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EXHIBIT 10.13
FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of
May __, 1999 (this "Amendment"), is by and among PIA MERCHANDISING SERVICES,
INC., a Delaware corporation ("PIA Delaware"), SG ACQUISITION, INC., a Nevada
corporation ("PIA Acquisition"), PIA MERCHANDISING CO., INC., a California
corporation ("PIA California"), SPAR ACQUISITION, INC., a Nevada corporation
("SAI"), SPAR MARKETING, INC., a Delaware corporation ("SMI"), SPAR MARKETING
FORCE, INC., a Nevada corporation ("SMF"), SPAR, INC., a Nevada corporation
("SINC"), SPAR/XXXXXXXX RETAIL SERVICES, INC., an Ohio corporation ("SBRS"),
SPAR MARKETING, INC., a Nevada corporation ("SMNEV"), SPAR INCENTIVE MARKETING,
INC., a Delaware corporation ("SIM"), SPAR MCI PERFORMANCE GROUP, INC., a
Delaware corporation ("SMCI"), and SPAR TRADEMARKS, INC., a Nevada corporation
("STM"). SMF, SINC, SMNEV and SBRS are sometimes referred to herein individually
as a "SPAR Marketing Company" and collectively as the "SPAR Marketing
Companies". SMI and the SPAR Marketing Companies are sometimes referred to
herein individually as a "SPAR Marketing Party" and collectively as the "SPAR
Marketing Parties". SIM and SMCI are sometimes referred to herein individually
as a "SPAR Incentive Party" and collectively as the "SPAR Incentive Parties".
SAI, STM, the SPAR Marketing Parties and the SPAR Incentive Companies are
sometimes referred to herein individually as a "SPAR Party" and collectively as
the "SPAR Parties". PIA Delaware, PIA Acquisition and PIA California are
sometimes referred to herein individually as a "PIA Party" and collectively as
the "PIA Parties". The PIA Parties and the SPAR Parties are sometimes referred
to herein individually as a "Party" and collectively as the "Parties".
RECITALS
The PIA Parties and the SPAR Parties are parties to that certain
Agreement and Plan of Merger dated as of February 28, 1999, which includes
modifications made pursuant to the Page Substitution Amendment to Merger
Agreement and Merger Documents among the Parties dated as of March __, 1999 (as
so modified, the "Existing Merger Agreement", and as modified by this Amendment,
and as the same may be supplemented, modified, amended, restated or replaced
from time to time in the manner provided therein, the "Merger Agreement").
Capitalized terms used and not otherwise defined or amended in this Amendment
shall have the meanings respectively assigned to them in the Merger Agreement or
other "Merger Documents" (as defined in the Merger Agreement).
The Parties have each determined that it is in its best interest
to amend the Existing Merger Agreement as provided below, and have entered into
this Amendment in order to do so, all upon the terms and provisions and subject
to the conditions hereinafter set forth.
AGREEMENT
In consideration of the foregoing, the mutual covenants and
agreements hereinafter set forth and other good and valuable consideration (the
receipt and adequacy of which are hereby acknowledged by the Parties), the
Parties hereto hereby agree as follows:
Section 1. Amendment to Existing Merger Agreement. The Existing
Merger Agreement is hereby amended as follows, effective as of the date first
written above:
(A) Recital E of the Existing Merger Agreement is hereby deleted
in its entirety, and the following new Recital E is hereby inserted in its
place:
E. Pursuant to the SPAR Reorganization Agreement, SAI will issue
to the SPAR Principals sufficient additional shares of SAI Stock such
that (after such issuance and including shares previously issued to
them) they will then together own shares of SAI Stock equal in number to
(i) the product of (A) two and one-third (2 1/3) times (B) the total
number of shares of PIA Delaware Stock (as hereinafter defined) issued
and outstanding as of the close of business on the Business Day
preceding the Closing Date (as defined in the Reorganization Agreement),
minus (ii) the sum of the number of shares of SAI Stock issuable upon
exercise of the SAI Options (without regard to the vesting provisions
thereof) plus shares of SAI Stock owned by stockholders other than the
SPAR Principals.
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(B) Recital I of the Existing Merger Agreement is hereby deleted
in its entirety, and the following new Recital I is hereby inserted in its
place:
I. As provided herein, (i) as a result of the Merger, each
outstanding share of SAI Common Stock will be converted into the right
to receive one share of common stock of PIA Delaware, par value $0.01
per share ("PIA Delaware Stock"), and (ii) following the Merger, each
SAI Option Holder will receive a Substitute Option (as hereinafter
defined) to purchase the same number of shares of PIA Delaware Stock on
the same terms as the number of shares of SAI Stock that such SAI Option
Holder was entitled to purchase under such SAI Option. Immediately
following the Merger, (A) the SPAR Stockholders will hold and the SAI
Option Holders will have the right to acquire upon exercise (without
regard to vesting) shares of PIA Delaware Stock that, in the aggregate,
will represent approximately 70% of the sum of (1) the total number of
shares of PIA Delaware Stock issued and outstanding immediately after
the Merger plus (2) the total number of shares of PIA Delaware Stock
issuable upon exercise of the Substitute Options (without regard to
vesting), and (B) the shares of PIA Delaware Stock held by stockholders
of PIA Delaware immediately prior to the Merger will represent
approximately 30% of such post-Merger sum.
(C) In Section 4.03 of the Existing Merger Agreement, subsection (b) is
hereby deleted in its entirety, and the following new subsection (b) is hereby
inserted in its place:
(b) The Board of Directors of PIA Delaware (the "PIA Delaware
Board") (i) has authorized and approved the adoption of an amendment to
PIA Delaware's certificate of incorporation in the form annexed hereto
as Exhibit E (together with such changes as may be made therein in
accordance with the PIA Delaware Board's approval, but subject to the
consent of the SPAR Parties, the "Charter Amendment"), which (among
other things) provides for an increase in the authorized number of
shares of PIA Delaware Stock to 47,000,000 shares, changes the name of
PIA Delaware to "SPAR GROUP, INC." (or such other name as the Parties
may mutually agree prior to the mailing of the PIA Proxy Materials), and
deletes Article Tenth containing the prohibition against actions by
stockholders without a meeting (i.e., Charter Amendment Xx. 0, Xxxxxxx
Xxxxxxxxx Xx. 0, Charter Amendment No. 3 as defined in the PIA Proxy
Statement); (ii) has authorized for inclusion in the proxy statement, a
proposal to authorize the PIA Delaware Board, if deemed necessary in its
sole discretion (after obtaining the consent of the SPAR Parties, if
such amendment is to be effected prior to the Merger or the termination
of this Agreement), to amend PIA Delaware's certificate of incorporation
(in the form annexed hereto as Exhibit E-1) to effect a reverse stock
split of the issued and outstanding shares of PIA Delaware Stock on the
basis of one of the following ratios: one new share in exchange for
every two issued and outstanding shares, one new share in exchange for
every three issued and outstanding shares, or one new share in exchange
for every four issued and outstanding shares, with the PIA Delaware
Board having the discretion to determine the appropriate ratio to use
immediately prior to effecting the reverse stock split (the "Reverse
Split Proposal" and together with the Charter Amendment, the "Proposed
PIA Certificate of Amendment"), and (iii) has directed that the Proposed
PIA Certificate of Amendment be submitted to PIA Delaware's stockholders
at the PIA Stockholders Meeting (as such term is defined in Section
5.01). Upon the approval of the Proposed PIA Certificate of Amendment by
the stockholders of PIA Delaware as required by the Delaware General
Corporation Law (the "DGCL") and the filing thereof with the Secretary
of State of the State of Delaware, the shares of PIA Delaware Stock to
be issued in connection with the Merger will be duly authorized and,
when issued as contemplated hereby at and after the Effective Time, will
be validly issued, fully paid and nonassessable and free of all
Restrictions.
(D) In Section 7.01 of the Existing Merger Agreement, subsection (b) is
hereby deleted in its entirety, and the following new subsection (b) is hereby
inserted in its place:
(b) Promptly after such calculation of the Closing Net Worth, the
Surviving Corporation shall deliver to the SPAR Principals written
notice of the Closing Net Worth as so calculated (the "Closing Net Worth
Notice"). Following the delivery of the Closing Net Worth Notice, the
SPAR Principals shall have the right to review the calculation thereof
for a period of thirty (30) days after the delivery of the Closing Net
Worth Notice to the SPAR Principals (the "Review Period"). If, the SPAR
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Principals do not provide PIA Delaware with written objection to the
calculation of the Closing Net Worth prior to the expiration of the
Review Period, then, (i) to the extent that the Closing Net Worth, as
set forth in the Closing Net Worth Notice, is greater than one million
four hundred thirty-six thousand dollars ($1,436,000) (the "Target
Amount"), no adjustment will be made, and the SPAR Principals will have
no further obligations hereunder; and (ii) to the extent the Closing Net
Worth, as set forth in the Closing Net Worth Notice, is less than the
Target Amount, the SPAR Principals shall pay to PIA Delaware, within
five (5) business days after the last day of the Review Period, the
amount of such shortfall, such payment obligation to be borne by the
SPAR Principals pro rata (44/72 by Xx. Xxxxx and 28/72 by Xx. Xxxxxxx),
and to be satisfied either (at the election of the SPAR Principals) (A)
by wire transfer of immediately available funds to such account as PIA
Delaware may designate or (B) by corresponding reductions in the loans
owed to the SPAR Principals from SMCI.
(E) Exhibit E-1 to the Existing Merger Agreement is hereby inserted in
the form annexed hereto as Exhibit 1.
(F) Each of the Parties hereto hereby acknowledges and, to the extent
such Party's consent may be required under the Merger Agreement, consents to the
First Amendment to Reorganization Agreement, dated as of the date hereof, a copy
of which is annexed hereto as Exhibit 2.
Section 2. Counterparts. This Amendment may be signed in two or more
counterpart copies of the entire document or of signature pages to the document,
each of which may be executed by one or more of the Parties hereto, but all of
which, when taken together, shall constitute a single agreement binding upon all
of the Parties hereto.
Section 3. Governing Law, Etc. This Amendment is a Merger Document and
shall be governed by and construed in accordance with the applicable terms and
provisions of Article IX (as well as any applicable definitions or provisions
appearing elsewhere) of the Merger Agreement as if this Amendment were the
Agreement referred to therein, which terms and provisions are incorporated
herein by reference.
Section 4. Agreement to Continue as Amended. The Merger Agreement, as
supplemented, modified and amended by this Amendment, shall remain and continue
in full force and effect after the date hereof.
[END OF PAGE]
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Section 5. Entire Agreement. This Amendment contains the entire
agreement of the Parties and supersedes all other representations, warranties,
agreements and understandings, oral or otherwise, among the parties with respect
to the matters contained herein.
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Amendment as of the date first written above.
PIA MERCHANDISING SERVICES, INC. SPAR ACQUISITION, INC.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: President and Chief Title: Chairman, Chief Executive
Executive Officer Officer and President
SG ACQUISITION, INC. SPAR MARKETING FORCE, INC.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: President and Chief Title: Chairman, Chief Executive
Executive Officer Officer and President
PIA MERCHANDISING CO., INC. SPAR, INC.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: President and Chief Title: Chairman, Chief Executive
Executive Officer Officer and President
SPAR/XXXXXXXX RETAIL SERVICES, INC. SPAR MARKETING, INC.
By: /s/ XXXXXX X. XXXXX By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Chairman, Chief Executive Title: Chairman, Chief Executive
Officer and President Officer and President
SPAR MCI PERFORMANCE GROUP, INC. SPAR TRADEMARKS, INC.
By: /s/ XXXXXX X. XXXXX By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Chairman, Chief Executive Title: Chairman, Chief Executive
Officer Officer and President
SPAR MARKETING, INC., a Nevada corporation
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Chairman, Chief Executive
Officer and President
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SPAR MARKETING, INC., a Nevada corporation
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Chairman, Chief Executive
Officer and President
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EXHIBIT E-1
EXHIBIT 1 TO FIRST AMENDMENT TO MERGER AGREEMENT
FORM OF REVERSE SPLIT AMENDMENT TO
PIA DELAWARE CERTIFICATE OF INCORPORATION
Upon this Certificate of Amendment to the Certificate of Incorporation
of the Corporation becoming effective pursuant to the General Corporation Law of
the State of Delaware (the "Effective Time"), each share of the Corporation=s
common stock, par value $.01 per share (the "Old Common Stock"), issued and
outstanding immediately prior to the Effective Time, will be automatically
reclassified as and converted into [_________] of a share of common stock, par
value $.01 per share, of the Corporation (the "New Common Stock"). Any stock
certificate that, immediately prior to the Effective Time, represented shares of
the Old Common Stock will, from and after the Effective Time, automatically and
without the necessity of presenting the same for exchange, represent the number
of shares of the New Common Stock as equals the product obtained by multiplying
the number of shares of Old Common Stock represented by such certificate
immediately prior to the Effective Time by [________]. No fractional shares of
New Common Stock will be issued in connection with the reclassification and
conversion of the Old Common Stock into the New Common Stock. In lieu of any
fractional shares, each holder of Old Common Stock who would otherwise receive a
fractional share of New Common Stock will be entitled to receive cash in an
amount equal to the product obtained by multiplying (1) the closing sales price
of the Corporation=s Common Stock at the Effective Time as reported on the
Nasdaq National Market (or, if applicable, the Nasdaq SmallCap Market or any
exchange that the PIA Common Stock may be traded on at the Effective Time) by
(2) the number of shares of Old Common Stock held by such holder that would
otherwise have been exchanged for such fractional share interest.
