XML 59 R17.htm IDEA: XBRL DOCUMENT v3.23.1
Note 11 - Share Based Compensation
 12 Months Ended
Dec. 31, 2022
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

11. Share Based Compensation 

 

Inducement Stock Award Summary

 

On August 2, 2021, as an inducement to Ron Lutz to become the Corporation's Chief Global Commercial Officer, the Corporation granted to Mr. Lutz's RSU Awards issued and effective on that date having a fair market value of $50,000 (representing 26,882 SGRP Shares at $1.86 per share) as of that date and vesting in one (1) year. On August 2, 2022, those RSUs automatically vested and converted and became payable either, at the option of SGRP, in cash or SGRP's Common Stock issued directly from SGRP. On September 30, 2022, SGRP elected to issue Common Stock in a letter to Mr. Lutz, giving rise to Mr. Lutz's right to receive such Common Stock.

 

On August 2, 2021, as an inducement to William Linnane to become the Corporation's Chief Strategy and Growth Officer, the Corporation granted to Mr. Linnane RSU Awards issued and effective on that date having a fair market value of $50,000 (representing 26,882 SGRP Shares at $1.86 per share) as of that date and vesting in one (1) year. On August 2, 2022, those RSUs automatically vested and converted and became payable either, at the option of SGRP, in cash or SGRP's Common Stock issued directly from SGRP. On September 30, 2022, SGRP elected to issue Common Stock in a letter to Mr. Linnane, giving rise to Mr. Linnane 's right to receive such Common Stock.

 

On February 22, 2021, Michael R. Matacunas received the following inducement awards approved by SGRP's (the Issuer) Board of Directors for:

 

 

 

1.

options to purchase 630,000 shares of the Common Stock of the Issuer at an exercise price of $1.90 per share (which was the market price on February 22, 2021, the date the options were issued). Subject to certain conditions (including Mr. Matacunas' continued employment by the Issuer at such time), the options were scheduled to automatically vest in one year. On February 22, 2022, the options automatically vested and became exercisable at the option of the Reporting Person, which requires notice and payment of $1.90 per share to SGRP to effect such exercise. The options automatically expire on February 22, 2031.

 

 

 

 

2.

Restricted Stock Units (RSUs) for $50,000 of shares of SGRP's Common Stock representing 26,315 shares of SGRP's Common Stock based on the market price of $1.90 per share on February 22, 2021 (the RSU issuance date). On February 22, 2022, those RSUs automatically vested and converted and became payable either, at the option of SGRP, in cash or SGRP's Common Stock issued directly from SGRP. On September 30, 2022, SGRP elected to issue Common Stock in a letter to Mr. Matacunas, giving rise to Mr. Matacunas' right to receive such Common Stock but no exercise price or other payment for such shares was required.

 

 

 

 

3.

RSUs for $100,000 of shares of SGRP's Common Stock issuable on May 15 of each year he remains employed by SGRP, commencing in 2022. On May 15, 2022, Mr. Matacunas automatically received from SGRP for RSUs for 89,286 shares of the SGRP's Common Stock based on the market price of $1.12 per share on May 13, 2022 (the last trading day preceding the RSU issuance date). Subject to certain conditions (including Mr. Matacunas' continued employment by the Issuer at such time), those RSUs (and each of the anniversary issuances) are scheduled to automatically vest one year after their May 15 issuance and convert and become payable either (at the option of SGRP) in cash or Common Stock issued directly from the Issuer, but no exercise price or other payment for such shares is required.

 

On August 31, 2020, as an inducement to Fay DeVriese to become the Corporation's Chief Financial Officer, Treasurer and Secretary, the Corporation granted to Ms. DeVriese an Award consisting of nonqualified options to acquire 200,000 SGRP shares at $0.85 per share, vesting twenty-five percent (25%) of the total number of shares of Common Stock subject hereto on August 31, 2021, and the balance of the Option shall thereafter were to have vested and become exercisable in a series of three (3) successive equal annual installments upon the Optionee's completion of each additional year of employment over the three-year period following August 31, 2021. An additional twenty-five percent (25%) of the total number of shares of Common Stock subject to such option vested on August 31, 2022. The remaining unvested balance of the fifty percent (50%) of shares subject to such options expired when Ms. DeVriese left employment with the Company on February 27, 2023. None of Ms. DeVriese's vested options have been exercised.

 

2021 Plan

 

On June 4, 2021, the Board and the Board's Compensation Committee (the "Compensation Committee") approved the revised proposed 2021 Stock Compensation Plan of SPAR Group, Inc. (the "2021 Plan") for submission, approval and ratification by the Corporation's stockholders at their Annual Meeting on August 12, 2021. At that meeting, the 2021 Plan was ratified and approved by the Corporation's stockholders and became effective immediately on August 12, 2021 (the "2021 Plan Effective Date"), through May 31, 2022 (the "2021 Plan Period"). The 2021 Plan terminated on May 31, 2022.

 

The 2021 Plan provides for the issuance of Awards for NQSOs and RSUs (as defined below) respecting shares of SGRP's Common Stock ("SGRP Shares") covering up to a total of 400,000 SGRP Shares ("Maximum Award") under the 2021 Plan ("New Awards") to, in or otherwise respecting SGRP Shares ("New Award Shares") so long as the New Award Shares covered by each proposed New Award or group of New Awards in the aggregate (NQSOs plus RSUs) do not at the time of the proposed issuance exceed the Maximum Award and the RSU component does not exceed 150,000 New Award Shares.

 

No Option Awards were granted in 2022 or 2021 under the 2021 Plan

 

As of December 31, 2021, RSU Awards covering 58,011 SGRP Shares had been granted under the 2021 Plan, and no RSU Awards were granted in 2022 under the 2021 Plan. RSU Awards covering 14,502. SGRP Shares granted under the 2021 Plan vested during 2022, which the Corporation elected to satisfy through the issuance of SGRP Shares, and RSU Awards covering 29,004 SGRP Shares granted under the 2021 Plan remained unvested at December 31, 2022.

 

Option Awards under the 2021 Plan expire on the fifth anniversary of grant or sooner as provided in the 2021 Plan, whether or not vested. Once vested under the 2021 Plan, RSU Awards do not expire. Under the 2021 Plan: (i) each stock option Award must vest over a four-year period following the date of grant in four (4) equal amounts annually starting on the first anniversary of the grant date; (ii) any RSU Award granted to an employee shall vest over a three-year period following the date of grant annually in three (3) equal amounts starting on the first anniversary of the RSU grant date; and (iii) any RSU Award granted to a Director shall vest over a one-year period following the date of grant in four (4) equal amounts quarterly with one (1) installment vesting at the end of each three-month period following the date of the RSU grant date.

 

2020 Plan

 

The Board authorized and approved the revised proposed 2020 stock compensation plan of SGRP (the "2020 Plan"), which was submitted to and approved by SGRP's stockholders at the Special Meeting of SGRP's stockholders on January 19, 2021 (the "2020 Plan Effective Date"). The 2020 Plan became effective immediately upon such approval.

 

The 2020 Plan: (a) has a four-month term from the 2020 Plan Effective Date (as defined below) through May 1, 2021 (the "2020 Plan Period"); and (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 (3) 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 2020 Plan Period as outlined below (the "20-21 Maximum") under 2020 Plan. Since one (1) new director joined the Board on the 2020 Plan Effective Date, 600,000 SGRP Shares were available for Awards on the 2020 Plan Effective Date. 

 

The 2020 Plan required the Corporation to issue as of the plan effective date new awards for options to purchase: (i) an aggregate of 125,000 SGRP Shares to 19 employees (other than the Named Executive Officers) in individual amounts designated by the Board; (ii) 10,000 SGRP Shares to each of Panagiotis N. Lazaretos, Igor Novgorodtsev, Robert G. Brown and Arthur H. Baer (each a director); and (iii) 50,000 SGRP Shares to each member of the Board of Directors on the Effective Date of the Plan. Those options were granted by the Board on February 4, 2021. The 2020 Plan was terminated on May 1, 2021, and no further options were granted under it.

 

 

2008 Plan Summary

 

2008 Plan Stock option award activity for the years ended  December 31, 2022 and 2021 is summarized below for the periods presented:

 

          

Weighted-

     
      

Weighted-

  

Average

  

Aggregate

 
      

Average

  

Remaining

  

Intrinsic

 
      Exercise  Contractual  Value 

Option Awards

 

Shares

  

Price

  

Term (Years)

  

(thousands)

 

Outstanding at January 1, 2021

  1,457,936  $1.31   3.63  $113 

Granted

  –   –   –   – 

Exercised/cancelled

  679,062   1.08   –   295 

Forfeited or expired

  (87,712)  –   –   – 

Outstanding at December 31, 2021

  691,162  $1.53   2.60  $72 

Granted

  –   –   –   – 

Exercised

  57,500   1.07   –   10 

Forfeited or expired

  (120,562)  –   –   – 

Outstanding at December 31, 2022

  513,100  $1.63   2.16  $68 

Exercisable at December 31, 2022

  513,100  $1.63   2.15  $68 

 

The Company recognized $0 and $13,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2022 and 2021, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2022 and 2021, was approximately $0 and $3,000, respectively.

 

As of December 31, 2022, total unrecognized stock-based compensation expense related to stock options was $0.

 

 

2018 Plan Summary

 

2018 Plan Stock option award activity for the years ended December 31, 2022 and 2021 are summarized below:

 

          

Weighted-

     
      

Weighted-

  

Average

  

Aggregate

 
      

Average

  

Remaining

  

Intrinsic

 
      Exercise  Contractual  Value 

Option Awards

 

Shares

  

Price

  

Term (Years)

  

(thousands)

 

Outstanding at January 1, 2021

  430,000  $0.90   7.87  $8 

Granted

  –   -   –   – 

Exercised/cancelled

  230,000   0.85   –   235 

Forfeited or expired

  (40,000)  –   –   – 

Outstanding at December 31, 2021

  160,000  $0.93   6.82  $31 

Granted

  –   –   –   – 

Exercised

  12,500   0.76   –   8 

Forfeited or expired

  (2,500)  -   –   – 

Outstanding at December 31, 2022

  145,000  $0.94   5.79  $52 

Exercisable at December 31, 2022

  135,000  $0.98   5.64  $44 

 

No stock options were granted in 2022 under the 2018 Plan.  The total intrinsic value of stock options awards exercised during the year ended December 31, 2022 and 2021 was $8,000 and $235,000, respectively.

 

The Company recognized $6,000 and $23,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2022 and 2021, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2022 and 2021 was approximately $2,000 and $6,000, respectively.

 

As of December 31, 2022, there was no unrecognized stock-based compensation expense related to stock options granted under the 2018 Plan.

 

2020 Plan Summary

 

Following are the specific valuation assumptions used for options granted in 2021 for the 2020 Plan:

 

   

2021

 

Expected volatility

   52.8%

Expected dividend yields

   0.0%

Expected term (in years)

   5 

Risk free interest rate

   1.0%

Expected forfeiture rate

   4.0%

 

2020 Plan Stock option award activity for the years ended December 31, 2022 and 2021 are summarized below:

 

          

Weighted-

     
      

Weighted-

  

Average

  

Aggregate

 
      

Average

  

Remaining

  

Intrinsic

 
      

Exercise

  

Contractual

  

Value

 

Option Awards

 

Shares

  

Price

  

Term (Years)

  

(thousands)

 

Outstanding at January 1, 2021

  –  $–   –  $– 

Granted

  565,000   1.55   4.10   – 

Exercised/cancelled

  –   –   –   – 

Forfeited or expired

  (180,000)  –   –   – 

Outstanding at December 31, 2021

  385,000  $1.55   4.10  $- 

Granted

  –   –   –   – 

Exercised

  –   –   –   – 

Forfeited or expired

  (10,000)  –   –   – 

Outstanding at December 31, 2022

  375,000  $1.55   3.10  $– 

Exercisable at December 31, 2022

  91,250  $1.55   3.10  $– 

 

No stock options were granted in 2022 under the 2020 Plan. The total intrinsic value of stock option awards exercised during the years ended December 31, 2022 and 2021 was $0.

 

The Company recognized $58,000 and $57,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2022 and 2021, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2022 and 2021 was approximately $15,000 and $16,000, respectively.

 

As of December 31, 2022, total unrecognized stock-based compensation expense related to stock options was $121,000. This expense is expected to be recognized over a weighted average period of approximately 2.1 years.

 

CFO Inducement Plan Summary

 

CFO Inducement Plan Stock option award activity for the years ended December 31, 2022 and 2021 are summarized below:

 

          

Weighted-

     
      

Weighted-

  

Average

  

Aggregate

 
      

Average

  

Remaining

  

Intrinsic

 
      

Exercise

  

Contractual

  

Value

 

Option Awards

 

Shares

  

Price

  

Term (Years)

  

(thousands)

 

Outstanding at January 1, 2021

  200,000  $0.85   9.67  $60.00 

Granted

  –   –   –   – 

Exercised/cancelled

  50,000   0.85   –   – 

Forfeited or expired

  –   –   –   – 

Outstanding at December 31, 2021

  150,000  $0.85   8.67  $57 

Granted

  –   –   –   – 

Exercised

  50,000   0.85   –   – 

Forfeited or expired

  –   –   –   – 

Outstanding at December 31, 2022

  100,000  $0.85   7.67  $45 

Exercisable at December 31, 2022

  –  $–   –  $– 

 

No stock options were granted in 2022 under the CFO Inducement Plan.  The total intrinsic value of stock option awards exercised during the years ended December 31, 2022 and 2021 was $45,000 and $37,000.

 

The Company recognized $19,000 and $22,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2022 and 2021, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2022 and 2021, was approximately $5,000 and $5,000, respectively.

 

As of December 31, 2022, total unrecognized stock-based compensation expense related to stock options was $32,000. This expense is expected to be recognized over a weighted average period of approximately 1.7 years.

 

CEO Inducement Plan Summary

 

Following are the specific valuation assumptions used for options granted in 2021 for the CEO Plan:

 

   

2021

 

Expected volatility

   52.7%

Expected dividend yields

   0.0%

Expected term (in years)

   1 

Risk free interest rate

   0.76%

Expected forfeiture rate

   6%

 

CEO Inducement Plan stock option award activity for the years ended December 31, 2022 and 2021 are summarized below:

 

          

Weighted-

     
      

Weighted-

  

Average

  

Aggregate

 
      

Average

  

Remaining

  

Intrinsic

 
      

Exercise

  

Contractual

  

Value

 

Option Awards

 

Shares

  

Price

  

Term (Years)

  

(thousands)

 

Outstanding at January 1, 2021

  –  $–   –  $– 

Granted

  630,000   1.90   9.15   – 

Exercised/cancelled

  –   –   –   – 

Forfeited or expired

  –   –   –   – 

Outstanding at December 31, 2021

  630,000  $1.90   9  $- 

Granted

  –   –   –   – 

Exercised

  –   –   –   – 

Forfeited or expired

  –   –   –   – 

Outstanding at December 31, 2022

  630,000  $1.90   8.15  $– 

Exercisable at December 31, 2022

  630,000  $1.90   8.15  $– 

 

No stock options were granted in 2022 under the CEO Inducement Plan.  The total intrinsic value of stock option awards exercised during the years ended December 31, 2022 and 2021 was $0.

 

The Company recognized $85,000 and $509,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2022 and 2021, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2022 and 2021, was $21,000 and $126,000, respectively.

 

As of December 31, 2022, there was no unrecognized share-based compensation expense related to stock options granted under the CEO Inducement Plan.

 

 

The following table summarizes the activity for Restricted Stock Unit (RSU) awards during the years ended  December 31, 2022 and 2021:
 
      

Weighted-

 
      

Average

 
      

Grant Date

 
      

Fair Value

 
  

Shares

  

per Share

 

Unvested at January 1, 2021

  –  $– 

Granted

  

138,090

   1.87 

Vested

  –   – 

Forfeited

  –   – 

Unvested at December 31, 2021

  138,090  $1.85 

Granted

     – 

Vested

  99,415   1.86 

Forfeited

  –   – 

Unvested at December 31, 2022

  38,675  $1.81 

 

During the years ended December 31, 2022 and 2021, the Company recognized approximately $101,000 and $87,000, respectively, of stock-based compensation expense related to RSUs. The recognized tax benefit on stock-based compensation expense related to RSUs during the years ended  December 31, 2022 and 2021 was approximately $25,000 and $21,000, respectively. 

 

During the years ended December 31, 2022 and 2021, the total fair value of RSUs vested was $120,000 and $0 respectively.

 

As of December 31, 2022, total unrecognized stock-based compensation expense related to unvested RSUs awards was $56,000. This expense is expected to be recognized over a weighted average period of approximately 1.6 years.

 

 

Share-Based Compensation Expense

 

Share-based compensation expense for the years ended  December 31, 2022 and 2021 was $346,000 and $711,000, respectively.