Large Shareholder Questions Governance of the SPAR Group Board of Directors

Core Viewpoint - The SPAR Group's recent Annual Shareholders' Meeting raised significant concerns regarding the governance practices of its Board of Directors, particularly the re-election process and the continued service of directors who were not re-elected by shareholders [1][6]. Governance and Board Composition - At the 2025 Shareholder Meeting, three out of seven nominees for the Board were not re-elected, including two members of the Governance Committee responsible for nominating directors [1][5]. - The Bylaws stipulate that directors must submit a written irrevocable resignation to be eligible for re-election, which raises questions about the governance standards when directors not re-elected continue to serve [1][4]. - The Board's composition was reduced to five directors from January 1, 2024, to December 31, 2024, following the non-re-election of three directors, and there was no annual shareholder meeting in 2024, limiting shareholder input [4][6]. Voting Results - The voting results for the directors not re-elected were as follows: - Linda Houston: 8,041,083 votes For; 9,714,561 votes Against - John Bode: 8,023,093 votes For; 9,747,031 votes Against - Michael R. Matacunas: 7,282,163 votes For; 10,473,481 votes Against [2]. Governance Committee Concerns - The Governance Committee, which includes two directors who were not re-elected, is responsible for vetting and recommending new nominees, raising concerns about conflicts of interest [5][6]. - There are substantive reasons to believe that the Board may not be adhering to good governance practices by allowing non-re-elected directors to remain in their positions while having the authority to nominate their successors [6].