11.

Stock Based Compensation and Other Plans

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 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 (including the

2018

Plan and

2008

Plan, each a "Prior Plan") with respect to all new Awards granted, and an amendment to the

2008

Plan in

May 2009,

permitting the discretionary repricing of existing awards. SGRP also has granted stock options that continue to be outstanding under the Prior Plans. Each Prior Plan will continue to be active for the purposes of any remaining outstanding options and other Awards granted under it for so long as such options are outstanding.

At the

May 2018

annual meeting of stockholders, the stockholders approved the

2018

Stock Compensation Plan of SPAR Group, Inc. (the

"2018

Plan").

new Awards could be issued under the

2018

Plan after the end of its final term on

May 31, 2019.

Awards granted prior to the end of the final term of the

2018

Plan shall continue to be governed by the

2018

Plan (which

2018

Plan shall continue in full force and effect for that purpose).

As of

December 31, 2019,

there were Awards respecting

600,000

shares of SGRP's Common Stock that had been granted under the

2018

Plan (

555,000

of which remained outstanding), and Awards respecting

3,044,927

shares of SGRP's Common Stock outstanding under the

2008

Plan. As of

December 31, 2019,

there were

Awards available for grant under the

2018

Plan.

The employees, officers and directors of the Corporation or any of its subsidiaries (collectively, the "Company") or their consultants providing services to the Company (collectively, the "Participants") under the

2018

Plan have been granted certain Equity Compensation Awards based on SGRP Shares ("Awards"). The Participants providing such consulting services include the employees of and consultants to certain non-subsidiary affiliates and licensees of SGRP providing services to the Company (see Certain Relationships and Related Transactions, below) and other affiliates of and providers to the Corporation ("SPAR Vendors").

The

2018

Plan permitted the granting of Awards consisting of options to purchase shares of SGRP Shares Common Stock ("Options"), stock appreciation rights based on SGRP Shares ("SARs"), restricted SGRP Shares ("Restricted Stock"), and restricted stock units based on SGRP Shares ("RSUs"). The

2018

Plan permitted the granting of both 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 "

ISOs

") and Options that do

not

qualify under the Code as Incentive Stock Options ("Nonqualified Stock Options" or "NQSOs"). ISOs

may

only be granted to employees of the Corporation or its subsidiaries.

The SGRP Shares issued pursuant to the Options, SARs, Restricted Stock and RSUs under the

2018

Plan were all subject to the

2018

Maximum as noted above.

Awards can

longer be granted under the

2018

Plan.

The purpose of the

2018

Plan was to promote the interests of the Corporation and its stockholders by providing stock-based incentives to certain employees, directors, officers and consultants. Under the

2018

Plan, the mutuality of interest between those participants and the Corporation is strengthened because they have a proprietary interest in pursuing the Corporation's long-term growth and financial success. In addition, by allowing participation in the Corporation's success, the Corporation is better able to attract, retain and reward quality employees, directors, officers and consultants. In selecting the participants to whom Awards

may

be granted, consideration is given to factors such as employment position, duties and responsibilities, ability, productivity, length of service, morale, interest in the Corporation and recommendations of supervisors.

The vesting, duration and other terms of future awards was determined by the Compensation Committee in its discretion subject to any restrictions in the

2018

Plan and the Code. The terms

may

be different for the same or similar Awards or Participants.

SARs or RSUs were issued under the

2008

Plan or

2018

Plan. Restricted Stock Awards granted under the

2008

Plan and

2018

Plan generally vested over

four

years (i.e.,

one

fourth

per year of service after the grant date). Option Awards granted under the

2008

Plan and

2018

Plan were generally Non-Qualified Options, generally vested over

four

years (i.e.,

one

fourth

per year of service after the grant date), had

ten

year terms, and had exercise prices set at fair market value on the grant date.

The grant date for an Award is generally the date the Award is approved by the Compensation Committee. Each Award granted under the

2018

Plan was evidenced by a Contract in a form approved by the Compensation Committee and executed by the Corporation and the Participant receiving the Award. Each Contract contained the terms, provisions and conditions pertaining to the applicable Award, including (as applicable) exercise price.

Participants received Awards in return for the past and future rendering of services and were

not

required to pay the Corporation for such Awards (except for applicable tax withholding when due and any exercise price in the case of Options) or purchase price (if any) established by the Compensation Committee in the applicable Contract.

The

2018

Plan gave SGRP's Compensation Committee the full authority and complete flexibility from time to time to designate and modify (in its discretion)

one

or more of the outstanding Awards (including their exercise and base prices and other components and terms) to (among other things) restore their intended values and incentives to their holders. However, the exercise price, Base Value (as defined in the

2018

Plan) or similar component (if equal to SGRP's full stock price at issuance) of any Award cannot be lowered to an amount that is less than the Fair Market Value (as defined in the

2018

Plan) on the date of the applicable modification, and

modification can adversely affect an awardee's rights or obligations under an Award without the awardee's consent.

2008

Plan Summary

2008

Plan Stock option Award activity for the years ended

December 31, 2019

and

2018

is summarized below:

					Weighted-
			Weighted-		Average		Aggregate
			Average		Remaining		Intrinsic
			Exercise		Contractual		Value
Option Awards	Shares		Price		Term (Years)		(thousands)
Outstanding at January 1, 2018		3,344,177	$	0.96		5.17	$	1,221
Granted		45,000		1.67		–		–
Exercised/cancelled		306,750		0.40		–		–
Forfeited or expired		37,500		–		–		–
Outstanding at December 31, 2018		3,044,927	$	1.01		4.55	$	103
Granted		–		–		–		–
Exercised		804,580		0.44		–		–
Forfeited or expired		13,136		–		–		–
Outstanding at December 31, 2019		2,227,211	$	1.22		4.83	$	452
Exercisable at December 31, 2019		1,723,961	$	1.27		4.06	$	321

The weighted-average grant-date fair value of stock option Awards granted during the year ended

December 31, 2019

was

$0.00.

The total intrinsic value of stock option Awards exercised during the year ended

December 31, 2019

and

2018

was

$258,000

and

$274,000,

respectively.

The Company recognized

$139,000

and

$155,000

in stock-based compensation expense relating to stock option Awards during the years ended

December 31, 2019

and

2018

, respectively. The recognized tax benefit on stock based compensation expense related to stock options during the years ended

December 31, 2019

and

2018

, was approximately

$35,000

and

$38,000,

respectively.

As of

December 31, 2019

, total unrecognized stock-based compensation expense related to stock options was

$182,000.

This expense is expected to be recognized over a weighted average period of approximately

2.0

years, and will be adjusted for changes in estimated forfeitures.

Plan Summary

Following are the specific valuation assumptions used for options granted in

2018

for the

2018

Plan:

	2019	2018
Expected volatility	39.0%	43.0%
Expected dividend yields	0.0%	0.0%
Expected term (in years)	3	5
Risk free interest rate	2.3%	2.5%
Expected forfeiture rate	5.0%	5.0%

2018

Plan Stock option Award activity for the years ended

December 31, 2019

and

2018

are summarized below:

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Price

Term (Years)

(thousands)

Outstanding at January 1, 2018

–

Granted

245,000

1.23

–

Exercised/cancelled

–

Forfeited or expired

10,000

–

Outstanding at December 31, 2018

235,000

1.23

9.35

Granted

320,000

0.64

–

Exercised

–

Forfeited or expired

–

Outstanding at December 31, 2019

555,000

0.89

8.88

Exercisable at December 31, 2019

88,750

1.23

8.35

The weighted-average grant-date fair value of stock option Awards granted during the year ended

December 31, 2019

was

$0.27.

The total intrinsic value of stock option Awards exercised during the years ended

December 31, 2019

and

2018

was

The Company recognized

$90,000

and

$31,000

in stock-based compensation expense relating to stock option Awards during the years ended

December 31, 2019

and

2018

, respectively. The recognized tax benefit on stock based compensation expense related to stock options during the years ended

December 31, 2019

and

2018

, was approximately

$22,000

and

$8,000,

respectively.

As of

December 31, 2019

, total unrecognized stock-based compensation expense related to stock options was

$122,000.

This expense is expected to be recognized over a weighted average period of approximately

2.0

years, and will be adjusted for changes in estimated forfeitures.

Restricted Stock -

2008

Plan

The restricted stock Awards previously issued under the

2008

Plan vested during the

first

four

years following issuance at the rate of

25%

on each anniversary date of their issuance so long as the holder continues to be employed by the 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. In

2018,

the Company did

not

issue restricted stock Awards to its employees or Directors.

The following table summarizes the activity for restricted stock Awards during the years ended

December 31, 2019

and

2018

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

During the years ended

December 31, 2019

and

2018

, the Company recognized approximately

$1,200

and

$15,000,

respectively, of stock-based compensation expense related to restricted stock. The recognized tax benefit on stock based compensation expense related to restricted stock during the years ended

December 31, 2019

and

2018

was approximately

and

$4,000,

respectively.

During the years ended

December 31, 2019

and

2018

, the total fair value of restricted stock vested was

$1,000

and

$23,000,

respectively.

As of

December 31, 2019

, total unrecognized stock-based compensation expense related to unvested restricted stock Awards was

$0.

Restricted Stock -

2018

Plan

The restricted stock Awards previously issued under the

2018

Plan (like those under the

2008

Plan) vested during the

first

four

years following issuance at the rate of

25%

on each anniversary date of their issuance so long as the holder continues to be employed by the Company. Restricted stock granted 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

2019,

there were

restricted stock Awards issued to its Directors.

The following table summarizes the activity for restricted stock Awards during the year ended

December 31, 2019

and

2018:

				Weighted-
				Average
				Grant Date
				Fair Value
	Shares			per Share
Unvested at January 1, 2018		20,000		$	1.23
Granted		–			–
Vested		(10,000	)		1.23
Forfeited		–			–
Unvested at December 31, 2018		10,000			1.23
Granted		–			–
Vested		(10,000	)		1.23
Forfeited		–			–
Unvested at December 31, 2019		–		$	-

During the years ended

December 31, 2019

and

2018

, the Company recognized approximately

$4,000

and

$20,000,

respectively, of stock-based compensation expense related to restricted stock. The recognized tax benefit on stock based compensation expense related to restricted stock during the years ended

December 31, 2019

and

2018

was approximately

$1,000

and

$5,000,

respectively.

During the years ended

December 31, 2019

and

2018

, the total fair value of restricted stock vested was

$7,000

and

$12,000,

respectively.

As of

December 31, 2019

, total unrecognized stock-based compensation expense related to unvested restricted stock Awards was

$0.

Stock Purchase Plans

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.