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Note 11 - Stock Based Compensation and Other Plans | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Share-based Payment Arrangement [Text Block] | 11. Stock Based Compensation and Other Plans The Company believes that it is desirable to align the interests of its directors, executives, employees and consultants with those of its stockholders through their ownership of shares of Common Stock issued by (" SGRP Shares "). Although the Company does not require its directors, executives, employees or consultants to own SGRP Shares, the Company believes that it can help achieve this objective: (i) by providing medium term equity incentives through the issuance to its eligible directors, executives, employees or consultants of options to purchase SGRP Shares and other stock-based awards, which it believes it has done pursuant to the Prior Plans (as defined below); (ii) by providing medium-term equity incentives through the issuance to its eligible directors, executives and employees of options to purchase SGRP Shares pursuant to the 2020 Plan (as defined below) if approved by SGRP's stockholders; and (iii) by facilitating the purchase of SGRP Shares by all of its eligible executives, employees and consultants who elect to participate in its Employee or Consultant Stock Purchase Plans (as defined below). In particular, the Company believes that granting stock-based awards (including restricted options to purchase SGRP Shares to such directors, executives and employees, encourages growth in their ownership of SGRP Shares, which in turn leads to the expansion of their stake in the longer-term performance and success of the Company. SGRP has granted stock option and restricted stock awards to the Company's eligible directors, officers and employees and consultants providing services to the Company to purchase SGRP Shares pursuant to SGRP's 2018 Stock Compensation (the " 2018 Plan "), and SGRP's 2008 Stock Compensation Plan (as amended, the " 2008 Plan "). SGRP's stockholders approved and adopted the 2018 Plan in May 2018 and the 2008 Plan in May 2008, as the successor to various predecessor stock option plans. As of December 31, 2020, there were awards representing 585,000 shares of SGRP's Common Stock that had been granted under the 2018 Plan ( 565,000 of which remained outstanding), and awards respecting 3,044,927 shares of SGRP's Common Stock outstanding under the 2008 Plan. After May 31, 2019, the 2018 Plan ended and no further grants can be made under the 2018 Plan respecting such shares of SGRP's Common Stock. 2020 Plan The Board authorized and approved the revised proposed 2020 stock compensation plan of SPAR Group, Inc. (the " 2020 Plan "), to be submitted to the Corporation's stockholders for ratification and approval at the Special Meeting. The 2020 Plan: (a) has four -month term from the 2020 Plan Effective Date (as defined below) through May 1, 2021 ( the " 20 - 21 Period "); (b) provides for the issuance of "non-qualified" option awards to purchase shares of SGRP's Common Stock (" SGRP Shares ") aggregating: (i) 550,000 SGRP Shares plus; (ii) 50,000 SGRP Shares for each of up to the first three additional new Directors during the period December 1, 2020, to April 30, 2021 ( for a possible total of 700,000 SGRP Shares) available for future Awards during the 20 - 21 Period as outlined below (the " 20 - 21 Maximum ") under 2020 Plan; (c) requires the Company to issue as of the Effective Date of the Plan new awards for options to purchase: (i) New Awards for options to purchase an aggregate of 125,000 New Award Shares to 19 employees (other than the Named Executive Officers) in individual amounts designated by the Board; (ii) 10,000 new award shares to each of Panagiotis N. Lazaretos, Igor Novgorodtsev, Robert G. Brown, and Arthur H. Baer (each a director); and (iii) 50,000 new award shares to each member of the Board of Directors on the Effective Date of the Plan. The 2020 Plan became effective immediately upon the approval by stockholders on January 19, 2021 ( the " 2020 Plan Effective Date "), and the 2020 Plan will govern all options issued thereafter. Capitalized terms used and not otherwise defined herein shall have the meanings respectively assigned to them in the 2020 Plan. The 2020 Plan provides: (i) for a term from the 2020 Plan Effective Date (as defined below) through May 31, 2021 ( the " 20 - 21 Period "); and (ii) for 550,000 shares of SGRP's Common Stock (" SGRP Shares ") plus 50,000 additional SGRP Shares for each new director added to the Board between January 19, 2021 and April 1,2021, available for future Awards during the 20 - 21 Period as outlined below (the " 20 - 21 Maximum ") under 2020 Plan. The descriptions of the 2020 Plan below are subject to and are qualified in their entirety by the full text of the 2020 Plan, which is attached as Annex B to and is hereby incorporated by reference into this Proxy Statement/Information Statement. Since one new director joined the Board, 600,000 SGRP Shares were available for Awards on the 2020 Plan Effective Date. After making the contemplated awards after the 2020 Plan Effective Date, the remaining availability for future new awards for options to purchase will be 35,000 SGRP Shares unless new directors join the Board between January 19, 2021 and April 1,2021. Under the 2020 Plan, the Company (through its Compensation Committee with Board approval) may from time to time grant Awards in the form of nonqualified stock options (" NQSO s"), respecting SGRP Shares to and the Company's specified executives and employees and directors. However, unlike the 2008 Plan and 2018 Plan, the 2020 Plan does not permit the granting of incentive stock options (" ISOs "), stock appreciation rights based on SGRP Shares (" SAR s"), restricted SGRP Shares (" Restricted Stock "), or restricted stock units based on SGRP Shares (" RSU s"). Summary of the 2020 Plan The 2020 Plan and 2018 Plan and information regarding options, stock appreciation rights, restricted stock and restricted stock units granted thereunder are summarized below, but these descriptions are subject to and are qualified in their entirety by the full text of the 2020 Plan. Unless again amended and extended (as approved by SGRP's stockholders), the 2020 Plan terminates on May 31, 2021, and thereafter no further Awards may be made under it unless additional time and shares are added to it in an amendment approved by the Board and stockholders. Awards granted prior to the end the final term of the 2020 Plan shall continue to be governed by the 2020 Plan (which 2020 Plan shall continue in full force and effect for that purpose). Subject to the terms and conditions and within the limitations of the 2020 Plan, the Compensation Committee has the power and authority to recommend to the Board for Board approval: (i) the persons who shall be granted Awards under the 2020 Plan; (ii) when they shall receive Awards and the applicable grant dates; (iii) the standard term of each award, including any provisions for early termination or forfeiture; (iv) the method or formula for determining: (A) the date each option shall become exercisable; (B) whether the installments shall be cumulative; and (C) the date each installment shall become exercisable or vest and the term of each installment; (v) the form of payment of the exercise price for any option; (vi) the method or formula for determining: (A) the exercise price of each option; and (B) the Fair Market Value of a share of Common Stock for all purposes of the Plan; (vii) 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, 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; (viii) 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; (ix) 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 the 2020 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 the 2020 Plan; ( x ) how to construe the respective Contracts and the 2020 Plan; and (xi) the policies, rules and regulations relating to the 2020 Plan and how and when to prescribe, amend and rescind the same. The 2020 Plan sets and limits the maximum number of shares of Common Stock that may be issued pursuant to Awards made under the 2020 Plan to the 20 - 21 Maximum during the 20 - 21 Period, subject to adjustment as provided in the 2020 Plan (see below). The employees, officers and directors of the providing services to the Company (collectively, the " Participants ") under the 2020 Plan may be (and under the 2018 Plan may have been) granted certain Equity Compensation Awards based on SGRP Shares. There are approximately 120 employees, officers and directors who currently meet the eligibility requirements to participate in the 2020 Plan. Like the 2018 Plan, the 2020 Plan permits the granting of awards consisting of non-qualified options to purchase shares of SGRP Shares Common Stock (" NQSOs " or " Options "). However (unlike the 2018 Plan and 2008 Plan), the 2020 Plan does not permit granting options that qualify under Section 422 of the United States Internal Revenue Code of 1986 as amended (the " Code ") for treatment as incentive stock options (" Incentive Stock Options " or " ISO s ") stock appreciation rights based on SGRP Shares (" SAR s"), restricted SGRP Shares (" Restricted Stock "), and restricted stock units based on SGRP Shares (" RSUs "). 2008 Plan Summary 2008 Plan Stock option award activity for the years ended December 31, 2020 and 2019 is summarized below:
|  |  |  |  |  |  |  |  |  | Weighted- |  |  |  |  |
|  |  |  |  |  | Weighted- |  |  | Average |  |  | Aggregate |
|  |  |  |  |  | Average |  |  | Remaining |  |  | Intrinsic |
|  |  |  |  |  | Exercise |  |  | Contractual |  |  | Value |
Option Awards |  | Shares |  |  | Price |  |  | Term (Years) |  |  | (thousands) |
Outstanding at January 1, 2019 |  |  | 3,044,927 |  |  | $ | 1.01 |  |  |  | 4.55 |  |  | $ | 103 |
Granted |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Exercised/cancelled |  |  | 804,580 |  |  | $ | 0.44 |  |  |  | – |  |  | $ | – |
Forfeited or expired |  |  | 13,136 |  |  |  | – |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2019 |  |  | 2,227,211 |  |  | $ | 1.22 |  |  |  | 4.83 |  |  | $ | 452 |
Granted |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Exercised |  |  | 57,500 |  |  | $ | 1.00 |  |  |  | – |  |  | $ | – |
Forfeited or expired |  |  | 711,775 |  |  |  | – |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2020 |  |  | 1,457,936 |  |  | $ | 1.31 |  |  |  | 3.63 |  |  | $ | 113 |
Exercisable at December 31, 2020 |  |  | 1,367,936 |  |  | $ | 1.33 |  |  |  | 3.45 |  |  | $ | 101 |
The weighted-average grant-date fair value of stock option awards granted during the year ended December 31, 2020 was $0.00. The total intrinsic value of stock option awards exercised during the year ended December 31, 2020 and 2019 was $6,000 and $257,000, respectively. The Company recognized $95,000 and $139,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2020 and 2019 , respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2020 and 2019 , was approximately $24,000 and $35,000, respectively. As of December 31, 2020 , total unrecognized stock-based compensation expense related to stock options was $17,000. This expense is expected to be recognized over a weighted average period of approximately 1.0 years, and will be adjusted for changes in estimated forfeitures. 20 1 8 Plan Summary Following are the specific valuation assumptions used for options granted in 2020 and 2019 for the 2019 Plan:
|  | 2020 |  |  | 2019 |
Expected volatility |  |  | 0.0 | % |  |  | 39.0 | %
Expected dividend yields |  |  | 0.0 | % |  |  | 0.0 | %
Expected term (in years) |  |  | 2 |  |  |  | 3 |
Risk free interest rate |  |  | 0.0 | % |  |  | 2.3 | %
Expected forfeiture rate |  |  | 0.0 | % |  |  | 5.0 | %
2018 Plan Stock option award activity for the years ended December 31, 2020 and 2019 are summarized below:
|  |  |  |  |  |  |  |  |  | Weighted- |  |  |  |  |
|  |  |  |  |  | Weighted- |  |  | Average |  |  | Aggregate |
|  |  |  |  |  | Average |  |  | Remaining |  |  | Intrinsic |
|  |  |  |  |  | Exercise |  |  | Contractual |  |  | Value |
Option Awards |  | Shares |  |  | Price |  |  | Term (Years) |  |  | (thousands) |
Outstanding at January 1, 2019 |  |  | 235,000 |  |  | $ | 1.23 |  |  |  | 9.35 |  |  | $ | – |
Granted |  |  | 320,000 |  |  | $ | 0.64 |  |  |  | – |  |  | $ | – |
Exercised/cancelled |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Forfeited or expired |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2019 |  |  | 555,000 |  |  | $ | 0.89 |  |  |  | 8.88 |  |  | $ | – |
Granted |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Exercised |  |  | 18,750 |  |  | $ | 0.64 |  |  |  | – |  |  | $ | – |
Forfeited or expired |  |  | 106,250 |  |  |  | – |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2020 |  |  | 430,000 |  |  | $ | 0.90 |  |  |  | 7.87 |  |  | $ | 8 |
Exercisable at December 31, 2020 |  |  | 281,250 |  |  | $ | 0.90 |  |  |  | 7.87 |  |  | $ | 8 |
The weighted-average grant-date fair value of stock option awards granted during the year ended December 31, 2020 was $0.00. The total intrinsic value of stock option awards exercised during the years ended December 31, 2020 and 2018 was $3,000 and $0. The Company recognized $34,000 and $90,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2020 and 2019 , respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2020 and 2019 , was approximately $8,000 and $22,000, respectively. As of December 31, 2020 , total unrecognized stock-based compensation expense related to stock options was $41,000. This expense is expected to be recognized over a weighted average period of approximately 2.0 years, and will be adjusted for changes in estimated forfeitures. Restricted Stock - 2008 Plan The restricted stock awards previously issued under the 2008 Plan vested during the first four years following issuance at the rate of 25% on each anniversary date of their issuance so long as the holder continues to be employed by the Company. Restricted stock granted under the 2008 Plan is measured at fair value on the date of the grant, based on the number of shares granted and the quoted price of the Company's common stock. The shares of stock are issued and value is recognized as compensation expense ratably over the requisite service period which generally is the award's vesting period. The Company did not issue restricted stock awards to its employees or Directors under the 2008 plan during the years ended December 31, 2020 and 2019. The following table summarizes the activity for restricted stock Awards during the years ended December 31, 2020 and 2019 :
|  |  |  |  |  | Weighted- |
|  |  |  |  |  | Average |
|  |  |  |  |  | Grant Date |
|  |  |  |  |  | Fair Value |
|  | Shares |  |  | per Share |
Unvested at January 1, 2019 |  |  | 1,000 |  |  | $ | 1.36 |
Granted |  |  | – |  |  |  | – |
Vested |  |  | (1,000 | ) |  |  | 1.36 |
Forfeited |  |  | – |  |  |  | – |
Unvested at December 31, 2019 |  |  | – |  |  |  | – |
Granted |  |  | – |  |  |  | – |
Vested |  |  | – |  |  |  | – |
Forfeited |  |  | – |  |  |  | – |
Unvested at December 31, 2020 |  |  | – |  |  | $ | – |
During the years ended December 31, 2020 and 2019 , the Company recognized approximately $0 and $1,200, respectively, of stock-based compensation expense related to restricted stock. The recognized tax benefit on stock-based compensation expense related to restricted stock during the years ended December 31, 2020 and 2019 was approximately $0 . During the years ended December 31, 2020 and 2019 , the total fair value of restricted stock vested was $0 and $1,000, respectively. As of December 31, 2020 , total unrecognized stock-based compensation expense related to unvested restricted stock awards was $0. Restricted Stock - 2018 Plan The restricted stock awards previously issued under the 2018 Plan (like those under the 2008 Plan) vested during the first four years following issuance at the rate of 25% on each anniversary date of their issuance so long as the holder continues to be employed by the Company. Restricted stock granted under the 2018 Plan (like those under the 2008 Plan) is measured at fair value on the date of the grant, based on the number of shares granted and the quoted price of the Company's common stock. The shares of stock are issued and value is recognized as compensation expense ratably over the requisite service period which generally is the award's vesting period. In 2020 and 2019, there were no restricted stock awards issued to its Directors. The following table summarizes the activity for restricted stock awards during the year ended December 31, 2020 and 2019:
|  |  |  |  |  | Weighted- |
|  |  |  |  |  | Average |
|  |  |  |  |  | Grant Date |
|  |  |  |  |  | Fair Value |
|  | Shares |  |  | per Share |
Unvested at January 1, 2019 |  |  | 10,000 |  |  | $ | 1.23 |
Granted |  |  | – |  |  |  | – |
Vested |  |  | (10,000 | ) |  |  | 1.23 |
Forfeited |  |  | – |  |  |  | – |
Unvested at December 31, 2019 |  |  | – |  |  |  | – |
Granted |  |  | – |  |  |  | – |
Vested |  |  | – |  |  |  | – |
Forfeited |  |  | – |  |  |  | – |
Unvested at December 31, 2020 |  |  | – |  |  | $ | – |
During the years ended December 31, 2020 and 2019 , the Company recognized approximately $0 and $4,000, respectively, of stock-based compensation expense related to restricted stock. The recognized tax benefit on stock based compensation expense related to restricted stock during the years ended December 31, 2020 and 2019 was approximately $0 and $1,000, respectively. During the years ended December 31, 2020 and 2019 , the total fair value of restricted stock vested was $0 and $7,000, respectively. As of December 31, 2020 and 2019, total unrecognized stock-based compensation expense related to unvested restricted stock awards was $0 . Inducement Plan Summary During 2020, the Company issued 200,000 inducement stock options outside the 2018 Plan. Inducement Plan Stock option award activity for the year ended December 31, 2020 is summarized below:
|  |  |  |  |  | Weighted- |  |
|  |  |  | Weighted- |  | Average |  | Aggregate
|  |  |  | Average |  | Remaining |  | Intrinsic
|  |  |  | Exercise |  | Contractual |  | Value
Option Awards |  | Shares |  | Price |  | Term (Years) |  | (thousands)
Outstanding at December 31, 2019 |  | – |  | – |  | – |  | –
Granted |  | 200,000 | $ | 0.85 |  | 9.67 | $ | 60
Exercised |  | – |  | – |  | – |  | –
Forfeited or expired |  | – |  | – |  | – |  | –
Outstanding at December 31, 2020 |  | 200,000 | $ | 0.85 |  | 9.67 | $ | 60
Exercisable at December 31, 2020 |  | – |  | – |  | – |  | –
The weighted-average grant-date fair value of stock option Awards granted during the year ended December 31, 2020 was $0. The total intrinsic value of stock option Awards exercised during the year ended December 31, 2020 was $0. The Company recognized $7,000 and $0 in stock-based compensation expense relating to stock option awards during the year ended December 31, 2020. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2020, was approximately $2,000. As of December 31, 2020, total unrecognized stock-based compensation expense related to stock options was $71,000. This expense is expected to be recognized over a weighted average period of approximately 4.0 years, and will be adjusted for changes in estimated forfeitures. Stock Purchase Plans In 2001, SGRP adopted its 2001 Employee Stock Purchase Plan (the " ESP Plan "), which replaced its earlier existing plan, and its 2001 Consultant Stock Purchase Plan (the " CSP Plan "). These plans were each effective as of June 1, 2001. The ESP Plan allows employees of the Company, and the CSP Plan allows employees of the affiliates of the Company to purchase SGRP's Common Stock from SGRP without having to pay any brokerage commissions. On August 8, 2002, the Board approved a 15% discount for employee purchases of Common Stock under the ESP Plan and recommended that its affiliates pay 15% of the value of the stock purchased as a cash bonus for affiliate consultant purchases of Common Stock under the CSP Plan.

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