Exhibit 10.1

2018 STOCK COMPENSATION PLAN

OF

SPAR GROUP, INC.

 

Effective as of May 2, 2018

 

Section 1.     Approval and Purposes of this Plan. (a) In addition to the
definitions contained in various Sections below, certain definitions and
interpretations applicable to this Plan are set forth below in Sections 26 and
27, respectively. Capitalized terms used and not otherwise defined herein shall
have the meanings respectively assigned to them in the SGRP By-Laws.

 

(b)     SPAR Group, Inc., a Delaware corporation ("SGRP" or the "Corporation"),
through the action of its Board of Directors (the "Board") on April 10, 2018,
authorized, approved and established this 2018 Stock Compensation Plan of SPAR
Group, Inc. (as the same may be supplemented, modified, amended or restated from
time to time in the manner provided herein, this "Plan"), for submission to the
stockholders of the Corporation at their annual meeting on May 2, 2018, and
effective upon the approval of this Plan by the stockholders of the Corporation
at that meeting (or, if later, within no more than one year after such Board
approval) in accordance with applicable Exchange Rules and other Applicable Law
(the "Effective Date).

 

(c)     This Plan is intended to provide an incentive to selected employees,
officers and directors of each SGRP Company and each SGRP Consultant, and to
offer an additional inducement in obtaining the services of such individuals.
This Plan provides for the grant of equity compensation awards (each an "Award")
in, to or otherwise respecting shares of the Corporation's Common Stock, par
value $.01 per share (the "Common Stock"), in the form of (i) "incentive stock
options" within the meaning of Section 422 of the Code (as defined in Section
26) as described in Section 5 ("ISOs"), (ii) nonqualified stock options that do
not qualify as ISOs as described in Section 5 ("NQSOs"), (iii) stock
appreciation rights as described in Section 6 ("SARs"), (iv) restricted stock as
described in Section 7 ("Restricted Stock"), and (v) restricted stock units as
described in Section 8 ("RSUs"), in each case to the greatest extent permitted
by this Plan and Applicable Law. The Corporation makes no representation or
warranty, express or implied, as to the qualification of any option as an
"incentive stock option" under the Code. Each reference to a consultant in this
Plan shall be deemed to include each of the consultant's employees in the case
of a consultant that is not a natural person.

 

(d)     This Plan amends, restates, supercedes and replaces the 2008 Plan (which
in turn replaced the 2000 and 1995 Plan, as such terms are defined in Section 26
hereof) for new Awards granted on and after the Effective Date. All Awards
issued at any time under the 2008 Plan (in each case other than to the extent
exercised in the case of any option or SAR or end of the applicable vesting or
similar restrictions in the case of Restricted Stock or RSUs), 2000 Plan or 1995
Plan and still outstanding on the Effective Date ("Continuing Awards"),
respecting the covered shares of the Corporation's Common Stock ("Continuing
Award Shares"), shall continue to be governed by such plans, as applicable,
except that those Continuing Awards may be modified as provided in Section 12
hereof as if they were Awards hereunder to the extent the provisions respecting
adverse modifications in those plans are not violated by such modification.

 

Section 2.     Stock Subject to this Plan. (a) Subject to adjustment under and
the other provisions of Sections 11 and 12, the Corporation from time to time
may grant new options (including ISOs), SARs, Restricted Stock, RSUs and other
Awards under this Plan ("New Awards") to, in or otherwise respecting its Common
Stock ("New Award Shares") so long as the New Award Shares covered by each
proposed New Award or group of New Awards in the aggregate do not at the time of
the proposed issuance exceed the remaining unused availability for New Award
Shares under this Plan (the "Remaining Availability"). The Remaining
Availability at a particular calculation time shall be equal to the remainder of
the following: (i) 600,000 shares; minus (ii) the sum at the calculation time of
the cumulative aggregate number of New Award Shares covered by Awards issued
under this Plan on and after the Effective Date (including all options to
acquire Common Stock and SARs, RSUs payable in Common Stock or Restricted Stock
issued pursuant to this Plan).

 

(b)     The Corporation shall at all times during the term of this Plan reserve
and keep available such number of shares of Common Stock as will be sufficient
to satisfy the Awards issued under and the other requirements of this Plan. Such
shares of Common Stock may, in the discretion of the Board, consist either in
whole or in part of authorized but unissued shares of Common Stock or shares of
Common Stock held in the treasury of the Corporation. No fractional shares of
Common Stock shall be issued or purchased under this Plan.

 

(c)     Notwithstanding any other provisions of the Plan, substitute awards as
provided for under Section 17 hereof shall not be counted against or otherwise
reduce the number of shares available for future issuance under the Plan. In
addition, if a Constituent Corporation has shares available under a pre-existing
plan approved by stockholders and not adopted in contemplation of an acquisition
or combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange
ratio or other adjustment or valuation ratio or formula used in such acquisition
or combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for
Awards under the Plan and shall not reduce the shares available for future
issuance under the Plan. Awards using such available shares under acquired plans
shall not be made after the date awards could have been made under the terms of
the acquired plan, absent the acquisition or combination, and shall only be made
to individuals who were not eligible to participate in the Plan prior to such
acquisition or combination.

 

 

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Section 3.     Administration of this Plan; Administrators' Authority and
Discretion, No Liability, Minimum Vesting Periods, Etc. (a) This Plan will be
administered under the authority of the Compensation Committee of the Board of
Directors of the Corporation as provided in its Charter or such other standing
committee of the Corporation as the Board may from time to time designate to
administer its plans generally or this Plan specifically (including the
Compensation Committee or such successor committee, the "Compensation
Committee"). The Compensation Committee or the Corporation (acting through the
proper officer(s) of the Corporation) from time to time may appoint one or more
officers, employees and independent contractors (including the Compensation
Committee to the extent applicable, each an "Administrator") to assist in the
administration of this Plan and may delegate (in whole or in part) power and
authority under this Plan to them to the maximum extent permitted by the Charter
(as defined in Section 26), applicable Exchange Rules and Applicable Law.
Notwithstanding the foregoing, so long as the Corporation has any class of its
common equity securities registered or required to be registered under Section
12 of the Securities Exchange Act, to the extent necessary to comply with Rule
16b-3 promulgated under the Securities Exchange Act, as amended, or any
successor rule (together with such section, "Rule 16b-3"), or to preserve any
deduction or otherwise comply with any applicable provision of the Code, ERISA,
Securities Law, Exchange Rules, Accounting Standards or other Applicable Law,
any Compensation Committee appointed by the Board to administer this Plan shall
be comprised of two or more directors, each of whom shall be a "non-employee
director" within the meaning of Rule 16b-3. The delegation of power and
authority to the Administrators hereunder shall be consistent with all
Applicable Law (including, without limitation, applicable state law and Rule
16b-3) and any applicable Exchange Rules. Unless otherwise provided in the
Charter or by Applicable Law, a majority of the members of the Compensation
Committee shall constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, and any acts approved in
writing by all members without a meeting, shall be the acts of the Compensation
Committee.

 

(b)     The Compensation Committee shall have the power and authority (which it
may delegate to the Administrators to the maximum extent permitted by this Plan,
the Charter, applicable Exchange Rules and Applicable Law), in their sole
discretion, to determine or approve (among other things), to the maximum extent
permitted by this Plan, the Charter, Applicable Law and applicable Exchange
Rules: (i) the persons who shall be granted Awards under this Plan; (ii) when
they shall receive Awards and the applicable grant dates; (iii) whether an Award
granted to an employee shall be an ISO, a NQSO, a SAR, Restricted Stock and/or
RSUs; (iv) the type (i.e., voting or non-voting) and number of shares of Common
Stock to be subject to each Award; (v) the standard term of each Award,
including any provisions for early termination or forfeiture; (vi) the method or
formula for determining (A) the date each option or SAR shall become exercisable
or restrictions on Restricted Stock or RSUs shall lapse (i.e., the Award will
vest), including any provisions for early vesting, (B) whether an Award shall be
exercisable or vest in whole or in installments, and (C) if in installments, (1)
the number of shares of Common Stock to be subject to each installment, (2)
whether the installments shall be cumulative and (3) the date each installment
shall become exercisable or vest and the term of each installment; (vii) whether
to accelerate the date of exercise or vesting of any Award or installment;
(viii) whether shares of Common Stock may be issued upon the exercise of an
option as partly paid, and, if so, the method or formula for determining the
dates when future installments of the exercise price shall become due and the
amounts of such installments; (ix) the form of payment of the exercise price for
any option; (x) the method or formula for determining (A) the exercise price of
each option, (B) the Base Value (as defined in Section 6(e)) of each SAR, and
(C) the Fair Market Value of a share of Common Stock for all purposes of this
Plan; (xi) whether and under what conditions to restrict the pledge, sale or
other disposition of any Award granted under this Plan, the shares of Common
Stock acquired upon the exercise of an option or SAR or vesting and settlement
of Restricted Stock or RSUs and, if so, whether and under what conditions to
waive any such restriction, whether individually, by class or otherwise; (xii)
whether and under what conditions to subject the exercise or vesting of all or
any portion of an Award to the fulfillment of certain restrictions or
contingencies as specified in the Contract referred to in Section 10 hereof,
including (without limitation) restrictions or contingencies relating to (A)
entering into a covenant not to compete with any SGRP Company, (B) financial
objectives for the Corporation, any of its Subsidiaries, a division, a product
line or other category and/or (C) the period of continued employment or
consulting of the Awardee with any SGRP Company, and in each case to determine
whether such restrictions or contingencies have been met; (xiii) the method or
formula for determining the amount, if any, necessary to satisfy the obligation
to withhold taxes or other amounts with respect to any Award; (xiv) whether an
Awardee Retires or has a Disability; (xv) whether to cancel or modify an Award
either with or without the consent of the Awardee or as provided in the
Contract, provided, however, that any modified provision is permitted to be
included in an Award granted under this Plan on the date of the modification,
and provided, further, that in the case of a modification (within the meaning of
Section 424(h) of the Code) of an ISO, such option as modified would be
permitted to be granted on the date of such modification under the terms of this
Plan; and (xvi) how to construe the respective Contracts and this Plan;
(xvii) the policies, rules and regulations relating to this Plan and how and
when to prescribe, amend and rescind the same.

 

 

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(c)     The Compensation Committee shall have exclusive power and authority
respecting (i) any provision of this Plan or any Award granted under this Plan,
or any amendment to either, that under Rule 16b-3 requires the approval of the
Board, a committee of non-employee directors or the stockholders, in order to be
exempt under Section 16(b) of the Securities Exchange Act (unless otherwise
specifically provided herein), and (ii) any other determination necessary or
advisable for administering this Plan to the extent such determination must be
made by the Compensation Committee or similar committee of independent directors
under applicable provisions of the Code, ERISA, Securities Law, Exchange Rules
or Accounting Standards, other Applicable Law or the Charter.

 

(d)     Any controversy or claim arising out of or relating to this Plan, any
option granted under this Plan or any Contract on the books and records of the
Corporation with respect thereto shall be determined unilaterally by the
Administrators in their sole and absolute discretion. The Administrators may in
their discretion refer, or shall refer to the extent required by this Plan, the
Charter, the Code, ERISA, Securities Law, Exchange Rules, Accounting Standards
or other Applicable Law, any such matter to the Compensation Committee for its
determination, which determination shall be final, conclusive and binding on all
parties. In all other cases, the determinations of the Administrators on such
matters shall be final, conclusive and binding on all parties.

 

(e)     No present or former Administrator or director, officer or employee of
any SGRP Company or SGRP Consultant shall be liable for any action, inaction or
determination made in good faith, and no present or former member of the
Compensation Committee shall be liable for any action, inaction or determination
made, with respect to this Plan, any Award granted, exercisable, exercised,
vested, settled, surrendered or expired hereunder or any bookkeeping entry made
in connection therewith.

 

(f)     The Corporation shall maintain a separate permanent record of its
actions with respect to the Plan, which shall be available for inspection by
appropriate parties as may be required by Applicable Law. Such records shall
include (without limitation) a separate account for each Awardee reflecting all
Awards granted, exercisable, exercised, vested, settled, surrendered, forfeited,
cancelled or expired and other actions taken with respect thereto. The
Corporation's books and records shall be conclusive as to the existence, amounts
and terms of all Awards absent manifest error.

 

(g)     Notwithstanding any provision of the Plan to the contrary, any
stock-settled Award that vests solely on the basis of the passage of time (e.g.,
not on the basis of achievement of performance goals) shall not vest more
quickly than ratably over at least a three (3)-year period following the date of
grant and any stock-settled Award that vests based solely on the achievement of
performance goals shall not vest more quickly than one year following the date
of grant, except that the Award Agreement may reflect, or the Compensation
Committee may in its discretion provide after the date of grant for, earlier or
accelerated vesting (on a full or pro rata basis) (i) in the event of the
Awardee's death, Disability, Retirement or termination without Cause, (ii) upon
an Extraordinary Event (as defined in Section 11(b)), or (iii) in connection
with establishing the terms and conditions of employment of an Awardee necessary
for the recruitment of such individual. The provisions of this Section 3(g)
shall not apply to (1) Awards granted to non-employee directors or consultants,
(2) substitute Awards under Section 17 or repricing under Section 12, or (3)
Awards involving an aggregate number of shares of Common Stock not exceeding 5%
of the number of shares available for Awards under Section 2.

 

Section 4.     Eligibility; Absences; Certain Changes of Employment or Service
Relationship. (a) The Administrators may from time to time, consistent with the
purposes of this Plan, grant Awards to any director, officer or employee of any
SGRP Company or any SGRP Consultant as the Administrators may determine in their
sole discretion; provided, however, that ISOs may only be granted to an employee
of a SGRP Company. Such Awards granted shall cover such number of shares of
Common Stock as the Administrators may determine in their sole discretion;
provided, however, that if on the date of grant of an Award, any class of common
stock of the Corporation (including without limitation the Common Stock) is
required to be registered under Section 12 of the Securities Exchange Act, the
maximum number of shares subject to Awards that may be granted to any employee
during any calendar year under this Plan shall be 1,000,000 shares.

 

(b)     For the purposes of this Plan, and consistent with subsection (c) of
this Section below, an employment or consulting relationship shall be deemed to
exist if, at the time of the determination, the individual was a director,
officer, or employee of any SGRP Company or a SGRP Consultant. As a result, an
individual on military leave, sick leave or other bona fide leave of absence
shall continue to be considered a director, officer, employee or consultant for
purposes of this Plan during such leave if the period of the leave does not
exceed ninety (90) days, or, if longer, so long as the individual's right to
re-employment with or re-engagement by such SGRP Company, as the case may be is
guaranteed either by statute or by contract or such SGRP Company has consented
by policy or in writing to longer absence. If the period of leave exceeds ninety
(90) days and the individual's right to re-employment is not guaranteed by
statute, contract, policy or consent, the employment or consulting relationship
shall be deemed to have terminated on the 91st day of such leave.

 

(c)     Notwithstanding anything to the contrary in this Plan, unless otherwise
provided in an applicable Contract or as the Administrators may otherwise
determine in their sole discretion and advise in writing: (i) the termination
(other than the Awardee's Retirement, death or Disability, but consistent with
subsections (a) and (b) of this Section, above) of an Awardee's employment or
service relationship as a director, officer or employee of one SGRP Company or
SGRP Consultant shall not be deemed to be a termination of the Awardee's
employment or service relationship, the relationship shall be deemed to be
continuing, and not a termination, for the purposes of this Plan (including
continuation for the measurement of applicable vesting periods), as long as the
Awardee continues to be a director, officer, employee of any other SGRP Company
or SGRP Consultant; and (ii) if the SGRP Consultant (other than an individual
consultant) ceases to provide consulting services to any SGRP Company (whether
as scheduled, by termination or otherwise), then any director, officer or
employee of or individual consultant to that former SGRP Consultant who is an
Awardee shall (except for any Awardee covered by clause (i) of this subsection)
be deemed to have suffered a termination of that employment or service
relationship for the purposes of this Plan.

 

 

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Section 5.     Options. Grant of Options. (a) The Administrators may grant
Awards of options, whether ISOs and/or NQSOs, to acquire shares of Common Stock
as provided in this Section, and each person receiving an option will be
referred to as an "Optionee" and is also an Awardee under this Plan. Each Award
of options granted pursuant to this Plan shall be made on such terms and
conditions as are not inconsistent with this Plan and as are established by the
Administrators, in their sole discretion, at or before the time such Award is
granted; provided, however, that the aggregate Fair Market Value determined at
the time the Award is granted of the shares of Common Stock for which any
eligible employee may be granted ISOs under this Plan or any other plan of any
SGRP Company, that are exercisable for the first time by such Optionee during
any calendar year shall not exceed $100,000. The $100,000 ISO limitation amount
shall be applied by taking ISOs into account in the order in which they were
granted or as otherwise may be required by Section 422 of the Code. Any option
(or portion thereof) granted in excess of such ISO limitation amount or that for
any reason is not or ceases to be treated as an ISO for Code purposes shall be
treated as a NQSO to the extent of such excess or all or any portion thereby not
treated as an ISO.

 

(b)     Exercise Price of Options. The exercise price of the shares of Common
Stock under each option shall be determined by the Administrators in their sole
discretion; provided, however, that (i) except as provided below, the exercise
price of an option shall not be less than the Fair Market Value of the Common
Stock subject to such option on the date of grant; (ii) if, at the time an ISO
is granted, the Optionee owns (or is deemed to own under Section 424(d) of the
Code) stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of any SGRP Company, the exercise price of such
ISO shall not be less than one hundred ten percent (110%) of the Fair Market
Value of the Common Stock subject to such ISO on the date of grant; and
(iii) the Administrators must first obtain the approval of the Board to grant a
NQSO with an exercise price that is less than the Fair Market Value of the
shares on the date of the granting of the NQSO.

 

(c)     Term of Options. Each option granted pursuant to this Plan shall be for
such term as is established by the Administrators, in their sole discretion, at
or before the time such option is granted; provided, however, that the term of
each option granted pursuant to this Plan shall be for a period not exceeding
ten (10) years from the date of grant thereof, and provided further, that if, at
the time an ISO (but not an NQSO) is granted, the Optionee owns (or is deemed to
own under Section 424(d) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of any SGRP
Company, the term of the ISO shall be for a period not exceeding five (5) years
from the date of grant. Options shall be subject to earlier termination as
hereinafter provided.

 

(d)     Exercise of Options.

 

(i)     An option (or any installment thereof), to the extent then exercisable,
shall be exercised by giving written notice (an "Exercise Notice") to the
Corporation at its principal office (A) specifying the option being exercised
and the number of shares of Common Stock as to which such option is being
exercised, and (B) accompanied by payment in full of the aggregate exercise
price therefor (or the amount due on exercise if the applicable Contract permits
installment payments) (I) in cash and/or by certified check, (II) with the
authorization of the Administrators, with previously acquired shares of Common
Stock having an aggregate Fair Market Value on the date of exercise, equal to
the aggregate exercise price of all options being exercised, (III) with a
concurrent sale of option shares to the extent permitted by clause (ii) of this
Section 5(d), (IV) with the authorization of the Administrators, through a "net
exercise" method as described in clause (iii) of this Section 5(d), or (V) some
combination thereof; provided, however, that in no case may shares be tendered
if such tender would require the Corporation to incur a charge against its
earnings for financial accounting purposes. The Corporation shall not be
required to issue any shares of Common Stock pursuant to the exercise of any
option until all required payments with respect thereto, including payments for
any required withholding amounts, have been made.

 

(ii)     The Administrators may, in their sole discretion, permit payment of the
exercise price of an option by delivery by the Optionee of a properly executed
Exercise Notice, together with a copy of the Optionee's irrevocable instructions
to a broker acceptable to the Administrators to sell all or a portion of the
option shares and deliver promptly to the Corporation the amount of sale or loan
proceeds sufficient to pay such exercise price. In connection therewith, the
Corporation may enter into agreements for coordinated procedures with one or
more brokerage firms.

 

(iii)     Upon its receipt of a properly executed Exercise Notice, the
Corporation, in its sole discretion and to the greatest extent permitted by
Accounting Standards and Applicable Law, may allow the payment or offset of the
applicable exercise price of those exercised Option shares and pay the
applicable tax withholding on behalf of the employee, by reducing the number of
shares of Common Stock to be issued upon exercise by the largest whole number of
shares with a Fair Market Value not in excess of the aggregate Exercise Price
and tax withholding, and then issuing only the net number of Option shares
remaining to the Awardee.

 

 

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(iv)     An Optionee shall not have the rights of a stockholder with respect to
such shares of Common Stock to be received upon the exercise of an option until
the date of issuance of a stock certificate to the Optionee for such shares or,
in the case of uncertificated shares, until the date an entry is made on the
books of the Corporation's transfer agent representing such shares; provided,
however, that until such stock certificate is issued or until such book entry is
made, any Optionee using previously acquired shares of Common Stock in payment
of an option exercise price shall continue to have the rights of a stockholder
with respect to such previously acquired shares.

 

(e)     Handling Options on Termination of Relationship; Retirement.

 

(i)     Except as may otherwise be expressly provided in the applicable
Optionee's Contract or written employment, consulting or termination contract or
in Section 4, above, Optionee's any Optionee whose employment or consulting
relationship with any SGRP Company or SGRP Consultant has terminated for any
reason (other than the Optionee's Retirement, death or Disability) may exercise
any option granted to the Optionee as an employee or consultant, to the extent
exercisable on the date of such termination, at any time within three (3) months
after the date of termination, but not thereafter and in no event after the date
the option would otherwise have expired; provided, however, that if such
relationship is terminated for Cause (as defined in Section 26), such option
shall terminate and be forfeited immediately, and the grantee shall have no
further rights or interest with respect to the option.

 

(ii)     Except as may otherwise be expressly provided in the applicable
Optionee's Contract or written employment contract or in Section 4, above, an
Optionee whose directorship with any SGRP Company or SGRP Consultant has
terminated for any reason (other than the Optionee's Retirement, death or
Disability) may exercise the options granted to the Optionee as a director of
any SGRP Company or SGRP Consultant, to the extent exercisable on the date of
such termination, at any time within three (3) months after the date of
termination, but not thereafter and in no event after the date the option would
otherwise have expired; provided, however, that if the Optionee's directorship
is terminated for Cause, such option shall terminate immediately.

 

(iii)     If any Optionee Retires, the options granted to the Optionee under
this Plan will become fully vested automatically, notwithstanding any vesting
schedule in the Contract, and may be exercised by the Optionee (A) in the case
of an ISO, within three (3) months after Retirement, but not beyond the
remaining term of the option, or (B) in the case of any other option, at any
time within the remaining term of the option, in each case subject to any other
early termination that may be applicable under this Plan.

 

(iv)     No option shall be subject to early expiration or termination as
provided in clause (i), (ii) or (iii) of Section 5(e) of this Plan due to the
Retirement, death or Disability of the original Optionee, subject, however, to
all the other provisions of this Plan, including (without limitation) any such
other provision for early termination that may become applicable.

 

(v)     Nothing in this Plan or in any option granted under this Plan shall
confer on any person any right to continue as a director, officer or employee of
any SGRP Company or SGRP Consultant, to become a director, officer or employee
of any other SGRP Company or SGRP Consultant, or to interfere in any way with
any right of any SGRP Company or SGRP Consultant to terminate such relationship
at any time for any reason whatsoever without liability to any SGRP Company or
SGRP Consultant.

 

(f)     Death or Disability of an Optionee.

 

(i)     Except to the extent more favorable treatment may otherwise be expressly
accorded to the Optionee in the applicable Contract or Optionee's written
employment or consulting or termination contract, if an Optionee dies (A) while
the Optionee is a director (whether or not an employee), officer (whether or not
an employee), or employee of any SGRP Company or SGRP Consultant, (B) at any
time following the original Optionee's Retirement from such relationship or
termination of such relationship by reason of the Optionee's Disability, or (C)
within three (3) months after any other termination of such relationship (unless
such other termination was for Cause or without the consent of the Corporation),
the options granted to the Optionee under this Plan will become fully vested
automatically, notwithstanding any vesting schedule in the Contract, and may be
exercised by the Optionee's Legal Representative (as such term is defined in
Section 26) at any time (I) in the case of an ISO, within one year after death,
but not beyond the remaining term of the option, or (II) in the case of any
other option, within the remaining term of the option, in each case subject to
any other early termination that may be applicable under this Plan.

 

(ii)     Except to the extent more favorable treatment may otherwise be
expressly accorded to the Optionee in the applicable Contract or Optionee's
written employment or consulting or termination contract, in the event of the
termination due to Disability of an Optionee's status as a director, officer or
employee of any SGRP Company or SGRP Consultant, the options granted to the
Optionee under this Plan will become fully vested automatically, notwithstanding
any vesting schedule in the Contract, and may be exercised by the Optionee, or
by the Optionee's Legal Representative, at any time (A) in the case of an ISO,
within one year after Disability, but not beyond the remaining term of the
option, or (B) in the case of any other option, within the remaining term of the
option, in each case subject to any other early termination that may be
applicable under this Plan.

 

 

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Section 6.     Stock Appreciation Rights. Grant of SARs. (a) The Administrators
may grant Awards of SARs as provided in this Section. Each Award of SARs granted
pursuant to this Plan shall be made on such terms and conditions that are not
inconsistent with this Plan as are established by the Administrators, in their
sole discretion, at or before the time such Award is granted.

 

(b)     SAR Terms. The Contract for each SAR Award shall specify the Base Value
(as defined in Section 6(e)), the duration of the SAR, the number of shares of
Common Stock to which the SAR pertains, any conditions imposed upon the
exercisability of the SAR in the event of Retirement (as defined in Section 26),
death, Disability or other termination of employment or termination of a
consulting or other relationship, and such other provisions as the
Administrators shall determine consistent with the Plan. SARs granted under the
Plan shall be exercisable at such times and be subject to such restrictions and
conditions as the Administrators shall determine, which need not be the same for
all Awardees.

 

(c)     Exercise of SARs. SARs may be exercised with respect to all or part of
the shares of Common Stock upon whatever terms and conditions the
Administrators, in their sole discretion, imposes upon such SARs. A SAR shall be
exercised by delivery to the Corporation of a notice of exercise in the form
prescribed by the Administrators.

 

(d)     Other Conditions Applicable to SARs. In no event shall the term of any
SAR granted under the Plan exceed ten (10) years from the date of grant. A SAR
may be exercised only when the Fair Market Value of a share of Common Stock
exceeds the Base Value (as defined in Section 6(e)).

 

(e)     Payment upon Exercise of SARs.

 

(i)     Subject to the provisions of the Contract, upon the exercise of a SAR,
the Awardee is entitled to receive, without any payment to the Corporation
(other than required tax withholding amounts), an amount (the "SAR Value") equal
to the product of multiplying (A) the number of shares of Common Stock with
respect to which the SAR is exercised by (B) an amount equal to the excess of
(I) the Fair Market Value per share on the date of exercise of the SAR over
(II) the "Base Value" of the SAR designated in the Contract (which "Base Value"
shall be the Fair Market Value per share on the date of grant or any amount
greater than such Fair Market Value stated as the Base Value in the Contract).

 

(ii)     Payment of the SAR Value to the Awardee shall be made (A) in shares of
Common Stock, valued at the Fair Market Value on the date of exercise in the
case of an immediate payment after exercise, (B) in cash or (C) in a combination
thereof as determined by the Administrators, either at the time of the Award or,
unless otherwise provided in the applicable Contract, thereafter, and as
provided in the Contract.

 

(iii)     To the extent required to satisfy the conditions of Rule 16b-3 or
other applicable provision of the Code, ERISA, Securities Law, Exchange Rules,
Accounting Standards or other Applicable Law, or as otherwise provided in the
Contract, the Compensation Committee shall have the sole discretion to consent
to or disapprove the election of any Awardee to receive cash in full or partial
settlement of a SAR. In cases where an election of settlement in cash must be
consented to by the Administrators, the Administrators may consent to, or
disapprove, such election at any time after such election, or within such period
for taking action as is specified in the election, and failure to give consent
shall be disapproval. Consent may be given in whole or as to a portion of the
SAR surrendered by the Awardee. If the election to receive cash is disapproved
in whole or in part, the SAR shall be deemed to have been exercised for shares
of Common Stock, or, if so specified in the notice of exercise, not to have been
exercised to the extent the election to receive cash is disapproved.

 

(iv)     As an alternative to the foregoing, if the Administrators determine to
issue SARs that are subject to Section 409A of the Code and are intended to
comply with the requirements of Section 409A of the Code, the Administrators may
provide in the Contract for a deferred payment, issuance and/or delivery of the
cash to be paid or shares of Common Stock to be issued in connection with the
SAR exercise at a time or times permitted under Section 409A of the Code. In
such event, dividends or other distributions with respect to shares of Common
Stock that would otherwise have been issued and received by the Awardee in
connection with the exercise shall be paid to the Awardee currently as and when
payable to stockholders of the Corporation or, if provided in the applicable
Contract, deferred until the underlying deferred shares of Common Stock are
issued and delivered. Any cash payment, dividends or other distributions that
are deferred shall be credited with interest at a reasonable rate as determined
by the Administrators from time to time.

 

(f)     Restrictions on Stock Transferability. The Administrators may impose
such restrictions on any shares of Common Stock delivered to an Awardee on
exercise of a SAR as they may deem advisable in their sole and absolute
discretion, including, without limitation, restricting transferability and/or
designating such shares as Restricted Stock or stock subject to further service,
performance, consulting or noncompetition period after settlement. Each
certificate representing such shares of Common Stock shall bear a legend
referencing such restrictions, which legend may be the same as the legend placed
on certificates pursuant to Section 7(d).

 

(g)     Applicability of Section 5(e) and (f). Unless otherwise provided in the
Contract, the provisions of Sections 5(e) and (f) shall apply to SARs as though
the SARs were options (other than ISOs).

 

 

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Section 7.     Restricted Stock. Grant of Restricted Stock. (a) The
Administrators may grant Awards of shares of Common Stock that are restricted as
provided in this Section (referred to as "Restricted Stock" while so
restricted). Each Award of Restricted Stock granted pursuant to this Plan shall
be made on such terms and conditions that are not inconsistent with this Plan as
are established by the Administrators, in their sole discretion, at or before
the time such Award is granted. Unless otherwise provided in the applicable
Contract, an Awardee receiving a Restricted Stock Award is not required to pay
the Corporation therefor (except for applicable tax withholding) other than the
rendering of services. As determined by the Administrators, shares of Restricted
Stock may be issued in book entry or electronic form or in certificated form.
Unless otherwise determined by the Administrators, custody of shares of
Restricted Stock in certificated form shall be retained by the Corporation or
held in escrow by an escrow agent selected, and subject to change from time to
time, by the Administrators until the termination of the Period of Restriction
(as defined in Section 26) pertaining thereto.

 

(b)     Restrictions. Each Restricted Stock Award shall specify the Period of
Restriction, the number of shares of Restricted Stock in the Award, and the
applicable restrictions (whether service-based restrictions, with or without
performance acceleration, and/or performance-based restrictions) and such other
provisions as the Administrators shall determine. If a Restricted Stock Award is
intended to be a performance-based compensation Award, the terms and conditions
of the Award, including the Performance Goal(s) (as defined in Section 26) and
Period of Restriction and, if different, performance period, shall be set forth
in the Contract or in a subplan of this Plan, which is incorporated by reference
into the Contract, and the requirements to satisfy or achieve the Performance
Goal(s) as so provided therein shall be considered to be restrictions under this
Plan.

 

(c)     Other or Additional Restrictions. The Administrators may also impose
restrictions in the form a right of first refusal running to the Corporation, a
buyback right by the Corporation or other restriction on transferability. In the
event the Administrators so provide in a Contract, shares of Common Stock
delivered pursuant to this Plan in connection with Awards of Restricted Stock
may be subject to a buyback right by the Corporation in the amount of, or based
on, a specific or formula price therefor or otherwise in the event the Awardee
does not complete a specified service, consulting or noncompetition period after
issuance or delivery of the shares to the Awardee.

 

(d)     Certificate Legend. In addition to any legends placed on certificates in
connection with securities laws, each certificate representing shares of
Restricted Stock awarded pursuant to this Plan shall bear the following legend:

 

"The sale, transfer, pledge, hypothecation or other disposition of the shares of
stock represented by this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on transfer set forth in
the 2018 Stock Compensation Plan of SPAR Group, Inc., as amended, in the rules
and administrative procedures adopted pursuant to such Plan, and in an
associated Restricted Stock Agreement. A copy of the Plan, such rules and
procedures, and the applicable Restricted Stock Agreement may be obtained from
the Secretary of SPAR Group, Inc."

 

(e)     Removal of Restrictions. Except as otherwise provided in this Section 7
or elsewhere in this Plan, shares of Restricted Stock awarded under this Plan
shall become freely transferable by the Awardee immediately after the last day
of the Period of Restriction and, where applicable, immediately after a
determination of the satisfaction or achievement of any applicable Performance
Goal(s) by the Administrators. Once the shares are released from the
restrictions, the legend required by Section 7(d) herein shall be removed and,
unless and until the Awardee requests in writing, or the Administrators direct,
issuance and delivery in certificated form, the released shares of Common Stock
may remain in book entry or electronic form or held in escrow by an escrow agent
selected, and subject to change from time to time, by the Administrators.

 

(f)     Voting Rights. Unless otherwise provided in the Contract, during the
Period of Restriction, Awardees to whom shares of Restricted Stock hereunder may
exercise voting rights with respect to those shares.

 

(g)     Dividends and Other Distributions. Unless otherwise provided in the
Contract (which may or may not provide for the accumulation and payment of
dividends and other distributions made in cash or property other than shares of
Common Stock until the shares to which the dividends and other distributions
relate vest), during the Period of Restriction, Awardees entitled to or holding
shares of Restricted Stock hereunder shall be entitled to receive all dividends
and other distributions made in cash or property other than shares of Common
Stock with respect to those shares of Restricted Stock. If any dividends or
distributions are paid in shares of Common Stock, such shares shall be subject
to the same restrictions on transferability and the same rules for vesting,
forfeiture, and custody as the shares of Restricted Stock with respect to which
they were distributed.

 

(h)     Failure to Satisfy Performance Goal(s). In the event that the specified
Performance Goal(s) are not satisfied within the time period established by the
Administrators, the shares of Restricted Stock that were awarded subject to the
satisfaction of such Performance Goal(s) shall be automatically forfeited and
returned to the Corporation; provided, that the Administrators may waive all or
any part of the Performance Goal(s) and provide for vesting of the Award on such
basis as they deem appropriate.

 

 

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(i)     Termination of Employment or Service. Unless otherwise provided in the
Contract pertaining to a Restricted Stock Award, and otherwise consistent with
Section 4(b) above, in the event that an Awardee's employment or service with
any SGRP Company or SGRP Consultant has terminated for any reason, then the
unvested portion of a Restricted Stock Award shall automatically be forfeited to
the Corporation. The Administrators may provide in a Contract made pursuant to
this Plan for vesting of Restricted Stock Awards in connection with the
termination of an Awardee's employment or service on such basis as they deem
appropriate, including, without limitation, any provisions for vesting at death,
Disability, Retirement, or other cessation of employment or service, with or
without the further consent of the Administrators. The Contracts evidencing
Awards may contain such provisions as the Administrators may approve with
reference to the effect of approved leaves of absence.

 

Section 8.     RSUs. Grant of RSUs. (a) The Administrators, at any time and from
time to time, may grant RSUs under this Plan (with one RSU representing the
right to one share of Common Stock) on such terms and conditions that are not
inconsistent with this Plan as are established by the Administrators, in their
sole discretion, at or before the time such Award is granted. Unless otherwise
provided in the applicable Contract, an Awardee receiving a RSU Award is not
required to pay the Corporation therefor (except for applicable tax withholding)
other than the rendering of services.

 

(b)     Restrictions. The Contract for each RSU Award shall specify the Period
of Restriction, the number of RSUs granted, the applicable restrictions (whether
service-based restrictions, with or without performance acceleration, and/or
performance-based restrictions), the payment terms and such other provisions as
the Administrators shall determine. If a RSU Award is intended to be a
performance-based compensation Award, the terms and conditions of such Award,
including the Performance Goal(s) and Period of Restriction and, if different,
performance period, shall be set forth in a Contract or in a subplan of this
Plan, which is incorporated by reference into a Contract, and the requirements
to satisfy or achieve the Performance Goal(s) as so provided therein shall be
considered to be restrictions under this Plan.

 

(c)     Dividends and Other Distributions. Unless otherwise provided in the
Contract (which may or may not provide for the current payment, or for the
accumulation subject to the same restrictions, vesting, forfeiture, and payment
as the RSUs to which they are attributable, of dividends and other distributions
made in cash or property other than shares of Common Stock), during the Period
of Restriction, Awardees holding RSUs shall have no rights to dividends and
other distributions made in cash or property other than shares of Common Stock
that would have been paid with respect to the shares represented by those RSUs
if such shares were outstanding. Awardees holding RSUs shall have no right to
vote the shares of Common Stock represented by such RSUs until such shares are
actually issued in settlement of such RSUs. Unless otherwise provided in the
Contract, if any deemed dividends or other distributions would be paid in shares
of Common Stock, such shares shall be considered to increase the Awardee's RSUs
with respect to which they were declared based on one share equaling one RSU. In
addition, unless otherwise provided in the Contract, during the Period of
Restriction, any such deemed dividends and other distributions for which rights
are provided but which are not paid currently shall be deemed converted to
additional RSUs based on the Fair Market Value of a share on the date of payment
or distribution of the deemed dividend or distribution.

 

(d)     Payment after Lapse of Restrictions. Subject to the provisions of the
Contract, upon the lapse of restrictions with respect to a RSU, the Awardee is
entitled to receive, without any payment to the Corporation (other than required
tax withholding amounts), an amount equal to the product of multiplying (i) the
number of shares of Common Stock with respect to which the restrictions lapse by
(ii) the Fair Market Value per share on the date the restrictions lapse (such
amount, the "RSU Value"). The Contract may provide for payment of the RSU Value
at the time of vesting or, on an elective or non-elective basis, for payment of
the RSU Value at a later date, adjusted (if so provided in the Contract) from
the date of vesting based on an interest, dividend equivalent, earnings, or
other basis (including deemed investment of the RSU Value in shares of Common
Stock) set out in the Contract (the "adjusted RSU Value"). The Administrators
are expressly authorized to grant RSUs that are "nonqualified deferred
compensation" covered by Section 409A of the Code, as well as RSUs that are not
such nonqualified deferred compensation. Payment of the RSU Value or adjusted
RSU Value to the Awardee shall be made in cash or shares of Common Stock, or a
combination thereof, as provided in the Contract, valued at the Fair Market
Value on the date or dates the restrictions on the Award lapse in the case of an
immediate payment after vesting, or at the Fair Market Value on the date of
settlement in the event of an elective or non-elective delayed payment. Any
payment in shares of Common Stock shall be effected in book entry or electronic
form, provided that issuance and delivery in certificated form shall occur if
the Awardee so requests in writing or the Administrators so direct.

 

(e)     Restrictions on Stock Transferability. The Administrators may impose
such restrictions on any shares of Common Stock delivered to an Awardee in
settlement of a RSU as they may deem advisable in their sole and absolute
discretion, including, without limitation, a right of first refusal running to
the Corporation, a buyback right by the Corporation or other restriction on
transferability. In the event the Administrators so provide in a Contract,
shares of Common Stock delivered on the settlement of a RSU may be designated as
Restricted Stock and/or may be subject to a buyback right by the Corporation in
the amount of, or based on, a specific or formula price therefor or otherwise in
the event the Awardee does not complete a specified service, consulting or
noncompetition period after settlement.

 

(f)     Failure to Satisfy Performance Goal(s). In the event that the specified
Performance Goal(s) are not satisfied within the time period established by the
Administrators, the RSUs that were awarded subject to the satisfaction of such
Performance Goal(s) shall be automatically forfeited and returned to the
Corporation; provided, that the Administrators may waive all or any part of the
Performance Goal(s) and provide for vesting of the Award on such basis as they
deem appropriate.

 

 

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(g)     Termination of Employment or Service. Except as may otherwise be
expressly provided in the applicable Awardee's Contract or written employment,
consulting or termination contract or in Section 4, above, in the event that an
Awardee's employment or service with any SGRP Company or SGRP Consultant has
terminated for any reason (other than the Awardee's Retirement, death or
Disability), then the unvested portion of a RSU Award shall automatically be
forfeited to the Corporation. The Administrators may provide in a Contract made
pursuant to this Plan for vesting of RSU Awards in connection with the
termination of an Awardee's employment or service on such basis as they deem
appropriate, including, without limitation, any provisions for vesting at death,
Disability, Retirement, or other cessation of employment or service, with or
without the further consent of the Administrators. The Contracts evidencing
Awards may contain such provisions as the Administrators may approve with
reference to the effect of approved leaves of absence.

 

Section 9.     Compliance with Securities Laws. (a) It is a condition to the
exercise of any option or SAR, the issuance of any share of Common Stock and the
vesting of any Award granted under this Plan that either (i) a Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the shares of Common Stock to be issued in connection therewith
shall be effective and current at the time of exercise or issuance, or (ii)
there is an exemption from registration under the Securities Act for the
issuance of the shares of Common Stock thereupon. Nothing herein shall be
construed as requiring the Corporation to register shares subject to any Award
under the Securities Act or to keep any Registration Statement effective or
current.

 

(b)     The Administrators may require, in their sole discretion, as a condition
to the grant, issuance of shares of Common Stock pursuant to or exercise of an
Award, that the Awardee execute and deliver to the Corporation such Awardee's
representations and warranties, in form, substance and scope satisfactory to the
Administrators, as the Administrators may determine to be necessary or
convenient to facilitate the perfection of an exemption from the registration
requirements of the Securities Act, applicable state securities laws or other
legal requirements, including (without limitation) that (i) the shares of Common
Stock to be issued are being acquired by the Awardee for the Awardee's own
account, for investment only and not with a view to the resale or distribution
thereof, and (ii) any subsequent resale or distribution of shares of Common
Stock by such Awardee will be made only pursuant to (A) a Registration Statement
under the Securities Act that is effective and current with respect to the
shares of Common Stock being sold, or (B) a specific exemption from the
registration requirements of the Securities Act, but in claiming such exemption,
the Awardee, prior to any offer of sale or sale of such shares of Common Stock,
shall provide the Corporation with a favorable written opinion of counsel
satisfactory to the Corporation, in form, substance and scope satisfactory to
the Corporation, as to the applicability of such Securities Act exemption to the
proposed sale or distribution.

 

(c)     In addition, if at any time the Administrators shall determine that the
listing or qualification of the shares of Common Stock subject to such Award on
any securities exchange or under any Applicable Law, or that the consent or
approval of any governmental agency or regulatory body, is necessary or
desirable as a condition to, or in connection with, the granting of an Award or
the issuance of shares of Common Stock thereunder, such Award may not be
granted, exercised or settled in whole or in part, as the case may be, unless
such listing, qualification, consent or approval shall have been effected or
obtained by the Administrators free of any conditions not acceptable to the
Administrators.

 

Section 10.     Award Contracts. Each Award shall be evidenced by an appropriate
Contract duly executed by the Corporation and the Awardee (each a "Contract").
Such Contract shall contain such terms, provisions and conditions not
inconsistent herewith as may be determined by the Administrators in their sole
discretion. The terms of each Award and Contract need not be identical.

 

Section 11.     Adjustments upon Changes in Common Stock. Notwithstanding any
other provision of this Plan, in the event of any change in the outstanding
Common Stock by reason of a stock dividend, recapitalization, spin-off,
split-up, combination or exchange of shares or the like that results in a change
in the number or kind of shares of Common Stock that were outstanding
immediately prior to such event, the aggregate number and kind of shares subject
to this Plan (including the Remaining Availability and the components thereof),
the aggregate number and kind of shares subject to each outstanding option or
SAR and the exercise price thereof, the number of outstanding shares of
Restricted Stock, the number of outstanding RSUs and the maximum number of
shares subject to Awards that may be granted to any employee in any calendar
year, shall be appropriately adjusted by the Compensation Committee to preserve
the inherent economic value of the Awards and the intent and purposes of this
Plan, consistent with this Plan and the applicable provisions of the Code,
ERISA, Securities Law, Exchange Rules, Accounting Standards and other Applicable
Law, and this mandatory adjustment and the Compensation Committee's
determination of the mechanics of its implementation shall be conclusive and
binding on all parties. Such adjustment may provide for the elimination of
fractional shares that might otherwise be subject to the Award without payment
therefor and for the rounding up to the next whole cent in the case of exercise
prices. Notwithstanding the foregoing, no adjustment shall be made pursuant to
this Section 11 if such adjustment (i) would cause this Plan to fail to comply
with Section 409A or 422 of the Code or with Rule 16b-3 (if applicable to such
Award), or (ii) would be considered as the adoption of a new plan requiring
stockholder approval.

 

 

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(b)     Except as provided below but subject to compliance with Section 409A of
the Code (if applicable), unless the Administrators shall, in their sole
discretion, determine otherwise, upon (i) the dissolution, liquidation or sale
of all or substantially all of the business, properties and assets of the
Corporation, (ii) any reorganization, merger or consolidation in which the
Corporation does not survive, (iii) any reorganization, merger, consolidation or
exchange of securities in which the Corporation does survive and any of the
Corporation's stockholders have the opportunity to receive cash, securities of
another corporation and/or other property in exchange for their capital stock of
the Corporation, or (iv) any acquisition by any person or group (as defined in
Section 13(d) of the Securities Exchange Act) of beneficial ownership of more
than fifty percent (50%) of the Corporation's then outstanding shares of Common
Stock (other than ownership by Robert G. Brown, William H. Bartels, their
respective families, trusts under which either of them is a trustee or
beneficiary, and corporations and other entities under their individual or
collective control) (each of the events described in clauses (i), (ii), (iii)
and (iv) are referred to herein individually as an "Extraordinary Event"), this
Plan and each outstanding option or SAR shall terminate, each outstanding share
of Restricted Stock shall be deemed vested and each outstanding RSU shall be
deemed vested and settled. In such event each Awardee shall have the right to
exercise, in whole or in part, any unexpired option or options or SAR or SARs
issued to the Awardee, to the extent that said option or SAR is then vested and
exercisable pursuant to the provisions of said option or options or SAR or SARs
and this Plan within fifteen (15) Business Days of the Corporation's giving of
written notice to the Awardee of such Extraordinary Event.

 

(c)     Except as otherwise expressly provided in this Plan, the applicable
Contract or the Awardee's written employment or consulting or termination
contract, the termination of employment of, or the termination of a consulting
or other relationship with, an Awardee for any reason shall not, unless the
Administrators decide otherwise, accelerate or otherwise affect the number of
shares with respect to which an Award may be exercised, vested or settled;
provided, however, that an option or SAR may only be exercised with respect to
that number of shares that could have been purchased under the option or SAR had
the option or SAR been exercised by the Awardee on the date of such termination.

 

(d)     Notwithstanding anything to the contrary contained in this Plan, or any
provision to the contrary contained in a particular Contract, the
Administrators, in their sole discretion, at any time, or from time to time, may
elect to accelerate the exercisability or vesting or all or any portion of any
Award then outstanding. The decision by the Administrators to accelerate an
Award or to decline to accelerate an Award shall be final, conclusive and
binding. In the event of the acceleration of the exercisability of options or
SARs as the result of a decision by the Administrators pursuant to this Section
11, each outstanding option or SAR 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 Administrators may determine in their 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 or SAR after the stated period) may not adversely
affect the rights of any Awardee without the consent of the Awardee so adversely
affected. Any outstanding option or SAR that has not been exercised by the
holder at the end of such stated period shall terminate automatically and become
null and void.

 

Section 12.     Repricing and other Award Modifications; Amendments and
Termination of this Plan. (a) Subject to the terms and conditions and within the
limitations of the Plan, the Compensation Committee at any time and from time to
time in its discretion: (i) may select (by price, expiration or other relevant
term or otherwise) one or more outstanding Awards granted under the Plan, the
2008 Plan, 2000 Plan, the 1995 Plan or any other equity compensation plan of the
Corporation; (ii) may modify, extend or renew those Awards and their
Corresponding Contracts; (iii) may authorize and direct the Corporation to
accept the surrender of outstanding Awards and grant new or replacement Awards
pursuant to the Plan in substitution therefor; and (iv) may provide that such
modified, extended, renewed or substituted Awards have one or more of the
following (in any combination) (A) a lower exercise price, Base Value or similar
component than the surrendered Award or Awards, (B) a higher number of covered
Award Shares than the surrendered Award or Awards, (C) a longer term than the
surrendered Award or Awards, (D) more rapid vesting and exercisability than the
surrendered Award or Awards, (E) a different market or intrinsic value than the
surrendered Award or Awards, and (F) other modifications and additional
provisions that are authorized by the Plan and more favorable to the Awardee
than the surrendered Award or Awards. Notwithstanding the foregoing, however:
(1) if the exercise price, Base Value or similar component of the original Award
was originally set at the then full Fair Market Value or a specified fraction or
multiple thereof, such exercise price, Base Value or similar component shall not
be lowered in any such modification, extension, renewal or substitution to an
amount that is less than the full Fair Market Value or such specified fraction
or multiple thereof, as applicable, on the date of such modification, extension,
renewal or substitution; and (2) no modification of an Award granted under this
Plan or any such other plan shall adversely affect the rights or obligations of
an Awardee under such Award without such Awardee's consent.

 

(b)     This Plan shall have an initial term that ends on May 31, 2019, and no
Award may be granted thereafter under this Plan, unless an extension or
elimination of such initial term Plan is approved by stockholders of the
Corporation if and as required pursuant to Section 27. In any event, no Award
may be granted under this Plan on or after the tenth (10th) anniversary of the
Effective Date of this Plan unless an extension of the term of this Plan is
approved by stockholders of the Corporation if and as required pursuant to
Section 27. Awards granted prior to the end the term of this Plan shall continue
to be governed by this Plan (which shall continue in full force and effect for
that purpose).

 

 

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(c)     The Compensation Committee, without further approval of the
Corporation's stockholders, may at any time suspend or terminate this Plan, in
whole or in part, or amend it from time to time in such respects as it may deem
advisable, including (without limitation) in order that ISOs granted hereunder
meet the requirements for "incentive stock options" under the Code, or to comply
with the provisions of Rule 16b-3 or any change in the Code, ERISA, Securities
Law, Exchange Rules, Accounting Standards or other Applicable Law (including any
regulation, ruling or interpretation of any governmental agency or regulatory
body) applicable to this Plan, any Award or any related matter; provided,
however, that no amendment shall be effective, without the requisite prior or
subsequent stockholder approval, that would (a) except as contemplated in
Section 11, increase the maximum number of shares of Common Stock for which
Awards may be granted under this Plan or change the maximum number of shares for
which Awards may be granted to employees in any calendar year, (b) change the
eligibility requirements for individuals to whom Awards may be granted
hereunder, or (c) make any change for which stockholder approval is required
under this Plan, the Code, ERISA, Securities Law, Exchange Rules, Accounting
Standards or other Applicable Law or the Charter.

 

(d)     No termination, suspension or amendment of this Plan shall adversely
affect the rights of an Awardee under any Award granted under this Plan without
such Awardee's consent. The power of the Administrators to construe and
administer any Award granted under this Plan prior to the termination or
suspension of this Plan shall continue after such termination or during such
suspension.

 

Section 13.     Non-Transferability. (a) Except as otherwise provided below or
in the applicable Contract, no Award granted under this Plan shall be
transferable other than by will or the laws of descent and distribution, and
options or SARs may be exercised, during the lifetime of the Awardee, only by
the Awardee or the Awardee's Legal Representatives. Except to the extent
provided below or in the applicable Contract, Awards may not be assigned,
transferred, pledged, hypothecated or disposed of in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process, and any such attempted assignment, transfer, pledge,
hypothecation or disposition shall be null and void ab initio and of no force or
effect, unless and to the extent the Board, in the case of Awards other than
ISOs, has given its express written consent to any pledge or hypothecation to
(and subsequent disposition by) a financial institution, which Awards shall
continue to be subject to the terms and provisions of this Plan and the
applicable Contract and may be subject to such additional limits, conditions and
provisions as the Board may require in its sole and absolute discretion as a
condition of such consent.

 

(b)     The Administrators may, in their discretion, authorize all or a portion
of any Award other than an ISO granted to an Awardee to be on terms that permit
transfer by such Awardee to (i) the spouse, children or grandchildren of the
Awardee ("Immediate Family Members"), including (without limitation) adopted
children and grandchildren, (ii) a trust or trusts for the exclusive benefit of
such Immediate Family Members, or (iii) a partnership in which such Immediate
Family Members are the only partners, provided that (A) there may be no
consideration for any such transfer (other than natural love and affection, the
beneficial or equity interests therein received in connection with any such
transfer to a trust or partnership, or the legal consideration for such a
transfer to be enforceable), and (B) the Contract pursuant to which such Awards
are granted must (1) be specifically approved by the Administrators and (2)
expressly provide for transferability in a manner consistent with this Section
13.

 

(c)     Following any permitted transfer, any such Awards shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes hereof reference to "Awardee" shall be
deemed to refer to the transferee. The provisions hereof respecting the effect
of Retirement or other termination of employment or service and respecting the
effect of death or Disability shall continue to be applied with respect to the
original Awardee, following which an Award of shall be exercisable, where
applicable, by the transferee only to the extent, and for the periods specified
in the Contract. Any permitted transferee shall be required prior to any
transfer of an Award or shares of Common Stock acquired pursuant to the exercise
or settlement of an Award to execute a written undertaking to be bound by the
provisions of this Plan and the applicable Contract.

 

Section 14.     Withholding Taxes. The applicable SGRP Company, may withhold (a)
cash or (b) with the consent of the Administrators (in the Contract or
otherwise), shares of Common Stock to be issued upon exercise or settlement of
an Award or a combination of cash and shares, having an aggregate Fair Market
Value equal to the amount that the Administrators determine is necessary to
satisfy the obligation of the SGRP Company to withhold Federal, state and local
income taxes or other amounts incurred by reason of the grant, vesting,
exercise, vesting, settlement or disposition of an Award or the disposition of
the underlying shares of Common Stock. Alternatively, the Corporation may
require the Awardee to pay to the Corporation such amount, in cash, promptly
upon demand.

 

Section 15.     Legends; Payment of Expenses. (a) The Corporation may endorse
such legend or legends upon the certificates for shares of Common Stock issued
upon exercise, granting or settlement of an Award under this Plan and may issue
such "stop transfer" instructions to its transfer agent in respect of such
shares as it determines, in its sole discretion, to be necessary or appropriate
to (i) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, applicable state securities laws or other
legal requirements, (ii) implement the provisions of this Plan or any agreement
between the Corporation and the Awardee with respect to such shares of Common
Stock, or (iii) permit the Corporation to determine the occurrence of a
"disqualifying disposition," as described in Section 421(b) of the Code, of the
shares of Common Stock transferred upon the exercise of an ISO granted under
this Plan.

 

 

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(b)     The Corporation shall pay all issuance taxes with respect to the
issuance of shares of Common Stock upon the exercise, granting or settlement of
an Award granted under this Plan, as well as all fees and expenses incurred by
the Corporation in connection with such issuance.

 

Section 16.     Use of Proceeds. Except to the extent required by law, the
Corporation's Certificate of Incorporation, or the SGRP By-Laws, the cash
proceeds to be received upon the exercise of an option under this Plan shall be
added to the general funds of the Corporation and used for such corporate
purposes as the Board may determine, in its sole discretion.

 

Section 17.     Substitutions and Assumptions of Awards of Certain Constituent
Corporations. Anything in this Plan to the contrary notwithstanding, the Board
may, without further approval by the stockholders, substitute new Awards for
prior Awards of the same type as is permitted under this Plan of a Constituent
Corporation (as such term is defined in Section 26) or assume the prior Awards
of the same type as is permitted under this Plan of such Constituent
Corporation.

 

Section 18.     Nonqualified Deferred Compensation. (a) The Corporation
generally intends that each option and each Award of Restricted Stock granted
under this Plan not constitute "nonqualified deferred compensation" within the
meaning of and subject to Section 409A of the Code. To the extent that the
Administrators determine that any provision of this Plan or any option or
Contract relating to an option or Restricted Stock provides for any such
nonqualified deferred compensation (in whole or in part), the Administrators at
any time may amend this Plan and/or amend, restructure, terminate or replace any
Contract to either comply with Section 409A of the Code and/or minimize or
eliminate any such nonqualified deferred compensation, in each case
notwithstanding anything in this Plan or any applicable Contract to the
contrary.

 

(b)     Notwithstanding the foregoing, it is intended that SARs and RSUs may be
awarded that are considered to be "nonqualified deferred compensation" subject
to Section 409A of the Code, and it is intended that such Awards shall be
provided and paid in a manner, and at such time and in such form, as complies
with the applicable requirements of Section 409A of the Code to avoid the
unfavorable tax consequences provided therein for non-compliance. The
Administrators are authorized to amend any Contract and to amend or declare void
any election by an Awardee as may be determined by it to be necessary or
appropriate to evidence or further evidence required compliance with Section
409A of the Code.

 

(c)     Notwithstanding any other provision of this Plan, the Corporation shall
not be liable to any Awardee if any payment or benefit that is to be provided
pursuant to this Plan and that is considered "nonqualified deferred
compensation" subject to Section 409A of the Code fails to comply with, or be
exempt from, the requirements of Section 409A of the Code.

 

Section 19.     No Employment Contract or other Additional Rights. Neither this
Plan nor the granting of any Award or Contract hereunder shall, and none of them
shall be deemed or construed to, in any way: constitute an employment contract
between any director, officer or employee and any SGRP Company or SGRP
Consultant; be consideration or inducement for the employment of any director,
officer or employee by any SGRP Company or SGRP Consultant; create any specific
employment term or period for any director, officer or employee of any SGRP
Company or SGRP Consultant; give any director, officer or employee of any SGRP
Company or SGRP Consultant the right to be retained in the service of any SGRP
Company or SGRP Consultant; interfere with the right of any SGRP Company or SGRP
Consultant to terminate any director, officer, employee or SGRP Consultant at
any time, with or without cause, regardless of the effect that such termination
will or may have upon such individual as an Awardee under this Plan; otherwise
affect the "at will" or other employment or engagement status of any director,
officer, employee or SGRP Consultant of any SGRP Company or SGRP Consultant;
extend, modify or affect any written contract between of any SGRP Company and
any SGRP Consultant; affect or restrict the power or authority of any SGRP
Company or SGRP Consultant to undertake any corporate or other action otherwise
permitted under Applicable Law or any written contract between of any SGRP
Company and any SGRP Consultant; except as may be expressly provided in this
Plan or the applicable Contract, give any rights as a stockholder with respect
to shares covered by any Award until such time (if ever) as the Awardee is
listed as the owner of record, without restrictions on vesting or entitlement
(other than those relating to securities laws) imposed pursuant to this Plan, of
the shares on the books and records of the Corporation's transfer agent; or
except as may be expressly provided in this Plan or the applicable Contract,
provide any right to any adjustment for cash dividends or other rights for which
the record date is prior to the date (if ever) the Awardee is listed as the
owner of record, without restrictions on vesting or entitlement (other than
those relating to securities laws) imposed pursuant to this Plan, of the shares
on the books and records of the Corporation's transfer agent.

 

Section 20.     No Corporation Guaranty or Personal Liability. None of the SPAR
Companies and Administrators has in any way guaranteed or assumed any other
liability or responsibility for any loss or depreciation in or other adverse
event respecting any Award covered by this Plan or any Contract with respect
thereto or made any promise or assurance with respect thereto.

 

 

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Section 21.     Indemnification. (a) To the maximum extent permitted by law, the
Corporation shall indemnify each Administrator and every other member of the
Board, as well as any other director, officer or employee of any SGRP Company,
from and against any and all liabilities and expenses (including any amount paid
in settlement or in satisfaction of a judgment and reasonable attorneys fees and
expenses) reasonably incurred by the individual in connection with any claims
against the individual by reason of any action, inaction or determination on
behalf of the Corporation by the individual under this Plan. This indemnity
shall not apply, however, if: (i) it is determined in the action, lawsuit, or
proceeding that the individual is guilty of gross negligence or intentional
misconduct in the performance of any duties under this Plan; or (ii) the
individual fails to assist the Corporation in defending against any such claim.

 

(b)     Notwithstanding the above, the Corporation shall have the right to
select counsel and to control the prosecution or defense of the suit.

 

(c)     Furthermore, the Corporation shall not be obligated to indemnify any
individual for any amount incurred through any settlement or compromise of any
action unless the Corporation consents in writing to the settlement or
compromise.

 

Section 22.     Governing Law. This Plan, each Award granted and each Contract
executed hereunder, the Contracts and all rights, powers, privileges, remedies,
interests and other matters arising hereunder and thereunder shall be governed
by, administered under and construed in accordance with, to the extent
applicable: (i) ERISA, the Code or other federal tax or similar law; (ii) the
Securities Law and other federal law of the United States of America; (iii) the
DEGCL and the DEUCC; and (iv) to the extent that such federal law is not
dispositive and does not preempt local law, and the DEGCL and DEUCC are not
applicable, the Applicable Law of the State of New York, in each case other than
those conflict of law rules thereof that would defer to the substantive laws of
any other jurisdiction.

 

Section 23.     Waiver of Notice, No Waiver by Action, Rights Cumulative, Etc.
Each express waiver, release, relinquishment or similar surrender of rights
(however expressed) made by a party under or pursuant this Plan or any Award
granted or Contract executed hereunder has been absolutely, unconditionally,
irrevocably, knowingly and intentionally made by such person. Any waiver or
consent respecting this Plan or any Award granted or Contract executed hereunder
shall be effective only if in writing and signed by the required parties and
then only in the specific instance and for the specific purpose for which given.
No waiver or consent shall be deemed (regardless of frequency given) to be a
further or continuing waiver or consent. A person or its designee may accept or
reject any payment, reimbursement or performance without affecting any of its
rights, powers, privileges, remedies and other interests under this Plan or any
Award granted or Contract executed hereunder. No voluntary notice to or demand
on any party in any case shall entitle such party to any other or further notice
or demand. Except as expressly provided otherwise this Plan or any Award granted
or Contract executed hereunder, (a) no failure or delay by any party in
exercising any right, power, privilege, remedy, interest or entitlement
hereunder shall deemed or construed to be a waiver thereof, (b) no single or
partial exercise thereof shall preclude any other or further exercise or
enforcement thereof or the exercise or enforcement of any other right, power,
privilege, interest or entitlement, and (c) the rights, powers, privileges,
remedies, interests and entitlements under this Plan or any Award granted or
Contract executed hereunder shall be cumulative, are not alternatives, and are
not exclusive of any other right, power, privilege, remedy, interest or
entitlement provided by this Plan, by any Award granted or Contract executed
hereunder, or by Applicable Law.

 

Section 24.     Severability. In the event that any provision of this Plan or
any Award granted or Contract executed hereunder shall be determined to be
superseded, invalid, illegal or otherwise unenforceable (in whole or in part)
pursuant to Applicable Law by a court or other governmental authority, the
parties agree that: (a) any such authority shall have the power, and is hereby
requested by the parties, to reduce or limit the scope or duration of such
provision to the maximum permissible under Applicable Law or to delete such
provision or portions thereof to the extent it deems necessary to render the
balance of this Plan or any such Award or Contract enforceable; (b) such
reduction, limitation or deletion shall not impair or otherwise affect the
validity, legality or enforceability of the remaining provisions of this Plan or
any such Award or Contract, which shall be enforced as if the unenforceable
provision or portion thereof were so reduced, limited or deleted, in each case
unless such reduction, limitation or deletion of the unenforceable provision or
portion thereof would impair the practical realization of the principal rights
and benefits of either party hereunder; and (c) such determination and such
reduction, limitation and/or deletion shall not be binding on or applied by any
court or other governmental authority not otherwise bound to follow such
conclusions pursuant to Applicable Law.

 

Section 25.     Amendments; Future Stockholder Approval. The Corporation
reserves the right at any time, by action authorized by its Board or applicable
Committee, to supplement, modify, amend or restate, in whole or in part, any or
all of the provisions of this Plan (including all provisions hereof incorporated
by reference into any Award granted or Contract executed hereunder). This right
specifically includes (without limitation) the right to make such amendments
effective retroactively, if necessary, to bring this Plan into conformity with
applicable provisions of the Code, ERISA, Securities Law, Exchange Rules,
Accounting Standards or other Applicable Law that must be complied with so that
this Plan may provide the special tax consequences contemplated under the Plan
or in connection with an Award. This Plan (a) may not be supplemented, modified,
amended, restated, waived, discharged, released or terminated orally, (b) may
only be supplemented, modified, amended or restated in a writing signed or
approved in writing by the Corporation, and (c) may only be waived, discharged
(other than by performance), released or voluntarily terminated in a writing
signed by the Corporation, subject to any required stockholder vote as provided
below. Any Award granted or Contract executed hereunder (excluding all
provisions hereof incorporated by reference therein) (a) may not be
supplemented, modified, amended, restated, waived, discharged, released or
terminated orally, (b) may only be supplemented, modified, amended or restated
in a writing signed or approved in writing by the Corporation and by the
applicable Awardee, and (c) may only be waived, discharged (other than by
performance), released or voluntarily terminated in a writing signed or approved
in writing by the Corporation and by the applicable Awardee. Any amendment to
this Plan shall be subject to approval (i) by the Board (upon the recommendation
of the Compensation Committee to the extent provided by the Charter), and (ii)
if and to the extent required by Applicable Law or applicable Exchange Rules, or
if the Board otherwise directs that the matter be submitted to the Corporation's
stockholders, by (A) the holders of a majority of the votes present in person or
by proxy entitled to vote hereon at a duly held meeting of the Corporation's
stockholders at which a quorum is present or (B) the Corporation's stockholders
acting in accordance with the provisions of Section 228 of the DEGCL.

 

 

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Section 26.     Certain Definitions.

 

(a)     "1995 Plan" shall mean the Amended and Restated 1995 Stock Option Plan
of the Corporation, as the same may have been supplemented, modified, amended,
restated or replaced from time to time in the manner provided therein.

 

(b)     "2000 Plan" shall mean the 2000 Stock Option Plan of the Corporation, as
the same may have been supplemented, modified, amended, restated or replaced
from time to time in the manner provided therein.

 

(c)     "2008 Plan" shall mean the 2008 Stock Compensation Plan of the
Corporation, as the same may have been supplemented, modified, amended, restated
or replaced from time to time in the manner provided therein.

 

(d)     "Accounting Standards" shall mean the generally accepted accounting
standards then in effect, as established, supplemented, modified, amended,
restated or replaced from time to time by the Financial Accounting Standards
Board and other generally recognized U.S. accounting authorities.

 

(e)     "Applicable Law" shall mean, to the extent applicable: (i) any Exchange
Rules; (ii) ERISA, the Code or other federal tax or similar law; (iii) the
Securities Law and other federal law of the United States of America; (iv) the
DEGCL and the DEUCC; (v) to the extent that such federal law is not dispositive
and does not preempt local law, and the DEGCL and DEUCC are not applicable, the
Applicable Law of the State of New York; and (vi) to the extent the foregoing
are inapplicable, any other applicable federal, state, territorial, provincial,
county, municipal or other governmental or quasi-governmental law, statute,
ordinance, requirement or use or disposal classification or restriction; whether
domestic or foreign; in each case (A) including (without limitation) any and all
rules and regulations promulgated under any of the foregoing and then in effect,
and (B) as the same may be adopted, supplemented, modified, amended or restated
from time to time or any corresponding or succeeding law or provision.

 

(f)     "Awardee" shall mean any recipient of an Award under this Plan, and
shall consist solely of eligible individuals as set forth under Section 4,
above, and paragraph (a) of Instruction A.1 of Form S-8, and otherwise in
accordance with the terms of this Plan.

 

(g)     "Business Day" shall mean any day other than (i) any Saturday or Sunday
or (ii) any day the Securities and Exchange Commission is closed''''.

 

(h)     "Cause" shall mean, in connection with the termination of an Awardee,
(I) "cause", as such term (or any similar term, such as "with cause",
"Termination for Cause", or the like) is defined in any employment, consulting,
severance, or other applicable agreement for services or termination agreement
between such Awardee and any SGRP Company or SGRP Consultant, or (II) in the
absence of such an agreement, "cause" as such term is defined in the Contract
executed by the Corporation and such Awardee pursuant to Section 10, or (III) in
the absence of both of the foregoing, any of the following reasons: (other than
where the applicable events are based upon or also constitute good reason for
the Awardee's actions) (i) the Awardee's willful, grossly negligent or repeated
breach (whether through neglect, negligence or otherwise) in any material
respect of, or the Awardee's willful, grossly negligent or repeated
nonperformance, misperformance or dereliction (whether through neglect,
negligence or otherwise) in any material respect of any of his or her duties and
responsibilities to any SGRP Company or the Awardee's employer, whether under,
any agreement or document with any SGRP Company or the Awardee's employer, any
of the directives, ethics or other codes, controls, policies or procedures of
any SGRP Company or the Awardee's employer adopted or implemented from time to
time, or otherwise, in each case other than in connection with any excused
absence or diminished capacity; (ii) the gross or repeated disparagement by the
Awardee of the business or affairs of the Corporation, any SGRP Company,
Awardee's employer or any of their Representatives that in the reasonable
judgment of SGRP adversely affected or would be reasonably likely to adversely
affect the operations or reputation of any such person; (iii) any resume,
application, report or other information furnished to any SGRP Company or
Awardee's employer by or on behalf of the Awardee shall be in any material
respect untrue, incomplete or otherwise misleading when made or deemed made;
(iv) the Awardee is indicted for, charged with, admits or confesses to, pleads
guilty or no contest to, adversely settles respecting or is convicted of (A) any
willful dishonesty or fraud (whether or not related to any SGRP Company or
Awardee's employer) (B) any material breach of any Applicable Law, (C) any
assault or other violent crime, (D) any theft, embezzlement or willful
destruction by the Awardee of any asset or property of any SGRP Company or
Awardee's employer or any of their respective representatives, customers or
vendors, (E) any other misdemeanor involving moral turpitude, or (F) any other
felony; (vi) alcohol or drug abuse by the Awardee; or (v) any other event or
circumstance that constitutes cause for termination of an employee under
Applicable Law and is not described in another clause of this subsection;
provided, however, that termination for Cause shall not be considered present
unless the same has been determined by the SGRP Compensation Committee in their
sole and absolute discretion.

 

 

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(i)     "Charter" shall mean, as and to the extent applicable, the By-Laws of
the Corporation, as amended, the charter of the Compensation Committee or other
committee comprising the Compensation Committee, as amended, and all resolutions
of the Board, Compensation Committee or such other committee having continuing
effect.

 

(j)     "Code" shall mean the Internal Revenue Code of 1986, as amended, and any
and all rules and regulations promulgated thereunder and then in effect.

 

(k)     "Constituent Corporation" shall mean any corporation that engages with
any SGRP Company or SGRP Consultant in a transaction to which Section 424(a) of
the Code applies (or would apply if the option or SAR assumed or substituted
were an ISO), or any Parent or any Subsidiary of such corporation.

 

(l)     "DEGCL" shall mean the General Corporation Law of the State of Delaware,
as amended.

 

(m)     "DEUCC" shall mean Article 8 of the Uniform Commercial Code of the State
of Delaware, as amended.

 

(n)     "Disability" shall mean a permanent and total disability within the
meaning of Section 22(e)(3) of the Code.

 

(o)     "Exchange Rules" shall mean the charter or other organizational or
governance document or listing or other requirements of the applicable national
securities exchange or market on which SGRP's stock is listed or quoted
(currently Nasdaq), or any other applicable self-regulatory or governing body or
organization, and the rules and regulations promulgated thereunder, as the same
may be adopted, supplemented, modified, amended or restated from time to time or
any corresponding or succeeding rule, regulation or provision.

 

(p)     "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any and all rules and regulations promulgated thereunder and
then in effect.

 

(q)     "Fair Market Value" shall mean the fair market value of a share of
Common Stock on any day that shall be: (i) if the principal market for the
Common Stock is a national securities exchange, the closing sales price per
share of the Common Stock on such day as reported by such exchange or on a
consolidated tape reflecting transactions on such exchange; or (ii) if the
principal market for the Common Stock is not a national securities exchange, the
average of the closing bid and asked prices per share for the Common Stock on
such day as reported on the OTC Bulletin Board Service or by National Quotation
Bureau, Incorporated or a comparable service; provided, however, that if clauses
(i) and (ii) of this subsection are all inapplicable because the Corporation's
Common Stock is not publicly traded, or if no trades have been made or no quotes
are available for such day, the fair market value of a share of Common Stock
shall be determined by the Administrators by any method consistent with the
provisions of the Code, ERISA, Securities Law, Exchange Rules and Accounting
Standards applicable to the relevant Awards.

 

(r)     "Legal Representative" shall mean the executor, administrator or other
person who at the time is entitled by law to exercise the rights of a deceased
or incapacitated Awardee with respect to an Award granted under this Plan.

 

(s)     "Parent" shall mean a "parent corporation" within the meaning of Section
424(e) of the Code.

 

 

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(t)     "Performance Goal" shall mean one or more performance measures or goals
set by the Administrators in their sole and absolute discretion for each grant
of a performance-based compensation Award. The extent to which such performance
measures or goals are met will determine the amount or value of the
performance-based compensation Award that an Awardee is entitled to exercise,
receive, or retain. Performance Goals may be particular to an Awardee; may
relate to the performance of a Subsidiary, operating segment, division, branch,
strategic business unit, or line of business, which employs him or her; or may
be based on the performance of the Corporation generally. Performance Goals may
be based on Common Stock value or increases therein; earnings per share or
earnings per share growth; net earnings, earnings, or earnings growth (before or
after one or more of taxes, interest, depreciation, and/or amortization);
operating profit; operating cash flow; operating or other expenses; operating
efficiency; return on equity, assets, capital, or investment; sales or revenues
or growth thereof; working capital targets or cost control measures; regulatory
compliance; gross, operating, or other margins; credit ratings; productivity;
customer satisfaction; satisfactory internal or external audits; improvement of
financial ratings; achievement of balance sheet or income statement objectives;
quality measures; and any component or components of the foregoing (including,
without limitation, determination thereof with or without the effect of
discontinued operations and dispositions of business segments, non-recurring
items, material extraordinary items that are both unusual and infrequent,
special charges, and/or accounting changes), or implementation, management, or
completion of critical projects or processes or other measurement determined by
the Administrators. Performance Goals may include a threshold level of
performance below which no payment or vesting may occur, levels of performance
at which specified payments or specified vesting will occur, and a maximum level
of performance above which no additional payment or vesting will occur.
Performance Goals may be absolute in their terms or measured against or in
relationship to a market index; a group of other companies comparably,
similarly, or otherwise situated; or a combination thereof. Each of the
Performance Goals shall be determined, where applicable and except as provided
herein or in the applicable Contract, in accordance with generally accepted
accounting principles applied in the United States of America. The
Administrators, in their sole and absolute discretion and at any time, may
adjust any Performance Goal and any evaluation of performance under a
Performance Goal to take into account any of the following events that occurs
during a performance period: (i) asset write-downs, (ii) litigation or claim
judgments or settlements, (iii) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported results, (iv)
accruals for reorganization and restructuring programs, and (v) any
extraordinary non-recurring items as described in Accounting Principles Board
Opinion No. 30 (or in any replacement thereof) and/or in management's discussion
and analysis of financial condition and results of operations appearing in the
Corporation's annual report to stockholders for the applicable year. In
addition, the Administrators, in their sole and absolute discretion and at any
time, may adjust any Performance Goal and any evaluation of performance under a
Performance Goal on such basis and for such reason as it may determine.

 

(u)     "Period of Restriction" shall mean the period during which Restricted
Stock or RSUs are restricted, pursuant to Section 7 or 8 herein.

 

(v)     "Retires" and "Retirement" shall mean, subject to Section 4 of this
Plan), the voluntary termination by an Awardee of such person's status as a
director (whether or not an employee), officer (whether or not an employee),
employee or consultant to any SGRP Company or SGRP Consultant, in each case so
long as: (i) such person shall be at least 65 years of age or such younger age
as (A) may be specifically provided for retirement in the applicable Contract or
Awardee's written employment, consulting, retirement or termination contract, or
(B) the Administrators in their discretion may permit in any particular case or
class of cases; and (ii) such person shall not be employed full time by anyone
else except as (A) may be otherwise specifically permitted following retirement
in the applicable Contract or Awardee's written employment or consulting or
termination contract, or (B) the Administrators in their discretion may permit
in any particular case or class of cases.

 

(w)     "Securities Act" shall mean the Securities Act of 1933, as amended, and
any and all rules and regulations promulgated thereunder and then in effect.

 

(x)     "Securities Exchange Act" shall mean the Securities Act of 1934, as
amended, and any and all rules and regulations promulgated thereunder and then
in effect.

 

(y)     "Securities Law" shall mean the Securities Act, the Securities Exchange
Act, the Sarbanes-Oxley Act of 2002, as amended, any "blue sky" or other
applicable federal or state securities law, or any other comparable law of any
applicable jurisdiction, as amended and any and all rules and regulations
promulgated thereunder and then in effect,.

 

(z)     "SGRP Board" shall mean the Board of Directors of SGRP.

 

(aa)     "SGRP By-Laws" shall mean the By-Laws of SGRP, including (without
limitation) the charters of the SGRP Audit Committee, SGRP Compensation
Committee and the SGRP Governance Committee, as the same may have been and
hereafter may be adopted, supplemented, modified, amended or restated from time
to time in the manner provided therein.

 

(bb)     "SGRP Committee" shall mean the SGRP Board's Audit Committee, the SGRP
Board's Compensation Committee, the SGRP Board's Governance Committee or any
other committee of the SGRP Board established from time to time, as applicable.

 

(cc)     "SGRP Company" shall mean SGRP, any Parent of SGRP, or any direct or
indirect Subsidiary of SGRP. The subsidiaries of SGRP at the referenced date are
listed in Exhibit 21.1 to SGRP's most recent Annual Report on Form 10-K as filed
with the U.S. Securities and Exchange Commission (a copy of which can be viewed
at the Corporation's website (www.SMFinc.com) under the tab/sub-tab of Investor
Relations/SEC Filings).

 

(dd)     "SGRP Consultant" shall mean any corporation, limited liability
company, partnership, trust or other entity, or any individual consultant (who
shall be deemed to be his or her own employee for the purpose of this Plan),
that provides bona fide consulting services to any SGRP Company. SGRP
Consultants have included and may include affiliates of SGRP.

 

(ee)     "Subsidiary" shall mean a "subsidiary corporation" within the meaning
of Section 424(f) of the Code.

 

 

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Section 27.     Construction, Interpretation, Headings, Etc. In this Plan and
each Award granted and Contract executed hereunder: (a) the meaning of each
capitalized term or other word or phrase defined in singular form also shall
apply to the plural form of such term, word or phrase, and vice versa; each
singular pronoun shall be deemed to include the plural variation thereof, and
vice versa; and each gender specific pronoun shall be deemed to include the
neuter, masculine and feminine, in each case as the context may permit or
required; (b) any bold text, italics, underlining or other emphasis, any table
of contents, or any caption, section or other heading is for reference purposes
only and shall not affect the meaning or interpretation of this Plan; (c) the
word "event" shall include (without limitation) any event, occurrence,
circumstance, condition or state of facts; (d) this Plan includes each schedule
and exhibit hereto, all of which are hereby incorporated by reference into this
Plan, and the words "hereof", "herein" and "hereunder" and words of similar
import shall refer to this Plan (including all schedules and exhibits hereto)
and the applicable statement(s) of work as a whole and not to any particular
provision of any such document; (e) the words "include", "includes" and
"including" (whether or not qualified by the phrase "without limitation" or the
like) shall not in any way limit the generality of the provision preceding such
word, preclude any other applicable item encompassed by the provision preceding
such word, or be deemed or construed to do so; (f) unless the context clearly
requires otherwise, the word "or" shall have both the inclusive and alternative
meaning represented by the phrase "and/or"; (g) each reference to any ethics
code, financial or reporting control or governing document or policy of SGRP
adopted or implemented from time to time or the Awardee's employer shall include
those of each SGRP Company, any Securities Law or Exchange Rules, or other
Applicable Law, whether generically or specifically, shall mean the same as then
in effect; and (h) each provision of this Plan and each Award granted and
Contract executed hereunder shall be interpreted fairly as to as to all parties
and persons irrespective of the primary drafter of such provision.

 

Section 28.     Recovery of Compensation in Connection with Financial
Restatement or Corporation Policy. Notwithstanding any other provision of this
Plan or any applicable Award Agreement to the contrary, if the Corporation is
required to restate its financial statements due to material noncompliance with
any financial reporting requirement under the law or any ethics code, financial
or reporting control or governing document or policy of SGRP adopted or
implemented from time to time, and if such non-compliance is the result of
material misconduct or other fault of grantee, a grantee shall be required to
reimburse the Corporation for any amounts earned or payable with respect to an
Award to the extent required by and otherwise in accordance with Applicable Law
and any ethics code, financial or reporting control or governing document or
policy of SGRP adopted or implemented from time to time.

 

Section 29.     Entire Understanding. This Plan and each Award granted and
Contract executed hereunder contain all provisions applicable to the applicable
Award and Contract and the entire understanding of the parties with respect
thereto and supersede and completely replace all prior and other provisions,
promises, assurances and other agreements and understandings (whether written,
oral, express, implied or otherwise) among the parties with respect to the
matters contained in this Plan and such Award and Contract. Except as otherwise
provided in this Plan: this Plan supersedes and completely replaces all earlier
versions of this Plan (including the 2008 Plan, 2000 Plan and 1995 Plan) and
applies to all Awards made under the Plan after the original Effective Date; and
this Plan supersedes and completely replaces the 2008 Plan, 2000 Plan and 1995
Plan such that no further Awards shall be made thereafter under the 2008 Plan,
2000 Plan or 1995 Plan on or after the Effective Date, but this Plan does not
modify the administration of, or any of the Continuing Awards or existing
Contracts outstanding under, the 2008 Plan, 2000 Plan or 1995 Plan, except that
those Continuing Awards may be modified as provided in Section 12 hereof as if
they were Awards and Contracts hereunder to the extent the provisions respecting
adverse modifications in those plans are not violated by such modification.

 

 

2018 Stock Compensation Plan

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