- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
------------------
SPAR GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0684451
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
580 White Plains Road
White Plains, New York 10591
(914) 332-4100
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
2001 CONSULTANT STOCK PURCHASE PLAN
(Full title of the plans)
Charles Cimitile
Chief Financial Officer and Secretary
SPAR GROUP, INC.
580 White Plains Road
White Plains, New York 10591
(914) 332-4100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Lawrence David Swift, Esq.
Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement.
CALCULATION OF REGISTRATION FEE
==================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount of
Title of securities to be Offering Price Aggregate Registration
to be registered Registered Per Share Offering Price Fee
- --------------------------------------------------------------------------------------------------
Common Stock, $.01 par value 500,000 $1.75(1) 875,000 $218.75
- --------------------------------------------------------------------------------------------------
(1) For the purpose of calculating the registration fee pursuant to Rule 457(c)
of the Securities Act of 1933, as amended, on the basis of the average of
the high and low prices per share of Common Stock as reported on the NASDAQ
Small Cap Stock Market on November 5, 2001, a day within five business
days of this registration statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by SPAR Group, Inc. (the
"Company") with the Securities and Exchange Commission (the "Commission"), as
noted below, are incorporated by reference into this Registration Statement:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000, as filed with the Commission on April
11, 2001;
(2) The Company's Amendment No. 1 to Annual Report on Form 10-K/A for
the fiscal year ended December 31, 2000, as filed with the
Commission on April 20, 2001;
(3) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2001 as filed with the Commission on May
15, 2001;
(4) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 2001 as filed with the Commission on
August 14, 2001;
(5) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on
February 22, 1996; and
(6) All documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended, prior to the filing
of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing such
documents. Any statement contained in any document incorporated
or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed to constitute a part
of this Registration Statement, except as so modified or
superseded.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of Common Stock offered hereby has been
passed upon for the Company by Jenkens & Gilchrist Parker Chapin LLP, New York,
New York. Certain principals of Jenkens & Gilchrist Parker Chapin LLP
beneficially own shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
The Company is a Delaware corporation. Article VI of the Company's
Bylaws provides that the Company may indemnify its officers and Directors to the
full extent permitted by law. Section 145 of the General Corporation Law of the
State of Delaware (the "GCL") provides that a Delaware corporation has the power
to indemnify anyone who is or was serving as a director or officer of the
corporation in certain circumstances.
II-2
Subsection (a) of Section 145 of the GCL empowers a corporation to
indemnify (i) any director or officer; or (ii) any former director or officer,
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation), against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding provided that such director, officer or other
person acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, provided that such director or officer had no
reasonable cause to believe his or her conduct was unlawful.
Subsection (b) of Section 145 of the GCL empowers a corporation to
indemnify (i) any director or officer; or (ii) former director or officer who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses actually and reasonably incurred in
connection with the defense or settlement of such action or suit provided that
such director, officer or other person acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect of any claim,
issue or matter as to which such director, officer or other person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that despite the adjudication of liability but
in view of all the circumstances of the case, such director, officer or other
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery shall deem proper.
Section 145 of the GCL further provides that (i) to the extent a
present or former director or officer of a corporation has been successful in
the defense of any action, suit or proceeding referred to in subsections (a) and
(b) or in the defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection therewith; (ii) indemnification provided
for by Section 145 shall not be deemed exclusive of any other rights to which
the indemnified party may be entitled; and (iii) the corporation shall have
power to purchase and maintain insurance on behalf of (a) a director or officer
of the corporation or (b) a former director or officer against any liability
asserted against him or her or incurred by him or her in any such capacity or
arising out of his or her status as such whether or not the corporation would
have the power to indemnify him or her against such liability under Section 145.
Article Ninth of the Company's Certificate of Incorporation currently
provides that each Director shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a Director,
except for liability (i) for any breach of the Director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the GCL, or (iv) for any transaction from which the Director
derived an improper benefit.
The Company carries directors' and officers' liability insurance
covering its directors and officers.
II-3
Item 7. Exemptions from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description of Exhibit
----------- --------------------------------------------------------------
4.1 2001 Consultant Stock Purchase Plan, as amended.
5.1 Opinion of Jenkens & Gilchrist Parker Chapin LLP as to the
legality of the Common Stock registered hereby.
23.1 Consent of Jenkens & Gilchrist Parker Chapin LLP (contained in
the opinion filed as Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included on Page II-6 hereto).
Item 9. Undertakings.
(A) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
Provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(B) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
II-4
registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tarrytown, State of New York, on this 6th day of
November, 2001.
SPAR GROUP, INC.
By:/s/ Robert G. Brown
---------------------------------------
Robert G. Brown
Chairman of the Board, Chief Executive
Officer, President and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert G. Brown and William H. Bartels as
his true and lawful attorney-in-fact and agent, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board, Chief Executive November 6, 2001
Officer, President and Director
/s/ Robert G. Brown (Principal Executive Officer)
- ---------------------------------
Robert G. Brown
Chief Financial Officer and Secretary November 6, 2001
(Principal Financial and Accounting
/s/ Charles Cimitile Officer)
- ---------------------------------
Charles Cimitile
November 6, 2001
/s/ William H. Bartels Vice Chairman and Director
- ---------------------------------
William H. Bartels
/s/ Robert O. Aders Director November 6, 2001
- ---------------------------------
Robert O. Aders
/s/ Jack W. Partridge Director November 6, 2001
- ---------------------------------
Jack W. Partridge
II-6
/s/ Jerry Gilbert Director November 6, 2001
- ---------------------------------
Jerry Gilbert
/s/ George W. Off Director November 6, 2001
- ---------------------------------
George W. Off
II-7
EXHIBIT INDEX
Exhibit No. Description of Exhibit
----------- --------------------------------------------------------------
4.1 2001 Consultant Stock Purchase Plan, as amended.
5.1 Opinion of Jenkens & Gilchrist Parker Chapin LLP as to the
legality of the Common Stock registered hereby.
23.1 Consent of Jenkens & Gilchrist Parker Chapin LLP (contained in
the opinion filed as Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included on Page II-6 hereto).
II-8
Exhibit 4.1
SPAR GROUP, INC.
2001 CONSULTANT STOCK PURCHASE PLAN
AS AMENDED THROUGH NOVEMBER 1, 2001
ARTICLE I
PURPOSE AND EFFECTIVE DATE.
---------------------------
Section 1.1. Purpose. The purpose of the Plan is to provide employment
incentives for, and to encourage stock ownership by employees of the affiliates
of SPAR Group, Inc., which affiliates provide consulting and other services to
the Company, in order to increase such employees proprietary interest in the
success of the Company (as "Subsidiary", "Plan" and "Company" are hereinafter
defined). The Plan is not intended to qualify as an employee stock purchase plan
under Section 423 of the Code.
Section 1.2. Effective Date. The effective date of the Plan is as of
June 1, 2001.
ARTICLE II
DEFINITIONS.
------------
Section 2.1. Certain Defined Terms. Whenever used in the text of this
Plan, the following terms shall have the meanings set forth below:
"affiliate" of a referenced person shall mean (a) any other person
controlling, controlled by or under common control with such referenced person,
(b) any other person beneficially owning or controlling ten percent (10%) or
more of the outstanding voting securities or rights or of the interest in the
capital, distributions or profits of the referenced person, (c) any other person
operating the business or substantially all of the property of the referenced
person, or vice versa, or (d) any director, officer, manager or other executive
of or partner, member or joint venturer in the referenced person or such other
person. If the referenced person is an individual, then the term. "affiliate"
also shall include members of the immediate family (including parents, spouse
and children) of such individual and any "affiliate" of one or more of those
family members. The terms "control", "controlling", "controlled" and the like
shall mean the direct or indirect possession of the power to direct or cause the
direction of the management or policies of a person or the disposition of its
assets or properties, whether through ownership, by contract, arrangement or
understanding, or otherwise.
"Affiliate Employee" shall mean any person who is designated by the
Company as an employee of any SPAR Affiliate for purposes of the Tax Code and
who is not otherwise permitted to participate in the Company's ESP Plan. This
term does not include members of the Board unless they are employed by a SPAR
Affiliate, and does not include individuals designated by the Company as
independent contractors, notwithstanding any subsequent determination to the
contrary by the Internal Revenue Service.
"Board" shall mean the Board of Directors of SGRP.
"Committee" shall mean the Board or a committee (which may include
non-members of the Board) or officer(s) of SGRP designated by the Board to
administer the Plan. The Board may appoint and remove members of the Committee
at any time. "Committee" shall include (without limitation) the Board acting as
the Committee irrespective of whether such a Committee then exists.
"Common Stock" shall mean the common stock of SPAR Group, Inc.
"Company" shall mean SGRP.
"Disability" shall mean a permanent and total disability within the
meaning of Section 22(e)(3) of the Tax Code.
"ESP Plan" shall mean SGRP's 2001 Employee Stock Purchase Plan,
effective as of June 1, 2001, as the same may be supplemented, modified,
amended, restated or replaced from time to time in the manner provided therein.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
-C-1-
"Fair Market Value" of Common Stock shall be determined in accordance
with the following rules.
(i) If the Common Stock is admitted to trading or listed on a national
securities exchange, Fair Market Value shall be the last reported
sale price on that day, or if no such reported sale takes place on
that day, the average of the last reported bid and ask prices on
that day, in either case on the principal national securities
exchange on which the Common Stock is admitted to trading or is
listed;
(ii) If not listed or admitted to trading on any national securities
exchange, Fair Market Value shall be the last sale price on that day
of the Common Stock reported on the Nasdaq Stock Market or any
comparable system or, if no such reported sale takes place on that
day, the average of the closing bid and asked prices on that day;
(iii) If the Common Stock is not included in the Nasdaq Stock Market or
any comparable system, Fair Market Value shall be the closing bid
and asked prices on that day as furnished by any member of the
National Association of Securities Dealers, Inc. selected from time
to time by the Company for that purpose;
(iv) If the Common Stock is not traded on the day in question, its Fair
Market Value on the most recent preceding day on which it was traded
shall be used.
"Participant" shall mean an Affiliate Employee who has been granted a
Purchase Right under the Plan.
"Plan" shall mean this 2001 Consultant Stock Purchase Plan, as the same
may be supplemented, modified, amended, restated or replaced from time to time
in the manner provided herein.
"Purchase Right" shall mean a right to purchase Common Stock granted
pursuant to the Plan.
"Purchase Right Period" shall mean the following periods: (a) January 1
- - March 31; (b) April 1 - June 30; (c) July 1 - September 30; and (d) October 1
- - December 31; or such other periods as the Committee from time to time may
approve. The first Purchase Right Period shall commence on July 1, 2001, or such
later date as the Committee may approve, and shall end on September 30, 2001.
"Securities Act" shall mean the Securities Act of 1933, as amended,,
and the rules and regulations promulgated thereunder, in each case as the same
may have been and hereafter may be supplemented, modified, amended, restated or
replaced from time to time.
"SGRP" shall mean SPAR Group, Inc., a Delaware corporation.
"SPAR Affiliate" and "SPAR Affiliates" shall respectively mean any one
or more of SPAR Marketing Services, Inc., SPAR Management Services, Inc., SPAR
InfoTech, Inc., and any other affiliate of any of them or of the Company,
including (without limitation) any corporation or other entity directly or
indirectly under the control of one or more of Robert G. Brown, William H.
Bartels, their respective families, and trusts under which either of them is a
trustee or beneficiary.
"Stockholders" shall mean the holders of Common Stock.
"Subsidiary" shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder, in each case as the same
may have been and hereafter may be supplemented, modified, amended, restated or
replaced from time to time.
-C-2-
ARTICLE III
ELIGIBILITY AND PARTICIPATION
-----------------------------
Section 3.1. Eligibility. (a) Except as otherwise provided in Section
31(b) or 31(c) hereof, all Affiliate Employees are eligible to participate in
the Plan.
(b) The Committee from time to time may establish, and once established
from time to time may modify or repeal, additional limits on or criteria for
eligibility not prohibited by applicable law, including (without limitation)
duration of employment.
Section 3.2. Payroll Withholding. (a) Affiliate Employees may enroll as
Participants by executing prior to the commencement of each Purchase Right
Period a form provided by the Committee on which they designate: (i) the dollar
amount (not a percentage of compensation) to be deducted from their paychecks
and contributed to the Plan Account for the purchase of Common Stock, which
shall not be less than ten dollars ($10) per week in the case of a Participant
paid on a weekly basis, twenty dollars ($20) per pay period in the case of a
Participant paid on a bi-weekly or semi-monthly basis, or forty dollars ($40)
per pay period in the case of a Participant paid on a monthly basis; and/or (ii)
the amount of funds, if any, which they will deposit at the beginning of the
Purchase Right Period for the purchase of Common Stock, which amount may be
subject to a limit established by the Board or Committee from time to time. Each
Participant hereby authorizes his SPAR Affiliate employer to make such
withholdings and remit them to SGRP to hold and apply in accordance with this
Plan.
(b) Once chosen, the rate of contributions for a Purchase Right Period
cannot be decreased or increased without terminating the Purchase Right.
(c) However, pursuant to rules and procedures prescribed by the
Committee, a Participant may make additional contributions to make up any
contributions that he or she failed to make while on a leave of absence if the
Participant returns to active employment and contributes those amounts before
the end of the Purchase Right Period.
Section 3.3. Limitations. (a) Notwithstanding anything herein to the
contrary, a Participant may not accrue a right to purchase shares of Common
Stock under this Plan at a rate that exceeds either six thousand two hundred
fifty dollars ($6,250) per quarterly Purchase Right Period or twenty-five
thousand dollars ($25,000) per calendar year.
(b) The twenty-five thousand dollar ($25,000) limitation shall apply to
the Participant's right to purchase Common Stock under this Plan and under all
other employee stock purchase plans that are maintained by the Company and its
Subsidiaries, including those described in Tax Code Section 423.
(c) These dollar limitations apply to the Fair Market Value of Common
Stock on the first day of the Purchase Right Period.
Section 3.4. Granting of Purchase Rights. (a) The price at which each
share covered by a Purchase Right will be purchased will in all instances be one
hundred percent (100%) of the Fair Market Value of a share of Common Stock on
the last day of that Purchase Right Period; provided, however, that the Board in
its discretion from time to time may determine that it is in the best interests
of the Company to charge, and direct that the purchase price will be (for such
period or until the Board in its discretion determines otherwise), such lesser
percentage of Fair Market Value with respect to newly issued shares of Common
Stock as may be specified by the Board.
(b) Notwithstanding the provisions of Paragraph (a) above, and subject
to the limitations of Section 33 above, in no event will a Participant be
entitled to purchase more than ten thousand (10,000) shares in a single Purchase
Right Period.
Section 3.5. Establishment of the Plan Account. (a) All amounts
contributed by the Participant to the Plan (whether by means of payroll
withholding or a lump sum advance contribution, or both) will be deposited into
a separate account maintained for all of the Participants (the "Plan Account").
The Company will maintain a separate bookkeeping account on its books and
records for each Participant for the purpose of crediting all additions to and
subtractions from the Plan Account made by or on behalf of the Participant, and
such books and records shall be conclusive as to the existence and amounts
thereof absent manifest error.
(b) No interest will be earned on any Participant contributions to the
Plan.
-C-3-
(c) A Participant may not withdraw any amounts from his or her deposits
(including withholdings and lump sum contributions)into the Plan Account without
terminating his or her Purchase Right for the applicable Purchase Right Period
pursuant to Section 41 below.
ARTICLE IV
PURCHASE RIGHTS.
----------------
Section 4.1. Termination of Purchase Rights. (a) A Participant may
withdraw from the Plan at any time with respect to the then current or the next
Purchase Right Period (as specified by the Participant) by submitting written
notice to the Company by no later than the fifteenth (15th) day of the last
month of the then current Purchase Right Period. The Participant's Purchase
Right shall terminate upon his or her withdrawal from the Plan.
(b) Except as otherwise provided in Section 45 hereof, a Purchase Right
shall terminate automatically if the Participant holding the Purchase Right: (i)
ceases to be employed by the Company, any Subsidiary or any SPAR Affiliate for
any reason for more than ninety (90) days; or (ii) is on a leave of absence in
excess of ninety (90) days, unless the Participant's rights to reemployment are
guaranteed by statute or contract with the Company, any Subsidiary or any SPAR
Affiliate; provided that no termination will occur if an employee is immediately
hired by any other company consisting of either the Company, its subsidiaries or
any SPAR Affiliate.
(c) Upon the termination of a Purchase Right, all amounts held for the
Participant in the Plan Account shall be refunded to the Participant no later
than ninety (90) days after the date of termination.
(d) Notwithstanding the above provisions of this Section 41, in the
event that a Participant ceases making contributions during a Purchase Right
Period but does not incur a termination of employment, the Participant may elect
to leave his or her prior contributions in the Plan to be used to purchase
Common Stock at the end of the Purchase Right Period. However, in no event can a
Participant: (i) reduce (but not eliminate) his or her contributions during a
Purchase Right Period; or (ii) suspend his or her contributions and recommence
making them in the same Purchase Right Period, unless due to a leave of absence.
Section 4.2. Exercise of Purchase Rights. (a) Unless previously
terminated, Purchase Rights will be exercised automatically on the last day of
the Purchase Right Period.
(b) Except as provided in Section 32(b) above, payment for shares to be
purchased at the termination of the Purchase Right Period may only be made from
funds: (i) deposited at the beginning of a Purchase Right Period; and/or (ii)
accumulated through payroll deductions made during the Purchase Right Period.
(c) The Company, at its option may either (i) issue stock certificates
to each individual purchaser for the whole number of shares of Common Stock or
(ii) issue one or more global stock certificates for the aggregate number of
shares of Common Stock, and maintain records of the amount of Common Stock owned
by each individual purchaser, as soon as practicable following the date of the
exercise of the Purchase Right.
(d) Fractional shares will not be issued under the Plan. Any
accumulated payroll deduction or funds deposited at the beginning of a Purchase
Right Period that otherwise would have been used to purchase fractional shares
(but for the foregoing) will be carried forward and applied toward the purchase
of Common Stock under the Plan at the end of the next Purchase Right Period.
Section 4.3. Extraordinary Event. The following provisions of this
Section 43 shall apply, notwithstanding any other Section of this Plan to the
contrary.
(a) An "Extraordinary Event" shall be deemed to occur as a result of
(i) the dissolution, liquidation or sale of all or substantially all of the
business, properties and assets of the Company, (ii) any reorganization, merger
or consolidation in which the Company does not survive, (iii) any
reorganization, merger, consolidation or exchange of securities in which the
Company does survive and any of the Stockholders have the opportunity to receive
cash, securities of another corporation and/or other property in exchange for
their capital stock of the Company, or (iv) any acquisition by any person or
group (as defined in Section 13(d) of the Exchange Act) of beneficial ownership
of more than fifty percent (50%) of the 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).
-C-4-
(b) All Purchase Rights shall be deemed automatically exercised
immediately preceding the Extraordinary Event. In such an event, the Purchase
Right Period shall be deemed to have ended on such preceeding day, and
accordingly the purchase price for the Common Stock purchased in such exercise
shall be based on the Fair Market Value of the Common Stock on that date for
purposes of Section 34(a) above.
Section 4.4. Non-Transferability of Purchase Rights. A Purchase Right
may not be assigned or otherwise transferred by a Participant other than by will
and the laws of descent and distribution. During the lifetime of the
Participant, the Purchase Right may be exercised only by the Participant.
Section 4.5. Death or Disability. Except as may otherwise be expressly
provided in the Participant's written employment or termination contract, upon
the death or Disability of a Participant while employed by the Company or any
Subsidiary or any SPAR Affiliate, the Purchase Rights of such Participant shall
continue for the balance of the then current Purchase Right Period, and the
Participant or his estate shall purchase and receive the shares of Common Stock
provided under this Plan. The Participant's SPAR Affiliate employer shall
continue to make the previously elected payroll deductions for the balance of
the then current Purchase Right Period with respect to such Participant to the
extent any amounts are due to such Participant in the relevant payroll periods.
A disabled Participant or the estate of a deceased Participant may, but shall
not be required to, make up any deduction shortfalls in the manner contemplated
by Section 32(c) hereof.
ARTICLE V
COMMON STOCK.
-------------
Section 5.1. Shares Subject to Plan. (a) The maximum number of share of
Common Stock which may be issued under the Plan is five hundred thousand
(500,000) shares, subject to adjustment pursuant Section 52 below, provided that
in no event shall the aggregate number of shares of Common Stock that may be
issued under this Plan and the ESP Plan exceed 500,000 (subject to such
adjustments).
(b) If any outstanding Purchase Right is terminated for any reason
prior to its exercise, the shares allocable to the Purchase Right may again
become subject to purchase under the Plan.
(c) The Common Stock issuable under the Plan may be previously unissued
or may have been reacquired by the Company in the open market (or otherwise).
Section 5.2. Adjustment Upon Changes in Capitalization. A proportionate
adjustment shall be made by the Committee in the number, kind or other relevant
affected attribute of the shares subject to outstanding Purchase Rights if after
the end of a Purchase Right Period and before the issuance of the affected
shares the outstanding shares of Common Stock are increased, decreased or
exchanged for different securities, through reorganization, recapitalization,
reclassification or other similar transaction (not constituting an Extraordinary
Event under Section 43 above).
Section 5.3. Compliance with Securities Laws. (a) It is a condition to
the exercise of any Purchase Right that either (i) a Registration Statement
under the Securities Act with respect to the shares of Common Stock to be issued
upon such exercise shall be effective and current at the time of exercise, or
(ii) there is an exemption from registration under the Securities Act for the
issuance of the shares of Common Stock upon such exercise. Nothing herein shall
be construed as requiring the Company to register shares subject to any Purchase
Right under the Securities Act or to keep any Registration Statement effective
or current.
(b) The Committee may require, in its sole discretion, as a condition
to the exercise of a Purchase Right that the Participant execute and deliver to
the Company such Participant's representations and warranties, in form,
substance and scope satisfactory to the Committee, as the Committee 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 upon exercise of
the Purchase Right are being acquired by the Participant for the Participant'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 Participant will be made only pursuant to (A) a
Registration Statement under the Securities Act which 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 Participant, prior to any offer of sale or sale of
such shares of Common Stock, shall provide the Company with a favorable written
opinion of counsel satisfactory to the Company, in form, substance and scope
satisfactory to the Company, as to the applicability of such Securities Act
exemption to the proposed sale or distribution.
-C-5-
(c) In addition, if at any time the Committee shall determine that the
listing or qualification of the shares of Common Stock subject to such Purchase
Right on any securities exchange, Nasdaq 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
a Purchase Right or the issuance of shares of Common Stock thereunder, such
Purchase Right may not be granted or exercised 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 Company free of any conditions not acceptable to the
Committee.
ARTICLE VI
PLAN ADMINISTRATION.
--------------------
Section 6.1. Administration. (a) The Plan shall be administered by the
Committee. The Committee shall have the authority to: (i) interpret the Plan;
(ii) prescribe rules and procedures relating to the Plan; and (iii) take all
other actions necessary or appropriate for the administration of the Plan.
(b) A majority of the members of the Committee shall constitute a
quorum, and any action shall constitute the action of the Committee if it is
authorized by: (i) a majority of the members present at any meeting; or (ii) all
of the members in writing without a meeting.
(c) Any controversy or claim arising out of or relating to this Plan,
any Purchase Right granted under this Plan or the books and records of the
Company with respect thereto shall be determined unilaterally by the Committee
in their sole and absolute discretion. The determinations of the Committee on
such matters shall be final, conclusive and binding on all parties.
(d) No present or former member of the Committee or Board of Directors
or employee of the Company, any Subsidiary or any SPAR Affiliate shall be liable
for any action, inaction or determination made in good faith with respect to
this Plan, any Purchase Right granted hereunder or any bookkeeping entry made in
connection therewith.
(e) Notwithstanding anything herein to the contrary, the Board may at
any time and from time to time make any determination or take any other action
delegated to the Committee hereunder.
Section 6.2. Indemnification. (a) To the maximum extent permitted by
law, the Company shall indemnify each member of the Committee and every other
member of the Board, as well as any other employee of the Company or any
Subsidiary or Affiliate Employee, 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 by the individual under the 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 the Plan; or (ii)
the individual fails to assist the Company in defending against any such claim.
(b) Notwithstanding the above, the Company shall have the right to
select counsel and to control the prosecution or defense of the suit.
(c) Furthermore, the Company shall not be obligated to indemnify any
individual for any amount incurred through any settlement or compromise of any
action unless the Company consents in writing to the settlement or compromise.
ARTICLE VII
AMENDMENT AND TERMINATION.
--------------------------
Section 7.1. Amendment and Termination. The Board may amend or
terminate the Plan at any time by means of written action, except with respect
to outstanding Purchase Rights during a Purchase Period. However,
notwithstanding the preceding sentence, the Committee may elect to accelerate
the last day of the Purchase Right Period (by means of an amendment to the Plan
or otherwise) at any time.
Section 7.2. Stockholder Approval. (a) No shares of Common Stock shall
be issued under the Plan unless the Plan is approved by the Stockholders within
twelve (12) months before or after the date of the adoption of the Plan by the
Board.
-C-6-
(b) If the Plan is not approved by the Stockholders within that time
period, the Plan and all Purchase Rights issued under the Plan will terminate
and all contributions will be refunded to the Participants. The approval by the
Stockholders must relate to: (i) the class of individuals who may be
Participants; and (ii) the aggregate number of shares that can be granted under
the Plan. If either of those items are changed, the approval of the Stockholders
must again be obtained.
ARTICLE VIII
MISCELLANEOUS MATTERS.
----------------------
Section 8.1. Uniform Rights and Privileges. The rights and privileges
of all Participants under the Plan shall be the same.
Section 8.2. Application of Proceeds. The proceeds received by the
Company from the sale of Common Stock pursuant to Purchase Rights may be used
for any corporate purpose.
Section 8.3. No Additional Rights. (a) Neither the adoption of this
Plan nor the granting of any Purchase Right shall: (i) affect or restrict in any
way the power of the Company, any Subsidiary or any SPAR Affiliate to undertake
any corporate action otherwise permitted under applicable law; or (ii) confer
upon any Participant the right to continue to be employed by the Company or any
Subsidiary or SPAR Affiliate, nor shall it interfere in any way with the right
of the Company, any Subsidiary or any SPAR Affiliate to terminate the employment
of any Participant at any time, with or without cause.
(b) No Participant shall have any rights as a Stockholder with respect
to shares covered by a Purchase Right until such time as the Participant is
listed as the owner of record of the purchased shares on the books and records
of the Company's transfer agent.
(c) No adjustments will be made for cash dividends or other rights for
which the record date is prior to the date the Participant is listed as the
owner of record of the purchased shares on the books and records of the
Company's transfer agent .
Section 8.4. Governing Law. This Plan and all related matters shall be
governed by, and construed in accordance with, the laws of the State of Delaware
(other than those that would defer to the substantive laws of another
jurisdiction).
Section 8.5. Construction. None of the terms or provisions of this Plan
or any related document shall be construed or interpreted with any presumption
against the Company by reason of the Company causing the drafting thereof.
Whenever from the context it appears appropriate, any term stated in either the
singular or plural shall include the plural and singular, respectively, and any
term stated in the masculine, feminine or neuter gender shall include the other
forms as well. Captions and headings have been provided for convenience and
shall not affect the meaning or interpretation of this Plan.
Section 8.6. Partial Invalidity. The invalidity, illegality or
unenforceability of any provision in this Plan shall not affect the validity,
legality or enforceability of any other provision, all of which shall be valid,
legal and enforceable to the fullest extent permitted by applicable law.
-C-7-
Exhibit 5.1
Jenkens & Gilchrist Parker Chapin LLP
AUSTIN, TEXAS
THE CHRYSLER BUILDING (512) 499-3800
405 LEXINGTON AVENUE CHICAGO, ILLINOIS
NEW YORK, NEW YORK 10174 (312) 425-3900
DALLAS, TEXAS
(212) 704-6000 (214) 855-4500
FACSIMILE (212) 704-6288 HOUSTON, TEXAS
(713) 951-3300
www.jenkens.com LOS ANGELES, CALIFORNIA
(310) 820-8800
SAN ANTONIO, TEXAS
(210) 246-5000
WASHINGTON, D.C.
(202) 326-1500
November 6, 2001
SPAR Group, Inc.
580 White Plains Road
Tarrytown, NY 10591
Ladies and Gentlemen:
We have acted as counsel for SPAR Group, Inc., a Delaware corporation (the
"Company"), in connection with its Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act") relating to
the registration of 500,000 shares of Common Stock, par value $.01 per share
(the "Shares"), issuable pursuant to the Company's 2001 Consultants Stock
Purchase Plan (the "Plan").
In connection with the foregoing, we have examined the Registration Statement
and originals or copies, satisfactory to us, of the following: (i) the
certificate of incorporation and all amendments thereto of the Company as
certified by the Secretary of State of the State of Delaware on April 3, 2000;
(ii) the by-laws and all amendments thereto of the Company; (iii) a unanimous
written consent of the Board of Directors of the Company dated June 29, 2001, by
which resolutions were adopted relating to the approval of the Plan (items (i)
through (iii) will be referred to individually as a "Organizational Document"
and collectively as the "Organizational Documents"); and (iv) the Plan. In
addition, we have made such other investigations of applicable statutes and
regulations of the State of New York and the United States of America and the
applicable provisions of the DGCL (as hereinafter defined) currently in effect
as we deemed necessary under customary practice to enable us to render this
Opinion Letter.
In conducting our examination, we have assumed (with your consent) the
genuineness of all signatures, the legal capacity of all individual signatories,
the accuracy of all documents submitted to us as originals and the conformity to
originals of all documents submitted to us as copies (whether or not certified).
As to any facts material to such opinion, we have relied on certificates of
public officials and certificates, oaths and declarations of officers or other
representatives of the Company. Each of the governmental certificates, publicly
filed or recorded items and searches of public record (if any) reviewed by us
were obtained by an independent firm not under our control or supervision, and
we have assumed (with your consent) that they are sufficient and would disclose
no additional relevant facts if updated through the date of this Opinion Letter.
In addition, we have assumed (with your consent) and without independent
investigation have relied upon the factual accuracy of the information contained
in the items we examined and upon the assumptions we have made in this Opinion
Letter. Except as expressly set forth in this Opinion Letter, we have not
undertaken any independent investigation, examination or inquiry to confirm or
determine the existence or absence of any facts, searched any of the books,
records or files of the Company or any other person, searched any internal file,
court file, public record or other information collection, or examined or
reviewed any communication, instrument, agreement, document, file, financial
statement, tax return, minute, record, lien, or other item. The Organizational
Documents, the Plan and the Registration Statement are the only items of their
respective types reviewed by us in connection with or covered by us in this
Opinion Letter.
Jenkens & Gilchrist Parker Chapin LLP
November 6, 2001
Page 2
Our opinion is as of and limited to the date hereof and we do not in any event
undertake to advise you of any facts or circumstances occurring or coming to our
attention or any changes in applicable law subsequent to the date hereof.
Whenever any opinion of ours refers to or includes the payment or other
performance of any obligation or the issuance, execution or delivery of any
instrument, certificate or other item after the date hereof, it is based on our
assumption that: (i) all relevant facts and circumstances will be the same at
such future time as we believe them to be on the date hereof (except as noted in
the next clause (ii)); (ii) each party will have taken all future or further
actions necessary or appropriate thereto; (iii) no relevant liens, filings,
approvals, permits or similar items will have expired or otherwise adversely
changed; and (iv) no changes will have occurred in any of the Registration
Statement, the Plan, the Organizational Documents, or other relevant
certificates and documents, applicable law, trade usage or course of dealings.
Finally, we are counsel admitted to practice only in the State of New York, and
we express no opinions as to the applicable laws of any jurisdiction other than
those of the State of New York, the Delaware General Corporation Law including
the Constitution of the State of Delaware and reported judicial interpretations
thereof (together with the Delaware General Corporation Law, the "DGCL") and the
United States of America.
Based upon and subject to the foregoing, we are of the opinion that the Shares
to be issued pursuant to the Plan will be, when issued and fully paid for
pursuant to the provisions of the Plan, legally issued, fully paid and
non-assessable.
We hereby consent to the filing of a copy of this opinion as an exhibit to the
Registration Statement. In giving this consent, however, we are not thereby
admitting that we are within the category of persons whose consent is required
under Section 7 of the Act, the rules and regulations of the Securities Exchange
Commission promulgated thereunder, or Item 509 of Regulation S-K promulgated
under the Act.
Very truly yours,
/s/ Jenkens & Gilchrist Parker Chapin LLP
Jenkens & Gilchrist Parker Chapin LLP
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the SPAR Group, Inc. 2001 Consultant Stock Purchase Plan, of
our report dated march 2, 2001, with respect to the consolidated financial
statements of SPAR Group, inc. included in its Annual Report (Form 10-K/A) for
the year ended December 31, 2000, filed with the Securities and Exchange
Commission.
Minneapolis, Minnesota /s/ Ernst & Young LLP
November 7, 2001