3/31/94 -- 67.331 45.999
4/29/94 -- 66.457 47.591
5/31/94 -- 66.619 46.220
6/30/94 -- 64.182 46.323
7/29/94 -- 65.499 46.391
8/31/94 -- 69.674 49.001
9/30/94 -- 69.496 51.044
10/31/94 -- 70.862 52.332
11/30/94 -- 68.511 49.976
12/30/94 -- 68.703 51.647
1/31/95 -- 69.088 52.587
2/28/95 -- 72.742 52.696
3/31/95 -- 74.899 52.301
4/28/95 -- 77.258 54.418
5/31/95 -- 79.251 55.176
6/30/95 -- 85.673 57.485
7/31/95 -- 91.971 64.985
8/31/95 -- 93.836 70.176
9/29/95 -- 95.994 72.697
10/31/95 -- 95.443 76.471
11/30/95 -- 97.684 87.043
12/29/95 -- 97.164 89.145
1/31/96 -- 97.643 99.098
2/29/96 -- 101.359 99.029
3/1/96 100.000 100.000 100.000
3/29/96 120.161 101.695 109.537
4/30/96 169.355 110.132 125.605
5/31/96 104.839 115.189 132.691
6/28/96 93.548 109.997 131.553
7/31/96 94.355 100.202 117.580
8/30/96 92.742 105.816 130.236
9/30/96 82.258 113.910 146.904
10/31/96 77.419 112.652 131.105
11/29/96 58.065 119.616 131.031
12/31/96 67.742 119.508 121.456
1/31/97 70.161 128.001 127.105
2/28/97 56.452 120.925 107.668
3/31/97 33.065 113.031 89.217
4/30/97 39.516 116.565 77.944
5/30/97 35.484 129.780 99.810
6/30/97 37.097 133.751 101.707
7/31/97 35.484 147.869 98.212
8/29/97 48.387 147.644 93.061
9/30/97 45.565 156.379 100.351
10/31/97 50.806 148.284 92.513
11/28/97 45.161 149.027 86.381
12/31/97 32.258 146.686 87.073

12/31/92 12/31/93 12/30/94 12/29/95 12/31/96 12/31/97

PIA Merchandising Services, Inc. 67.7 32.3
Nasdaq Stock Market (US Companies) 61.2 70.3 68.7 97.2 119.5 146.7
NASDAQ Stocks (SIC 7380-7389 US Companies) 51.3 52.7 51.6 89.1 121.5 87.1
Miscellaneous Business Services

Notes:

a. The lines represent monthly index levels derived from compounded daily
returns that include all dividends

b. The indexes are reweighted daily, using the market capitalization on the
previous trading day

c. If the monthly interval, based on the fiscal year-end is not a trading day
the preceding trading day is used.

d. The index level for all series was set to $100.00 on 03/01/96.

-18-

[PERFORMANCE GRAPH]

Comparison of Five Year-Cumulative Total Returns

12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- -------- -------- -------- -------- -------- --------

67.7 32.3
61.2 70.3 68.7 97.2 119.5 146.7
51.3 52.7 51.6 89.1 121.5 87.1
20
PROPOSAL 2 -- AMENDMENT OF 1995 STOCK OPTION PLAN

At the 1998 Annual Meeting, the stockholders will be asked to approve an
amendment (the "Amendments") to the Company's 1995 Stock Option Plan (the "1995
Plan"). Such approval will require the affirmative vote of a majority of the
voting power of all outstanding shares of the Company's Common Stock present or
represented and entitled to vote at the 1998 Annual Meeting. On February 20,
1998, the Board adopted the Amendment, subject to stockholder approval as
described herein, to increase the number of shares that may be issued pursuant
to the Plan from 1,000,000 to 1,300,000. The 19952018 Plan and information regarding optionsAwards granted thereunder isare summarized below, but these descriptions are subject to and are qualified in their entirety by the full text of the 19952018 Plan, which is hereby incorporated by reference into this Proxy Statement from SGRP's Current Report on Form 8-K, as amended byfiled with the proposed Amendments,SEC on May 8, 2018).
At the First Special Meeting, the Corporation's stockholders voted against the ratification and approval of the 2020 Plan of SPAR Group, Inc. (the "2020 Plan") (i) for a term from April 30, 2020 through May 31, 2021 (the "20-21 Period"), and (ii) providing for a total of 1,200,000 SGRP Shares available for future Awards during the 20-21 Period under 2020 Plan, which is attached as Appendix 1Annex A to this Proxythe First Special Meeting Proxy/Information Statement.

SUMMARY OF THE 1995 PLAN

26
As of September 30, 2019, there were Awards respecting 600,000 shares of SGRP's Common Stock that had been granted under the 2018 Plan (580,000 of which remained outstanding), and Awards respecting 3,044,927 shares of SGRP's Common Stock outstanding under the 2008 Plan. As of September 30, 2019, and March 13, 2020, there were no Awards available for grant under the 2018 Plan.
2008 Plan Summary
2008 Plan Stock option Award activity for the years ended December 31, 2019 and 2018 are summarized below:
Option Awards Covered Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (thousands)
Outstanding at January 1, 2018 3,334,177 $ 0.96 5.17 $ 1,221
Granted 45,000 1.67 – –
Exercised/cancelled 306,750 0.40 – –
Forfeited or expired 37,500 – – –
Outstanding at December 31, 2018 3,044,927 $ 1.01 4.55 $ 103
Granted – – – –
Exercised 804,580 0.44 – –
Forfeited or expired 13,136 – – –
Outstanding at December 31, 2019 2,227,211 $ 1.22 4.83 $ 452
Exercisable at December 31, 2019 1,723,961 $ 1.27 4.06 $ 321
The 1995weighted-average grant-date fair value of stock option Awards granted during the year ended December 31, 2019 was $0.00. The total intrinsic value of stock option Awards exercised during the year ended December 31, 2019 and 2018 was $257,000 and $274,000, respectively.
The Company recognized $139,000 and $155,000 in stock-based compensation expense relating to stock option Awards during the years ended December 31, 2019 and 2018, respectively. The recognized tax benefit on stock based compensation expense related to stock options during the years ended December 31, 2019 and 2018, was approximately $35,000 and $38,000, respectively.
As of December 31, 2019, total unrecognized stock-based compensation expense related to stock options was $182,000. This expense is expected to be recognized over a weighted average period of approximately 2.0 years, and will be adjusted for changes in estimated forfeitures.
2018 Plan Summary
Following are the specific valuation assumptions used for options granted in 2019 for the 2018 Plan:
Expected volatility 39 %
Expected dividend yields 0 %
Expected term (in years) 3
Risk free interest rate 2.3 %
Expected forfeiture rate 5 %
27
2018 Plan Stock option Award activity for the years ended December 31, 2019 and 2018 are summarized below:
Option Awards Covered Shares Weighted- Average
Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (thousands)
Outstanding at January 1, 2018 – $ – – –
Granted 245,000 1.23 – –
Exercised/cancelled – – – –
Forfeited or expired 10,000 – – –
Outstanding at December 31, 2018 235,000 $ 1.23 9.35 $ –
Granted 320,000 0.64 – –
Exercised – – – –
Forfeited or expired – – – –
Outstanding at December 31, 2019 555,000 $ 0.89 8.88 $ 6
Exercisable at December 31, 2019 88,750 $ 1.23 8.35 $ 6
The weighted-average grant-date fair value of stock option Awards granted during the year ended December 31, 2019 was initially adopted$0.27. The total intrinsic value of stock option Awards exercised during the year ended December 31, 2019 and 2018 was $0.
The Company recognized $90,000 and $31,000 in stock-based compensation expense relating to stock option Awards during the years ended December 31, 2019 and 2018, respectively. The recognized tax benefit on stock based compensation expense related to stock options during the years ended December 31, 2019 and 2018, was approximately $22,000 and $8,000, respectively.
As of December 31, 2019, total unrecognized stock-based compensation expense related to stock options was $122,000. This expense is expected to be recognized over a weighted average period of approximately 2.0 years, and will be adjusted for changes in estimated forfeitures.
Restricted Stock- 2008 Plan
The restricted stock Awards previously issued under the 2008 Plan vested during the first four years following issuance at the rate of 25% on each anniversary date of their issuance so long as the holder continues to be employed by the Board of Directors and
stockholdersCompany. Restricted stock granted under the 2008 Plan is measured at fair value on the date of the Company in December 1995. Undergrant, based on the 1995 Plan, employees,
certain directors, officersnumber of shares granted and consultants (collectively referred tothe quoted price of the Company's common stock. The shares of stock are issued and value is recognized as "Participants") providing services tocompensation expense ratably over the requisite service period which generally is the Award's vesting period. In 2018, the Company did not issue restricted stock Awards to its employees or its subsidiaries mayDirectors.
The following table summarizes the activity for restricted stock Awards during the years ended December 31, 2019 and 2018:
Shares Weighted- Average Grant Date Fair Value per Share
Unvested at January 1, 2018 68,400 $ 1.38
Granted – –
Vested (18,900 ) 1.48
Forfeited (48,500 ) 1.35
Unvested at December 31, 2018 1,000 1.36
Granted – –
Vested (1,000 ) 1.36
Forfeited – –
Unvested at December 31, 2019 – $ –
During the years ended December 31, 2019 and 2018, the Company recognized approximately $1,200 and $15,000, respectively, of stock-based compensation expense related to restricted stock. The recognized tax benefit on stock based compensation expense related to restricted stock during the years ended December 31, 2019 and 2018 was approximately $0 and $4,000, respectively. During the years ended December 31, 2019 and 2018, the total fair value of restricted stock vested was $1,000 and $23,000, respectively.
As of December 31, 2019, total unrecognized stock-based compensation expense related to unvested restricted stock Awards was $0.
Restricted Stock - 2018 Plan
The restricted stock Awards previously issued under the 2018 Plan (like those under the 2008 Plan) vested during the first four years following issuance at the rate of 25% on each anniversary date of their issuance so long as the holder continues to be employed by the Company. Restricted stock granted options to purchaseunder the 2018 Plan (like those under the 2008 Plan) is measured at fair value on the date of the grant, based on the number of shares granted and the quoted price of the Company's common stock. The shares of common stock ofare issued and value is recognized as compensation expense ratably over the requisite service period which generally is the Award's vesting period. In 2019, there were no restricted stock Awards issued to its Directors.
28
The following table summarizes the activity for restricted stock Awards during the years ended December 31, 2019 and 2018:
Shares Weighted- Average Grant Date Fair Value per Share
Unvested at January 1, 2018 20,000 $ 1.23
Granted – –
Vested (10,000 ) 1.23
Forfeited – –
Unvested at December 31, 2018 10,000 1.23
Granted – –
Vested (10,000 ) 1.23
Forfeited – –
Unvested at December 31, 2019 – $ –
During the years ended December 31, 2019 and 2018, the Company ("Common
Stock"recognized approximately $4,000 and $20,000, respectively, of stock-based compensation expense related to restricted stock. The recognized tax benefit on stock based compensation expense related to restricted stock during the years ended December 31, 2019 and 2018 was approximately $1,000 and $5,000, respectively.
During the years ended December 31, 2019 and 2018, the total fair value of restricted stock vested was $7,000 and $12,000, respectively.
As of December 31, 2019, total unrecognized stock-based compensation expense related to unvested restricted stock Awards was $0.
Stock Purchase Plans
In 2001, SGRP adopted its 2001 Employee Stock Purchase Plan (the "ESP Plan"), which replaced its earlier existing plan, and its 2001 Consultant Stock Purchase Plan (the "CSP Plan"). These plans were each effective as of June 1, 2001. The 1995ESP Plan permits the granting of both options that qualify for
treatment as incentive stock options ("Incentive Stock Options") under Section
422 of the Code, and/or options that do not qualify as Incentive Stock Options
("Nonqualified Stock Options"). Incentive Stock Options may only be granted toallows employees of the Company.

The purpose of the 1995 Plan and of granting options to specified
persons is to promote the interests of the Company, and its stockholders, by
providing stock-based incentives to certain Participants. Under the 1995CSP Plan Participants can receive certain options ("Options")allows employees of the affiliates of the Company to purchase SGRP's Common Stock thus strengtheningfrom SGRP without having to pay any brokerage commissions. On August 8, 2002, SGRP's Board approved a 15% discount for employee purchases of Common Stock under the mutualityESP Plan and recommended that its affiliates pay 15% of interests between Participants and the Company becausevalue of the Participants havestock purchased as a proprietary interest in pursuingcash bonus for affiliate consultant purchases of Common Stock under the Company's long-term growth and financial success. In addition, by allowing
Participants to participate in the Company's success, the Company is able to
better attract, retain and reward quality employees, directors, officers and
consultants.

Persons eligible to participate in the 1995 Plan are Participants
providingCSP Plan.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth all compensation for services rendered to the Company and/in all capacities for the years ended December 31, 2019 and 2018, except for amounts paid to or by SAS, SBS and SIT (see - Transactions with Related Persons, Promoters and Certain Control Persons, above), by (i) the Corporation's Chief Executive Officer, and (ii) each of the other persons named below, which include the two most highly compensated Executives or other Officers of the Company. "Named Executive Officers" shall mean each of the individuals listed below, other than Mr. Bartels. The Company does not have any Non-Equity Incentive Compensation Plans other than as part of its subsidiaries (collectively referredindividual Incentive Bonus Plans, any pension plans or any non-qualified deferred compensation plans, and accordingly those columns have been omitted.
Name and Principal Positions Year Salary ($) Bonus ($) Stock
Awards
($) (1) Option
Awards
($)(1) All Other
Compensation
($) (2) Total ($)
(a) (b) (c) (d) (e) (f) (g) (h)
Christiaan M. Olivier 2019 300,000 100,000 6,738 – 20,800 431,538
Chief Executive Officer, President and Director 2018 300,000 12,261 63,566 4,800 380,627
William H. Bartels (3) 2019 150,000 4,800 154,800
Vice Chairman and Director 2018 150,000 4,800 154,800
James R. Segreto 2019 204,749 – – 38,560 4,800 248,109
Chief Financial Officer, Treasurer and Secretary 2018 200,000 22,000 3,163 4,755 4,800 234,817
Kori G. Belzer 2019 220,106 – – 35,174 4,800 260,080
Chief Operating Officer 2018 215,000 30,100 3,163 4,672 4,800 257,735
Steven J. Adolph 2019 204,749 100,000 – – – 304,749
President International 2018 200,000 40,000 – 4,755 – 244,755
Gerard Marrone 2019 204,749 – – 9,500 – 214,249
Chief Revenue Officer 2018 200,000 – – 14,424 214,424
(1) These are not amounts actually paid to or received by the Named Executive or Officer. These are "compensation expenses" for restricted stock or stock option awards recognized by the Corporation under generally accepted accounting principles computed in accordance with ASC-718- 10. See Note 2 to our 2019 Annual Report on Form 10-K for additional assumptions used to value stock and option awards.
(2) "Other Compensation" primarily represents automobile allowance, except for, the $16,000 paid to Christiaan Olivier for living expenses.
(3) Mr. Bartels retired as an employee of SGRP as of January 1, 2020, but he will continue to serve as a non-employee director. (SeeBartels' Retirement and Director Compensation, below for a description of the benefits that he will receive as a director.)
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Narrative to Summary Compensation Table
Compensation Elements
As indicated in the Summary Compensation Table above, in addition to base salary, we provide the following compensation and benefits to our Named Executive Officers:
● Cash Bonuses. Annually, the Company enters into bonus plans with key management and administrators based on specified goals. The bonuses noted in the above table that were paid in 2019 were in fact earned in 2018. Management bonuses earned and accrued in 2019 of approximately $1.4 million were scheduled to be paid by March 31, 2020 but, at managements recommendation, they have been temporarily delayed to preserve cash reserves for potential impact of Covid-19. Personal that have earned 2019 bonuses entered into Delayed Payment Agreements with the Company which effectively defer these compensation payments until the later part of 2020 as cash availability projections improve.
● Stock and Option Awards. The Corporation grants our Named Executive Officers awards of stock options and restricted stock from time to time. During 2019, the Corporation granted Messrs. Oliver, Segreto, Belzer and Marrone options to purchase shares of our common stock. Such options were issued with an exercise price equal to the fair market value on the date of grant and vest and become exercisable 25% on each of the first four anniversaries of the date of grant, provided that the recipient remains employed through the vesting date.
● Retirement Benefits. The only retirement plan the Company maintains in the United States is its 401(k) Profit Sharing Plan, which is which is a tax-qualified defined contribution plan that is available to all of its eligible employees, including the Named Executive Officers. Although it is not required to do so, the Corporation makes discretionary contributions to plan participants from time to time. In 2019, the Corporation contributed a total of $75,000 to that plan, which was shared by its 197 participants in proportion to their respective contributions. The amounts that the Corporation contributed to each of the Named Executive Officers is included in the "All Other Compensation" column above. The Corporation does not maintain any defined benefit pension plans, supplemental retirement plans, or nonqualified deferred compensation plans. However, see Bartels' Retirement and Director Compensation, below.
● Other Benefits and Perquisites. Other than providing car allowances and paying for life and long-term disability benefits, each as described in footnote (2) to the Summary Compensation Table above, the Corporation does not provide any perquisites or other benefits to its Named Executive Officers. The Corporation provides standard healthcare benefits to its eligible employees, including the Named Executive Officers.
We have not entered into an employment agreement with any of our Named Executive Officers.
Potential Severance Payments upon a Change-In-Control and Termination
In order to retain and motivate certain highly qualified executives in the event of a "Change-in-Control", the Corporation entered into a separate Amended and Restated Change in Control Severance Agreement (each a "CICSA") in substantially the same form (each a "CICSA") with Messrs. Oliver, Segreto, Belzer, Marrone, and Adolph. all of which are still in effect, and which each were most recently amended as of November 8, 2018. William H. Bartels, SGRP's Vice Chairman and a Director, also has an Amended and Restated Change in Control Severance Agreement dated as of December 22, 2008, which also is still in effect.
Each CICSA provides that the applicable executive will receive a lump sum severance payment if both (1) a "Change in Control" occurs (which includes certain changes in ownership as well as the "Company") whohiring of a new Chief Executive Officer and non-independence of the Board), and (2) within the "Protected Period" the executive either resigns for "Good Reason" (such as an adverse change in duties or compensation) or is terminated other than in a "Termination For Cause" (as such terms are defined in positions which enable them to make significant
contributionsthe applicable CICSA). The Protected Period is equal to the Company's long-term performancegreater of 36 months from the date of the CICSA or 24 months from the then most recent Change in Control (which could begin after the end of such 36 month period). The CICSA severance payment is equal to the sum of (i) the employee's monthly salary times the number of remaining months in the Protected Period following such resignation or termination, plus (ii) the maximum bonus if any that would have been paid to such employee for any bonus plan then in effect (not to exceed 25% of the employee's annual salary).
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The Corporation also has entered into a separate Executive Officer Severance Agreement (each an "EOSA") with Mr. Olivier dated as of September 5, 2017, and growth. In selecting
Participants to whom Optionswith Mr. Adolph dated as of June 17, 2016. The EOSAs do not require a "Change in Control" but do require a resignation for "Good Reason" (such as an adverse change in duties or compensation) or termination other than in a "Termination For Cause" within the applicable "Protected Period" (which generally means the three year period following the effective date of the EOSA, but which may be granted, consideration is givenextended for additional 12 month periods from time to factorstime) for severance to be paid, as such as employment position, duties and responsibilities, ability, productivity,
length of service, morale, interestterms are defined in the Companyapplicable EOSA. Severance payments under an EOSA are generally equal to 6 months of his salary (but without duplication of any payment due under the applicable CICSA).
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth unexercised options, unvested stock options and recommendationscertain related information for each Named Officer outstanding as of supervisors. December 31, 2019.
Stock Option Awards
Name Grant
Date Number of Securities Underlying Unexercised Options Exercisable at 12/31/19 (#) Number of Securities Underlying Unexercised Options Not Exercisable at 12/31/19 (#) Option Exercise Price ($) Option Expiration Date
Christiaan Olivier 09/05/17 250,000 250,000 (2) $ 1.08 09/05/27
05/03/18 12,500 37,500 (3) $ 1.23 05/03/28
04/05/19 18,750 56,250 (4) $ 0.64 04/05/29
James Segreto 08/04/11 30,000 – $ 1.23 08/04/21
08/01/12 30,000 – $ 1.09 08/01/22
08/06/13 35,000 – $ 2.14 08/06/23
08/07/14 – –
08/13/15 – –
08/11/16 18,750 6,250 (1) $ 0.92 08/11/26
08/09/17 12,500 12,500 (2) $ 1.05 08/09/27
05/03/18 5,000 15,000 (3) $ 1.23 05/03/28
04/05/19 5,000 15,000 (4) $ 0.64 04/05/29
Kori Belzer 08/04/11 35,000 – $ 1.23 08/04/21
08/01/12 35,000 – $ 1.09 08/01/22
08/06/13 35,000 – $ 2.14 08/06/23
08/07/14 – –
08/13/15 – –
08/11/16 18,750 6,250 (1) $ 0.92 08/11/26
05/07/17 12,500 12,500 (2) $ 0.90 05/17/27
05/03/18 5,000 15,000 (3) $ 1.23 05/03/28
04/05/19 6,250 18,750 (4) $ 0.64 04/05/29
Gerard Marrone 01/09/17 – 50,000 (2) $ 1.00 01/09/27
05/03/18 5,000 15,000 (3) $ 1.23 05/03/28
04/05/19 5,000 15,000 (4) $ 0.64 04/05/29
Steven Adolph 06/20/16 75,000 25,000 (1) $ 0.99 06/20/26
08/09/17 12,500 12,500 (2) $ 1.05 08/09/27
05/03/18 5,000 15,000 (3) $ 1.23 05/03/28
04/05/19 5,000 15,000 (4) $ 0.64 04/05/29
(1) Amounts vest on the anniversary of the grant date in 2020.
(2) Amounts vest on the anniversary of the grant date, one half in 2020 and 2021.
(3) Amounts vest on the anniversary of the grant date one third in each 2020, 2021, and 2022.
(4) Amounts vest on the anniversary of the grant date one fourth in each 2020, 2021, 2022, and 2023.
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COMPENSATION OF DIRECTORS
The maximum numberfollowing table sets forth all compensation costs of sharesthe Corporation for services rendered to it by its directors (other than any Named Officer), and certain other amounts that may be issuedhave been received by or allocated to a single
Employee is 1,000,000.them, for the year ended December 31, 2019. The 1995Corporation has not given restricted stock awards to its directors and does not have pension plans or non-qualified deferred compensation plans for its directors, so those columns have been omitted.
Name Year Fees
Earned
or Paid in
Cash ($) Option Awards
($)(1) All Other
Compensation
($)
Total ($)
Jack W. Partridge (2) 2019 31,250 – – 31,250
Lorrence T. Kellar (3) 2019 3,125 – – 3,125
Arthur B. Drogue 2019 95,250 – – 95,250
R. Eric McCarthey 2019 65,000 1,071 – 66,071
Peter W. Brown 2019 55,000 – – 55,000
Jeffery A. Mayer 2019 64,179 – – 64,179
Arthur H. Baer 2019 17,949 – – 17,949
Panagiotis N. Lazaretos 2019 3,288 – – 3,288
(1) These are not amounts actually paid to or received by the named director. These are "compensation expenses" for restricted stock or stock option awards recognized by the Corporation under generally accepted accounting principles computed in accordance with ASC- 718-10.
(2) Mr. Partridge's tenure as a director of SGRP ended in May 2019.
(3) Mr. Kellar's tenure as a director of SGRP ended in January 2019.
Discussion of Directors' Compensation
The Compensation Committee administers the compensation of directors pursuant to SGRP's Director Compensation Plan is administeredfor its outside Directors, as approved and amended by the Committee from time to time (the "Directors Compensation Plan"), as well as the compensation for SGRP's executives. The Directors Compensation Plan was modified in the March 16, 2017, quarterly meeting of the Compensation Committee, (the
"Committee"). The memberseffective April 1, 2017.
Under the Directors Compensation Plan taking effect for all periods on and after April 1, 2017: each Independent Director and Non- Employee Director is entitled to receive director's fees of $55,000 per annum; each applicable Independent Director is entitled to receive for chairing the applicable committee an additional $10,000 per annum fee in the case of the Audit Committee must qualify as "outside directors"
under Section 162(m)Chairman and an additional $7,500 per annum fee in the case of the Code,Compensation Committee Chairman and Governance Committee Chairman; and the Independent Director serving as Lead Director is entitled to receive an additional $10,000 per annum; in each case payable quarterly in cash. The Compensation Committee must be constituted soin May 2018 approved total compensation of $90,000 per year for the Corporation's Chairman following the retirement of Robert G. Brown as Chairman.
In addition to permittheir cash compensation, in the 1995 Planpast each Independent Director received options to comply with Rule 16b-3purchase 10,000 SGRP Shares upon acceptance of the Exchange Act.

The Committee has fulldirectorship, options to purchase 10,000 additional SGRP Shares after one year of service, and complete authority, in its discretion, but
subjectoptions to purchase 10,000 additional SGRP Shares for each additional year of service thereafter (typically granted by the express provisionsCorporation at the regularly scheduled board meeting which coincided with the Annual Meeting). All such options have an exercise price equal to 100% of the 1995fair market value of a SGRP Share at the date of grant and vest 100% on the first anniversary of the Award's grant date. When we have granted restricted stock awards instead of options, each Independent Director would receive 4,000 restricted SGRP Shares upon acceptance of the directorship, 4,000 additional SGRP Shares after one year of service, and 4,000 additional restricted SGRP Shares for each additional year of service thereafter (typically granted by the Corporation at the regularly scheduled board meeting which coincided with the Annual Meeting). All restricted SGRP Shares vest 25% on the first anniversary of the Award's grant date for a period of four years. During 2019, Messrs. Drogue, McCarthey, Partridge, and Brown each received option grants to purchase 20,000 of the Company's Common Stock and Mr. Mayer received option grants to purchase 30,000 shares of the Company's Common Stock.
32
All stock options and restricted stock awards to Independent Directors have been granted under the 2018 Plan and Prior Plans, under which each member of the Board is eligible to participate. Independent Directors will be reimbursed for all reasonable expenses incurred during the course of their duties. There is no additional compensation for committee participation, phone meetings, or other Board activities.
Bartels' Retirement and Director Compensation
William H. Bartels retired as an employee of the Company as of January 1, 2020. However, he will continue to serve as Vice Chairman and a member of SGRP's Board, positions he has held since July 8, 1999.
Effective as of January 18, 2020, SGRP's Governance Committee proposed and unanimously approved the following benefits for the five year period commencing January 1, 2020, and ending December 31, 2024 (the "Five Year Period"), for Mr. Bartels in connection with his retirement: (a) retirement payments of $100,000 per year ("Retirement Compensation"); (b) the then applicable regular non-employee director fees ("Regular Fees"), currently $55,000 per year, and a supplemental Board fee of $50,000 per year ("Supplemental Fees"); and (c) the same medical, dental, eye and life insurance benefits he received as of December 31, 2019, under an arrangement whereby Mr. Bartels shared part of the cost of Medicare and supplemental health benefits, currently valued at approximately $15,588 per year ("Medical Benefits"); in each case paid in accordance with SGRP's payroll schedule and policies, and payable whether or not Mr. Bartels remains a director of SGRP for any reason.
The Retirement Compensation, Regular Fees and Supplemental Fees that remain unpaid during the Five Year Period: (i) shall be accelerated and paid to Mr. Bartels (or his heirs or assigns) in full upon the sale to a third party of a majority of the SGRP Shares or all or substantially all of SGRP's assets; and (ii) shall survive and be payable in full to his heirs and assigns in the event of the death of Mr. Bartels.
Based on current rates and benefits, the aggregate value of such compensation, fees and benefits payable to Mr. Bartels will be approximately $220,558 per year and a total of $1,102,940 for the Five Year Period. Such compensation, fees and benefits (in whole or in part) may be extended beyond the Five Year Period in the discretion of the Board.
In the event of any future business transaction involving Mr. Bartels and SGRP for which Bartels may receive additional compensation as mutually agreed at the time of or in connection with such transaction, which under applicable law also will require approval of SGRP's Audit Committee as a related party payment or transaction (as Mr. Bartels will still be a related party if he is then a director or significant stockholder), such retirement compensation, fees or benefits will not offset, replace or limit any such additional approved transactional compensation payable to Mr. Bartels.
Mr. Bartels is one of the founders and a significant stockholder of SGRP (holding approximately 25.1% of the SGRP Shares). He also is part of a control group holding a majority of the SGRP Shares with Robert G. Brown (together with Mr. Bartels, the "Majority Stockholders"), which group recently acted to (1) unilaterally select, appoint and elect Panagiotis ("Panos") N. Lazaretos to serve on the board of directors of SGRP, effective on December 10, 2019, and unilaterally select, appoint and elect Robert G. Brown to serve on the Participants, to specifyboard of directors of SGRP, effective as of the Brown Effective Time (see Information in Connection with Appointment of Robert G. Brown as a Director and Background in Proposal 1 in the First Special Meeting Proxy/Information Statement). See SGRP's Preliminary Proxy Statement as filed with the SEC effective on January 31, 2020, and SGRP's Current Reports on Form 8-K as filed with the SEC on January 31, 2020, January 7, 2020, September 16, 2019, August 23, 2019, and August 12, 2019.
COMPENSATION PLANS
Equity Compensation Plans
The following table contains a summary of the number of shares of Common Stock with respectof SGRP to which Options are granted to each Participant, to specifybe issued upon the termsexercise of stock options outstanding at December 31, 2019, under the Options2018 Plan and whether such Options shall be Incentive Stock Options or
Nonqualified Stock Options, and in general to grant Options; (2) to determine
the dates upon which Options shall be granted2008 Plan and the termsPrior Plans, the weighted-average exercise price of those outstanding stock options, and conditions
thereof in a manner consistent with the 1995 Plan, which terms and conditions
need not be identical as to the various Options granted; (3) to interpret the
1995 Plan; (4) to prescribe, amend and rescind rules relating to the 1995 Plan;
(5) to authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant of an Option previously granted by the
Committee; (6) to determine the rights and obligations of Participants under the
1995 Plan; (7) to specify the Option price; (8) to accelerate the time during
which an Option may be exercised, including, but not limited to, upon a change
of control of the Company, and to otherwise accelerate the time or extend the
post-termination exercise period during which an Option may be exercised; and
(9) to make all other determinations deemed necessary or advisable for the
administration of the Plan.

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The number of additional shares of Common Stock in respectremaining available for future issuance of whichstock options may be
granted under the 1995 Plan shall not exceed 1,000,000 shares. In the event of
certain changes in the Company's capitalization or structure, an appropriate
adjustment shall be made by theand other stock based awards.
Equity Compensation Plan Information
Plan category Number of securities to be issued upon exercise of outstanding stock options and stock rights (#) Weighted average exercise price of outstanding stock options and stock rights ($) Number of securities remaining available for future issuance of options, rights and other stock based awards (#)
Equity compensation plans approved by security holders:
2008 Plan 2,227,211 $ 1.22 –
2018 Plan 555,000 $ 0.89 –
33
Audit and Compensation Committee in the number, kind or exercise price
of shares as to which options may thereafter be grantedInterlocks and as to shares covered
by unexercised outstanding options.

Each option granted under the 1995 Plan shall be evidenced by a written
agreement ("Option Agreement") in a form approved by the Committee and executed
by the Company and the Participant to whom the Option is granted. Options are
exercisable at such time(s) and are subject to such terms and conditions as may
be set forth in the Option Agreement between the Participant and the Company.

The purchase price of shares of Common Stock subject to each Option
which is intended to qualify as an Incentive Stock Option shall be equal to the
fair market value of such shares (110% of fair market value in the case of a
holder of more than 10%Insider Participation
No member of the Company's Common Stock) on the date of grant of
such Option. The purchase price of any Option which shall not qualify as an
Incentive Stock Option shall be determined by theBoard's Audit Committee, but shall not be
less than the fair market value of the Common Stock in the case of a Stock
Option granted to an individual who is a "covered employee" under 162(m) of the
Code. The fair market value of such shares is the closing price of the Common
Stock on the date of grant on the NASDAQ National Market System.

Options granted under the 1995 Plan may be exercised, to the extent
vested, by the Participant by payment of the full purchase price therefor in
cash, by cashier'sCompensation Committee or certified check or by surrender of outstanding shares of
the Company's Common Stock. Options granted to a Participant are not
transferable during the individual's lifetime, other than to the Employee's
immediate family members, a trust for their benefit or a partnership in which
such family members are the only partners, and may be transferred in the event
of death only by will or the laws of descent and distribution.

Each option granted under the 1995 Plan shall set forth a termination
date thereof, which shall be not later than ten years (five years in the case of
a holder of more than 10% of the Company's Common Stock) from the date such
option is granted subject to earlier termination or forfeiture as set forth
below, or as otherwise set forth in each particular Option Agreement.

Unless earlier terminated by the Board, the 1995 Plan shall terminate on
December 5, 2005. The Board mayGovernance Committee was at any time amendduring the 1995 Plan; provided,
however, that no amendmentyear ended December 31, 2019, or modification may be adopted without approval of
the stockholders which would (1) increase the number of shares of Common Stock
which may be issued under the 1995 Plan (except for adjustments due to a change
in capitalization), (2) modify the requirements as to eligibility for receipt of
Incentive Stock Optionsat any other time an officer or (3) modify the 1995 Plan such that it fails to meet
the requirements of Section 16(b) of the Exchange Act.

Future Participants in the 1995 Plan and the amounts of their allotments
are to be determined by the Committee subject to any restrictions outlined
above. Since no such determinations have yet been made, it is not possible to
state the terms of any individual awards which may be issued under the 1995 Plan
or the names or positions of or respective amounts of the allotment to any
individual who may participate.

FEDERAL INCOME TAX CONSEQUENCES APPLICABLE TO THE 1995 PLAN

Incentive Stock Options. No taxable income will be recognized by an
optionee upon the grant or exercise of any Incentive Stock Option under the 1995
Plan. The Company will not be entitled to any income tax deduction as the result
of the grant or exercise of any incentive stock option.

Gain or loss resulting from the subsequent sale of stock acquired upon
exercise of an Incentive Stock Option will be long-term capital gain or loss if
such sale is made after two years from the date of the grant of the option and
after one year from the transfer of such stock to the optionee upon exercise,
provided that the optionee is an employee of the Company from the date of grant
until three months before the date of exercise. In the event of the optionee's
death or disability prior to exercise of an Incentive Stock Option, special
rules apply in

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22
determining whether gain or loss upon sale of the stock acquired upon exercise
of such option will be taxable as long-term capital gain or loss.

If the subsequent sale of stock is made prior to the expiration of such
two-year or one-year periods, the optionee will recognize ordinary income in the
year of sale in an amount equal to the difference between the exercise price and
the fair market value of the stock on the date of exercise, provided that if
such sale is a transaction in which a loss (if sustained) would have been
recognized by the optionee, the amount of ordinary income recognized by the
optionee will not exceed the excess (if any) of the amount realized on the sale
over the option price. The Company will then be entitled to an income tax
deduction of like amount. Any excess gain recognized by the optionee upon such
sale would then be taxable as capital gain, either long-term or short-term
depending upon whether the stock had been held for more than one year prior to
sale.

If an individual sale of shares of Common Stock received upon exercise
of an option qualifies for long term capital gain treatment, the capital gain
from such sale would be taxed at the current maximum federal tax rate of 28% if
the Common Stock has been held for more than one year but less than 18 months,
and at a rate of 20% if the Common Stock has been held for more than 18 months.
Ordinary income is currently taxed at a maximum federal income tax rate of
39.6%. The amount by which the fair market value of stock purchased upon
exercise of an incentive stock option exceeds the option price of such stock
constitutes an item of tax preference which could then be subject to the
alternative minimum tax in the year that the option is exercised.

Nonqualified Stock Options. Generally, at the time of the grant of any
option under the 1995 Plan, no taxable income will be recognized by the optionee
and the Company will not be entitled to a deduction. Upon the exercise of such
option, the optionee generally will recognize taxable income, and the Company
will then be entitled to a deduction, in the amount by which the then fair
market value of the shares of Common Stock issued to such optionee exceeds the
option price.

Income recognized by the optionee upon exercise of a Nonqualified Stock
Option will be taxed as ordinary income up to the current maximum rate of 39.6%.
Such income constitutes "wages" with respect to which the Company is required to
deduct and withhold federal and state income tax. Such deductions will be made
from the wages, salary, bonus or other income to which the optionee would
otherwise be entitled and, at the Company's election, the optionee may be
required to pay to the Company (for withholding on the optionee's behalf) any
amount not so deducted but required to be so withheld.

Upon the subsequent disposition of shares acquired upon the exercise of
an option other than an incentive stock option, the optionee will recognize
capital gain or loss in an amount equal to the difference between the proceeds
received upon disposition and the fair market value of such shares at the time
of exercise. If such shares have been held for more than one year at the time of
such disposition, the capital gain or loss will be long-term.

Exercising Options with Shares of Common Stock. To the extent an
optionee pays all or part of the option price by tendering shares of Common
Stock owned by the optionee, the tax consequences described above generally
would apply. However, the number of shares received (upon exercise) equal to the
number of shares surrendered in payment of the aggregate option price will have
the same basis and tax holding period as the shares surrendered. The additional
shares received upon such exercise will have a tax basis equal to the amount of
ordinary income recognized and any cash paid on such exercise and a holding
period which commences on the date of exercise.

If an optionee exercises an option by tendering shares previously
acquired on the exercise of an Incentive Stock Option, a disqualifying
disposition will occur if the applicable holding period requirements have not
been satisfied with respect to the surrendered stock. The consequences of such a
disqualifying disposition is that the optionee may recognize ordinary income at
the time.

Acceleration of Stock Options Upon a Transfer of Control. If, upon a
reorganization, merger, sale or other transaction resulting in a change in
controlCompany. No executive officer of the Company or ofBoard member serves as a substantial portion of its assets, the
exercisability of stock options held by certain employees (generally officers,
stockholders and highly compensated

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23
employeesmember of the Company) is accelerated (or payments are made to cancel
unexercisable optionsboard of such employees), such accelerationdirectors, audit, compensation or payment will be
determined to be a "parachute payment" for federal income tax purposes. If the
present value of all of the optionee's parachute payments exceeds three times
the optionee's average compensation for the past five years, the optionee will
be subject to a 20% excise tax on the amount of such parachute payment which is
in excess of the greater of such average compensation of the optionee or an
amount which the optionee establishes as reasonable compensation. In addition,
the Company will not be allowed a deduction for such excess parachute payment.

Limitation on Compensation Deduction. Upon exercise, options granted to
a "covered employee" with an option price equal to or greater than the fair
market value of the Common Stock at the time of grant should not be subject to
the $1.0 million deduction cap for compensation paid to certain executives of
publicly held corporations such as the Company. The Plan should satisfy the
rules governing exemption from the deduction cap for "performance based"
compensation since (1) stockholders should have received adequate disclosure of
the terms of the Plan in this Proxy Statement and (2) the Plan has been approved
by a compensationgovernance committee consisting solely of two or more "Outside Directors"
of the Company.

Upon exercise, options granted to a covered employee with an option
price less than the fair market value of the Common Stock at the time of grant
would be subject to the $1.0 million deduction cap for the Company. A "covered
employee" is an optionee who, on the last day of the taxable year of the
Company, is the Chief Executive Officer or one of the four other most highly
compensated executive officers for proxy disclosure purposes. An "Outside
Director" is a Director who is not (1) a current employee of the Company or
related entity, (2) a former employee who is receiving compensation for prior
services, (3) a former officer or (4) receiving compensation from the Company
for personal services other than regular directors' compensation.

The foregoing summary of the effects of federal income taxation upon
optionees, holders of restricted stock and the Company with respect to shares
issued under the Plan does not purport to be complete and reference is made to
the applicable provisions of the Code.

THE BOARD BELIEVES THAT THE AMENDMENTS ARE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL
THEREOF. PROXIES WILL BE VOTED FOR THIS PROPOSAL UNLESS OTHERWISE SPECIFICALLY
INDICATED.

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PROPOSAL 3 -- RATIFICATION OF THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS INDEPENDENT ACCOUNTANTS

The Audit Committee of the Board has selected Deloitte & Touche LLP as
independent public accountants to audit the financial statements of the Company
for 1998. Deloitte & Touche LLP served as the Company's independent pubic
accountants for 1997. A member of that firm is expected to be present at the
1997 Annual Meeting, will have an opportunity to make a statement if so desired,
and will be available to respond to appropriate questions. If the stockholders
do not ratify the selection of Deloitte & Touche LLP, if it should decline to
act or otherwise become incapable of acting, or if its employment is
discontinued, the Audit Committee will appoint independent public accountants
for 1998. Proxies solicited by the Board will be voted in favor of ratification
unless stockholders specify otherwise.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS
FOR 1998. PROXIES WILL BE VOTED FOR THIS PROPOSAL UNLESS OTHERWISE SPECIFICALLY
INDICATED.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act ("Section 16(a)") requires the
Company's directors and certain of its officers, and persons who own more than
10% of a registered class of the Company's equity securities (collectively,
"Insiders"), to file reports of ownership and changes in ownership with the
Commission. Insiders are required by Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5s were
required for those persons, the Company believes that its Insiders complied with
all applicable Section 16(a) filing requirements for 1997.

OTHER BUSINESS

The Company is not aware of any other businessentity that has one or more executive officers serving as a member of SGRP's Board, Audit Committee, Compensation Committee or Governance Committee, except for the positions of Messrs. Brown and Bartels as directors and officers of SGRP and as directors and officers of each of its affiliates, including SBS, SAS and SIT (see Transactions with Related Persons, Promoters and Certain Control Persons, above).
NO OTHER BUSINESS
In accordance with the Restated By-Laws, no proposals or matters other than those specifically described above are permitted to come before the Special Meeting. If any other matters or motions are attempted to be presented at the 1998 Annual Meeting. All shares represented by Company proxiesSpecial Meeting, they will be voted in
favorruled out of order and denied. It is the intention of the proposalspersons named in the accompanying form of Proxy to vote Proxies in accordance with their judgment on those matters or motions to the greatest extent permitted by applicable law, including any matter dealing with the conduct of the Company described herein unless otherwise
indicatedSpecial Meeting.
STOCKHOLDER COMMUNICATIONS
Communications with SGRP and the Directors
Generally, a stockholder who has a question or concern regarding the business or affairs of SGRP should contact the Chief Financial Officer of SGRP. However, if a stockholder would like to address any such question directly to the Board, to a particular Committee, or to any individual director(s), the stockholder may do so by sending his or her question(s) in writing addressed to such group or person(s), c/o SPAR Group, Inc., 333 Westchester Avenue, South Building, Suite 204, White Plains, New York 10604, and marked "Stockholder Communication".
SGRP has a policy of generally responding in writing to each bona fide, non-frivolous, written communication from an individual stockholder. This policy is reflected in the SPAR Group, Inc. Statement of Policy Respecting Stockholder Communications with Directors dated as of May 18, 2004, approved and recommended by the Governance Committee and adopted by the Board on May 18, 2004. You can obtain and review a current copy of this policy on the formCompany's web site (www.sparinc.com), which is posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab.
In addition, questions may be asked of proxy. If any other matters properly comedirector before the Special Meeting and all of SGRP's directors are expected to attend the Special Meeting. Additionally, the Corporation believes its directors should attend all possible meetings of the Board and its committees and stockholders, but has not specified any required minimum attendance.
Submission of Stockholder Proposals and Director Nominations for Annual Meetings
For any business, nominee or proposal to be properly brought before any annual meeting Company proxy holders will vote thereon accordingby a stockholder (acting in his or her capacity as stockholder), the Restated By-Laws require that such stockholder must give timely written notice thereof by physical delivery to their best
judgment.

SUBMISSION OF STOCKHOLDER PROPOSALSthe Secretary of SGRP. Any stockholder who wishes to present aany business, nominee or proposal for action at the 19982021 Annual Meeting and who wishes to have it set forth in the corresponding proxy
statement and identified in the corresponding form of proxy prepared by
managementSGRP stockholders (the "2021 Annual Meeting") must notify the CompanySGRP by no later than December 9, 1998February 12, 2021. Such stockholder's notice shall be in suchthe form asand contain the substance required under the Restated By-Laws and the rules and regulations promulgated by the Securities and Exchange Commission. ANNUALAccordingly, notices of stockholder proposals and nominations submitted after February 12, 2021, or that do not conform to the requirements of the Restated By-Laws or Rule 14a-18 of the Securities Exchange Act of 1934 (relating to proposals to be presented at the meeting but not included in SGRP's Proxy Statement and form of proxy) will be considered untimely or incomplete, respectively, and thus such matters will not be brought before the 2021 Annual Meeting.
Stockholder proposals submitted under Rule 14a-18 of the Securities Exchange Act of 1934 (relating to proposals to be presented at the meeting but not included in SGRP's Proxy Statement and form of proxy) can be submitted by no later than the 90th day preceding the scheduled stockholder meeting. Since such a proposal does not have to be in the Proxy Statement, this provision was added to the Restated By-Laws pursuant to the Settlement (see 2019 Restated By-Laws, above) and principally benefits those who make such a proposal and have sufficient votes to approve it, such as the Majority Stockholders. However, the Corporation may choose to voluntarily include such a proposal in its Proxy Statement to provide actual notice to all of its stockholders.
34
The Restated By-Laws provide that a stockholder's notice to the Secretary must set forth as to each matter the stockholder proposes to bring before the 2021 Annual Meeting (i) a brief description of the business, nominee or proposal desired to be brought before the 2021 Annual Meeting and the reasons for considering the same at the 2021 Annual Meeting, (ii) the name and address, as they appear on SGRP's books, of the stockholder proposing such business and any other stockholders known by such stockholder to be supporting such proposal, (iii) the class and number of shares of SGRP's stock which are beneficially owned by the stockholder on the date of such stockholder notice and by any other stockholders known by such stockholder to be supporting such proposal on the date of such stockholder notice, and (iv) any financial interest of such stockholder (or any affiliate or family member of such stockholder), whether current or at any time within the past three years, in such business, nominee or proposal. In addition, if the notice is a nomination of a candidate for director, the stockholder's notice also must contain (A) the proposed nominee's name and qualifications, including five year employment history with employer names and a description of the employer's business, whether such individual can read and understand basic financial statements, and board memberships (if any), (B) the reason for such recommendation, (C) the number of shares of stock of SGRP that are beneficially owned by such nominee, (D) a description of any business or other relationship, whether current or at any time within the past three years, between such nominee (or any affiliate or family member of such nominee) and either the Company, any of its directors or officers, its auditor, or any of its customers or vendors, and (E) a description of any financial or other relationship, whether current or at any time within the past three years, between the stockholder (or any affiliate or family member of such stockholder) and such nominee (or any affiliate or family member of such nominee).
If it is determined by the Governance Committee or the presiding officer of the 2021 Annual Meeting that a stockholder proposal was not made in accordance with the terms of the Restated By-Laws or the applicable SEC Rules or is not under the circumstances required to be considered thereunder, such proposal will not be acted upon at the 2021 Annual Meeting.
DELIVERY OF PROXY MATERIALS TO HOUSEHOLDS
Pursuant to the rules of the SEC, services that deliver the Company's communications to stockholders that hold their stock through a bank, broker or other holder of record may deliver to multiple stockholders sharing the same address a single copy of any Notice of Internet Availability of Proxy Materials and/or a printed version of the 2019 Annual Report to stockholders and this Proxy Statement. Upon oral or written request, the Company will promptly deliver a separate copy of the above materials to any stockholder at a shared address to which a single copy of the document was delivered. Stockholders sharing an address may also request delivery in the future of a single copy of such documents if they are currently receiving multiple copies of such documents. Stockholder may notify SGRP of their requests by writing to: c/o Spar Group, Inc., Attn: James R. Segreto, 333 Westchester Avenue, South Building, Suite 204, White Plains, New York 10604.
Q&A/Information Regarding Virtual Attendance at the Special Meeting
Further details and frequently asked questions regarding the Special Meeting are available on the Company's Investor Relations website at https://investors.sparinc.com/.
OTHER REPORTS
A COPY OF THE COMPANY'S 19972019 ANNUAL REPORT ANDON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997 ARE BEING MAILED TO EACH STOCKHOLDER OF RECORD TOGETHER2019 (THE "2019 ANNUAL REPORT") FILED WITH THE SEC ON APRIL 14, 2020 AND THE CURRENT REPORTS ON FORM 8-K REFERENCED IN THIS PROXY STATEMENT.STATEMENT ARE AVAILABLE AT INVESTORS.SPARINC.COM/SEC-FILINGS.
SGRP WILL PROVIDE EACH PERSON TO WHOM THIS PROXY STATEMENT IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON AND BY FIRST CLASS MAIL OR OTHER EQUALLY PROMPT MEANS WITHIN ONE BUSINESS DAY OF RECEIPT OF SUCH REQUEST, A COPY OF ANY AND ALL OF THE INFORMATION THAT HAS BEEN INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT (EXCLUDING ALL EXHIBITS NOT EXPLICITLY INCORPORATED BY REFERENCE HEREIN). REQUESTS FOR COPIES OF THE 2019 ANNUAL REPORT MUST BE SENT TO C/O SPAR GROUP, INC., ATTN: JAMES R. SEGRETO, 333 WESTCHESTER AVENUE, SOUTH BUILDING, SUITE 204, WHITE PLAINS, NEW YORK 10604.
THE 2019 ANNUAL REPORT, THE QUARTERLY REPORTS ON FORM 10-Q AND THE CURRENT REPORTS ON FORM 10-K8-K REFERENCED IN THIS PROXY STATEMENT ARE NOT PART OF THE
COMPANY'SSGRP'S SOLICITING MATERIAL.

-23-

PROXIES AND SOLICITATION
The proxy accompanying this Proxy Statement is solicited on behalf of the SGRP's Board of Directors. Proxies for the 1998 AnnualSpecial Meeting are being solicited by mail directly and through brokerage and banking institutions. The CompanySGRP will pay all expenses in connection with the solicitation of proxies. In addition to the use of mails, proxies may be solicited by Directors,directors, officers and regular employees of the CompanySGRP (who will not be specifically compensated for such services) personally or by telephone. The CompanySGRP will reimburse banks, brokers, custodians, nominees and fiduciaries for any reasonable expenses in forwarding proxy materials to beneficial owners.
35
All stockholders are urged to complete, sign and promptly return the enclosed proxy card.

By Order of the Board of Directors

CATHY L. WOOD
Secretary

Irvine, California
April 1, 1998

-24-

26
APPENDIX-1

PIA MERCHANDISING SERVICES, INC.
1995 STOCK OPTION PLAN, AS AMENDED

Section 1. Description of Plan. This is the 1995 Stock Option Plan,
dated December 5, 1995 (the "Plan"), of PIA Merchandising Services, Inc., a
Delaware corporation (the "Company"). Under the Plan, officers, certain
directors, key employees and consultants of the Company or its wholly-owned
Subsidiaries (as defined below), to be selected as set forth below, may be
granted options ("Options") to purchase shares of the common stock of the
Company ("Common Stock"). The Plan permits the granting of both Options that
qualify for treatment as incentive stock options ("Incentive Stock Options")
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and Options that do not qualify as Incentive Stock Options ("Nonqualified Stock
Options"). For purposes of the Plan, the term "Subsidiary" shall mean any
corporation or other entity of which 50% or more of the voting stock (or
equivalent thereof) is owned by the Company or by another Subsidiary (as so
defined) of the Company.

Section 2. Purpose of Plan. The purpose of the Plan and of granting
Options to specified persons is to further the growth, development and financial
success of the Company and the Subsidiaries by providing additional incentives
to certain officers, directors, key employees and consultants of the Company. By
assisting such persons in acquiring shares of the Company's Common Stock, the
Company can ensure that such persons will themselves benefit directly from the
Company's and the Subsidiaries' growth, development and financial success.

Section 3. Eligibility. The persons who shall be eligible to receive
grants of Options under the Plan shall be, at the time of the grant, the
officers, certain directors, key employees and consultants of the Company and
the Subsidiaries, excluding those directors of the Company and its Subsidiaries
who serve on the Committee (as defined in Section 4). Notwithstanding the
preceding sentence, only persons who are employees of the Company and the
Subsidiaries shall be eligible to receive grants of Incentive Stock Options
under the Plan. In addition, a person who holds an Option is herein referred to
as a "Participant." More than one Option may be granted to any Participant,
grants of Options may be made on more than one occasion to any Participant and
any individual Participant may receive grants of Options on up to 1,000,000
shares of Common Stock. Such grants of Options under the Plan may include an
Incentive Stock Option, Nonqualified Stock Option, or any combination thereof.
Notwithstanding the foregoing, the Board of Directors of the Company (the
"Board") may at any time or from time to time designate one or more Directors as
ineligible for selection as a Participant under the Plan for any period or
periods of time. The designation by the Board of a Director as ineligible for
selection as a Participant under the Plan shall not affect Options previously
granted to such Director under the Plan.

Section 4. Administration. The Plan shall be administered by the
Compensation Committee (the "Committee") established by the Board. The Committee
shall be constituted so as to permit the Plan to comply with the provisions of
Rule 16b-3 ("Rule 16b-3") under the Securities Exchange Act of 1934 (the
"Exchange Act") and so that each member of the Committee would be an "outside
director" within the meaning of Code Section 162(m). The Committee shall meet at
such times and places as it determines and may meet through a telephone
conference call. A majority of its members shall constitute a quorum, and the
decision of a majority of those present at any meeting at which a quorum is
present shall constitute the decision of the Committee. A memorandum signed by
all the members of the Committee shall constitute the decision of the Committee
without necessity, in such event, for holding an actual meeting. The Committee
is authorized and empowered to administer the Plan and, subject to the Plan (a)
to select the Participants, to specify the number of shares of Common Stock with
respect to which Options are granted to each Participant, to specify the terms
of the Options and whether such Options shall be Incentive Stock Options or
Nonqualified Stock Options, and in general to grant Options; (b) to determine
the dates upon which Options shall be granted and the terms and conditions
thereof in a manner consistent with the Plan, which terms and conditions need
not be identical as to the various Options granted; (c) to interpret the Plan;
(d) to prescribe, amend and rescind rules relating to the Plan; (e) to authorize
any person to execute on behalf of the Company any instrument required to
effectuate the grant of an Option

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27
previously granted by the Committee; (f) to determine the rights and obligations
of Participants under the Plan; (g) to specify the Option Price (as hereinafter
defined); (h) to accelerate the time during which an Option may be exercised,
including, but not limited to, upon a change of control of the Company, and to
otherwise accelerate the time or extend the post-termination exercise period
during which an Option may be exercised, in each case notwithstanding the
provisions in the Option Agreement (as defined in Section 13) stating the time
during which it may be exercised; and (i) to make all other determinations
deemed necessary or advisable for the administration of the Plan. The good faith
interpretation and construction by the Committee of any provision of the Plan or
of any Option granted under it shall be final, conclusive and binding. No member
of the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Option granted under it.

Section 5. Shares Subject to the Plan. The number of shares of Common
Stock in respect of which Options may be granted under the Plan is 1,300,000,
subject to adjustment as provided in Section 12 hereof. Upon the expiration or
termination, in whole or in part, for any reason of an outstanding Option or any
portion thereof which shall not have vested or shall not have been exercised in
full, any shares of Common Stock then remaining unissued which shall have been
reserved for issuance upon such exercise shall again become available for the
granting of additional Options under the Plan. Notwithstanding the foregoing,
shares subject to a terminated Option shall continue to be considered to be
outstanding for purposes of determining the maximum number of shares that may be
issued to a Participant. Similarly, the repricing of an Option will be
considered the grant of a new Option for this purpose.

Section 6. Option Price. Except as provided in Section 12 hereof, the
purchase price per share (the "Option Price") of the shares of Common Stock
underlying each Incentive Stock Option shall be not less than the fair market
value of such shares on the date of granting of the Incentive Stock Option;
provided, however, that if the Participant is a ten percent (10%) stockholder of
the Company as detailed in Code Section 422(b)(6) at the time such Option is
granted (determined after taking into account the constructive ownership rules
of Section 424(d) of the Code), the Option Price shall be not less than 110
percent (110%) of said fair market value. The Option Price of the shares of
Common Stock underlying each Nonqualified Stock Option shall be not less than
eighty-five percent (85%) of the fair market value of such shares on the date of
granting of the Nonqualified Stock Option; provided, however, that with respect
to any Nonqualified Stock Option granted to a "covered employee" (as such term
is defined in Section 162(m) of the Code), the Option Price of the shares of
Common Stock underlying such Nonqualified Stock Option shall be not less than
the fair market value of such shares on the date of granting of such
Nonqualified Stock Option. The fair market value of such shares shall be
determined by the Committee on the basis of the average, rounded to the nearest
eighth, of the Quoted Prices of a share of Common Stock for the five consecutive
business days prior to the day as of which the fair market value of the Common
Stock is being determined. The "Quoted Price" of a share of Common Stock shall
be the last reported sales price of the Common Stock as reported by the NASDAQ
National Market System ("NASDAQ") or, if the Common Stock is listed on a
securities exchange, the last reported sales price of the Common Stock on such
exchange which shall be for consolidated trading if applicable to such exchange
or, if the Common Stock is not so reported or listed, the average of the last
reported bid and asked price of the Common Stock.

Section 7. Restrictions on Grants; Vesting of Options. Notwithstanding
any other provisions set forth herein or in any Option Agreement, no Options may
be granted under the Plan subsequent to ten (10) years from December 5, 1995.
All Options granted pursuant to the Plan shall be granted pursuant to Option
Agreements, as described in Section 13 hereof. The vesting of all Options may be
based on the Company's attaining of performance criteria as specified at the
time of the granting thereof and/or may also be based on the passage of time.
The Committee shall determine the performance criteria, the performance
measurement period and the vesting schedule applicable to each Option or group
of Options in a schedule, a copy of which shall be filed with the records of the
Committee and attached to each Option Agreement to which the same applies. The
performance criteria, the performance measurement period and the vesting
schedule and period of exercisability need not be identical for all Options
granted hereunder. Following the conclusion of each applicable performance
measurement period, the Committee shall determine, in its sole good faith
judgment, the extent, if at all, that each Option subject thereto shall have
vested based upon the applicable performance criteria and vesting schedule. To
the extent each such Option shall not have vested, because the applicable
performance criteria has not been met, and does not also vest based on the
passage of time, it shall, to that extent, automatically terminate and cease to
be

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28
exercisable to such extent notwithstanding the stated term during which it may
be exercised. The Committee shall promptly notify each affected Participant of
such determination. The Committee may periodically review the performance
criteria applicable to any Option or Options and, in its sole good faith
judgment, may adjust the same to reflect unanticipated major events, such as
catastrophic occurrences, mergers, acquisitions and the like.

Section 8. Special Limitations on Incentive Stock Options. To the extent
that the aggregate fair market value (determined at the time the respective
Incentive Stock Option is granted) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year under all incentive stock option plans of the Company
and the Subsidiaries exceeds $100,000, or such other limit as may be required by
the Code, such excess Incentive Stock Options shall be treated as Nonqualified
Stock Options. The Committee shall determine, in accordance with applicable
provisions of the Code, Treasury Regulations and other administrative
pronouncements, which of a Participant's Incentive Stock Options will not
constitute Incentive Stock Options because of such limitation and shall notify
the Participant of such determination as soon as practicable after such
determination.

Section 9. Exercise of Options. Subject to all other provisions of the
Plan, once vested, each Option shall be exercisable for the full number of
shares of Common Stock subject thereto, or any part thereof, in such
installments and at such intervals as the Committee may determine in granting
such Option, provided that no option may be exercisable subsequent to its
termination date. Once vested, and prior to its termination date, an Option may
be exercised by the Participant by giving written notice to the Company
specifying the number of full shares to be purchased and accompanied by payment
of the full purchase price therefor in cash, by check or in such other form of
lawful consideration as the Committee may approve from time to time, including,
without limitation and in the sole discretion of the Committee, the assignment
and transfer by the Participant to the Company of outstanding shares of Common
Stock theretofore held by the Participant in a manner intended to comply with
the provisions of Rule 16b-3, if applicable. In connection with such assignment
and transfer, the Company shall have the right to deduct any fractional shares
to be paid to the Participant. Once vested, and prior to its termination date,
an Option may only be exercised by the Participant or, in the event of death of
the Participant, by the person or persons (including the deceased Participant's
estate) to whom the deceased Participant's rights under such Option shall have
passed by will or the laws of descent and distribution. Notwithstanding the
foregoing in the immediately preceding sentence, in the event of disability
(within the meaning of Section 22(e)(3) of the Code) of a Participant, a
designee, or if the Participant has no designee, the legal representative, of
such Participant may exercise the Option on behalf of such Participant (provided
such Option would have been exercisable by such Participant) until the right to
exercise such Option expires, as set forth in such Participant's particular
Option Agreement. No Option granted to a person subject to Section 16 of the
Exchange Act shall be exercisable during the first six (6) months after the date
such Option is granted.

Section 10. Issuance of Common Stock. The Company's obligation to issue
shares of its Common Stock upon exercise of an Option is expressly conditioned
upon the compliance by the Company with any registration or other qualification
obligations with respect to such shares under any state or federal law or
rulings and regulations of any government regulatory body and the making of such
investment representations or other representations and undertakings by the
Participant (or the Participant's legal representative, heir or legatee, as the
case may be) in order to comply with the requirements of any exemption from any
such registration or other qualification obligations with respect to such shares
which the Company in its sole discretion shall deem necessary or advisable. Such
required representations and undertakings may include representations and
agreements that such Participant (or the Participant's legal representative,
heir or legatee): (a) is purchasing such shares for investment and not with any
present intention of selling or otherwise disposing of such shares; and (b)
agrees to have a legend placed upon the face and reverse of any certificates
evidencing such shares (or, if applicable, an appropriate data entry made in the
ownership records of the Company) setting forth (i) any representations and
undertakings which such Participant has given to the Company or a reference
thereto, and (ii) that, prior to effecting any sale or other disposition of any
such shares, the Participant must furnish to the Company an opinion of counsel,
satisfactory to the Company and its counsel, to the effect that such sale or
disposition will not violate the applicable requirements of state and federal
laws and regulatory agencies; provided, however, that any such legend or data
entry shall be removed when no longer applicable. The Company, during the term
of the Plan, will at all times reserve and keep available, and will use its
reasonable efforts to obtain from any regulatory body having jurisdiction any

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29
requisite authority in order to issue and sell such number of shares of Common
Stock as shall be sufficient to satisfy the requirements of the Plan. Inability
of the Company to obtain, from any regulatory body having jurisdiction,
authority reasonably deemed by the Company's counsel to be necessary for the
lawful issuance and sale of any shares hereunder shall relieve the Company of
any liability in respect of the non-issuance or sale of such shares as to which
such requisite authority shall not have been obtained.

Section 11. Non-transferability.

(a) Except as provided in Section 11(b), an Option may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent or distribution.

(b) The Committee may, in its discretion, authorize all or a portion of
the Nonqualified Stock Options to be granted to a Participant to be on terms
which permit transfer by such Participant to (a) the spouse, children or
grandchildren of the optionee ("Immediate Family Members"), (b) a trust or
trusts for the exclusive benefit of such Immediate Family Members, or (c) a
partnership in which such Immediate Family Members are the only partners,
provided that (i) there may be no consideration for any such transfer, (ii) the
Option Agreement (defined below) pursuant to which such Options are granted must
be approved by the Committee, and must expressly provide for transferability in
a manner consistent with this Section 11, and (iii) subsequent transfers of
transferred Options shall be prohibited except those in accordance with Section
11(a). Following transfer, any such Options shall continue to be subject to the
same terms and conditions as were applicable immediately prior to transfer,
provided that for purposes of Sections 9 and 10 hereof the term "Participants"
shall be deemed to refer to the transferee. The events of termination of
employment of Section 25 hereof shall continue to be applied with respect to the
original Participant, following which the Options shall be exercisable by the
transferee only to the extent, and for the periods specified in the Option
Agreement. Any permitted transferee shall be required prior to any transfer of
an Option or shares of Common Stock acquired pursuant to the exercise of an
Option to execute a written undertaking to be bound by the provisions of the
applicable Option Agreement.

Section 12. Adjustments Upon Capitalization and Corporate Changes;
Substitute Options. Subject to Section 15(b) hereof, if the outstanding shares
of the Common Stock of the Company are changed into, or exchanged for, a
different number or kind of shares or securities of the Company through
reorganization, merger, recapitalization or reclassification, or if the number
of outstanding shares is changed through a stock split, stock dividend, stock
consolidation or like capital adjustment, or if the Company makes a distribution
in partial liquidation or any other comparable extraordinary distribution with
respect to its Common Stock, an appropriate adjustment shall be made by the
Committee in the number, kind or Option Price of shares as to which Options may
be granted. A corresponding adjustment shall likewise be made in the number,
kind or Option Price of shares with respect to which unexercised Options have
theretofore been granted. Any such adjustment in an outstanding Option, however,
shall be made without change in the total price applicable to the unexercised
portion of the Option but with a corresponding adjustment in the price for each
share covered by the Option. In making such adjustments, or in determining that
no such adjustments are necessary, the Committee may rely upon the advice of
counsel and accountants to the Company, and the good faith determination of the
Committee shall be final, conclusive and binding. No fractional shares of stock
shall be issued under the Plan on account of any such adjustment.

If the Company at any time should succeed to the business of another
corporation through a merger or consolidation, or through the acquisition of
stock or assets of such corporation or its subsidiaries, Options may be granted
under the Plan to option holders of such corporation or its subsidiaries, in
substitution for options to purchase stock of such corporation held by them at
the time of succession. The Committee, in its sole and absolute discretion,
shall determine the extent to which such substitute Options shall be granted (if
at all), the person or persons to receive such substitute Options (who need not
be all option holders of such corporation), the number of Options to be received
by each such person, the Option Price of such Option (which may be determined
without regard to Section 6 hereof) and the terms and conditions of such
substitute Options; provided, however, that the Option Price of each such
substituted Option which is an Incentive Stock Option shall be an amount such
that, in the sole and absolute judgment of the Committee (and in compliance with
Section 424(a) of the Code in the case of an Incentive Stock Option), the
economic benefit provided by such Option is not greater

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30
than the economic benefit represented by the option in the acquired corporation
as of the date of the Company's acquisition of such corporation. Notwithstanding
anything to the contrary herein, no Option shall be granted, nor any action
taken, permitted or omitted, which would cause the Plan, or any Options granted
hereunder as to which Rule 16b-3 under the Exchange Act may apply, not to comply
with such Rule 16b-3.

Section 13. Option Agreement. Each Option granted under the Plan shall
be evidenced by a written stock option agreement ("Option Agreement") executed
by the Company and the Participant which (a) shall contain each of the
provisions and agreements herein specifically required to be contained therein;
(b) shall indicate whether such Option is to be an Incentive Stock Option or a
Nonqualified Stock Option, and if an Incentive Stock Option, shall contain terms
and conditions permitting such Option to qualify for treatment as an incentive
stock option under Section 422 of the Code; and (c) may contain such other terms
and conditions as the Committee deems desirable and which are not inconsistent
with the Plan.

Section 14. Rights as a Stockholder. A Participant or permitted
transferee of a Participant shall have no rights as a stockholder with respect
to any shares covered by an Option until the date of an entry evidencing such
ownership is made in the stock transfer books of the Company (the "Exercise
Date"). No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the Exercise Date.

Section 15. Termination of Options, Acceleration of Options.

(a) Each Option shall terminate and expire, and shall no longer be
subject to exercise, as the Committee may determine in granting such Option, and
each Option granted under the Plan shall set forth a termination date thereof,
which, subject to earlier termination as set forth in Section 7 or this Section
15 hereof, or as otherwise set forth in each particular Option Agreement, with
respect to Nonqualified Stock Options, shall be no later than ten years from the
date such Option is granted, and with respect to Incentive Stock Options, shall
also be no later than ten years from the date such Option is granted, unless the
Participant is a ten percent (10%) stockholder of the Company (as described in
Section 422(b)(6) of the Code, and determined after taking into account the
constructive ownership rules of Section 424(d) of the Code) at the time such
Option is granted, in which case the Option shall terminate and expire no later
than five years from the date of the grant thereof. An Incentive Stock Option
shall contain any additional termination events required by Section 422 of the
Code.

(b) Subject to Section 15(c) hereof, unless the Committee shall, in its
sole discretion, determine otherwise, upon (i) the dissolution, liquidation or
sale of all or substantially all of the business, properties and assets of the
Company, (ii) upon any reorganization, merger or consolidation in which the
Company does not survive, (iii) upon any reorganization, merger, consolidation
or exchange of securities in which the Company does survive and any of the
Company's stockholders have the opportunity to receive cash, securities of
another corporation and/or other property in exchange for their capital stock of
the Company, or (iv) upon any acquisition by any person or group (as defined in
Section 13(d) of the Securities Act of 1934) of beneficial ownership of more
than fifty percent (50%) of the Company's then outstanding shares of Common
Stock (each of the events described in clauses (i), (ii), (iii) or (iv) is
referred to herein individually as an "Extraordinary Event"), the Plan and each
outstanding Option shall terminate. In such event each Participant shall have
the right until 10 days before the effective date of the Extraordinary Event to
exercise, in whole or in part, any unexpired Option or Options issued to the
Participant, to the extent that said Option is then vested and exercisable
pursuant to the provisions of said Option or Options and of Section 7 hereof.

The termination of employment of, or the termination of a consulting
relationship with, a Participant for any reason shall not accelerate or
otherwise affect the number of shares with respect to which an Option may be
exercised; provided, however, that the Option may only be exercised with respect
to that number of shares which could have been purchased under the Option had
the Option been exercised by the Participant on the date of such termination.

(c) Notwithstanding the provisions of Section 7 or paragraphs (a) or (b)
of this Section 15, or any provision to the contrary contained in a particular
Option Agreement, the Committee, in its sole discretion, at any

A1-5

31
time, or from time to time, may elect to accelerate the vesting of all or any
portion of any Option then outstanding. The decision by the Committee to
accelerate an Option or to decline to accelerate an Option shall be final,
conclusive and binding. In the event of the acceleration of the exercisability
of Options as the result of a decision by the Committee pursuant to this Section
15(c), each outstanding Option so accelerated shall be exercisable for a period
from and after the date of such acceleration and upon such other terms and
conditions as the Committee may determine in its sole discretion; provided,
however, that such terms and conditions (other than terms and conditions
relating solely to the acceleration of exercisability and the related
termination of an Option) may not adversely affect the rights of any Participant
without the consent of the Participant so adversely affected. Any outstanding
Option which has not been exercised by the holder at the end of such stated
period shall terminate automatically and become null and void.

Section 16. Withholding of Taxes. The Company, or a Subsidiary, as the
case may be, may deduct and withhold from the wages, salary, bonus and other
income paid by the Company or such Subsidiaries to the Participant the requisite
tax upon the amount of taxable income, if any, recognized by the Participant in
connection with the exercise in whole or in part of any Option, or the sale of
Common Stock issued to the Participant upon the exercise of an Option, as may be
required from time to time under any federal or state tax laws and regulations.
This withholding of tax shall be made from the Company's (or such Subsidiaries')
concurrent or next payment of wages, salary, bonus or other income to the
Participant or by payment to the Company (or such Subsidiaries) by the
Participant of the required withholding tax, as the Committee may determine. The
Company may permit the Participant to elect to surrender, or authorize the
Company to withhold, shares of Common Stock (valued at their fair market value
on the date of surrender or withholding of such shares) in satisfaction of the
Company's withholding obligation, subject to such restrictions as the Committee
deems necessary to satisfy the requirements of Rule 16b-3. However, no
fractional shares of Common Stock shall be delivered, nor shall any cash in lieu
of fractional shares be paid, by the Company. The Company shall have the right
to deduct fractional shares to be paid to the Participant as a result of such
surrender or withholding of shares.

Section 17. Effectiveness and Termination of Plan. The Plan shall be
effective on the date on which it is adopted by the Board, provided the Plan is
approved by the stockholders of the Company within twelve (12) months of
December 5, 1995 and on or prior to the date of the first annual meeting of
stockholders of the Company held subsequent to the acquisition of an equity
security by a Participant hereunder for which exemption is claimed under Rule
16b-3. Notwithstanding any provision of the Plan or in any Option Agreement, no
Option shall be exercisable prior to such stockholder approval. The Plan shall
terminate at the earliest of the time when all shares of Common Stock which may
be issued hereunder have been so issued, or at such time as set forth in Section
15(b) hereof; provided, however, that the Board may in its sole discretion
terminate the Plan at any other time. Unless earlier terminated by the Board,
the Plan shall terminate on December 5, 2005. Subject to Section 15(b) hereof,
no such termination shall in any way affect any Option then outstanding.

Section 18. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Committee makes the
determination granting such Option. Notice of the determination shall be given
to each Participant to whom an Option is so granted within a reasonable time
after the date of such grant.

Section 19. Amendment of Plan. The Board may (a) make such changes in
the terms and conditions of granted Options as it deems advisable, provided each
Participant adversely affected by such change consents thereto, and (b) make
such amendments to the Plan as it deems advisable. Such amendments and changes
shall include, but not be limited to, acceleration of the time at which an
Option may be exercised, but may not, without the written consent or approval of
the holders of a majority of that voting stock of the Company which is
represented and is entitled to vote at a duly held stockholder's meeting (i)
increase the maximum number of shares subject to Options, except pursuant to
Section 12 hereof, (ii) change the designation of the class of employees
eligible to receive Incentive Stock Options, or (iii) in any manner modify the
Plan such that it fails to meet the requirements of Rule 16b-3 of the Exchange
Act for the exemption of the acquisition, cancellation, expiration or surrender
of Options from the operation of Section 16(b) of the Exchange Act.

Section 20. Transfers and Leaves of Absence. For purposes of the Plan,
(a) a transfer of a Participant's employment or consulting relationship, without
an intervening period, between the Company and a Subsidiary

A1-6

32
shall not be deemed a termination of employment or a termination of a consulting
relationship, and (b) a Participant who is granted in writing a leave of absence
shall be deemed to have remained in the employ of, or in a consulting
relationship with, the Company (or a Subsidiary, whichever is applicable) during
such leave of absence. Notwithstanding the foregoing, for purposes of
determining the exercisability of an Incentive Stock Option, a Participant who
is on a leave of absence that exceeds ninety (90) days will be considered to
have terminated his or her employment on the ninety-first (91st) day of the
leave of absence, unless the Participant's rights to reemployment are guaranteed
by statute or contract.

Section 21. No Obligation to Exercise Option. The granting of an Option
shall impose no obligation on the Participant to exercise such Option.

Section 22. Governing Law. The Plan and any Option granted pursuant to
the Plan shall be construed under and governed by the laws of the State of
Delaware without regard to conflict of law provisions thereof.

Section 23. Not an Employment or Other Agreement. Nothing contained in
the Plan or in any Option Agreement shall confer, intend to confer or imply any
rights of employment or any rights to any other relationship or rights to
continued employment by, or rights to a continued consulting relationship with,
the Company or any Subsidiaries in favor of any Participant or limit the ability
of the Company or any Subsidiaries to terminate, with or without cause, in its
sole and absolute discretion, the employment of, or relationship with, any
Participant, subject to the terms of any written employment or other agreement
to which a Participant is a party.

Section 24. Rule 16b-3. It is intended that the Plan and any grant of an
Option made to a person subject to Section 16 of the Exchange Act meet all of
the requirements of Rule 16b-3. If any provision of the Plan or any such grant
would disqualify the Plan or such grant under, or would not otherwise comply
with, Rule 16b-3, such provision or grant shall be construed or deemed amended
to conform to Rule 16b-3.

Section 25. Termination of Employment. The terms and conditions under
which an Option may be exercised after a Participant's termination of employment
shall be determined by the Committee and shall be specified in the Option
Agreement. The conditions under which such post-termination exercises shall be
permitted with respect to Incentive Stock Options shall be determined in
accordance with the provisions of Section 422 of the Code.

Section 26. Indemnification. In addition to such other rights of
indemnification as they may have as directors, the members of the Board or
Committee shall be indemnified by the Company to the fullest extent permitted by
law against the reasonable expenses, including reasonable attorneys' fees,
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan or any Option granted thereunder, and against all
amounts paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such Committee member is not entitled to
indemnification under applicable law; provided that within 60 days after
institution of any such action, suit or proceeding such Committee member shall
in writing offer the Company the opportunity, at the Company's expense, to
handle and defend the same.

A1-7

33
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

CHECK THE APPROPRIATE BOX:
[X] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
[ ] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SECTION 240.14a-11(c) OR SECTION 240.14a-12

PIA MERCHANDISING SERVICES, INC.
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

N/A
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] NO FEE REQUIRED
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14a-6(i)(1) AND 0-11.

1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:

-----------------------------------------------------------------------------

2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:

-----------------------------------------------------------------------------

3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED PURSUANT TO
EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE FILING FEE IS
CALCULATED AND STATE HOW IT WAS DETERMINED):

-----------------------------------------------------------------------------

4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:

-----------------------------------------------------------------------------

5) TOTAL FEE PAID:

-----------------------------------------------------------------------------

[ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE ACT
RULE 0-11(a)(2) AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE WAS
PAID PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT
NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.

1) AMOUNT PREVIOUSLY PAID:

-----------------------------------------------------------------------------

2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:

-----------------------------------------------------------------------------

3) FILING PARTY:

-----------------------------------------------------------------------------

4) DATE FILED:

-----------------------------------------------------------------------------

A2-3

34
APPENDIX-2

FORM OF PROXY

PROXY

PIA MERCHANDISING SERVICES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned appoints Terry R. Peets and Cathy L. Wood, and each of
them, proxies with full power of substitution, to vote all shares of Common
Stock of PIA Merchandising Services, Inc. (the "Company") held of record by the
undersigned as of March 13, 1998, the record date with respect to this
solicitation, at the Annual Meeting of Stockholders of the Company to be held at
The Sutton Place Hotel, 4500 MacArthur Boulevard, Newport Beach, California
92660, beginning at 10:00 a.m., Pacific Time, on Tuesday, May 12, 1998, and at
any adjournments thereof, upon the following matters:

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:

1. ELECTION OF DIRECTORS

[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as noted below) for all nominees listed below

(Instructions: To withhold authority to vote for any nominee, line
through or otherwise strike out the nominee's name below.)

Clinton E. Owens Joseph H. Coulombe
Terry R. Peets Patrick C. Haden
Patrick W. Collins J. Christopher Lewis
John A. Colwell

2. APPROVAL OF THE AMENDMENT OF THE COMPANY'S 1995 STOCK OPTION PLAN, AS
DESCRIBED IN THE PROXY STATEMENT.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS FOR THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 1998.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

4. OTHER MATTERS

In their discretion, Terry R. Peets and Cathy L. Wood are authorized to
vote upon such other business as may properly come before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
THE NOMINEES NAMED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3 ABOVE. IF ANY NOMINEE
DECLINES OR IS UNABLE TO SERVE AS A DIRECTOR, THEN THE PERSONS NAMED AS PROXIES
SHALL HAVE FULL DISCRETION TO VOTE FOR ANY OTHER PERSON DESIGNATED BY THE BOARD
OF DIRECTORS.

Dated _________________________________, 1998

_______________________________________
(Signature)

Please sign exactly as your name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee, guardian or
corporate officer, please give full
title as such.

The signer hereby revokes all proxies
heretofore given by the signor to vote
at said meeting or any adjournments
thereof.

A2-1

~~AMOUNT OF SHARES NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENTAGE - ------------------------------------ ------------------ ----------~~ ~~Riordan, Lewis & Haden(1) 1,637,151 (2) 30.2 300 S. Grand~~
*	Less than 1%
(1)	The address of such owners is c/o SPAR Group, Inc. 333 Westchester Avenue, ~~29th Floor Los Angeles, California 90071 Clinton E. Owens 734,720 (3) 13.1 c/o PIA Merchandising Services, Inc. 19900 MacArthur Boulevard,~~South Building, Suite ~~900 Irvine, California 92718 Heartland Advisors, Inc. 1,124,200~~ 204, White Plains, New York 10604.
(2)	These shares are owned beneficially by a control group consisting of Mr. William H. Bartels, Mr. Robert G. Brown, and SP/R Defined Benefit Pension Trust ("SP/R Trust") for the benefit of Mr. Robert G. Brown and his children. Mr. Bartels owns 5,288,693 of those shares or 25.1% and Mr. Robert G. Brown owns 5,047,293 of those shares and the SP/R Trust owns 1,109,625 of those shares for a total of 29.2%.
(3)	Mr. Olivier's beneficial ownership includes 296,250 shares issuable upon exercise of options.
(4) ~~20.8 790 North Milwaukee Street Milwaukee, Wisconsin 53202 California Community Foundation 484,872~~	Mr. Drogue's beneficial ownership includes 60,000 shares issuable upon exercise of options.
(5) ~~8.9 606 S. Olive Street, Suite 2400 Los Angeles, California 90014 Terry R. Peets~~	Mr. McCarthey's beneficial ownership includes 40,000 * Michael J. Skinner 3,703 shares issuable upon exercise of options.
(6) * Edwin J. Werner 14,071	Mr. Mayer's beneficial ownership includes 30,000 shares issuable upon exercise of options.
(7) * Jay F. Smyre 5,500	Mr. Peter Brown's beneficial ownership includes 67,500 shares issuable upon exercise of options.
(8) * Larry M. Dorr 137,476	Mr. Segreto's beneficial ownership includes 171,250 shares issuable upon exercise of options.
(9) 2.5 Roy L. Olofson -- * John A. Colwell 65,359	Ms. Belzer's beneficial ownership includes 193,750 shares issuable upon exercise of options.
(10) ~~1.2 Patrick C. Haden 1,639,651~~	Mr. Marrone's beneficial ownership includes 40,000 shares issuable upon exercise of options.
(11) ~~30.2 Joseph H. Coulombe 15,810~~	Mr. Adolph's beneficial ownership includes 102,500 shares issuable upon exercise of options.
(12) * Edwin E. Epstein 14,459	Mr. Baer's beneficial ownership includes [______TBD______]
(13) * J. Christopher Lewis 1,639,651	Mr. Lazaretos's beneficial ownership includes [______TBD______]
(14) ~~30.2 All directors~~	Mr. Novgorodtsev's beneficial ownership includes [_____TBD_______]
(15)	Mr. Brown Sr.'s beneficial ownership includes [_____TBD_______]
(16)	Percentage ownership is based on the total number of shares of Common Stock outstanding (21,108,352 shares) and ~~executive officers~~the number of shares of Common Stock beneficially owned (including Common Stock currently obtainable under vested options, indirectly owned through retirement plans and beneficially owned by certain family members) by such person or group, in each case as ~~a 2,673,249 45.7 group (12 persons)~~ of March 30, 2020.

	/s/ James R. Segreto
	James R. Segreto
	Secretary, Treasurer and Chief Financial Officer

White Plains, New York
July 17, 2020

	(1)	Member of the Governance, Compensation and Audit Committees
	(2)	Member of the Audit Committee until August 1, 2020
	(3)	Member of the Compensation Committee

Name	Age	Position with SPAR Group, Inc.
Arthur B. Drogue	74	Chairman of the Board
Christiaan M. Olivier	55	Chief Executive Officer, President and Director
William H. Bartels	75	Vice Chairman and Director
Arthur H. Baer (1)	73	Director and Chairman of the Audit Committee
R. Eric McCarthey (2)	64	Director
Peter W. Brown	38	Director
Jeffrey A. Mayer (1)	68	Director and Chairman of the Governance Committee
Panagiotis ("Panos") N. Lazaretos (3)	47	Director
Robert G. Brown	76	Director
Igor Novgorodtsev (1)	TBD	Director and Chairman of the Compensation Committee
James R. Brown Sr.	73	Nominee

Name	Age	Position with SPAR Group, Inc. (1)(2)

Christiaan M. Olivier	55	Chief Executive Officer, President and a Director

James R. Segreto	71	Chief Financial Officer, Secretary and Treasurer

Kori G. Belzer	54	Chief Operating Officer

Gerard Marrone	57	Chief Revenue Officer

Steven J. Adolph	53	President International

Title of Class	Name and Address of Beneficial Owner	Number of Shares Beneficially Owned	See Note #	Percentage
Common Shares	William H. Bartels (1)	11,445,611	(2)	54.2%
Common Shares	Christiaan M. Olivier (1)	304,390	(3)	1.4%
Common Shares	Arthur B. Drogue (1)	64,000	(4)	*
Common Shares	R. Eric McCarthey (1)	44,000	(5)	*
Common Shares	Jeffrey A. Mayer (1)	30,000	(6)	*
Common Shares	Peter W. Brown (1)	155,210	(7)	*
Common Shares	James R. Segreto (1)	171,251	(8)	*
Common Shares	Kori G. Belzer (1)	206,745	(9)	*
Common Shares	Gerard Marrone (1)	40,260	(10)	*
Common Shares	Steven J. Adolph (1)	102,500	(11)	*
Common Shares	Arthur H. Baer	[____TBD______]	(12)	*
Common Shares	Panagiotis ("Panos") N. Lazaretos	[______TBD____]	(13)	*
Common Shares	Igor Novgorodtsev	[_____TBD_____]	(14)	*
Common Shares	James R. Brown Sr.	[____TBD______]	(15)	*
Common Shares	Robert G. Brown 123 Sunesta Cove Drive Palm Beach Gardens, FL 33418	11,445,611	(2)	54.2%
Common Shares	Whittier Holdings, Inc. 100 Liberty Street, Suite 890 Reno, NV 89501	1,105,455	(17)	5.24%
Common Shares	All Executives and Directors	12,712,399	-	60.2%

	Three Months Ended
	March 31,
	2020		2019
Services provided by affiliates:
National Store Retail Services (NSRS)		1,342		125
Office lease expenses (Mr. Burdekin)		6		-
Office lease expenses (RJ Holdings)		173		102
Office and vehicle lease expenses (MPT)		16		16
Vehicle rental expenses (MCPT)		299		290
Office and vehicle rental expenses (MHT)		73		64
Consulting and administrative services (CON)		12		37
Legal Services (KMSA)		23		22
Warehousing rental (JFMD)		13		12
Sparfacts		31		-

Total services provided by affiliates	$	1,988	$	668

Due to affiliates consists of the following (in thousands):	March 31,		December 31,
	2020		2019
Loans from local investors:(1)
Australia	$	410	$	467
Mexico		623		623
Brazil		139		139
China		2,217		2,271
South Africa		399		635
Resource Plus		531		531
Total due to affiliates	$	4,319	$	4,666

Option Awards	Covered Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (thousands)
Outstanding at January 1, 2018		3,334,177	$	0.96		5.17	$	1,221
Granted		45,000		1.67		–		–
Exercised/cancelled		306,750		0.40		–		–
Forfeited or expired		37,500		–		–		–
Outstanding at December 31, 2018		3,044,927	$	1.01		4.55	$	103
Granted		–		–		–		–
Exercised		804,580		0.44		–		–
Forfeited or expired		13,136		–		–		–
Outstanding at December 31, 2019		2,227,211	$	1.22		4.83	$	452
Exercisable at December 31, 2019		1,723,961	$	1.27		4.06	$	321

Expected volatility	39	%
Expected dividend yields	0	%
Expected term (in years)	3
Risk free interest rate	2.3	%
Expected forfeiture rate	5	%

	Shares			Weighted- Average Grant Date Fair Value per Share
Unvested at January 1, 2018		68,400		$	1.38
Granted		–			–
Vested		(18,900	)		1.48
Forfeited		(48,500	)		1.35
Unvested at December 31, 2018		1,000			1.36
Granted		–			–
Vested		(1,000	)		1.36
Forfeited		–			–
Unvested at December 31, 2019		–		$	–

Name and Principal Positions	Year	Salary ($)		Bonus ($)		Stock Awards ($) (1)		Option Awards ($)(1)		All Other Compensation ($) (2)		Total ($)
(a)	(b)	(c)		(d)		(e)		(f)		(g)		(h)
Christiaan M. Olivier	2019		300,000		100,000		6,738		–		20,800		431,538
Chief Executive Officer, President and Director	2018		300,000				12,261		63,566		4,800		380,627
William H. Bartels (3)	2019		150,000								4,800		154,800
Vice Chairman and Director	2018		150,000								4,800		154,800
James R. Segreto	2019		204,749		–		–		38,560		4,800		248,109
Chief Financial Officer, Treasurer and Secretary	2018		200,000		22,000		3,163		4,755		4,800		234,817
Kori G. Belzer	2019		220,106		–		–		35,174		4,800		260,080
Chief Operating Officer	2018		215,000		30,100		3,163		4,672		4,800		257,735
Steven J. Adolph	2019		204,749		100,000		–		–		–		304,749
President International	2018		200,000		40,000		–		4,755		–		244,755
Gerard Marrone	2019		204,749		–		–		9,500		–		214,249
Chief Revenue Officer	2018		200,000		–		–		14,424				214,424

(1)	These are not amounts actually paid to or received by the Named Executive or Officer. These are "compensation expenses" for restricted stock or stock option awards recognized by the Corporation under generally accepted accounting principles computed in accordance with ASC-718- 10. See Note 2 to our 2019 Annual Report on Form 10-K for additional assumptions used to value stock and option awards.
(2)	"Other Compensation" primarily represents automobile allowance, except for, the $16,000 paid to Christiaan Olivier for living expenses.
(3)	Mr. Bartels retired as an employee of SGRP as of January 1, 2020, but he will continue to serve as a non-employee director. (SeeBartels' Retirement and Director Compensation, below for a description of the benefits that he will receive as a director.)

	●	Cash Bonuses. Annually, the Company enters into bonus plans with key management and administrators based on specified goals. The bonuses noted in the above table that were paid in 2019 were in fact earned in 2018. Management bonuses earned and accrued in 2019 of approximately $1.4 million were scheduled to be paid by March 31, 2020 but, at managements recommendation, they have been temporarily delayed to preserve cash reserves for potential impact of Covid-19. Personal that have earned 2019 bonuses entered into Delayed Payment Agreements with the Company which effectively defer these compensation payments until the later part of 2020 as cash availability projections improve.
	●	Stock and Option Awards. The Corporation grants our Named Executive Officers awards of stock options and restricted stock from time to time. During 2019, the Corporation granted Messrs. Oliver, Segreto, Belzer and Marrone options to purchase shares of our common stock. Such options were issued with an exercise price equal to the fair market value on the date of grant and vest and become exercisable 25% on each of the first four anniversaries of the date of grant, provided that the recipient remains employed through the vesting date.
	●	Retirement Benefits. The only retirement plan the Company maintains in the United States is its 401(k) Profit Sharing Plan, which is which is a tax-qualified defined contribution plan that is available to all of its eligible employees, including the Named Executive Officers. Although it is not required to do so, the Corporation makes discretionary contributions to plan participants from time to time. In 2019, the Corporation contributed a total of $75,000 to that plan, which was shared by its 197 participants in proportion to their respective contributions. The amounts that the Corporation contributed to each of the Named Executive Officers is included in the "All Other Compensation" column above. The Corporation does not maintain any defined benefit pension plans, supplemental retirement plans, or nonqualified deferred compensation plans. However, see Bartels' Retirement and Director Compensation, below.
	●	Other Benefits and Perquisites. Other than providing car allowances and paying for life and long-term disability benefits, each as described in footnote (2) to the Summary Compensation Table above, the Corporation does not provide any perquisites or other benefits to its Named Executive Officers. The Corporation provides standard healthcare benefits to its eligible employees, including the Named Executive Officers.

Name	Grant Date	Number of Securities Underlying Unexercised Options Exercisable at 12/31/19 (#)		Number of Securities Underlying Unexercised Options Not Exercisable at 12/31/19 (#)			Option Exercise Price ($)		Option Expiration Date
Christiaan Olivier	09/05/17		250,000		250,000	(2)	$	1.08	09/05/27
	05/03/18		12,500		37,500	(3)	$	1.23	05/03/28
	04/05/19		18,750		56,250	(4)	$	0.64	04/05/29

James Segreto	08/04/11		30,000		–		$	1.23	08/04/21
	08/01/12		30,000		–		$	1.09	08/01/22
	08/06/13		35,000		–		$	2.14	08/06/23
	08/07/14		–		–
	08/13/15		–		–
	08/11/16		18,750		6,250	(1)	$	0.92	08/11/26
	08/09/17		12,500		12,500	(2)	$	1.05	08/09/27
	05/03/18		5,000		15,000	(3)	$	1.23	05/03/28
	04/05/19		5,000		15,000	(4)	$	0.64	04/05/29

Kori Belzer	08/04/11		35,000		–		$	1.23	08/04/21
	08/01/12		35,000		–		$	1.09	08/01/22
	08/06/13		35,000		–		$	2.14	08/06/23
	08/07/14		–		–
	08/13/15		–		–
	08/11/16		18,750		6,250	(1)	$	0.92	08/11/26
	05/07/17		12,500		12,500	(2)	$	0.90	05/17/27
	05/03/18		5,000		15,000	(3)	$	1.23	05/03/28
	04/05/19		6,250		18,750	(4)	$	0.64	04/05/29

Gerard Marrone	01/09/17		–		50,000	(2)	$	1.00	01/09/27
	05/03/18		5,000		15,000	(3)	$	1.23	05/03/28
	04/05/19		5,000		15,000	(4)	$	0.64	04/05/29

Steven Adolph	06/20/16		75,000		25,000	(1)	$	0.99	06/20/26
	08/09/17		12,500		12,500	(2)	$	1.05	08/09/27
	05/03/18		5,000		15,000	(3)	$	1.23	05/03/28
	04/05/19		5,000		15,000	(4)	$	0.64	04/05/29

	(1)	Amounts vest on the anniversary of the grant date in 2020.
	(2)	Amounts vest on the anniversary of the grant date, one half in 2020 and 2021.
	(3)	Amounts vest on the anniversary of the grant date one third in each 2020, 2021, and 2022.
	(4)	Amounts vest on the anniversary of the grant date one fourth in each 2020, 2021, 2022, and 2023.

Name	Year	Fees Earned or Paid in Cash ($)		Option Awards ($)(1)		All Other Compensation ($)		Total ($)
Jack W. Partridge (2)	2019		31,250		–		–		31,250
Lorrence T. Kellar (3)	2019		3,125		–		–		3,125
Arthur B. Drogue	2019		95,250		–		–		95,250
R. Eric McCarthey	2019		65,000		1,071		–		66,071
Peter W. Brown	2019		55,000		–		–		55,000
Jeffery A. Mayer	2019		64,179		–		–		64,179
Arthur H. Baer	2019		17,949		–		–		17,949
Panagiotis N. Lazaretos	2019		3,288		–		–		3,288

(1)	These are not amounts actually paid to or received by the named director. These are "compensation expenses" for restricted stock or stock option awards recognized by the Corporation under generally accepted accounting principles computed in accordance with ASC- 718-10.
(2)	Mr. Partridge's tenure as a director of SGRP ended in May 2019.
(3)	Mr. Kellar's tenure as a director of SGRP ended in January 2019.