CUSIP No. 784933103
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Page 1 of 8
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 4)*
Under the Securities Exchange Act of 1934
SPAR Group, Inc.
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(Name of Issuer)
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Common Stock, par value $0.01 per share
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(Title of Class of Securities)
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784933103
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(CUSIP Number)
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William H. Bartels
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333 Westchester Avenue,
South Building, Suite 203
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White Plains, NY 10604
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(914) 332-4100
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(Name, Address and Telephone Number of Person
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Authorized to Receive Notices and Communications)
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January
18, 2019
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(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §240.13d-1(e), §240.13d-1(f) or §240.13d-1(g), check the following box
£
.
Note.
Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.
See
Rule 240.13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
SCHEDULE 13D/A
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Item 1.
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Security and Issuer
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This Amendment
No. 4 to Schedule 13D (this “
Amendment
”) amends and supplements the information set forth in the Schedule 13D
originally filed by the Reporting Person with the Securities and Exchange Commission (“
SEC
”) on July 19, 1999
(the “
Original Schedule 13D
”) relating to the common stock, $0.01 par value per share (the “
Common
Stock
”), of SPAR Group, Inc., a Delaware corporation (the “
Company
” or “
SGRP
”),
as amended by Amendment No. 1 to the Original Schedule 13D filed with the SEC on May 31, 2018 (“
Amendment No. 1
”),
Amendment No. 2 to the Original Schedule 13D filed with the SEC on August 6, 2018 (“
Amendment No. 2
”) and Amendment
No. 3 to the Original Schedule 13D filed with the SEC on September 19, 2018 (“
Amendment No. 3
”). The Original
Schedule 13D, as amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3, is hereinafter referred to as the “
Schedule
13D
”. The address of the principal executive offices of the Company is 333 Westchester Avenue, South Building, Suite
204, White Plains, New York 10604. Except as specifically provided herein, this Amendment does not modify any of the information
previously reported in the Schedule 13D.
As of the date
of this Amendment, the Reporting Person may be deemed to beneficially own, in the aggregate, 11,955,611 shares of the Common Stock
of the Company, which represents approximately 57.9% of the outstanding Common Stock of the Company. The percentages in this Amendment
are calculated based upon 20,657,919 outstanding shares of Common Stock as of November 14, 2018, as reported in the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 filed with the SEC on November 19, 2018.
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Item 4.
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Purpose of Transaction.
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Item 4 of the Schedule 13D is hereby
amended and supplemented as follows:
The Reporting Person,
alone or in conjunction with Mr. Brown, has determined from time to time, to engage with the Company’s Board of Directors
(the “
Board
”) and to take actions in his capacity as a significant stockholder to strengthen the Company’s
corporate governance. Under the Company’s by-laws, the Reporting Person and Mr. Brown (the “
Stockholders
”)
have the right to call special meetings of stockholders and to take action by written consent in lieu of a meeting.
As previously reported
in Amendment No. 1, the Stockholders delivered written consents to the Company on June 29, 2018 and July 5, 2018 resolving to
remove Mr. Lorrence Kellar from the Board and to elect and appoint Mr. Jeffrey Mayer as a director to fill the resulting vacancy
(the “
Mayer Consents
”), effective July 5, 2018. The Board, however, did not recognize the removal of Mr. Kellar
or the appointment of Mr. Mayer.
As previously
reported in Amendment No. 2 and Amendment No. 3, on August 6, 2018, the Stockholders delivered an action by written consent
of stockholders, executed on August 6, 2018 (the “
August 6 Consent
”), pursuant to which the Stockholders
resolved to adopt amendments to the Company’s by-laws (the “
By-law Amendments
”). The August 6
Consent represented less than a majority of the Company’s outstanding Common Stock. In Amendment No. 2, the
Stockholders disclosed their intention to engage with the Board regarding the By-law Amendments prior to delivery of the
remaining written consents required to represent a majority of the outstanding Common Stock. Notwithstanding the
Stockholders’ willingness to engage with the Board regarding the By-law Amendments, on September 4, 2018, the Company
filed a claim against the Stockholders in the Court of Chancery of the State of Delaware (the “
Court
”),
C.A. No. 2018-0650 (the “
By-law Action
”), in response to the August 6 Consent, which, among other things,
challenged the validity of the By-law Amendments. The Company reported the filing of this claim and an amended claim in
Current Reports on Form 8-K filed with the SEC on September 10, 2018 and September 28, 2018.
CUSIP No. 784933103
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Page 4 of 8 Pages
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Thereafter, on
September 18, 2018, the Stockholders delivered executed written consents resolving to adopt the By-law Amendments which, together
with the shares of Common Stock represented by the August 6 Consent, represented a majority of the Company’s outstanding
Common Stock (the “
By-law Consents
”). Upon delivery of the By-law Consents, the By-law Amendments became effective
under Section 228 of the Delaware General Corporation Law (the “
DGCL
”).
On September 18,
2018, Mr. Brown also filed an action in the Court (C.A. No. 2018-0687) pursuant to DGCL Section 225 seeking a declaratory judgment
that the Mayer Consents were valid and effective and that Mr. Kellar had validly been removed from the Board and Mr. Mayer has
validly been elected to the Board (the “
225 Action
”). A copy of the complaint was filed as Exhibit 5 to
Amendment No. 3.
On
January 18, 2019, the parties mutually agreed to settle the By-law Action and the 225 Action (the
“
Settlement
”) and submitted Stipulations of Dismissal to the Court, copies of which are attached hereto as
Exhibits 7 and 8. Pursuant to the terms of the Settlement:
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In
connection with the Settlement, on January 18, 2019, Lorrence T. Kellar retired
from the Board and Jeffrey Mayer was appointed and seated as a director by the Board.
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In
connection with the Settlement, the Governance Committee re-evaluated the independence
of Mr. Mayer, based on (among other things) his independent business skills and contribution
to the Settlement process, determined that he has the requisite independence from the
management of the Company except for the Related Party Matters (as defined below), and
accordingly Mr. Mayer: (a) will be an independent director for all purposes other than
any Related Party Matter; (b) will be a non-independent director respecting any Related
Party Matter; and (c) may participate in discussions but will be excluded and shall recuse
himself from any and all decisions of the Board and applicable Board Committees respecting
any Related Party Matter. “
Related Party Matter
” means any payment
to or for, or any transaction or litigation with, the Reporting Person, Mr. Bartels,
any of their respective family members, or any company or other business or entity directly
or indirectly owned or controlled by any one or more of the Reporting Person, Mr. Bartels
or their respective family members.
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The
Board adopted a resolution approving amended and restated by-laws which are consistent
with the By-Law Amendments adopted by the Stockholders via the By-law Consents in September,
with the following changes agreed upon as part of Settlement negotiations (these changes
are reflected in the marked copy of the amended by-laws attached hereto as Exhibit 6):
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