x |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended
December 31, 2011
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o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from __________ to __________
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Delaware
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33-0684451
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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|
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560 White Plains Road, Suite 210, Tarrytown, New York
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10591
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(Address of principal executive offices)
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(Zip Code)
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INDEX | ||
PART I | ||
Page | ||
Item 1
|
Business
|
3
|
Item 1A
|
Risk Factors
|
11
|
Item 1B
|
Unresolved Staff Comments
|
19
|
Item 2
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Properties
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19
|
Item 3
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Legal Proceedings
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19
|
Item 4
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Submission of Matters to a Vote of Security Holders
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20
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PART II | ||
Item 5
|
Market for Registrant's Common Equity, Related Shareholder Matters and
|
21
|
|
Issuer Purchases of Equity Securities
|
|
Item 6
|
Selected Financial Data
|
24
|
Item 7
|
Management's Discussion and Analysis of Financial Condition and Results
|
24
|
|
of Operations, Liquidity and Capital Resources
|
|
Item 7A
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Quantitative and Qualitative Disclosures about Market Risk
|
30
|
Item 8
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Financial Statements and Supplementary Data
|
30
|
Item 9
|
Changes in and Disagreements with Accountants on Accounting and
|
30
|
|
Financial Disclosure
|
|
Item 9A(T)
|
Controls and Procedures
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30
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Item 9B
|
Other Information
|
31
|
PART III | ||
Item 10
|
Directors, Executive Officers and Corporate Governance
|
32
|
Item 11
|
Executive Compensation
|
32
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Item 12
|
Security Ownership of Certain Beneficial Owners and Management and
|
32
|
Related Stockholder Matters
|
||
Item 13
|
Certain Relationships and Related Transactions, and Director Independence
|
32
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Item 14
|
Principal Accountant Fees and Services
|
32
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PART IV | ||
Item 15
|
Exhibits and Financial Statement Schedules
|
33
|
Signatures
|
41
|
Primary Territory
|
Date
Established
|
SGRP Percentage
Ownership
|
Principal Office Location
|
|||
United States of America
|
1979
|
100%
|
Tarrytown, New York, United States of America
|
|||
Japan
|
May 2001
|
100%
|
Osaka, Japan
|
|||
Canada
|
June 2003
|
100%
|
Toronto, Canada
|
|||
South Africa
|
April 2004
|
51%
|
Durban, South Africa
|
|||
India
|
April 2004
|
51%*
|
New Delhi, India
|
|||
Lithuania
|
September 2005
|
51%**
|
–
|
|||
Australia
|
April 2006
|
51%
|
Melbourne, Australia
|
|||
Romania
|
July 2009
|
51%***
|
Bucharest, Romania
|
|||
China
|
March 2010
|
51%****
|
Shanghai, China
|
|||
Mexico
|
August 2011
|
51%
|
Mexico City, Mexico
|
|||
Turkey
|
August 2011
|
51%*****
|
Istanbul, Turkey
|
*
|
In June 2011, the Company sold 49% of its interest to KROGNOS Integrated Marketing Services Private Limited.
|
**
|
The Company closed this subsidiary in the Fourth Quarter of 2010.
|
***
|
Currently the Company owns two subsidiaries in Romania. One subsidiary is 100% owned and is inactive, and the second subsidiary, acquired in July 2009, is 51% owned.
|
****
|
Currently the Company owns two subsidiaries in China. One subsidiary is 100% owned and is inactive, and the second subsidiary, acquired in March 2010 and operational in August 2010, is 51% owned.
|
*****
|
In August 2011, the Company sold its 51% ownership in its original subsidiary in Turkey to its original local investor, and in November 2011 the Company started a new 51% owned subsidiary to compete in this important market.
|
•
|
Reordering and replenishment of products
|
|
•
|
Ensuring that the Company's clients' products authorized for distribution are in stock and on the shelf or sales floor
|
|
•
|
Adding new products that are approved for distribution but not yet present on the shelf or sales floor
|
|
•
|
Designing and implementing store planogram schematics
|
|
•
|
Setting product category shelves in accordance with approved store schematics
|
|
•
|
Ensuring that product shelf tags are in place
|
|
•
|
Checking for overall salability of the clients' products
|
|
•
|
Placing new product and promotional items in prominent positions
|
|
•
|
Kiosk replenishment and maintenance
|
Test Market Research
- Testing promotion alternatives, new products and advertising campaigns, as well as packaging, pricing, and location changes, at the store level.
|
|
Mystery Shopping
- Calling anonymously on retail outlets (e.g. stores, restaurants, banks) to check on distribution or display of a brand and to evaluate products, service of personnel, conditions of store, etc.
|
|
Data Collection
- Gathering sales and other information systematically for analysis and interpretation.
|
|
RFID
– Utilizing technology to track merchandiser performance, product inventory at store level as well as other related merchandising and marketing applications.
|
•
|
Mass Merchandisers
|
|
•
|
Drug
|
|
•
|
Grocery
|
|
•
|
Office Supply
|
|
•
|
Other retail outlets (such as discount and electronic stores, in-home and in-office, etc.)
|
|
·
|
the relatively small public float and corresponding thin trading market for SGRP Common Stock, attributable to (among other things) the large block of voting shares beneficially owned by the Company's co-founders (as noted below) and generally low trading volumes, and that thin trading market may cause small trades to have significant impacts on SGRP Common Stock price;
|
|
·
|
the substantial beneficial ownership of approximately 62.1% of the Company's voting stock and potential control by the Company's co-founders (who also are directors and executive officers of the Company), Mr. Robert G. Brown, who beneficially owns approximately 36.3% (or 7,639,580 shares) of SGRP Common Stock, and Mr. William H. Bartels, who beneficially owns approximately 25.8% (or 5,429,800 shares) of SGRP Stock, which amounts were calculated using total beneficial ownership (21,053,971 shares) and their individual beneficial ownerships at December 31, 2011 (including all shares then beneficially owned under currently exercisable warrants and vested options), as more fully described above and below;
|
|
·
|
the periodic potential risk of the delisting of SGRP Common Stock from trading on Nasdaq (as described below);
|
|
·
|
any announcement, estimate or disclosure by the Company, or any projection or other claim or pronouncement by any of the Company's competitors or any financial analyst, commentator, blogger or other person, respecting (i) any new product created, product improvement, significant contract, business acquisition or relationship, or other publicized development by the Company or any of its competitors, or (ii) any change, fluctuation or other development in the Company's actual, estimated or desired assets, business, capital, cash flow, credit, expenses, financial condition, income, liabilities, liquidity, locations, marketing, operations, prospects, sales, strategies, taxation or other achievement, results or condition or in those of any of the Company's competitors, in each case irrespective of accuracy or validity and whether or not adverse or material; and
|
|
·
|
the general volatility of stock markets, consumer and investor confidence and the economy generally (which often affect the prices of stock issued by the Company and many others without regard to financial results or condition).
|
•
|
Political and economic risks, including terrorist attacks and political instability;
|
|
•
|
Various forms of protectionist trade legislation that currently exist, or have been proposed;
|
|
•
|
Expenses associated with customizing products;
|
|
•
|
Local laws and business practices that favor local competition;
|
|
•
|
Dependence on local vendors;
|
|
•
|
Multiple, conflicting and changing governmental laws and regulations;
|
|
•
|
Potentially adverse tax consequences;
|
|
•
|
Local accounting principles, practices and procedures and limited familiarity with US GAAP;
|
|
•
|
Foreign currency exchange rate fluctuations;
|
|
•
|
Communication barriers, including those arising from language, culture, custom and times zones; and
|
|
•
|
Supervisory challenges arising from distance, physical absences and such communication barriers.
|
DOMESTIC:
|
||
Tarrytown, NY (Corporate Headquarters)
|
||
Auburn Hills, MI (Regional Office, Warehouse and Central Computer Operations)
|
||
INTERNATIONAL:
|
||
Toronto, Ontario, Canada
|
Tokyo, Japan
|
Bucharest, Romania
|
Durban, South Africa
|
New Delhi, India
|
Melbourne, Australia
|
Mexico City, Mexico
|
Shanghai, China
|
Istanbul, Turkey
|
2011
|
2010
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
First Quarter
|
$ | 2.38 | $ | 0.88 | $ | 1.10 | $ | 0.76 | ||||||||
Second Quarter
|
1.90 | 1.05 | 1.00 | 0.45 | ||||||||||||
Third Quarter
|
1.58 | 0.87 | 1.09 | 0.42 | ||||||||||||
Fourth Quarter
|
1.25 | 0.88 | 1.10 | 0.80 |
12/31/06
|
12/31/07
|
12/31/08
|
12/31/09
|
12/31/10
|
12/31/11
|
|||||||||||||||||||
SPAR Group, Inc.
|
100.00 | 56.56 | 61.48 | 65.57 | 68.03 | 81.97 | ||||||||||||||||||
NASDAQ Composite
|
100.00 | 110.26 | 65.65 | 95.19 | 112.10 | 110.81 | ||||||||||||||||||
Russell 2000
|
100.00 | 98.43 | 65.18 | 82.89 | 105.14 | 100.75 | ||||||||||||||||||
S&P Advertising
|
100.00 | 85.47 | 47.59 | 73.87 | 92.28 | 90.23 | ||||||||||||||||||
Peer Group
|
100.00 | 106.77 | 49.73 | 87.80 | 118.39 | 119.89 |
Year Ended December 31,
|
||||||||||||||||
2011
|
%
|
2010
|
%
|
|||||||||||||
Net revenues
|
$ | 73.5 | 100.0 | % | $ | 63.2 | 100.0 | % | ||||||||
Cost of revenues
|
51.0 | 69.4 | 42.2 | 66.8 | ||||||||||||
Selling, general & administrative expense
|
18.5 | 25.1 | 17.1 | 27.1 | ||||||||||||
Depreciation & amortization
|
1.1 | 1.5 | 1.0 | 1.6 | ||||||||||||
Interest expense
|
0.2 | 0.3 | 0.3 | 0.5 | ||||||||||||
Other (income)
|
– | – | – | – | ||||||||||||
Income before income tax
provision and non-controlling interest
|
2.7 | 3.7 | 2.6 | 4.0 | ||||||||||||
Provision for income taxes
|
0.4 | 0.5 | 0.3 | 0.4 | ||||||||||||
Net income
|
2.3 | 3.2 | 2.3 | 3.6 | ||||||||||||
Net income attributable to non-
controlling interest
|
(0.1 | ) | (0.2 | ) | (0.1 | ) | (0.2 | ) | ||||||||
Net income attributable to SPAR Group, Inc.
|
$ | 2.2 | 3.0 | % | $ | 2.2 | 3.4 | % |
Year Ended December 31,
|
||||||||||||||||
2011
|
%
|
2010
|
%
|
|||||||||||||
Selling, general & administrative
|
$ | 18.5 | 25.1 | % | $ | 17.1 | 27.1 | % | ||||||||
Depreciation and amortization
|
1.1 | 1.5 | 1.0 | 1.6 | ||||||||||||
Total operating expenses
|
$ | 19.6 | 26.6 | % | $ | 18.1 | 28.7 | % |
December 31, 2011
|
Average
Interest Rate
|
December 31, 2010
|
Average
Interest Rate
|
|||||||||||||
Credit Facilities
Loan Balance
:
|
||||||||||||||||
United States
|
$ | 2,621 | 4.75 | % | $ | 3,536 | 4.87 | % | ||||||||
Australia
|
402 | 10.38 | % | 548 | 10.24 | % | ||||||||||
Canada
|
618 | 4.00 | % | 623 | 4.00 | % | ||||||||||
$ | 3,641 | $ | 4,707 | |||||||||||||
Other Debt Facility
:
|
||||||||||||||||
Japan Term Loan
|
$ | 227 | 0.1 | % | $ | – | – | |||||||||
Michael Anthony Note
|
– | – | 556 | 9.5 | % | |||||||||||
$ | 227 | 0.1 | % | $ | 556 | 9.5 | % | |||||||||
December 31, 2011
|
December 31, 2010
|
|||||||||||||||
Unused Availability
:
|
||||||||||||||||
United States
|
$ | 2,671 | $ | 1,700 | ||||||||||||
Australia
|
818 | 952 | ||||||||||||||
Canada
|
118 | 87 | ||||||||||||||
$ | 3,607 | $ | 2,739 |
Contractual Obligations
|
Period in which payments are due
|
|||||||||||||||||||
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
||||||||||||||||
Lines of Credit and Other Debt
|
$ | 3,868 | $ | 3,678 | $ | 74 | $ | 74 | $ | 42 | ||||||||||
Capital Lease Obligations
|
287 | 154 | 133 | – | – | |||||||||||||||
Operating Lease Obligations
|
2,560 | 931 | 1,382 | 247 | – | |||||||||||||||
Total
|
$ | 6,715 | $ | 4,763 | $ | 1,589 | $ | 321 | $ | 42 |
Reports of Independent Registered Public Accounting Firms
|
|
– Rehmann Robson
|
F-1
|
– Nitin Mittal & Co.
|
F-2
|
Consolidated Balance Sheets as of December 31, 2011, and December 31, 2010
|
F-3
|
Consolidated Statements of Income for the years ended December 31, 2011, and December 31, 2010
|
F-4
|
Consolidated Statements of Equity for the years ended December 31, 2011, and December 31, 2010
|
F-5
|
Consolidated Statements of Cash Flows for the years ended December 31, 2011, and December 31, 2010
|
F-6
|
Notes to Consolidated Financial Statements
|
F-7
|
Schedule II - Valuation and Qualifying Accounts for the two years ended December 31, 2011
|
F-30
|
Exhibit
Number
|
Description
|
|
3.1
|
Certificate of Incorporation of SPAR Group, Inc. (referred to therein under its former name of PIA Merchandising Services, Inc.), as amended ("SGRP"), incorporated by reference to SGRP's Registration Statement on Form S-1 (Registration No. 33-80429), as filed with the Securities and Exchange Commission ("SEC") on December 14, 1995 (the "Form S-1"), and the Certificate of Amendment filed with the Secretary of State of the State of Delaware on July 8, 1999 (which, among other things, changes SGRP's name to SPAR Group, Inc.), (incorporated by reference to Exhibit 3.1 to SGRP's Quarterly Report on Form 10-Q for the 3rd Quarter ended September 30, 1999).
|
|
3.2
|
Amended and Restated By-Laws of SPAR Group, Inc., as adopted on May 18, 2004, as amended through November 10, 2011 (as filed herewith).
|
|
3.3
|
Amended and Restated Charter of the Audit Committee of the Board of Directors of SPAR Group, Inc., adopted on May 18, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 27, 2004).
|
|
3.4
|
Charter of the Compensation Committee of the Board of Directors of SPAR Group, Inc., adopted on May 18, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 27, 2004).
|
|
3.5
|
Charter of the Governance Committee of the Board of Directors of SPAR Group, Inc., adopted on May 18, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 27, 2004).
|
|
3.6
|
SPAR Group, Inc. Statement of Policy Respecting Stockholder Communications with Directors, adopted on May 18, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 27, 2004).
|
3.7
|
SPAR Group, Inc. Statement of Policy Regarding Director Qualifications and Nominations, adopted on May 18, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 27, 2004).
|
|
3.8
|
Certificate of Designation of Series "A" Preferred Stock of SPAR Group, Inc., As of March 28, 2008 (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as filed with the SEC on March 31, 2008).
|
|
4.1
|
Registration Rights Agreement entered into as of January 21, 1992, by and between SGRP (as successor to, by merger in 1996 with, PIA Holding Corporation, f/k/a RVM Holding Corporation, the California Limited Partnership, The Riordan Foundation and Creditanstalt-Bankverine (incorporated by reference to the Form S-1).
|
|
4.2
|
Amended and Restated Series A Preferred Stock Subscription Agreement by and among SGRP, Robert G. Brown, William H. Bartels and SPAR Management Services, Inc., a Nevada corporation ("SMSI"), dated September 30, 2008, and effective as of March 31, 2008 (incorporated by reference to SGRP's Current Report on Form 8-K dated October 6, 2008, as filed with the SEC on October 10, 2008).
|
|
4.3
|
Series A Preferred Stock Subscription Agreement by and among SGRP, SP/R Inc. Defined Benefit Pension Plan, acting through Robert G. Brown, its Trustee, WHB Services, Inc. Defined Benefit Trust, acting through William H. Bartels, its Trustee, and WHB Services, Inc. Investment Savings Trust, acting through William H. Bartels, its Trustee, affiliates of Mr. Robert G. Brown and Mr. William H. Bartels, dated September 30, 2008, and effective as of September 24, 2008 (incorporated by reference to SGRP's Current Report on Form 8-K dated October 6, 2008, as filed with the SEC on October 10, 2008).
|
|
4.4
|
SGRP's Offer to Exchange Certain Outstanding Stock Options for New Stock Options dated August 24, 2009 (incorporated by reference to Exhibits 99(a)(1)(A) through (G) of SGRP's Schedule TO dated August 24, 2009, as filed with the SEC on August 25, 2009 ("SGRP's SC TO-I")).
|
|
4.5 |
SGRP's Common Stock Prospectus Dated April 8, 2011 (incorporated by reference to SGRP's Pre-Effective Amendment No. 4 to its Registration Statement on Form S-3 (Registration No. 333-162657) as filed with the SEC on April 7, 2011).
|
|
4.6
|
Form of SGRP's Common Stock Certificate (incorporated by reference to SGRP's Pre-Effective Amendment No. 1 to its Registration Statement on Form S-3 (Registration No. 333-162657) as filed with the SEC on February 7, 2011).
|
|
4.7
|
Form of SGRP's Preferred Stock Certificate (incorporated by reference to SGRP's Pre-Effective Amendment No. 1 to its Registration Statement on Form S-3 (Registration No. 333-162657) as filed with the SEC on February 7, 2011).
|
|
10.1
|
SPAR Group, Inc. 2008 Stock Compensation Plan, effective as of May 29, 2008, and as amended through May 28, 2009 (the "SGRP 2008 Plan") (incorporated by reference to SGRP's Current Report on Form 8-K dated June 4, 2009, as filed with the SEC on June 4, 2009).
|
|
10.2
|
Summary Description and Prospectus dated August 24, 2009, respecting the SPAR Group, Inc. 2008 Stock Compensation Plan, as amended (incorporated by reference to Exhibit 99(a)(1)(G) to SGRP's SC TO-I).
|
|
10.3
|
Form of Nonqualified Stock Option Contract for new awards under the SGRP 2008 Plan (incorporated by reference to SGRP's first and final amendment to its SC TO-I on Schedule TO I/A dated October 20, 2009, as filed with the SEC on October 22, 2009).
|
|
10.4
|
2000 Stock Option Plan, as amended through May 16, 2006 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, as filed with the SEC on November 14, 2006).
|
|
10.5
|
2001 Employee Stock Purchase Plan (incorporated by reference to SGRP's Proxy Statement for SGRP's annual stockholders meeting held on August 2, 2001, as filed with the SEC on July 12, 2001).
|
|
10.6
|
2001 Consultant Stock Purchase Plan (incorporated by reference to SGRP's Proxy Statement for SGRP's Annual meeting held on August 2, 2001, as filed with the SEC on July 12, 2001).
|
|
10.7
|
Amended and Restated Change in Control Severance Agreement between William H. Bartels and SGRP, dated as of December 22, 2008 (incorporated by reference to SGRP's Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on April 15, 2010).
|
10.8
|
Amended and Restated Change in Control Severance Agreement between Gary S. Raymond and SGRP, dated as of December 30, 2008 (incorporated by reference to SGRP's Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on April 15, 2010).
|
|
10.9
|
Amended and Restated Change in Control Severance Agreement between Kori G. Belzer and SGRP, dated as of December 31, 2008 (incorporated by reference to SGRP's Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on April 15, 2010).
|
|
10.10
|
Amended and Restated Change in Control Severance Agreement between Patricia Franco and SGRP, dated as of December 31, 2008 (incorporated by reference to SGRP's Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on April 15, 2010).
|
|
10.11
|
Amended and Restated Change in Control Severance Agreement between James R. Segreto and SGRP, dated as of December 20, 2008 (incorporated by reference to SGRP's Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on April 15, 2010).
|
|
10.12
|
Amended and Restated Field Service Agreement dated and effective as of January 1, 2004, by and between SPAR Marketing Services, Inc., and SPAR Marketing Force, Inc. (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, as filed with the SEC on May 21, 2004).
|
|
10.13
|
First Amendment to Amended and Restated Field Service Agreement between SPAR Marketing Services, Inc., a Nevada corporation ("
SMS
"), and SPAR Marketing Force, Inc., a Nevada corporation ("
SMF
"), dated September 30, 2008, and effective as of September 24, 2008 (the "
First Amendment
") (incorporated by reference to SGRP's Current Report on Form 8-K dated October 6, 2008, as filed with the SEC on October 10, 2008).
|
|
10.14
|
Amended and Restated Field Management Agreement dated and effective as of January 1, 2004, by and between SPAR Management Services, Inc., and SPAR Marketing Force, Inc. (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, as filed with the SEC on May 21, 2004).
|
|
10.15
|
Amended and Restated Programming and Support Agreement by and between SPAR Marketing Force, Inc. and SPAR Infotech, Inc., dated and effective as of September 15, 2007 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on November 14, 2007).
|
|
10.16
|
Trademark License Agreement dated as of July 8, 1999, by and between SPAR Marketing Services, Inc., and SPAR Trademarks, Inc. (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2002, as filed with the SEC on March 31, 2003).
|
|
10.17
|
Trademark License Agreement dated as of July 8, 1999, by and between SPAR Infotech, Inc., and SPAR Trademarks, Inc. (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2002, as filed with the SEC on March 31, 2003).
|
|
10.18
|
Master Lease Agreement by and between SPAR Marketing Services, Inc. and SPAR Marketing Force, Inc. dated as of November 2004 relating to lease of handheld computer equipment (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as filed with the SEC on April 12, 2005).
|
|
10.19
|
Amended and Restated Equipment Leasing Schedule 001 to Master Lease Agreement by and between SPAR Marketing Services, Inc., and SPAR Marketing Force, Inc., dated as of November 1, 2004, relating to lease of handheld computer equipment (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as filed with the SEC on May 18, 2005).
|
|
10.20
|
Amended and Restated Equipment Leasing Schedule 002 to Master Lease Agreement by and between SPAR Marketing Services, Inc., and SPAR Marketing Force, Inc., dated as of January 4, 2005, relating to lease of handheld computer equipment (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as filed with the SEC on May 18, 2005).
|
10.21
|
Amended and Restated Equipment Leasing Schedule 003 to Master Lease Agreement by and between SPAR Marketing Services, Inc., and SPAR Marketing Force, Inc., dated as of January 31, 2005, relating to lease of handheld computer equipment (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as filed with the SEC on May 18, 2005).
|
|
10.22
|
Equipment Leasing Schedule 004 to Master Lease Agreement by and between SPAR Marketing Services, Inc., and SPAR Marketing Force, Inc., dated as of March 24, 2005, relating to lease of handheld computer equipment (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as filed with the SEC on May 18, 2005).
|
|
10.23
|
Master Lease Agreement by and between SPAR Marketing Services, Inc. and SPAR Canada Company dated as of January 2005 relating to lease of handheld computer equipment (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as filed with the SEC on April 12, 2005).
|
|
10.24
|
Amended and Restated Equipment Leasing Schedule 001 to Master Lease Agreement by and between SPAR Marketing Services, Inc., and SPAR Canada Company dated as of January 4, 2005, relating to lease of handheld computer equipment (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as filed with the SEC on May 18, 2005).
|
|
10.25
|
Bill of Sale and Lease Termination Under Certain Schedules to Master Equipment Leases by and among SMF, SPAR Canada Company, a Nova Scotia corporation, and SMS dated September 30, 2008, and effective as of September 24, 2008 (the "Bill of Sale") (incorporated by reference to SGRP's Current Report on Form 8-K dated October 6, 2008, as filed with the SEC on October 10, 2008).
|
|
10.26
|
Master Lease Agreement by and between SPAR Marketing Services, Inc. ("SMS"), and SGRP's subsidiary, SPAR Marketing Force, Inc. ("SMF"), dated as of July 1, 2008, relating to leases of handheld computer equipment (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, as filed with the SEC on May 15, 2009).
|
|
10.27
|
Equipment Leasing Schedule No. 001 to Master Lease Agreement by and between SMS and SMF dated as of July 1, 2008 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, as filed with the SEC on May 15, 2009).
|
|
10.28
|
Equipment Leasing Schedule No. 002 to Master Lease Agreement by and between SMS and SMF dated as of September 1, 2008 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, as filed with the SEC on May 15, 2009).
|
|
10.29
|
Joint Venture Agreement dated as of March 26, 2004, by and between Solutions Integrated Marketing Services Ltd. and SPAR Group International, Inc., respecting the Corporation's subsidiary in India (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as filed with the SEC on April 12, 2005).
|
|
10.30
|
Joint Venture Agreement dated as of May 1, 2001, by and between Paltac Corporation and SGRP, respecting the Corporation's subsidiary in Japan (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as filed with the SEC on April 12, 2005).
|
|
10.31
|
Agreement on Amendment dated as of August 1, 2004, by and between SGRP and SPAR FM Japan, Inc., respecting the Corporation's subsidiary in Japan (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as filed with the SEC on April 12, 2005).
|
|
10.32
|
Joint Venture Agreement dated as of January 26, 2005, by and between Best Mark Investments Holdings Ltd. and SPAR International Ltd., respecting the Corporation's subsidiary in China (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as filed with the SEC on April 12, 2005).
|
10.33
|
Joint Venture Agreement dated as of March 29, 2006 by and between FACE AND COSMETIC TRADING SERVICES PTY LIMITED and SPAR International, Ltd., respecting the Corporation's subsidiary in Australia (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as filed with the SEC on April 2, 2007).
|
|
10.34
|
Third Amended and Restated Revolving Credit and Security Agreement dated as of January 24, 2003 (as amended, the "Webster Credit Agreement"), by and among Webster Business Credit Corporation, formerly known as Whitehall Business Credit Corporation ("Webster") with SGRP, SPAR Marketing Force, Inc., SPAR, Inc., SPAR/Burgoyne Retail Services, Inc., SPAR Incentive Marketing, Inc., SPAR Trademarks, Inc., SPAR Marketing, Inc. (DE), SPAR Marketing, Inc. (NV), SPAR Acquisition, Inc., SPAR Group International, Inc., SPAR Technology Group, Inc., SPAR/PIA Retail Services, Inc., Retail Resources, Inc., Pivotal Field Services Inc., PIA Merchandising Co., Inc., Pacific Indoor Display Co. and Pivotal Sales Company (as such borrower list may be amended from time to time, collectively, the "SPAR Borrowers"), (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2002, as filed with the SEC on March 31, 2003).
|
|
10.35
|
Consent, Joinder, Release and Amendment Agreement (Amendment No. 1) to the Webster Credit Agreement among the SPAR Webster Borrowers and Webster dated as of October 31, 2003 (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2003, as filed with the SEC on March 30, 2004).
|
|
10.36
|
Waiver and Amendment Letter (Amendment No. 2) to the Webster Credit Agreement among the SPAR Webster Borrowers and Webster dated as of January 1, 2004 (incorporated by reference to SGRP's Amended Annual Report on Form 10-K/A for the fiscal year ended December 31, 2003, as filed with the SEC on June 28, 2004).
|
|
10.37
|
Waiver And Amendment No. 3 To Third Amended And Restated Revolving Credit And Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of March 26, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 26, 2004).
|
|
10.38
|
Waiver And Amendment No. 4 To Third Amended And Restated Revolving Credit And Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of May 17, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 26, 2004).
|
|
10.39
|
Waiver and Amendment No. 5 to Third Amended and Restated Revolving Credit and Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of August 20, 2004 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, as filed with the SEC on August 23, 2004).
|
|
10.40
|
Waiver and Amendment No. 6 to Third Amended and Restated Revolving Credit and Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of November 15, 2004 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, as filed with the SEC on November 17, 2004).
|
|
10.41
|
Waiver to the Third Amended and Restated Revolving Credit and Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of March 31, 2005 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as filed with the SEC on May 18, 2005).
|
|
10.42
|
Waiver to the Third Amended and Restated Revolving Credit and Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of May 11, 2005, with respect to the fiscal quarter ended March 31, 2005 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as filed with the SEC on May 18, 2005).
|
|
10.43
|
Waiver to the Third Amended and Restated Revolving Credit and Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of August 10, 2005, with respect to the fiscal quarter ended June 30, 2005 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, as filed with the SEC on August 15, 2005).
|
10.44
|
Waiver to the Third Amended and Restated Revolving Credit and Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of November 10, 2005, with respect to the fiscal quarter ended September 30, 2005 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, as filed with the SEC on November 14, 2005).
|
|
10.45
|
Amendment No. 7 to the Third Amended and Restated Revolving Credit and Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of January 18, 2006 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on January 26, 2006).
|
|
10.46
|
Waiver And Amendment No. 8 To Third Amended And Restated Revolving Credit And Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of March 28, 2007, with respect to the fiscal year ended December 31, 2006 (incorporated by reference to SGRP's Annual Report on Form 10-K for year ended December 31, 2006, as filed with the SEC on April 2, 2007).
|
|
10.47
|
Waiver And Amendment No. 9 To Third Amended And Restated Revolving Credit And Security Agreement (
i.e.
, to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of May 18, 2007, with respect to the fiscal year ended December 31, 2006 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, as filed with the SEC on May 21, 2007).
|
|
10.48
|
Limited Guaranty of Robert G. Brown respecting certain obligations of the SPAR Webster Borrowers under the Webster Credit Agreement in favor of Webster dated as of May 18, 2007 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, as filed with the SEC on May 21, 2007).
|
|
10.49
|
Limited Guaranty of William H. Bartels respecting certain obligations of the SPAR Webster Borrowers under the Webster Credit Agreement in favor of Webster dated as of May 18, 2007 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, as filed with the SEC on May 21, 2007).
|
|
10.50
|
Waiver And Amendment No. 10 To Third Amended And Restated Revolving Credit And Security Agreement (i.e., to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of August 1, 2007, with respect to the fiscal quarter ended June 30, 2007 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, as filed with the SEC on August 20, 2007).
|
|
10.51
|
Waiver And Amendment No. 11 To Third Amended And Restated Revolving Credit And Security Agreement (i.e., to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of November 16, 2007, with respect to the fiscal year ended December 31, 2006 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, as filed with the SEC on November 19, 2007).
|
|
10.52
|
Waiver And Amendment No. 12 To Third Amended And Restated Revolving Credit And Security Agreement (i.e., to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of February 12, 2008, with respect to the fiscal year ended December 31, 2007 (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, as filed with the SEC on March 31, 2008).
|
|
10.53
|
Waiver And Amendment No. 13 To Third Amended And Restated Revolving Credit And Security Agreement (i.e., to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of August 14, 2008, with respect to the fiscal quarter ended June 30, 2008 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, as filed with the SEC on August 14, 2008).
|
|
10.54
|
Amendment No. 14 To Third Amended And Restated Revolving Credit And Security Agreement (i.e., to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of January 23, 2009 (incorporated by reference to SGRP's Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on April 15, 2010).
|
10.55
|
Amendment No. 15 To Third Amended And Restated Revolving Credit And Security Agreement (i.e., to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of March15, 2009 (incorporated by reference to SGRP's Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on April 15, 2010).
|
|
10.56
|
Amendment No. 16 To Third Amended And Restated Revolving Credit And Security Agreement (i.e., to the Webster Credit Agreement) among the SPAR Webster Borrowers and Webster dated as of March 15, 2010 (incorporated by reference to SGRP's Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on April 15, 2010).
|
|
10.57
|
Revolving Loan and Security Agreement dated as of July 6, 2010 (the "Sterling Loan Agreement"), by and among SGRP, and certain of its direct and indirect subsidiaries, namely SPAR Incentive Marketing, Inc., PIA Merchandising Co., Inc., Pivotal Sales Company, National Assembly Services, Inc., SPAR/Burgoyne Retail Services, Inc., SPAR Group International, Inc., SPAR Acquisition, Inc., SPAR Trademarks, Inc., SPAR Marketing Force, Inc. and SPAR, Inc. (each a "Subsidiary Borrower", and together with SGRP, collectively, the "SPAR Sterling Borrowers"), and Sterling National Bank, as Agent (the "Sterling Agent"), and Sterling National Bank and Cornerstone Bank, as lenders (collectively, the "Sterling Lenders") (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on July 12, 2010).
|
|
10.58
|
Secured Revolving Loan Note in the original maximum principal amount of $5,000,000.00 issued by the SPAR Sterling Borrowers to Sterling National Bank pursuant to (and governed by) the Sterling Loan Agreement and dated as of July 6, 2010 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on July 12, 2010).
|
|
10.59
|
Secured Revolving Loan Note in the original maximum principal amount of $1,500,000.00 issued by the SPAR Sterling Borrowers to Cornerstone Bank pursuant to (and governed by) the Sterling Loan Agreement and dated as of July 6, 2010 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on July 12, 2010).
|
|
10.60
|
Limited Continuing Guaranty of the obligations of the SPAR Sterling Borrowers under the Sterling Loan Agreement from Robert G. Brown and William H. Bartels in favor of the Sterling Lenders dated as of July 6, 2010 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on July 12, 2010).
|
|
10.61
|
Agreement of Amendment to Revolving Loan and Security Agreement And Other Documents dated as of September 1, 2011, and effective as of June 1, 2011, among the SPAR Sterling Borrowers, the Sterling Lenders and the Sterling Agent and confirmed by Robert G. Brown and William H. Bartels as guarantors (as filed herewith).
|
|
10.62
|
Confirmation of Credit Facilities Letter by Royal Bank of Canada in favor of SPAR Canada Company dated as of October 17, 2006 (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as filed with the SEC on April 2, 2007).
|
|
10.63
|
General Security Agreement by SPAR Canada Company in favor of Royal Bank of Canada dated as of October 20, 2006 (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as filed with the SEC on April 2, 2007).
|
|
10.64
|
Waiver Letter and Amendment by and between Royal Bank of Canada Company, dated as of March 31, 2008 (incorporated by reference to SGRP's Annual Report on Form 10-K, as filed with the SEC on March 31, 2008).
|
|
10.65
|
Debtor Finance Agreement dated as of May 24, 2006, by and among Bendingo Bank Limited ACN and SPARFACTS Pty Ltd. together with Bendingo Bank Limited ACN Standard Terms and Conditions (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, as filed with the SEC on May 15, 2008).
|
|
14.1
|
Code of Ethical Conduct for the Directors, Senior Executives and Employees, of SPAR Group, Inc., dated May 1, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 5, 2004).
|
SPAR Group, Inc.
|
|
By:
/s/ Gary S. Raymond
|
|
Gary S. Raymond
|
|
Chief Executive Officer
|
|
Date: March 21, 2012
|
SIGNATURE
|
TITLE
|
|
/s/ Gary S. Raymond
|
Chief Executive Officer and Director
|
|
Gary S. Raymond
|
||
Date: March 21, 2012
|
||
/s/ Robert G. Brown
|
Chairman of the Board and Director
|
|
Robert G. Brown
|
||
Date: March 21, 2012
|
||
/s/ William H. Bartels
|
Vice Chairman and Director
|
|
William H. Bartels
|
||
Date: March 21, 2012
|
||
/s/ Jack W. Partridge
|
Director
|
|
Jack W. Partridge
|
||
Date: March 21, 2012
|
||
/s/ Jerry B. Gilbert
|
Director
|
|
Jerry B. Gilbert
|
||
Date: March 21, 2012
|
||
/s/ Lorrence T. Kellar
|
Director
|
|
Lorrence T. Kellar
|
||
Date: March 21, 2012
|
||
/s/ C. Manly Molpus
|
Director
|
|
C. Manly Molpus
|
||
Date: March 21, 2012
|
||
/s/ James R. Segreto
|
Chief Financial Officer,
|
|
James R. Segreto
|
Treasurer and Secretary (Principal Financial and Accounting Officer)
|
|
Date: March 21, 2012
|
/s/ Rehmann Robson |
/s/ Nitin Mittal & Co.
|
Chartered Accountants
|
December 31,
2011
|
December 31,
2010
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 1,705 | $ | 923 | ||||
Accounts receivable, net
|
15,461 | 13,999 | ||||||
Prepaid expenses and other current assets
|
801 | 1,283 | ||||||
Total current assets
|
17,967 | 16,205 | ||||||
Property and equipment, net
|
1,523 | 1,452 | ||||||
Goodwill
|
1,148 | 848 | ||||||
Intangibles
|
705 | 362 | ||||||
Other assets
|
178 | 226 | ||||||
Total assets
|
$ | 21,521 | $ | 19,093 | ||||
Liabilities and equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,819 | $ | 1,804 | ||||
Accrued expenses and other current liabilities
|
4,039 | 2,733 | ||||||
Accrued expenses due to affiliates
|
1,092 | 1,575 | ||||||
Customer deposits
|
183 | 471 | ||||||
Lines of credit and other debt
|
3,641 | 5,263 | ||||||
Total current liabilities
|
10,774 | 11,846 | ||||||
Long-term debt and other liabilities
|
334 | – | ||||||
Total liabilities
|
11,108 | 11,846 | ||||||
Equity:
|
||||||||
SPAR Group, Inc. equity
|
||||||||
Preferred stock, $.01 par value:
Authorized and available shares – 2,445,598
Issued and outstanding shares –
none – December 31, 2011
554,402 –
December 31, 2010
|
– | 6 | ||||||
Common stock, $.01 par value:
Authorized shares – 47,000,000
Issued and outstanding shares –
20,103,043 – December 31, 2011
19,314,306 – December 31, 2010
|
201 | 193 | ||||||
Treasury stock
|
– | (1 | ) | |||||
Additional paid-in capital
|
13,940 | 13,549 | ||||||
Accumulated other comprehensive loss
|
(172 | ) | (142 | ) | ||||
Accumulated deficit
|
(4,626 | ) | (6,808 | ) | ||||
Total SPAR Group, Inc. equity
|
9,343 | 6,797 | ||||||
Non-controlling interest
|
1,070 | 450 | ||||||
Total liabilities and equity
|
$ | 21,521 | $ | 19,093 |
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Net revenues
|
$ | 73,524 | $ | 63,154 | ||||
Cost of revenues
|
51,028 | 42,165 | ||||||
Gross profit
|
22,496 | 20,989 | ||||||
Selling, general and administrative expense
|
18,542 | 17,140 | ||||||
Depreciation and amortization
|
1,069 | 1,018 | ||||||
Operating income
|
2,885 | 2,831 | ||||||
Interest expense
|
197 | 310 | ||||||
Other income
|
(11 | ) | (21 | ) | ||||
Income before provision for income taxes
|
2,699 | 2,542 | ||||||
Provision for income taxes
|
362 | 263 | ||||||
Net income
|
2,337 | 2,279 | ||||||
Net income attributable to non-controlling interest
|
(123 | ) | (112 | ) | ||||
Net income attributable to SPAR Group, Inc.
|
$ | 2,214 | $ | 2,167 | ||||
Net income per basic and diluted common share:
|
||||||||
Net income – basic
|
$ | 0.11 | $ | 0.11 | ||||
Net income – diluted
|
$ | 0.10 | $ | 0.11 | ||||
Weighted average common shares – basic
|
19,958 | 19,209 | ||||||
Weighted average common shares – diluted
|
21,327 | 20,602 |
Preferred Stock
|
Common Stock
|
Accumulated
|
||||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Treasury
Stock
|
Paid-In
Capital
|
Accumulated
Deficit
|
Other Comprehensive
Loss
|
Non-
Controlling
Interest
|
Total
Equity
|
|||||||||||||||||||||||||||||||
Balance at January 1, 2010
|
554 | $ | 6 | 19,139 | $ | 191 | $ | (1 | ) | $ | 13,099 | $ | (8,975 | ) | $ | (220 | ) | $ | 431 | $ | 4,531 | |||||||||||||||||||
Preferred Stock Issued
|
– | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||
Issuance of stock to non-employees
|
120 | 1 | – | – | – | – | – | 1 | ||||||||||||||||||||||||||||||||
Issuance of stock options to
employees & non-employees for services
|
– | – | – | 335 | – | – | – | 335 | ||||||||||||||||||||||||||||||||
Purchase of non-controlling interest in joint ventures
|
– | – | – | 90 | – | – | (141 | ) | (51 | ) | ||||||||||||||||||||||||||||||
Exercise of Options
|
55 | 1 | – | 25 | – | – | – | 26 | ||||||||||||||||||||||||||||||||
Other changes to non-controlling interest
|
– | – | – | – | – | – | 48 | 48 | ||||||||||||||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||||||||||
Foreign currency translation gain
|
– | – | – | – | – | 78 | – | 78 | ||||||||||||||||||||||||||||||||
Net Income
|
2,167 | – | 112 | 2,279 | ||||||||||||||||||||||||||||||||||||
Comprehensive income
|
2,167 | 78 | 112 | 2,357 | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2010
|
554 | $ | 6 | 19,314 | $ | 193 | $ | (1 | ) | $ | 13,549 | $ | (6,808 | ) | $ | (142 | ) | $ | 450 | $ | 7,247 | |||||||||||||||||||
Preferred stock and accrued
dividends converted to
common stock
|
(554 | ) | (6 | ) | 609 | 6 | – | – | – | – | – | – | ||||||||||||||||||||||||||||
Exercise of warrants
|
75 | 1 | – | 63 | – | – | – | 64 | ||||||||||||||||||||||||||||||||
Issuance of stock options to
employees & non- employees for services
|
– | – | – | 420 | – | – | – | 420 | ||||||||||||||||||||||||||||||||
Exercise of Options
|
105 | 1 | – | 36 | – | – | – | 37 | ||||||||||||||||||||||||||||||||
Sale of non-controlling interest of subsidiary in India
|
– | – | – | (127 | ) | – | – | 217 | 90 | |||||||||||||||||||||||||||||||
Establishment of new subsidiaries with non-controlling interest
|
– | – | – | – | – | – | 158 | 158 | ||||||||||||||||||||||||||||||||
Distribution of subsidiary’s equity
|
– | – | – | – | (32 | ) | – | 122 | 90 | |||||||||||||||||||||||||||||||
Reissued treasury stock
|
– | – | 1 | (1 | ) | – | – | – | – | |||||||||||||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||||||||||
Foreign currency translation loss
|
– | – | – | – | – | (30 | ) | – | (30 | ) | ||||||||||||||||||||||||||||||
Net Income
|
2,214 | – | 123 | 2,337 | ||||||||||||||||||||||||||||||||||||
Comprehensive income
|
2,214 | (30 | ) | 123 | 2,307 | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2011
|
– | $ | – | 20,103 | $ | 201 | $ | – | $ | 13,940 | $ | (4,626 | ) | $ | (172 | ) | $ | 1,070 | $ | 10,413 |
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Operating activities
|
||||||||
Net income
|
$ | 2,337 | $ | 2,279 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities
|
||||||||
Depreciation and Amortization
|
1,069 | 1,018 | ||||||
Issuance of stock options and warrants
|
420 | 336 | ||||||
Changes in non-controlling interest
|
497 | 93 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(1,493 | ) | (3,790 | ) | ||||
Prepaid expenses and other assets
|
530 | 1,604 | ||||||
Accounts payable
|
15 | (2,015 | ) | |||||
Accrued expenses, other current liabilities
and customer deposits
|
160 | 735 | ||||||
Net cash provided by operating activities
|
3,535 | 260 | ||||||
Investing activities
|
||||||||
Purchases of property and equipment and capitalized software
|
(810 | ) | (1,439 | ) | ||||
Purchase of Mexican and Turkish subsidiaries
|
(442 | ) | – | |||||
Net cash used in investing activities
|
(1,252 | ) | (1,439 | ) | ||||
Financing activities
|
||||||||
Net payments on lines of credit
|
(1,101 | ) | (55 | ) | ||||
Proceeds from options exercised
|
36 | 26 | ||||||
Proceeds from term debt
|
244 | 500 | ||||||
Payment on term debt
|
(557 | ) | – | |||||
Payments on capital lease obligations
|
(107 | ) | (95 | ) | ||||
Net cash (used in) provided by financing activities
|
(1,485 | ) | 376 | |||||
Effect of foreign exchange rate changes on cash
|
(16 | ) | 67 | |||||
Net change in cash and cash equivalents
|
782 | (736 | ) | |||||
Cash and cash equivalents at beginning of year
|
923 | 1,659 | ||||||
Cash and cash equivalents at end of year
|
$ | 1,705 | $ | 923 | ||||
Supplemental disclosure of cash flows information
|
||||||||
Interest paid
|
$ | 205 | $ | 378 | ||||
Taxes paid
|
$ | 219 | $ | 203 | ||||
Supplemental disclosure of non-cash financing activities
|
||||||||
Liability related to acquisition of Mexican subsidiary
|
$ | 300 | $ | – | ||||
Preferred stock converted to common stock at par
|
$ | 6 | $ | – | ||||
Acquisition of equipment through capital leases
|
$ | 140 | $ | 250 |
Primary Territory
|
Date
Established
|
SGRP Percentage Ownership
|
Principal Office Location
|
|||
United States of America
|
1979
|
100%
|
Tarrytown, New York, United States of America
|
|||
Japan
|
May 2001
|
100%
|
Osaka, Japan
|
|||
Canada
|
June 2003
|
100%
|
Toronto, Canada
|
|||
South Africa
|
April 2004
|
51%
|
Durban, South Africa
|
|||
India
|
April 2004
|
51%*
|
New Delhi, India
|
|||
Lithuania
|
September 2005
|
51%**
|
–
|
|||
Australia
|
April 2006
|
51%
|
Melbourne, Australia
|
|||
Romania
|
July 2009
|
51%***
|
Bucharest, Romania
|
|||
China
|
March 2010
|
51%****
|
Shanghai, China
|
|||
Mexico
|
August 2011
|
51%
|
Mexico City, Mexico
|
|||
Turkey
|
August 2011
|
51%*****
|
Istanbul, Turkey
|
*
|
In June 2011, the Company sold 49% of its interest to KROGNOS Integrated Marketing Services Private Limited.
|
**
|
The Company closed this subsidiary in the Fourth Quarter of 2010.
|
***
|
Currently the Company owns two subsidiaries in Romania. One subsidiary is 100% owned and is inactive, and the second subsidiary, acquired in July 2009, is 51% owned.
|
****
|
Currently the Company owns two subsidiaries in China. One subsidiary is 100% owned and is inactive, and the second subsidiary, acquired in March 2010 and operational in August 2010, is 51% owned.
|
*****
|
In August 2011, the Company sold its 51% ownership in its original subsidiary in Turkey to its original local investor, and in November 2011 the Company started a new 51% owned subsidiary to compete in this important market.
|
Start Date:
|
Original Cost
|
Accumulated Depreciation
|
Net Book Value as of December 31, 2011
|
|||||||||
July 2010
|
$ | 215 | $ | 101 | $ | 114 | ||||||
November 2010
|
48 | 19 | 29 | |||||||||
June 2011
|
140 | 23 | 117 | |||||||||
$ | 403 | $ | 143 | $ | 260 |
Year Ending
December 31,
|
Amount
|
|||
2012
|
$ | 154 | ||
2013
|
110 | |||
2014
|
23 | |||
287 | ||||
Less amount representing interest
|
27 | |||
Present value of net minimum lease payments included with other liabilities
|
$ | 260 |
Location
|
Variable Interest Rate
(1)
|
US Dollars
(2)
|
||||||
United States
|
4.75% | $ | 2,621 | |||||
International
|
0.1% -10.38% | 1,247 | ||||||
$ | 3,868 |
(1)
|
Per annum interest at December 31, 2011
|
(2)
|
Based on exchange rate at December 31, 2011
|
December 31,
|
||||||||
Accounts receivable, net, consists of the following :
|
2011
|
2010
|
||||||
Trade
|
$ | 11,806 | $ | 9,846 | ||||
Unbilled
|
3,309 | 3,914 | ||||||
Non-trade
|
403 | 382 | ||||||
15,518 | 14,142 | |||||||
Less allowance for doubtful accounts
|
57 | 143 | ||||||
|
$ | 15,461 | $ | 13,999 |
December 31,
|
||||||||
Property and equipment consists of the following:
|
2011
|
2010
|
||||||
Equipment
|
$ | 7,866 | $ | 7,893 | ||||
Furniture and fixtures
|
543 | 541 | ||||||
Leasehold improvements
|
250 | 250 | ||||||
Capitalized software development costs
|
4,261 | 3,518 | ||||||
12,920 | 12,202 | |||||||
Less accumulated depreciation and amortization
|
11,397 | 10,750 | ||||||
$ | 1,523 | $ | 1,452 |
December 31,
|
||||||||
Intangible assets consist of the following:
|
2011
|
2010
|
||||||
Customer contracts and lists
|
$ | 869 | $ | 426 | ||||
Less accumulated amortization
|
164 | 64 | ||||||
$ | 705 | $ | 362 |
Year
|
Amount
|
|||
2012
|
$ | 134 | ||
2013
|
134 | |||
2014
|
134 | |||
2015
|
71 | |||
2016
|
47 | |||
Thereafter
|
185 | |||
Total
|
$ | 705 |
December 31,
|
||||||||
Accrued expenses and other current liabilities:
|
2011
|
2010
|
||||||
Accrued salaries payable
|
$ | 1,005 | $ | 708 | ||||
Accrued accounting and legal expenses
|
285 | 266 | ||||||
Other
|
2,749 | 1,759 | ||||||
$ | 4,039 | $ | 2,733 |
December 31, 2011
|
Average
Interest Rate
|
December 31, 2010
|
Average
Interest Rate
|
|||||||||||||
Credit Facilities
Loan Balance
:
|
||||||||||||||||
United States
|
$ | 2,621 | 4.75 | % | $ | 3,536 | 4.87 | % | ||||||||
Australia
|
402 | 10.38 | % | 548 | 10.24 | % | ||||||||||
Canada
|
618 | 4.00 | % | 623 | 4.00 | % | ||||||||||
$ | 3,641 | $ | 4,707 |
Other Debt Facility
:
|
||||||||||||||||
Japan Term Loan
|
$ | 227 | 0.1 | % | $ | – | – | |||||||||
Michael Anthony Note
|
– | – | 556 | 9.5 | % | |||||||||||
$ | 227 | 0.1 | % | $ | 556 | 9.5 | % | |||||||||
December 31, 2011
|
December 31, 2010
|
|||||||||||||||
Unused Availability
:
|
||||||||||||||||
United States
|
$ | 2,671 | $ | 1,700 | ||||||||||||
Australia
|
818 | 952 | ||||||||||||||
Canada
|
118 | 87 | ||||||||||||||
$ | 3,607 | $ | 2,739 |
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Current
|
$ | 362 | $ | 263 | ||||
Deferred
|
– | – | ||||||
$ | 362 | $ | 263 |
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Provision for income taxes at
federal statutory rate, net of foreign tax
|
$ | 883 | $ | 726 | ||||
State income taxes, net of federal benefit
|
102 | 89 | ||||||
Permanent differences
|
(26 | ) | 18 | |||||
Change in valuation allowance
|
(780 | ) | (722 | ) | ||||
International tax provisions
|
112 | 92 | ||||||
Federal Alternative Minimum Tax
|
35 | 58 | ||||||
Change in Tax Reserve
|
19 | 22 | ||||||
Other
|
17 | (20 | ) | |||||
Provision for income taxes
|
$ | 362 | $ | 263 |
Deferred taxes consist of the following (in thousands):
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$ | 4,989 | $ | 5,953 | ||||
Deferred revenue
|
128 | 145 | ||||||
SIM reserve against loan commitment
|
147 | 147 | ||||||
Allowance for doubtful accounts and other receivable
|
15 | 36 | ||||||
Share-based compensation expense
|
573 | 427 | ||||||
Depreciation
|
66 | 34 | ||||||
Acquisition costs
|
50 | – | ||||||
Other
|
27 | 27 | ||||||
Valuation allowance
|
(5,495 | ) | (6,275 | ) | ||||
Total deferred tax assets
|
500 | 494 | ||||||
Deferred tax liabilities:
|
||||||||
Goodwill
|
117 | 121 | ||||||
Capitalized software development costs
|
383 | 373 | ||||||
Total deferred tax liabilities
|
500 | 494 | ||||||
Net deferred taxes
|
$ | – | $ | – |
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Beginning Balance
|
$ | 43 | $ | 119 | ||||
Additions for tax positions of prior years
|
22 | 33 | ||||||
Reductions for tax positions of prior years
|
– | (109 | ) | |||||
Ending Balance
|
$ | 65 | $ | 43 |
Taxes
|
Interest
|
Penalty
|
Total Tax Liability
|
|||||||||||||
Domestic
|
||||||||||||||||
State
|
$ | 55 | $ | 5 | $ | 5 | $ | 65 | ||||||||
Federal
|
– | – | – | – | ||||||||||||
International
|
– | – | – | – | ||||||||||||
Total reserve
|
$ | 55 | $ | 5 | $ | 5 | $ | 65 |
Year
|
Amount
|
|||
2012
|
$ | 931 | ||
2013
|
562 | |||
2014
|
423 | |||
2015
|
397 | |||
2016
|
247 | |||
Total
|
$ | 2,560 |
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Services provided by affiliates:
|
||||||||
Field merchandiser services (SMS)
|
$ | 17,555 | $ | 16,052 | ||||
Field management services (SMSI)
|
$ | 4,283 | $ | 4,110 | ||||
Handheld computer leases (SMS)
|
$ | 77 | $ | 132 | ||||
Total services provided by affiliates
|
$ | 21,915 | $ | 20,294 |
Accrued expenses due to affiliates (in thousands):
|
December 31,
|
|||||||
|
2011
|
2010
|
||||||
Total accrued expenses due to affiliates
|
$ | 1,092 | $ | 1,575 |
Outstanding Options
|
||||||||||||||||||||
Plan
|
Beginning Balance
|
Granted
|
Exercised
|
Cancelled
|
December 31, 2011 Balance
|
|||||||||||||||
2008 Plan
|
2,452,474 | 395,750 | (97,900 | ) | (15,700 | ) | 2,734,624 | |||||||||||||
2000 Plan
|
229,165 | – | (14,726 | ) | (29,831 | ) | 184,608 | |||||||||||||
Special Purpose Plan
|
– | – | – | – | – | |||||||||||||||
1995 Plan
|
– | – | – | – | – | |||||||||||||||
Director’s Plan
|
– | – | – | – | – | |||||||||||||||
Total
|
2,681,639 | 395,750 | (112,626 | ) | (45,531 | ) | 2,919,232 |
Shares
|
Weighted Average
Exercise Price
|
|||||||
Options outstanding, January 1, 2010
|
2,385,230 | $ | 0.48 | |||||
2010
|
||||||||
Granted
|
422,950 | $ | 0.98 | |||||
Exercised
|
(54,941 | ) | 0.47 | |||||
Canceled or expired
|
(71,600 | ) | 0.90 | |||||
Options outstanding, December 31, 2010
|
2,681,639 | $ | 0.55 | |||||
2011
|
||||||||
Granted
|
395,750 | $ | 1.24 | |||||
Exercised
|
(112,626 | ) | 0.44 | |||||
Canceled or expired
|
(45,531 | ) | 0.89 | |||||
Options outstanding, December 31, 2011
|
2,919,232 | $ | 0.64 | |||||
Option price range at December 31, 2011
|
$0.40 to $4.65
|
2011
|
2010
|
|||||||
Grant date weighted average fair value of
options granted during the year
|
$ | 1.24 | $ | 0.98 |
Options Outstanding
|
Options Exercisable
|
||||||||||||||||
Range of
Exercise Prices
|
Number
Outstanding at
December 31, 2011
|
Weighted
Average
Remaining
Contractual Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable at
December 31,
2011
|
Weighted
Average
Exercise Price
|
||||||||||||
Less than $1.01
|
2,463,148 |
7.63 years
|
$ | 0.53 | 1,406,775 | $ | 0.50 | ||||||||||
$1.01 - $2.00
|
451,834 |
8.80 years
|
1.25 | 55,209 | 1.29 | ||||||||||||
$2.01 - $4.00
|
4,000 |
1.08 years
|
2.96 | 4,000 | 2.96 | ||||||||||||
Greater than $4.00
|
250 |
1.60 years
|
4.65 | 250 | 4.65 | ||||||||||||
Total
|
2,919,232 | 1,466,234 |
Year Ended December 31,
|
||||||||||||
2011
|
2010
|
% increase
|
||||||||||
Net revenues:
|
||||||||||||
United States
|
$ | 37,809 | $ | 36,564 | 3 | % | ||||||
International
|
35,715 | 26,590 | 34 | % | ||||||||
Total net revenues
|
$ | 73,524 | $ | 63,154 | 16 | % |
Year Ended December 31,
|
||||||||||||||||
2011
|
2010
|
|||||||||||||||
Net revenues International:
|
% of consolidated
net revenue
|
% of consolidated
net revenue
|
||||||||||||||
Australia
|
$ | 8,232 | 11.2 | % | $ | 7,711 | 12.2 | % | ||||||||
Canada
|
6,467 | 8.8 | 7,219 | 11.4 | ||||||||||||
Mexico
|
4,649 | 6.3 | – | – | ||||||||||||
South Africa
|
4,454 | 6.1 | 2,298 | 3.6 | ||||||||||||
Japan
|
4,280 | 5.8 | 4,089 | 6.5 | ||||||||||||
China
|
3,890 | 5.3 | 1,406 | 2.2 | ||||||||||||
All Others
|
3,743 | 5.1 | 3,867 | 6.1 | ||||||||||||
Total international revenue
|
$ | 35,715 | 48.6 | % | $ | 26,590 | 42.0 | % |
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Operating income (loss):
|
||||||||
United States
|
$ | 2,774 | $ | 3,043 | ||||
International
|
111 | (212 | ) | |||||
Total operating income
|
$ | 2,885 | $ | 2,831 |
Year Ended December 31, | ||||||||
2011
|
2010
|
|||||||
Long lived assets:
|
||||||||
United States
|
$ | 2,169 | $ | 2,231 | ||||
International
|
1,385 | 657 | ||||||
Total long lived assets
|
$ | 3,554 | $ | 2,888 |
Revenue
|
Net Income
|
|||||||
Actual from September 1 to December 31, 2011
|
$ | 4,649 | $ | (65 | ) | |||
2011 Supplemental pro forma from January 1 to December 31, 2011
|
$ | 83,900 | $ | 2,400 | ||||
2011 Adjusted supplemental pro forma from January 1 to December 31, 2011
|
$ | 83,900 | $ | 2,500 | ||||
2010 Supplemental pro forma from January 1 to December 31, 2010
|
$ | 76,600 | $ | 2,400 |
Year Ended
|
Year Ended
|
|||||||
December 31, 2011
|
December 31, 2010
|
|||||||
Net income attributed to SPAR Group, Inc.
|
$ | 2,214 | $ | 2,167 | ||||
(Decrease)/increase in SPAR Group, Inc. Paid in Capital for sale/purchase of subsidiaries common stock
|
(159 | ) | 90 | |||||
Change from net income attributed to SPAR Group, Inc. and transfer from/to non-controlling interest
|
$ | 2,055 | $ | 2,257 |
Year Ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Numerator:
|
||||||||
Net income
|
$ | 2,214 | $ | 2,167 | ||||
Denominator:
|
||||||||
Shares used in basic net income per share calculation
|
19,958 | 19,209 | ||||||
Effect of diluted securities:
|
||||||||
Stock options
|
1,369 | 1,393 | ||||||
Shares used in diluted net income per share calculations
|
21,327 | 20,602 | ||||||
Basic net income per common share:
|
$ | 0.11 | $ | 0.11 | ||||
Diluted net income per common share:
|
$ | 0.10 | $ | 0.11 |
|
·
|
SPAR Marketing, Inc.
|
|
·
|
PIA Merchandising Co., Inc.
|
|
·
|
SPAR Incentive Marketing, Inc.
|
|
·
|
SPAR All Store Marketing Services, Inc.
|
|
·
|
SPAR Technology Group, Inc.
|
|
·
|
SPAR/PIA Retail Services, Inc.
|
|
·
|
Retail Resources, Inc.
|
|
·
|
Pivotal Field Services, Inc.
|
|
·
|
Pivotal Sales Company
|
|
·
|
SPAR/Burgoyne Retail Services, Inc.
|
|
·
|
SPAR, Inc.
|
|
·
|
SPAR Marketing, Inc.
|
Balance at Beginning of Period
|
(Recovered From)/Charged to Costs and Expenses
|
Deductions
(1)
|
Balance at End
of Period
|
|||||||||||||
Year ended December 31, 2011:
|
||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||
Allowance for doubtful accounts
|
$ | 143 | (55 | ) | 31 | $ | 57 | |||||||||
Year ended December 31, 2010:
|
||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||
Allowance for doubtful accounts
|
$ | 317 | 265 | 439 | $ | 143 |
As Amended Through November 10, 2011
|
SPAR Group By-Laws |
NewYork01 921370v8 |
Section | Title | Page |
ARTICLE I.
|
CERTIFICATE, BY-LAWS, AGENT and OFFICES
|
1
|
Section 1.01.
|
Certificate of Incorporation
|
1
|
Section 1.02.
|
By-Laws and Restatement
|
1
|
Section 1.03.
|
Registered Agent
|
1
|
Section 1.04.
|
Registered Office
|
1
|
Section 1.05.
|
Chief Executive Office
|
1
|
Section 1.06.
|
Other Offices
|
1
|
ARTICLE II.
|
Meetings of Shareholders
|
1
|
Section 2.01.
|
Annual Meetings
|
1
|
Section 2.02.
|
Special Meetings
|
2
|
Section 2.03.
|
Notice of Meeting
|
2
|
Section 2.04.
|
Quorum and Manner of Participation; Treasury Stock.
|
2
|
Section 2.05.
|
Adjournments
|
2
|
Section 2.06.
|
Inspectors
|
2
|
Section 2.07.
|
Voting
|
3
|
Section 2.08.
|
Proxies.
|
3
|
Section 2.09.
|
Action by Written Consent
|
3
|
Section 2.10.
|
List of Shareholders
|
3
|
Section 2.11.
|
Stockholder Proposals and Nominations
|
4
|
ARTICLE III.
|
Board
|
5
|
Section 3.01.
|
Number
|
5
|
Section 3.02.
|
Power
|
5
|
Section 3.03.
|
Term of Office
|
5
|
Section 3.04.
|
Vacancies and Additional Directorships
|
5
|
Section 3.05.
|
Meetings.
|
5
|
Section 3.06.
|
Quorum, Manner of Participation and Voting.
|
5
|
Section 3.07.
|
Action by Written Consent
|
6
|
Section 3.08.
|
Resignation of Directors
|
6
|
Section 3.09.
|
Removal of Directors
|
6
|
Section 3.10.
|
Compensation of Directors
|
6
|
ARTICLE IV.
|
Committees of the Board
|
6
|
Section 4.01.
|
Standing Committees, Designation of Additional Committees, Etc
|
6
|
Section 4.02.
|
Committee Charters, Powers, Etc.
|
6
|
Section 4.03.
|
Appointment and Term
|
7
|
Section 4.04.
|
Committee Chairman
|
7
|
Section 4.05.
|
Meetings, Notices and Records
|
7
|
Section 4.06.
|
Quorum, Manner of Participation and Voting.
|
7
|
Section 4.07.
|
Action by Written Consent
|
8
|
Section 4.08.
|
Resignations
|
8
|
Section 4.09.
|
Removal
|
8
|
Section 4.10.
|
Vacancies
|
8
|
Section 4.11.
|
Compensation
|
8
|
As Amended Through November 10, 2011
|
SPAR Group By-Laws |
NewYork01 921370v8 |
Section | Title | Page |
ARTICLE V.
|
Officers
|
8
|
Section 5.01.
|
Positions, Election, Executives, Etc
|
8
|
Section 5.02.
|
Term of Office, Resignation and Removal
|
9
|
Section 5.03.
|
Vacancies
|
9
|
Section 5.04.
|
General Authority, Etc
|
9
|
Section 5.05.
|
The Chairman
|
9
|
Section 5.06.
|
The Vice Chairman
|
9
|
Section 5.07.
|
The Chief Executive Officer
|
9
|
Section 5.08.
|
The Chief Financial Officer
|
9
|
Section 5.09.
|
The President
|
10
|
Section 5.10.
|
Senior, Executive and other Vice Presidents
|
10
|
Section 5.11.
|
Assistant or other Vice Presidents
|
11
|
Section 5.12.
|
The Secretary
|
11
|
Section 5.13.
|
Assistant Secretaries
|
11
|
Section 5.14.
|
The Treasurer
|
11
|
Section 5.15.
|
The Controller
|
12
|
Section 5.16.
|
Assistant Treasurers
|
12
|
Section 5.17.
|
Compensation of Officers
|
12
|
Section 5.18.
|
Surety Bonds
|
12
|
ARTICLE VI.
|
INDEMNIFICATION
|
13
|
Section 6.01.
|
Certain Defined Terms.
|
13
|
Section 6.02.
|
Persons Indemnified
|
14
|
Section 6.03.
|
Notice of Proceeding
|
14
|
Section 6.04.
|
Defense Counsel
|
14
|
Section 6.05.
|
Right to Indemnification, Etc
|
14
|
Section 6.06.
|
Right to Advancement of Expenses
|
14
|
Section 6.07.
|
Determination of Right to Indemnification
|
15
|
Section 6.08.
|
Indemnification on Success
|
15
|
Section 6.09.
|
Payment Claims to Recover Losses and Expenses
|
15
|
Section 6.10.
|
Suits Brought by an Indemnitee
|
15
|
Section 6.11.
|
Suits on Payment Claims, Etc
|
15
|
Section 6.12.
|
Indemnification Enforcement Expenses
|
15
|
Section 6.13.
|
Indemnitee's Proper Conduct
|
15
|
Section 6.14.
|
Continuation of Rights
|
15
|
Section 6.15.
|
Non-Exclusivity of Rights
|
16
|
Section 6.16.
|
Insurance
|
16
|
Section 6.17.
|
Indemnification of Officers, Employees and Agents of the Corporation
|
16
|
Section 6.18.
|
Savings Clause
|
16
|
Section 6.19.
|
Changes in Indemnification Rights
|
16
|
Section 6.20.
|
Contractual and Beneficial Rights
|
16
|
As Amended Through November 10, 2011
|
SPAR Group By-Laws |
NewYork01 921370v8 |
As Amended Through November 10, 2011
|
SPAR Group By-Laws |
NewYork01 921370v8 |
Section | Term | Page |
4.01
|
Additional Committee
|
6
|
10.07
|
Applicable Law
|
19
|
4.02
|
Additional Committee Charter
|
6
|
5.13
|
Assistant Secretary
|
11
|
5.16
|
Assistant Treasurer
|
12
|
5.11
|
Assistant Vice President
|
10
|
4.01
|
Audit Committee
|
6
|
4.02
|
Audit Committee Charter
|
6
|
1.02
|
Board
|
1
|
1.02
|
By-Laws
|
1
|
1.01
|
Certificate
|
1
|
5.05
|
Chairman
|
9
|
5.07
|
Chief Executive Officer
|
9
|
5.08
|
Chief Financial Officer
|
9
|
4.01
|
Committee
|
6
|
4.04
|
Committee Chairman
|
7
|
4.02
|
Committee Charter
|
6
|
4.01
|
Compensation Committee
|
6
|
4.02
|
Compensation Committee Charter
|
6
|
5.15
|
Controller
|
12
|
1.01
|
Corporation
|
1
|
6.01
|
DGCL
|
12
|
10.02
|
Electronic Delivery
|
19
|
6.01
|
Entity
|
13
|
5.01
|
Executive
|
8
|
5.10
|
Executive Vice President
|
10
|
6.06
|
Expense Advances
|
14
|
6.01
|
Expenses
|
13
|
6.01
|
Final Decision
|
13
|
4.01
|
Governance Committee
|
6
|
4.02
|
Governance Committee Charter
|
6
|
6.01
|
Indemnification Rights
|
13
|
6.01
|
Indemnitee
|
13
|
6.01
|
Losses
|
13
|
7.06
|
Lost Stock Certificate
|
17
|
6.09
|
Payment Claims
|
15
|
10.02
|
Physical Delivery
|
19
|
5.09
|
President
|
10
|
6.01
|
Proceeding
|
13
|
6.01
|
Proper Conduct
|
13
|
6.01
|
Reimbursement Agreement
|
13
|
6.01
|
Representative
|
13
|
1.02
|
Restatement Date
|
1
|
5.12
|
Secretary
|
11
|
5.10
|
Senior Vice President
|
10
|
1.06
|
SPAR Group
|
1
|
5.14
|
Treasurer
|
11
|
5.06
|
Vice Chairman
|
9
|
5.10
|
Vice President
|
10
|
As Amended Through November 10, 2011
|
SPAR Group By-Laws |
NewYork01 921370v8 |
(a)
|
have charge of and supervision over and be responsible for the funds, securities, receipts and disbursements of the Corporation;
|
(b)
|
cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies or with such bankers or other depositaries as shall be selected in accordance with these By-Laws or to be otherwise handled in such manner as the Board may direct;
|
(c)
|
be empowered to endorse all commercial documents requiring endorsements for or on behalf of the Corporation and sign all receipts and vouchers for payments made to the Corporation;
|
(d)
|
be empowered to cause the funds of the Corporation to be disbursed by checks or drafts upon the authorized depositaries of the Corporation, and cause to be taken and preserved proper vouchers for all moneys disbursed;
|
(e)
|
render to the Board, the Chief Executive Officer or the Vice Chairman, whenever requested, a statement of the financial condition of the Corporation and of all his transactions as Treasurer, Chief Financial Officer or Controller (as applicable);
|
(f)
|
cause to be kept at the Corporation's principal office correct books of account of all its business and transactions and such duplicate books of account as he shall determine, and upon request cause such books or duplicates thereof to be exhibited to any director;
|
(g)
|
see that the financial reports, statements, certificates and similar documents and records required by Applicable Law (including, without limitation, those required under applicable securities laws) are properly prepared and filed;
|
(h)
|
be empowered to require from the officers or agents of the Corporation reports or statements from time to time giving such information as he may desire with respect to any and all financial transactions of the Corporation;
|
(i)
|
be empowered to sign (unless the Treasurer, Secretary or an Assistant Secretary or an Assistant Treasurer shall sign) certificates representing stock of the Corporation, the issuance of which shall have been duly authorized (the signature to which may be a facsimile signature); and
|
(j)
|
in general, exercise the powers and perform all duties incident to the office of Chief Financial Officer.
|
(a)
|
record all the proceedings of the meetings of the stockholders, the Board and any Committees in a book or books to be kept for that purpose;
|
(b)
|
cause all notice to be duly given in accordance with the provisions of these By-Laws and as required by Applicable Law;
|
(c)
|
whenever any Committee shall be appointed in pursuance of a resolution of the Board, furnish the chairman of such Committee with a copy of such resolution;
|
(d)
|
be custodian of the records and of the seal of the Corporation, cause such seal to be affixed to all certificates representing stock of the Corporation prior to the issuance thereof, and from time to time to cause such seal to be affixed to all such duly authorized instruments, agreements and other documents as may be necessary or desirable;
|
(e)
|
see that the lists, books, reports, statements, certificates and other documents and records required by Applicable Law are properly kept and filed (other than those for which the Chief Financial Officer is responsible);
|
(f)
|
have authority over of the stock and transfer books of the Corporation, and at all reasonable times shall cause such stock books (or if maintained by a transfer agent, shall cause the transfer agent to produce such stockholder lists) to such persons as are entitled by statute to have access thereto;
|
(g)
|
be empowered to sign (unless the Chief Financial Officer, Treasurer or an Assistant Secretary or an Assistant Treasurer shall sign) certificates representing stock of the Corporation, the issuance of which shall have been duly authorized (the signature to which may be a facsimile signature); and
|
(h)
|
in general, exercise the powers and perform all duties incident to the office of the Secretary and such other duties as are given to the Secretary by these By-Laws or as from time to time may be assigned to the Secretary by the Board or the Chief Executive Officer.
|
(a)
|
cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies or with such bankers or other depositaries as shall be selected in accordance with these By-Laws or to be otherwise handled in such manner as the Board may direct;
|
(b)
|
be empowered to endorse all commercial documents requiring endorsements for or on behalf of the Corporation and sign all receipts and vouchers for payments made to the Corporation;
|
(c)
|
be empowered to cause the funds of the Corporation to be disbursed by checks or drafts upon the authorized depositaries of the Corporation, and cause to be taken and preserved proper vouchers for all moneys disbursed;
|
(d)
|
render to he Board, the Chairman, the Vice Chairman, the Chief Executive Officer, the President or the Chief Financial Officer, whenever requested, a statement of all his transactions as Treasurer;
|
(e)
|
cause to be kept at the Corporation's principal office correct books of account of all its business and transactions and such duplicate books of account as he shall determine, and upon request cause such books or duplicates thereof to be exhibited to any director;
|
(f)
|
be empowered to sign (unless the Secretary or an Assistant Secretary or an Assistant Treasurer shall sign) certificates representing stock of the Corporation, the issuance of which shall have been duly authorized (the signature to which may be a facsimile signature); and
|
(g)
|
in general, exercise the powers and perform all duties incident to the office of Treasurer and such other duties as are given to the Treasurer by these By-Laws or as from time to time may be assigned to the Treasurer by he Board, the Chairman, the Vice Chairman, the Chief Executive Officer, the President or the Chief Financial Officer.
|
As Amended Through November 10, 2011
|
SPAR Group By-Laws |
NewYork01 921370v8 |
As Amended Through November 10, 2011
|
SPAR Group By-Laws |
NewYork01 921370v8 |
(a)
|
The record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the date next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;
|
(b)
|
The record date for determining stockholders entitled to authorize corporate action in a particular written consent without a meeting shall be (i) if preceded by a Board action, the day on which such action was taken, or (ii) in any other cases, the day on which the first stockholder signs such written consent; and
|
(c)
|
The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
|
(a)
|
the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board or such Committee, and the Board or such Committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum;
|
As Amended Through November 10, 2011
|
SPAR Group By-Laws |
NewYork01 921370v8 |
(b)
|
the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders;
|
(c)
|
the contract or transaction is fair to the Corporation as of the time it is authorized, approved or ratified by the Board, a Committee thereof or the stockholders; or
|
(d)
|
the contract or transaction is otherwise permissible under Applicable Law.
|
As Amended Through November 10, 2011
|
SPAR Group By-Laws |
NewYork01 921370v8 |
(BORROWER)
|
|
Witness: | SPAR GROUP, INC. |
SPAR INCENTIVE MARKETING, INC. | |
PIA MERCHANDISING CO., INC. | |
NATIONAL ASSEMBLY SERVICES, INC. | |
s/ Marc J. Pedalino | SPAR/GROUP INTERNATIONAL, INC. |
Print Name: Marc Pedalino | SPAR ACQUISITION, INC. |
Title: Administrative Assistant | SPAR TRADEMARKS, INC. |
SPAR MARKETING, INC. | |
By: /s/ James R. Segreto | |
James R. Segreto | |
Chief Financial Officer, | |
Treasurer and Secretary | |
(As to all Borrower entities) | |
(AGENT/LENDER)
|
|
STERLING NATIONAL BANK
|
|
By: /s/ Marline Alexander | |
Marline Alexander
|
|
Vice President
|
|
(LENDER)
|
|
CORNERSTONE BANK
|
|
By: /s/ John V. Lavin | |
John V. Lavin
|
|
Vice President
|
100 % Owned Subsidiaries
|
State/Country of Incorporation
|
SPAR Acquisition, Inc.
|
Nevada
|
SPAR Bert Fife, Inc. (inactive)
|
Nevada
|
SPAR Canada Company
|
Nova Scotia, Canada
|
SPAR Wings & Ink Company
|
Nova Scotia, Canada
|
SPAR Canada, Inc.
|
Nevada
|
SPAR Group International, Inc.
|
Nevada
|
SPAR International Ltd.
|
Cayman Islands
|
SPAR Marketing Force, Inc.
|
Nevada
|
SPAR Megaforce, Inc. (inactive)
|
Nevada
|
SPAR Trademarks, Inc.
|
Nevada
|
SPAR Merchandising Romania, Ltd. (inactive)
|
Romania
|
SPAR China Ltd.
|
China
|
SPAR FM Japan, Inc.
|
Japan
|
SPAR (Shanghai) Field Marketing Ltd. (inactive)
|
China
|
NMS Retail Services, ULC
|
Nova Scotia, Canada
|
National Assembly Services, Inc.
|
New Jersey
|
51% Owned International Subsidiaries
|
Country
|
SGRP Meridian (Pty), Ltd.
|
South Africa
|
SPARFACTS Australia (Pty), Ltd.
|
Australia
|
S.C. SPAR City S.R.L.
|
Romania
|
SPAR (Shanghai) Marketing Management Company Ltd.
|
China
|
SPAR TODOPROMO, SAPI, de CV
|
Mexico
|
NDS SPAR Tanitium ve Danismanlik Anonim Sti.
|
Turkey
|
SPAR KROGNOS Marketing Private Limited (formerly known as
SPAR Solutions Merchandising Private Limited
and mistakenly referenced in the SGRP 2010 Annual Report as
SPAR Solutions India Private Limited
)
|
India
|
/s/ Rehmann Robson
|
/s/ Nitin Mittal and Co.
|
Date: March 21, 2012
|
/s/ Gary S. Raymond
|
|
Gary S. Raymond, Chief Executive Officer
|
Date: March 21, 2012
|
/s/ James R. Segreto
|
|
James R. Segreto, Chief Financial Officer,
Treasurer and Secretary
|
/s/ Gary S. Raymond
|
||
Gary S. Raymond
|
||
Chief Executive Officer
|
||
March 21, 2012
|
/s/ James R. Segreto
|
||
James R. Segreto
|
||
Chief Financial Officer, Treasurer and Secretary
|
||
March 21, 2012
|