1

SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ______)

FILED BY THE REGISTRANT [X]

FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

CHECK THE APPROPRIATE BOX:

[X] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
[ ] DEFINITIVE PROXY STATEMENT 
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SECTION 240.14a-11(c) OR SECTION 240.14a-12

PIA MERCHANDISING SERVICES, INC.
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

N/A
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[ ]     NO FEE REQUIRED
[X]     FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14a-6(i)(1) AND 0-11.

1)      TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
SPAR ACQUISITION, INC. ("SAI")
------------------------------------------------------------------------

2)      AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
12,970,978(a)
------------------------------------------------------------------------

3)      PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE
FILING FEE IS CALCULATED AND STATE HOW IT WAS DETERMINED): $ 43,237(b)
------------------------------------------------------------------------

4)      PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
$ 43,237(b)
------------------------------------------------------------------------

5)      TOTAL FEE PAID:
$ 9.00(c)
------------------------------------------------------------------------

(a)     BASED ON 12,970,978 THE ESTIMATED MAXIMUM NUMBER OF SHARES OF
SAI COMMON STOCK AND SHARES OF SAI COMMON STOCK UNDERLYING
OPTIONS TO PURCHASE SAI COMMON STOCK THAT WILL BE OUTSTANDING
IMMEDIATELY PRIOR TO THE MERGER.

(b)     CALCULATED PURSUANT TO EXCHANGE ACT RULES 0-11(c)(1)(i) AND
0-11(a)(4), BASED UPON ONE THIRD OF THE PAR VALUE OF SAI COMMON
STOCK TO BE ACQUIRED.

(c)     PURSUANT TO EXCHANGE ACT RULES 14a-6(i)(1) AND 0-11, THE FILING
FEE REPRESENTS 1/50TH OF ONE PERCENT OF THE VALUE OF THE SAI
SECURITIES TO BE ACQUIRED BY THE REGISTRANT IN THE PROPOSED
TRANSACTION.

[ ]     FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
[ ]     CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE ACT
RULE 0-11(a)(2) AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE WAS
PAID PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT
NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
------------------------------------------------------------------------

1)      AMOUNT PREVIOUSLY PAID:
------------------------------------------------------------------------

2)      FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
------------------------------------------------------------------------

3)      FILING PARTY:
------------------------------------------------------------------------

4)      DATE FILED:
------------------------------------------------------------------------

2
PIA MERCHANDISING SERVICES, INC.
19900 MACARTHUR BOULEVARD, SUITE 900
IRVINE, CALIFORNIA 92612

Dear Stockholder:

You are cordially invited to attend an Annual Meeting of the
stockholders of PIA Merchandising Services, Inc. ("PIA"), which will be held at
[_____] a.m., Pacific Time on [__________], [__], 1999 (the "Annual Meeting"),
at [_______________________________________].

At the Annual Meeting, you will be asked to consider and vote upon
proposals to:

1. Approve (i) the issuance of shares of PIA common stock to Robert G.
Brown and William H. Bartels (together, the "SAI Principals"), and the other
stockholders (collectively with the SAI Principals, the "SAI Stockholders") of
SPAR Acquisition, Inc. ("SAI"), and (ii) the issuance of options to purchase
134,114 shares of PIA common stock to holders of SAI options, in exchange for
their respective SAI shares and SAI options (collectively, the "Share/Option
Issuance") as consideration for the merger (the "Merger") of a subsidiary of PIA
with and into SAI;

2. Amend PIA's Certificate of Incorporation to (i) increase the number
of authorized shares of PIA common stock from 15 million to 47 million, (ii)
delete the prohibition on stockholder action by written consent without a
meeting under Delaware law, and (iii) change the name of PIA Merchandising
Services, Inc. to "SPAR Group, Inc." (the "Charter Amendment");

3. Amend PIA's Amended and Restated 1995 Stock Option Plan, subject to
the consummation of the Merger, to increase the number of shares of PIA common
stock reserved for issuance upon exercise of stock options granted thereunder
from 1.3 million to 3.5 million (the "Option Plan Amendment"); and

4. Elect seven directors to serve on PIA's Board of Directors (the "PIA
Board") until the consummation of the Merger, or if the Merger is not
consummated, until such time as their successors are duly elected and qualified.
In connection with the consummation of the Merger, however, if elected, each of
the nominees for director other than Messrs. Patrick W. Collins and J.
Christopher Lewis has agreed to resign from the PIA Board, and Messrs. Collins
and Lewis will appoint the two SAI Principals (Robert G. Brown and William H.
Bartels) and Robert O. Aders to fill three of the five remaining vacancies on
the PIA Board.

Each of these proposals is described more fully in the accompanying
Notice of Annual Meeting of Stockholders and Proxy Statement.

In connection with the Merger, one share of PIA common stock will be
issued in exchange for each share of SAI common stock outstanding immediately
prior to the consummation of the Merger. This one-to-one ratio, as explained in
more detail in the opinion of ING Baring Furman Selz LLC attached as Annex D to
the accompanying Proxy Statement, is referred to as the "Exchange Ratio." In
addition, PIA will assume all of SAI's outstanding options to purchase SAI
common stock (the "SAI Options") and will issue options (the "Substitute
Options") to purchase an aggregate of 134,114 shares of PIA common stock. Each
Substitute Option will have an exercise price of $0.01 per share.

Although the exact number of shares to be issued to the SAI Stockholders
in connection with the Merger will not be determined until immediately prior to
the closing of the Merger, the number of shares will equal (a) 2.2546 times the
total number of outstanding shares of PIA common stock on the business day prior
to the closing of the Merger, minus (b) 134,114 (the number of Substitute
Options). Immediately following the Merger and assuming full exercise of all
Substitute Options and without regard to vesting (i) the SAI Stockholders and
the holders of Substitute Options will hold an aggregate of approximately 69.3%
of the PIA common stock then outstanding and (ii) the holders of PIA common
stock immediately prior to the Merger will hold an aggregate of approximately
30.7% of the PIA

3

common stock then outstanding. The total number of shares of PIA common stock to
be issued to the SAI Stockholders and to be covered by the Substitute Options
issued to SAI Option holders pursuant to the Merger is estimated to be between
12.3 million and 12.4 million.

While dollar fluctuations in the market price of PIA common stock will
not affect the number of shares of PIA common stock and Substitute Options to be
issued in the Merger, they would change the aggregate value of the shares of PIA
common stock and Substitute Options issued in the Merger. Based on the number of
shares of PIA common stock outstanding on [_____], 1999 ([__________]
outstanding shares), upon the consummation of the Merger, PIA will issue an
aggregate of [________] shares of PIA common stock to the SAI Stockholders and
Substitute Options covering an aggregate of [________] shares of PIA common
stock to the holders of SAI Options. Such shares of PIA common stock would have
a value of approximately $[__________] and the Substitute Options (assuming full
exercise thereof and without regard to vesting) would have a value of
approximately [$_____], based upon the closing price of PIA common stock as
reported on the Nasdaq National Market on [__________], 1999.

If the requisite approval of the stockholders of PIA is received and all
other conditions to closing are satisfied or waived, the Merger is anticipated
to close within the second calendar quarter of 1999.

YOUR BOARD OF DIRECTORS HAS CAREFULLY REVIEWED AND CONSIDERED THE TERMS
AND CONDITIONS OF THE SHARE/OPTION ISSUANCE, THE CHARTER AMENDMENT AND THE
OPTION PLAN AMENDMENT AND HAS DETERMINED THAT THE SHARE/OPTION ISSUANCE, THE
CHARTER AMENDMENT AND THE OPTION PLAN AMENDMENT ARE FAIR TO PIA AND IN THE BEST
INTERESTS OF THE PIA STOCKHOLDERS. ACCORDINGLY, YOUR BOARD OF DIRECTORS HAS
UNANIMOUSLY APPROVED THE SHARE/OPTION ISSUANCE, THE CHARTER AMENDMENT AND THE
OPTION PLAN AMENDMENT AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
SHARE/OPTION ISSUANCE, THE CHARTER AMENDMENT AND THE OPTION PLAN AMENDMENT. YOUR
BOARD OF DIRECTORS ALSO RECOMMENDS THAT STOCKHOLDERS VOTE FOR ELECTION OF THE
SEVEN NOMINEES TO SERVE AS DIRECTORS OF PIA UNTIL SUCH TIME AS THE MERGER MAY BE
CONSUMMATED, OR IF THE MERGER IS NOT CONSUMMATED, UNTIL SUCH TIME AS THEIR
SUCCESSORS ARE DULY ELECTED AND QUALIFIED.

Your vote is important regardless of how many shares you own. Please
take a few minutes now to review the Proxy Statement and to sign and date your
proxy and return it in the envelope provided. You may attend the meeting and
vote in person even if you have previously returned your proxy.

Sincerely,

Terry R. Peets
Chief Executive Officer, President
and Director

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4

PIA MERCHANDISING SERVICES, INC.
19900 MACARTHUR BOULEVARD, SUITE 900
IRVINE, CALIFORNIA 92612

-----------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON [         ], 1999

TO THE STOCKHOLDERS OF PIA MERCHANDISING SERVICES, INC.:

NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") of PIA Merchandising Services, Inc, a Delaware corporation
("PIA") will be held at [ ] a.m., Pacific Time, on [ ], [ ], 1999 at
[____________________________________________], for the following purposes, all
as more fully described in the attached Proxy Statement:

1.     To consider and vote upon a proposal to approve the issuance of
(i) shares (the "Merger Shares") of common stock, $.01 par value
per share of PIA (the "PIA Common Stock") to Robert G. Brown and
William H. Bartels (together, the "SAI Principals") and the other
stockholders (collectively with the SAI Principals, the "SAI
Stockholders") of SPAR Acquisition, Inc., a Nevada corporation
("SAI"), and (ii) the issuance of options ("Substitute Options")
to purchase 134,114 shares of PIA Common Stock to holders (each,
an "SAI Option Holder") of SAI options ("SAI Options"), in
exchange for their respective SAI shares (the "SAI Shares") and
SAI Options as consideration for the merger of a subsidiary of
PIA with and into SAI.

The Merger Shares and the Substitute Options will be issued as
consideration pursuant to the terms of that certain Agreement and
Plan of Merger dated as of February 28, 1999 (the "Merger
Agreement"), among PIA, PIA Merchandising Co., Inc., a California
corporation and wholly owned subsidiary of PIA ("PIA
California"), SG Acquisition, Inc., a Nevada corporation and
wholly owned subsidiary of PIA ("PIA Acquisition"), SAI, SPAR MCI
Performance Group, Inc., a Delaware corporation ("SMCI"), SPAR
Incentive Marketing, Inc., a Delaware corporation ("SIM"), SPAR
Marketing Force, Inc., a Nevada corporation ("SMF"), SPAR
Marketing, Inc., a Delaware corporation ("SMI"), SPAR, Inc., a
Nevada corporation ("SINC"), SPAR/Burgoyne Retail Services, Inc.,
an Ohio corporation ("SBRS"), SPAR Marketing, Inc., a Nevada
corporation ("SMNEV"), and SPAR Trademarks, Inc., a Nevada
corporation ("STM"), whereby, among other things, PIA Acquisition
will merge with and into SAI (the "Merger"). The issuance of the
Merger Shares and the Substitute Options pursuant to the terms of
the Merger Agreement is referred to as the "Share/Option
Issuance."

As a result of the Merger, each share of common stock, $.01 par
value per share of SAI (the "SAI Common Stock") outstanding
immediately prior to the consummation of the Merger will be
converted into the right to receive one share of PIA Common
Stock. This one-to-one ratio is referred to as the "Exchange
Ratio" and is explained in more detail in the fairness opinion of
ING Baring Furman Selz LLC which is attached as Annex D to the
Proxy Statement. The Merger Agreement also provides for the
assumption by PIA of all outstanding options to purchase SAI
Common Stock. Pursuant to the Merger Agreement, PIA will issue
Substitute Options covering an aggregate of 134,114 shares of PIA
Common Stock to the holders of SAI Options. Each Substitute
Option shall provide for the same terms and conditions (including
an exercise price of $0.01 per share) and right to purchase the
same number of shares as the surrendered SAI Option.

Although the exact number of Merger Shares to be issued to the
SAI Stockholders in connection with the Merger will not be
determined until immediately prior to the closing of the Merger,
the number of such shares will equal (a) 2.2546 times the total
number of outstanding shares of PIA Common

5

Stock on the business day prior to the closing of the Merger,
minus (b) 134,114 (the number of Substitute Options). Immediately
following the Merger (and assuming full exercise of all
Substitute Options and without regard to vesting), (i) the SAI
Stockholders and the holders of Substitute Options will hold an
aggregate of approximately 69.3% of the PIA Common Stock then
outstanding and (ii) the holders of PIA Common Stock immediately
prior to the Merger will hold an aggregate of approximately 30.7%
of the PIA Common Stock then outstanding. The total number of
shares of PIA Common Stock to be issued to the SAI Stockholders
and to be covered by the Substitute Options issued to the SAI
Option Holders pursuant to the Merger is estimated to be between
12.3 million and 12.4 million.

While dollar fluctuations in the market price of PIA Common Stock
will not affect the number of shares of PIA Common Stock and
Substitute Options to be issued in the Merger, such changes in
market price would change the aggregate value of shares of PIA
Common Stock and Substitute Options issued in the Merger. Based
on the number of shares of PIA common stock outstanding on
[_____], 1999 ([____________] outstanding shares), upon the
consummation of the Merger, PIA will issue an aggregate of
[________] shares of PIA Common Stock to the SAI Stockholders and
Substitute Options covering [________] shares of PIA Common Stock
to the holders of SAI Options. Such Merger Shares would have a
value of approximately $[_____] and the Substitute Options
(assuming full exercise thereof and without regard to vesting)
would have a value of approximately [$_____], based upon the
closing price of PIA Common Stock as reported on the Nasdaq
National Market on [__________], 1999. A copy of the Merger
Agreement is attached as Annex A to the Proxy Statement.

If the requisite approval of the stockholders of PIA is received
and all other conditions to the Merger are satisfied or waived,
the Merger is anticipated to close within the second calendar
quarter of 1999.

2.     To consider and vote upon a proposal to amend PIA's Certificate
of Incorporation to (i) increase the number of authorized shares
of PIA Common Stock from 15 million to 47 million, (ii) delete
the prohibition on stockholder action by written consent without
a meeting under Delaware law, and (iii) change the name of PIA
Merchandising Services, Inc. to "SPAR Group, Inc." (the "Charter
Amendment"). A copy of the proposed amendment to PIA's
Certificate of Incorporation is attached as Annex B to the Proxy
Statement.

3.     To consider and vote upon a proposal to amend PIA's Amended and
Restated 1995 Stock Option Plan (the "1995 Option Plan"), subject
to the consummation of the Merger, to increase the number of
shares of PIA Common Stock reserved for issuance upon exercise of
stock options granted thereunder from 1.3 million to 3.5 million
(the "Option Plan Amendment"). The Option Plan Amendment will be
effected only if the Merger is consummated. The full text of the
1995 Option Plan, as amended by the Option Plan Amendment, is
attached as Annex C to the Proxy Statement.

4.     To elect seven directors of PIA to serve on the Board of
Directors of PIA (the "PIA Board") until the consummation of the
Merger or, if the Merger is not consummated, until such time as
their successors are duly elected and qualified. In connection
with the consummation of the Merger, however, if elected, each of
the nominees for director other than Messrs. Patrick W. Collins
and J. Christopher Lewis has agreed to resign from the PIA Board,
and Messrs. Collins and Lewis will appoint the two SAI Principals
(Robert G. Brown and William H. Bartels) and Robert O. Aders to
fill three of the five remaining vacancies on the PIA Board.

5.     To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.

Approval of the Charter Amendment requires the affirmative vote of a
majority of the outstanding shares of PIA Common Stock entitled to vote thereon
at the Annual Meeting. Approval of each of the Share/Option Issuance

-2-

6

and the Option Plan Amendment requires the affirmative vote of a majority of the
votes cast with respect to each such proposal; provided that the total number of
votes cast on each such proposal represents more than 50% of the outstanding
shares of PIA Common Stock entitled to vote thereon at the Annual Meeting.
Approval of the Share/Option Issuance, the Charter Amendment and Option Plan
Amendment is required for the Merger to be consummated. Unless all three
proposals are approved, the Merger cannot be consummated and none of the three
proposals will be approved. The director nominees that receive the greatest
number of votes at the Annual Meeting will be elected to serve on the PIA Board
until such time as the Merger may be consummated, or if the Merger is not
consummated, until such time as their successors are duly elected and qualified.

The PIA Board unanimously recommends that stockholders vote FOR approval
and adoption of the Share/Option Issuance, the Charter Amendment and the Option
Plan Amendment and FOR election of the seven nominees for director of PIA.

The PIA Board has fixed the close of business on [       ], 1999, as the
record date for the determination of stockholders entitled to notice of, and to
vote at, the Annual Meeting or any adjournment thereof. Only holders of record
of PIA Common Stock at the close of business on [________], 1999 are entitled to
notice of, and to vote at, the Annual Meeting or any adjustment thereof.

YOU ARE URGED TO VOTE UPON THE MATTERS PRESENTED AND TO SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IT IS IMPORTANT FOR
YOU TO BE REPRESENTED AT THE ANNUAL MEETING. PROXIES ARE REVOCABLE AT ANY TIME
AND THE EXECUTION OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF
YOU ARE PRESENT AT THE ANNUAL MEETING.

By Order of the Board of Directors

Cathy L. Wood
Secretary
[        ], 1999
Irvine, California

-----------

REQUESTS FOR ADDITIONAL COPIES OF PROXY MATERIALS SHOULD BE ADDRESSED TO
CATHY L. WOOD, EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY,
AT THE OFFICES OF PIA MERCHANDISING SERVICES, INC., 19900 MACARTHUR BOULEVARD,
SUITE 900, IRVINE, CALIFORNIA 92612.

-3-

7

(Preliminary Copy)

PIA MERCHANDISING SERVICES, INC.
19900 MACARTHUR BOULEVARD, SUITE 900
IRVINE, CALIFORNIA 92612

----------------------

PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON [ ], 1999

This Proxy Statement and the accompanying form of proxy are
furnished in connection with the solicitation of proxies by the Board of
Directors (the "PIA Board") of PIA Merchandising Services, Inc., a Delaware
corporation ("PIA"), for use in voting at the 1999 Annual Meeting of
Stockholders (the "Annual Meeting") to be held on [________], [________], 1999
at [____] a.m., Pacific Time, at [_______________________________________], and
any adjournment thereof. This Proxy Statement and the form of proxy to be
utilized at the Annual Meeting were mailed or delivered to the stockholders of
PIA on or about [ ], 1999.

At the Annual Meeting, the stockholders of PIA will be asked:

1.          To consider and vote upon a proposal to approve the
issuance of (i) shares (the "Merger Shares") of common
stock, $.01 par value per share of PIA (the "PIA Common
Stock") to Robert G. Brown and William H. Bartels
(together, the "SAI Principals") and the other
stockholders (collectively with the SAI Principals, the
"SAI Stockholders") of SPAR Acquisition, Inc., a Nevada
corporation ("SAI"), and (ii) the issuance of options
("Substitute Options") to purchase 134,114 shares of PIA
Common Stock to holders (each, an "SAI Option Holder")
of SAI options ("SAI Options"), in exchange for their
respective SAI shares (the "SAI Shares") and SAI Options
as consideration for the merger of a subsidiary of PIA
with and into SAI.

The Merger Shares and the Substitute Options will be
issued as consideration pursuant to the terms of that
certain Agreement and Plan of Merger dated as of
February 28, 1999 (the "Merger Agreement"), among PIA,
PIA Merchandising Co., Inc., a California corporation
and wholly owned subsidiary of PIA ("PIA California"),
SG Acquisition, Inc., a Nevada corporation and wholly
owned subsidiary of PIA ("PIA Acquisition"), SAI, SPAR
MCI Performance Group, Inc., a Delaware corporation
("SMCI"), SPAR Incentive Marketing, Inc., a Delaware
corporation ("SIM"), SPAR Marketing Force, Inc., a
Nevada corporation ("SMF"), SPAR Marketing, Inc., a
Delaware corporation ("SMI"), SPAR, Inc., a Nevada
corporation ("SINC"), SPAR/Burgoyne Retail Services,
Inc., an Ohio corporation ("SBRS"), SPAR Marketing,
Inc., a Nevada corporation ("SMNEV"), and SPAR
Trademarks, Inc., a Nevada corporation ("STM"), whereby,
among other things, PIA Acquisition will merge with and
into SAI (the "Merger"). The issuance of the Merger
Shares and the Substitute Options pursuant to the terms
of the Merger Agreement is referred to as the
"Share/Option Issuance."

As a result of the Merger, each share of common stock,
$.01 par value per share of SAI (the "SAI Common Stock")
outstanding immediately prior to the consummation of the
Merger will be converted into the right to receive one
share of PIA Common Stock. This one-to-one ratio is
referred to as the "Exchange Ratio" and is explained in
more detail in the fairness opinion of ING Baring
Furman Selz LLC which is attached as Annex D to this
Proxy Statement. The Merger Agreement

8
(Preliminary Copy)

also provides for the assumption by PIA of all
outstanding options to purchase SAI Common Stock.
Pursuant to the Merger Agreement, PIA will issue
Substitute Options covering an aggregate of 134,114
shares of PIA Common Stock to the holders of SAI
Options. Each Substitute Option shall provide for the
same terms and conditions (including an exercise price
of $0.01 per share) and right to purchase the same
number of shares as the surrendered SAI Option.

Although the exact number of Merger Shares to be issued
to the SAI Stockholders in connection with the Merger
will not be determined until immediately prior to the
closing of the Merger, the number of such shares will
equal (a) 2.2546 times the total number of outstanding
shares of PIA Common Stock on the business day prior to
the closing of the Merger, minus (b) 134,114 (the number
of Substitute Options). Immediately following the Merger
(and assuming full exercise of all Substitute Options
and without regard to vesting), (i) the SAI Stockholders
and the holders of Substitute Options will hold an
aggregate of approximately 69.3% of the PIA Common Stock
then outstanding and (ii) the holders of PIA Common
Stock immediately prior to the Merger will hold an
aggregate of approximately 30.7% of the PIA Common Stock
then outstanding. The total number of shares of PIA
Common Stock to be issued to the SAI Stockholders and to
be covered by the Substitute Options issued to the SAI
Option Holders pursuant to the Merger is estimated to be
between 12.3 million and 12.4 million.

While dollar fluctuations in the market price of PIA
Common Stock will not affect the number of shares of PIA
Common Stock and Substitute Options to be issued in the
Merger, such changes in market price would change the
aggregate value of shares of PIA Common Stock and
Substitute Options issued in the Merger. Based on the
number of shares of PIA common stock outstanding on
[_____], 1999 ([____________] outstanding shares), upon
the consummation of the Merger, PIA will issue an
aggregate of [________] shares of PIA Common Stock to
the SAI Stockholders and Substitute Options covering
[________] shares of PIA Common Stock to the holders of
SAI Options. Such Merger Shares would have a value of
approximately $[_____] and the Substitute Options
(assuming full exercise thereof and without regard to
vesting) would have a value of approximately [$_____],
based upon the closing price of PIA Common Stock as
reported on the Nasdaq National Market on [__________],
1999. A copy of the Merger Agreement is attached as
Annex A to the Proxy Statement.

If the requisite approval of the stockholders of PIA is
received and all other conditions to the Merger are
satisfied or waived, the Merger is anticipated to close
within the second calendar quarter of 1999.

2.          To consider and vote upon a proposal to amend PIA's
Certificate of Incorporation to (i) increase the number
of authorized shares of PIA Common Stock from 15 million
to 47 million, (ii) delete the prohibition on
stockholder action by written consent without a meeting
under Delaware law, and (iii) change the name of PIA
Merchandising Services, Inc. to "SPAR Group, Inc." (the
"Charter Amendment"). A copy of the proposed amendment
to PIA's Certificate of Incorporation is attached as
Annex B to the Proxy Statement.

3.          To consider and vote upon a proposal to amend PIA's
Amended and Restated 1995 Stock Option Plan (the "1995
Option Plan"), subject to the consummation of the
Merger, to increase the number of shares of PIA Common
Stock reserved for issuance upon exercise of stock
options granted thereunder from 1.3 million to 3.5
million (the "Option Plan Amendment"). The Option Plan
Amendment will be effected only if the Merger is
consummated. The full text of the 1995 Option Plan, as
amended by the Option Plan Amendment, is attached as
Annex C to the Proxy Statement.

-2-

9
(Preliminary Copy)

4.          To elect seven directors of PIA to serve on the Board of
Directors of PIA (the "PIA Board") until the
consummation of the Merger or, if the Merger is not
consummated, until such time as their successors are
duly elected and qualified. In connection with the
consummation of the Merger, however, if elected, each of
the nominees for director other than Messrs. Patrick W.
Collins and J. Christopher Lewis has agreed to resign
from the PIA Board, and Messrs. Collins and Lewis will
appoint the two SAI Principals (Robert G. Brown and
William H. Bartels) and Robert O. Aders to fill three of
the five remaining vacancies on the PIA Board.

5.          To transact such other business as may properly come
before the Annual Meeting or any adjournment thereof.

Approval of the Charter Amendment requires the affirmative vote of a
majority of the outstanding shares of PIA Common Stock entitled to vote thereon
at the Annual Meeting. Approval of each of the Share/Option Issuance and the
Option Plan Amendment requires the affirmative vote of a majority of the votes
cast with respect to each such proposal; provided that the total number of votes
cast on each such proposal represents more than 50% of the outstanding shares of
PIA Common Stock entitled to vote thereon at the Annual Meeting. Approval of the
Share/Option Issuance, the Charter Amendment and Option Plan Amendment is
required for the Merger to be consummated. Unless all three proposals are
approved, the Merger cannot be consummated and none of the three proposals will
be approved. The director nominees that receive the greatest number of votes at
the Annual Meeting will be elected to serve on the PIA Board until such time as
the Merger may be consummated, or if the Merger is not consummated, until such
time as their successors are duly elected and qualified.

The PIA Board has obtained an opinion from its financial advisor,
ING Baring Furman Selz LLC, that, taking into account the number of SAI Shares
and SAI Options to be outstanding immediately prior to the Merger and the number
of Merger Shares and Substitute Options to be received, the Exchange Ratio in
connection with the Merger is fair, from a financial point of view, to the
holders of PIA Common Stock. PIA stockholders are urged to read the opinion in
its entirety and a copy is attached as Annex D to this Proxy Statement. The PIA
Board unanimously recommends that the stockholders of PIA vote "FOR" the Merger
Agreement, the Share/Option Issuance, the Charter Amendment and the Option Plan
Amendment and FOR election of the seven nominees to serve as directors of PIA.
In connection with the Merger, Clinton E. Owens, a PIA director, and RVM/PIA, a
California limited partnership, who own approximately 40.7% of the outstanding
voting securities of PIA, in the aggregate, have executed a voting agreement to
vote all PIA Common Stock over which they have voting control in favor of the
Share/Option Issuance, the Charter Amendment and the Option Plan Amendment.

Holders of PIA's voting securities will not be entitled to any
dissenters' or appraisal rights in connection with the Merger.

All proxies that are properly completed, signed and returned prior
to the Annual Meeting will be voted. Any proxy given by a stockholder may be
revoked at any time before it is exercised, by filing with the Secretary of PIA
an instrument revoking it, by delivering a duly executed proxy bearing a later
date or by the stockholder attending the Annual Meeting and voting his or her
shares in person.

PIA's executive offices are located at PIA Merchandising Services,
Inc., 19900 MacArthur Boulevard, Suite 900, Irvine, California 92612.

The PIA Board has fixed the close of business on [__________], 1999
as the record date (the "Record Date") for the determination of stockholders
entitled to vote at the Annual Meeting and any adjournment thereof. As of the
Record Date, there were [________] shares of PIA Common Stock issued and
outstanding.

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TABLE OF CONTENTS

Page
----
FORWARD-LOOKING STATEMENTS........................................................1

SUMMARY...........................................................................1

RISK FACTORS.....................................................................14

THE ANNUAL MEETING...............................................................24

PROPOSAL I:  SHARE/OPTION ISSUANCE ..............................................26

BUSINESS OF SPAR ................................................................49

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION61
AND RESULTS OF OPERATIONS OF SPAR ...............................................56

MARKET AND DIVIDEND INFORMATION FOR SPAR.........................................63

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION.............................. 64

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF PIA PRIOR TO THE MERGER.......74

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF THE
COMBINED COMPANY FOLLOWING THE MERGER............................................77

PROPOSAL II:  CHARTER AMENDMENT..................................................78

PROPOSAL III:  OPTION PLAN AMENDMENT.............................................80

PROPOSAL IV:  ELECTION OF DIRECTORS..............................................84

EXECUTIVE OFFICERS' COMPENSATION AND OTHER INFORMATION OF PIA....................87

COMPANY PERFORMANCE..............................................................96

DESCRIPTION OF PIA'S CAPITAL STOCK...............................................98

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..........................99

INDEPENDENT ACCOUNTANTS.........................................................100

SUBMISSION OF STOCKHOLDER PROPOSALS.............................................100

AVAILABLE INFORMATION...........................................................100

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PIA'S ANNUAL REPORT............................................................101

OTHER MATTERS..................................................................101

PROXIES AND SOLICITATION.......................................................101

INCORPORATION BY REFERENCE.....................................................101

INDEX TO FINANCIAL STATEMENTS..................................................F-1

Annex A - Agreement and Plan of Merger

Annex B - Form of Amendment to Certificate of Incorporation of PIA 
Merchandising Services, Inc.

Annex C - PIA Merchandising Services, Inc.  Amended and Restated 1995 Stock 
Option Plan

Annex D - Opinion of ING Baring Furman Selz LLC

Annex E - Glossary

Annex F - Form of Proxy

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FORWARD-LOOKING STATEMENTS

Certain statements in this Proxy Statement constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21B of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The reasons
for the Merger discussed under the caption "Proposal I: Share/Option Issuance,
statements about the expected impact of the Merger on the businesses, financial
performance and condition, accounting and tax treatment of the PIA Companies and
the SPAR Companies (each as defined below), the extent of the charges to be
incurred by PIA related to the Merger and the strategy of the Combined Company
(as defined below) after the Merger are forward-looking statements. Further, any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, the
words "projects," "believes," "anticipates," "plans," "expects," "may," "might,"
"will," "continue," "intends" or the negative thereof or other variations
thereon or comparable and similar expressions are intended to identify
forward-looking statements. There are a number of important factors that could
cause the results of the PIA Companies and the SPAR Companies following the
effective time of the Merger (collectively, the "Combined Company") to differ
materially from those indicated by such forward-looking statements, including,
but not limited to: (i) factors related to the Merger, including the risks that
anticipated synergies will not be realized, the significant transaction charges
and the substantial dilutive effect to holders of PIA Common Stock that will
result from the Merger, and of the effect of the Merger on customers and
partners of the PIA Companies and the SPAR Companies, and (ii) factors related
to the respective businesses of the PIA Companies and the SPAR Companies,
including history of operating losses and uncertain profitability, significant
fluctuations in operating results, uncertainty of commission income,
concentrated client base, loss of business, potential employment tax liability,
the ability to recruit, train and retain qualified sales and other personnel, as
well as those additional factors set forth in this Proxy Statement under the
caption "Risk Factors." Neither PIA nor SPAR undertakes any obligation to update
any forward-looking statements.

SUMMARY

The following is a summary of certain information contained
elsewhere in this Proxy Statement and the Annexes hereto. This summary does not
contain a complete statement of all material features of the proposals to be
voted on and is qualified in its entirety by reference to the full text of this
Proxy Statement and the Annexes. Stockholders are urged to read this Proxy
Statement and the Annexes in their entirety. See the glossary at Annex E for a
description of certain terms that are used throughout this Proxy Statement.

THE PARTIES TO THE MERGER

PIA

The PIA Companies (as defined in the next paragraph) are suppliers
of in-store merchandising and sales services in the United States and Canada.
The PIA Companies provide these services primarily on behalf of consumer product
manufacturers and retailers at approximately 17,000 retail grocery stores, 6,000
mass merchandisers and 8,800 drug stores. The PIA Companies currently provide
three principal types of services: shared services, where an associate
represents multiple clients; dedicated services, where associates work for one
specific client; and project services, where associates perform special in-store
activities.

PIA, organized in 1943, initially provided merchandising services in
retail grocery chains on behalf of manufacturers. In mid-1988, PIA's management
determined that a national merchandising company could capitalize on
developments within the retail grocery industry by providing merchandising
services to a variety of manufacturers

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in the industry. Until 1989, PIA operated exclusively in retail grocery chains
in California and Arizona. In 1990, PIA implemented a national expansion
strategy to cover the grocery trade. In 1993, PIA expanded its focus to address
additional retail channels, including mass merchandiser, chain drug and discount
drug stores. In 1994, PIA began offering dedicated services to retailers and
manufacturers. In 1997, PIA established a corporate and division infrastructure
for its project services business. The PIA Companies currently perform their
services primarily on behalf of approximately 805 consumer product
manufacturers. PIA, PIA California and PIA Acquisition are sometimes
collectively referred to as the "PIA Parties" and individually, as a "PIA
Party." PIA, PIA California and all of PIA California's subsidiaries are
sometimes collectively referred to as the "PIA Companies" and individually as a
"PIA Company."

The PIA Companies' principal executive offices are located at 19900
MacArthur Boulevard, Suite 900, Irvine, California 92612, and its telephone
number is (949) 476-2200.

PIA ACQUISITION

PIA Acquisition was incorporated in the State of Nevada in February
1999, solely for the purpose of consummating the Merger. PIA Acquisition has
limited assets and has no business and has not carried on any activities other
than those which are directly related to its formation and its execution of the
Merger Agreement. Its principal executive offices are located at 19900 MacArthur
Boulevard, Suite 900, Irvine, California 92612 and its telephone number is (949)
476-2200.

SPAR

SAI was organized as a holding company in December 1998. The SAI
Stockholders own all of the issued and outstanding capital stock of SAI. The SAI
Principals also own all of the issued and outstanding capital stock of each of
SMI, SMF, SINC, SBRS, SIM, SMCI, SMNEV, and STM. SMF, SINC, SBRS and SMNEV may
be referred to individually as a "SPAR Marketing Company" and collectively as
the "SPAR Marketing Companies." SAI, SIM, SMCI, SMI, the SPAR Marketing
Companies and STM may be referred to individually as a "SPAR Company" and
collectively as the "SPAR Companies" or "SPAR." The SAI Principals have agreed
to effect certain reorganization transactions (the "SPAR Reorganization
Transactions") immediately prior to the closing of the Merger. After the
completion of the SPAR Reorganization Transactions, SAI will be the parent
holding company and the sole stockholder of each of SMI, SIM and STM, SIM will
be the sole stockholder of SMCI, and SMI will be the sole stockholder of each of
the SPAR Marketing Companies.

Since the founding of SINC in 1979, the SPAR Marketing Companies
have grown to provide nationwide retail merchandising and marketing services to
home video, consumer goods and food products companies. The SPAR Marketing
Companies currently operate in all 50 states and provide a broad range of
in-store merchandising and other marketing services to many of the nation's
leading companies, including Warner Bros. and General Motors Corporation. The
SPAR Marketing Companies provide their services through approximately 3,062
part-time employees, which are supported by approximately 169 full-time office
employees, and approximately 2,300 independent contractors pursuant to the SPAR
Marketing Companies' agreement (the "Field Service Agreement") with SPAR
Marketing Services, Inc. ("SMS"), a related company not being acquired by PIA or
SPAR. See "Business of SPAR-- Certain Relationships and Related Party
Transactions" and "Risk Factors--Related Party Contingent Tax Liability."

The services provided by the SPAR Marketing Companies include retail
merchandising (increasing the visibility, availability and sales of products
on-site), test market research (testing promotion alternatives, new products and
advertising campaigns, as well as packaging, pricing, and location changes, at
store level), mystery shopping (calling anonymously on retail outlets to check
on distribution or display of a brand and to evaluate products, services,
clients or employees), database marketing (managing proprietary information to
permit easy access, analysis and

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manipulation) and data collection (systematically gathering information for
analysis and interpretation), and teleservices (inbound and outbound calling to
strengthen customer relationships, solicit new programs and collect consumer
business services or retail or product information).

In January 1999, SMCI acquired substantially all the assets and
liabilities of MCI Performance Group, Inc., a Texas corporation ("MCI"), the
predecessor-in-interest of which was founded in 1987. This acquisition is
referred to as the "MCI Acquisition." SMCI had no operations prior to the MCI
Acquisition. SMCI specializes in designing and implementing premium incentives
and managing group travel and meetings for clients throughout the United States.
SMCI provides a wide variety of consulting, creative, program administration and
travel and merchandise fulfillment services to companies seeking to motivate
employees, salespeople, dealers, distributors, retailers and consumers toward
certain action or objectives. SMCI employs approximately 100 persons.

SPAR's principal executive offices are located at 303 South
Broadway, Suite 140, Tarrytown, New York 10591. The telephone number of its
principal executive offices is (914) 332-4100.

OPERATIONS AFTER THE MERGER

OVERVIEW OF SPAR REORGANIZATION, MERGER AND POST-MERGER DIVISIONS

SPAR currently provides merchandising and marketing services to
leading entertainment, consumer goods, food products and retail companies
through SPAR's two existing operating divisions (the "Existing SPAR Divisions"):
(i) merchandising and marketing services through SMI and the SPAR Marketing
Companies (the "SPAR Merchandising Division"); and (ii) premium incentives
through SIM and SMCI (the "SPAR Incentive Division"). Immediately prior to the
effective time of the Merger (the "Effective Time"), SAI will acquire all of the
stock of the SPAR Merchandising Division, the SPAR Incentive Division and STM
from the SAI Principals pursuant to the Reorganization Agreement dated as of
February 28, 1999, among SAI, the SPAR Companies and the SAI Principals (the
"Reorganization Agreement"). SAI's acquisition of such stock and the other
transactions under the Reorganization Agreement are referred to as the SPAR
Reorganization Transactions. After the completion of the SPAR Reorganization
Transactions, SAI will be the parent holding company and the sole stockholder of
each of the other SPAR Companies in the SPAR Merchandising Division and the SPAR
Incentive Division and of STM.

At the Effective Time, PIA Acquisition will merge into and with SAI,
and SAI will be the surviving corporation and a wholly owned subsidiary of PIA.
Following the Merger, the Combined Company intends to conduct its businesses
through three divisions: (i) the SPAR Merchandising Division; (ii) the SPAR
Incentive Division; and (iii) PIA California and its subsidiaries (the "PIA
Division," and together with the Existing SPAR Divisions, the "Divisions").

OPERATING STRATEGY POST MERGER

PIA and SPAR intend to (i) leverage their current client
relationships by cross-selling the range of services offered by the Divisions
after the Merger, (ii) achieve operating efficiencies within the Divisions
through utilization of their existing field force and technology infrastructure
to support additional customers and revenue, and by combining certain
administrative functions, and (iii) utilize computer, Internet and other
technology to enhance their efficiency and ability to provide real-time data to
their customers and to respond to customers' needs and implement programs more
rapidly. PIA and SPAR intend that management of each Division will conduct their
day-to-day operations, sales representation and potential customer
identification on a decentralized basis, while a company-wide team of senior
management will provide the Divisions with strategic oversight and guidance with
respect to acquisitions, financing, marketing, operations and cross-selling
opportunities. The operational autonomy of the

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Divisions will be complimented by equity and other incentive compensation
through which the Combined Company intends to motivate division managers to
focus on company-wide performance.

ACQUISITION STRATEGY

PIA and SPAR intend to acquire businesses across the United States
and Canada that offer marketing services in which each of the Divisions operates
and to consolidate the sectors of the marketing services they serve. PIA and
SPAR also believe that there are numerous other attractive sectors within the
marketing services industry, such as ad specialty, direct marketing, database
marketing, sales promotions, information/research, sampling and consumer
demonstrations. As part of its acquisition strategy, SPAR is actively exploring
and considering a number of potential acquisition candidates in both the
business of the existing SPAR Divisions and in other sectors of the marketing
services industry. However, neither PIA nor SPAR has entered into any definitive
and binding arrangements with respect to any contemplated or desired
acquisition.

THE ANNUAL MEETING

PURPOSE

At the Annual Meeting, PIA stockholders will be asked to: (i)
approve the Share/Option Issuance; (ii) approve the Charter Amendment; (iii)
approve the Option Plan Amendment; (iv) elect seven directors to the PIA Board;
and (v) transact any other business that may properly come before the meeting or
any adjournments or postponements thereof.

TIME, PLACE AND DATE

The Annual Meeting will be held at
[___________________________________________________] located at
[_____________________________________] on [__________], [__________], 1999 at
[___] a.m. Pacific Time.

RECORD DATE; QUORUM; VOTES REQUIRED

Holders of shares of PIA Common Stock as of the close of business on
[__________], which has been set as the "Record Date," will be entitled to vote
at the Annual Meeting. The presence in person or by proxy of a majority of the
outstanding shares of PIA Common Stock at the Annual Meeting constitutes a
quorum, thus enabling the stockholders to transact business at the Annual
Meeting. In connection with the Merger, Clinton E. Owens, a PIA director, and
RVM/PIA, a California limited partnership, who own approximately 40.7% of the
outstanding voting securities of PIA in the aggregate, have executed a voting
agreement to vote all PIA Common Stock over which they have voting control in
favor of the Share/Option Issuance, the Charter Amendment and the Option Plan
Amendment.

Approval of the Charter Amendment requires the affirmative vote of a
majority of the outstanding shares of PIA Common Stock entitled to vote thereon
at the Annual Meeting. Approval of each of the Share/Option Issuance and the
Option Plan Amendment requires the affirmative vote of a majority of the votes
cast with respect to each such proposal; provided that the total number of votes
cast on each such proposal represents more than 50% of the outstanding shares of
PIA Common Stock entitled to vote thereon at the Annual Meeting. Approval of the
Share/Option Issuance, the Charter Amendment and Option Plan Amendment is
required for the Merger to be consummated. Unless all three proposals are
approved, the Merger cannot be consummated and none of the three proposals will
be approved. The director nominees who receive the greatest number of votes at
the Annual Meeting will be elected to the PIA Board.

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THE MERGER

STRUCTURE

Pursuant to the Merger Agreement, PIA Acquisition, a wholly owned
subsidiary of PIA will be merged with and into SAI. Following the Merger, SAI
shall continue as the surviving corporation (sometimes also referred to herein
as the "Surviving Corporation") and will be a wholly owned subsidiary of PIA,
and PIA Acquisition shall cease to exist. If the PIA stockholders approve the
Share/Option Issuance, the Charter Amendment and the Option Plan Amendment, it
is contemplated that the Merger will become effective no later than two business
days after certain regulatory approvals are obtained and the other conditions to
the closing (the "Closing") of the transactions contemplated by the Merger are
satisfied or waived. The Merger will become effective on the date and time of
filing of the Articles of Merger with the Nevada Secretary of State or at such
later time as may be specified for effectiveness in the Articles of Merger. 
The date on which the Closing occurs is referred to as the "Closing Date."

MERGER CONSIDERATION

Each share of SAI Common Stock outstanding immediately prior to the
Effective Time will be converted into the right to receive one share of PIA
Common Stock, provided that any holder of SAI Common Stock entitled to receive a
fractional share of PIA Common Stock will receive cash in lieu of such
fractional share. PIA will also assume all outstanding options to purchase SAI
Common Stock and issue Substitute Options covering an aggregate of 134,114
shares of PIA Common Stock to the holders of SAI Options. Each Substitute Option
shall provide for the same terms and conditions (including an exercise price of
$0.01 per share) and right to purchase the same number of shares as the
surrendered SAI Options. The shares of PIA Common Stock and the Substitute
Options to be issued in connection with the Merger are referred to collectively
as the "Merger Consideration."

MANAGEMENT AFTER THE MERGER

The Merger Agreement provides that the members of the PIA Board will
have taken all necessary action to cause the PIA Board, from and after the
Effective Time until such time as their successors are duly elected and
qualified, to be comprised of seven members and to cause the following persons
to be elected as directors of the PIA Board: Messrs. Robert O. Aders, William H.
Bartels, Robert G. Brown, Patrick W. Collins, and J. Christopher Lewis.
Accordingly, at the Effective Time, the existing directors of PIA other than
Messrs. Collins and Lewis have agreed to resign, and Messrs. Collins and Lewis
will appoint Messrs. Aders, Brown and Bartels to fill three of the five
remaining vacancies on the PIA Board.

Pursuant to the Merger Agreement, the PIA Board will take all
necessary action to cause the following persons to be appointed to the offices
indicated as of the Effective Time:

NAME                                                 OFFICE
----                                                 ------

Robert G. Brown                    Chairman, Chief Executive Officer and President
William H. Bartels                 Vice Chairman
Terry R. Peets                     Vice Chairman
Cathy L. Wood                      Executive Vice President, Chief Financial Officer and Secretary
James H. Ross                      Treasurer

See "Proposal I: Share/Option Issuance--Board of Directors and Management After
the Merger."

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CONDITIONS TO THE CLOSING OF THE MERGER

The consummation of the Merger is subject to the satisfaction of
certain conditions including among other things the: (i) approval of the
Share/Option Issuance and the Charter Amendment by the requisite vote of PIA's
stockholders; (ii) absence of any legal restraints or prohibitions preventing
the consummation of the Merger, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended; (iii) listing of the PIA Common
Stock to be issued in the Merger on the Nasdaq National Market; and (iv) filing
of the Certificate of Amendment to PIA's Certificate of Incorporation to
effectuate the Charter Amendment. There are a number of other conditions that
must be satisfied before the Merger can occur. See "Proposal I: Share/Option
Issuance--Merger Agreement--Conditions to the Merger."

INDEMNIFICATION

In connection with the Merger Agreement, each of the SAI Principals,
jointly and severally, has agreed to indemnify the PIA Parties and certain SPAR
Companies against matters arising out of (i) certain tax litigation involving
SMS, and (ii) potential claims arising under a contingent subordinated
promissory note (the "ADVO Note") in the maximum principal amount of $3 million
made by SMF in favor of ADVO Investment Company, Inc., ADVO, Inc., and Stighen,
Inc. The SAI Principals have also agreed to deposit an aggregate of ten percent
of the shares of PIA Common Stock that they and their family members receive in
the Merger in escrow as security for such stockholders' indemnification
obligations. See "Proposal I: Share/Option Issuance -- Merger Agreement --
Indemnification."

TERMINATION; BREAKUP FEE

In general, the transactions contemplated by the Merger may be
terminated by either PIA or SAI if the Merger is not consummated on or prior to
June 30, 1999, and in certain other instances. In addition, the transactions
contemplated by the Merger may be terminated by PIA if PIA accepts an
acquisition proposal from a third party and pays the SPAR Companies a
termination fee equal to 3.5% of the value of the consideration in connection
with such acquisition proposal as determined by the Merger Agreement and the
amount of the SPAR Companies' and the SAI Stockholders' reasonable expenses in
connection with the Merger. See "Proposal I: Share/Option Issuance -- Merger
Agreement -- Termination."

NO SOLICITATION

Pursuant to the Merger Agreement, the PIA Parties, in general, have
agreed not to solicit, initiate, or encourage any inquiries in the making,
submission or announcement of any alternate acquisition proposal other than in
connection with an unsolicited acquisition proposal. See "Proposal I:
Share/Option Issuance--Merger Agreement-- No Solicitation."

REASONS FOR THE MERGER

Each of the PIA Board and the SAI Board has identified potential
mutual benefits of the Merger that they believe may contribute to the success of
the Combined Company. These potential benefits may include the following:

(i) As a significantly larger company than either PIA or SPAR alone,
with greater revenue and a broader geographic scope, the Combined Company may be
able to more effectively compete in the highly competitive marketing services
industry with respect to the pricing of its products and services and its
product offerings.

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(ii) The complementary businesses of PIA and SPAR may lead to
operating synergies and efficiencies, improved technology, and better customer
relationships for the Combined Company that, if achieved, will allow investors
to participate in the anticipated future growth of a consolidator of the
marketing services industry.

(iii) The Combined Company may be a more attractive public
investment than PIA alone and may be more closely followed by securities
analysts and investors.

(iv) The Combined Company's access to capital in the private and
public markets may be enhanced and it could use its public stock as a form of
currency to partially finance potential future acquisitions.

In light of the above and the other factors described in this Proxy
Statement, the PIA Board believes that the terms of the Merger are fair to, and
in the best interest of, PIA and the PIA stockholders. See "Proposal I:
Share/Option Issuance -- Background of the Merger," "-- PIA's Reasons for the
Merger" and "--SPAR's Reasons for the Merger."

RECOMMENDATION OF THE PIA BOARD OF DIRECTORS

The PIA Board unanimously recommends that the stockholders approve
the Share/Option Issuance, the Charter Amendment and the Option Plan Amendment
and vote FOR the election of each of the nominees named herein as directors of
PIA.

FAIRNESS OPINION

ING Baring Furman Selz LLC ("ING Barings"), the financial advisor
retained by the PIA Board in connection with the Merger, has rendered its
opinion that the Exchange Ratio in connection with the Merger is fair, from a
financial point of view, to the stockholders of PIA. The full text of the ING
Barings' opinion is attached as Annex D to this Proxy Statement and PIA
stockholders are urged to read the full text of the opinion. See "Proposal I:
Share/Option Issuance--Opinion of Financial Advisor."

STOCK OWNERSHIP FOLLOWING THE MERGER

PIA estimates that it will issue approximately 12.2 million shares
of PIA Common Stock to the SAI Stockholders and Substitute Options covering an
aggregate of 134,114 shares of PIA Common Stock in the Merger assuming no
exercise of existing PIA options or warrants. Immediately following the Merger,
and assuming full exercise of all Substitute Options and without regard to
vesting, (i) the SAI Stockholders and the SAI Option Holders will hold an
aggregate of approximately 69.3% of the PIA Common Stock outstanding, and (ii)
the holders of PIA Common Stock immediately prior to the Merger will hold an
aggregate of approximately 30.7% of the PIA Common Stock outstanding. PIA does
not anticipate the exercise of any options or warrants prior to the Merger
because the per share exercise price of the majority of existing PIA options
exceeds the closing price of PIA Common Stock as of the business day immediately
prior to the date of this Proxy Statement. In the event any PIA options are
exercised prior to the Merger, the actual number of shares of PIA Common Stock
issuable to the SAI Stockholders will increase, so that the SAI Stockholders and
SAI Option Holders (assuming full exercise of all Substitute Options) will still
receive an aggregate of 69.3% of the PIA Common Stock outstanding post-Merger.
See "Security Ownership of Certain Beneficial Owners of the Combined Company
Following the Merger."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the respective recommendations of the PIA Board with
respect to the Merger and the Share/Option Issuance, the PIA stockholders should
be aware that certain members of the PIA Board and certain executive officers of
PIA have interests in the Merger that are in addition to, or different from, the
interests of the PIA

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stockholders generally. These matters include, among other matters, provisions
in the Merger Agreement relating to indemnification and arrangements regarding
acceleration of vesting of PIA stock options for the benefit of employees,
officers and directors of PIA. In addition, certain executive officers of PIA
may receive severance payments if they are terminated following the Merger. See
"Proposal I: Share/Option Issuance -- Interests of Certain Persons in the
Merger."

NO APPRAISAL RIGHTS FOR DISSENTERS

Under Delaware law, holders of PIA Common Stock will not be entitled
to appraisal rights in connection with the Merger or the Share/Option Issuance.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The Merger of SAI and PIA Acquisition is intended to be a "tax-free
reorganization," for Federal income tax purposes under Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"). Neither PIA nor SAI will
recognize any gain or loss in the Merger and neither the PIA stockholders nor
the SAI Stockholders will recognize any gain or loss in the Merger, except to
the extent SAI Stockholders receive cash in lieu of fractional shares.

ACCOUNTING TREATMENT

For accounting purposes, the Merger will be treated as a purchase of
PIA by SPAR as a reverse acquisition since the holders of SAI Common Stock would
hold and have voting power with respect to approximately 69.0% of the total
issued and outstanding voting capital stock of PIA immediately following the
Merger. Under purchase accounting, the fair value of all the shares of PIA
Common Stock outstanding immediately prior to the Merger will be allocated to
the individual PIA assets and liabilities based on their relative fair values.
The excess of the purchase price over the fair value of the net assets acquired
will be amortized over the estimated period benefitted not to exceed 15 years.
The individual allocations are subject to valuations as of the date of the
Merger based on appraisal and other studies, which are not yet completed.
Accordingly, the final allocations will be different from the amounts reflected
in the unaudited pro forma condensed combined financial information.
Notwithstanding this factor, the unaudited pro forma condensed combined
financial information reflects SPAR's best estimate based on currently available
information as of the date of this Proxy Statement. See "Unaudited Pro Forma
Combined Financial Information."

SELECTED CONSOLIDATED FINANCIAL DATA OF PIA

The following selected consolidated financial data below, for the
periods and the dates indicated, has been derived from the audited consolidated
financial statements of PIA. The selected consolidated statements of operations
data presented below with respect to the three years ended December 31, 1996,
December 31, 1997 and January 1, 1999, and the consolidated balance sheet data
at December 31, 1997 and January, 1, 1999 have been derived from, and are
qualified by reference to, the audited consolidated financial statements
contained in PIA's 1998 Annual Report to Stockholders on Form 10-K which is
incorporated by reference herein. The consolidated statements of operations data
for the years ended December 31, 1994, and 1995, and the consolidated balance
sheet data at December 31, 1994, 1995, and 1996, are derived from the audited
consolidated financial statements of PIA and are not included herein or
incorporated by reference herein. The financial data presented below are
qualified by reference to PIA's consolidated financial statements and should be
read in conjunction with such financial statements and related notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in PIA's 1998 Annual Report to Stockholders on Form 10-K
which is incorporated by reference herein.

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FISCAL YEAR
ENDED
YEAR ENDED DECEMBER 31,                   JANUARY 1,
--------------------------------------------------    -----------
1994          1995          1996         1997          1999
---------     ---------     ---------    ---------     ---------
(in thousands, except per share data)

STATEMENT OF OPERATIONS DATA:
Net revenues ............................................    $  80,449     $ 104,791     $ 119,940    $ 128,208     $ 121,788
Operating expenses:
Field services costs .................................       61,876        81,320        94,841      119,830       105,448
Selling expenses .....................................        9,028        10,339        11,133       10,482         8,245
General and administrative expenses ..................        5,800         6,810         8,081       10,234        11,788
Restructure and other charges ........................           --            --            --        5,420            --
Depreciation and amortization ........................          339           497           595          997         1,129
---------     ---------     ---------    ---------     ---------
Total operating expenses ..........................       77,043        98,966       114,650      146,963       126,610
Operating income (loss) .................................        3,406         5,825         5,290      (18,755)       (4,822)
Interest income (expense) net ...........................         (725)         (465)          823          799           462
Equity in earnings in affiliate .........................           --            --            72           96           149
---------     ---------     ---------    ---------     ---------
Income (loss) before provision (benefit) for income taxes        2,681         5,360         6,185      (17,860)       (4,211)
Income tax provision (benefit) ..........................          101         1,829         2,426       (2,761)           55
---------     ---------     ---------    ---------     ---------
Net income (loss) .......................................    $   2,580     $   3,531     $   3,759    $ (15,099)    $  (4,266)
=========     =========     =========    =========     =========
Net income (loss) per share - basic(1) ..................    $    0.88     $    1.13     $    0.70    $   (2.72)    $   (0.78)
=========     =========     =========    =========     =========
Weighted average shares - basic(1) ......................        2,923         3,117         5,370        5,551         5,439
=========     =========     =========    =========     =========
Net income (loss) per share - diluted(1) ................    $    0.68     $    0.89     $    0.63    $   (2.72)    $   (0.78)
=========     =========     =========    =========     =========
Weighted average shares - diluted(1) ....................        3,895         3,981         5,990        5,551         5,439
=========     =========     =========    =========     =========

AS OF
AS OF DECEMBER 31,                 JANUARY 1,
--------------------------------------------------     ---------
194          1995          1996         1997          1999
---------     ---------     ---------    ---------     ---------
(in thousands)

BALANCE SHEET DATA:
Working capital .........................................    $   3,642     $   7,131     $  32,737    $  15,938     $  13,844
Total assets ............................................       10,224        16,086        47,672       36,467        26,054
Current portion of long-term debt .......................          277            --            --           --            --
Long-term debt, net of current portion ..................        3,274         3,400            --           --         2,095
Total stockholders' equity ..............................        2,481         5,988        36,718       18,678        14,724

- ----------

(1)         Net income (loss) per share has been restated for all periods
presented in accordance with the adoption of SFAS No.128 Earnings
Per Share

SELECTED FINANCIAL DATA OF SPAR

SELECTED COMBINED FINANCIAL DATA OF THE SPAR MARKETING COMPANIES

The following selected combined financial data sets forth, for the
periods and the dates indicated, selected combined financial data of the SPAR
Marketing Companies. The selected combined statements of operations data
presented below for the years ended March 31, 1996, 1997 and 1998, and the
combined balance sheet data at March 31, 1997, and 1998 have been derived from
the SPAR Marketing Companies audited combined financial statements included
elsewhere herein. The combined statements of operations data for the years ended
March 31, 1994 and 1995, and the combined balance sheet data at March 31, 1994,
1995 and 1996, are derived from unaudited combined financial statements not
included herein.

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The selected combined financial data of the SPAR Marketing Companies
as of December 31, 1998, and for the nine months ended December 31, 1997 and
1998, have been derived from the unaudited combined financial statements
included elsewhere herein. Such selected financial data are not necessarily
indicative of the results to be expected for the full year. In the opinion of
the management of the SPAR Marketing Companies, the unaudited financial
statements reflect all adjustments, consisting only of normal, recurring accrual
adjustments, necessary for a fair presentation of the financial position and
results of operations for those periods in accordance with generally accepted
accounting principles. The selected financial data presented below are qualified
by reference to the SPAR Marketing Companies' combined financial statements and
should be read in conjunction with such financial statements and related notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations of SPAR" contained elsewhere in this Proxy Statement.

YEAR                                   NINE MONTHS ENDED
ENDED MARCH 31,                               DECEMBER 31,
----------------------------------------------------------    --------------------
1994        1995        1996        1997          1998        1997        1998
--------    --------    --------     --------     --------    --------    --------
(in thousands)                          

SPAR MARKETING COMPANIES
Statement of Operations Data:
Net revenues                           $ 14,144    $ 18,973    $ 14,425     $ 35,574     $ 36,804    $ 27,202    $ 32,601
Gross profit                              6,399       8,669       6,746       13,820       17,387      12,623      15,021
Selling, general and administrative       5,264       7,922       7,030       13,477       12,248       9,310       8,868
Operating income (loss)                   1,135         747        (284)         343        5,139       3,313       6,153
Interest and other expense, net              39          69          99          766          390         295         155
Net income (loss)                      $  1,096    $    678    $   (383)    $   (423)    $  4,749    $  3,018    $  5,998
========    ========    ========     ========     ========    ========    ========

MARCH 31,                           DEC. 31,
---------------------------------------------------------    --------
1994          1995        1996        1997        1998        1998
--------     --------    --------    --------    --------    --------
(in thousands)

Balance Sheet Data:
Working capital (deficit)         $   (124)    $    503    $  1,665    $  1,319    $  3,412    $ (2,326)
Total assets                         4,501         3,84      10,129       8,868      10,896      14,965
Total long-term debt                    28          604       1,389         937         828         311
Stockholders' equity (deficit)         731          512       1,017         935       3,142      (1,517)

SELECTED COMBINED FINANCIAL DATA OF MCI PERFORMANCE GROUP, INC.

SMCI acquired substantially all the assets of MCI in January 1999.
The following selected financial data sets forth, for the periods and the dates
indicated, selected financial data of MCI. The selected statements of operations
data presented below with respect to the years ended December 31, 1996, 1997 and
1998, and the balance sheet data at December 31, 1997 and 1998, have been
derived from the MCI audited financial statements included elsewhere herein. The
statements of operations data for the years ended December 31, 1994 and 1995,
and the balance sheet data at December 31, 1994, 1995 and 1996, are derived from
unaudited financial statements not included herein. The selected financial data
presented below are qualified by reference to the MCI financial statements and
should be read in conjunction with such financial statements and related notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations of SPAR" contained elsewhere in this Proxy Statement.

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YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1994           1995          1996            1997          1998
--------       --------       --------       --------      ---------
(in thousands)

MCI
Statement of Operations Data:
Net revenues                                  $ 17,449       $ 25,066       $ 33,161       $ 42,294      $ 33,196
Gross profit                                     4,168          6,714          7,010         10,572         7,088
Selling, general and administrative              4,770          6,842          6,571          9,757         6,781
Operating income (loss)                           (602)           (98)           439            815           307
Interest and other (income) expense, net            56             51             (4)            43           (77)
Net income (loss)                                 (658)          (149)           443            771           383
========       ========       ========       ========      ========

DECEMBER 31,
--------------------------------------------------------------------
1994           1995           1996           1997           1998
--------       --------       --------       --------       --------
(in thousands)

Balance Sheet Data:
Working capital                     $ (2,035)      $ (2,318)      $ (1,802)      $ (1,860)      $   (769)
Total assets                        $  4,191       $  6,252       $  7,829       $ 11,921       $  8,718
Total long-term debt                      70             --             --          1,219             --
Stockholders' equity (deficit)        (1,289)        (2,003)        (1,560)          (789)          (406)

SELECTED PRO FORMA COMBINED FINANCIAL INFORMATION

The following selected financial data sets forth certain unaudited
pro forma combined financial data for PIA, the SPAR Marketing Companies and MCI.
The data gives effect to the MCI Acquisition and the Merger under the purchase
method of accounting. The unaudited pro forma statement of operations data for
the fiscal year ended March 31, 1998 and the nine-month period ended December
31, 1998 give effect to the MCI Acquisition and Merger as if they had occurred
at the beginning of the periods. The unaudited pro forma balance sheet data
gives effect to the MCI Acquisition and the Merger as if they had occurred
December 31, 1998. The unaudited pro forma financial information has been
prepared based on a number of assumptions that are directly attributed to the
MCI Acquisition and Merger and which are expected to have a continuing impact on
the operations of the Combined Company. For further information on the manner in
which the summary pro forma data was derived, see "Unaudited Pro Forma Combined
Financial Information." The following data should be read in conjunction with
the consolidated financial statements of PIA contained in PIA's 1998 Annual
Report to Stockholders which is incorporated by reference herein, and the
consolidated financial statements of the SPAR Marketing Companies, the financial
statements of MCI, and the pro forma combined financial information regarding
the MCI Acquisition and Merger, appearing elsewhere in this Proxy Statement.

The unaudited pro forma combined statements of operations exclude a
one-time, non-cash non-tax deductible charge which will be based on the stock
price on the Effective Date (approximately $1,480,000, or $0.08 per combined pro
forma share, based on an average closing price of $4.43 over the six day trading
period ending on March 4, 1999) resulting from the grant of 134,114 options and
issuance of 200,000 shares to employees of SPAR prior to the Merger. The 134,114
options and 200,000 shares are included in determining the pro forma basic and
diluted weighted average number of shares.

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(Preliminary Copy)

The unaudited pro forma combined financial information is presented
for illustrative purposes only and is not necessarily indicative of the
operating results or financial position that would have occurred if the MCI
Acquisition and Merger had been consummated as of such dates, nor is it
necessarily indicative of future operating results or financial position.

NINE-MONTHS
ENDED
YEAR ENDED        DECEMBER 31,
MARCH 31, 1998         1998
-------------       -----------

SPAR / PIA - PRO FORMA
Statement of Operations Data:
Net Revenues                                                        $    207,306       $    147,503
Gross Profit                                                              36,337             31,140
Selling, general and administrative                                       41,231             29,248
Restructure and other changes                                              5,420                 --
Goodwill amortization                                                      2,275              1,706
Operating income (loss)                                                  (12,589)               186
Interest and other expense                                                   686                546
Net income (loss)                                                   $    (10,514)      $       (403)
============       ============
Net income (loss) per share:
Basic                                                            $      (0.59)      $      (0.02)
============       ============
Diluted                                                          $      (0.59)      $      (0.02)
============       ============
Shares used in computing pro forma net income (loss) per share
Basic                                                              17,694,083         17,694,083
============       ============
Diluted                                                            17,694,083         17,694,083
============       ============

DECEMBER 31,
1998
-----------

Balance Sheet Data:
Working capital (deficit)                                              $(11,583)
Total assets                                                             75,929
Total long-term debt                                                      2,406
Stockholders' equity                                                     22,731

COMPARATIVE PER SHARE DATA

The following tables present certain historical, pro forma and pro
forma equivalent per share data for PIA, the SPAR Marketing Companies and MCI.
The pro forma data do not purport to be indicative of the results of future
operations or the results that would have occurred had the Merger been
consummated at the beginning of the periods presented. The information presented
herein should be read in conjunction with the Unaudited Pro Forma Combined
Financial Information, including the notes thereto, appearing elsewhere in this
Proxy Statement. Neither PIA, nor any SPAR Marketing Company, nor MCI has paid
cash dividends on their respective common stock for the periods presented. The
SPAR Marketing Companies and MCI have made, and may make in certain instances, S
corporation distributions to shareholders for, among other things, tax
obligations and reinvestments in affiliate operations.

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YEAR ENDED       NINE MONTHS ENDED
DECEMBER 31, 1997     JANUARY 1, 1999
-----------------    ----------------

PIA - HISTORICAL
Loss per share:
Basic                                                        $  (2.72)            $  (0.59)
Diluted                                                         (2.72)               (0.59)
Book value per common stock at end of period                     3.82                 2.96
(excludes 507,000 shares of Treasury stock)

YEAR ENDED       NINE MONTHS ENDED
MARCH 31, 1998     DECEMBER 31, 1998
--------------     -----------------

SPAR  MARKETING COMPANIES/ MCI - PRO FORMA
Income (loss) per share:
Basic                                                      $   0.31            $   0.20
Diluted                                                        0.31                0.20
Book value per common stock at end of period                   N/A                (0.12)

YEAR ENDED         NINE MONTHS ENDED
MARCH 31, 1998       DECEMBER 31, 1998
--------------       -----------------

SPAR / PIA - PRO FORMA
Income (loss) per share:
Basic                                                      $  (0.59)            $  (0.02)
Diluted                                                       (0.59)               (0.02)
Book value per common stock at end of period                    N/A                 1.29

MARKET PRICE DATA

The PIA Common Stock is traded on the Nasdaq National Market under
the symbol "PIAM." On February 26, 1999, the last trading day for which bid and
ask information is available prior to the public announcement of the execution
and delivery of the Merger Agreement, the ask and the bid prices of the PIA
Common Stock were $4-1/8 and $3-7/8, respectively (there were no sales on
February 26, 1999). On _____, 1999, the most recent date for which it was
practicable to obtain market price information prior to the printing of this
Proxy Statement, the high and low sales prices were $[____] and $[____],
respectively. There is no public market for the capital stock of SAI or any
other SPAR Company.

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(Preliminary Copy)

RISK FACTORS

Statements contained in this Proxy Statement using forward-looking
terminology, such as "may," "might,""will," "expect," "anticipate," "estimate,"
"believe," "seek" or "continue" or the negative thereof or other variations
thereon or comparable terminology, are forward-looking statements. The
discussions set forth below constitute cautionary statements identifying
important factors with respect to such forward-looking statements, including
risks and uncertainties, that could cause actual results to differ materially
from results referred to in the forward-looking statements. There can be no
assurance that PIA's or SPAR's expectations regarding any of these matters will
be fulfilled. PIA stockholders should carefully read these risk factors before
voting their shares of PIA Common Stock.

RISKS RELATING TO THE MERGER

EXCHANGE RATIO NOT DEPENDENT UPON CHANGES IN PIA STOCK PRICE

The Exchange Ratio is fixed and will not be adjusted in the event of
any increase or decrease in the market price of PIA Common Stock. While dollar
fluctuations in the market price of PIA Common Stock will not affect the
Exchange Ratio, they would change the aggregate value of the shares of PIA
Common Stock and Substitute Options issued in the Merger. The market price of
PIA Common Stock at the Effective Time may vary from its price on the date of
this Proxy Statement and on the date of the Annual Meeting. Such variations may
be the result of changes in the business, operations or prospects of PIA, market
assessments of the likelihood that the Merger will be consummated, the timing
thereof, the prospects of post-Merger operations, regulatory considerations,
general market and economic conditions and other factors. In the event that the
market price of PIA Common Stock decreases or increases prior to the Effective
Time, the value of the SAI Common Stock at the Effective Time would
correspondingly decrease or increase. Because the Effective Time will occur at a
date later than the Annual Meeting, there can be no assurance that the market
price of PIA Common Stock on the date of such meeting will be indicative of its
price at the Effective Time. The Merger Agreement provides that the Effective
Time will occur no later than two business days following the satisfaction or
waiver of all other conditions set forth in the Merger Agreement. PIA
stockholders are urged to obtain current market quotations for PIA Common Stock
in order to determine the current market price of the Merger Consideration. See
"Proposal 1: Share/Option Issuance -- Merger Agreement."

UNCERTAINTIES RELATING TO INTEGRATION OF OPERATIONS

PIA and SPAR believe that the Merger will result in long-term
strategic benefits. However, the realization of these benefits will depend on
whether management of the Combined Company can integrate the operations of the
SPAR Companies and the PIA Companies in an efficient and effective manner.
Although the PIA Companies and the SPAR Companies have substantial in-store
merchandising activities, PIA and SPAR use different strategies and
technologies, target different client segments and also offer different
services. The integration of the PIA Companies and the SPAR Companies, which
have previously operated independently, will require substantial effort from the
Combined Company, including the coordination of their sales and marketing
efforts and integration of their product lines and personnel. Further, the SPAR
Marketing Companies are still in the process of integrating certain of their
operations with those of SMCI, which acquired substantially all of the assets of
MCI in January 1999. There can be no assurance that the Combined Company will be
able to integrate the operations of the SPAR Companies and the PIA Companies
without encountering difficulties or experiencing the loss of key personnel, or
that the benefits expected from such integration will be realized.

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(Preliminary Copy)

The Combined Company may not be successful as an integrated provider
of in-store merchandising or other outsourced marketing services and/or its
targeted clients may not accept the Combined Company as a provider of such
services. In addition, the diversion of the attention of management and any
difficulties encountered in the transition process (including the interruption
of, or a loss of momentum in, the activities of the SPAR Companies and the PIA
Companies, problems associated with integration of management information and
reporting systems, and delays in implementation of consolidation plans) could
also have an adverse impact on the Combined Company's ability to realize
anticipated synergies from the Merger.

FAILURE TO ACHIEVE BENEFICIAL SYNERGIES

SPAR and PIA management have entered into the Merger Agreement with
the expectation that the Merger will result in beneficial synergies. Achieving
these anticipated synergies will depend on a number of factors, including,
without limitation, the successful integration of SPAR's and PIA's operations
and general and industry-specific economic factors. The Combined Company intends
to integrate SPAR's Internet and other technological capabilities to reduce
costs and operate more efficiently and to pursue field expense and other cost
reductions. Even if the Combined Company is able to integrate the technological
systems and other operations of the PIA Companies and the SPAR Companies, and
economic conditions remain stable, the anticipated synergies still may not be
achieved. See "--History of Losses."

INCURRENCE AND EFFECT OF SIGNIFICANT TRANSACTION CHARGES

The parties expect to incur costs estimated to be an aggregate of
approximately $12.0 million primarily for investment banking, legal and
accounting fees and severance payments incurred in connection with the Merger
and other costs associated with combining the operations of the two companies,
including restructuring costs. These costs will be recorded by the Combined
Company as part of the purchase price at the time the Merger is consummated.
Additional unanticipated expenses may be incurred relating to the integration of
the businesses of the SPAR Companies and the PIA Companies. There can be no
assurance that combining the businesses of the SPAR Companies and the PIA
Companies, even if achieved in an efficient and effective manner, will result in
combined results of operations and financial condition superior to what would
have been achieved by either company independently. In accordance with purchase
accounting rules, the historical book values of the assets and liabilities of
PIA will be adjusted to their fair values. The costs incurred to complete the
Merger plus the excess of the fair value of the consideration paid over the
adjusted fair values of the assets and liabilities of the Combined Company will
be recorded by it as goodwill, which will be amortized over approximately 15
years resulting in additional expenses of approximately $1.4 million per year.

DILUTIVE EFFECT TO PIA STOCKHOLDERS

The issuance of PIA Common Stock in connection with the Merger could
reduce the market price of the PIA Common Stock unless the market perceives that
the combined revenues, assets and business or potential growth, cost savings and
other business synergies are sufficient to offset the effect of such issuance.
In addition, as a result of the Merger, any given PIA stockholder's percentage
ownership of PIA Common Stock prior to the Merger will decrease substantially,
and the percentage ownership of all pre-Merger PIA stockholders will decrease
from 100% of the issued and outstanding capital stock of PIA immediately prior
to the Merger to approximately 30.7% of the issued and outstanding capital stock
of PIA immediately following the Merger (assuming full exercise of all
Substitute Options and without regard to vesting). As a result, PIA stockholders
immediately prior to the Merger will experience an immediate reduction in their
voting power and could experience a material reduction in their interest in PIA
with respect to earnings per share, liquidation and book and market value per
share in connection with the Merger.

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CONTROL BY SAI STOCKHOLDERS

Upon the consummation of the Merger, the SAI Principals will
beneficially own approximately 67.4% of the outstanding PIA Common Stock in the
aggregate and the SAI Stockholders and SAI Option Holders together will
beneficially own approximately 69.3% of the outstanding PIA Common Stock in the
aggregate (based on the number of shares outstanding as of the Record Date
assuming full exercise of all Substitute Options, but no exercise of any other
PIA options or warrants). As a result, such persons, if they act together,
generally will be able to elect all directors, exercise control over the
business, policies and affairs of the Combined Company and will have the power
to approve or disapprove most actions requiring stockholder approval, including
amendments to the Combined Company's charter and bylaws, certain mergers or
similar transactions, sales of all or substantially all of the Combined
Company's assets, and the power to prevent or cause a change in control of the
Combined Company. In the future, this situation could make the acquisition of
control of the Combined Company and the removal of management more difficult.

UNCERTAIN EFFECT OF THE MERGER ON CUSTOMERS AND PARTNERS

Certain of the existing customers or strategic partners of the PIA
Companies or SPAR Companies may view themselves as competitors of the other
existing customers or strategic partners of the SPAR Companies or PIA Companies.
Although the Combined Company will endeavor to address those concerns through
effective use of its Divisions, each company's relationship with such customers
or strategic partners could be adversely affected by the Merger during its
pendency and after its completion.

INABILITY TO CONSUMMATE THE MERGER

The consummation of the Merger depends upon the approval of the
Share/Option Issuance, the Charter Amendment and the Option Plan Amendment at
the Annual Meeting. Failure to obtain such approval could result in termination
by SAI of the Merger Agreement. If the Merger Agreement is terminated, PIA will
have to make changes in operations and may need to seek financing.

INABILITY TO MAINTAIN A LISTING OF THE PIA COMMON STOCK ON NASDAQ

In the future, the Combined Company may not be able to meet the
listing requirements of the Nasdaq National Market which requires a certain
minimum bid price of the PIA Common Stock, a factor beyond the Combined
Company's control. If the Combined Company cannot meet these listing
requirements, and unless the Nasdaq National Market agrees to waive its
requirements for a period of time, the PIA Common Stock may be delisted from the
Nasdaq National Market. In that event, management will take the steps necessary
to list the PIA Common Stock on another stock exchange, the Nasdaq SmallCap
Market or on the OTC Bulletin Board. In such case, an investor in the Combined
Company may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of the PIA Common Stock. This lack of
liquidity may also cause the Combined Company to have difficulty raising capital
for its operations or to make acquisitions in the future.

BENEFITS TO CERTAIN OFFICERS AND DIRECTORS

In considering the recommendations in favor of the Merger by the PIA
Board, PIA stockholders should be aware that certain directors and executive
officers of PIA may be deemed to have conflicts of interest with respect to the
Merger. Under certain employee benefit plans or contracts created by PIA, some
officers of PIA are entitled to accelerated vesting of certain benefits as well
as severance benefits if their employment is terminated in certain circumstances
within a specified period after the Merger. Further, each of PIA's directors and
officers will benefit from PIA's and SPAR's commitments to provide
indemnification for PIA's officers and directors, and directors' and

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(Preliminary Copy)

officers' liability insurance for a period of six years after the consummation
of the Merger. The PIA Board considered these interests, together with other
relevant factors, in deciding to recommend that PIA stockholders approve the
Merger. See "Proposal I-- The Share/Option Issuance-- Interests of Certain
Persons in the Merger."

OTHER RISKS RELATING TO PIA, SPAR AND THE COMBINED COMPANY

FUTURE CAPITAL NEEDS OF THE COMBINED COMPANY AND UNCERTAINTY OF
ADDITIONAL FINANCING

The Combined Company will require substantial capital to satisfy the
obligations it will incur in connection with the Merger and for the operation of
its business on a going forward basis. As of December 31, 1998, on a pro forma
basis, the Combined Company had total current liabilities of $50.8 million and a
working capital deficit of $11.6 million. The MCI Acquisition was financed in
part through the issuance of a promissory note in the original principal amount
of approximately $12.4 million (plus the amount of any earnout payment required
to be made in connection therewith) which matures on September 15, 1999. If the
amount owed under this note ($9.3 million as of March 1, 1999 exclusive of
earn-out payments, if any) is not repaid in full before the Merger is
consummated, the Combined Company will be responsible for the payment of any
unpaid amounts under such note. The Combined Company will also incur Merger
related expenses (including accounting, legal and investment banking fees and
severance payments) estimated to be approximately $5.4 million. PIA is in
discussions with its current lender to increase its credit line to enable it to
meet its cash needs in connection with the Merger and for the operation of the
business of the Combined Company (including future acquisitions). Failure to
obtain financing for such purposes would have a material adverse affect on the
business, results of operations or financial condition of the Combined Company.

In addition to funds needed by the Combined Company for working
capital and payment of Merger related expenses and indebtedness, in order to
pursue the Combined Company's operating strategy after the Merger, the Combined
Company may need to raise funds in order to fund any acquisitions or other
expansion or to acquire new technologies. If funds are raised through the
issuance of equity securities of the Combined Company, the percentage ownership
of the Combined Company's stockholders will be reduced or the holders of such
equity securities may have rights, preferences or privileges senior to those of
the holders of PIA Common Stock. There can be no assurance that financing will
be available when needed on terms favorable to the Combined Company or at all.
If adequate funds are not available or are not available on acceptable terms,
the Combined Company may be unable to pursue its acquisitions, develop or
enhance its services, take advantage of future opportunities or respond to
competitive pressures, which could have a material adverse effect on the
Combined Company's business, financial condition and results of operations. See
"--Uncertainty of Financing for, and Dilution Resulting from, Future
Acquisitions."

HISTORY OF LOSSES

During the years ended December 31, 1992, and 1993, PIA incurred
significant losses and experienced substantial negative cash flow. PIA had net
losses of $3.2 million and $2.6 million for the years ended December 31, 1992,
and 1993, respectively. PIA has incurred losses in seven of the eight quarters
during fiscal 1997, and 1998, resulting in a total net loss of $15.1 million for
the year ended December 31, 1997 ("fiscal 1997"), and $4.3 million for the year
ended January 1, 1999 ("fiscal 1998"). PIA also incurred aggregate net losses of
$2.2 million in January 1999 and February 1999 and expects to incur a net loss
in March 1999. The SPAR Marketing Companies and MCI have also incurred net
losses in certain prior periods. There can be no assurance that the Combined
Company will not sustain losses after the Merger. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" contained in
PIA's 1998 Annual Report to Stockholders on Form 10-K incorporated by reference
herein, and "Management's Discussion and Analysis of Financial Condition and
Results of Operations of SPAR."

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LOSS OF BUSINESS

The business mix of the PIA Companies has changed significantly over
the last year, and is expected to continue to change during 1999, in response to
client needs, and the evolving outsourced retail merchandising industry. Due in
part to the completion of a major dedicated client program, and the loss of
several shared service clients, sales have declined over the last 18 months and
no sizeable new dedicated business has been able to compensate for these losses.
PIA has reduced its dedicated management and personnel infrastructure
accordingly. The continued loss or reduction of business will negatively affect
the Combined Company's financial performance.

INDUSTRY CONSOLIDATION; CONCENTRATED CLIENT BASE

The retail and manufacturing industries are undergoing consolidation
processes that result in larger but fewer retailers and suppliers. The Combined
Company's success depends in part upon its ability to maintain the existing
clients of the PIA Companies and the SPAR Companies and to obtain new clients.
As a result of industry consolidation, PIA has lost certain clients, and this
trend could continue to have a negative effect on PIA's client base and results
of operations.

PIA's ten largest clients generated approximately 69% and 75% of
PIA's net revenues for fiscal 1997 and fiscal 1998, respectively. During these
periods, none of PIA's manufacturer or retail clients accounted for greater than
10% of net revenues, other than Buena Vista Home Entertainment and Eckerd Drug
Stores, which respectively accounted for 16.0% and 13.6% of net revenues for
fiscal 1997, and Eckerd Drug Stores, CVS Pharmacy Incorporated and Buena Vista
Home Entertainment, which accounted for 15.6%, 12.6% and 10.6% of net revenues,
respectively, for fiscal 1998.

The SPAR Marketing Companies' ten largest clients generated
approximately 63.4% and 68.4% of the SPAR Marketing Companies' net revenues for
fiscal 1997 and fiscal 1998, respectively. During these periods, none of the
SPAR Marketing Companies' manufacturer or retail clients accounted for greater
than 10% of net revenues, other than Warner Home Video, Buena Vista Home Video
and General Motors Corporation, which accounted for 15.0%, 15.3% and 10.0% of
net revenues in fiscal 1997 and 24.6%, 13.6% and 13.7% of net revenues in fiscal
1998, respectively.

MCI's ten largest clients generated approximately 70% and 63.0% of
MCI's net revenues for fiscal 1997 and fiscal 1998, respectively. During these
periods, none of MCI's manufacturer or retail clients accounted for greater than
10% of net revenues, other than MCI WorldCom, a company not related to or
affiliated with MCI and Taco Bell Corp., which accounted for 28.8% and 10.1% of
net revenues for fiscal 1997, and 25.0% and 10.5% of net revenues for fiscal
1998, respectively.

The majority of PIA's contracts with its clients for shared services
have multi-year terms. PIA and SPAR believe that the uncollectibility of amounts
due from any of their large clients, a significant reduction in business from
such clients, or the inability to attract new clients, could have a material
adverse effect on the Combined Company's business, financial condition and
results of operations.

DEPENDENCE ON TREND TOWARD OUTSOURCING

The business and growth of the Combined Company depends in large
part on the trend toward outsourcing of marketing services, which PIA and SPAR
believe has resulted from the consolidation of retailers and manufacturers, as
well as their desire to seek outsourcing specialists and to reduce fixed
operation expenses. There can be no assurance that this trend in outsourcing
will continue, as companies may elect to perform such services internally. A
significant change in the direction of this trend generally, or a trend in the
retail manufacturer or business services industry not to use, or to reduce the
use of, outsourced marketing services such as those provided by the Combined

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Company, would materially adversely affect the Combined Company's business,
financial condition and results of operations.

COMPETITION

The marketing services industry is highly competitive. Competition
arises from a number of enterprises that are national in scope. The PIA
Companies and the SPAR Companies also compete with a large number of relatively
small enterprises with specific client, channel or geographic coverage, as well
as the internal marketing and merchandising operations of its clients and
prospective clients. The PIA Companies and the SPAR Marketing Companies also
compete with independent brokers and smaller regional providers. In addition, in
the premium promotion and travel incentive sector, SMCI competes with Carlson
Marketing Group Inc., Maritz Inc. and BI Services, each of which have
significantly greater financial and marketing resources than the Combined
Company, as well as with Exceed Motivation, Incentive Associates and regional
and local suppliers.

As the marketing services industry continues to evolve, additional
competitors with greater resources than the Combined Company may enter the
marketing services industry or particular sectors thereof. PIA and SPAR also
compete with the internal marketing and merchandising operations of their
clients and prospective clients. The Combined Company's clients with such
internal capacity may choose to conduct more of their merchandising services or
premium incentive programs internally. Furthermore, remaining competitive in the
highly competitive marketing services industry requires that the Combined
Company monitor and respond to trends in all industry sectors. There can be no
assurance that the Combined Company will be able to anticipate and respond
successfully to such trends in a timely manner.

The marketing services industry generally does not require
significant initial capital expenditures and thus the barriers to entry in this
industry are low. However, over time advanced technology has become a
significant competitive advantage. If certain competitors were to combine in
integrated marketing services companies, additional marketing service companies
were to enter into this market, or existing participants in this industry were
to become more competitive, the Combined Company's business, financial condition
and results of operations could be materially adversely affected.

UNCERTAINTY OF COMMISSION INCOME

Approximately 15% of PIA's net revenues for fiscal 1998 were earned
under commission-based contracts. These contracts provide for commissions based
on a percentage of the client's net sales of certain of its products to
designated retailers. Under certain of these contracts, PIA generally receives a
draw on a monthly or quarterly basis, which is then applied against commissions
earned. Adjustments are made on a monthly or quarterly basis upon receipt of
reconciliations between commissions earned from the client and the draws
previously received. The reconciliations typically result in commissions owed to
PIA in excess of previous draws; however, PIA cannot predict with accuracy the
level of its clients' commission-based sales. Accordingly, the amount of
commissions in excess of or less than the draws previously received will
fluctuate and can significantly affect PIA's operating results in any quarter.

EFFECT OF CERTAIN CHARTER PROVISIONS; ANTI-TAKEOVER EFFECTS OF
CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW

After the Effective Time, the Certificate of Incorporation of PIA
will remain the Certificate of Incorporation of the Combined Company, subject to
the amendments to be effectuated by the Charter Amendment. The PIA Board has the
authority to issue up to 3,000,000 shares of preferred stock and to determine
the price, rights, preferences, privileges and restrictions, including voting
rights, of those shares without any further vote or action by the stockholders.
The rights of the holders of PIA Common Stock will be subject to, and may be
adversely affected by, the

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rights of the holders of any preferred stock that may be issued in the future.
The issuance of preferred stock could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of the Combined Company. In addition, the Combined Company will be subject
to the anti-takeover provisions of Section 203 of the Delaware General
Corporation Law, which prohibits the Combined Company from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
The application of Section 203 also could have the effect of delaying or
preventing a change of control of the Combined Company. Further, certain
provisions of the Combined Company's bylaws (e.g., the requirement that the
holders of shares entitled to cast no less than 30% of the votes at a special
meeting of stockholders may call such a special meeting) and of Delaware law
could delay or impede a merger, tender offer or proxy contest involving the
Combined Company, which could adversely affect the market price of PIA Common
Stock.

INABILITY TO IDENTIFY, ACQUIRE AND INTEGRATE ADDITIONAL MARKETING
SERVICES BUSINESSES

Key components of the Combined Company's growth strategy are the
acquisition of businesses across the United States and Canada that offer
marketing or incentive services in which each of the Combined Company's
Divisions operates, as well as acquisitions in numerous other attractive sectors
within or related to the marketing services industry. After the Merger, the
successful implementation of this strategy depends upon the Combined Company's
ability to identify suitable acquisition candidates, acquire such businesses on
acceptable terms and integrate their operations successfully with those of the
Divisions of the Combined Company. There can be no assurance of the availability
of such candidates or, if such candidates are available, of the Combined
Company's ability to identify, acquire or integrate acquired businesses
successfully. In addition, in pursuing acquisition opportunities, the Combined
Company may compete with other entities with similar growth strategies, which
competitors may be larger and have greater financial and other resources than
the Combined Company. Competition for these acquisition targets could also
result in increased prices of acquisition targets and a diminished pool of
companies available for acquisition.

UNCERTAINTY OF FINANCING FOR, AND DILUTION RESULTING FROM, FUTURE
ACQUISITIONS

After the consummation of the Merger, a significant portion of the
Combined Company's resources may be used for acquisitions. The timing, size and
success of such acquisition efforts and any associated capital commitments
cannot be readily predicted. If the Merger is consummated, future acquisitions
may be financed by issuing shares of PIA Common Stock, cash or a combination of
PIA Common Stock and cash. If the PIA Common Stock does not maintain a
sufficient market value, or if potential acquisition candidates are otherwise
unwilling to accept PIA Common Stock as part of the consideration for the sale
of their businesses, the Combined Company may be required to utilize more of its
cash resources, if available, in order to initiate and maintain its acquisition
program. If the Combined Company does not have sufficient cash resources, its
growth could be limited unless it is able to obtain additional capital through
debt or equity financings. There can be no assurance that the Combined Company
will be able to obtain additional financing it may need for its acquisitions on
terms that the Combined Company deems acceptable. To the extent PIA Common Stock
is used for all or a portion of the consideration to be paid for future
acquisitions, dilution may be experienced by existing stockholders. See
"--Future Capital Needs and the Uncertainty of Additional Financing."

FAILURE TO IMPLEMENT OPERATING STRATEGY

There are several key elements to the Combined Company's operating
strategy, including capitalizing on cross-selling opportunities, achieving
operating efficiencies at its Divisions, operating on a decentralized basis and
implementing technology. After the Merger, the Combined Company's ability to
improve profitability through this operating strategy will be affected by
various factors, many of which are beyond its control, and such strategy may not
be successful. There can be no assurance that the Combined Company will be able
to cross-sell its services

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successfully. The Combined Company's ability to achieve operating efficiencies
will be affected by various factors, including the availability of, and the cost
associated with the hiring and training of, retail merchandisers, as well as its
ability to leverage its corporate overhead over its existing infrastructure.
Moreover, the Combined Company may not be able to realize sufficient
concentration of clients in some geographic areas, which would limit the
efficiency and productivity of its labor force, as well as its ability to reduce
variable costs. If the Combined Company does not implement proper overall
business controls, the decentralized operating strategy could result in
inconsistent operating and financial practices at the Combined Company's
subsidiaries and any subsequently acquired businesses. With respect to
technology, the Combined Company may not be able to deploy SPAR's Internet and
other technology across divisional lines to enhance the services the PIA
Division will provide. Moreover, there can be no assurance that products or
technologies developed by others will not render the Combined Company's services
uncompetitive or obsolete. The Combined Company's failure to implement any part
of its operating strategy could materially adversely affect the Combined
Company's overall profitability and thus its business, financial condition and
results of operations. See "Business of SPAR -- Business Strategy."

VARIABILITY OF OPERATING RESULTS

The PIA Companies and the SPAR Companies have experienced, and the
Combined Company may continue to experience in the future, fluctuations in
quarterly operating results. Factors that may cause the Combined Company's
quarterly operating results to vary include the number of active customer
projects, the requirements of customer projects, the termination of major
customer projects, the loss of major customers, the timing of new engagements
and the timing of personnel cost increases. In particular, the timing of
revenues is difficult to forecast for the motion picture industry customers of
PIA and SMF because they can be dependent on the commercial success of movies or
home video releases of particular customers. In addition, SMCI's operating
results are subject to fluctuation because it recognizes revenues at the
completion of programs but expenses direct costs of projects as such costs are
incurred. Because of this policy, the timing of the commencement or completion
of a project, particularly at or near the end of any quarter, can cause
significant variations in operating results from quarter to quarter and could
result in losses for any particular period. Due to all of the foregoing factors,
there can be no assurance that the Combined Company's results of operations will
be profitable for any given fiscal period. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations of SPAR."

POTENTIAL CONFLICTS OF INTEREST REGARDING SERVICES PROVIDED BY SMS
AND SIT

Mr. Robert G. Brown, who will be a director and the Chairman and
Chief Executive Officer of the Combined Company, and Mr. William H. Bartels, who
will be a director and a Vice Chairman of the Combined Company, are the sole
stockholders and executive officers and directors of SMS, SPAR Infotech, Inc., a
Nevada corporation ("SIT"), and certain other companies that are not parties to
the Merger Agreement and will not be included in the Combined Company.

SMS provides substantial field representative and field management
services to the SPAR Marketing Companies on a cost-plus basis. SIT provides
computer programming services to SMF on an hourly fee basis. See "Risk Factors -
Related Party Contingent Tax Liability," below, and "Business of SPAR - Certain
Relationships and Related Party Transactions."

In the event of any dispute in the business relationships between
the Combined Company and SMS or SIT, or in the course of pursuing SMS's
independent contractor/employee dispute with the Internal Revenue Service
("IRS"), it is possible that Messrs. Brown and Bartels may have one or more
conflicts of interest with respect to these relationships and dispute that could
have a material adverse effect on the Combined Company. See "Business of SPAR -
Related Party Contingent Tax Liability," "Business of SPAR - Certain
Relationships and Related Party Transactions" and "Notes to the Combined
Financial Statements of SPAR."

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RELATED PARTY CONTINGENT TAX LIABILITY

The SPAR Marketing Companies currently receive, and in the past have
received, from SMS various field representative and field management services.
Messrs. Brown and Bartels, the SAI Principals, are the owners, directors and
officers of SMS and, prior to the acquisition of the SPAR Companies by SAI in
the SPAR Reorganization Transactions, directly owned all the stock of the SPAR
Companies. SMS is a separate corporation and is not being acquired by any of the
SPAR Companies or PIA Companies. See "Risk Factors - Potential Conflicts of
Interest Regarding Services Provided by SMS and SIT."

In performing field and other services for the SPAR Marketing
Companies, SMS has informed the SPAR Marketing Companies that SMS has treated,
and expects to continue to treat, a substantial number of merchandising service
providers and other field representatives as independent contractors, not
employees. In making such determination, SMS has informed the SPAR Marketing
Companies that SMS has followed industry precedent and made an independent
review of, and analyzed and it believes complied in all material respects with,
the applicable regulations and other laws issued by the IRS. SMS is engaged in a
dispute with the IRS concerning the status of certain of SMS's
independent contractors, which the IRS has asserted should be classified as
employees for federal employment tax purposes. SMS has informed SPAR that the
IRS has offered in the past to settle the matter for approximately $60,000 (with
a conversion of SMS's independent contractors to part-time employees), but that
SMS could owe on a worst case basis up to approximately $6.6 million in
employment taxes (including withholding for income taxes), penalties and
interest if the IRS were to prevail in full in its dispute with SMS (assuming
none of the independent contractors ever paid any of his or her self-employment
taxes). SMS has informed the SPAR Marketing Companies that SMS has prevailed in
various state proceedings respecting the same or similar issues, and that SMS
believes it will prevail in or favorably settle such matter with the IRS. There
can be no assurance, however, that the IRS will agree with SMS's
characterization of such merchandising service providers as independent
contractors or that SMS will be able to favorably settle with the IRS. See
"Business of SPAR - Related Party Contingent Tax Liability."

Although SMS is not a party to the Merger Agreement or SPAR
Reorganization Agreement and SPAR has not entered into any tax sharing or tax
indemnification arrangement with SMS, there can be no assurance that the IRS
will not attempt to collect employment taxes from the SPAR Marketing Companies.
Accordingly, if SMS is unable to pay such taxes or otherwise prevail in or
settle its dispute with the IRS, the IRS might seek to collect all or a portion
of such tax liability from the SPAR Marketing Companies. In connection with the
closing of the Merger, the SAI Principals have agreed to indemnify the SPAR
Companies and PIA Companies against such potential tax liability and to place an
aggregate of 10% of the shares of PIA Common Stock issued to them and their
family members in the Merger (estimated at approximately 1.2 million shares) in
escrow as security for such indemnification obligations (and the indemnification
obligations of the SAI Principals with respect to the ADVO Note). In the event,
however, SMS is unsuccessful in its challenge against the IRS's adverse
independent contractor determination, and the IRS were to assert successfully
that one or more of the SPAR Marketing Companies are legally responsible for all
or a portion of such liability, there can be no assurance the Combined Company
will be able to recover from the SAI Principals any amounts the Combined Company
might be required to pay to the IRS. Such result could have a material adverse
effect on the Combined Company's business, financial condition and results of
operations. In addition, if SMS's field representatives are required to be
treated as employees, the additional cost of such reclassification is passed on
to the Combined Company, and the Combined Company is unable to obtain these
services elsewhere, the Combined Company may incur significant additional
operating costs which could have a material adverse effect on the Combined
Companies' business, financial condition and results of operations. See
"Business of SPAR - Related Party Contingent Tax Liability."

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RESTRICTION ON DIVIDENDS

At present, the Combined Company intends to retain any earnings or
other cash resources to finance the expansion of its business and for general
corporate purposes. Any payment of future dividends will be at the discretion of
the Board of Directors and will depend upon, among other factors, the Combined
Company's earnings, financial condition, capital requirements, level of debt,
contractual restrictions with respect to the payment of dividends and other
considerations that the Board of Directors deems relevant.

LEVERAGE OF THE COMBINED COMPANY

As of December 31, 1998, on a pro forma basis, the Combined Company
had approximately $53.2 million in liabilities, with approximately $50.8 million
of such liabilities representing current liabilities and approximately $2.4
million representing long-term debt. In addition, as of March 1, 1999 the
Combined Company will owe an aggregate of approximately $15.9 million to MCI,
Mr. Bartels, Mr. Brown and affiliated entities upon the consummation of the
Merger if such amounts are not paid prior to the Merger. In addition, Mr.
Bartels and Mr. Brown have pledged their shares of SMCI to MCI as security for
the note to MCI. If such indebtedness to MCI is not repaid, MCI may foreclose on
the securities which would have a material adverse effect on the business,
financial condition and results of operations of the Combined Company. In
addition, PIA is negotiating with its existing lender to increase the amount it
may borrow under its existing credit facility for the Combined Company. This
debt may limit the Combined Company's ability to obtain additional financing on
acceptable terms. The Combined Company's ability to make scheduled payments on
or to refinance its obligations will depend on its financial and operating
performance, which is subject to prevailing industry and economic conditions and
to financial, business and other factors beyond its control. In the event the
Combined Company is unable to meet its obligations with respect to its existing
debt, it may be required to refinance all or a portion of its existing debt or
to obtain additional financing. There can be no assurance that the Combined
Company would have the ability to obtain such financing. Failure to obtain such
financing would have a material adverse effect on the business, financial
condition and results of operations of the Combined Company.

YEAR 2000 ISSUES

Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. As a result, many
date-sensitive computer applications will fail beginning January 1, 2000 because
they are unable to process dates properly beyond December 31, 1999. Each of PIA
and SPAR has reviewed its computer systems to identify areas that could be
affected by Year 2000 issues and has implemented its own plans to resolve these
issues.

PIA has substantially completed the evaluation of its information
technology infrastructure, software, hardware and communications systems. PIA
believes that its mission-critical hardware and software applications are
currently Year 2000 compliant. Completion of PIA's plan to upgrade all hardware
and software applications to be Year 2000 compliant is expected by the third
quarter of 1999. Third party vendors are also being reviewed for Year 2000
compliance and PIA expects this risk assessment to be complete by the second
quarter of 1999. PIA's assessment and evaluation efforts include testing
systems, inquiries of third parties and other research. By implementing
significant systems upgrades, PIA believes that it has substantially reduced its
potential exposure to Year 2000 problems. Due to the nature of its business,
however, PIA does not believe that its operations are systems dependent and
believes that manual processes could be implemented if certain systems failed to
function properly.

SPAR is currently assessing the readiness of its systems and the
systems of its key customers, suppliers and critical business partners for their
compliance with Year 2000 issues and determining the extent to which it may be
vulnerable if these third parties fail to address Year 2000 issues. These
efforts should be substantially completed during the second half of calendar
1999, which is prior to any anticipated significant impact on operations. SPAR
currently does not have any contingency plans but may develop appropriate
contingency plans if a significant Year 2000

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exposure is identified. Management believes that it may not be possible to
determine with any certainty (i) that all Year 2000 issues affecting SPAR have
been identified or corrected, (ii) how or when any particular Year 2000 related
failure will occur, or (iii) the severity, duration, or financial consequences
of any Year 2000 related failure. Accordingly, there can be no assurance that
SPAR will not suffer from operational inconveniences and inefficiencies for SPAR
and its clients that may divert management's time, attention and resources from
its ordinary business activities, or even serious system failures that may
require significant efforts by SPAR or its clients to prevent or alleviate
material business disruptions, as a result of Year 2000 issues.

The extent and magnitude of the Year 2000 problem as it will affect
PIA and SPAR, both before and after January 1, 2000, is difficult to predict or
quantify for a number of reasons. These include the lack of control over systems
that are used by third parties, the complexity of testing inter-connected
networks and applications that depend on third party networks and the
uncertainty surrounding how others will deal with liability issues raised by
Year 2000 related failures. If any of these third parties experience Year 2000
problems, it could have a material adverse effect on the Combined Company.

THE ANNUAL MEETING

PIA is furnishing this Proxy Statement to holders of PIA Common
Stock in connection with the solicitation of proxies by the PIA Board for use at
the Annual Meeting. This Proxy Statement and accompanying form of proxy are
first being mailed to the stockholders of PIA on or about [__________], 1999.

PURPOSE, TIME AND PLACE

At the Annual Meeting, holders of PIA Common Stock will be asked to
vote upon the proposals (collectively, the "PIA Proposals") to approve the
Share/Option Issuance, the Charter Amendment and the Option Plan Amendment, to
elect seven directors to the PIA Board and to transact such other matters as may
properly come before the Annual Meeting. The Annual Meeting will be held at
[_______________________________________________________
___________________________] located at [_____________________________________]
on [__________], [__________], 1999, at [___] a.m., Pacific Time.

The PIA Board has unanimously determined that the approval of the
Share/Option Issuance, the Charter Amendment, and the Option Plan Amendment are
in the best interests of PIA and the stockholders of PIA, and the PIA Board has
approved the Share/Option Issuance, the Charter Amendment and the Option Plan
Amendment. THE PIA BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF PIA
VOTE "FOR" APPROVAL OF THE SHARE/OPTION ISSUANCE, THE CHARTER AMENDMENT AND THE
OPTION PLAN AMENDMENT AND "FOR" THE ELECTION OF THE SEVEN NOMINEES SET FORTH
HEREIN TO THE PIA BOARD.

For a discussion of the potential interests that certain officers of
PIA may have with respect to the Share/Option Issuance and the Merger that are
different from, or in addition to, the interests of stockholders of PIA
generally, see "Proposal I: The Share/Option Issuance -- Interests of Certain
Persons in the Merger." Such interests, together with other relevant factors,
including the financial analysis contained in the opinion of ING Barings which
is attached as Annex D, were considered by the PIA Board in making its
recommendation.

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VOTING RIGHTS; VOTES REQUIRED FOR APPROVAL; QUORUM

The PIA Board has fixed the close of business on [_______], 1999, as
the Record Date for voting at the Annual Meeting. Only holders of record of
shares of PIA Common Stock on the Record Date are entitled to notice of and to
vote at the Annual Meeting. On the Record Date, there were [__________] shares
of PIA Common Stock outstanding and entitled to vote at the Annual Meeting, held
by approximately [___] stockholders of record. Each holder of record of PIA
Common Stock, as of the Record Date, is entitled to cast one vote per share. The
presence, in person or by proxy, of the holders of a majority of the outstanding
shares of PIA Common Stock at the Annual Meeting shall constitute a quorum at
the Annual Meeting. In the event that a quorum is not present at the Annual
Meeting, it is expected that such meeting will be adjourned or postponed to
solicit additional proxies.

As of the Record Date, PIA's directors, executive officers and their
affiliates beneficially owned shares of PIA Common Stock representing
approximately [__]% of the outstanding PIA Common Stock. Pursuant to the terms
of a voting agreement (the "Voting Agreement") executed in connection with the
Merger, each of Mr. Owens, a director of PIA, and RVM/PIA, a California limited
partnership have agreed to vote all their shares of PIA Common Stock, which
represents an aggregate of approximately of 40.7% of the outstanding PIA Common
Stock as of the Record Date, in favor of the Share/Option Issuance, the Charter
Amendment and the Option Plan Amendment. In addition, each of PIA's executive
officers and other directors and their affiliates intend to vote their shares of
PIA Common Stock beneficially owned by them for approval of the Charter
Amendment, the Share/Option Issuance and the Option Plan Amendment. The SPAR
Principals have also executed the Voting Agreement and agreed to vote their
shares of SAI in favor of the Merger.

Approval of the Charter Amendment requires the affirmative vote of a
majority of the outstanding shares of PIA Common Stock entitled to vote thereon
at the Annual Meeting. Approval of each of the Share/Option Issuance and the
Option Plan Amendment requires the affirmative vote of a majority of the votes
cast with respect to each such proposal; provided that the total number of votes
cast on each such proposal represents more than 50% of the outstanding shares of
PIA Common Stock entitled to vote thereon at the Annual Meeting. Approval of the
Share/Option Issuance, the Charter Amendment and Option Plan Amendment is
required for the Merger to be consummated. Unless all three proposals are
approved, the Merger cannot be consummated and none of the three proposals will
be approved. The director nominees who receive the greatest number of votes at
the Annual Meeting will be elected to the PIA Board.

SHARE OWNERSHIP OF MANAGEMENT

At the close of business on the Record Date, directors and executive
officers of PIA, as a group, were the beneficial owners of an aggregate of
[_____] shares (approximately [__]%) of the PIA Common Stock then outstanding.

PROXIES

All shares of PIA Common Stock represented by properly executed
proxies received prior to or at the Annual Meeting and not revoked will be voted
in accordance with the instructions indicated in such proxies. If no
instructions are indicated on a properly executed returned proxy, such proxy
will be voted FOR the approval of the PIA Proposals. A properly executed proxy
marked "ABSTAIN" will not be voted, although it will be counted for purposes of
determining whether there is a quorum and for purposes of determining the
aggregate voting power and number of shares represented and entitled to vote at
the Annual Meeting. Therefore, abstentions are treated as votes cast against a
PIA Proposal except in the case of election of directors where abstentions have
no legal effect. In accordance with Nasdaq National Market rules, brokers and
nominees are precluded from exercising their voting discretion with respect to
the approval and adoption of any of the PIA Proposals and thus, absent specific
instructions from the beneficial

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owner of such shares, are not empowered to vote such shares with respect to the
approval and adoption of such proposals. The affirmative vote of a majority of
the shares of PIA Common Stock entitled at the Annual Meeting to vote on the
Charter Amendment is required to approve such proposal. The affirmative vote of
a majority of the votes cast with respect to the Share/Option Issuance and the
Option Plan Amendment is required to approve such proposals; provided that the
total number of votes cast with respect to the Share/Option Issuance and the
Option Plan Amendment represents more than 50% of the outstanding shares of PIA
Common Stock entitled to vote. The director nominees who receive the greatest
number of votes at the Annual Meeting will be elected to the PIA Board. Votes
against a candidate and votes withheld have no legal effect. Therefore, a
"broker non-vote" (i.e., shares held by brokers or nominees which are
represented at a meeting but with respect to which the broker or nominee is not
empowered to vote on a particular proposal) will not be counted as a vote cast
on any of the PIA proposals. Shares represented by "broker non-votes" will,
however, be counted in determining whether there is a quorum at the Annual
Meeting.

The PIA Board is not currently aware of any business to be acted
upon at the Annual Meeting other than as described herein. If, however, other
matters are properly brought before the Annual Meeting, or any adjournments or
postponements thereof, the persons appointed as proxies will have discretion to
vote or act thereon according to their judgment. Such adjournments may be for
the purpose of soliciting additional proxies in the absence of a quorum at the
Annual Meeting.

A stockholder may revoke his or her proxy at any time prior to its
use by delivering to the Secretary of PIA, an instrument revoking it, by
delivering a duly executed proxy bearing a later date or by attending the Annual
Meeting and voting in person. Attendance at the Annual Meeting will not in
itself constitute the revocation of a proxy.

The cost of the solicitation of proxies will be paid by PIA. In
addition to solicitation by mail, arrangements will be made with brokerage
houses and other custodians, nominees and fiduciaries to send proxy materials to
beneficial owners, and PIA will, upon request, reimburse them for their
reasonable expenses. To the extent necessary in order to ensure sufficient
representation at the Annual Meeting, PIA, through its officers and regular
employees, who will receive no compensation in excess of their regular salaries
for their services, may request by telephone or telegram the return of proxy
cards. The extent to which this will be necessary depends entirely upon how
promptly proxy cards are returned. Stockholders are urged to send in their
proxies without delay.

PIA STOCKHOLDERS DO NOT NEED TO TAKE ANY ACTION WITH RESPECT TO
THEIR STOCK CERTIFICATES, WHICH WILL CONTINUE TO EVIDENCE THE SAME NUMBER OF
SHARES OF PIA COMMON STOCK FOLLOWING THE MERGER.

PROPOSAL I: SHARE/OPTION ISSUANCE

The following is a brief summary of certain aspects of the
Share/Option Issuance, the Merger Agreement and the Merger contemplated thereby.
This summary does not purport to be complete and is qualified in its entirety by
reference to the Merger Agreement, attached hereto as Annex A and incorporated
herein by reference. Stockholders of PIA are urged to read the Merger Agreement
in its entirety.

THE SHARE/OPTION ISSUANCE

The Share/Option Issuance contemplates the issuance by PIA of 
approximately 12.2 million shares of PIA Common Stock in exchange for all of
the outstanding SAI Common Stock and the issuance of Substitute Options to
purchase an aggregate of 134,114 shares of PIA Common Stock to the holders of
SAI Options under the Merger Agreement, pursuant to which PIA Acquisition will
merge with and into SAI. Following the Merger, SAI will become the Surviving
Corporation and a wholly owned subsidiary of PIA and PIA Acquisition will cease
to exist. Although the Delaware General Corporation Law does not require that
the stockholders of PIA approve the

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Share/Option Issuance, under the rules of the Nasdaq Stock Market, PIA must 
obtain stockholder approval prior to the issuance of the Merger Consideration.

EFFECTIVE TIME

The Merger will become effective upon the filing of the Articles of
Merger with the Nevada Secretary of State. It is expected that such filing will
take place no later than two business days after the approval by the PIA
stockholders of the Share/Option Issuance, the Charter Amendment and the Option
Plan Amendment and the satisfaction or waiver of the other conditions to the
Merger, including obtaining necessary regulatory approvals. The time of the
filing of the Articles of Merger (or such later time as may be specified for
effectiveness of the Merger in the Articles of Merger) is referred to as the
Effective Time.

BACKGROUND OF THE MERGER

The terms of the Merger Agreement are the result of arm's length
negotiations between executive officers and representatives of PIA and SPAR. The
following is a brief description of the background of these negotiations and the
Merger.

Initiation of discussions between PIA and SPAR was principally a
result of PIA management's efforts to maximize stockholder value. During fiscal
1997 PIA experienced net losses in each quarter, with an aggregate net loss of
$15.1 million for the year. This resulted primarily from the loss of shared
clients which resulted in margin reductions, higher overhead costs as a
percentage of revenue and, in addition, inefficiencies in field labor execution.
During 1998, PIA scaled back its operations, reduced administrative costs,
laid-off employees and closed several offices. Despite these efforts, PIA
continued to incur net losses in 1998. Because PIA's revenues did not support
its cost structure, PIA determined that the best way to continue to provide the
same level of service that its customers demand and maximize stockholder value
was to achieve cost savings and other synergies through a consolidation of PIA
with a suitable candidate. In order to implement this strategy, in the third
quarter of 1998, PIA's management retained the services of ING Barings to advise
PIA on possible transactions through which PIA could engage in potential
acquisition transactions, such as a merger or sale of the company.

On September 16, 1998, following a special meeting of the PIA Board,
representatives of ING Barings made an informal presentation to the PIA Board
concerning PIA's strategic alternatives. The PIA Board instructed
representatives of ING Barings and PIA management to generate a list of
potential strategic partners. Seventeen potential candidates were subsequently
identified and ING Barings as well as Mr. Peets, Chief Executive Officer of PIA,
made informal contact with all 17 potential candidates regarding a business
combination with PIA. Out of such 17 candidates, nine entered into
confidentiality agreements with PIA.

On September 30, 1998, at a PIA Board special meeting,
representatives of ING Barings summarized the strategic alternatives discussed
at the informal presentation following the September 16, 1998 Board meeting, and
reviewed the various strategic alternatives available to PIA. The PIA Board
acknowledged that some of the possible alternatives would include a sale of the
company or a majority interest in the company. ING Barings and PIA management
reported on their discussions with the potential candidates. The PIA Board
authorized PIA management to continue negotiating with potential candidates.

On October 1, 1998, Mr. Peets and Cathy Wood, Chief Financial
Officer of PIA, met with Mr. Brown, Chief Executive Officer and co-founder of
SPAR, and Mr. Bartels, Senior Vice President and co-founder of SPAR, in ING
Barings' office in San Francisco. Mr. Peets provided Messrs. Brown and Bartels
information regarding PIA's business, service offerings, markets, financials and
management.

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On October 28, 1998, at a regular meeting of the PIA Board, Mr.
Peets and representatives of ING Barings reviewed the status of discussions held
between PIA management and other potential strategic partners (including SPAR)
and management's continuing efforts to identify other candidates regarding a
possible business combination with PIA. The PIA Board authorized ING Barings to
continue its analysis of, and its discussions with, SPAR and any other possible
strategic partners and acquirors.

On November 3, 1998, Mr. Peets, Ms. Wood, John Colwell, a director
of PIA, and representatives of ING Barings met with Messrs. Brown and Bartels
and James H. Ross, Chief Financial Officer of SPAR, at ING Barings office in New
York. At the meeting, PIA representatives obtained information regarding SPAR's
business, service offerings, markets, profitability and management for
presentation to the PIA Board. Messrs. Brown and Bartels also informed Mr. Peets
and Ms. Wood that SPAR was negotiating with MCI to acquire its assets. The
parties also discussed the operating philosophies of the two companies and
possible synergies and benefits of a merger of PIA and SPAR. PIA also provided
SPAR additional information regarding PIA.

On November 19, 1998, Mr. Peets, Ms. Wood and representatives of ING
Barings and Riordan & McKinzie, PIA's legal counsel, met with Mr. Brown in Las
Vegas. At the meeting, the parties negotiated preliminary terms of a proposed
transaction and discussed the financial structure for such a transaction. Mr.
Brown indicated to Mr. Peets that the acquisition of MCI would probably occur
prior to any proposed business combination between SPAR and PIA. During these
discussions, Mr. Peets negotiated a business combination that would result in
the SPAR stockholders owning between 69% and 70% of the combined companies and
PIA's stockholders owning between 30% and 31% of the combined companies. This
ratio was based on MCI being acquired prior to any combination of PIA and SPAR.
As part of the financial structure, Messrs. Peets and Brown also discussed PIA
granting options to SPAR employees. The parties agreed to proceed with further
negotiations, subject to further due diligence and PIA Board approval.

On November 25, 1998, at a special PIA Board meeting with
representatives from ING Barings and Riordan & McKinzie, Mr. Peets apprised the
PIA Board of the discussions between PIA and SPAR. Mr. Peets provided the PIA
Board with background information regarding SPAR's business, products, markets,
financial situation and management. The PIA Board also reviewed the results of
the discussions Mr. Peets and representatives of ING Barings had engaged in with
other companies regarding a possible business combination with PIA. The PIA
Board also discussed the general terms for the transaction that Messrs. Peets
and Brown had discussed in Las Vegas during the previous week. Following these
discussions, the PIA Board authorized the officers of PIA to conduct a thorough
due diligence investigation regarding SPAR and to negotiate the terms of a
definitive merger agreement, subject to PIA Board approval. The PIA Board also
authorized its officers to continue negotiations with other interested parties
until the execution of a definitive agreement with SPAR.

On December 7, 1998, and December 8, 1998, representatives from ING
Barings and Riordan & McKinzie and PIA's accountants met with Mr. Ross and James
Segreto, Controller for SPAR and representatives from SPAR's legal counsel,
Parker Chapin Flattau & Klimpl, LLP ("Parker Chapin"), at SPAR's corporate
offices in New York at which the management of SPAR made a series of
presentations regarding SPAR. On-site financial and legal due diligence related
to SPAR, including a review of SPAR's accounting and legal papers, was conducted
by PIA and its legal, financial and accounting representatives.

On December 9, 1998, representatives from ING Barings and Riordan &
McKinzie and PIA's accountants met with John H. Wile, founder of MCI, Mark A.
Whitney, chief executive officer of MCI, Gary W. Oakley, intended President of
SPAR Incentive, and Edward Loos, Chief Financial Officer of MCI at MCI's offices
in Dallas. The meeting focused on financial and legal due diligence related to
MCI and included a review of MCI's accounting and legal papers. Subsequently,
PIA's legal, financial and accounting representatives reported the results of
its due diligence investigation to PIA management.

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On December 9, 1998, and December 10, 1998, Messrs. Ross and Segreto
met Ms. Wood at Riordan & McKinzie's office in Costa Mesa, California, together
with representatives of Ernst & Young LLP, and Messrs. Ross and Segreto
conducted certain financial due diligence review of PIA.

On December 14, 1998 and December 15, 1998, Mr. Peets, Ms. Wood, Mr.
Colwell, John Bain, Executive Vice President, Operations of PIA, Larry Dorr,
Senior Vice President, Operations of PIA, Don Holman, Executive Vice President,
Sales and Marketing of PIA and a representative from ING Barings met with
representatives from SPAR. The parties discussed potential synergies of a
business combination as well as customer information, financial information and
proposed integration plans.

On January 6, 1999, Mr. Peets met with Mr. Brown in Dallas. The
parties discussed the number of PIA options to be granted to SPAR employees in
connection with the business combination.

On January 14, 1999, at a special meeting with Ms. Wood and
representatives from ING Barings and Riordan & McKinzie also present, the PIA
Board reviewed the status of the discussions with SPAR and two potential
strategic partners that had recently expressed interest in PIA. A representative
from ING Barings identified certain key issues that were still unresolved. A
representative from Riordan & McKinzie described the proposed structure of the
merger and described several important provisions in the proposed merger
agreement. Mr. Peets then described the status of discussions with two other
potential strategic partners. The PIA Board directed Mr. Peets to pursue
discussions with the two parties and SPAR. Preliminary discussions were
subsequently held with the two parties but such parties expressed no further
interest and made no offers.

On January 23, 1999, Mr. Peets and representatives from ING Barings
and Riordan & McKinzie met with Messrs. Brown, Bartels, and Ross and
representatives of Parker Chapin at Parker Chapin's offices in New York. The
parties continued to negotiate the terms of the merger agreement.

On February 9, 1999, Mr. Peets, Ms. Wood and representatives from
ING Barings met with Mr. Brown at Riordan & McKinzie's office in Costa Mesa to
continue to finalize the terms of the merger agreement, which included
discussions regarding the number of PIA options to be granted to SPAR employees
and the closing net worth of SPAR.

On February 11, 1999, the PIA Board met in a special meeting to
discuss the proposed transaction with Ms. Wood and representatives of ING
Barings and Riordan & McKinzie also present. Mr. Peets provided the PIA Board
with an overview of SPAR's business and the results of PIA's due diligence. A
representative from ING Barings reviewed for the PIA Board the activities
undertaken by PIA and ING Barings over the past several months to identify
potential strategic opportunities for PIA and informed the PIA Board that all
discussions with third parties had been terminated other than the ongoing
negotiations with SPAR. He also described the recent acquisition by SMCI of the
assets of MCI, and reviewed certain material features of the proposed
combination with SPAR, including a discussion of PIA option grants to be made in
connection with the transaction. Mr. Peets led the PIA Board in a discussion of
the merits and risks of the proposed transaction. PIA's legal counsel discussed
a number of legal matters and described the legal structure of the transaction
including the principal terms of the legal documents to effectuate the proposed
transaction.

On February 18, 1999, Mr. Peets and Mr. Holman met with Mr. Brown at
SPAR's offices in Minneapolis. The parties discussed synergies and integration
plans.

On February 25, 1999 at a special telephonic meeting of the PIA
Board, which included Ms. Wood and representatives of Riordan & McKinzie and ING
Barings, Mr. Peets summarized the status of the discussions with SPAR. A
representative of Riordan & McKinzie reviewed the fiduciary duties of the PIA
Board in considering the merger and several provisions of the merger agreement,
and related documents, draft copies of which had been

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delivered to all PIA Board members. In addition, representatives of ING Barings
made a presentation to the PIA Board which included its detailed financial
analysis and other information with respect to the companies, and indicated that
it would be in a position to render its opinion that the proposed Exchange Ratio
was fair to the PIA stockholders from a financial point of view upon completion
of the negotiations with SPAR, subject to a review of the final merger
agreement. The PIA Board authorized PIA's officers to continue the negotiations
with SPAR and scheduled a PIA Board meeting for February 28, 1999 to review any
further changes to the Merger Agreement, to receive the final ING Barings
fairness opinion and to provide final authorization for the transaction.

On the morning of February 28, 1999, the PIA Board met at a special
telephonic meeting which included Ms. Wood and representatives of Riordan &
McKinzie and ING Barings. Mr. Peets informed the PIA Board that the negotiations
concerning the proposed combination of PIA with the SPAR Companies were
substantially concluded, and that the Merger Agreement and related agreements
were being prepared for signature. Representatives of Riordan & McKinzie
reviewed for the PIA Board the issues that had been resolved in the negotiations
since the February 25, 1999, Board meeting and answered questions from the PIA
Board. Representatives of ING Barings confirmed that they had reviewed the final
draft of the Merger Agreement and the related agreements, copies of which had
been provided to the PIA Board members. After answering questions from the PIA
Board, representatives from ING Barings indicated that ING Barings was prepared
to deliver its written opinion to the PIA Board dated February 28, 1999, to the
effect that, as of such date, the Exchange Ratio was fair from a financial point
of view to PIA's stockholders. The PIA Board then unanimously approved the
Merger Agreement and the transactions contemplated thereby. PIA then received
ING Barings' oral opinion, PIA executed the Merger Agreement and ING Barings
subsequently confirmed its oral opinion in writing. In addition, Mr. Owens and
RVM/PIA, a California limited partnership, executed the Voting Agreement.

Execution of the Merger Agreement was announced on March 1, 1999, by
issuance of a joint press release.

PIA'S REASONS FOR THE MERGER

The PIA Board believes that the Merger and the Share/Option Issuance
are in the best interest of PIA and PIA's stockholders. Accordingly, the PIA
Board has unanimously approved the Merger and the Share/Option Issuance. In
reaching its decision, the PIA Board consulted with PIA management as well as
its financial and legal advisors, and considered a number of factors, including,
without limitation, the following:

(i) The significant opportunity for PIA stockholders to own shares
in a larger company with improved financial strength and flexibility.

(ii) Ownership in the Combined Company will allow PIA stockholders
to participate in the long-term growth and appreciation that may result from the
Combined Company's future participation in the consolidation of the marketing
services industry and from the Combined Company's more diversified product
offerings.

(iii) SPAR's sophisticated Internet-based technology will allow PIA
to dramatically improve its technological capabilities and infrastructure for
collecting and distributing store level information to customers and managing
the activities in its field force.

(iv) The opportunity for PIA to become a broad-based marketing
services company instead of remaining a single-service company.

(v) The strategic fit between PIA and SPAR and the complementary
nature of their respective businesses and similar customer base which could
strengthen existing, and develop new, customer relationships through the
marketing capabilities of the Combined Company.

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(vi) Anticipated significant operating synergies, cost savings and
other operating efficiencies including those with respect to reduced field costs
and administrative expenses resulting from the consolidation of sales,
corporate, administrative and support functions.

(vii) Information with respect to the business, operations,
financial condition, earnings and prospects of SPAR, on an historical and a
prospective basis.

(viii) The tax-free nature of the Merger.

(ix) The financial analysis provided by ING Barings and ING Barings'
opinion that the Exchange Ratio is fair, from a financial point of view, to the
PIA stockholders.

(x) The terms of the Merger Agreement which permit PIA, under
certain limited circumstances, to negotiate with third parties and to accept
more favorable proposals, if any are received.

In the course of its deliberations, the PIA Board reviewed, among
other things, the following information relevant to the Merger: (a) the
financial presentation and analysis of ING Barings prepared in connection with
its fairness opinion; (b) reports from PIA's management and legal advisers on
specific terms of the Merger Agreement; (c) reports from PIA management
regarding the financial performance, conditions, business operations and
prospects of SPAR; and (d) the proposed terms, timing and structure of the
Merger and the final form of the Merger Agreement. The PIA Board believes that
all of the factors listed above, as well as the opinion of ING Barings, support
the fairness of the Merger and the Share/Option Issuance to PIA and its
stockholders and that the Merger and the Share/Option Issuance are in the best
interests of PIA and its stockholders.

The PIA Board also considered the following potentially negative
factors in its deliberation concerning the Merger: (a) the risk that some, if
not all, of the potential benefits of the Merger will not be fully realized, (b)
the risks associated with integrating the businesses and operations of PIA and
SPAR, (c) the possibility that the Merger may not be consummated, (d) the
potential adverse effect of announcement of the Merger, or its failure to be
consummated, on PIA's customers and employees, and (e) dilution of the voting
power of PIA stockholders and the reduction in book value of PIA Common Stock.

The foregoing discussion of information and factors considered by
the PIA Board is not intended to be exhaustive. In view of the variety of
factors considered, the PIA Board did not find it practical to, and did not
quantify or otherwise assign relative weight to the specific factors considered
and individual directors may have given differing weights to different factors.

THE PIA BOARD BELIEVES THAT THE TERMS OF THE MERGER AND THE
SHARE/OPTION ISSUANCE ARE FAIR TO, AND IN THE BEST INTERESTS OF, PIA AND THE
HOLDERS OF PIA COMMON STOCK. ACCORDINGLY, THE PIA BOARD HAS APPROVED THE MERGER
AGREEMENT, THE SHARE/OPTION ISSUANCE AND THE TRANSACTIONS CONTEMPLATED THEREBY
AND APPROVED THE MERGER. THE PIA BOARD RECOMMENDS TO THE HOLDERS OF PIA COMMON
STOCK THAT THEY VOTE FOR THE SHARE/OPTION ISSUANCE AND THE APPROVAL OF THE
TRANSACTIONS CONTEMPLATED THEREBY. SEE "--INTERESTS OF CERTAIN PERSONS IN THE
MERGER."

SPAR'S REASONS FOR THE MERGER

SPAR has concluded that the Merger offers the SPAR Companies and
their respective stockholders a significant opportunity to create a combined
organization that will be:

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(i) significantly larger than either PIA or the SPAR Companies
alone, with more trained and experienced field managers and a much larger field
force and improved efficiency,

(ii) better able to be (and remain) competitive in its pricing and
services in an increasingly competitive industry, through increased use of
Internet and other technological efficiencies, and through increased leverage
over suppliers and other cost controls, and

(iii) strategically positioned to become a leading provider of
in-store merchandising and other outsourced marketing services, and
differentiated marketing and sales solutions through a single point of contact.

The Merger could provide the Combined Company with immediate access
to additional financial resources, including public stock that can be used as
currency to accelerate its growth and implement its acquisition strategy, as
well as provide access to the public markets for further capital, if necessary.

SPAR believes that the Combined Company can grow and become a
leading provider of in-store merchandising and other outsourced marketing
services through the acquisition and consolidation of other marketing,
merchandising and incentive companies and related providers in other sectors of
this industry, such as ad specialty (using free promotional items to stimulate
corporate remembrance), direct marketing (marketing to or soliciting orders from
consumers via mail and telephone), database marketing (direct marketing using
lists developed by marketers with proprietary data), sales promotions (marketing
activities to encourage purchases in support of or in lieu of advertising),
information/research (collecting and reselling data on consumers and consumer
preferences), sampling (distributing free product to consumers to promote
awareness) and demonstrations (live exhibitions, typically in-store, of how a
product works).

STRATEGY OF THE COMBINED COMPANY AFTER THE MERGER

MARKETING SERVICES INDUSTRY OVERVIEW

According to industry sources such as PROMO Magazine, Brand
Marketing and Advertising Age, in 1997, the marketing services industry
generated over $100 billion in revenue. The merchandising and premium incentive
sectors accounted for approximately $46 billion of this overall market.
Merchandising services represented approximately $13.5 billion of the market, of
which approximately $1.3 billion was outsourced to third-party retail
merchandising businesses. The premium incentive market, which includes
merchandise fulfillment and travel fulfillment companies, generated over $20.0
billion in revenues.

PIA and SPAR believe, based on industry sources and the collective
experience of its management, that the highly fragmented nature of the marketing
services industry, together with the consolidation of retailers and
manufacturers, is driving the growth and consolidation of the industry. This
consolidation has created retailers which are larger, have broader geographic
reach, and more centralized procurement and administration functions than many
mid-size retailers. As a result, many retailers and manufacturers have started
to choose third-party marketing service providers with broader capabilities in
order to achieve consistent and simultaneous execution of certain of their
retail marketing strategies across a larger geographic area and to customize the
scope of certain other services performed on their behalf. In addition, PIA and
SPAR believe that the increasing use of information technology by retailers and
manufacturers for inventory control, product shelf placement and off-shelf
displays, will create demand for third-party expertise in the selection,
deployment and management of such technologies.

Merchandising. PIA and SPAR believe that merchandising services
bring added value to retailers, manufacturers and other businesses. Retail
merchandising services enhance sales by making a product more visible and
available to consumers. These services primarily include shelf maintenance,
display placement, reconfiguring

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product on store shelves, replenishing product and placing orders and other
services such as test market research, mystery shopping, teleservices, database
marketing and promotion planning and analysis.

Merchandising services previously undertaken by retailers,
manufacturers and independent brokers have been increasingly outsourced to third
parties. Historically, retailers staffed their stores as needed to ensure
inventory levels, the advantageous display of new items on shelves, and the
maintenance of shelf schematics. Manufacturers deployed their own sales
representatives to ensure that their products were displayed on the shelves and
were properly spaced and positioned. Independent brokers performed similar
services on behalf of the manufacturers they represented. In an effort to
improve their margins, retailers are increasing their reliance on manufacturers
and brokers to perform such services. Initially, manufacturers attempted to
satisfy their needs for merchandising services in retail stores by utilizing
their own sales representatives. Manufacturers discovered that using its own
sales representatives for this purpose was expensive and inefficient, however,
and outsourced their needs for merchandising services to third parties capable
of operating at a lower cost by serving multiple manufacturers simultaneously.

Another significant trend impacting the merchandising segment is a
significant tendency of consumers to make product purchase decisions once inside
the store. Accordingly, merchandising services and in-store product promotions
have proliferated and diversified. Retailers are continually re-merchandising
and remodeling entire stores to respond to new product developments and changes
in consumer preferences. PIA and SPAR estimate that these activities have
doubled in frequency over the last five years, such that most stores are
re-merchandised and remodeled every twenty-four months. Both retailers and
manufacturers are seeking third parties to help them meet the increased demand
for these labor-intensive services.

Premium Incentive. SPAR believes that American companies are
increasingly using third party incentive providers as a more efficient and cost
effective means to increase the productivity of their employees. Third party
incentive premium providers can offer a customized, unique turnkey solution
specifically tailored to a company's needs. Additionally, incentive premium
providers are able to capitalize on supplier relationships and to realize volume
discounts, particularly on travel and merchandise.

Premium incentives are performance-determined rewards used to
motivate employees, salespeople, dealers and consumers, as well as to
differentiate a product, service or store. According to the Incentive Federation
Survey, only 26.0% of American businesses are using premium incentives to
motivate employees and that the majority of these businesses are large companies
(with over 1,000 employees). SPAR anticipates that this market segment will grow
as additional companies realize the value of using incentives to motivate
employees, sales forces and consumers.

The three most commonly used incentives are cash, travel and
merchandise. While consumer promotions, including direct premium offers (using
travel or merchandise in conjunction with a purchase of a product or service),
sweepstakes (promotions that require only chance to win) and self-liquidating
premiums (offering travel or merchandise premiums to consumers at a price that
totally covers the marketer's costs) generate the most attention, most incentive
expenditures are for trade incentives to motivate salespeople to sell and
retailers to buy and display products. Recent trends include the growth of
retail certificates or debit or cash cards in the merchandise fulfillment sector
(the segment of the premium incentive sector concerned with providing
merchandise as rewards in incentive programs), while the travel fulfillment
sector (the segment of the premium incentive sector concerned with providing
travel as rewards in incentive programs) has seen growth in individual travel
and meetings involving registration services (fee-based services used to
simplify the process of signing up individuals to attend a meeting or seminar).

Other Marketing Services Sectors. The other marketing services
sectors, such as ad specialty, point-of-purchase displays, direct marketing,
database marketing, sales promotions, information/research, sampling and
demonstrations, generated over $54 billion in revenues in 1997. PIA and SPAR
believe that these sectors are highly fragmented and represent significant
opportunities for consolidation.

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BUSINESS STRATEGY

PIA and SPAR believe, based on industry sources and the collective
experience of its management, that the highly fragmented nature of the marketing
services industry, together with the consolidation of retailers and
manufacturers, is driving the growth and consolidation of the industry. As the
industry continues to grow and consolidate, large retailers and manufacturers
are increasingly outsourcing their marketing needs to third-party providers. PIA
and SPAR believe that offering marketing services in multi-use sectors on a
national basis will provide PIA and SPAR with a competitive advantage. Moreover,
PIA and SPAR believe that developing a sophisticated technology infrastructure
is key to providing clients with a high level of customer service. PIA and
SPAR's objective is to become such a national integrated provider by pursuing
both an operating and acquisition- driven strategy, as described below.

OPERATING STRATEGY POST MERGER

Capitalize on Cross-Selling Opportunities. PIA and SPAR intend to
leverage their current client relationships by cross-selling the range of
services offered by the Divisions after the Merger. For example, PIA and SPAR
believe that their retail merchandising and database marketing services can be
packaged with their premium incentive services to provide a high level of
customer services, and that additional cross-selling opportunities will increase
if, as management intends, the Combined Company acquires businesses in other
sectors of the marketing services industry.

Achieve Operating Efficiencies. PIA and SPAR intend to achieve
operating efficiencies within the Divisions. For example, as new businesses are
acquired within the SPAR Merchandising Division, PIA and SPAR believe their
existing field force and technology infrastructure can support additional
customers and revenue. In the SPAR Incentive Division, PIA and SPAR believe they
can similarly realize volume purchasing advantages with respect to travel and
merchandise fulfillment. At the corporate level, the Combined Company will also
seek to combine certain administrative functions, such as accounting and
finance, insurance, strategic marketing and legal support.

Leverage Divisional Autonomy. PIA and SPAR intend to conduct their
operations on a decentralized basis whereby management of each Division will be
responsible for its day-to-day operations, sales relationships and the
identification of additional acquisition candidates in their respective sectors.
A company-wide team of senior management will provide the Divisions with
strategic oversight and guidance with respect to acquisitions, financing,
marketing, operations and cross-selling opportunities. PIA and SPAR believe that
a decentralized management approach will result in better customer service by
allowing management of each Division the flexibility to implement policies and
make decisions based on the needs of customers. The operational autonomy of the
Divisions will be complimented by equity and other incentive compensation
through which the Combined Company intends to motivate division managers to
focus on company-wide performance.

Implement Technology. PIA and SPAR intend to utilize computer,
Internet and other technology to enhance their efficiency and ability to provide
real-time data to its customers. Industry sources indicate that customers are
increasingly relying on marketing service providers to supply rapid, value-added
information regarding the results of marketing expenditures on sales and
profits. The SPAR Merchandising Division owns proprietary Internet software
technology that allows it to communicate with its field representatives over the
Internet, to schedule its field operations more efficiently, to receive field
representative reports over the Internet and incorporate their data immediately,
to quantify the benefits of its services to customers more quickly and to
respond to customers' needs and implement programs more rapidly. PIA and SPAR
believe that this technology is a competitive advantage, and that the PIA
Division and SPAR Incentive Division can utilize portions of this technology to
enhance the services they now provide.

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ACQUISITION STRATEGY

Acquire Complementary Businesses. PIA and SPAR intend to acquire
businesses across the United States and Canada that offer marketing services in
which each of the Divisions operates to consolidate the sectors of the marketing
services they serve. PIA and SPAR believe that adding geographic breadth and
increasing its presence within geographic regions will allow it to service its
clients more efficiently and cost effectively. As their customers' industries
continue to consolidate, PIA and SPAR believe that national coverage and
operational technology capabilities and efficiencies will become increasingly
important.

As part of its acquisition strategy, SPAR is actively exploring and
considering a number of potential acquisition candidates, however, there can be
no assurance that any of the acquisitions will occur or whether, if completed,
the consolidation of the sectors of the marketing services industry will be
successful. Neither PIA nor SPAR has entered into any definitive and binding
arrangements with respect to any contemplated acquisition.

Acquire Strategic New Businesses. PIA and SPAR believe that there
are numerous other attractive sectors within the marketing services industry.
PIA and SPAR plan to acquire strategic new businesses in other marketing
services areas and from new divisions. Some of the areas are ad specialty (using
free promotional items to stimulate corporate remembrance), direct marketing
(marketing to or soliciting orders from consumers via mail and telephone),
database marketing (direct marketing using lists developed by marketers with
proprietary data), sales promotions (marketing activities to encourage purchases
in support of or in lieu of advertising), information/research (collecting and
reselling data on consumers and consumer preferences), sampling (distributing
free product to consumers to promote awareness) and demonstrations (live
exhibitions, typically in-store, of how a product works). By entering any one or
more of these sectors, the Combined Company may realize additional operating and
revenue synergies across the Divisions, and may leverage existing relationships
with manufacturers, retailers and other businesses to create cross-selling
opportunities.

OPINION OF FINANCIAL ADVISOR

On February 28, 1999, ING Barings, financial advisor to PIA,
delivered its oral opinion to the PIA Board, which was subsequently confirmed in
writing to the effect that, as of such date, and based upon the assumptions
made, matters considered and limits of review as set forth in such opinion, the
Exchange Ratio is fair to the stockholders of PIA from a financial point of
view. References herein to the "ING Barings Opinion" refer to the written
opinion of ING Barings dated as of February 28, 1999.

A COPY OF THE ING BARINGS OPINION, WHICH SETS FORTH THE ASSUMPTIONS
MADE, MATTERS CONSIDERED AND CERTAIN LIMITATIONS ON THE SCOPE OF REVIEW
UNDERTAKEN BY ING BARINGS, IS ATTACHED TO THIS PROXY STATEMENT AS ANNEX D.
HOLDERS OF PIA COMMON STOCK ARE URGED TO READ THE ING BARINGS OPINION IN ITS
ENTIRETY. THE ING BARINGS OPINION IS DIRECTED ONLY TO THE FAIRNESS FROM A
FINANCIAL POINT OF VIEW OF THE EXCHANGE RATIO PURSUANT TO THE MERGER. THE ING
BARINGS OPINION DOES NOT ADDRESS THE MERITS OF THE UNDERLYING DECISION OF PIA TO
ENGAGE IN THE MERGER AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY HOLDER OF
PIA COMMON STOCK AS TO HOW SUCH STOCKHOLDER SHOULD VOTE. THE SUMMARY OF THE ING
BARINGS OPINION SET FORTH IN THIS PROXY STATEMENT IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.

In arriving at the ING Barings Opinion, ING Barings, among other
things: (i) reviewed a draft of the Merger Agreement as of February 27, 1999, by
and between the PIA Parties and the SPAR Companies; (ii) reviewed drafts of the
other Merger Documents as defined in the Merger Agreement, as of February 27,
1999; (iii) reviewed the SPAR Marketing Companies' audited financial statements
for the two fiscal years ended March 31, 1998 and unaudited financial
information for the nine months ended December 31, 1998; (iv) reviewed the Asset
Purchase Agreement (the "MCI Agreement") among MCI, SMCI and John H. Wile (the
sole stockholder of MCI) dated December 22, 1998, as

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amended by a First Amendment dated January 15, 1999; (v) reviewed MCI's audited
financial statements for the two fiscal years ended December 31, 1997 and
unaudited financial statements for the fiscal year ended December 31, 1998; (vi)
reviewed PIA's Form 10-Ks and related financial information for the two fiscal
years ended December 31, 1997; PIA's Form 10-Q and related unaudited financial
statements for the nine months ended October 2, 1998 and unaudited financial
information for the fiscal year ended December 31, 1998; (vii) reviewed certain
information, including financial forecasts, relating to the business, earnings,
cash flow, assets, liabilities and prospects of SPAR and PIA, as well as related
cost savings and expenses expected to result from the Merger furnished to it by
SPAR and PIA, respectively; (viii) conducted discussions with members of senior
management and representatives of SPAR and PIA concerning their respective
businesses and prospects before and after giving effect to the Merger; (ix)
reviewed the historical and projected results of SPAR and PIA with those of
certain companies that it deemed relevant; (x) compared the proposed financial
terms of the Merger with the financial terms, to the extent publicly available,
of certain other transactions which it deemed to be relevant; and (xi) reviewed
such other financial studies and analyses and took into account such other
matters as it deemed necessary, including its assessment of general economic,
market and monetary conditions.

In arriving at the ING Barings Opinion, it assumed and relied on the
accuracy and completeness of all information supplied or otherwise made
available to it or publicly available. With respect to the financial forecast
information furnished to or discussed with it by SPAR and PIA, it has assumed
that such information has been reasonably prepared and reflects the best
currently available estimates and judgment of SPAR's or PIA's management as to
the expected future financial performance of SPAR or PIA, as the case may be. It
has assumed that the reserves established on the books and records of each of
PIA and SPAR are adequate to cover any threatened or pending litigation. ING
Barings has also assumed that the deferred payments due pursuant to the MCI
Agreement will be paid in cash. It has not assumed any responsibility for
independently verifying such information nor has it undertaken an independent
evaluation or appraisal of any of the assets or liabilities of SPAR or PIA or
been furnished with any such evaluation or appraisal. In addition, it has not
conducted any physical inspection of the properties or facilities of SPAR or
PIA. It has assumed that the Merger will be consummated on the terms
substantially similar to those set forth in the draft of the Merger Agreement as
of February 27, 1999, and that no adjustment with respect to the net worth of
SPAR will be made, as the amount of such adjustment, if any, is not presently
determinable.

The matters considered by ING Barings in arriving at the ING Barings
Opinion are based on numerous macroeconomic, operating and financial assumptions
with respect to industry performance, general business and economic conditions,
many of which are beyond the control of PIA and SPAR, and involve the
application of complex methodologies and educated judgment. Any estimates
incorporated in the analyses performed by ING Barings are not necessarily
indicative of actual past or future results or values, which may be
significantly more or less favorable than such estimates. Estimated values do
not purport to be appraisals and do not necessarily reflect the prices at which
businesses or companies may be sold in the future, and such estimates are
inherently subject to uncertainty. No public company utilized as a comparison is
identical to PIA or SPAR, and none of the acquisition comparables or other
business combinations utilized as a comparison is identical to the proposed
Merger. Accordingly, an analysis of publicly traded comparable companies and
comparable business combinations is not mathematical; rather it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the comparable companies and other factors that could affect
the public trading value of the comparable companies or company to which they
are being compared.

The following is a summary of the material portions of the financial
and comparative analyses performed by ING Barings in arriving at the ING Barings
Opinion.

CONTRIBUTION ANALYSIS. ING Barings reviewed and analyzed the pro
forma contribution of each of PIA and SPAR to pro forma combined operational and
financial information as of and for the calendar year 1997, calendar year 1998
and as projected for the calendar year 1999. For purposes of this analysis, ING
Barings used historical and

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projected operational and financial information for PIA and for SPAR (pro forma
for the MCI Acquisition) as of and for the twelve months ended December 31, 1997
(excluding a $5.4 million non-recurring restructuring charge for PIA), 1998 and
1999 provided by management of PIA and SPAR. ING Barings reviewed the estimated
contribution of SPAR and PIA, respectively, to the calendar years 1997, 1998 and
1999 revenues, gross profit, earnings before interest, taxes depreciation and
amortization ("EBITDA"), earnings before interest and taxes ("EBIT"), and net
income of the Combined Company. Based on this analysis for the calendar year
1997, SPAR contributed 37.4% of the combined revenues, 76.4% of the combined
gross profit, and greater than 100% of the EBITDA, EBIT and net income. For the
calendar year 1998, SPAR contributed 38.1% of the combined revenues, 68.9% of
the combined gross profit, and greater than 100% of the EBITDA, EBIT and net
income. For the calendar year 1999, SPAR contributed 49.4% of the combined
revenues, 68.9% of the combined gross profit, 86.0% of the EBITDA, 89.8% of the
EBIT and 86.5% of the net income. Based on the Exchange Ratio, the stockholders
of SAI and the SAI Option Holders will own, or have the right to acquire,
approximately 69.3% of the outstanding shares of PIA after the Merger (excluding
options to purchase shares of PIA Common Stock currently outstanding or to be
granted upon Closing of the Merger).

COMPARABLE PUBLIC COMPANIES ANALYSIS. ING Barings compared certain
financial and operating information and ratios for SPAR with corresponding
publicly available financial and operating information and ratios for a group of
publicly traded companies that ING Barings deemed to be relevant. The companies
included the following marketing services companies: ADVO Inc., Catalina
Marketing Corp., Harte-Hanks, Inc., Snyder Communications, Inc. and Valassis
Communications, Inc. The companies also included the following advertising
companies: Interpublic Group, Omnicom Group and WPP Group PLC, collectively (the
"SPAR Comparable Companies"). These companies were selected, among other
reasons, because they operate in one or more of the market segments in which
SPAR operates.

ING Barings analyzed the enterprise value of the companies as a
multiple of each company's respective latest twelve-month ("LTM") revenues, LTM
EBITDA and LTM EBIT, and the equity value of the companies as a multiple of each
company's respective book value, calendar 1998 earnings per share ("1998 EPS"),
calendar 1999 earnings per share ("1999 EPS") and calendar 2000 earnings per
share ("2000 EPS"), (based on earnings estimates from First Call Earnings
Estimates). The ranges of the enterprise and equity values as a multiple of LTM
revenues, LTM EBITDA, LTM EBIT, book value, 1998 EPS, 1999 EPS and 2000 EPS were
as follows: (i) enterprise value to LTM revenues ranged from 0.60x to 5.18x
(with a median of 3.15x and a mean of 2.92x); (ii) enterprise value to LTM
EBITDA ranged from 6.3x to 23.2x (with a median of 15.1x and a mean of 15.5x);
(iii) enterprise value to LTM EBIT ranged from 8.4x to 28.3x (with a median of
19.4x and a mean of 19.4x); (iv) equity value to book value ranged from 3.4x to
11.4x (with a median of 8.8x and a mean of 8.2x), (v) equity value to 1998 EPS
ranged from 12.3x to 39.2x (with a median of 31.6x and a mean of 29.4x), (vi)
equity value to 1999 EPS ranged from 10.8x to 34.2x (with a median of 25.3x and
a mean of 23.9x) and (vii) equity value to 2000 EPS ranged from 9.8x to 29.4x
(with a median of 20.7x and a mean of 20.3x). ING Barings then applied the
relevant ratios for the SPAR Comparable Companies to SPAR's financial and
operating information and determined an implied range of equity values for SPAR,
which ranged from a high of $102.2 million to a low of $62.2 million.

ING Barings also compared certain financial and operating
information and ratios for PIA with corresponding publicly available financial
and operating information and ratios for a group of publicly traded companies
that ING Barings deemed to be relevant. The companies included the following
marketing services companies: ADVO Inc., Catalina Marketing Corp., Harte-Hanks,
Inc., Snyder Communications, Inc. and Valassis Communications, Inc. The
companies also included the following specialty staffing companies: Modis
Professional Services and StaffMark, Inc., collectively (the "PIA Comparable
Companies"). These companies were selected, among other reasons, because they
operate in one or more of the market segments in which PIA operates.

ING Barings analyzed the enterprise value of the companies as a
multiple of each company's estimated LTM revenues, LTM EBITDA, LTM EBIT,
projected 1999 revenues, projected 1999 EBITDA, and projected 1999 EBIT

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(based on estimates from publicly available equity research), and the equity
value of the companies as a multiple of each company's respective book value,
calendar 1998 EPS, calendar 1999 EPS and calendar 2000 EPS (based on earnings
estimates from First Call Earnings Estimates). The ranges of the enterprise and
equity values as a multiple of LTM revenues, LTM EBITDA, LTM EBIT, book value,
projected 1999 revenues, projected 1999 EBITDA, projected 1999 EBIT, 1998 EPS,
1999 EPS and 2000 EPS were as follows: (i) enterprise value to LTM revenues
ranged from 0.49x to 5.18x (with a median of 2.38x and a mean of 2.26x); (ii)
enterprise value to LTM EBITDA ranged from 5.4x to 23.2x (with a median of 11.6x
and a mean of 11.6x); (iii) enterprise value to LTM EBIT ranged from 6.4x to
28.3x (with a median of 12.6x and a mean of 14.6x); (iv) enterprise value to
projected 1999 revenues ranged from 0.42x to 3.85x (with a median of 2.17x and a
mean of 1.85x); (v) enterprise value to projected 1999 EBITDA ranged from 4.1x
to 12.0x (with a median of 8.0x and a mean of 8.0x); (vi) enterprise value to
projected 1999 EBIT ranged from 4.9x to 15.8x (with a median of 10.9x and a mean
of 10.8x); (vii) equity value to book value ranged from 1.3x to 11.4x (with a
median of 3.4x and a mean of 5.2x); (viii) equity value to 1998 EPS ranged from
9.5x to 37.2x (with a median of 21.0x and a mean of 23.2x); (ix) equity value to
1999 EPS ranged from 7.2x to 25.9x (with a median of 17.0x and a mean of 17.7x),
and (x) equity value to 2000 EPS ranged from 6.1x to 21.6x (with a median of
14.4x and a mean of 14.5x). ING Barings then applied the relevant ratios for the
PIA Comparable Companies to PIA's financial and operating information and
determined an implied range of equity values for PIA, which ranged from a high
of $24.1 million to a low of $18.6 million.

COMPARABLE TRANSACTIONS ANALYSIS. ING Barings reviewed and analyzed
the following ten selected mergers and acquisitions announced since 1995 of
companies in the marketing and business services industries (acquiror/target):
Acxiom Corp./May & Speh Inc.; Great Universal Stores PLC/Metromail Corp.;
Electronic Data Systems Corp./Neodata Services Inc.; Chancellor Media Group/Katz
Media Group; Snyder Communications Inc./American List Corp.; News Corp./Heritage
Media Corporation; FIserv Inc./BHC Financial Inc.; Snyder Communications
Inc./Medical Marketing Detailing, Inc.; Harte-Hanks Inc./DiMark Inc.; and
Heritage Media Corp./DIMAC Corp (the "Comparable Acquisitions").

ING Barings compared the enterprise value of the acquired company
implied by each of these transactions as a multiple of LTM revenues, LTM EBITDA
and LTM EBIT and the equity value of the acquired company implied by each of
these transactions as a multiple of LTM net income and one year forward
projected earnings per share to certain financial data. The ranges of the
enterprise and equity values as a multiple of LTM revenues, LTM EBITDA, LTM
EBIT, LTM net income and one year forward projected earnings per share for such
acquisitions were as follows: (i) enterprise value to LTM revenues ranged from
1.06x to 6.16x (with a median of 2.23x and a mean of 2.75x); (ii) enterprise
value to LTM EBITDA ranged from 5.3x to 22.7x (with a median of 10.9x and a mean
of 11.6x); (iii) enterprise value to LTM EBIT ranged from 5.5x to 23.7x (with a
median of 14.9x and a mean of 13.8x); (iv) equity value to LTM net income ranged
from 12.6x to 38.3x (with a median of 27.4x and a mean of 25.2x); and (v) equity
value to one year forward projected earnings per share ranged from 13.7x to
30.8x (with a median of 20.9x and a mean of 21.0x). ING Barings then applied the
relevant ratios for the Comparable Acquisitions to SPAR's financial and
operating information and determined an implied range of equity values for SPAR,
which ranged from a high of $87.2 million to a low of $62.2 million.

ING Barings also applied the relevant ratios for the Comparable
Acquisitions to PIA's financial and operating information and determined an
implied range of equity values for PIA, which ranged from a high of $25.3
million to a low of $22.6 million.

DISCOUNTED CASH FLOW ANALYSIS. ING Barings calculated ranges of
enterprise values for SPAR and PIA based upon the value, discounted to the
present, of an estimated four calendar year stream of unlevered free cash flow
through 2002 and a projected calendar year 2002 terminal value based on
multiples of estimated unlevered net income ranging from 10.0x to 14.0x for SPAR
and 7.0x to 10.0x for PIA. ING Barings prepared the estimates of SPAR's and
PIA's four calendar year stream of unlevered free cash flow and unlevered net
income through 2002 based upon discussions

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with management of SPAR and PIA, respectively. ING Barings utilized discount
rates based on theoretical analyses of the weighted average cost of capital and
a range of unlevered net income multiples based on review of the multiples of
the SPAR Comparable Companies, the PIA Comparable Companies and the Acquisition
Comparables. Based on such analyses, the implied equity value of SPAR ranged
from a high of $133.8 million to a low of $82.1 million and the implied equity
value of PIA ranged from a high of $67.8 million to a low of $50.2 million.

The summary set forth above, while containing all material elements
of the analyses performed by ING Barings, does not purport to be a complete
description of such analyses. Arriving at a fairness opinion is a complex
process not necessarily susceptible to partial or summary description. In
arriving at its opinion, ING Barings did not attribute any particular weight to
any analysis or factors considered by it, but rather made qualitative judgments
as to the significance and relevance of each analysis and factor. ING Barings
believes that its analysis must be considered as a whole and that selecting
portions of its analyses and of the factors considered by it, without
considering all such factors and analyses, could create a misleading view of the
process underlying its analyses set forth in the ING Barings Opinion.

The PIA Board selected ING Barings to render a fairness opinion on
the basis of ING Barings' reputation as an internationally recognized investment
banking firm with substantial expertise in transactions similar to the Merger
and because it is familiar with PIA and its business. As part of its investment
banking business, ING Barings is continually engaged in the valuation of
businesses and their securities in connection with mergers and acquisitions. For
ING Barings' services, PIA has agreed to pay ING Barings a transaction fee
equaling the greater of $800,000 or 1.7% of the first $60 million of
consideration plus 0.8% on any consideration in excess of $60 million. Upon
rendering the ING Barings Opinion, PIA has agreed to pay $500,000, which will be
credited against such transaction fee. In addition, PIA agreed to reimburse ING
Barings for its reasonable out-of-pocket expenses (including reasonable fees and
expenses of its legal counsel) not to exceed $30,000 incurred in connection with
its engagement and to indemnify ING Barings and certain related persons against
certain liabilities, including liabilities under securities laws, arising out of
its engagement.

ING Barings has also performed various investment banking services
for PIA in the past, including advisory service regarding the contemplated
private equity offering, and has received customary fees for such services.
Since January 1997, the total amount of fees owed or paid to ING Barings by PIA
for services rendered was approximately $600,000, all of which is to be credited
against the transaction fee for the Merger described above. In the ordinary
course of its securities business, ING Barings may actively trade equity
securities of PIA for its own account and the accounts of its customers, and ING
Barings therefore may hold a long or short position in such securities.

RECOMMENDATION OF THE BOARD OF DIRECTORS OF PIA

The PIA Board has unanimously approved the Merger and the
Share/Option Issuance and related matters and believes they are fair to, and in
the best interests of PIA and PIA's stockholders. The PIA Board unanimously
recommends that stockholders approve the Share/Option Issuance.

REGULATORY APPROVAL

PIA and SPAR must comply with certain federal and state regulatory
requirements in order to consummate the Merger, including (i) compliance with
applicable federal and state securities laws providing for the issuance of the
Merger Consideration in the absence of registration under the Securities Act;
and (ii) the listing on the Nasdaq National Market of the Merger Consideration.
The consummation of the Merger is also subject to the expiration or termination
of the relevant waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). PIA and SPAR intend to
file notification and report forms under the HSR Act within the next several
weeks.

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MATERIAL CONTRACTS BETWEEN PIA AND SPAR

There are no material agreements between any SPAR Company, the SAI
Stockholders or their affiliates on the one hand, and any PIA Party or their
affiliates on the other hand, other than the Merger Agreement, and agreements
executed in connection with the Merger Agreement and the transactions
contemplated thereby.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the recommendations of the PIA Board with respect to
the approval of the Share/Option Issuance and the other proposals contained
herein, the holders of PIA Common Stock should be aware that certain members of
PIA's management and the PIA Board have interests in the Merger which are
different from, or in addition to, the interests of PIA's stockholders
generally. The PIA Board was aware of these interests and considered them in
approving the Merger, the Share/Option Issuance and the transactions
contemplated thereby.

INDEMNIFICATION OF OFFICERS AND DIRECTORS OF PIA

The Merger Agreement provides that for a period of six years from
and after the Effective Time, (a) the PIA Parties and the SPAR Companies will
not amend any provisions limiting personal liability of any of their present or
former directors, officers, employees or agents contained in such party's
charter documents as in effect on February 28, 1999, and (b) the PIA Parties
will indemnify to the fullest extent permitted by law (i) each of the seven
nominees for director set forth under "Proposal IV: Election of Directors," (ii)
each person who has served as a director of PIA prior to February 28, 1999, and
(iii) each officer holding a title of Senior Vice President or higher with PIA,
PIA California or any of PIA California's subsidiaries as of February 28, 1999.
In addition, each of the PIA Parties and the SPAR Companies has also agreed to
maintain current directors' and officers' liability insurance as in effect on
the Closing Date for six years following the Merger for claims arising from
events which occurred prior to the Effective Time.

ACCELERATION OF VESTING OF PIA STOCK OPTIONS

Pursuant to action taken by the PIA Board, all PIA stock options
granted to its non-employee directors will automatically vest in full upon the
occurrence of the Merger. In addition, pursuant to PIA Board action, unvested
stock options held by any officer or other employee of PIA will be automatically
vested in full if such officer is terminated without cause within two years (one
year for all other employees) following the Merger, and the vesting schedule for
all such PIA options will be automatically accelerated by two years upon the
consummation of the Merger.

SEVERANCE ARRANGEMENTS

Pursuant to the terms of Mr. Peets' employment agreement, Mr. Peets
is entitled to receive his salary for 18 months if the Combined Company
terminates his employment "without cause" during the two year period following
the Merger, or if Mr. Peets terminates his employment for a "material reason"
(each, as defined in his employment agreement) within one year following the
Merger. Pursuant to the terms of Ms. Wood's severance agreement with PIA, Ms.
Wood is entitled to receive her salary for 18 months if the Combined Company
terminates her employment "without cause" during the two year period following
the Merger, or if Ms. Wood terminates her employment for "good reason" (each, as
defined in her severance agreement) within one year following the Merger.

PIA has adopted severance policies pursuant to which (i) John Bain
and Don Holman will continue to receive their base salary and certain employee
benefits for a period of 12 months if they are terminated without cause within
two years following the Merger, (ii) Larry Dorr and Mark Hallsman will continue
to receive their base salary and

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certain employee benefits for a period of nine months if they are terminated
without cause within two years following the Merger, (iii) other officers will
continue to receive their base salary and certain employee benefits for a period
equal to the greater of six months or one week for each year of employment with
PIA if they are terminated without cause within two years following the Merger,
and (iv) all other employees will continue to receive their base salary for a
period equal to one week for each year of employment with PIA (with prorated
payments for partial years of service) if they are terminated without cause
within one year following the Merger.

PIA currently estimates that it will owe an aggregate of $3.0
million in severance payments following the Merger.

STOCK OWNERSHIP FOLLOWING THE MERGER

In the Merger, PIA estimates that it will issue approximately 12.2
million shares of PIA Common Stock to the SAI Stockholders and issue Substitute
Options to purchase 134,114 million shares of PIA Common Stock to the SAI Option
Holders assuming no exercise of existing PIA options or warrants. Immediately
following the Merger and assuming full exercise of all Substitute Options
without regard to vesting, the SAI Stockholders and the holders of Substitute
Options will hold an aggregate of approximately 69.3% of the PIA Common Stock
outstanding post-Merger, and the holders of PIA Common Stock immediately prior
to the Merger will hold an aggregate of approximately 30.7% of the PIA Common
Stock outstanding post-Merger (assuming full exercise of all Substitute Options
and without regard to vesting). PIA does not anticipate the exercise of any
options or warrants prior to the Merger because the per share exercise price of
the majority of existing PIA options exceeds the closing price of the PIA Common
Stock as of the business day immediately prior to the date of this Proxy
Statement. In the event any PIA options are exercised prior to the Merger, the
actual number of shares of PIA Common Stock issuable to the SAI Stockholders
will increase, so that the SAI Stockholders and SAI Option Holders (assuming
full exercise of all Substitute Options) will still receive an aggregate of
69.3% of the PIA Common Stock outstanding post-Merger. See "Security Ownership
of Certain Beneficial Owners of the Combined Company Following the Merger."

RESALE OF PIA COMMON STOCK ISSUED IN THE MERGER

The shares of PIA Common Stock issued to the SAI Stockholders in the
Merger will not be registered under the Securities Act, will be "restricted"
securities as that term is defined under Rule 144 promulgated under the
Securities Act, and may be resold only pursuant to an effective registration
statement under the Securities Act or an applicable exemption from the
registration requirements of the Securities Act.

ACCOUNTING TREATMENT

For accounting purposes, the Merger will be treated as a purchase of
PIA by SPAR as a reverse acquisition since the holders of SAI Common Stock would
hold and have voting power with respect to approximately 69.0% of the total
issued and outstanding voting capital stock of PIA immediately following the
Merger. Under purchase accounting, the fair value of all the shares of PIA
Common Stock outstanding immediately prior to the Merger will be allocated to
the individual PIA assets and liabilities based on their relative fair values.
The excess of the purchase price over the face value of the net assets acquired
will be amortized over the estimated period benefitted not to exceed 15 years.
The individual allocations are subject to valuations as of the date of the
Merger based on appraisal and other studies, which are not yet completed.
Accordingly, the final allocations will be different from the amounts reflected
in the unaudited pro forma condensed combined financial information. Although
the final allocations will differ, the unaudited pro forma condensed combined
financial information reflects SPAR's best estimate based on currently available
information as of the date of this Proxy Statement. See "Pro Forma Condensed
Combined Financial Information."

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CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The Merger of SAI and PIA is intended to be a "tax-free
reorganization," for Federal income tax purposes under Section 368 of the Code.
Neither PIA nor SAI will recognize any gain or loss in the Merger and neither
the PIA Stockholders nor SAI Stockholders will recognize any gain or loss in the
Merger, except to the extent SAI Stockholders receive cash in lieu of fractional
shares.

NO APPRAISAL RIGHTS FOR DISSENTERS

Under Delaware law, PIA's stockholders will not be entitled to
appraisal rights in connection with the Merger.

MERGER AGREEMENT

The description of the Merger Agreement set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Merger Agreement, attached hereto as Annex A and incorporated herein by
reference.
Stockholders are urged to read the Merger Agreement in its entirety.

THE MERGER

On February 28, 1999, PIA, PIA California and PIA Acquisition
entered into the Merger Agreement with the SPAR Companies pursuant to which PIA
Acquisition will merge with and into SAI with SAI surviving and PIA Acquisition
ceasing to exist.

MERGER CONSIDERATION; NO FRACTIONAL SHARES

Pursuant to the Merger Agreement, PIA will issue approximately 12.2
million shares of PIA Common Stock to the SAI Stockholders. Under the terms of
the Merger Agreement, each share of SAI Common Stock outstanding immediately
prior to the Effective Time will be converted into the right to receive one
share of PIA Common Stock. The shares of SAI Common Stock are, and will be at
Closing, the only outstanding securities of SAI. Each holder of SAI Common Stock
entitled to receive a fractional share of PIA Common Stock shall receive a cash
payment from PIA in lieu of such fractional share in an amount equal to such
fractional proportion multiplied by the closing price of one share of PIA Common
Stock on the Closing Date. PIA will also assume all outstanding options to
purchase SAI Common Stock and issue Substitute Options covering an aggregate of
134,114 shares of PIA Common Stock to the holders of SAI Options. Each
Substitute Option shall provide for the same terms and conditions (including an
exercise price of $0.01 per share) and right to purchase the same number of
shares as the surrendered SAI Options.

SUBSTITUTE OPTIONS

As of the Effective Time, PIA will assume all of the outstanding SAI
Options to purchase SAI Common Stock. PIA shall issue to each holder of an
outstanding SAI Option, against delivery and cancellation of the agreement
evidencing such outstanding SAI Option, a Substitute Option under PIA's Special
Purpose Stock Option Plan. Each Substitute Option shall entitle the SAI Option
Holder to purchase the same number of shares of PIA Common Stock as the number
of shares of SAI Common Stock that could have been purchased under the SAI
Option (reflecting the one-to-one Exchange Ratio) and shall otherwise be issued
upon the same terms and conditions as set forth in the written agreement
evidencing the SAI Option so surrendered, including (without limitation) the
same per share exercise price and the same vesting as the surrendered SAI
Option. All SAI Options have, and each Substitute Option will have, an exercise
price of $0.01 per share and vest immediately upon the Merger. In addition, PIA
has undertaken to prepare and file with the Commission a registration statement
which shall cover the shares of PIA Common Stock issuable upon exercise of the
Substitute Options. PIA shall use commercially reasonable efforts to maintain
the

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effectiveness of such registration statement so long as any options covered
thereby remain outstanding and unexercised. THE FOREGOING DISCUSSION DOES NOT
ADDRESS ANY TAX CONSEQUENCES ASSOCIATED WITH THE SAI OPTIONS OR THE SUBSTITUTE
OPTIONS.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains various representations and warranties
of the SPAR Companies, on the one hand, and the PIA Parties, on the other hand,
relating to, among other things: (i) due organization and similar corporate
matters; (ii) capital structure; (iii) authorization, execution, delivery,
performance and enforceability of the Merger Agreement and related matters; (iv)
absence of any conflict with their respective charter documents, bylaws and
material contracts and any applicable laws; (v) governmental or regulatory
approvals and consents of third parties required to consummate the Merger; (vi)
their respective financial statements; (vii) the absence of certain material
events and changes since the date of their respective financial statements; and
(viii) various matters relating to their respective assets, and the operations
and conduct of their respective businesses.

CERTAIN COVENANTS

Pursuant to the Merger Agreement, the SPAR Companies, on the one
hand, and the PIA Parties, on the other hand, have agreed that during the period
from the date of the Merger Agreement through the Closing Date, and except as
permitted by the Merger Agreement, each will, among other things: (i) conduct
its business in the ordinary course and consistent in all material respects with
past practice; (ii) maintain and service their respective properties and assets
in order to preserve their value and usefulness in the conduct of their
respective business consistent with past practice and commercially reasonable
standards; (iii) keep available the services of their current employees and
agents and maintain their relations and goodwill with suppliers, customers,
distributors and any others with whom or with which they have business
relations; (iv) comply in all material respects with all laws, ordinances,
rules, regulations and orders; (v) cause all of the conditions to the
consummation of the transactions contemplated by the Merger Agreement to be
satisfied on or prior to the Closing Date; and (vi) provide the other party
reasonable access to all of their premises, properties, assets, records,
contracts and related materials and permit the other party to consult with the
employees and agents of such party.

In addition, no PIA Company and no SPAR Company shall: (i) enter
into any agreement or other arrangement for the acquisition or proposed
acquisition of any other corporation, business or entity, whether by means of an
asset purchase, stock purchase, merger or otherwise; (ii) except as expressly
contemplated by the Merger Agreement or upon the exercise of stock options
outstanding on February 28, 1999, issue or agree to issue, any shares of, or
rights of any kind to acquire any shares of its capital stock; (iii) increase
the compensation payable or to become payable to any officer or director except
in accordance with employment agreements or benefit plans in effect as of
February 28, 1999 and except for increases consistent with past practice; (iv)
adopt or enter into any employee benefit or compensation plan, agreement or
arrangement except for individual employment agreements and arrangements in the
ordinary course of business consistent with past practice; (v) make any loan or
advance to, or enter into any non- employment contract, lease or commitment
with, any officer or director; (vi) assume, guarantee, endorse or otherwise
become responsible for any material obligations of any other individual, firm or
corporation or make any material loans or advances to any individual, firm or
corporation (other than pursuant to existing agreements or as otherwise
disclosed to the other in the Merger Agreement); (vii) modify or amend in any
material respect or take any action to voluntarily terminate any material
contract or any amendment to the Field Service Agreement; (viii) waive, release,
grant or transfer any rights of material value except in the ordinary course of
business or as contemplated by the Merger Agreement or the agreement to effect
the SPAR Reorganization Transactions; (ix) transfer, lease, license, sell,
mortgage, pledge, dispose of or encumber any material assets other than in the
ordinary course of business and consistent with past practice; (x) take any
action, other than reasonable and usual actions in the ordinary course of
business and consistent with past practice, with respect to accounting policies
or procedures, except for changes

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required by generally accepted accounting principles ("GAAP"); (xi) settle or
compromise any material federal, state, local or foreign income tax proceeding
or audit with respect to such party; or (xii) enter into an agreement to do any
of the foregoing.

The SPAR Companies have agreed to use their reasonable best efforts
to ensure that the consolidated net worth of SPAR as determined by a
post-closing audit pursuant to the terms of the Merger Agreement is not less
than five hundred thousand dollars ($500,000) (after giving effect to the
exclusions set forth therein) and the SAI Principals, at their option, will
either pay PIA the amount of any shortfall or reduce the amounts owed by SMCI to
the SAI Principals by a corresponding amount. The SPAR Companies also will cause
the SPAR Reorganization Transactions to be consummated prior to the Effective
Time. In addition, the SPAR Companies and the PIA Parties have agreed not to
amend any provision limiting personal liability of PIA's present or former
directors, officers, employees and agents contained in PIA's charter documents
and to indemnify PIA's current and former directors and certain of its officers
to the fullest extent permitted by law. See "--Interests of Certain Persons in
the Merger."

CONDITIONS TO THE MERGER

The obligations of each of the parties to the Merger to effect the
Merger are subject to a number of conditions, including: (i) approval of the
Share/Option Issuance and the Charter Amendment by the requisite vote of PIA's
stockholders; (ii) the absence of any legal restraints or prohibitions
preventing the consummation of the Merger, including compliance with the HSR
Act; (iii) the listing on the Nasdaq National Market of the PIA Common Stock to
be issued in the Merger and the continued listing of existing shares of PIA
Common Stock; (iv) the filing of the Certificate of Amendment to PIA's
Certificate of Incorporation to effectuate the Charter Amendment; (v) the
execution of a software ownership agreement by SMF, SMS and SIT with respect to
Internet job scheduling software jointly developed by such parties; (vi) receipt
by STM of an assignment of the SPAR trademark registrations in the U.S. and
Canada; (vii) a license agreement among SIT, SMS and STM whereby STM will grant
non-exclusive royalty-free licenses to SIT and SMS for the use of the name
"SPAR" and certain other trademarks and related rights owned by STM; and (viii)
the SPAR Companies and the PIA Companies shall have executed an indemnification
agreement (the "Limited Indemnification Agreement") with the SAI Principals with
respect to such stockholders' obligations regarding the SMS tax litigation and
ADVO Note and an escrow agreement (the "Indemnity Escrow Agreement") to place an
aggregate of 10% of the shares of PIA Common Stock to be issued to the SAI
Principals and their family members in the Merger in escrow as security for such
indemnification obligations.

In addition, the obligations of the SPAR Companies to consummate the
Merger are subject to, among other things, the following conditions: (i) the
representations and warranties of the PIA Parties shall be accurate in all
material respects as of the Closing Date, subject to certain limitations; (ii)
all terms, covenants and conditions required by the Merger Agreement to be
performed by the PIA Parties by the Closing shall have been complied with and
performed in all material respects; (iii) since December 31, 1998, no material
adverse change in the business, operations, assets, properties, or condition of
the PIA Companies taken as a whole shall have occurred, and the PIA Companies
shall not have suffered any uninsured material loss or damage to any of their
properties or assets, that would be reasonably likely to materially affect or
impair the ability of the PIA Companies to conduct their business; and (iv) the
persons set forth under the " -- Board of Directors and Management After the
Merger" shall have been elected or appointed as directors and officers of PIA.

In addition to the conditions set forth in the first paragraph of
this section, the obligation of the PIA Parties to consummate the Merger are
subject to, among other things, the following conditions: (i) the
representations and warranties of the SPAR Companies shall be accurate in all
material respects as of the Closing Date, subject to certain limitations; (ii)
all terms, covenants and conditions required by the Merger Agreement to be
performed by the SPAR Companies by the Closing shall have been complied with and
performed in all material respects; (iii) since December 31, 1998, no material
adverse change in the business, operations, assets, properties, prospects or
condition of the SPAR

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Companies taken as a whole shall have occurred, and the SPAR Companies shall not
have suffered any uninsured material loss or damage to any of their properties
or assets, that would be reasonably likely to materially affect or impair the
ability of the SPAR Companies to conduct their business; (iv) all property and
assets currently used by any SPAR Company in the conduct of its business as of
the date of the Merger Agreement which are not owned by, licensed to or leased
by a SPAR Company shall have been transferred or assigned to a SPAR Company
without the payment of any consideration therefor; and (v) the SAI Stockholders
shall have delivered a mutual release releasing each SPAR Company from any
claims of the SAI Stockholders against each SPAR Company for matters preceding
the Closing Date.

TERMINATION

The transactions contemplated by the Merger may be terminated under
the following limited circumstances: (i) by mutual written consent of PIA and
SAI; (ii) by either PIA or SAI if, without fault of such terminating party, the
Merger is not consummated on or prior to June 30, 1999; (iii) by PIA, if there
is a breach of any of the representations and warranties of any SPAR Company,
subject to certain limitations, or if any SPAR Company fails to comply after
notice with any of its covenants or agreements contained in the Merger
Agreement, which breaches or failures are, in the aggregate, material in the
context of the transactions contemplated by the Merger Agreement and cannot
reasonably be anticipated to be cured within thirty days of the date of such
notice; (iv) by SAI, if there is a breach of any of the representations and
warranties of any PIA Party, subject to certain limitations, or if any PIA Party
fails to comply after notice with any of its covenants or agreements contained
herein, which breaches or failures are, in the aggregate, material in the
context of the transactions contemplated by the Merger Agreement and cannot
reasonably be anticipated to be cured within thirty days of the date of such
notice; (v) by PIA on written notice to SAI, if (A) an Acquisition Proposal (as
defined below) has been made and not withdrawn, (B) a majority of disinterested
members of the PIA Board determines in good faith (with the advice of
independent financial advisors and legal counsel) that such Acquisition Proposal
is superior for PIA's stockholders to the transaction contemplated by the Merger
Agreement, (C) PIA has notified SAI in writing of the determination described in
clause (B) above, (D) at least five (5) business days have elapsed following
receipt by SAI of such written notice and (taking into account any revised
proposal made by SAI since receipt of such written notice) such Acquisition
Proposal remains an Acquisition Proposal and a majority of the disinterested
directors of the PIA Board has again made the determination referred to in
clause (B) above, (E) the PIA Board concurrently approves, and (F) PIA
concurrently enters into, a definitive agreement providing for the
implementation of such Acquisition Proposal subject to payment of the breakup
fee and expense reimbursement described below; (vi) by either PIA or SAI on
written notice to the other, if a governmental entity shall have enacted any
law, rule, regulation, injunction or other order which is in effect and has the
effect of making illegal or otherwise prohibiting the transactions contemplated
by the Merger Agreement; and (vii) by SAI or PIA, if PIA's stockholders do not
approve either the Share/Option Issuance or the Charter Amendment by the
requisite vote as described in this Proxy Statement.

BREAKUP FEE

If PIA terminates the Merger Agreement and enters into a definitive
agreement implementing an Acquisition Proposal (as described in the above
paragraph), PIA shall pay the SPAR Companies a breakup fee equal to 3.5% of the
value of the consideration in connection with such Acquisition Proposal as
determined by the Merger Agreement and the amount of the reasonable costs and
expenses of the SPAR Companies and the SAI Stockholders incurred in connection
with the preparation negotiation, execution and performance of the Merger
Agreement.

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NO SOLICITATION

Each PIA Party has agreed not to direct or cause its respective
directors, officers, employees, representatives or agents to initiate, solicit
or encourage any inquiries or the making or implementation of any proposal or
offer, with respect to any merger, acquisition, consolidation, share exchange,
business combination or other transaction involving: (i) the acquisition of a
majority of the outstanding equity securities of any PIA Company, (ii) the
issuance by any PIA Company of equity securities which would represent upon
issuance a majority of the outstanding equity securities of any PIA Party, or
(iii) the acquisition of a majority of the consolidated assets of any PIA
Company (any such proposal or offer being referred to as an "Acquisition
Proposal"), or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person or
entity relating to an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal; provided, however, that
the PIA Board may furnish information (a) to or enter into discussions or
negotiations with any person or entity that makes an unsolicited bona fide
Acquisition Proposal or (b) as required by securities laws.

INDEMNIFICATION

As a condition to the Closing of the Merger, the SAI Principals,
jointly and severally, pursuant to the Limited Indemnification Agreement will
agree to indemnify the PIA Parties and the SPAR Companies against (a) any taxes
or losses incurred on or before the Closing Date for certain employment tax and
employee benefit matters relating to litigation involving SMS and the
reclassification by the IRS of SMS' independent contractors as employees and or
(b) for any amounts due under the ADVO Note ($3 million in maximum principal
amount).

As a condition to the Closing of the Merger and pursuant to the
Indemnity Escrow Agreement, the SAI Principals will deposit an aggregate of ten
percent of the shares of PIA Common Stock issued to them and their family
members in the Merger in escrow as security for such stockholders'
indemnification obligations. Any claim for indemnification must be made on or
prior to February 28, 2004. If there are no unsatisfied or disputed claims for
matters regarding the SMS tax litigation made against the escrowed shares,
one-half of the escrowed shares will be released on March 31, 2000. In addition,
the PIA Board will evaluate the amount of collateral reasonably necessary to
continue to secure the SAI Principals' indemnification obligations on or before
the second, third and fourth anniversary dates of the Merger Agreement and
release any escrowed shares in excess of such amounts, provided that there are
no unsatisfied or disputed claims for matters regarding the SMS litigation.

The SAI Principals have also agreed to reimburse PIA for any
short-fall to the extent the consolidated net worth of SPAR as determined by a
post-closing audit pursuant to the terms of the Merger Agreement is less than
five hundred thousand dollars ($500,000) (after giving effect to the exclusions
set forth therein) or to reduce the amount of the obligation owed by SMCI to the
SAI Principals by the amount of such shortfall.

LICENSE OF SPAR NAME AND OTHER INTELLECTUAL PROPERTY AGREEMENTS

As a condition to the Closing of the Merger, STM will enter into a
Trademark License Agreement (the "Trademark Agreement") with SIT and SMS. Under
the terms of the Trademark Agreements, STM will grant licenses to SIT and SMS to
use (i) certain trademarks in the United States and Canada in connection with
the products and services claimed in the registrations for such trademarks and
(ii) the name "SPAR." In addition, SIT will enter into a Software Ownership
Agreement (the "Software Agreement") with SMF and SMS. Under the terms of the
Software Agreement, each party agrees that each other party to the Software
Agreement is a co-owner of certain confidential information and software and
program documentation created jointly by SIT, SMF and SMS.

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OBLIGATIONS IN CONNECTION WITH THE MCI ACQUISITION

MCI ACQUISITION. On January 15, 1999, SMCI acquired all of the
business and substantially all of the assets of MCI, pursuant to the MCI
Agreement. See "Business of SPAR - Premium Incentive Division - MCI
Acquisition." The MCI Acquisition was financed in part through the issuance by
SMCI of a promissory note dated as of January 15, 1999 (the "MCI Note"), to MCI
in an aggregate principal amount equal to $12,422,189.00 plus the amount of the
Earn-Out Consideration (as defined in the MCI Agreement). The MCI Agreement
provides that MCI is generally entitled to Earn-Out Consideration equal to the
earnings before taxes, subject to certain adjustments ("EBT"), of MCI for the
period from April 1, 1998, through January 15, 1999, and of SMCI thereafter
through March 31, 1999, but MCI is not entitled to any Earn-Out Consideration if
the EBT for such combined periods does not exceed $3,500,000.

The MCI Note is payable in monthly installments of $400,000, subject
to possible reductions, and is due in full on September 15, 1999. An additional
installment payment of $1,000,000 is due on April 15, 1999, subject to possible
reduction, and of $500,000 is due on April 30, 1999. The payment of $250,000 of
each monthly installment and the $1,000,000 April 15 additional installment are
limited to Available Cash (as defined in the MCI Note) and are automatically
reduced (with the reductions deferred to maturity) if there is insufficient
Available Cash. The MCI Note defines "Available Cash" as "the cash and cash
equivalents of SMCI in excess of $1,500,000 at the time of payment and
calculation (after giving effect to the payment of interest to accompany such
installment, and in the case of the Additional April Installment, after giving
effect to the Monthly Installment for April)." MCI may elect to receive up to
$3,000,000 of the final installment payment in unregistered shares of common
stock of any publicly traded company holding, directly or indirectly, all of the
issued and outstanding stock of SMCI (i.e., in shares of PIA Common Stock),
valued at the average public trading price for the 30 day period preceding the
maturity date. In connection with the note to MCI, Messrs. Brown and Bartels
pledged their shares of SMCI stock to secure SMCI's obligations under the MCI
Note. Under the terms of a hypothecation agreement, MCI will be entitled to
foreclose on the SMCI securities if the MCI Note is accelerated or if the debt
is not paid in full upon maturity.

BOARD OF DIRECTORS AND MANAGEMENT AFTER THE MERGER

The following table sets forth certain information in connection
with each person who will be an executive officer or director of PIA immediately
after the Effective Time of the Merger other than each of Messrs. Peets, Collins
and Lewis whose business experience is described in "Proposal IV: Election of
Directors--Information Concerning Nominees to PIA Board" and Ms. Wood whose
business experience is described in "Executive Officers' Compensation and Other
Information of PIA." Ages are as of March 1, 1999.

POSITION WITH THE COMBINED COMPANY
NAME       AGE                  CURRENT POSITION WITH PIA OR SPAR                           AFTER THE MERGER
- --------------------   ----     -------------------------------------------------------    ----------------------------------------

Robert G.  Brown        52      Chairman, Chief Executive Officer, President and           Chairman, Chief Executive Officer, 
Director of each of the SPAR Companies                           President and Director

William H.  Bartels     54      Vice Chairman, Senior Vice President, Treasurer,           Vice Chairman and Director
Secretary and Director of each of the SPAR Companies

Patrick W.  Collins     70      Director of PIA                                            Director

Robert O. Aders         71      None                                                       Director

J. Christopher Lewis    42      Director of PIA                                            Director

Terry R.  Peets         54      Chief Executive Officer, President and Director of PIA     Vice Chairman

James H. Ross           65      Chief Financial Officer of each of the SPAR Companies      Treasurer

Cathy L.  Wood          51      Executive Vice President, Chief Financial Officer and      Executive Vice President, Chief 
Secretary of PIA                                     Financial Officer and Secretary

Robert G. Brown will become the Chairman, Chief Executive Officer
and Director of the Combined Company upon consummation of the Merger. Mr. Brown
has been the Chairman, President and Chief Executive Officer of the

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SPAR Marketing Companies (SBRS since 1994, SINC since 1979, SMNEV since November
1993, and SMF since SMF acquired its assets and business from ADVO in 1996).

William H. Bartels will become the President of the SPAR
Merchandising Division, the President of the SPAR Marketing Companies, and a
Vice Chairman and Director of the Combined Company upon consummation of the
Merger. Mr. Bartels has served as the Vice-Chairman, Secretary, Treasurer and
Senior Vice President-Corporate of the SPAR Marketing Companies (SBRS since
1994, SINC since 1979, SMNEV since November 1993, and SMF since SMF acquired its
assets and business from ADVO in 1996), and has been responsible for SPAR's
sales and marketing efforts, as well as for overseeing joint ventures and
acquisitions.

Robert O. Aders will become a director of the Combined Company upon
the consummation of the Merger. Mr. Aders has served as Chairman of The Advisory
Board, Inc., an international consulting organization since 1993, as President
Emeritus of the Food Marketing Institute ("FMI") since 1993, and as counsel to
Collier, Shannon, Rill & Scott, a Washington, D.C. law firm since 1993.
Immediately prior to his election to the presidency of FMI in 1976, Mr. Aders
was Acting Secretary of Labor in the Ford Administration. Mr. Aders was the
Chief Executive Officer of FMI from 1976 to 1993. He also served in the Kroger
Co., in various executive positions and was Chairman of the Board from 1970 to
1974. Mr. Aders also serves as a director of FMI, the Stedman Nutrition
Foundation at Duke Medical Center, Checkpoint Systems, Inc., Coinstar, Inc.,
Source Information Systems and Telepanel Systems, Inc., and as a trustee of The
National Urban League, Food Industry Crusade Against Hunger and St. Joseph
Academy of Food Marketing.

James H. Ross will become the Treasurer of the Combined Company upon
consummation of the Merger. Mr. Ross has been the Chief Financial Officer of the
SPAR Marketing Companies since 1991, and the General Manager of SBRS since 1994.

If the Merger is not consummated, the current directors of PIA will
continue to serve as directors of PIA until their successors are duly elected
and qualified, and the current executive officers of PIA will continue to serve
in their current positions until the end of their present employment terms as
set forth in their existing employment agreements, or if no such agreement
exists, as determined by the PIA Board.

ADDITIONAL OPTION GRANTS TO SPAR EMPLOYEES AND OTHER INDIVIDUALS

Subject to the consummation of the Merger and the approval of the
Option Plan Amendment, the PIA Board has agreed to grant options covering an
aggregate of up to 2,133,744 shares of PIA Common Stock under the 1995 Option
Plan to employees of SPAR and other individuals providing valuable services for
SPAR. The date of grant of such stock options shall be the Closing Date, and the
exercise price of such stock options shall be the last sale price as reported on
the Nasdaq National Market on the Closing Date.

REASON FOR AUTHORIZATION

The rules of the Nasdaq National Market require stockholder approval
in connection with the acquisition of the stock or assets of another company if
the number of shares of PIA Common Stock to be issued in the transaction would
equal or exceed 20% of the number of shares of PIA Common Stock outstanding
immediately prior to such issuance or if the issuance of the PIA Common Stock
would result in a change of control of PIA.

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VOTE REQUIRED

The rules of the Nasdaq National Market require the affirmative vote
of a majority of the votes cast in person or by proxy at the Annual Meeting to
approve the Share/Option Issuance, provided that the total number of votes cast
on the Share/Option Issuance represents more than 50% of the outstanding shares
of PIA Common Stock entitled to vote thereon at the Annual Meeting. The PIA
Board has unanimously determined that the Merger and the Share/Option Issuance
are in the best interests of PIA and the stockholders of PIA, and has approved
the Merger Agreement and the Share/Option Issuance. Approval of the Share/Option
Issuance, the Charter Amendment and the Option Plan Amendment is required for
the Merger to be consummated. If any one of the foregoing three proposals is not
approved, even if the other two proposals are approved, the Merger cannot be
consummated and none of the three proposals will be approved. THE PIA BOARD
UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" APPROVAL OF THE
SHARE/OPTION ISSUANCE.

BUSINESS OF SPAR

This section (Business of SPAR) and other parts of this Proxy
Statement contain, in addition to historical information, forward-looking
statements that involve risks and uncertainties. Actual results could differ
significantly from the results discussed in the forward-looking statements.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed in "Risk Factors." See the glossary at Annex E for a
description of certain terms that are used throughout this Proxy Statement.

SAI was founded on December 31, 1998. Immediately prior to the
Effective Time of the Merger, SAI will acquire, directly or indirectly, all of
the stock of SMI, SMF, SINC, SBRS, SMNEV, SIM, SMCI and STM from the SAI
Principals, pursuant to the Reorganization Agreement. SAI's acquisition of such
stock and the other transactions under the Reorganization Agreement will be
referred to as the SPAR Reorganization Transactions.

SPAR currently provides merchandising and marketing services to
leading entertainment, consumer goods, food products and retail companies
through the Existing SPAR Divisions: (i) merchandising and marketing services
through the SPAR Merchandising Division; and (ii) premium incentives through the
SPAR Incentive Division. Following the Merger, PIA California and its
subsidiaries will form the PIA Division, which will continue to provide
merchandising and marketing services.

PIA and SPAR intend to consolidate the sectors of the marketing
services industry that its Divisions will serve through the acquisition of other
marketing, merchandising and incentive companies. Additionally, PIA and SPAR
intend to pursue acquisitions in other sectors of this industry, such as ad
specialty (using free promotional items to stimulate corporate remembrance),
direct marketing (marketing to or soliciting orders from consumers via mail and
telephone), database marketing (direct marketing using lists developed by
marketers with proprietary data), sales promotions (marketing activities to
encourage purchases in support of or in lieu of advertising),
information/research (collecting and reselling data on consumers and consumer
preferences), sampling (distributing free product to consumers to promote
awareness) and demonstrations (live exhibitions, typically in-store, of how a
product works). As part of its acquisition strategy, SPAR is actively exploring
and considering a number of potential acquisition candidates, however, there can
be no assurance that any of the acquisitions will occur or whether, if
completed, the consolidation of the sectors of the marketing services industry
will be successful. Neither PIA nor SPAR has entered into any definitive and
binding arrangements with respect to any contemplated acquisition.

The Existing SPAR Divisions currently operate in all 50 states and
serve a broad range of the nation's leading companies, including MCI WorldCom,
Taco Bell Corp., Warner Bros., Twentieth Century Fox Film Corp., Procter &
Gamble, and General Motors Corporation. The SPAR Merchandising Division and the
SPAR Incentive Division

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conduct their businesses through approximately 3,300 employees and 2,300
independent contractors, as well as outside service providers.

THE DIVISIONS OF SPAR

SPAR MERCHANDISING DIVISION

The Original SPAR Group. Since the founding of its predecessor
companies in 1967, the SPAR Merchandising Division has become a national
marketing services company that provides retail merchandising and other
marketing services to home video, consumer goods and food products companies,
including Warner Bros., General Motors Corporation, Gallant Greeting and The
Procter & Gamble Company. The SPAR Merchandising Division's services include
in-store merchandising, test market research, mystery shopping, database
marketing and data collection. The SPAR Merchandising Division also provides
teleservices (using telecommunications and telemarketers for gathering and
soliciting information) within an extensive inbound and outbound call center.
The SPAR Merchandising Division offers these services directly through a network
of in-store merchandising specialists and teleservices and data entry personnel
consisting of approximately 3,000 part-time employees. In addition, the SPAR
Merchandising Division currently contracts with SMS to provide the services of
approximately 2,300 independent contractors and four regional and 33 district
managers who currently oversee and deploy the SMS independent contractors and
the SPAR Merchandising Division's part-time employees. See "--Certain
Relationships and Related Party Transactions." By using its part-time employees
and contracting with providers of independent contractors, the SPAR
Merchandising Division is able to assign work on an as needed basis, which
enables the SPAR Merchandising Division to be responsive to client needs on
short notice (without incurring fixed costs) and to cover approximately 8,000
stores and 30 chains and make 45,000 client calls per month. Management believes
this structure provides the SPAR Merchandising Division with a significant
advantage relative to retailers or smaller brokers who generally cannot optimize
an employee's time over multiple locations and clients. The SPAR Merchandising
Division maintains five offices in the United States, including its headquarters
in Tarrytown, New York, and its teleservices center in Rochester Hills,
Michigan.

The SPAR Merchandising Division uses in-store merchandising
specialists to provide a variety of retail servicing and merchandising services
to clients, including category resets (reorganizing new or existing products on
shelves), reordering, shelf stocking, placing and maintenance of shelf tags and
stocking video displays plus a full-range of consumer, trade and in-store
intelligence (gathering information on store conditions). Market research
performed by the SPAR Merchandising Division for its clients includes a full
range of consumer, trade and in-store services including test marketing,
reporting on in-store conditions and mystery shopping. This information is of
particular value to the SPAR Merchandising Division's clients because it
provides them with the data necessary to evaluate their advertising and
promotional efforts.

The SPAR Merchandising Division emphasizes the use of information
technology, including an interactive voice response system and a teleservices
center, to provide value-added marketing services to its clients. Recently, the
SPAR Merchandising Division introduced a proprietary Internet-based system
called "Business Manager." Through Business Manager, its management can
coordinate and evaluate on a real-time basis the services provided through its
network of merchandising specialists and quantify the impact of the services on
client sales and profit. The SPAR Merchandising Division has tested a field
merchandising solution that combines a wearable personal computer with
hands-free voice recognition software, a heads-up display, bar-code scanner,
digital camera and wireless modem to link to this system. The SPAR Merchandising
Division has tested and is presently using hand-held computers through which it
collects in-store data for certain customers.

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PREMIUM INCENTIVE DIVISION

MCI ACQUISITION. On January 15, 1999, SMCI acquired all of the
business and substantially all of the assets of MCI pursuant to the MCI
Agreement. The MCI Acquisition was financed in part through the issuance by SMCI
of the MCI Note, to MCI in an aggregate principal amount equal to
U.S.$12,422,189.00 plus the amount of the Earn-Out Consideration (as defined in
the MCI Agreement). The MCI Agreement provides that MCI is generally entitled to
Earn-Out Consideration equal to the EBT of MCI for the period from April 1,
1998, through January 15, 1999, and for SMCI thereafter through March 31, 1999,
but MCI is not entitled to any Earn-Out Consideration if the EBT for such
combined periods does not exceed $3,500,000.

The MCI Note is payable in monthly installments of $400,000, subject
to possible reductions, and is due in full on September 15, 1999. An additional
installment payment of $1,000,000 is due on April 15, 1999, subject to possible
reduction, and $500,000 is due on April 30, 1999. The payment of $250,000 of
each monthly installment and the $1,000,000 April 15 additional installment are
limited to Available Cash and are automatically reduced (with the reductions
deferred to maturity) if there is insufficient Available Cash. MCI may elect to
receive up to $3,000,000 of the final installment payment in unregistered shares
of common stock of any publicly traded company holding, directly or indirectly,
all of the issued and outstanding stock of SMCI (i.e., in shares of PIA Common
Stock), valued at the average public trading price for the 30 day period
preceding the maturity date.

SPAR MCI. SMCI specializes in designing and implementing premium
incentives and managing group travel and meetings for clients throughout the
United States, which business MCI began in 1987. SMCI's diverse base of clients
includes Taco Bell Corp., MCI WorldCom, Triangle Pacific, Source Services and
Yamaha. SMCI provides a wide variety of consulting, creative, program
administration and travel and merchandise fulfillment services to companies
seeking to motivate employees, salespeople, dealers, distributors, retailers and
consumers toward certain action or objectives. SMCI's strategy is to allow
companies to outsource the entire design, implementation and fulfillment of
incentive programs in a one-stop, "umbrella" shopping approach. SMCI consults
with a client to design the most effective plan to achieve the client's goals.
SMCI then provides services necessary to implement the program, generates
detailed efficiency progress reports and reports on the return on investment
upon completion of the program. SMCI also provides meeting and convention
management travel services to clients. SMCI employs approximately 100 people in
its Carrollton, Texas headquarters and maintains additional sales offices in
Nashville, Tennessee, and Newport Beach, California.

SMCI's process typically begins when a client requires assistance in
developing a performance improvement program. SMCI's senior consultants work
with clients to develop programs to improve productivity by delivering positive
reinforcement in ways that are meaningful to employees and supportive of
business strategy. A wide range of reward options is available, including cash,
travel and merchandise. Most formal compensation programs deliver cash to plan
participants, while premium incentives tend to make greater use of non-financial
rewards. SMCI has experience in all forms of incentives and therefore can
provide its clients with the most appropriate program design. SMCI has a full
service agency capability to assist its clients in the writing, designing and
printing of the program elements. Teams of creative directors, copywriters,
graphic designers and print specialists develop campaigns for incentive programs
meetings, trade shows and consumer promotions.

In addition, SMCI provides its clients with travel or merchandise
fulfillment alternatives as well as a series of innovative product specific
alternatives. While the majority of SMCI's fulfillment is in the travel area,
SMCI provides a wide variety of catalog merchandise awards. Through an informal
arrangement with some of the country's largest mass merchandise retailers, SMCI
can provide its clients with programs that offer the flexibility of in-home

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ordering. SMCI also provides to its clients custom merchandise, special
catalogs, retail certificates and a Local Purchase Option ("LPO"). The LPO
allows winning participants to select and redeem merchandise from a series of
participating merchants.

SMCI has award delivery programs (developed by MCI) in its Ultima
Visa Award Card program and Phonovation, a system which utilizes
state-of-the-art techniques in interactive voice response. Clients who utilize
the card program have participant awards posted to their Visa statement. Like an
airline frequent flyer program or a credit card frequency program, participants
can redeem awards from any of over 12 million Visa locations worldwide. Using
toll free telephone numbers, program participants interact with a computer to
reinforce performance, check results or conduct customer or product satisfaction
surveys.

SMCI also provides turnkey program administration for its clients,
utilizing technology to administer large, complex programs for its clients. SMCI
operates a local area network that enables support staff and program
administrators to communicate effectively throughout the United States in
support of a client program. SMCI utilizes Oracle databases to custom design and
build information tracking systems for its clients including input forms and
reports. SMCI uses American Airlines' SABRE system, Sabrevision and Worldview to
provide its clients with a wide range of information and reservation
alternatives. SMCI believes that its technological resources serve as a
competitive advantage.

FACILITIES

SPAR's corporate offices are located in leased space at 303 South
Broadway, Suite 140, Tarrytown, New York 10591. The telephone number of its
principal executive offices is (914) 332-4100. In addition to its corporate
offices, the SPAR Merchandising Division and SMCI maintain the following
facilities:

COMPANY                 LOCATION                               PRINCIPAL USE
- ---------------------------      -------------------        -------------------------------------------------

SPAR Merchandising Division      Tarrytown, NY              Headquarters and Sales Office
Mahwah, NJ                 SBRS Office
Cincinnati, OH             SBRS Office
Rochester Hills, MI        Regional Office and Teleservices Center
Eden Prairie, MN           Regional Office and Information Technology Office
SMCI                             Carrollton, TX             Headquarters
Newport Beach, CA          Sales Office
Nashville, TN              Sales Office

SPAR believes that all of the above facilities are adequate for the
Existing SPAR Divisions' current and anticipated operations.

COMPETITION

The marketing services industry is highly competitive. Competition
in each of the Existing SPAR Divisions arises from a number of enterprises which
are national in scope. SPAR also competes in each of the Existing SPAR Divisions
with a large number of relatively small enterprises with specific client,
channel or geographic coverage, as well as the internal marketing and
merchandising operations of its clients and prospective clients. The SPAR
Merchandising Division and PIA each competes with independent brokers and
smaller, regional providers. In the premium incentive sector, SMCI competes with
Carlson Marketing Group, Inc., Maritz Inc. and BI Services, each of which has
significantly greater financial and marketing resources than SMCI, as well as
Exceed Motivation, Incentive Associates and regional and local suppliers. SPAR
believes that it is able to compete effectively in the SPAR

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Merchandising Division through a national network of employees and other
merchandisers, broad service offerings and information technology capabilities,
which will augment the strengths of the PIA Division, and in the SPAR Incentive
Division through its a broad range of products and value-added services and
competitive pricing. See "Risk Factors--Competition."

EMPLOYEES

As of March 1, 1999, the SPAR Merchandising Division employed
approximately 3,231 people, of whom approximately 169 were full-time employees
and approximately 3,062 were part-time employees, of which approximately 148
full-time employees were engaged in operations and 14 were engaged in sales. As
of March 1, 1999, the SPAR Incentive Division (i.e., SMCI) employed
approximately 100 people of whom approximately 98 were full-time employees and
approximately 2 were part time employees, of which approximately 93 full-time
employees were engaged in operations and 7 were engaged in sales. As of March 1,
1999, PIA employed approximately 2,147 people, of whom approximately 1,105 were
full-time employees and approximately 1,042 were part-time employees, of which
approximately 999 full-time employees were engaged in operations and 38 were
engaged in sales.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Mr. Robert G. Brown, a director and the Chairman and Chief Executive
Officer of each of the SPAR Companies (and of the Combined Company), and Mr.
William H. Bartels, a director and the Vice Chairman, Secretary and Treasurer of
each of the SPAR Companies (and a director and the Vice Chairman of the Combined
Company), are the sole stockholders and executive officers and directors of SMS,
SIT, and certain other companies that are not parties to the Merger Agreement
and will not be included in the Combined Company.

SMS provided field representative (through its independent
contractors) and field management services to the SPAR Marketing Companies at a
total cost of $6.4 million to the SPAR Marketing Companies in the fiscal year
ended March 31, 1998, and at a total cost of $5.1 million to the SPAR Marketing
Companies for the nine months ended December 31, 1998. Under the terms of the
Field Service Agreement, SMS will continue to provide the services of
approximately 2,300 field representatives and 37 regional and district managers
to the SPAR Marketing Companies as they may request from time to time, for which
the SPAR Companies have agreed to pay SMS for all of its costs of providing
those services plus 4%. However, SMS may not charge any SPAR Company for any
past taxes or associated costs for which the SAI Principals have agreed to
indemnify the SPAR Companies. See "Business of SPAR - Related Party Contingent
Tax Liability," below.

SIT provided computer programming services to SMF at a total cost of
$213,000 to SMF in the fiscal year ended March 31, 1998, and at a total cost of
$248,000 to SMF for the nine months ended December 31, 1998. Under the terms of
the programming agreement between SMF and SIT effective as of October 1, 1998
(the "Programming Agreement"), SIT will continue continues to provide
programming services to SMF as SMF may request from time to time, for which SMF
has agreed to pay SIT competitive hourly wage rates and to reimburse SIT's
out-of-pocket expenses.

As a condition to the Merger Agreement, SMF, SMS and SIT will enter
into a Software Ownership Agreement with respect to Internet job scheduling
software jointly developed by such parties. In addition, STM, SMS and SIT will
enter into trademark licensing agreements whereby STM will grant non-exclusive
royalty-free licenses to SIT and SMS for the use of the name "SPAR" and certain
other trademarks and related rights owned by STM.

In the event of any material dispute in the business relationships
between the Combined Company and SMS or SIT, or in the course of pursuing SMS's
independent contractor/employee dispute with the IRS, it is possible that
Messrs. Brown and Bartels may have one or more conflicts of interest with
respect to these relationships and dispute

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that could have a material adverse effect on the Combined Company. See "Business
of SPAR - Related Party Contingent Tax Liability" and "Notes to the Combined
Financial Statements of SPAR."

LEGAL PROCEEDINGS

SPAR is, from time to time, a party to litigation or administrative
proceedings that arise in the normal course of its business. SPAR does not have
pending any litigation that, separately or in the aggregate, if adversely
determined, would have a material adverse effect on the business, financial
condition or results of operations of the SPAR. (See the next paragraphs with
respect to certain SPAR affiliate litigation.)

RELATED PARTY CONTINGENT TAX LIABILITY

The SPAR Marketing Companies contract with SMS, to receive the
services of SMS's field representative and field managers pursuant to the Field
Service Agreement, and have received such services under similar arrangements in
the past. Robert G. Brown and William H. Bartels (the SAI Principals) own all of
the stock of SMS, and prior to the acquisition of the SPAR Companies by SAI in
the SPAR Reorganization Transactions, have owned all the stock of the SPAR
Companies. SMS is a separate corporation and is not being acquired by any of the
SPAR Companies or PIA Companies. See "Risk Factors - Potential Conflicts of
Interest Regarding Services Provided by SMS and SIT." Approximately 75% of the
in-store merchandising specialists who perform work for the SPAR Marketing
Companies are SMS field representatives, while the other 25% are employees of
SMF. The information in the following three paragraphs has been provided to the
SPAR Marketing Companies by SMS.

SMS has always treated its field representatives as independent
contractors, and in 1986 SMS received a favorable determination letter from the
IRS that SMS's field representatives were properly classified as "independent
contractors" for Federal employment tax purposes. In connection with the audit
of SMS's tax returns for 1991 and 1992, the IRS reversed its earlier position
and determined that SMS's field representatives should have been treated as
employees, claiming that SMS owed approximately $2,000,000 in federal employment
related taxes and interest. This claimed deficiency assumes that the field
representatives failed to pay any taxes themselves (even though SMS filed the
requisite Form 1099s), as all of the tax payments made by the field
representatives respecting their payments from SMS during such years would be
credited against any such amount that SMS might owe (and such payments are
generally discoverable). If this IRS reversal were to be upheld and be applied
to the years 1993 through 1998, SMS could owe up to approximately $6.6 million
in additional employment taxes (including withholding for income taxes),
penalties and interest (again assuming that the field representatives failed to
pay any self-employment taxes themselves). However, SMS is vigorously contesting
this determination and contemplates filing suit in Tax Court to challenge it,
assuming it is unable to settle the case which is currently under administrative
appeal internally at the IRS. Furthermore, SMS believes (based on settlement
offers and discussions) that it could settle this matter with little or no
payment in employment taxes, penalties and interest if SMS would agree on a
prospective basis to classify its field representatives as employees. SMS has
refused to settle because it believes that its field representatives satisfy the
applicable tax criteria for treatment as independent contractors for federal
employment tax purposes and SMS believes that it will ultimately prevail on this
issue.

Similar claims have been filed against SMS by certain states.
However, SMS is confident in defending its position against the IRS and these
state claims because of prior success in several states, and SMS will continue
to vigorously defend its position against any future state claims that may
arise. For example, SMS prevailed on a similar claim by the State of California,
which had instituted administrative proceedings against SMS. The administrative
law judge agreed with SMS's classification of field representatives as
independent contractors. The State of California has declined to file a further
appeal and has refunded payments made by SMS under protest during the appeal
process.

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Although SMS is not a party to the Merger Agreement or SPAR
Reorganization Agreement and SPAR has not entered into any tax sharing or tax
indemnification arrangement with SMS, there can be no assurance that the IRS
will not attempt to collect employment taxes from the SPAR Marketing Companies.
Accordingly, if SMS is unable to pay such taxes or otherwise prevail in or
settle its dispute with the IRS, the IRS might seek to collect all or a portion
of such tax liability from the SPAR Marketing Companies as a result of their
common control and business relationship with SMS during the period such
liabilities were incurred. In connection with the closing of the Merger, the SAI
Principals have agreed to indemnify the SPAR Companies and PIA Companies against
such potential tax liability and to place an aggregate of 10% of the shares of
PIA Common Stock issued to them and their family members in the Merger
(estimated at approximately 1.2 million shares) in escrow as security for such
indemnification obligations (and the indemnification obligations of the SAI
Principals with respect to the ADVO Note). In the event, however, SMS is
unsuccessful in its challenge against the IRS's adverse independent contractor
determination, and the IRS were to assert successfully that one or more of the
SPAR Marketing Companies are responsible for all or a portion of such liability,
there can be no assurance the Combined Company will be able to recover from the
SAI Principals any amounts the Combined Company might be required to pay to the
IRS.

As part of its overall business plan, and regardless of the outcome
of the SMS tax litigation described above, the Combined Company intends to
aggressively seek out alternative sources to provide in-store merchandising
specialists at the lowest possible cost. The SPAR Marketing Companies currently
perform approximately 75% of their field work through SMF's own employees. There
is no assurance, however, that the Combined Company will be able to procure
elsewhere (through the employees of SMF, the PIA Companies or otherwise)
replacements for the field representatives currently provided by SMS. To assure
that such representatives will be available from SMS, SMF has entered into a
Field Service Agreement with SMS pursuant to which SMS field work will be
available to SMF on a non-exclusive cost-plus basis. See "--Certain
Relationships and Related Transactions." If SMS were to settle its independent
contractor dispute with the IRS by treating its field representatives as
employees in the future, such a settlement could increase the cost to the
Combined Company of the SMS field representatives because SMS could pass-through
to the Combined Company any additional operating cost associated with having
field representatives classified as "employees" rather than "independent
contractors." If the SMS in-store merchandising specialists utilized by the
Company had to be treated as employees rather than independent contractors, if
SMS passed any associated additional costs to the Combined Company, and if the
Combined Company was unable to procure the services rendered by these field
representatives elsewhere, it is estimated that the Combined Company's aggregate
operating costs would increase by approximately 1 1/2 to 2% from 1998.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF SPAR

The following discussion and analysis of financial condition and
results of operations contains statements that constitute forward-looking
statements. Such forward-looking statements relate to future events or the
future financial performance of SPAR and involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of SPAR to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among other things, the following: general
economic and business conditions; SPAR's dependence on the trend toward
outsourcing; relationship with SMS and potential employment tax liability;
uncertainty regarding and changes in customer preferences; competition; changes
in political, social and economic conditions; and various other factors beyond
SPAR's control. Each holder of PIA Common Stock should specifically consider the
various factors identified in this Proxy Statement including the matters set
forth under "Risk Factors," which could cause actual results to differ
materially from those indicated by such forward-looking statements. SPAR
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Proxy Statement will in fact
transpire. The following discussion should be read in conjunction with SPAR's
Consolidated Financial Statements and the related Notes thereto, included
elsewhere in this Proxy Statement.

The SPAR Marketing Companies have historically reported financial
results on a March 31 fiscal year end. MCI and PIA have historically reported
financial results on a calendar year end. Because the Combined Company will
report financial results on a March 31 fiscal year end, historical information
appearing in this Proxy Statement relating to all of the companies except the
SPAR Marketing Companies may not be comparable to future results of the Combined
Company.

The following discussion of the financial condition and results of
operations should be read in conjunction with the SPAR Marketing Companies' and
MCI's financial statements and the notes thereto appearing elsewhere herein.

THE SPAR MARKETING COMPANIES

Since the founding of its predecessor companies in 1967, the SPAR
Marketing Companies have become a national marketing services company that
provides retail merchandising and other marketing services to home video,
consumer goods and food products companies. The SPAR Marketing Companies'
services include in-store merchandising, test market research, mystery shopping,
database management and data collection and teleservices. In March 1996, SMF
acquired substantially all of the assets of Marketing Force, Inc., a provider of
merchandising services primarily to retailers and home video production
companies. SMF also performs teleservicing and database services, primarily for
divisions of General Motors Corporation.

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RESULTS OF OPERATIONS-SPAR MARKETING COMPANIES

The following table sets forth selected financial data and data as a
percentage of net revenues for the periods indicated.

YEARS ENDED MARCH 31,                    
------------------------------------------------------------- 
1996                  1997                  1998       
-----------------     -----------------     ----------------- 
(IN THOUSANDS, EXCEPT PERCENTAGES)

Net revenues                                   $ 14,425    100.0%    $ 35,574    100.0%    $ 36,804    100.0%
--------    -----     --------    -----     --------    ----- 
Gross profit                                      6,746     46.8       13,820     38.8       17,387     47.2 
Selling, general and administrative expenses      7,030     48.8       13,477     37.8       12,248     33.2 
--------    -----     --------    -----     --------    ----- 
Operating income (loss)                            (284)    (2.0)         343      1.0        5,139     14.0 
Other income (expense)                              (99)    (0.7)        (766)    (2.2)        (390)    (1.1)
--------    -----     --------    -----     --------    -----      
Net income (loss)                              $   (383)    (2.7)%   $   (423)    (1.2)    $  4,749     12.9%
========    =====     ========    =====     ========    ===== 

NINE MONTHS ENDED DECEMBER 31,
--------------------------------------
1997                1998
-----------------    -----------------
(IN THOUSANDS, EXCEPT PERCENTAGES)

Net revenues                                    $ 27,202    100.0%   $ 32,601    100.0%
--------    -----    --------    -----
Gross profit                                      12,623     46.4      15,020     46.1
Selling, general and administrative expenses       9,310     34.2       8,868     27.2
--------    -----    --------    -----
Operating income (loss)                            3,313     12.2       6,152     18.9
Other income (expense)                              (295)    (1.1)       (155)     (.4)
--------    -----    --------    -----  
Net income (loss)                               $  3,018     11.1%   $  5,997     18.5%
========    =====    ========    =====

NINE MONTHS ENDED DECEMBER 31, 1998 COMPARED TO NINE MONTHS ENDED DECEMBER 31,
1997-SPAR MARKETING COMPANIES

NET REVENUES. Net revenues increased to $32.6 million in the nine
months ended December 31, 1998 from $27.2 million in the nine months ended
December 31, 1997, an increase of $5.4 million, or 19.8%. Net revenues increased
due to increased sales of in-store merchandising, predominately in the home
video sector.

GROSS PROFIT. Cost of revenues consists of in-store labor (including
travel expenses) and field management. SPAR's gross profit increased to $15.0
million in the nine months ended December 31, 1998 from $12.6 million in the
nine months ended December 31, 1997, an increase of $2.4 million, or 19.0%.
Gross margin decreased slightly to 46.1% in the nine months ended December 31,
1998 from 46.4% in the nine months ended December 31, 1997.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative expenses include corporate overhead, project management,
management information systems, executive compensation, human resources expenses
and accounting expenses. Selling, general and administrative expenses decreased
to $8.9 million in the nine months ended December 31, 1998 from $9.3 million in
the nine months ended December 31, 1997, a decrease of $0.4 million, or 4.7%. As
a percentage of net revenues, selling, general and administrative expenses
decreased to 27.2% of net revenue in the nine months ended December 31, 1998
from 34.2% in the nine months ended December 31, 1997. This decrease is
primarily the result of higher net revenues and continued cost controls and a
resultant decrease in selling, general and administrative expenses for the nine
months ended December 31, 1998.

OPERATING INCOME (LOSS). As a result of the factors discussed above,
operating income increased to $6.1 million in the nine months ended December 31,
1998 from $3.3 million in the nine months ended December 31, 1997, an increase
of $2.8 million, or 85.7%. As a percentage of net revenues, operating income
increased to 18.9% of net revenue in the nine months ended December 31, 1998
from 12.2% in the nine months ended December 31, 1997.

OTHER INCOME (EXPENSE). Other expense decreased to $(0.2) million in
the nine months ended December 31, 1998 from ($0.3) million in the nine months
ended December 31, 1997. As a percentage of net revenues, other expense
decreased to (0.4)% in the nine months ended December 31, 1998 from (1.1)% in
the nine months ended December 31, 1997.

NET INCOME. As a result of the factors discussed above, net income
increased to $6.0 million in the nine months ended December 31, 1998 from $3.0
million in the nine months ended December 31, 1997, an increase of $3.0

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million, or 98.7%. As a percentage of net revenues, net income increased to
18.5% in the nine months ended December 31, 1998 from 11.1% in the nine months
ended December 31, 1997.

YEAR ENDED MARCH 31, 1998 COMPARED TO YEAR ENDED MARCH 31, 1997-SPAR MARKETING
COMPANIES

NET REVENUES. Net revenues increased to $36.8 million in the year
ended March 31, 1998 from $35.6 million in the year ended March 31, 1997, an
increase of $1.2 million, or 3.5%. Net revenues increased slightly as a result
of new merchandising services customers in the home video sector, offset in
large part by the SPAR Marketing Companies' exit from certain less profitable
business lines, such as in-store demonstrations, acquired by SMF in its 1996
acquisition of Marketing Force, Inc.

GROSS PROFIT. The SPAR Marketing Companies' gross profit increased
to $17.4 million in the year ended March 31, 1998 from $13.8 million in the year
ended March 31, 1997, an increase of $3.6 million, or 25.8%. Gross margin
increased to 47.2% of net revenue in the year ended March 31, 1998 from 38.8% in
the year ended March 31, 1997. The increase in gross margin is primarily the
result of management's focus on achieving the cost savings envisioned in the
combination of the SPAR Marketing Companies and SMF and the exit from the less
profitable business lines described above.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative expenses decreased to $12.2 million in the year ended March 31,
1998 from $13.5 million in the year ended March 31, 1997, a decrease of $1.2
million, or 9.1%. As a percentage of net revenues, selling, general and
administrative expenses decreased to 33.2% in the year ended March 31, 1998 from
37.8% in the year ended March 31, 1997. Selling, general and administrative
expenses decreased as a percentage of net revenues due to management's efforts
to reduce costs and improve efficiency through the reduction of certain
facilities, including the consolidation of SMF 's warehousing and teleservices
facilities, and the reduction of personnel.

OPERATING INCOME (LOSS). As a result of the factors discussed above,
operating income increased to $5.1 million in the year ended March 31, 1998 from
$0.3 million in the year ended March 31, 1997, an increase of $4.8 million, or
1,398.3%. As a percentage of net revenues, operating income increased to 14.0%
in the year ended March 31, 1998 from 1.0% in the year ended March 31, 1997.

OTHER INCOME (EXPENSE). Other expense decreased to $(0.4) million in
the year ended March 31, 1998 from $(0.8) in the year ended March 31, 1997, a
decrease of $0.4 million, or 49.1%. As a percentage of net revenues, other
expense decreased to (1.1)% in the year ended March 31, 1998 from (2.2)% in the
year ended March 31, 1997. This decrease in other expense is primarily
attributable to nonrecurring charges in 1997 relating to the abandonment of
certain assets.

NET INCOME (LOSS). As a result of the factors discussed above, net
income increased to $4.7 million in the year ended March 31, 1998 from a loss of
$(0.4) million in the year ended March 31, 1997, an increase of $5.2 million. As
a percentage of net revenues, net income increased to 12.9% in the year ended
March 31, 1998 from a net loss of (1.2)% in the year ended March 31, 1997.

YEAR ENDED MARCH 31, 1997 COMPARED TO YEAR ENDED MARCH 31, 1996-SPAR MARKETING
COMPANIES

NET REVENUES. Net revenues increased to $35.6 million in the year
ended March 31, 1997 from $14.4 million in the year ended March 31, 1996, an
increase of $21.1 million, or 146.6%. This increase was primarily driven by the
acquisition of substantially all of the assets of Marketing Force, Inc. by SMF,
which accounted for $21.0 million of net revenues in the year ended March 31,
1997, an increase of $18.0 million from the year ended March 31, 1996. The
increase was also driven by additional business from other merchandising and
marketing services clients of the SPAR

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Marketing Companies which accounted for $14.6 million of net revenues in the
year ended March 31, 1997, an increase of $3.2 million from the year ended March
31, 1996.

GROSS PROFIT. Gross profit increased to $13.8 million in the year
ended March 31, 1997 from $6.7 million in the year ended March 31, 1996, an
increase of $7.1 million, or 104.9%, primarily as a result of increased
revenues. Gross margin decreased as a percentage of net revenue to 38.8% in the
year ended March 31, 1997 from 46.8% in the year ended March 31, 1996. The
decrease in gross margin as a percentage of net revenue is primarily a result of
the acquisition of Marketing Force, Inc. by SMF, which resulted in the temporary
duplication of certain costs such as field management and project management.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative expenses increased to $13.5 million in the year ended March 31,
1997 from $7.0 million in the year ended March 31, 1996, an increase of $6.4
million, or 91.7% primarily a result of the acquisition of Marketing Force, Inc.
by SMF and increased personnel costs to support the increase in net revenues. As
a percentage of net revenues, selling, general and administrative expenses
decreased to 37.8% in the year ended March 31, 1997 from 48.8% in the year ended
March 31, 1996 primarily as a result of the elimination of administrative
personnel and closure of certain warehousing facilities and regional offices
after the acquisition of Marketing Force, Inc. by SMF .

OPERATING INCOME. As a result of the factors discussed above,
operating income (loss) increased to $0.3 million profit in the year ended March
31, 1997 from $(0.3) million profit in the year ended March 31, 1996, an
increase of $0.6 million, or 220.8%. As a percentage of net revenues, operating
income increased to 1.0% in the year ended March 31, 1997 from (2.0)% in the
year ended March 31, 1996.

OTHER INCOME (EXPENSE). Other expense increased to $(0.8) in the
year ended March 31, 1997 from $(0.1) million in the year ended March 31, 1996,
an increase of $0.7 million. As a percentage of net revenues, other expense
increased to (2.2)% in the year ended March 31, 1997 from (0.7)% in the year
ended March 31, 1996. Other expense increased as a result of higher interest
expense associated with increased borrowings and a loss related to the
abandonment of certain assets.

NET INCOME (LOSS). As a result of the factors discussed above, net
loss remained constant at $(0.4) million in the year ended March 31, 1997 and in
the year ended March 31, 1996. As a percentage of net revenues, net loss
decreased to (1.2)% in the year ended March 31, 1997 from (2.7)% in the year
ended March 31, 1996.

MCI

In January 1999, SMCI acquired substantially all of the assets of
MCI, a Texas corporation, the predecessor of which was founded in 1987. MCI
specialized in designing and implementing premium incentives and managing group
travel and meetings for clients throughout the United States. MCI employed
approximately 100 people and maintained its headquarters in Carrollton, Texas,
as well as sales offices in Nashville, Tennessee and Newport Beach, California.

MCI's revenues consisted primarily of fees charged for the design
and implementation of its programs. Program revenues and related external costs
were recognized when a project was completed; a project typically spanned a
period of six to twelve months. Because an individual project may have comprised
a significant portion of MCI's revenues in any particular quarter, MCI
experienced significant variability in its quarterly revenues. Direct costs
primarily included labor incurred for the design and implementation of programs
and materials used in the program. Because indirect costs for projects are
expensed as incurred, MCI's profitability in any particular quarter is highly
variable.

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Program revenues were subject to fluctuation depending on the type
and timing of completed programs. Although repeat customers were not unusual,
MCI was often limited in its ability to estimate the amount of revenues it
derived from a particular customer, as the nature and timing of the customer's
program needs were likely to vary from year to year. See "Risk
Factors-Variability of Operating Results."

RESULTS OF OPERATIONS-MCI

The following table sets forth selected financial data and data as a
percentage of net revenues for the periods indicated.

YEARS ENDED DECEMBER 31
------------------------------------------------------------------
1996                   1997                     1998
-----------------      -------------------       -----------------
(IN THOUSANDS, EXCEPT PERCENTAGES)

Net revenues                                     $33,361     100.0%     $ 42,294      100.0%      $33,196     100.0%
-------     -----      --------      -----       -------     -----
Gross profit                                       7,010      21.0        10,572       25.0         7,088      21.0
Selling, general and administrative expenses       6,571      19.7         9,757       23.1         6,781      20.0
-------     -----      --------      -----       -------     -----
Operating income                                     439       1.3           815        1.9           307       1.0
Other income (expense)                                 4       0.0           (43)      (0.1)           77       0.2
-------     -----      --------      -----       -------     -----
Net income                                       $   443       1.3%     $    771        1.8%      $   383       1.2
=======     =====      ========      =====       =======     =====

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997-MCI

NET REVENUES. Net revenues decreased to $33.2 million in the year
ended December 31, 1998 from $42.2 million in the year ended December 31, 1997,
a decrease of $9.1 million, or 21.5%.

GROSS PROFIT. Cost of revenues consists of direct labor, independent
contractors, food, beverage, entertainment and travel costs. Gross profit
decreased to $7.1 million in the year ended December 31, 1998 from $10.6 million
in the year ended December 31, 1997, a decrease of $3.5 million, or 32.9%. As a
percentage of net revenues, gross margin decreased to 21% in the year ended
December 31, 1998 from 25% in the year ended December 31, 1997. The decrease in
gross margin was primarily due to $735,000 of volume discounts, in the form of
airline override commissions ("discounts"), received in 1997 pursuant to
arrangements with certain airlines, as well as the completion of several low
margin and volume discount programs. The discounts are received in the form of
airline tickets or cash, depending on the airline's choice, and are recorded at
fair market value. By eliminating the $735,000 of discounts, the gross margin
would be 23.3% for the year ended December 31, 1997. The balance of the
variation is directly related to product mix changes between 1997 and 1998.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative expenses decreased to $6.8 million in the year ended December 31,
1998 from $9.8 million in the year ended December 31, 1997, a decrease of $3.0
million, or 30.5%. As a percentage of net revenues, selling, general and
administrative expenses decreased to 20.0% of revenue in the year ended December
31, 1998 from 23.1% in the year ended December 31, 1997. Selling, general and
administrative expenses decreased primarily as a result of a salary of $2.2
million paid to the sole stockholder of MCI in 1997 together with a one-time
management information service costs incurred in connection with the
investigation of new systems for MCI.

OPERATING INCOME. As a result of the factors discussed above,
operating income decreased to $0.3 million in the year ended December 31, 1998
from $0.8 million in the year ended December 31, 1997, a decrease of $0.5
million, or 62.3%. As a percentage of net revenues, operating income decreased
to 1.0% in the year ended December 31, 1998 from 1.9% in the year ended December
31, 1997.

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OTHER INCOME (EXPENSE). Other expense increased to $0.1 million in
the year ended December 31, 1998, an increase of $0.1 million from the year
ended December 31, 1997. Other income as a percentage of net revenues, increased
to 0.2% in the year ended December 31, 1998 from (0.1)% in the year ended
December 31, 1997. The increase is a result of proceeds received from the
settlement of two legal proceedings and other ordinary interest and dividend
income.

NET INCOME. As a result of the factors discussed above, net income
for the year ended December 31, 1998 decreased to $0.4 million from $0.8 million
in the year ended December 31, 1997, a decrease of $0.4 million or 50.3%. As a
percentage of net revenues, net income decreased to 1.2% in the year ended
December 31, 1998 from 1.8% in the year ended December 31, 1997.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996-MCI

NET REVENUES. Net revenues increased to $42.3 million in the year
ended December 31, 1997 from $33.4 million in the year ended December 31, 1996,
an increase of $8.9 million, or 26.8%. The increase in net revenues is due to
increased sales volume and more programs for existing clients.

GROSS PROFIT. Gross profit increased to $10.6 million in the year
ended December 31, 1997 from $7.0 million in the year ended December 31, 1996,
an increase of $3.6 million, or 50.8%, primarily as a result of the increased
net revenues. As a percentage of net revenues, gross margin increased to 25.0%
in the year ended December 31, 1997 from 21.0% in the year ended December 31,
1996. The increase in gross margin is due primarily to $735,000 of discounts in
the form of airline override commissions received pursuant to arrangements with
certain airlines. The discounts are received in the form of airline tickets or
cash, depending on the airline's choice, and are recorded at fair market value.
In addition, during 1997 management sought to service higher margin programs by
maintaining increased selling prices and controlling direct labor costs.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative expenses increased to $9.8 million in the year ended December 31,
1997 from $6.6 million in the year ended December 31, 1996, an increase of $3.2
million, or 48.5%. As a percentage of net revenues, selling, general and
administrative expenses increased to 23.1% in the year ended December 31, 1997
from 19.7% in the year ended December 31, 1996. In 1997, MCI recorded
approximately $2.2 million in salary expense related to the sole stockholder of
MCI.

OPERATING INCOME. As a result of the factors discussed above,
operating income increased to $0.8 million in the year ended December 31, 1997
from $0.4 million in the year ended December 31, 1996, an increase of $0.4
million, or 85.4%. As a percentage of net revenues, operating income increased
to 1.9% in the year ended December 31, 1997 from 1.3% in the year ended December
31, 1996.

NET INCOME. As a result of the factors discussed above, net income
increased to $0.8 million in the year ended December 31, 1997 from $0.4 million
in the year ended December 31, 1996, an increase of $0.4 million, or 74.0%. As a
percentage of net revenues, net income increased to 1.8% in the year ended
December 31, 1997 from 1.3% in the year ended December 31, 1996.

LIQUIDITY AND CAPITAL RESOURCES-SPAR MARKETING COMPANIES AND MCI

The SPAR Marketing Companies' working capital (deficiency) was
$(2.4) million, $3.4 million and $1.3 million at December 31, 1998, March 31,
1998 and 1997, respectively. The SPAR Marketing Companies' accounts receivable
levels continue to increase primarily due to increases in sales. The deficiency
at December 31, 1998 is due to increases in property and equipment and
distributions payable to the stockholders.

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The SPAR Marketing Companies' cash flows from operations in the nine
month period ended December 31, 1998 and the year ended March 31, 1998 have been
$5.5 million and $2.6 million, respectively. Financing has been provided during
such period through a $6.0 million line of credit with an unused balance of $1.9
million at December 31, 1998.

MCI's working capital (deficiency) was $(0.7) million and $(1.9)
million at December 31, 1998 and 1997, respectively. Earnings in 1998 of $.9
million before depreciation contributed to the improvement in the working
capital (deficiency). Cash and cash equivalents amounted to $1.2 million at
December 31, 1998, compared to $3.7 million at September 30, 1997. Operations
for 1998 used cash of $2.0 million, as accounts payable balances decreased
significantly at year end.

The SPAR Marketing Companies believe that their available line of
credit and cash generated from operations will be sufficient to fund their
investments in property and equipment and distributions payable to the SPAR
Principals. Such companies believe that the January 15, 1999 purchase of MCI net
assets by SMCI and SMCI's 1999 operations will be financed through a new $3.0
million bank facility entered into in March 1999 and additional financing
arrangements currently being negotiated.

The MCI Agreement provides for principal payments to MCI totaling
$14.2 million through September 15, 1999. MCI may elect to receive up to $3
million of such consideration in unregistered shares of common stock of any
publicly traded company holding, directly or indirectly, all of the issued and
outstanding stock of SMCI (i.e., in shares of PIA Common Stock), valued at the
average public trading price for the 30 day period preceding September 15, 1999.
The MCI Agreement also provides for contingent Earn-Out Consideration equal to
the EBT of MCI for the period from April 1, 1998 through January 15, 1999, and
of SMCI thereafter through March 31, 1999. MCI is not entitled to any Earn-Out
Consideration if the EBT for such combined periods does not exceed $3.5 million.
The Earn-Out Consideration, if any, could substantially increase the amount due
to MCI.

The SPAR Marketing Companies and SMCI believe that their current
level of internally generated funds and their plans for securing financing will
be sufficient to meet their working capital requirements in fiscal 1999. SPAR
Marketing Companies and MCI have no material commitments for capital
expenditures.

SPAR YEAR 2000 ISSUES

Throughout the United States and the rest of the world, many
currently installed computer systems and software products were constructed or
programmed to accept only two digit entries in their date code fields, making it
difficult or impossible to distinguish dates beginning on or after January 1,
2000, from dates ending on or prior to December 31, 1999. As a result, in less
than a year, computer systems and/or software used by many companies may need to
be upgraded to deal with such dates, which is often referred to "Year 2000"
compliance. Significant uncertainty exists concerning the potential effects
associated with such compliance.

SPAR believes that the purchasing patterns of clients and potential
clients may be affected by Year 2000 issues in a variety of ways. Many companies
are expending significant resources to correct or patch their current software
systems for Year 2000 compliance. These expenditures may result in reduced funds
available to purchase services such as those offered by SPAR. Furthermore,
payments for deliveries of components of supplies to SPAR may be delayed,
incomplete, or otherwise unavailable as a consequence of Year 2000 problems
affecting clients or suppliers. Any of the foregoing could result in a material
adverse effect on the business, financial condition and results of operations of
SPAR

SPAR is currently assessing the readiness of its systems and the
systems of its key customers, suppliers and critical business partners for their
compliance with Year 2000 issues and determining the extent to which it may be

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vulnerable if these third parties fail to address Year 2000 issues. These
efforts should be substantially completed during the second half of calendar
1999, which is prior to any anticipated significant impact on operations.

SPAR currently does not have any contingency plans, but may develop
appropriate contingency plans when and if a significant Year 2000 issue is
identified in any system of SPAR or any interfacing third-party. Depending on
the systems affected, these plans could include accelerated replacement of
affected equipment or software, short to medium-term use of backup equipment and
software, increased work hours for personnel or use of contract personnel to
correct any Year 2000 issues that arise on an accelerated schedule or to provide
manual solutions for information system failures, and similar approaches. If
SPAR fails to develop any required contingency plan, any such contingency plan
is insufficient to deal with the Year 2000 issues, or SPAR is required to
implement any of these contingency plans, it could have a material adverse
effect on SPAR's business, financial results, or results of operations.

Both internal and external resources are being used to assess
technologies and to reprogram or replace technologies that are not compliant
with Year 2000, and to appropriately test Year 2000 modifications. These
modifications are being funded through operating cash flows. The total cost
associated with required modifications to become compliant with Year 2000 is not
expected to be material to the SPAR's financial position. SPAR anticipates
expenses of approximately $100,000 will be incurred in the nine months ending
December 31, 1999 to substantially complete the effort.

Management hopes to identify and resolve all Year 2000 issues that
could have a material adverse effect on SPAR's business or operations in time to
avoid any such material adverse effect. However, management believes that it may
not be possible to determine with any certainty (i) that all Year 2000 issues
affecting SPAR or third parties have been identified or corrected, (ii) how or
when any particular Year 2000 related failure will occur, or (iii) the severity,
duration, or financial consequences of any Year 2000 related failure.
Accordingly, there can be no assurance that SPAR will not suffer from
operational inconveniences and inefficiencies for SPAR and its clients that may
divert management's time and attention and resources from its ordinary business
activities, or even serious system failures that may require significant efforts
by SPAR or its clients to prevent or alleviate material business disruptions, as
a result of Year 2000 issues.

MARKET AND DIVIDEND INFORMATION FOR SPAR

SAI is privately held and there is no established public trading
market for the SAI Common Stock. As of March 1, 1999, SAI had ten record holders
of SAI Common Stock. Holders of SAI Common Stock acquired their shares directly
from SAI. SAI has never declared or paid any dividends on its capital stock. The
SPAR Marketing Companies and MCI have made, and may in certain instances make, S
corporation distributions to shareholders for, among other things, tax
obligations and reinvestments in affiliate operations.

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UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined financial statements give
effect to the January 15, 1999 acquisition by SMCI of substantially all the
assets of MCI. The MCI Acquisition will be accounted for using the purchase
method of accounting. The following unaudited pro forma combined financial
statements also give effect to the plan of merger between SPAR and PIA, a
publicly traded company. The Merger will be accounted for as a reverse merger
("Reverse Merger") with SPAR deemed to be the accounting acquirer.

The unaudited pro forma combined financial statements reflect the
following: (i) the MCI Acquisition, (ii) the Reverse Merger, (iii) adjustments
to allocate the purchase price based upon the estimated fair value of the assets
acquired and the obligations assumed, and (iv) a provision for income taxes, as
if the SPAR Marketing Companies and MCI had been taxed as a C corporation
(statement of operations only).

The unaudited pro forma combined statements of operations exclude a
one-time, non-cash non-tax deductible charge which will be based on the stock
price on the Effective Date (approximately $1,480,000, or $0.08 per combined pro
forma share, based on an average closing price of $4.43 over the six day trading
period ending on March 4, 1999) resulting from the grant of 134,114 options and
issuance of 200,000 shares to employees of SPAR prior to this Reverse Merger.
The 134,114 options and 200,000 shares are included in determining the pro forma
basic and diluted weighted average number of shares.

The unaudited pro forma combined balance sheet gives effect to the
MCI Acquisition and the Reverse Merger as if they had occurred on December 31,
1998. The unaudited pro forma combined statement of operations for the year
ended March 31, 1998 includes the operating results of SPAR for the fiscal year
ended March 31, 1998 and MCI and PIA for the year ended December 31, 1997 and
gives effect to the MCI Acquisition and Reverse Merger as if they had occurred
at the beginning of the periods. The unaudited pro forma combined statement of
operations for the nine-month period ended December 31, 1998 reflects the
operating results of the SPAR Marketing Companies for the nine-month period
ended December 31, 1998. The SPAR Marketing Companies have a fiscal year ending
March 31. MCI has a fiscal year ending December 31. PIA's fiscal year ending for
1997 and 1998 was December 31, 1997 and January 1, 1999, respectively. For
purposes of the nine-month period ended December 31, 1998 unaudited pro forma
combined statement of operations operating results for MCI and PIA for the year
ended December 31, 1998 and January 1, 1999, respectively, were adjusted by
subtracting the interim period January 1, 1998 through March 31, 1998.

The pro forma adjustments are based on estimates, available
information and certain assumptions and may be revised as additional information
becomes available. The pro forma financial data do not purport to represent what
SPAR's financial position or results of operations would actually have been if
such transactions in fact had occurred on those dates and are not necessarily
representative of SPAR's financial position or results of operations for any
future period. Since PIA and SPAR were not under common control or management,
historical combined results may not be comparable to, or indicative of, future
performance. The unaudited pro forma combined financial statements should be
read in conjunction with the financial statements and notes thereto included
elsewhere in this Proxy Statement or incorporated by reference herein.

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SPAR

UNAUDITED PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 1998
(IN THOUSANDS)

PRO FORMA                           PRO FORMA
SPAR                 PURCHASE       PRO                  REVERSE        PRO
MARKETING             ACCOUNTING     FORMA                  MERGER       FORMA
COMPANIES      MCI    ADJUSTMENTS   COMBINED      PIA     ADJUSTMENTS   COMBINED
---------    -------  -----------   --------    --------  -----------   --------
(See Note 3)                        (See Note 6)

ASSETS
Current assets:
Cash and cash equivalents                     $    910    $ 1,194    $ (2,104)   $     --    $ 11,064    $     --    $ 11,064
Accounts receivable, net                        10,627      1,386          --      12,013      11,222          --      23,235
Other receivables                                  600      1,273      (1,669)        204          81          --         285
Due from shareholders                            1,500      2,296      (2,296)      1,500          --          --       1,500
Prepaid program costs                               --      1,424          --       1,424          --          --       1,424
Prepaid expenses and other current assets          208        781          --         989         712          --       1,701
--------    -------    --------    --------    --------    --------    --------
Total current assets                               13,845      8,354      (6,069)     16,130      23,079          --      39,209
Property and equipment, net                         1,050        350         (25)      1,375       1,991      (1,822)      1,544
Goodwill, net                                          --         --      12,567      12,567          --      21,555      34,122
Other assets                                           70         14         (14)         70         431          --         501
Investment in affiliate                                --         --          --          --         553          --         553
--------    -------    --------    --------    --------    --------    --------
Total assets                                  $ 14,965    $ 8,718    $  6,459    $ 30,142    $ 26,054    $ 19,733    $ 75,929
========    =======    ========    ========    ========    ========    ========

LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
Accounts payable                              $  1,745    $   632    $   (632)   $  1,745    $  1,194         $--    $  2,939
Accrued expenses and other current 
liabilities                                   3,119      1,402      (1,402)      3,119       7,951      10,209      21,279
Deferred revenue                                    --      5,559          --       5,559          --          --       5,559
Income tax payable                                  --         --          --          --          90          --          90
Line of credit and note payable                  4,150         --         296       4,446          --          --       4,446
Note payable to related parties,  
current portion                                 375         --          --         375          --          --         375
Distribution and other amounts due to 
SPAR stockholders                             6,577         --          --       6,577          --          --       6,577
Due to affiliates                                  205         --          --         205          --          --         205
Note payable to MCI                                 --      1,530       7,792       9,322          --          --       9,322
--------    -------    --------    --------    --------    --------    --------
Total current liabilities                          16,171      9,123       6,054      31,348       9,235      10,209      50,792
Line of credit                                         --         --          --          --       2,095          --       2,095
Note payable to related parties, 
net of current portion                             311         --          --         311          --          --         311
--------    -------    --------    --------    --------    --------    --------
Total liabilities                                  16,482      9,123       6,054      31,659      11,330      10,209      53,198
Stockholders' equity:
Common stock                                        --          4          (4)         --          60         115         175
Additional paid-in capital                          --         --          --          --      33,740      (8,187)     25,553
Treasury stock                                      --         --          --          --      (3,004)      3,004          --
Accumulated deficit                             (1,517)      (409)        409      (1,517)    (16,072)     14,592      (2,997)
--------    -------    --------    --------    --------    --------    --------
Total stockholders' equity                         (1,517)      (405)        405      (1,517)     14,724       9,524      22,731
--------    -------    --------    --------    --------    --------    --------
Total liabilities and stockholders' equity       $ 14,965    $ 8,718    $  6,459    $ 30,142    $ 26,054    $ 19,733    $ 75,929
========    =======    ========    ========    ========    ========    ========

See Notes to the Unaudited Pro Forma Combined Financial Statements

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SPAR

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

PRO FORMA
SPAR             PURCHASE        PRO                                     PRO
MARKETING          ACCOUNTING     FORMA                    PRO FORMA      FORMA
COMPANIES    MCI   ADJUSTMENTS   COMBINED         PIA     ADJUSTMENTS    COMBINED
---------  ------- -----------  -----------   ----------- -----------   ------------
(See Note 4)                           (See Note 7)

Net revenues                          $36,804   $42,294   $    --    $    79,098   $   128,208    $    --    $    207,306
Cost of revenues                       19,417    31,722        --         51,139       119,830         --         170,969
-------   -------   -------    -----------   -----------    -------    ------------
Gross profit                           17,387    10,572        --         27,959         8,378         --          36,337
Selling, general and 
administrative expenses              12,248     9,757    (2,487)        19,518        21,713         --          41,231
Restructuring                              --        --        --             --         5,420         --           5.420
Goodwill amortization                      --        --       838            838            --      1,437           2,275
-------   -------   -------    -----------   -----------    -------    ------------
Operating income (loss)                 5,139       815     1,649          7,603       (18,755)    (1,437)        (12,589)
Interest expense (income)                 353        43     1,148          1,544          (799)        --             745
Other (income) expense                     37        --        --             37           (96)        --             (59)
-------   -------   -------    -----------   -----------    -------    ------------
Income (loss) before 
income tax provision                  4,749       772       501          6,022       (17,860)    (1,437)        (13,275)
Income tax provision (benefit)             --        --     2,222          2,222        (2,761)    (2,222)         (2,761)
-------   -------   -------    -----------   -----------    -------    ------------
Net income (loss)                     $ 4,749   $   772   $(1,721)   $     3,800   $   (15,099)   $   785    $    (10,514)
-------   -------   -------    -----------   -----------    -------    ------------
Net income (loss) per share:
Basic                                                             $      0.31   $     (2.72)              $      (0.59)
===========   ===========               ============
Diluted                                                           $      0.31   $     (2.72)              $      (0.59)
===========   ===========               ============
Shares used in computing pro forma 
net income (loss) per share
Basic                                                              12,216,237     5,551,000                 17,694,083
===========   ===========               ============
Diluted                                                            12,350,351     5,551,000                 17,694,083
===========   ===========               ============

See Notes to the Unaudited Pro Forma Combined Financial Statements

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SPAR

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE-MONTH PERIOD ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

PRO FORMA
SPAR                  PURCHASE        PRO                                       PRO
MARKETING               ACCOUNTING     FORMA                      PRO FORMA      FORMA
COMPANIES      MCI     ADJUSTMENTS    COMBINED         PIA       ADJUSTMENTS    COMBINED
---------    --------  -----------  ------------    -----------  -----------  ------------
(See Note 4)                             (See Note 7)

Net revenues                          $ 32,601    $ 27,853    $    --    $     60,454    $    87,049    $    --    $    147,503
Cost of revenues                        17,580      23,124         --          40,704         75,659         --         116,363
--------    --------    -------    ------------    -----------    -------    ------------
Gross profit                            15,021       4,729         --          19,750         11,390         --          31,140
Selling, general and 
administrative expenses               8,868       5,083        244          14,195         15,053         --          29,248
Goodwill amortization                       --          --        628             628             --      1,078           1,706
--------    --------    -------    ------------    -----------    -------    ------------
Operating income (loss)                  6,153        (354)      (872)          4,927         (3,663)    (1,078)            186
Interest (income) expense                  304          --        924           1,228           (334)        --             894
Other (income) expense                    (149)        (70)        --            (219)          (129)        --            (348)
--------    --------    -------    ------------    -----------    -------    ------------
Income (loss) before
income tax provision                  5,998        (284)    (1,796)          3,918         (3,200)    (1,078)           (360)
Income tax provision                        --          --      1,446           1,446             43     (1,446)             43
--------    --------    -------    ------------    -----------    -------    ------------
Net income (loss)                     $  5,998    $   (284)   $(3,242)   $      2,472    $    (3,243)   $   368    $       (403)
========    ========    =======    ============    ===========    =======    ============
Net income (loss) per share:
Basic                                                                 $       0.20    $     (0.59)              $      (0.02)
============    ===========               ============
Diluted                                                               $       0.20    $     (0.59)              $      (0.02)
============    ===========               ============
Shares used in computing pro forma
net income (loss) per share
Basic                                                                   12,216,237      5,477,846                 17,694,083
============    ===========               ============
Diluted                                                                 12,350,351      5,477,846                 17,694,083
============    ===========               ============

See Notes to the Unaudited Pro Forma Combined Financial Statements

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SPAR

NOTES TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1998

1.          GENERAL

The historical financial statements reflect the financial position
and results of operations of the SPAR Marketing Companies, MCI and PIA
(individually, the "Company," and collectively, the "Companies") and were
derived from the respective Companies' financial statements as indicated. The
unaudited pro forma combined financial statements should be read in connection
with the audited historical financial statements and notes thereto of the SPAR
Marketing Companies (year ended March 31, 1998), MCI (year ended December 31,
1997) and PIA (year ended December 31, 1997) and the unaudited historical
financial statements of SPAR Marketing Companies. The historical financial
statements included elsewhere herein (the SPAR Marketing Companies and MCI) and
incorporated by reference (PIA), have been included in accordance with
Commission Staff Accounting Bulletin No. 80.

2.          MCI ACQUISITION

On January 15, 1999, SMCI acquired substantially all the assets of
MCI. The acquisition will be accounted for using the purchase method of
accounting.

The purchase price has been allocated to MCI's historical assets and
liabilities based on their respective carrying values, as these carrying values
are deemed to represent fair market values of these assets and liabilities.
Additionally, adjustments have been made for assets not purchased and debt and
other liabilities not assumed in the transaction for purposes of determining the
excess of the purchase price over the fair value of the net assets acquired. The
total purchase consideration does not reflect contingent consideration related
to earn-out arrangements included in the MCI Agreement. The MCI Agreement
provides for a post-closing adjustment whereby additional contingent
consideration will be payable to MCI in the event that EBT exceeds $3,500,000.
The allocation of the purchase price is considered preliminary.

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3.          SPAR MARKETING COMPANIES AND MCI UNAUDITED PRO FORMA COMBINED
BALANCE SHEET ADJUSTMENTS

The following table summarizes unaudited pro forma combined balance
sheet adjustments.

PURCHASE ACCOUNTING ADJUSTMENTS
-------------------------------------------------------------
(IN THOUSANDS)                   PRO FORMA
(A)          (B)         (C)        (D)        ADJUSTMENTS
--------      -------      -----      -------     -----------

ASSETS
Current assets:
Cash and cash equivalents                   $     --      $(2,104)     $  --      $    --      $ (2,104)
Other receivables                             (1,069)          --       (600)          --        (1,669)
Due from shareholders                         (2,296)          --         --           --        (2,296)
--------      -------      -----      -------      --------
Total current assets                             (3,365)      (2,104)      (600)          --        (6,069)
Property and equipment, net                         (25)          --         --           --           (25)
Goodwill, net                                    14,467           --         --       (1,900)       12,567
Other assets                                        (14)          --         --           --           (14)
--------      -------      -----      -------      --------
Total assets                                   $ 11,063      $(2,104)     $(600)     $(1,900)     $  6,459
========      =======      =====      =======      ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable                            $   (632)         $--        $--          $--      $   (632)
Accrued expenses                              (1,402)          --         --           --        (1,402)
Line of credit                                    --          296         --           --           296
Note payable to MCI                           12,692       (2,400)      (600)      (1,900)        7,792
--------      -------      -----      -------      --------
Total current liabilities                        10,658       (2,104)      (600)      (1,900)        6,054
Stockholders' equity:
Common stock                                      (4)          --         --           --            (4)
Additional paid-in capital                        --           --         --           --            --
Retained earnings (deficit)                      409           --         --           --           409
--------      -------      -----      -------      --------
Total stockholders' equity                          405           --         --           --           405
--------      -------      -----      -------      --------
Total liabilities and stockholders' equity     $ 11,063      $(2,104)     $(600)     $(1,900)     $  6,459
========      =======      =====      =======      ========

- ----------

(a)         Records the (i) purchase of the MCI net assets by SMCI including
consideration of $12,422 in note payable due to MCI; (ii)
elimination of certain net property and equipment and other assets
of MCI not purchased of $39; (iii) elimination of certain other
receivable balances $1,069 and due from shareholders of $2,296 of
MCI not purchased; (iv) elimination of a liability due to an MCI
stockholder of $1,530 not assumed; (v) elimination of unassumed
liabilities of $2,034 of MCI (vi) the excess of the purchase price
over the fair value of the net assets acquired is $14,467. The
excess purchase price over the fair value of the net assets acquired
has been allocated on a preliminary basis to goodwill. The excess
purchase price may be allocated to other identifiable intangible
assets, such as, customer lists, resulting in different amortization
periods.

(b)         Records $2,400 payment to MCI in connection with the MCI
Acquisition.

(c)         Records $600 payment from escrow account to MCI in connection with
the MCI Acquisition.

(d)         Records the adjustment to the MCI purchase price as a result of the
deficit in MCI's equity compared to the book value required in the
asset purchase agreement.

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4.          MCI UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS ADJUSTMENTS

The following table summarizes unaudited pro forma combined
statement of operations adjustments.

PURCHASE ACCOUNTING ADJUSTMENTS
---------------------------------------------------------------
(IN THOUSANDS)                                           PRO FORMA
(A)       (B)        (C)         (D)         (E)         (F)      ADJUSTMENTS
------     -----      -----      -------      -----      -------    -----------

YEAR ENDED MARCH 31, 1998
Net revenues                                     $   --     $  --      $  --      $    --      $  --      $    --      $    --
Cost of revenues                                     --        --         --           --         --           --           --
Selling, general and administrative expenses     (2,613)      325         --           --       (199)          --       (2,487)
Goodwill amortization                                --        --        838           --         --           --          838
------     -----      -----      -------      -----      -------      -------
Operating income (loss)                           2,613      (325)      (838)          --        199           --        1,649
Interest (income) expense                            --        --         --        1,232        (84)          --        1,148
Other (income) expense                               --        --         --           --         --           --           --
------     -----      -----      -------      -----      -------      -------
Income (loss) before income tax provision         2,613      (325)      (838)      (1,232)       283           --          501
Income tax provision                                 --        --         --           --         --        2,222        2,222
------     -----      -----      -------      -----      -------      -------
Net income (loss)                                $2,613     $(325)     $(838)     $(1,232)     $ 283      $(2,222)     $(1,721)
======     =====      =====      =======      =====      =======      =======

NINE-MONTH PERIOD ENDED DECEMBER 31, 1998
Net revenues                                     $   --     $  --      $  --      $    --      $  --      $    --      $    --
Cost of revenues                                     --        --         --           --         --           --           --
Selling, general and administrative expenses         --       244         --           --         --           --          244
Goodwill amortization                                --        --        628           --         --           --          628
------     -----      -----      -------      -----      -------      -------
Operating income (loss)                              --      (244)      (628)          --         --           --         (872)
Interest expense                                     --        --         --          924         --           --          924
Other (income) expense                               --        --         --           --         --           --           --
------     -----      -----      -------      -----      -------      -------
Income (loss) before income tax provision            --      (244)      (628)        (924)        --           --       (1,796)
Income tax provision                                 --        --         --           --         --        1,446        1,446
------     -----      -----      -------      -----      -------      -------
Net income (loss)                                $   --     $(244)     $(628)     $  (924)     $  --      $(1,446)     $(3,242)
======     =====      =====      =======      =====      =======      =======

- ----------

(a)         Reflects the $2,613 reduction in salaries, bonuses and benefits to
the owner of MCI. The bonus and salaries paid historically to the
owner of MCI were not based upon the same performance criteria
therefore compensation expense to be issued in the future has been
reduced in the pro forma statement.

(b)         Reflects the increase in salaries, bonuses and benefits to new
management of MCI as scheduled from the employment agreements that
have been entered into or that will be entered into upon
consummation of the MCI Acquisition as follows:

YEAR ENDED           NINE-MONTH PERIOD
MARCH 31, 1998      ENDED DECEMBER 31, 1998
--------------      -----------------------

MCI                            $     325                $     244
=========                =========

(c)         Reflect the amortization of goodwill to be recorded as a result of
the MCI Acquisition over a 15-year estimated life.

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(d)         Reflects the increase interest expense resulting from the increase
of outstanding debt and distributions payable by the Company:

NINE-MONTH
PERIOD
YEAR               ENDED
ENDED            DECEMBER 31,
MARCH 31, 1998           1998
--------------       ------------

SPAR interest expense at a rate of 7.75% on a $9,322 note     $  722               $542
payable to MCI
SPAR interest expense at a rate of 7.75% on $6,577 of the
amounts due to the owners of SPAR                             510                382
------               ----
$1,232               $924
======               ====

(e)         Reflects adjustment for:

YEAR
ENDED
MARCH 31, 1998
--------------

Elimination of MCI depreciation expense related to                $199
property and equipment not purchased
MCI interest expense at a rate of 8.5% on $1,370 of                 84
personal property liabilities not assumed by SPAR

(f)         Reflects the incremental provision for federal and state income
taxes assuming all entities were subject to federal and state income
tax and relating to the other statements of operations' adjustments
and for income taxes on S corporation income, assuming a corporate
income tax rate of 36.9%.

5.          PIA REVERSE MERGER

In 1999, SPAR, through SAI, its newly formed parent, will complete
the Reverse Merger with PIA. The transaction will be accounted for as a purchase
with SPAR being treated as the accounting acquirer.

The estimated purchase price has been allocated based on the
estimated fair value of PIA assets acquired. The allocation of the purchase
price is considered preliminary until such time as the closing of the
transaction.

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6.          PIA UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS

The following table summarizes unaudited pro forma combined balance
sheet adjustments.

REVERSE MERGER ADJUSTMENTS
-----------------------------
(IN THOUSANDS)               PROFORMA
(A)          (B)      (C)    ADJUSTMENTS
--------      ------     ----   -----------

ASSETS
Property and equipment, net                                   $ (1,822)     $   --     $ --     $ (1,822)
Goodwill, net                                                   21,555          --       --       21,555
Total assets                                                  $ 19,733      $   --     $ --     $ 19,733
========      ======     ====     ========

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accrued expenses                                           $ 10,209      $   --     $ --     $ 10,209
--------      ------     ----     --------
Total current liabilities                                       10,209          --       --       10,209
Stockholders' equity:
Common stock                                                     (5)         --      120          115
Additional paid-in capital                                   (9,547)      1,480     (120)      (8,187)
Treasury stock                                                3,004          --       --        3,004
Retained earnings (deficit)                                  16,072      (1,480)      --       14,592
--------      ------     ----     --------
Total stockholders' equity                                       9,524          --       --        9,524
--------      ------     ----     --------
Total liabilities and stockholders' equity                    $ 19,733      $   --     $ --     $ 19,733
========      ======     ====     ========

(a)         Records the purchase accounting for the Reverse Merger of SPAR with
PIA. PIA's market value, for purposes of these pro forma statements
has been established at $24,248. This is based on using the number
of shares held prior to and to be retained in the transaction by PIA
stockholders multiplied by the average closing market price of PIA's
stock over the six trading days ending on March 4, 1999. The
goodwill that will result from the Reverse Merger is calculated
after giving effect to the following: (i) the PIA merger costs that
are accrued from January 2, 1999 through closing estimated at
$1,725, (ii) restructuring costs that are directly related to the
merger estimated at $9,706, plus (iii) any SPAR merger related costs
to be incurred through the closing estimated at $600. The amounts
allocated on a preliminary basis to goodwill may be allocated to
other identifiable intangible assets, such as customer lists,
resulting in different amortization periods.

PIA restructuring costs include $1,822 for assets deemed to be
redundant, $2,908 for property and equipment lease settlements,
$4,258 for severance pay and other employee benefit obligations and
$718 for other termination fees for contracts that are deemed to be
redundant. PIA will record any termination costs on its books in
accordance with EITF 95-3 Recognition of Liabilities in Connection
with a Business Combination.

(b)         Records the one-time, non-cash, non-tax deductible charge of
approximately $1,480 (based on an average closing market price per
share of $4.43 over the six trading day period ending on March 4,
1999) resulting from the grant of 134,114 options at $0.01 per share
and issuance of 200,000 shares to SPAR employees prior to this
Reverse Merger.

(c)         Records the par value of SPAR's shares that are to be issued and
outstanding and prior to the Reverse Merger with PIA.

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7.          PIA UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS ADJUSTMENTS

The following table summarizes unaudited pro forma combined
statement of operations adjustments.

REVERSE MERGER
ADJUSTMENTS
--------------------
(IN THOUSANDS)        PRO FORMA
(A)          (B)      ADJUSTMENTS
-------      -------    -----------

YEAR ENDED MARCH 31, 1998
Net revenues                                     $    --      $    --      $    --
Cost of revenues                                      --           --           --
Selling, general and administrative expenses          --           --           --
Goodwill amortization                              1,437           --        1,437
-------      -------      -------
Operating income (loss)                           (1,437)          --       (1,437)
Other (income) expense                                --           --           --
-------      -------      -------
Income (loss) before income tax provision         (1,437)          --       (1,437)
Income tax provisions                                 --       (2,222)      (2,222)
-------      -------      -------
Net income (loss)                                $(1,437)     $(2,222)     $   785
=======      =======      =======

NINE-MONTH PERIOD ENDED DECEMBER 31, 1998
Net revenues                                     $    --      $    --      $    --
Cost of revenues                                      --           --           --
Selling, general and administrative expenses          --           --           --
Goodwill amortization                              1,078           --        1,078
-------      -------      -------
Operating income (loss)                           (1,078)          --       (1,078)
Interest expense                                      --           --           --
Other (income) expense                                --           --           --
-------      -------      -------
Income (loss) before income tax provision         (1,078)          --       (1,078)
Income tax provision                                  --       (1,446)      (1,446)
-------      -------      -------
Net income (loss)                                $(1,078)     $(1,446)     $   368
=======      =======      =======

- ----------

(a)         Reflect the amortization of goodwill to be recorded as a result of
the Reverse Merger over a 15-year estimated life.

(b)         Reflects the reversal of the provision for federal and state income
taxes assuming the losses of PIA, excluding non-deductible PIA
goodwill, would be used to offset the income of SPAR.

8.          PER SHARE DATA

Pro forma net income (loss) per share, basic and diluted, has been
prepared using the following assumptions.: (i) the number of shares of PIA
Common Stock issued and outstanding at the date of closing is estimated to be
approximately 5,477,846; and (ii) the Exchange Ratio (as defined) is based upon
the product of 2.2546 times the number of issued and outstanding shares of PIA
Common Stock. Therefore, at the date of closing, SPAR Stockholders will exchange
their SAI shares for approximately 12,216,237 shares of PIA

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Common Stock and SAI option holders will receive approximately 134,114 options
that will be exercisable into PIA Common Stock at $0.01 per share at various
dates to be determined.

For purposes of computing pro forma basic and diluted earnings per
share, all SAI stock and SAI options that will be owned by SPAR Stockholders
immediately prior to the merger transaction have been treated as though they
were outstanding from the beginning of the respective period presented in the
unaudited pro forma combined statement of operations.

The diluted weighted average number of shares outstanding does not
include any anti-dilutive effects upon conversion of options outstanding.

9.          PIA NONRECURRING CHARGES

The March 31, 1998 unaudited pro forma combined statement of
operations includes $7,643 of restructuring and other charges recorded by PIA.
The restructuring and other charges consists of $1,797 of identified severance
and lease costs to various management, $2,121 in write-downs associated with the
redirection of PIA's technology strategy, $3,215 of reserves and write-offs
related to unprofitable contracts, and $510 of costs associated with changes in
PIA's service delivery model.

The nine months ended December 31, 1998 unaudited pro forma combined
statement of operations includes $1,038 of nonrecurring charges recorded by PIA.
These charges include $839 of purchased consulting services related to the
Company's redirection of its technology strategy, and $250 in merger transaction
costs.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF PIA PRIOR TO THE MERGER

The following table sets forth certain information regarding
beneficial ownership of the PIA Common Stock as of March 1, 1999 by: (i) each
person (or group of affiliated persons) who is known by PIA to own beneficially
more than 5% of PIA Common Stock; (ii) each of PIA's directors; (iii) each of
the executive officers named in the Summary Compensation Table; and (iv) PIA's
directors and executive officers as a group. Except as indicated in the
footnotes to this table, the persons named in the table, based on information
provided by such persons, have sole voting and sole investment power with
respect to all shares of PIA Common Stock shown as beneficially owned by them,
subject to community property laws where applicable.

BENEFICIAL OWNERSHIP OF PIA
COMMON STOCK PRIOR TO THE MERGER
--------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER                      NUMBER OF SHARES     PERCENTAGE
- ------------------------------------                      ----------------     ----------

Riordan, Lewis & Haden (1)                                  1,637,151(2)          29.7%
300 S.  Grand Avenue, 29th Floor
Los Angeles, California  90071

Clinton E. Owens                                              615,802(3)          11.0
c/o PIA
19900 MacArthur Boulevard, Suite 900
Irvine, California  92718

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BENEFICIAL OWNERSHIP OF PIA
COMMON STOCK PRIOR TO THE MERGER
--------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER                      NUMBER OF SHARES     PERCENTAGE
- ------------------------------------                      ----------------     ----------

Heartland Advisors, Inc.                                    1,423,800(4)          26.0
790 North Milwaukee Street
Milwaukee, Wisconsin  53202

California Community Foundation                               480,872(5)           8.7
606 S.  Olive Street, Suite 2400
Los Angeles, California  90014

Terry R.  Peets                                               102,500(6)           2.0

Cathy L.  Wood                                                 26,000(7)            *

Donald H.  Holman                                              18,594(8)            *

John R.  Bain                                                   8,750(9)            *

Patrick W.  Collins                                             2,500(10)           *

John A.  Colwell                                               67,011(11)          1.2

Joseph H.  Coulombe                                            18,310(12)           *

Patrick C.  Haden                                           1,641,151(13)         29.8

J.  Christopher Lewis                                       1,641,151(14)         29.8

All directors and executive officers as a group             2,531,899             43.3%
(11 persons)

- ---------------

*   Less than 1%.

(1)         Shares are owned by RVM/PIA, a California limited partnership
managed by Riordan, Lewis & Haden ("RLH").

(2)         Includes 29,729 shares issuable upon exercise of certain warrants to
purchase PIA Common Stock owned by RLH.

(3)         Includes 498,394 shares held by Clinton E. and Mary Ann Owens as
Trustees of The Owens Family Trust dated June 20, 1994, 9,300 shares
held by Clinton E. Owens as Trustee of the Welch Trust for Marcia
Browning and 108,108 shares issuable upon the exercise of options
which are exercisable as of, or will become exercisable within 60
days of, March 1, 1999.

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(4)         All information regarding share ownership is taken from and
furnished in reliance upon the Schedule 13G (Amendment No. 4), dated
January 28, 1999, filed by Heartland Advisors, Inc. with the
Securities and Exchange Commission on February 2, 1999.

(5)         All information regarding share ownership is taken from and
furnished in reliance upon Schedule 13G (Amendment No. 2), dated
February 12, 1999, filed by California Community Foundation with the
Securities and Exchange Commission on February 12, 1999. Includes
66,666 shares issuable upon exercise of a warrant to purchase PIA
Common Stock.

(6)         Includes 62,500 shares issuable upon the exercise of options which
are exercisable as of, or will become exercisable within 60 days of,
March 1, 1999.

(7)         Includes 25,000 shares issuable upon the exercise of options which
are exercisable as of, or will become exercisable within 60 days of,
March 1, 1999.

(8)         Includes 17,432 shares issuable upon the exercise of options which
are exercisable as of, or will become exercisable within 60 days of,
March 1, 1999.

(9)         Includes 8,750 shares issuable upon the exercise of options which
are exercisable as of, or will become exercisable within 60 days of,
March 1, 1999.

(10)        Includes 2,500 shares issuable upon the exercise of options which
are exercisable as of, or will become exercisable within 60 days of,
March 1, 1999.

(11)        Includes 64,206 shares issuable upon the exercise of options which
are exercisable as of, or will become exercisable within 60 days of,
March 1, 1999.

(12)        Includes 6,905 shares held by Joseph H. Coulombe as Trustee of The
Coulombe Family Trust dated July 26, 1980 and 11,405 shares issuable
upon the exercise of options which are exercisable as of, or will
become exercisable within 60 days of, March 1, 1999.

(13)        Includes 1,637,151 shares (including 29,729 shares issuable upon
exercise of warrants) owned by RLH. Mr. Haden, a director of PIA,
may be deemed to share voting and investment power with respect to
all such shares as a general partner of RLH. No other person, other
than J. Christopher Lewis, a director of PIA, has voting power or
investment power with respect to such shares. Also includes 4,000
shares issuable upon the exercise of options held by Mr. Haden which
are exercisable as of, or will become exercisable within 60 days of,
March 1, 1999.

(14)        Includes 1,637,151 shares (including 29,729 shares issuable upon
exercise of warrants) owned by RLH. Mr. Lewis, a director of PIA,
may be deemed to share voting and investment power with respect to
all such shares as a general partner of RLH. No other person, other
than Patrick C. Haden, a director of PIA, has voting power or
investment power with respect to such shares. Also includes 4,000
shares issuable upon the exercise of options held by Mr. Lewis which
are exercisable as of, or will become exercisable within 60 days of,
March 1, 1999.

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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS OF THE COMBINED COMPANY FOLLOWING THE MERGER

The following table sets forth certain information with respect to
the beneficial ownership of PIA Common Stock outstanding as of March 1, 1999,
giving effect to the SPAR Reorganization Transactions and the issuance of shares
of PIA Common Stock in the Merger and assuming the Merger occurs on May 1, 1999,
by: (i) each person who will beneficially own five percent or more of the
outstanding shares of PIA Common Stock following the Merger; (ii) each person
who will serve as a director of PIA following the Merger; (iii) each person who
will serve as an executive officer of the Combined Company following the Merger;
and (iv) all persons who will serve as executive officers or directors of the
Combined Company following the Merger as a group.

NUMBER OF SHARES OF PIA COMMON STOCK                                  
NAME OF BENEFICIAL OWNER             BENEFICIALLY OWNED AFTER THE MERGER     PERCENTAGE
------------------------            ------------------------------------     ----------

Robert O. Aders                                                     --                    --
Robert G.  Brown                                             7,286,089(1)               41.2%
William H.  Bartels                                          4,634,139                  26.2
Patrick W.  Collins                                             10,000(2)                  *
J. Christopher Lewis                                         1,642,651(3)                9.3
Terry R.  Peets                                                213,750(4)                1.2
James H. Ross                                                   42,418(5)                  *
Cathy L.  Wood                                                  96,000(6)                  *
Riordan, Lewis & Haden(7)                                    1,637,151(8)                9.2
Heartland Advisors, Inc.                                     1,423,800(9)                8.0
All directors and executive officers as a group (8)         13,925,047                  77.1

- ---------------

*           Less than 1%

(1)         Includes shares held individually or as a trustee of trusts over
which Mr. Brown is a trustee and has sole voting and investment
control.

(2)         Includes 10,000 shares issuable upon the exercise of options as a
result of the Merger.

(3)         Includes 1,637,151 shares (including 29,729 shares issuable upon
exercise of warrants) owned by RLH. Mr. Lewis, a director of PIA,
may be deemed to share voting and investment power with respect to
all such shares as a general partner of RLH. No other person, other
than Patrick C. Haden, a director of PIA, has voting power or
investment power with respect to such shares. Also includes 5,500
shares issuable upon the exercise of options held by Mr. Lewis which
are exercisable as of, or will become exercisable within 60 days of,
March 1, 1999.

(4)         Includes 173,750 shares issuable upon the exercise of options as a
result of the Merger.

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(5)         Includes 42,418 shares issuable upon the exercise of options as a
result of the Merger.

(6)         Includes 95,000 shares issuable upon the exercise of options as a
result of the Merger.

(7)         Shares are owned by RVM/PIA, a California limited partnership
managed by RLH.

(8)         Includes 29,729 shares issuable upon exercise of certain warrants to
purchase PIA Common Stock owned by RLH.

(9)         All information regarding share ownership is taken from and
furnished in reliance upon the Schedule 13G (Amendment No. 4), dated
January 28, 1999, filed by Heartland Advisors, Inc. with the
Securities and Exchange Commission on February 2, 1999.

PROPOSAL II: CHARTER AMENDMENT

The PIA Board has approved and adopted, subject to stockholder
approval, the Charter Amendment which provides for the amendment to PIA's
Certificate of Incorporation (i) to increase the number of authorized shares of
PIA Common Stock from 15 million to 47 million, (ii) to remove the prohibition
on stockholders taking action by written consent without a meeting under
Delaware law, and (iii) to change the name of PIA Merchandising Services, Inc.
to "SPAR Group, Inc." The text of the Charter Amendment is set forth in Annex B
to this Proxy Statement; however, such text is subject to change as may be
required by the Delaware Secretary of State.

REASONS FOR CHARTER AMENDMENT

The Charter Amendment is necessary to effectuate the Merger and the
Share/Option Issuance. At the close of business on [__________], 1999, the
Record Date, there were [__________] shares of PIA Common Stock outstanding and
entitled to vote. If the Merger is consummated, then the Combined Company will
be required to issue approximately [______] shares of PIA Common Stock (based on
the number of shares outstanding on the Record Date and assuming exercise of all
Substitute Options without regard to vesting). Based on such assumptions, if the
Share/Option Issuance, the Charter Amendment and the Option Plan Amendment are
approved, following the Merger, the Combined Company would have available for
future issuance approximately [__________] authorized shares of PIA Common
Stock. Of such authorized but unissued shares, [__________] shares of PIA Common
Stock (as of the close of business on the Record Date) would be reserved for
issuance under the Combined Company's employee benefit plans and an aggregate of
[_________] shares will be reserved for issuance for option grants to SPAR
employees and other persons providing valuable services for SPAR and for the
Substitute Options in connection with the Merger. Pursuant to the terms of the
Merger Agreement, the Charter Amendment will provide for PIA to change its name
to "SPAR Group, Inc," and will delete current Article Tenth (which presently
states that no action required to be taken or that may be taken at any annual or
special meeting of PIA's stockholders may be taken without a meeting, and denies
the power of the stockholders to consent in writing, without a meeting, to the
taking of any action pursuant to Delaware law).

PIA currently has an insufficient number of authorized but unissued
and unreserved shares of PIA Common Stock to effect the Merger and the
Share/Option Issuance pursuant to the Merger Agreement. As a result, the PIA
Board believes it is desirable to authorize additional shares of PIA Common
Stock so that there will be sufficient shares available for the Share/Option
Issuance in the Merger, as well as for issuance after the Merger for purposes
that the PIA Board may hereafter determine to be in the best interests of the
Combined Company and its stockholders. Such purposes could include the offer of
shares for cash, acquisitions, financings, mergers, stock splits or dividends,
employee benefit programs and other general corporate purposes. No further
action or authorization by the PIA

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stockholders would be necessary prior to the issuance of additional shares of
the PIA Common Stock unless required by the PIA Certificate of Incorporation or
by applicable law or regulation. The terms of any future issuance of shares of
PIA Common Stock will depend largely on market and financial conditions and
other factors existing at the time of issuance.

Other than in connection with the Share/Option Issuance, the
issuance of a maximum of up to 2,133,744 options to SPAR employees and other
persons providing valuable services to SPAR in connection with the Merger and
PIA's employee benefit plans, PIA does not have any immediate plans, agreements,
arrangements, commitments or understandings with respect to the issuance of any
of the additional shares of PIA Common Stock that would be authorized by the
Charter Amendment; provided, that the Combined Company may be required to issue
shares of PIA Common Stock valued at up to $3 million to MCI as the final
installment payment on the MCI Note if such payment is requested by MCI under
the terms and provisions of the MCI Note. The number of shares issued to MCI
will equal the amount of the final installment payment to MCI (up to $3 million)
divided by the average trading price of PIA Common Stock calculated over the 30
trading day period preceding the maturity date (September 15, 1999 at the
latest).

PRINCIPAL EFFECTS

The additional shares of PIA Common Stock to be authorized by the
Charter Amendment (including the Merger Shares) would have rights and privileges
identical to those of the currently outstanding PIA Common Stock. However, as
discussed in "Proposal I: Share/Option Issuance--Stock Ownership of the Combined
Company following the Merger," the Merger will increase the number of shares of
PIA Common Stock outstanding by over 200% and will result in a change of control
of PIA. Other than with respect to the Merger and the Share/Option Issuance, the
adoption of the Charter Amendment would not affect the rights of the holders of
currently outstanding PIA Common Stock, except for effects incidental to
increasing the number of shares of PIA Common Stock outstanding upon the
issuance of newly authorized shares of PIA Common Stock. The Charter Amendment
will increase the total number of authorized shares of PIA Common Stock by an
amount substantially greater than that necessary to effect the Share/Option
Issuance and the Merger. As a result, PIA stockholders could experience a
greater reduction in their interest in PIA with respect to earnings per share,
voting, liquidation value and book and market value per share if additional
authorized shares of PIA Common Stock are issued. The availability for issuance
of additional shares of the PIA Common Stock could also enable the PIA Board to
render more difficult or discourage an attempt to obtain control of PIA in the
future. For example, the issuance of shares in a public or private sale, merger
or similar transaction would increase the number of outstanding shares, thereby
possibly diluting the interest of a party attempting to obtain control of PIA.

Presently, the PIA Certificate of Incorporation states that no
action required to be taken or that may be taken at any annual or special
meeting of PIA's stockholders may be taken without a meeting, and denies the
power of the stockholders to consent in writing, without a meeting, to the
taking of any action. PIA and SPAR believe that allowing its stockholders to act
by written consent avoids the time and expense of calling a meeting each time
that the stockholders of the Combined Company seek to act. If such amendment is
approved, PIA stockholders may not have the opportunity to approve certain
corporate actions, in person or by proxy at a meeting of stockholders. However,
any action taken by the stockholders of the Combined Company without a meeting
will be required to comply with applicable law, including, without limitation,
the General Corporate Law of the State of Delaware and the rules of the Nasdaq
National Market then in effect. If the Charter Amendment is approved by the PIA
stockholders, it will become effective upon filing of a Certificate of Amendment
to PIA's Certificate of Incorporation with the Delaware Secretary of State,
which is expected to be filed promptly after the Annual Meeting.

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VOTE REQUIRED

Approval of the Charter Amendment requires the affirmative vote of a
majority of the shares of PIA Common Stock outstanding as of the Record Date.
Approval of the Share/Option Issuance, the Charter Amendment and the Option Plan
Amendment is required for the Merger to be consummated. If any one of the
foregoing three proposals is not approved, even if the other two proposals are
approved, the Merger cannot be consummated and none of the three proposals will
be approved. The PIA Board has unanimously determined that the Charter Amendment
is advisable and in the best interests of PIA and the stockholders of PIA. THE
PIA BOARD UNANIMOUSLY RECOMMENDS THAT THE PIA STOCKHOLDERS VOTE "FOR" APPROVAL
OF THE CHARTER AMENDMENT.

PROPOSAL III: OPTION PLAN AMENDMENT

At the Annual Meeting, PIA stockholders will be asked to consider
and vote upon a proposal to amend PIA's Amended and Restated 1995 Stock Option
Plan to increase the number of shares of PIA Common Stock reserved for issuance
upon exercise of stock options granted thereunder from 1,300,000 to 3,500,000.
In February 1999, the PIA Board adopted such amendment, subject to stockholder
approval. Such approval will require the affirmative vote of a majority of the
voting power of all outstanding shares of PIA Common Stock present or
represented and entitled to vote at the Annual Meeting.

As of the Record Date, there were options outstanding to purchase [
] shares of PIA Common Stock and [ ] shares remained available for future grants
under the 1995 Option Plan. The PIA Board approved the Option Plan Amendment
primarily to ensure that following the Merger, the Combined Company has an
option pool sufficient to attract and retain qualified personnel. In addition,
pursuant to the terms of the Merger Agreement, the PIA Board will grant options
covering up to a maximum of 2,133,744 shares of PIA Common Stock to SPAR
employees and other persons providing valuable services to SPAR effective as of
the Closing Date with Mr. Brown, Mr. Bartels and Mr. Oakley currently
anticipated to receive options to purchase 795,917, 506,493 and 300,000 shares
of PIA Common Stock, respectively, as of the Closing Date; provided that the
number of options to be granted to Messrs. Brown and Bartels may be reduced at
any time prior to the consummation of the Merger. The date of grant of such
stock options shall be the Closing Date, and the exercise price of such stock
options shall be the last sale price as reported on the Nasdaq National Market
on the Closing Date. The vesting provisions and other terms of such options
shall be determined pursuant to the terms of the Merger Agreement. The 1995
Option Plan, as amended by the Option Plan Amendment, and information regarding
options granted thereunder is summarized below, but these descriptions are
subject to and are qualified in their entirety by the full text of the 1995
Option Plan, as amended by the Option Plan Amendment, which is attached as Annex
C to this Proxy Statement.

SUMMARY OF THE 1995 OPTION PLAN

The 1995 Option Plan was initially adopted by the PIA Board and
stockholders of PIA in December 1995, and was amended and restated by the PIA
Board in February 1999. Under the 1995 Option Plan, employees, certain
directors, officers and consultants (collectively referred to as the
"Participants") providing services to PIA or its subsidiaries may be granted
certain options ("Options") to purchase shares of PIA Common Stock. The 1995
Option Plan permits the granting of both Options that qualify for treatment as
incentive stock options ("Incentive Stock Options") under Section 422 of the
Code, and Options that do not qualify as Incentive Stock Options ("Nonqualified
Stock Options"). Incentive Stock Options may only be granted to employees of PIA
or its subsidiaries.

The purpose of the 1995 Option Plan and of granting Options to
specified persons is to promote the interests of PIA and its stockholders, by
providing stock-based incentives to certain Participants. Under the 1995 Option
Plan, the mutuality of interest between the Participants and PIA is strengthened
because the Participants have a proprietary

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interest in pursuing PIA's long-term growth and financial success. In addition,
by allowing the Participants to participate in PIA's success, PIA is better able
to attract, retain and reward quality employees, directors, officers and
consultants. In selecting the Participants to whom Options may be granted,
consideration is given to factors such as employment position, duties and
responsibilities, ability, productivity, length of service, morale, interest in
PIA and recommendations of supervisors. The maximum number of shares that may be
issued to a single Participant is 1,000,000.

The 1995 Option Plan is administered by the PIA Board or by the
Compensation Committee established by the PIA Board. (The entity actually
administering the 1995 Option Plan is referred to herein as the "Committee").
The Committee is, when possible, composed of two or more Non-Employee Directors,
as defined in Rule 16b-3(b)(3) of the Exchange Act and of persons who are
"outside directors" under Section 162(m) of the Code.

The Committee has full and complete authority, subject to the
express provisions of the 1995 Option Plan: (1) to select the Participants, to
specify the number of shares of PIA Common Stock with respect to which Options
are granted to each Participant, to specify the terms of the Options and whether
such Options shall be Incentive Stock Options or Nonqualified Stock Options, and
in general to grant Options; (2) to determine the dates upon which Options shall
be granted and the terms and conditions thereof in a manner consistent with the
1995 Option Plan, which terms and conditions need not be identical as to the
various Options granted; (3) to interpret the 1995 Option Plan; (4) to
prescribe, amend and rescind rules relating to the 1995 Option Plan; (5) to
authorize any person to execute on behalf of PIA any instrument required to
effectuate the grant of an Option previously granted by the Committee; (6) to
determine the rights and obligations of Participants under the 1995 Option Plan;
(7) to specify the Option price; (8) to accelerate the time during which an
Option may be exercised, including, but not limited to, upon a change of control
of PIA, and to otherwise accelerate the time or extend the post-termination
exercise period during which an Option may be exercised; and (9) to make all
other determinations deemed necessary or advisable for the administration of the
1995 Option Plan.

If this proposal is approved, the number of shares of PIA Common
Stock in respect of the options which may be granted under the 1995 Option Plan
will increase from 1,300,000 shares to 3,500,000 shares, subject to certain
adjustments which may be made by the Committee upon the occurrence of certain
changes in PIA's capitalization or structure.

Each option granted under the Option Plan will be evidenced by a
written agreement ("Option Agreement") in a form approved by the Committee and
executed by PIA and the Participant to whom the Option is granted. Options will
be exercisable at such time(s) and subject to such terms and conditions as may
be set forth in the Option Agreement.

The purchase price of shares of PIA Common Stock subject to each
Option which is intended to qualify as an Incentive Stock Option will be equal
to the fair market value of such shares (110% of fair market value in the case
of a holder of more than 10% of PIA Common Stock) on the date of grant of such
Option. The purchase price of any Option which does not qualify as an Incentive
Stock Option shall be determined by the Committee, but shall not be less than
the fair market value of the PIA Common Stock in the case of an Option granted
to an individual who is a "covered employee" under Section 162(m) of the Code in
order to preserve the deductibility of the compensation that will be recognized
upon the exercise of the Option. The fair market value of such shares is the
closing price of the PIA Common Stock on the Nasdaq National Market on the date
of grant.

Options granted under the 1995 Option Plan may be exercised, to the
extent vested, by the Participant by payment of the full purchase price therefor
in cash, by cashier's or certified check or by surrender of outstanding shares
of PIA Common Stock. Options granted to a Participant are not transferable
during the individual's lifetime, other than

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to the employee's immediate family members, a trust for their benefit or a
partnership in which such family members are the only partners, and may be
transferred in the event of death only by will or the laws of descent and
distribution.

Each option granted under the 1995 Option Plan shall set forth a
termination date thereof, which shall not be later than ten years (five years in
the case of a holder of more than 10% of PIA Common Stock) from the date such
option is granted subject to earlier termination or forfeiture as set forth
below, or as otherwise set forth in each particular Option Agreement.

Unless earlier terminated by the Board, the 1995 Option Plan will
terminate on December 4, 2005. The PIA Board may make such further amendments to
the 1995 Option Plan as it shall deem advisable.

Future Participants in the 1995 Option Plan and the amounts of their
allotments are to be determined by the Committee subject to any restrictions
outlined above or in the text of the 1995 Option Plan or the applicable Option
Agreement. Because no such determinations have yet been made, it is not possible
to state the terms of any individual awards which may be issued under the 1995
Option Plan or the names or positions of or respective amounts of the allotment
to any individual who may participate.

FEDERAL INCOME TAX CONSEQUENCES APPLICABLE TO THE 1995 OPTION PLAN

Incentive Stock Options. No taxable income will be recognized by a
Participant upon the grant or exercise of any Incentive Stock Option under the
1995 Option Plan. The Combined Company will not be entitled to any income tax
deduction as the result of the grant or exercise of any incentive stock option.

Any gain or loss resulting from the subsequent sale of stock
acquired upon exercise of an Incentive Stock Option will be long-term capital
gain or loss if such sale is made after the later of (a) two years from the date
of the grant of the option or (b) one year from the transfer of such stock to
the Participant upon exercise, provided that the Participant is an employee of
PIA from the date of grant until three months before the date of exercise. This
three-month period is extended in the event of the Participant's death or
disability prior to exercise of an Incentive Stock Option.

If the subsequent sale of stock is made prior to the expiration of
such two-year or one-year periods, the Participant will recognize ordinary
income in the year of sale in an amount equal to the difference between the
exercise price and the fair market value of the stock on the date of exercise.
Furthermore, if such sale is a transaction in which a loss (if sustained) would
have been recognized by the Participant, the amount of ordinary income
recognized by the Participant will not exceed the excess (if any) of the amount
realized on the sale over the option price. PIA will then be entitled to an
income tax deduction of the amount of ordinary income that the Participant
recognizes. Any excess gain recognized by the Participant upon such sale would
then be taxable as capital gain, either long-term or short-term depending upon
whether the stock had been held for more than one year prior to sale.

If the sale of shares of PIA Common Stock received upon exercise of
an option qualifies for long-term capital gain treatment, the capital gain from
such sale would be taxed at the current maximum federal tax rate of generally
20% if the PIA Common Stock has been held for more than one year. Ordinary
income is currently taxed at the Participant's current maximum federal income
tax marginal rate of, which can be as much as 39.6%. The amount by which the
fair market value of stock purchased upon exercise of an Incentive Stock Option
exceeds the option price of such stock generally constitutes an item of tax
preference which could be subject to the alternative minimum tax in the year
that the option is exercised.

Nonqualified Stock Options. Generally, at the time of the grant of
any option under the 1995 Option Plan, no taxable income will be recognized by
the Participant and PIA will not be entitled to a deduction. Upon the exercise

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of such option, the Participant generally will recognize ordinary income, and
PIA will then be entitled to a deduction, in the amount by which the then fair
market value of the shares of PIA Common Stock issued to such Participant
exceeds the option price.

Income recognized by the Participant upon exercise of a Nonqualified
Stock Option will be taxed as ordinary income up to the Participant's current
maximum marginal rate, which can be as much as 39.6%. Such income constitutes
"wages" with respect to which PIA is required to deduct and withhold federal and
state income tax. Such deductions will be made from the wages, salary, bonus or
other income to which the Participant would otherwise be entitled and, at PIA's
election, the Participant may be required to pay to PIA (for withholding on the
Participant's behalf) any amount not so deducted but required to be so withheld.
PIA may permit the Participant to elect to surrender, or authorize PIA to
withhold, shares of PIA Common Stock (valued at their fair market value on the
date of surrender or withholding of such shares) in satisfaction of PIA's
withholding obligation.

Upon the subsequent disposition of shares acquired upon the exercise
of the Option, the Participant will recognize capital gain or loss in an amount
equal to the difference between the proceeds received upon disposition and the
fair market value of such shares at the time of exercise. If such shares have
been held for more than one year at the time of such disposition, the capital
gain or loss will be long-term.

Exercising Options with Shares of PIA Common Stock. To the extent a
Participant pays all or part of the option price by tendering shares of PIA
Common Stock owned by the Participant, the tax consequences described above
generally would apply. However, the number of shares received (upon exercise)
equal to the number of shares surrendered in payment of the aggregate option
price will have the same basis and tax holding period as the shares surrendered.
The additional shares received upon such exercise will have a tax basis equal to
the amount of ordinary income recognized and any cash paid on such exercise and
a holding period which commences on the date of exercise.

If a Participant exercises an option by tendering shares previously
acquired on the exercise of an Incentive Stock Option, a disqualifying
disposition will occur if the applicable holding period requirements have not
been satisfied with respect to the surrendered stock. The consequences of such a
disqualifying disposition is that the Participant may recognize ordinary income
at the time.

Acceleration of Stock Options upon a Transfer of Control. If, upon a
reorganization, merger, sale or other transaction resulting in a change in
control of PIA or of a substantial portion of its assets, the exercisability of
stock options held by certain employees (generally officers, stockholders and
highly compensated employees of PIA) is accelerated (or payments are made to
cancel unexercisable options of such employees), such acceleration or payment
will be determined to be a "parachute payment" for federal income tax purposes.
If the present value of all of the Participant's parachute payments exceeds
three times the Participant's average compensation for the past five years, the
Participant will be subject to a 20% excise tax on the amount of such parachute
payment which is in excess of the greater of such average compensation of the
Participant ("excess parachute payment"). In addition, PIA will not be allowed
to deduct such excess parachute payment.

Limitation on Compensation Deduction. Upon exercise, options granted
to a "covered employee" should not be subject to the $1 million deduction cap
for compensation paid to certain executives of publicly held corporations such
as PIA, if the following conditions are satisfied: (1) each option granted to a
covered employee (a) has an option price equal to or greater than the fair
market value of the PIA Common Stock on the date of the grant, and (b) was made
by a committee consisting solely of two or more "Outside Directors" of PIA, and
(2) the stockholders have approved the 1995 Option Plan.

Upon exercise, options granted to a covered employee with an option
price less than the fair market value of the PIA Common Stock at the time of
grant would be subject to the $1 million deduction cap for PIA. A "covered

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employee" is a Participant who, on the last day of the taxable year of PIA, is
the Chief Executive Officer or one of the four other most highly compensated
executive officers for proxy disclosure purposes. An "Outside Director" is a
Director who is not (1) a current employee of PIA or related entity, (2) a
former employee who is receiving compensation for prior services, (3) a former
officer or (4) receiving compensation from PIA for personal services other than
regular directors' compensation.

The foregoing summary of the effects of federal income taxation upon
the Participants, and the Combined Company with respect to shares issued under
the 1995 Option Plan does not purport to be complete and reference is made to
the applicable provisions of the Code.

VOTE REQUIRED

Approval of the Option Plan Amendment which increases the number of
shares of PIA Common Stock reserved for issuance under the 1995 Option Plan from
1,300,000 to 3,500,000 requires the affirmative vote of a majority of the voting
power of all outstanding shares of PIA Common Stock present or represented and
entitled to vote at the Annual Meeting. Approval of the Share/Option Issuance,
the Charter Amendment and the Option Plan Amendment is required for the Merger
to be consummated. If any one of the foregoing three proposals is not approved,
even if the other two proposals are approved, the Merger cannot be consummated
and none of the three proposals will be approved. The PIA Board has unanimously
determined that the Option Plan Amendment is advisable and in the best interests
of PIA and the stockholders of PIA. THE PIA BOARD UNANIMOUSLY RECOMMENDS THAT
THE PIA STOCKHOLDERS VOTE "FOR" APPROVAL OF THE OPTION PLAN AMENDMENT.

PROPOSAL IV: ELECTION OF DIRECTORS

Seven directors are to be elected at the Annual Meeting to serve
until the consummation of the Merger, or if the Merger is not consummated, until
the next Annual Meeting of Stockholders or until their respective successors
have been elected and qualified. In the absence of instructions to the contrary,
proxies covering shares of PIA Common Stock will be voted in favor of the
election of the persons listed below. In the event that any nominee for election
as director should become unavailable to serve, it is intended that votes will
be cast, pursuant to the enclosed proxy, for such substitute nominee as may be
nominated by PIA. PIA management has no present knowledge that any of the
persons named will be unavailable to serve.

None of the nominees has any family relationship to any other
nominee or to any executive officer of PIA. No arrangement or understanding
exists between any nominee and any other person or persons pursuant to which any
nominee was or is to be selected as a director or nominee other than with
respect to Mr. Owens who has a contractual right to be nominated as a director
as long as he holds at least 250,000 shares of PIA Common Stock. Mr. Owens has
indicated that he will waive his contractual right to be nominated to the PIA
Board in connection with the Merger. See "Executives, Officers' Compensation and
other Information-- Employment Agreement, Severance Arrangements and Change in
Control Arrangements." In connection with the consummation of the Merger, each
of the nominees other than Messrs. Collins and Lewis has agreed to resign from
the PIA Board and Messrs. Collins and Lewis will fill three of the five
remaining vacancies with Messrs. Brown, Bartels and Aders. See "Proposal I --
Share/Option Issuance -- Board of Directors and Management After the Merger."

INFORMATION CONCERNING NOMINEES TO PIA BOARD

Set forth in the table below are the names and ages of the nominees
for election as directors. Ages are shown as of March 1, 1999. Each nominee has
consented to being named in this Proxy Statement as a nominee for director and
has agreed to serve as a director if elected.

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NAME                           Age                   Position with PIA
- ----                           ---                   -----------------

Terry R.  Peets                 54      Chief Executive Officer, President and Director
Patrick W.  Collins(1)          70      Director
John A.  Colwell                48      Director
Joseph H.  Coulombe(2)          68      Director
Patrick C.  Haden(1)(2)         46      Director
J.  Christopher Lewis           42      Director
Clinton E.  Owens               57      Chairman of the Board and Director

- ----------

(1)         Member of the Compensation Committee.

(2)         Member of the Audit Committee.

Set forth below is a brief description of the business experience
for the previous five years of all nominees for directors of PIA.

Mr. Peets joined PIA in August 1997 as Chief Executive Officer,
President and Director. Mr. Peets served as Executive Vice President of The Vons
Companies, Inc. from 1995 to April 1997. Prior to joining Vons, Mr. Peets served
in various sales, marketing and operation roles as Senior Vice President for
Ralphs Grocery Company from 1977 to 1994, until he was named Executive Vice
President in 1994. Mr. Peets also serves as a director of Supermarkets Online, a
division of Catalina Marketing Corporation, a provider of in-store electronic
marketing services and Diamond Brands, Inc., a manufacturer and marketer of
branded household products.

Mr. Collins has been a member of the PIA Board since May 1998. Mr.
Collins served as Chief Operating Officer of Ralphs Grocery Company for 18
years, 17 of which he served as President and one year as Vice Chairman. Mr.
Collins also serves as a director of Catalina Marketing Corporation, a provider
of in-store electronic marketing services, and New Bristol Farms, Inc., a
gourmet food grocery chain.

Mr. Colwell has been a member of the PIA Board since March 1991, and
currently serves as a consultant to PIA. From February 1997 through August 1997,
Mr. Colwell served as interim Vice Chairman of the Board. Mr. Colwell is sole
proprietor of a consulting and interim management firm bearing his name, and
President of Facility Development Corporation. Since 1991, Mr. Colwell has
served as a Managing Director of Lineberger & Co., a private equity investment
firm. From November 1991 through February 1997, Mr. Colwell was Senior Vice
President of River City Plastics, Inc., a manufacturer of polyvinyl chloride
pipe.

Mr. Coulombe has been a member of the PIA Board since May 1993. Mr.
Coulombe is the founder and former Chief Executive Officer of Trader Joe's, a
specialty food grocery chain. Mr. Coulombe sold Trader Joe's in 1979 and
remained the Chief Executive Officer of Trader Joe's until January 1989. From
February 1995 to April 1995, Mr. Coulombe served as President and Chief
Executive Officer of Sport Chalet, and served as a director of Sport Chalet from
February 1993 to June 1994. From February 1994 to January 1995, Mr. Coulombe
served as Chief Executive Officer of Provigo Corp., the Northern California
subsidiary of Provigo Inc., of Montreal. From June 1992 to January 1994, Mr.
Coulombe served as a member of the Board of Directors of Imperial Bank, a
subsidiary of Imperial Bancorp. Mr. Coulombe also serves as a director of Cost
Plus World Market, a home furnishings store chain, and New Bristol Farms, Inc.,
a gourmet food grocery chain.

Mr. Haden became a member of the PIA Board in August 1988 in
connection with PIA's acquisition. Since 1987, Mr. Haden has been a general
partner of Riordan, Lewis & Haden (RLH), equity investors in California-based

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enterprises. RLH's portfolio interests emphasize high growth middle market
companies, especially those in the value added service sector. Mr. Haden also
serves as a director of Tetra Tech, Inc., an environmental engineering and
consulting firm, Data Processing Resources Corporation, a provider of
information technology specialty staffing services, and several privately-held
companies.

Mr. Lewis has been a member of the PIA Board since April 1997. Since
1981, Mr. Lewis has been a general partner of Riordan, Lewis & Haden. Mr. Lewis
also serves as a director of Tetra Tech, Inc., Data Processing Resources
Corporation, SM&A Corporation, California Beach Restaurants, Inc., an owner and
operator of restaurants, and several privately-held companies.

Mr. Owens has been Chairman of PIA since August 1988 and served as
Chief Executive Officer of PIA from August 1988 to August 1997. Mr. Owens has
over 30 years experience in the merchandising services and packaged goods
industries. Mr. Owens previously has served as Senior Vice President of Sales
and Marketing of Coca Cola Foods, and has also served in various management
positions with RJR Foods and Procter & Gamble, among others.

DIRECTOR COMPENSATION

During the year ended January 1, 1999, PIA paid to Messrs. Coulombe
and Edwin Epstein, a former director, an aggregate of $10,500 and $15,750,
respectively, for services as members of the PIA Board and as consultants, and
also reimbursed Messrs. Coulombe and Epstein for certain expenses in connection
with their attendance at PIA Board and committee meetings. Messrs. Haden and
Lewis received no compensation for their services as directors (other than the
grant of options as described in the following paragraphs). Commencing April 1,
1998, Mr. Colwell receives an annual salary of $50,000 for consulting services.
Mr. Colwell is also entitled to receive a success fee in the event certain
transactions (approximately $150,000 in connection with the Merger) are
completed by PIA. Prior to April 1, 1998, Mr. Colwell received a monthly salary
of $16,667 for his services as a director. During fiscal 1998, PIA paid Mr.
Colwell an aggregate of $120,790 for his services as a member of the PIA Board
and consultant, and also reimbursed Mr. Colwell for certain expenses in
connection with his attendance at PIA Board meetings. In addition, beginning in
April 1998, Messrs. Collins and Coulombe receive a $3,000 fee for regular
meetings (up to a maximum of four meetings) and a $500 fee for special meetings
(including telephonic meetings). Mr. Collins deferred receipt of his
compensation until January 1999.

Under the 1995 Option Plan, on April 8, 1998, PIA granted Messrs.
Collins and Coulombe an option to purchase 10,000 shares and 4,000 shares,
respectively, of PIA Common Stock at an exercise price of $4.875 per share. Such
options vest over four years at an annual rate of 25% beginning on the first
anniversary of the date of grant, provided that such option will automatically
vest in full upon the consummation of the Merger or another acquisition event as
described in the following paragraph.

1995 Stock Option Plan for Nonemployee Directors. PIA adopted its
1995 Stock Option Plan for Nonemployee Directors in December 1995 (the
"Nonemployee Directors Plan"), covering 100,000 shares of PIA Common Stock.
Under the Nonemployee Directors Plan, each of Messrs. Coulombe, Haden and Lewis
was granted an option to purchase 1,500 shares of PIA Common Stock at an
exercise price of $5.32 per share that became fully exercisable on May 12, 1998.
Messrs. Colwell, Coulombe, Haden and Lewis were each granted an option to
purchase 1,500 shares of PIA Common Stock at an exercise price of $5.125 per
share on May 12, 1998, that will become fully exercisable on the date of the
Annual Meeting if they are reelected as a director. Notwithstanding the
foregoing, pursuant to action taken by the PIA Board in February 1999, all
options granted to nonemployee directors will automatically vest in full upon
the occurrence of an acquisition event (such term, as defined by the PIA Board,
includes the consummation of the Merger).

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PIA's Compensation Committee administers the Nonemployee Directors
Plan. Each member of the PIA Board who is not otherwise an employee or officer
of PIA or any subsidiary of PIA (each, an "Eligible Director") is eligible to
participate in the Nonemployee Directors Plan. Directors who are consultants of,
but not otherwise employees or officers of, PIA are Eligible Directors.

Under the Nonemployee Directors Plan, an option to purchase 1,500
shares of PIA Common Stock is granted to each Eligible Director immediately
following each annual meeting of stockholders of PIA. Each option vests and
becomes exercisable in full at the next annual meeting of stockholders, provided
that the optionee is reelected as a director of PIA. The maximum term of options
granted under the Nonemployee Directors Plan is ten years and one day, subject
to earlier termination following an optionee's cessation of service with PIA.
The exercise price of stock options granted under the Nonemployee Directors Plan
will be the fair market value of the PIA Common Stock on the date of grant.

MEETINGS AND COMMITTEES

During fiscal 1998, the Board held nine meetings and took various
actions by written consent. Each incumbent director attended at least 75% of the
aggregate of (i) the total number of meetings held by the Board during fiscal
1998 and (ii) the total number of meetings held by all committees of the Board
during that period within which he was a Director or member of such committee of
the Board.

The standing committees of the PIA Board are the Audit Committee
(the "Audit Committee") and the Compensation Committee (the "Compensation
Committee"). The Audit Committee held two meetings and the Compensation
Committee held one meeting during fiscal 1998. PIA does not have a standing
nominating committee or any committee performing the functions thereof.

The Audit Committee presently consists of Messrs. Haden and
Coulombe. The Audit Committee makes recommendations concerning the engagement of
independent public accountants; reviews with the independent public accountants
the plans for and scope of the audit, reviews the results of the audit; approves
the professional services provided by the independent public accountants;
reviews the independence of the public accountants; and reviews the adequacy and
effectiveness of PIA's internal accounting control.

The Compensation Committee presently consists of Messrs. Haden and
Collins. The Compensation Committee determines compensation for PIA's executive
officers and administers PIA's stock incentive plans.

VOTE REQUIRED

The director nominees who receive the greatest number of votes at
the Annual Meeting will be elected to the PIA Board. THE PIA BOARD UNANIMOUSLY
RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES SET FORTH ABOVE.

EXECUTIVE OFFICERS' COMPENSATION AND OTHER INFORMATION OF PIA

EXECUTIVE OFFICERS

Set forth in the table below are the names, ages and positions of
the current executive officers of PIA. Ages are shown as of March 1, 1999.
Executive officers are elected by and serve at the discretion of the PIA Board.
None of the executive officers has any family relationship to any nominee for
director or to any other executive officer of PIA.

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NAME                      Age                       Position with PIA
- ----                      ---                       -----------------

Clinton E.  Owens          57     Chairman of the Board and Director
Terry R.  Peets            54     Chief Executive Officer, President and Director
Cathy L.  Wood             51     Executive Vice President, Chief Financial Officer and Secretary
Donald H.  Holman          42     Executive Vice President-- Marketing and Sales
John R.  Bain              52     Executive Vice President-- Operations
Mark J.  Hallsman          44     Senior Vice President-- Field Logistics and Operations Planning

Set forth below is a brief description of the business experience
for the previous five years of all current executive officers of PIA except
Messrs. Peets and Owens whose business experience have been previously
described. See "Proposal IV-Election of Directors--Information Concerning
Nominees to PIA Board." In connection with the consummation of the Merger, each
of the above executive officers has agreed to resign other than Ms. Wood who
will remain in her current position and Mr. Peets who will become Vice Chairman
of the Combined Company. Upon the consummation of the Merger, the executive
officers of PIA will be as set forth under "Proposal I--Share/Option Issuance
Proposal--Board of Directors and Management After the Merger."

Ms. Wood joined PIA in August 1997 as Executive Vice President,
Chief Financial Officer and Secretary. Ms. Wood served as Vice President and
Chief Financial Officer of Giant Group Ltd., a NYSE listed company specializing
in acquisitions, from 1995 to 1997. From 1989 to 1995, Ms. Wood served in
various capacities at Wherehouse Entertainment, Inc. prior to being named Senior
Vice President and Chief Financial Officer in 1993. From 1972 to 1989, Ms. Wood
served in various credit and lending positions at Mellon Bank, N.A., including
from 1982 to 1989, Vice President of Consumer Products and Retail Credit
Analysis.

Mr. Holman joined PIA in June 1992 and has served as Executive Vice
President of Marketing and Sales since August 1998. From June 1996 to August
1998, Mr. Holman served as PIA's Vice President of Sales. From January 1995 to
June 1996, Mr. Holman served as PIA's Vice President of Business Development and
from June 1992 to December 1994, Mr. Holman served as PIA's Vice President
Division Manager.

Mr. Bain joined PIA in November 1997 as Senior Vice President of
Operations and became Executive Vice President of Operations in August 1998. Mr.
Bain served as Executive Vice President of Shasta Beverages in the Western
Division from October 1995 to November 1997. Before joining Shasta Beverages,
Mr. Bain served as Vice President of Sales and Marketing for Casablanca Food
Company, and Divisional Vice President for Continental Baking Company, from 1992
to 1994.

Mr. Hallsman joined PIA in August 1993 and has served as Senior Vice
President of Field Logistics and Operations Planning since August 1998. From
December 1995 to August 1998, Mr. Hallsman served as PIA's Senior Vice President
of Human Resources and from August 1993 to December 1995, Mr. Hallsman served as
Vice President of Human Resources. From September 1985 to August 1993, Mr.
Hallsman served as Director, Human Resources of Con-Way Western Express, a
provider of short-haul trucking services.

EXECUTIVE COMPENSATION

The following table sets forth all compensation received for
services rendered to PIA in all capacities for the three fiscal years ended
January 1, 1999 by (i) PIA's Chief Executive Officer during fiscal 1998, and
(ii) each of the other four most highly compensated executive officers of PIA
who were serving as executive officers at the end of fiscal 1998 (collectively,
the "Named Executive Officers"):

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SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
ANNUAL COMPENSATION       AWARDS
----------------------   ------------
SECURITIES  ALL OTHER
FISCAL                            UNDERLYING COMPENSATION
NAME AND PRINCIPAL  POSITIONS               YEAR   SALARY($)(1)  BONUS($)    OPTIONS(#)   ($)(2)
- -----------------------------              ------  ------------  --------    ---------- ------------

Terry R. Peets                              1998     $253,894    $    --       35,000     $ 7,667
President and Chief Executive Officer     1997      111,757         --      250,000      10,675
1996           --         --           --          --

Clinton E. Owens                            1998      340,833         --           --      13,442
Chairman of the Board                    1997      400,000         --           --      34,557
1996      400,000     50,000           --      36,820

Cathy L. Wood                               1998      202,366         --       65,000          --
Executive Vice President,                 1997       96,692         --      100,000          --
Chief Financial Officer and Secretary     1996           --         --           --          --

John R. Bain                                1998      160,625         --       45,000       2,463
Executive Vice President-- Operations     1997       18,750         --       25,000          --
1996           --         --           --          --

Donald H. Holman                            1998      168,317         --       52,500       2,966
Executive Vice President--                1997      120,118         --       15,000       2,434
Marketing and Sales                      1996      107,056      9,000       10,000       2,174

- --------------------

(1)         For the year ended December 31, 1996, includes $109,500 and $4,347
deferred at the election of Messrs. Owens and Holman, respectively;
for the year ended December 31, 1997, includes $2,500, $95,833 and
$4,867, deferred at the election of Messrs. Peets, Owens and Holman,
respectively; and for the year ended January 1, 1999, includes
$10,000, $8,802, $9,850 and $5,933, deferred at the election of
Messrs. Peets, Owens, Bain and Holman, respectively; pursuant to
PIA's 401(k) Plan and Deferred Compensation Arrangement. See "--
Compensation Plans -- 401(k) Plan" and "-- Deferred Compensation
Arrangement."

(2)         Consists of contributions to the 401(k) Plan made by PIA on behalf
of each of Messrs. Peets, Owens, Bain and Holman, respectively. Also
includes an aggregate of $4,236 and $2,630 in insurance premiums
paid by PIA on behalf of Mr. Peets during the years ended December
31, 1997 and January 1, 1999, respectively, for certain life
insurance and disability insurance policies of which Mr. Peets is
the sole beneficiary. Also includes an aggregate of $29,820, $14,891
and $9,145 in insurance premiums paid by PIA on behalf of Mr. Owens
during the years ended December 31, 1996, December 31, 1997 and
January 1, 1999, respectively, for certain life and disability
insurance policies of which Mr. Owens is the sole beneficiary.

EMPLOYMENT AGREEMENTS, SEVERANCE ARRANGEMENTS AND CHANGE IN CONTROL ARRANGEMENTS

Mr. Peets entered into an at will employment agreement with PIA on
June 25, 1997. Such agreement is terminable by PIA at any time, subject to,
among other things, severance payments as provided in the employment agreement.
From June 25, 1997 through August 9, 1997, Mr. Peets received a salary of $1,200
per day and from August 10, 1997 to August 9, 1998 he received a salary of
$20,834 per month. Mr. Peets' employment agreement was

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amended on October 1, 1998 whereby effective August 10, 1998, Mr. Peets receives
a salary of $21,459 per month, subject to annual review by the PIA Board for
possible increases, with a minimum increase tied to the Los Angeles-Long
Beach-Anaheim consumer price index. Mr. Peets is also entitled to a yearly bonus
of up to 100% of his base salary based upon PIA achieving certain operating
results. PIA's obligation to pay a pro-rated bonus to Mr. Peets upon an
acquisition event (such term, as defined in his employment agreement, includes
the consummation of the Merger) is contingent on PIA achieving certain operating
results prior to such event. It is currently anticipated that no bonus will be
payable to Mr. Peets in connection with the consummation of Merger. The
employment agreement also provides for payment of Mr. Peets' salary for 18
months if PIA or the Combined Company, as the case may be, terminates his
employment without cause (as defined in his employment agreement) during the two
year period following a material corporate event (which term, as defined in his
employment agreement, includes the consummation of the Merger) or if Mr. Peets
terminates his employment for material reason (as defined in his employment
agreement) within one year following such event. His employment agreement
further provides that the vesting schedule for Mr. Peets' unvested options
(222,500 at January 1, 1999) be accelerated by two years upon the occurrence of
an acquisition event. Mr. Peets' employment agreement was amended further to
provide that his consent to certain actions taken by the Combined Company
following the Merger, including the change in Mr. Peets' title, will not require
him to waive his right to resign for material reason, nor will he be deemed to
have waived such right.

Mr. Owens entered into an agreement with PIA on August 10, 1998 that
settles all differences arising out of or relating to Mr. Owen's employment with
PIA. Pursuant to the agreement, Mr. Owens resigned as an employee of PIA and all
its subsidiaries effective November 10, 1998 but continues to serve as Chairman
of the Board and a director of PIA. The agreement provides, among other things,
for severance payments of $37,500 per month for a period of nine months
following the date of his resignation as an employee. In addition, under the
terms of the agreement, Mr. Owens has the right to be nominated to serve on the
PIA Board as long as he holds at least 250,000 shares of PIA Common Stock. Mr.
Owens has indicated that he will waive this right in connection with the Merger.

Ms. Wood entered into a severance agreement with PIA on February 20,
1998 which was amended and restated on October 1, 1998. Ms. Wood or PIA may
terminate the agreement at any time. The agreement provides, among other things,
for payment of Ms. Wood's salary for 18 months if PIA or the Combined Company,
as the case may be, terminates her employment without cause (as defined in Ms.
Wood's severance agreement) during the two year period following a change of
control (such term, as defined in her severance agreement, includes the
consummation of the Merger) or if Ms. Wood terminates her employment for good
reason (as defined in her severance agreement) within one year following such
event. The agreement further provides that the vesting schedule for her unvested
stock options (140,000 at January 1, 1999) shall be accelerated by two years
upon the occurrence of a change of control of PIA (which includes the Merger).
Ms. Wood's agreement was further amended to provide that her consent to certain
actions by the Combined Company following the Merger will not require her to
waive her right to resign for good reason, nor will she be deemed to have waived
such right.

PIA currently has no written employment or severance contracts with
any of the Named Executive Officers other than as described above.

Messrs. Bain, Holman and Hallsman are entitled to receive severance
payments pursuant to PIA's severance policy. Messrs. Bain and Holman will
receive their salary for 12 months and Mr. Hallsman will receive his salary for
nine months if they are terminated without cause within two years following a
material corporate event (such term, as defined by the PIA Board, includes the
consummation of the Merger). In addition, pursuant to action taken by the PIA
Board, all of the unvested options held by each executive officer of PIA or the
Combined Company, as the case may be,

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will be automatically vested in full if such executive officer is terminated
without cause within two years following a material corporate event. The vesting
schedule for such options will be accelerated by two years upon the occurrence
of an acquisition event (such term, as defined by the PIA Board, includes the
consummation of the Merger).

STOCK OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information regarding each grant of
stock options made during the year ended January 1, 1999 to each of the Named
Executive Officers. No stock appreciation rights ("SARs") were granted during
such period to such persons.

INDIVIDUAL GRANTS(1)
------------------------------------------------------
NUMBER OF      PERCENT OF                                      POTENTIAL REALIZABLE VALUE AT
SECURITIES    TOTAL OPTIONS                                     ASSUMED ANNUAL RATES OF STOCK
UNDERLYING      GRANTED TO                                     PRICE APPRECIATION FOR OPTION(2)
OPTIONS      EMPLOYEES IN     EXERCISE     EXPIRATION        --------------------------------
NAME                         GRANTED(#)      PERIOD(%)     PRICE ($/SH)      DATE                5%($)          10%($)
- ----                         -----------   -------------   ------------   ----------            -------         ------

Terry R. Peets                 35,000           10.2           4.500       09/21/08              99,051         251,014
Clinton E. Owens                   --             --              --             --                 --               --
Cathy L. Wood                  50,000           14.5           5.870       08/02/08             168,765         428,068
15,000            4.4           4.500       09/21/08              42,450         107,578
John R. Bain                   10,000            2.9           4.875       04/07/08              30,659          77,695
35,000           10.2           6.250       08/12/08             137,571         348,631
Donald H. Holman               10,000            2.9           4.875       04/07/08              30,659          77,695
32,500            9.4           6.250       08/12/08             127,744         323,729
10,000            2.9           4.000       10/28/08              25,156          63,750

- ------------

(1)         All such options vest over four year periods at an annual rate of
25% beginning on the first anniversary of the date of grant.
Notwithstanding the foregoing, the vesting schedule for all such
options will accelerate by two years upon the occurrence of an
acquisition event (such as the Merger) and all such options will be
fully vested for any officer who is terminated without cause within
two years following an acquisition event.

(2)         The potential realizable value is calculated based on the term of
the option (ten years) at its time of grant. It is calculated by
assuming that the stock price on the date of grant appreciates at
the indicated annual rate, compounded annually for the entire term
of the option.

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AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES

The following table sets forth the number and value of the
exercisable and unexercisable options held by each of the Named Executive
Officers at January 1, 1999. None of the Named Executive Officers exercised any
options during the fiscal year ended January 1, 1999.

NUMBER OF SECURITIES             VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED          IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END(#)       FISCAL YEAR-END($)(1)
-----------------------------    ----------------------------
NAME                  EXERCISABLE     UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
- ----                  -----------     -------------    -----------    -------------

Terry R. Peets           62,500          222,500            0               0
Clinton E. Owens        227,026               --            0               0
Cathy L. Wood            25,000          140,000            0               0
John R. Bain              6,250           63,750            0               0
Donald H. Holman         11,182           68,750            0               0

- ----------------

(1)         All options held by PIA Named Executive Offices were out of the
money at January 1, 1999. As of the year ended January 1, 1999 the
fair market value of PIA Common Stock (as reported by the Nasdaq
National Market) was $2.50 which was less than the exercise price of
the outstanding options.

COMPENSATION PLANS

1990 Stock Option Plan. In June 1990, PIA adopted a stock incentive
plan (as amended, the "1990 Option Plan"), covering 810,811 shares of PIA Common
Stock that may be granted to certain employees and directors to help them to
acquire shares of PIA Common Stock and thereby benefit directly from PIA's
growth, development and financial success. As of January 1, 1999, there were
393,031 options outstanding under the 1990 Option Plan at a weighted average
exercise price of $6.11 per share, and 95,814 shares of PIA Common Stock had
been issued upon exercise of options at a weighted average price of $5.10 per
share. In December 1995, the PIA Board determined that no further option grants
would be made under the 1990 Option Plan.

The 1990 Option Plan is administered by PIA's Compensation
Committee. Officers, key employees, consultants and directors of PIA and its
subsidiaries are eligible to receive grants under the 1990 Option Plan. Stock
options granted under the 1990 Option Plan are priced at no less than 85% of the
fair market value of the PIA Common Stock on the date of the grant.

1995 Option Plan. In December 1995, PIA adopted the 1995 Option
Plan. The 1995 Option Plan currently covers 1,300,000 shares of PIA Common Stock
that may be granted to certain employees, directors, consultants and other
persons providing valuable services to PIA. See "Proposal III: Option Plan
Amendment" regarding the proposed increase in the number of shares under the
1995 Option Plan to 3,500,000. As of January 1, 1999, there were 1,016,254
options outstanding under the 1995 Option Plan at a weighted average exercise
price of $5.69 per share, and 2,000 shares of PIA Common Stock had been issued
upon exercise of options at a weighted average price of $9.87 per share.

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The 1995 Option Plan is administered by PIA's Compensation
Committee. Officers, certain directors, key employees and consultants of PIA and
its subsidiaries are eligible to receive grants under the 1995 Option Plan. In
February 1999, PIA approved the amendment and restatement of the 1995 Option
Plan to provide that, among other things, grants may also be made to other
persons providing valuable services to PIA. Stock options granted under the 1995
Option Plan are priced at not less than the fair market value of the PIA Common
Stock on the date of grant. See "Proposal III--Option Plan Amendment."

Special Purpose Stock Option Plan. In February 1999, PIA adopted the
Special Purpose Stock Option Plan (the "Special Plan") to provide solely for the
issuance of Substitute Options at the Closing of the Merger. The Special Plan is
administered by the PIA Board. All available options to acquire stock under the
Special Plan will be granted at the Effective Time and no further Substitute
Options may be granted under the Special Plan.

Employee Stock Purchase Plan. On February 17, 1997, PIA adopted an
Employee Stock Purchase Plan ("ESP Plan"). The ESP Plan allows employees of PIA
to purchase PIA Common Stock at a discount, without having to pay any
commissions on the purchases. The maximum amount that any employee can
contribute to the ESP Plan per quarter is $6,250, and the total number of shares
which are reserved by PIA for purchase under the ESP Plan is 200,000. As of
January 1, 1999, 12,290 shares of PIA Common Stock had been issued at a weighted
average price of $3.69 per share.

401(k) Plan. The PIA Savings and Retirement 401(k) Plan (the "401(k)
Plan") covers all PIA employees that do not participate in the pension plans
described below. An employee may elect to defer, in the form of Company
contributions to the 401(k) Plan on his or her behalf, up to 15% of the total
compensation that would otherwise be paid to the employee, not to exceed the
amount allowed by applicable IRS guidelines. In addition, PIA makes matching
contributions to the 401(k) Plan each year equal to 50% of the participant's
elective contributions (not to exceed 4% of the total compensation) for such
year, and may also make additional contributions to the 401(k) Plan for one or
more plan years to be allocated to eligible participants in proportion to their
total compensation (including deferred salary contributions) for the year.
Contributions are allocated to each employee's individual account and are
invested in a variety of mutual funds according to the directions of the
employee. Employee contributions are fully vested and non-forfeitable at all
times. Company matching contributions vest over five years.

Deferred Compensation Arrangement. The Deferred Compensation
Arrangement (the "DCA") permits a certain group of highly compensated employees
who are designated by the PIA Board to defer the receipt of some or all of their
compensation until a subsequent year. Participants are not subject to income tax
on the amount of their contributions to the DCA ("Deferrals"), but those amounts
are subject to federal employment taxes. PIA will generally make matching
contributions on behalf of the contributions made by participants to the DCA and
participants will gain a vested interest in the matching contributions, to the
same extent as under the 401(k) Plan. Participants always have a fully vested
right to their Deferrals. Although no amounts are set aside by PIA to pay the
benefits under the DCA, a trust has been established to "informally" fund the
benefits under the DCA. Participants can direct the manner in which the amounts
held on their behalf under the DCA are invested. Although the DCA is not a
tax-qualified retirement plan, under certain circumstances, a participant's
Deferrals may be transferred to the 401(k) Plan. A participant's benefit under
the DCA will be paid in either a lump sum or in installments, as elected by the
participant.

Exec-U-Care Plan. Under the Exec-U-Care Plan (the "Exec-U-Care
Plan"), PIA provides the Chairman and certain other officers of PIA up to
$100,000 supplemental medical coverage in addition to the standard medical
coverage generally offered to such persons by PIA. The Exec-U-Care Plan requires
that the employees covered thereunder have a primary medical insurance plan
which meets certain minimum standards of coverage; the Exec-U-Care Plan then
covers the deductible and certain other expenses not paid for by the basic
medical insurance plan.

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Pension Plans. Certain of PIA's employees are covered by
union-sponsored, collectively bargained, multi-employer pension plans. PIA has
no current intention of withdrawing from any of these plans.

Incentive Compensation Plan. PIA has established its Incentive
Compensation Plan (the "Incentive Plan") for the compensation of its employees
and executives. All payments under the Incentive Plan are contingent on PIA
achieving its corporate profit goals, PIA's operating divisions achieving their
profit goals, the employee achieving his/her expected performance level, and
approval by the PIA Board.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the Compensation Committee was at any time during the
year ended January 1, 1999 or at any other time an officer or employee of PIA.
No executive officer of PIA serves as a member of the PIA Board or compensation
committee of any other entity, which has one or more executive officers serving
as a member of the PIA Board or Compensation Committee.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

PIA's Certificate of Incorporation limits the liability of directors
to the maximum extent permitted by Delaware law. Delaware law provides that
directors of a company will not be personally liable for monetary damages for
breach of their fiduciary duties as directors, except for liability (i) for any
breach of their duty of loyalty to the company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for unlawful payments of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit. Pursuant to the Merger Agreement, the SPAR
Companies and the PIA Parties have agreed not to amend such provisions limiting
personal liability in PIA's charter documents for six years following the
Merger.

PIA's bylaws provide that PIA may indemnify its officers, directors,
employees and other agents to the fullest extent permitted by law. Pursuant to
the Merger Agreement, the PIA Parties and the SPAR Companies have agreed to
indemnify to the fullest extent permitted by law (i) each of the seven nominees
for director set forth in Proposal IV: Election of Directors, (ii) each person
who has served as a director of PIA prior to February 28, 1999, and (iii) each
officer holding a title of Senior Vice President or higher with PIA, PIA
California or any of PIA California's subsidiaries as of February 28, 1999 for
six years following the consummation of the Merger. PIA's bylaws also permit it
to secure insurance on behalf of any officer, director, employee or other agent
for any liability arising out of his or her actions in such capacity, regardless
of whether the bylaws would permit indemnification. PIA currently maintains such
insurance and the PIA Parties and the SPAR Companies have also agreed to
maintain PIA's current directors' and officers' liability insurance for PIA as
in effect on the Closing Date for six years following the Merger.

At present, there is no pending litigation or proceeding involving
any director, officer, employee or agent of PIA in which indemnification will be
required or permitted. PIA is not aware of any threatened litigation or
proceeding which may result in a claim for such indemnification.

REPORT OF COMPENSATION COMMITTEE REGARDING COMPENSATION

The Compensation Committee of the PIA Board is comprised of Messrs.
Haden and Collins, two non-employee directors, who administer PIA's executive
compensation programs and policies. PIA's executive compensation programs are
designed to attract, motivate and retain the executive talent needed to optimize
stockholder value in a competitive environment. The programs are intended to
support the goal of increasing stockholder value while facilitating the business
strategies and long-range plans of PIA.

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The following is the Compensation Committee's report submitted to
the PIA Board addressing the compensation of PIA's executive officers for 1998.

COMPENSATION POLICY

PIA's executive compensation policy is (i) designed to establish an
appropriate relationship between executive pay and PIA's annual performance, its
long-term growth objectives and its ability to attract and retain qualified
executive officers; and (ii) based on the belief that the interests of the
executives should be closely aligned with PIA's stockholders. The Compensation
Committee attempts to achieve these goals by integrating competitive annual base
salaries with (i) annual incentive bonuses based on corporate performance and
individual contribution, and (ii) stock options through the 1995 Option Plan.
The Compensation Committee believes that cash compensation in the form of salary
and performance-based incentive bonuses provides Company executives with short
term rewards for success in operations, and that long-term compensation through
the award of stock options encourages growth in management stock ownership which
leads to expansion of management's stake in the long-term performance and
success of PIA. The Compensation Committee considers all elements of
compensation and the compensation policy when determining individual components
of pay.

EXECUTIVE COMPENSATION COMPONENTS

As discussed below, PIA's executive compensation package is
primarily comprised of three components: base salary, annual incentive bonuses
and stock options.

Base Salary. In establishing base salary levels for executive
officer positions the Committee and PIA's Chief Executive Officer consider
levels of compensation at comparable companies, levels of responsibility and
internal issues of consistency and fairness. In determining the base salary of a
particular executive, the Committee and the Chief Executive Officer consider
individual performance, including the accomplishment of short- and long-term
objectives, and various subjective criteria including initiative, contribution
to overall corporate performance and leadership ability. The Compensation
Committee reviews executive officer salaries annually and exercises its judgment
based on all the factors described above. No specific formula is applied to
determine the weight of each criterion.

Annual Incentive Bonuses. For 1998, the Compensation Committee
approved the 1998 Incentive Compensation Plan (the "ICP") which is based upon
PIA's 1998 Business Plan (the "Business Plan"). Under the ICP, 75% of the
specified bonuses will be payable in the event PIA meets its earnings per share
goal, as specified in the Business Plan, and earnings per share in the fourth
quarter of 1998 satisfy the specified goal; and 100% of the specified bonuses
will be payable in the event PIA meets it earnings per share goal, as specified
in the Business Plan, and earnings per share in the fourth quarter of 1998
satisfy the specified goal. In the event bonuses are payable under the ICP, PIA
will then determine whether the executive officer met his or her previously
established annual performance goal. An executive officer's failure to achieve
this goal will disqualify that officer from earning payment under the ICP.
No bonuses were paid to executive officers in 1998.

Stock Options. Stock options encourage and reward effective
management, which results in long-term corporate financial success, as measured
by stock price appreciation. Stock options covering 197,500 shares were granted
to the executive officers of PIA and stock options covering 133,000 shares were
granted to other employees of PIA during 1998 under the 1995 Option Plan. The
number of options that each executive officer or employee was granted was based
primarily on the executive's or employee's ability to influence PIA's long-term
growth and profitability. The Compensation Committee believes that option grants
afford a desirable long-term compensation method because they closely ally the
interests of management with stockholder value and that grants of stock options
are the best way to motivate executive officers to improve long-term stock
market performance. The vesting provisions

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of options granted under the 1995 Option Plan are designed to encourage
longevity of employment with PIA and generally extend over a four-year period.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

The Compensation Committee believes that its current Chief Executive
Officer, Terry R. Peets provides valuable services to PIA and that his
compensation should therefore be competitive with that paid to executives at
comparable companies. In addition, the Compensation Committee believes that an
important portion of his compensation should be based on PIA's performance.
Mr. Peets' base salary and bonus are determined pursuant to his employment
agreement, as described under "--Employment Agreements, Severance Agreements and
Change in Control Arrangements." In 1998, Mr. Peets' base salary was $253,894
and he did not receive a bonus for his performance in 1998.

INTERNAL REVENUE CODE SECTION 162(M)

Under Section 162(m) of the Code, with certain exceptions, the
amount of compensation paid to certain executives that is deductible with
respect to PIA's corporate taxes is limited to $1,000,000 annually. It is the
current policy of the Compensation Committee to maximize, to the extent
reasonably possible, PIA's ability to obtain a corporate tax deduction for
compensation paid to executive officers of PIA to the extent consistent with the
best interests of PIA and its stockholders.

COMPENSATION COMMITTEE

Patrick C.  Haden
Patrick W.  Collins

COMPANY PERFORMANCE

The following graph shows a comparison of cumulative total returns
for PIA, the NASDAQ Stock Market (U.S. Companies) Index and the NASDAQ Stocks
(SIC 7380-7389 U.S. Companies) Miscellaneous Business Services Index for the
period during which PIA Common Stock has been registered under the Exchange Act.
The graph assumes that the value of an investment in PIA Common Stock and in
each such index was $100 on February 29, 1996 (the date PIA Common Stock was
registered under the Exchange Act), and that all dividends have been reinvested.

The comparison in the graph below is based on historical data and is
not intended to forecast the possible future performance of PIA's Common Stock.

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COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG PIA, NASDAQ STOCK MARKET (U.S. COMPANIES)
AND THE NASDAQ STOCKS (SIC 7380-7389 U.S. COMPANIES)
MISCELLANEOUS BUSINESS SERVICES INDEX

[PERFORMANCE GRAPH]

3/1/96      12/31/96     12/31/97      1/1/99
------      --------     --------      ------

PIA Merchandising Services, Inc.                              $100       $  67.7      $  32.3      $  16.1

NASDAQ Stock Market (U.S. Companies)                          $100        $119.5       $146.4       $206.3

NASDAQ Stocks (SIC 7380-7389 U.S. Companies) Miscellaneous    $100        $121.6      $  87.2       $106.3
Business Services

*           Assumes $100 invested on March 1, 1996 in stock or index. Total
return assumes reinvestment of dividends. Fiscal year ending
December 31, 1996, December 31, 1997 and January 1, 1999.

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DESCRIPTION OF PIA'S CAPITAL STOCK

The authorized capital stock of PIA consists of 15,000,000 shares of
PIA Common Stock, $.01 par value, and 3,000,000 shares of preferred stock, $.01
par value (the "PIA Preferred Stock").

The following summary of certain provisions of the PIA Common Stock
and the PIA Preferred Stock does not purport to be complete and is subject to,
and qualified in its entirety by, the PIA Certificate of Incorporation and the
bylaws of PIA and by the provisions of applicable law.

COMMON STOCK

As of March 1, 1999, there were 5,477,846 shares of PIA Common Stock
outstanding held of record by 872 stockholders.

The holders of PIA Common Stock are entitled to one vote for each
share held of record. Subject to preferences that may be applicable to any then
outstanding PIA Preferred Stock, holders of PIA Common Stock are entitled to
receive ratably such dividends as may be declared by the PIA Board out of funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of PIA, holders of PIA Common Stock are entitled to share ratably in
all assets remaining after payment of liabilities and the liquidation
preferences of any then outstanding PIA Preferred Stock. Holders of PIA Common
Stock have no preemptive rights and no right to enter their PIA Common Stock
into any other securities. There are no redemption or sinking fund provisions
applicable to the PIA Common Stock. All outstanding shares of PIA Common Stock
are, and all shares of PIA Common Stock to be issued in the Merger, will be
fully paid and nonassessable.

PREFERRED STOCK

There are no shares of PIA Preferred Stock outstanding. However, the
PIA Board has the authority without further stockholder approval, to issue
shares of PIA Preferred Stock in one or more series and to determine the
dividend rights, any conversion rights or rights of exchange, voting rights,
rights and terms of redemption (including sinking fund provisions), liquidation
preferences and any other rights, preferences, privileges and restrictions of
any series of Preferred Stock, and the number of shares constituting such series
and the designation thereof.

The issuance of PIA Preferred Stock may have the effect of delaying,
deferring or preventing a change in control of PIA, making removal of the
present management of PIA more difficult, or resulting in restrictions upon the
payment of dividends and other distributions to the holders of PIA Common Stock.

WARRANTS

As of January 1, 1999, PIA had outstanding warrants providing for
the purchase of an aggregate of 96,395 shares of its PIA Common Stock (the
"Warrants"). The exercise price of the Warrants range from $2.78 to $8.51 per
share, and the Warrants expire at various dates from 2002 through 2004. Under
one of the Warrants, the holder may elect to receive shares equal to the value
of the Warrant or the portion thereof being exercised ("Net Issue Exercise"). If
the holder elects Net Issue Exercise, the holder will receive the number of
shares of PIA Common Stock equal to the product of (a) the number of shares of
PIA Common Stock purchasable under the Warrant, or portion thereof being
exercised, and (b) the fair market value of one share of PIA Common Stock minus
the exercise price for one share, divided by (c) the fair market value of one
share of the PIA Common Stock.

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REGISTRATION RIGHTS

Pursuant to that certain Registration Rights Agreement dated as of
January 21, 1992, to which PIA and the holders of 1,641,067 shares of Common
Stock are subject (the "Registration Rights Agreement"), such holders are
entitled to certain rights with respect to the registration of such shares under
the Securities Act. Subject to certain limitations, if PIA registers any of its
securities under the Securities Act, either for its own account or the account
of other security holders, such holders are entitled to written notice of the
registration and are entitled to include (at PIA's expense) such shares therein;
provided, among other conditions, that the underwriters of any such offering
have the right to limit the number of such shares included in the registration.
In addition, holders of at least 80% of the Registerable Securities (as defined
therein) can require PIA, at any time six months after PIA completes a sale of
shares of PIA Common Stock pursuant to a registration statement under the
Securities Act, and on not more than two occasions, to file a registration
statement under the Securities Act with respect to such shares, and PIA is
required to use its best efforts to effect such registration, subject to certain
conditions and limitations. All fees, costs and expenses of such registrations
(other than underwriting discounts, commissions and transfer taxes, and other
than legal and accounting expenses of such holders) will be borne by PIA.
Further, on not more than two occasions, such holders may require PIA (at PIA's
expense) to register their shares on Form S-3 when such form becomes available
to PIA, subject to certain conditions and limitations.

BUSINESS COMBINATIONS

Generally, Section 203 of the Delaware General Corporation Law (the
"DGCL") prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless (i) prior to the date of the business combination, the
transaction is approved by the board of directors of the corporation, (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owns at least 85% of the
outstanding voting stock, or (iii) on or after such date the business
combination is approved by the board and by the affirmative vote of at least
662/3% of the outstanding voting stock which is not owned by the interested
stockholder at an annual or Annual Meeting of the stockholders. A "business
combination" includes mergers, assets, sales and other transactions resulting in
a financial benefit to the stockholder at an annual or Annual Meeting of
stockholders. An "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 15% or more of
the corporation's voting stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the PIA Common Stock is U.S.
Stock Transfer Corporation.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act ("Section 16(a)") requires PIA's
directors and certain of its officers and persons who own more than 10% of PIA
Common Stock (collectively, "Insiders"), to file reports of ownership and
changes in their ownership of PIA Common Stock with the Commission. Insiders are
required by Commission regulations to furnish PIA with copies of all Section
16(a) forms they file.

Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5s
were required for those persons, PIA believes that its Insiders complied with
all applicable Section 16(a) filing requirements for fiscal 1998, with the
exception of Messrs. Bain, Colwell, Haden, Holman, Lewis, Owens and Peets and
Ms. Wood, each of which filed a late Form 5 reporting one transaction and Mr.
Coulombe who filed a late Form 5 reporting two transactions.

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INDEPENDENT ACCOUNTANTS

PIA has engaged the independent accounting firm of Deloitte & Touche
LLP as the auditors of PIA for its fiscal year ending January 1, 1999 who have
issued their opinion dated February 18, 1999. PIA has not selected its auditors
for fiscal 2000. PIA will make such determination based upon whether the Merger
is consummated. PIA anticipates selecting Ernst & Young LLP as its auditors for
fiscal 2000, provided that if the Merger is not consummated, PIA anticipates
selecting Deloitte & Touche LLP as its auditors. A representative of Deloitte &
Touche LLP is expected to be present at the Annual Meeting. The representative
will have the opportunity to make a statement and will be available to respond
to appropriate questions from stockholders. A representative of Ernst & Young
LLP is also expected to be present at the Annual Meeting. The representative
will have the opportunity to make a statement if such representative desires to
do so and will be available to respond to appropriate questions from
stockholders.

SUBMISSION OF STOCKHOLDER PROPOSALS

Any stockholder who wishes to present a proposal for action at PIA's
2000 Annual Meeting of Stockholders (the "2000 Annual Meeting") of PIA and who
wishes to have it set forth in the corresponding proxy statement and identified
in the corresponding form of proxy prepared by management in accordance with
Rule 14a-8 under the Exchange Act must notify PIA no later than December 2, 1999
in such form as required under the rules and regulations promulgated by the
Commission. A stockholder proposal that is not submitted by the December 2, 1999
deadline required by Rule 14a-8 is not required to be included in PIA's form of
proxy for its 2000 Annual Meeting. However, even if a stockholder proposal is
not included in the form of proxy for the 2000 Annual Meeting, the proposal may
be brought as business at the 2000 Annual Meeting if a stockholder gives PIA
appropriate notice in accordance with the requirements under the Exchange Act on
or prior to February 15, 2000. In such a case, PIA representatives may vote the
proxies they hold on such matters in their discretion only if (i) PIA includes,
in its proxy statement, advice on the nature of the matter and how PIA
management intends to exercise its discretion to vote on such matter and (ii)
the stockholder submitting the proposal does not give notice to PIA by February
15, 2000 of its intent to make, and then conduct, its own proxy solicitation
with regard to at least the percentage of stockholders required under applicable
law to approve the proposal. With respect to any stockholder proposal submitted
after February 15, 2000, PIA's representatives may vote all proxies held by them
in their sole discretion on such matter.

AVAILABLE INFORMATION

PIA is subject to the informational requirements of the Exchange
Act, and accordingly, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information filed with
the Commission are available for inspection and copying at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and at Seven World Trade Center, Suite 1300, New York,
New York 10048. Please call the Commission at 1-800-SEC-0330 for further
information on the public reference rooms. PIA's public filings are also
available to the public from commercial document retrieval services and at the
Internet World Wide Web site maintained by the Commission at
"http://www.sec.gov."

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PIA'S ANNUAL REPORT

A copy of the 1998 Annual Report to Stockholders (which includes
PIA's Annual Report on Form 10-K) is being mailed to each PIA stockholder of
record together with this Proxy Statement. PIA has also filed with the
Commission its Annual Report on Form 10-K for the fiscal year ended January 1,
1999. This report contains information concerning PIA and its operations. A COPY
OF THIS REPORT WILL BE FURNISHED TO PIA STOCKHOLDERS WITHOUT CHARGE UPON REQUEST
IN WRITING TO: Cathy L. Wood, Executive Vice President, Chief Financial Officer
and Secretary, PIA Merchandising Services, Inc., 19900 MacArthur Boulevard,
Suite 900, Irvine, California 92718; telephone number (949) 474-3504.

OTHER MATTERS

The PIA Board knows of no matter which will be presented for
consideration at the Annual Meeting other than the matters referred to in this
Proxy Statement. All shares represented by PIA proxies will be voted in favor of
the proposals of PIA described herein unless otherwise indicated on the form of
proxy. Should any other matter properly come before the Annual Meeting, it is
the intention of the persons named in the accompanying proxy to vote such proxy
in accordance with their best judgment.

PROXIES AND SOLICITATION

Proxies for the Annual Meeting are being solicited by mail directly
and through brokerage and banking institutions. PIA will pay all expenses in
connection with the solicitation of proxies. In addition to the use of mails,
proxies may be solicited by directors, officers and regular employees of PIA
personally or by telephone. PIA will reimburse banks, brokers custodians,
nominees and fiduciaries for any reasonable expenses in forwarding proxy
materials to beneficial owners.

INCORPORATION BY REFERENCE

PIA's Annual Report on Form 10-K for the year ended January 1, 1999
previously filed with the Commission is hereby incorporated by reference in this
Proxy Statement. PIA will provide without charge to each person to whom a copy
of this Proxy Statement is delivered, upon the written or oral request of such
person by first class mail or other equally prompt means within one business day
of receipt of such request, a copy of any and all information that has been
incorporated by reference in this Proxy Statement (not including exhibits to the
information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this Proxy
Statement incorporates). Requests for such copies should be directed to: Cathy
L. Wood, Executive Vice President, Chief Financial Officer and Secretary, PIA
Merchandising Services, Inc., 19900 MacArthur Boulevard, Suite 900, Irvine,
California 92718; telephone number (949) 474-3504.

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All stockholders are urged to complete, sign and promptly return the
enclosed proxy card.

By Order of the Board of Directors,

Cathy L. Wood,
Secretary

Irvine, California
[__________], 1999

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INDEX TO FINANCIAL STATEMENTS

Report of Independent Auditors SPAR Group Combined Financial Statements............F-2
Combined Balance Sheets SPAR Group.................................................F-3
Combined Statements of Operations SPAR Group.......................................F-4
Combined Statement of Stockholders' Equity SPAR Group..............................F-5
Combined Statements of Cash Flows SPAR Group.......................................F-6
Notes to Combined Financial Statements SPAR Group..................................F-7

Report of Independent Auditors MCI Performance Group, Inc.
Financial Statements............................................................F-18
Balance Sheets MCI Performance Group, Inc.........................................F-19
Statements of Income MCI Performance Group, Inc...................................F-20
Statements of Stockholder's Equity (Deficit) MCI Performance Group, Inc...........F-21
Statements of Cash Flows MCI Performance Group, Inc...............................F-22
Notes to Financial Statements MCI Performance Group, Inc..........................F-23

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Report of Ernst & Young LLP, Independent Auditors

To the Board of Directors and Stockholders of
SPAR Group

We have audited the accompanying combined balance sheets of SPAR Group as of
March 31, 1997 and 1998 and the related combined statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended March 31, 1998. These combined financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these combined financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of SPAR Group at March
31, 1997 and 1998, and the combined results of its operations and its cash flows
for each of the three years in the period ended March 31, 1998 in conformity
with generally accepted accounting principles.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
April 30, 1998

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SPAR Group

Combined Balance Sheets

MARCH 31               DECEMBER 31,
1997             1998            1998
------------     ------------     ------------
(Unaudited)

ASSETS
Current assets:
Cash                                                        $    519,604     $  1,919,076     $    909,899
Accounts receivable, less allowance
$321,000 and $568,000 at March 31,
1997 and 1998, respectively                                  7,565,421        8,049,491       10,627,098
Prepaid expenses and other current assets                         98,080          310,277          807,684
Due from stockholder                                                  --               --        1,500,000
Due from affiliates                                              132,181           60,000               --
------------     ------------     ------------
Total current assets                                             8,315,286       10,338,844       13,844,681

Property and equipment, net                                        218,470          226,961        1,050,171

Other assets                                                       334,577          330,124           69,719
------------     ------------     ------------
Total assets                                                  $  8,868,333     $ 10,895,929     $ 14,964,571
============     ============     ============

LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
Line of credit                                              $  2,054,962     $  2,400,990     $  4,149,403
Accounts payable                                                 879,255          630,250        1,745,228
Accrued expenses                                               2,321,007        1,755,020        2,808,357
Due to affiliate                                                 618,086          262,271          205,219
Deferred revenue                                                 466,919               --               --
Distributions payable to stockholders                                 --        1,203,000        6,577,000
Current portion of long-term debt due to                         155,959          375,000          375,000
affiliates
Current portion of other long-term debt                          500,000          300,000          310,000
------------     ------------     ------------
Total current liabilities                                        6,996,188        6,926,531       16,170,207

Long-term debt due to affiliates,
less current portion                                             402,374          592,500          311,250
Other long-term debt, less current portion                         535,000          235,000               --

Stockholders' equity (deficit)                                     934,771        3,141,898       (1,516,886)
------------     ------------     ------------
Total liabilities and stockholders' equity                    $  8,868,333     $ 10,895,929     $ 14,964,571
============     ============     ============

See accompanying notes.

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SPAR Group

Combined Statements of Operations

NINE MONTHS ENDED
YEAR ENDED MARCH 31                            DECEMBER 31
1996             1997             1998             1997             1998
------------     ------------     ------------     ------------     ------------
(unaudited)      (unaudited)

Net revenues                  $ 14,424,502     $ 35,574,316     $ 36,804,398     $ 27,202,398     $ 32,600,786
Cost of revenues                 7,678,650       21,753,915       19,417,492       14,579,492       17,580,440
------------     ------------     ------------     ------------     ------------
Gross profit                     6,745,852       13,820,401       17,386,906       12,622,906       15,020,346

Selling, general and
administrative expenses        7,029,830       13,476,964       12,248,137        9,310,137        8,867,790
------------     ------------     ------------     ------------     ------------
Operating income (loss)           (283,978)         343,437        5,138,769        3,312,769        6,152,556

Other income (expense):
Other income (expense)                --         (252,746)         (36,354)         (36,354)         148,832
Interest income                   23,085               --               --               --               --
Interest expense                (122,523)        (513,658)        (353,363)        (258,363)        (304,004)
------------     ------------     ------------     ------------     ------------
(99,438)        (766,404)        (389,717)        (294,717)        (155,172)
------------     ------------     ------------     ------------     ------------
Net income (loss)             $   (383,416)    $   (422,967)    $  4,749,052     $  3,018,052     $  5,997,384
============     ============     ============     ============     ============

Unaudited pro forma
information:
Net income (loss) before
income tax provision      $   (383,416)    $   (422,967)    $  4,749,052     $  3,018,052     $  5,997,384

Pro forma income tax
provision (benefit)           (132,493)          (6,350)       1,751,101        1,112,836        2,211,394
------------     ------------     ------------     ------------     ------------
Pro forma net income
(loss) (see Note 2)       $   (250,923)    $   (416,617)    $  2,997,951     $  1,905,216     $  3,785,990
============     ============     ============     ============     ============

See accompanying notes.

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SPAR Group

Combined Statement of Stockholders' Equity

TOTAL
STOCKHOLDERS'
EQUITY
------------

Balance at March 31, 1995                          $    512,472
Net loss                                             (383,416)
Net contributions from stockholders                   887,678
------------
Balance at March 31, 1996                             1,016,734
Net income                                           (422,967)
Net contributions from stockholders                   341,004
------------
Balance at March 31, 1997                               934,771
Net income                                          4,749,052
Net distributions to stockholders                  (2,541,925)
------------
Balance at March 31, 1998                             3,141,898
Net income (unaudited)                              5,997,384
Net distributions to stockholders (unaudited)     (10,656,168)
------------
Balance at December 31, 1998 (unaudited)           $ (1,516,886)
============

See accompanying notes.

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SPAR Group

Combined Statements of Cash Flows

NINE MONTHS ENDED
YEAR ENDED MARCH 31                        DECEMBER 31
1996            1997           1998             1997            1998
-----------     -----------     -----------      -----------     -----------
(unaudited)     (unaudited)

OPERATING ACTIVITIES
Net income (loss)                                     $  (383,416)    $  (422,967)    $ 4,749,052      $ 3,018,052     $ 5,997,384

Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Loss on disposal of property and equipment                 --         228,533              --               --              --
Depreciation                                          157,121         186,012         151,816          112,000         130,696
Amortization                                           33,729          41,455           9,376            7,200          11,250
Changes in operating assets and
liabilities:
Accounts receivable                                 201,315         102,616        (484,070)      (3,016,918)     (2,577,607)
Note receivable                                    (253,000)        253,000              --               --              --
Prepaid expenses and other
current assets                                     32,993        (168,451)       (217,120)          (4,622)       (237,002)
Due from affiliate                                 (429,481)        582,357          72,181           89,830          60,000
Accounts payable                                    311,306          67,037        (249,005)         (23,866)      1,114,978
Accrued expenses                                    268,667       1,216,401        (565,987)        (541,260)      1,053,337
Due to affiliates                                   181,237         436,849        (355,815)         (87,654)        (57,052)
Deferred revenue                                     46,020         420,899        (466,919)        (245,675)             --
-----------     -----------     -----------      -----------     -----------
Net cash provided by operating activities                 166,491       2,943,741       2,643,509         (692,913)      5,495,984

INVESTING ACTIVITIES
Purchases of property and equipment                       (91,217)       (104,845)       (160,307)         (71,335)       (965,156)
Purchase of business, net of cash  acquired            (4,669,717)             --              --               --              --
-----------     -----------     -----------      -----------     -----------
Net cash used in investing activities                  (4,760,934)       (104,845)       (160,307)         (71,335)       (965,156)

FINANCING ACTIVITIES
Net proceeds from (payments of) line of credit          3,523,734      (2,498,772)        346,028        2,128,508       1,748,413
Net proceeds from (payments of) long-term debt 
due to Spar Marketing Services, Inc.                   (249,999)       (145,835)        409,167          505,417        (281,250)
Due to (from) stockholders                                300,000              --      (1,297,000)        (432,750)     (1,500,000)
Payment of  other long-term debt                               --        (675,000)       (500,000)        (375,000)       (225,000)
Distributions to (contributions by) stockholders          887,678         341,004         (41,925)        (589,680)     (5,282,168)
-----------     -----------     -----------      -----------     -----------
Net cash provided by (used in)
financing activities                                  4,461,413      (2,978,603)     (1,083,730)       1,236,495      (5,540,005)
-----------     -----------     -----------      -----------     -----------

Net (decrease) increase in cash                          (133,030)       (139,707)      1,399,472          472,247      (1,009,177)
Cash at beginning of year                                 792,341         659,311         519,604          519,604       1,919,076
-----------     -----------     -----------      -----------     -----------
Cash at end of year                                   $   659,311     $   519,604     $ 1,919,076      $   991,851     $   909,899
===========     ===========     ===========      ===========     ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Interest paid                                         $   122,523     $   513,658     $   353,363      $   266,051     $   300,204
===========     ===========     ===========      ===========     ===========

Non-cash transactions:
Distributions payable to stockholders               $        --     $        --     $ 2,500,000      $        --     $ 6,577,000
===========     ===========     ===========      ===========     ===========

See accompanying notes.

F-6

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SPAR Group

Notes to Combined Financial Statements

March 31, 1998

1. BUSINESS AND ORGANIZATION

The SPAR Group ("SPAR" or the "Company") is a national marketing services
company that provides retail merchandising and other marketing services to home
video, consumer goods and food products companies, SPAR's services include
in-store merchandising, test market research, mystery shopping, database
management and data collection. SPAR offers these services directly through a
network of in-store merchandising specialists. SPAR also provides teleservices
within an extensive inbound and outbound call center.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The combined financial statements include the following operating companies
owned by the same two stockholders. The companies included in the SPAR Group
are:

Spar, Inc. (formerly Spar/Burgoyne Information Services, Inc.)--provides
merchandising services to manufacturers and distributors, across most
retail trade classes such as mass merchandise, food, drug and home
centers.

Spar/Burgoyne Retail Services, Inc.--provides information gathering and
consumer and trade research services and operates nationwide product
retrieval service, performing and conducting consumer and trade surveys.

Spar Marketing Force, Inc.--provides merchandising services to
manufacturers and distributors, across most retail trade classes such as
mass merchandise, food, drug and home centers. Spar Marketing Force, Inc.
also provides services for an international automobile manufacturer.

Spar Marketing, Inc.--provides merchandising services to manufacturers and
distributors, across most retail trade classes such as mass merchandise,
food, drug and home centers.

REVENUE RECOGNITION

Revenues are recognized as services are performed in accordance with contract
terms. All operating expenses are charged to operations as incurred.

F-7

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SPAR Group

Notes to Combined Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

AGENCY FUNDS

Cash balances available for the administration of a customer's bonus program are
deposited in accounts with financial institutions in which the Company acts as
agent for a customer pending payment settlement. These funds are considered
neither an asset nor liability of the Company. The balance of funds held in
agency accounts totaled approximately $612,000 and $997,000 as of March 31, 1997
and 1998, respectively.

PROPERTY AND EQUIPMENT

Property and equipment, including leasehold improvements, are stated at cost.
Depreciation and amortization is calculated on a straight-line basis over
estimated useful lives of the related assets, which range from five to seven
years. Leasehold improvements are amortized over the shorter of their estimated
useful lives or lease term, using the straight-line method.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews the recoverability of long-lived assets, whenever events or
changes in circumstances indicate that the carrying amounts may not be
recoverable, in accordance with criteria established by Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets." A loss is recognized for the difference between the carrying amount and
the estimated fair value of the asset. The Company made no adjustment to the
carrying values of the assets during the years ended March 31, 1996, 1997 and
1998.

FAIR VALUE OF FINANCIAL INSTRUMENTS

At March 31, 1997 and 1998, the fair value of the Company's cash, accounts
receivable, and accounts payable approximates carrying amounts due to the
short-term maturities of such instruments. The carrying amount of notes payable
approximates fair value since the current effective rates reflect the market
rate for debt with similar terms and remaining maturities.

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SPAR Group

Notes to Combined Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CONCENTRATION OF CREDIT RISK AND OTHER RISKS

Financial instruments which potentially subject the Company to concentrations of
credit risk consist primarily of cash and accounts receivable. The Company
places its cash with high credit quality financial institutions and investment
grade short-term investments, which limit the amount of credit exposure.

Three customers approximated 38% and 51% of net revenues for the years ended
March 31, 1997 and 1998, respectively. Additionally, two customers approximated
37% and 49% of accounts receivable at March 31, 1997 and 1998, respectively.

At March 31, 1998, the Company maintained approximately $1,900,000 in accounts
with a bank. These balances are in excess of Federal Deposit Insurance
Corporation insurance coverage.

INCOME TAXES

Historically, the companies in the SPAR Group have elected, by the consent of
its stockholders, to be taxed under the provisions of subchapter S of the
Internal Revenue Code (the "Code") with the exception of Spar/Burgoyne Retail
Services, Inc. which is taxed as a C corporation. Under the provisions of the
Code, the stockholders of the subchapter S companies include the Company's
corporate income in their personal income tax returns. Accordingly, these
subchapter S companies were not subject to federal corporate income tax during
period for which they were S Corporations. Certain states in which these
subchapter S companies do business do not accept certain provisions under
subchapter S of the Code and, as a result, income taxes in these states are a
direct responsibility of the Company. Spar/Burgoyne Retail Services, Inc. did
not recognize income tax expense for the year ended March 31, 1996 as the
Company had net operating loss carryforwards to offset any tax liability. In the
years ended March 31, 1997 and 1998, Spar/Burgoyne Retail Services, Inc.
recognized an income tax provision of approximately $52,000 and $12,000,
respectively. This expense is recorded in other expenses.

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SPAR Group

Notes to Combined Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The unaudited pro forma income tax information included in the statements of
operations is presented in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," as if the Company had been
subject to federal and state income taxes for the all periods presented.

USE OF ESTIMATES

The preparation of the combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the combined
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

INTERNAL USE SOFTWARE DEVELOPMENT COSTS

In March 1998, the AICPA issued SOP 98-1, Accounting For the Costs of Computer
Software Developed For or Obtained For Internal Use, (the "SOP"). The SOP is
effective for the Company beginning on April 1, 1999. The SOP will require the
capitalization of certain costs incurred after the date of adoption in
connection with developing or obtaining software for internal use. The Company
currently expenses such costs as incurred. The Company has not yet assessed what
the impact of the SOP will be on the Company's financial position or results of
operations.

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

MARCH 31
1997             1998
--------          --------

Computer equipment and programs          $320,924          $399,310
Furniture and equipment                    38,212            38,212
Leasehold improvements                     30,752                --
--------          --------
389,888           437,522
Less accumulated depreciation             171,418           210,561
--------          --------
$218,470          $226,961
========          ========

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SPAR Group

Notes to Combined Financial Statements (continued)

4. LINE OF CREDIT

Spar Marketing Force, Inc. ("SMF") has a line of credit with a bank, wherein SMF
can borrow up to $6,000,000 based on eligible accounts receivable. Borrowings
under the line of credit are due on demand with interest payable at the bank's
"alternate base rate" plus 2.0% (10.5% at March 31, 1998). The balance
outstanding on the line of credit was $2,054,962 and $2,400,990 at March 31,
1997 and 1998, respectively. The line of credit is secured by the assets of SMF.

5. LONG-TERM DEBT DUE TO AFFILIATE

The Company's affiliate, Spar Marketing Service, Inc. ("SMS"), had a long-term
loan dated August 1994 with an original balance of $1,000,000 and a line of
credit in the amount of $500,000. SMS refinanced and replaced these loans with a
single facility, long-term loan, on October 29, 1996. The replacement term loan
in the amount of $1,500,000 is due in 48 consecutive monthly principal
installments of $31,250 and interest at the bank's fluctuating announced rate
plus 1.25% (9.75% at March 31, 1998). The Company has borrowed these same funds
from SMS and has agreed to repay the amounts borrowed using the same terms
contained within the loan agreement between the bank and SMS. The bank loan is
secured by the assets of the SPAR Group and personal guarantees of stockholders.

The minimum principal payments on long-term debt due to SMS are as follows as at
March 31, 1998:

1999                                                       $375,000
2000                                                        375,000
2001                                                        217,500
========    
$967,500
========    

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SPAR Group

Notes to Combined Financial Statements (continued)

6. COMMON STOCK

Common stock of the companies included in SPAR Group at March 31, 1998 is as
follows:

SHARES
SHARES        ISSUED AND
AUTHORIZED     OUTSTANDING      PAR VALUE
----------     -----------      ---------

Spar Inc.                                   2,500             72           None
Spar/Burgoyne Retail Services, Inc.         2,500             72           None
Spar Marketing Force, Inc.                  2,500             72           None
Spar Marketing, Inc.                          100             72           None

7. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Company leases equipment and certain office space in several cities, under
non-cancelable operating lease agreements. Certain leases contain escalation
clauses and require the Company to pay its share of any increases in operating
expenses and real estate taxes. Rent expense was approximately $331,000,
$816,000 and $871,000 for the years ended March 31, 1996, 1997 and 1998,
respectively. At March 31, 1998, future minimum commitments under all
non-cancelable operating lease arrangements are as follows:

1999                                                   $   769,038
2000                                                       560,691
2001                                                        85,673
2002                                                        46,784
----------   
$1,462,186
==========   

LEGAL MATTERS

SMS, a related party, has been audited by the Internal Revenue Service with
respect to whether certain field representatives should be classified as
independent contractors or employees for federal employment tax purposes for the
tax years ended December 31,

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(Preliminary Copy)

SPAR Group

Notes to Combined Financial Statements (continued)

7. COMMITMENTS AND CONTINGENCIES (CONTINUED)

1991 and 1992. The dispute has worked its way through the Internal Revenue
Service appeals process and SMS intends to file a petition with the Federal
District Court. If it is found that the field representatives should be
classified as employees, SMS could be liable for employment taxes and related
penalties and interest. The outcome of this dispute and the amount of the
contingent liability are not determinable at this time. If a liability is
assessed and SMS is unable to pay, the IRS may seek to collect all or a portion
of the tax liability from the Company due to its common control and business
relationship with SMS. Accordingly, the Company believes an adequate provision
for the contingent liability has been made in the accompanying combined
financial statements as of March 31, 1997 and 1998, respectively. Similar claims
have been filed against SMS by certain states. However, SMS is confident
defending its position against these state claims because of prior success in
several states, and SMS will continue to vigorously defend its position against
any future state claims that may arise. For example, SMS prevailed on a similar
claim by the state of California, which had instituted administrative
proceedings against SMS. The administrative law judge agreed with SMS's
classification of field representatives as independent contractors. The State of
California has declined to file a further appeal and has refunded payments made
by SMS under protest during the appeal process.

The Company is a party to various legal actions and administrative proceedings
arising in the normal course of business. In the opinion of Company's
management, dispositions of these matters are not anticipated to have a material
adverse effect on the financial position, results of operations or cash flows of
the Company.

8. PROFIT SHARING PLAN

The SPAR Group has a 401(k) Profit Sharing Plan covering substantially all
full-time employees. Employer contributions of approximately $31,200, $31,600
and $37,000 were made to the plan during the years ended March 31, 1996, 1997
and 1998, respectively.

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(Preliminary Copy)

SPAR Group

Notes to Combined Financial Statements (continued)

9. PHANTOM STOCK PLAN

The SPAR Group has a phantom stock plan covering certain members of management.
Phantom shares are granted at the discretion of the Board of Directors and vest
over four years. The Company has accrued approximately $150,000 related to the
phantom stock plan as of March 31, 1998. All liabilities under the plan are
subordinated to bank debt.

10. ACCRUED EXPENSES

The accrued expense balance includes approximately $950,000 and $600,000 for
salaries and bonus amounts payable at March 31, 1997 and 1998, respectively.

11. RELATED PARTY TRANSACTIONS

The SPAR Group is affiliated through common ownership with Spar Retail Services,
Inc. (formerly Spar/Servco, Inc.), Spar Marketing Services, Inc. Spar/Burgoyne,
Inc., Spar Group, Inc., IDS Spar Pty, Ltd. (Aust.), Spar Ltd., (U.K.), Garden
Island, Inc., Spar Marketing Pty Ltd. (Aust.), Spar/Burgoyne Information
Services, Inc., WR Services, Inc., Spar Services Inc., Infinity Insurance Ltd.
and Spar Infotech, Inc.

The following transactions occurred between the SPAR Group and the above
affiliates during the years ended March 31:

1996                1997               1998
----------          ----------          ----------

Marketing services provided by affiliates:
Independent contractor services                   $4,077,621          $6,250,321          $3,232,500
==========          ==========          ==========

Field management services                         $1,820,000          $3,002,905          $2,964,246
==========          ==========          ==========

Services provided to affiliates:
Management services                               $  620,000          $  597,509          $  576,147
==========          ==========          ==========

The Company also received computer consulting services for programming and
software consulting from Spar Infotech, Inc. for which there was no charge to
the Company.

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SPAR Group

Notes to Combined Financial Statements (continued)

11. RELATED PARTY TRANSACTIONS (CONTINUED)

Through the services of Infinity Insurance, Ltd., the Company purchased
insurance coverage for its casualty and property insurance risk, for
approximately $321,000 and $318,000 during the years ended March 31, 1997 and
1998, respectively. No services were provided during the year ended March 31,
1996.

1996            1997            1998
--------        --------        --------

Balance due from affiliates:
Spar Marketing Services, Inc.                   $113,538        $     --        $ 60,000
Spar Group, Inc.                                 600,000         132,181              --
--------        --------        --------
$713,538        $132,181        $ 60,000
========        ========        ========

Balance due to affiliates:
Spar Marketing Services, Inc.                   $     --        $576,820        $261,771
Spar/Burgoyne, Inc.                                   --              --             500
Spar Group, Inc.                                  39,500          41,266              --
Spar/Burgoyne Information Services, Inc.         185,824              --              --
--------        --------        --------
$225,324        $618,086        $262,271
========        ========        ========

12. ACQUISITION

SPAR Marketing Force, Inc. was organized in late fiscal 1996 to acquire
substantially all of the assets of Marketing Force, Inc. The March 1, 1996
acquisition has been accounted for by the purchase method of accounting.
Accordingly, the purchase price was allocated to the net assets acquired based
on their estimated fair values. The fair value of tangible assets acquired and
liabilities assumed was $7,950,033 and $2,950,033, respectively. The purchase
consisted of (a) $5,000,000 in cash, financed through a revolving bank credit
line and security agreement, and (b) a subordinated promissory note not to
exceed $12,000,000 payable to Marketing Force, Inc. and its affiliate, ADVO,
Inc.

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(Preliminary Copy)

SPAR Group

Notes to Combined Financial Statements (continued)

12. ACQUISITION (CONTINUED)

The purchase agreement provided for a post closing adjustment to the purchase
price in the event of a deficiency in the closing business values. The final
assessment of net asset values has resulted in a restructuring of the
subordinated promissory note up to $3,000,000 which is payable only in the event
that SPAR Marketing Force, Inc. completes a public offering of its shares prior
to the year 2000. The consideration related to the subordinated promissory note
will be recorded as additional purchase price when paid.

13. EVENTS (UNAUDITED) SUBSEQUENT TO DATE OF INDEPENDENT AUDITORS' REPORT

MCI PERFORMANCE GROUP, INC.

On January 15, 1999, SPAR MCI Performance Group, Inc. ("SPAR MCI"), an affiliate
of the Company completed the purchase of substantially all of the assets and
assumed certain liabilities of Dallas based, MCI Performance Group, Inc. (MCI).
The transaction, to be accounted for as a purchase, consisted of $1,800,000 cash
and an $12,422,189 note payable to the seller. The purchase agreement provides
for post closing adjustments whereby the seller has guaranteed a minimum net
worth of $1,500,000 for MCI at the date of closing and additional contingent
consideration will be payable in the event that SPAR MCI and MCI achieve
$3,500,000 in earnings before taxes for the twelve month period ending March 31,
1999.

AMENDED REVOLVING LINE OF CREDIT/SECURITY AGREEMENT

In March 1999, the Company amended its revolving line of credit/security 
agreement with its bank, to include a $3,000,000 term loan due in monthly
installments of $83,334 through March, 2002.

F-16

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(Preliminary Copy)

SPAR Group

Notes to Combined Financial Statements (continued)

13. EVENTS (UNAUDITED) SUBSEQUENT TO DATE OF INDEPENDENT AUDITORS' REPORT
(CONTINUED)

PIA MERCHANDISING SERVICES, INC.

In February 1999, the Company entered into an agreement and Plan of Merger with
Irvine, California based, PIA Merchandising Services, Inc. (PIA). The
transaction, to be accounted for as a reverse merger, will consist of a stock
exchange. Prior to the merger, the Companies in the Spar Group (including SPAR,
Inc., Spar/Burgoyne Retail Services, Inc., Spar Marketing Force, Inc. and Spar
Marketing, Inc.) and SPAR MCI Performance Group, Inc. will be reorganized as
direct or indirect subsidiaries of newly formed SPAR Acquisition, Inc. Each
share of capital stock of Spar Acquisition, Inc. will be converted into its
right to receive one share of PIA stock and each option to acquire one share of
Spar Acquisition, Inc. stock will be converted into a corresponding right to
acquire one share of PIA stock. Initial converted shares and converted options
(if exercised) will together represent 69.274% of the outstanding shares of PIA
immediately following the merger. The agreement with PIA is subject to PIA
shareholder approval, and is anticipated to be completed in the second calendar
quarter of 1999.

In connection with the merger agreement, the shareholders of the SPAR Group have
agreed to indemnify PIA stockholders with respect to the independent contractor
contingent liability discussed in Note 7 and the subordinated promissory note
discussed in Note 12.

The affiliate arrangements as described in Notes 5 and 11 will be amended upon
consummation of the merger discussed above so that all continuing obligations
will be similar to terms and conditions of agreements/arrangements with
unaffiliated third parties.

F-17

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(Preliminary Copy)

Report of Independent Auditors

To the Board of Directors and Stockholder
of MCI Performance Group, Inc.

We have audited the accompanying balance sheets of MCI Performance Group, Inc.
as of December 31, 1997 and 1998 and the related statements of income,
stockholder's equity (deficit) and cash flows for each of the three years in the
period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MCI Performance Group, Inc. at
December 31, 1997 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1998 in conformity
with generally accepted accounting principles.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
February 22, 1999

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(Preliminary Copy)

MCI Performance Group, Inc.

Balance Sheets

DECEMBER 31
1997                1998
------------         ------------
(Restated)

ASSETS
Current assets:
Cash and cash equivalents                                                $  3,709,298         $  1,194,288
Accounts receivable, less allowance of $162,000 and
$219,000 at December 31, 1997 and 1998, respectively                      3,424,812            1,385,895
Employee advances                                                             457,404              522,798
Note receivable                                                                    --              750,000
Due from stockholder                                                               --            2,296,272
Prepaid program costs                                                       1,064,292            1,423,879
Prepaid expenses and other current assets                                     975,595              780,526
------------         ------------
Total current assets                                                          9,631,401            8,353,658
Property and equipment, net                                                 2,275,717              349,635
Other assets                                                                   14,297               14,225
------------         ------------
Total assets                                                               $ 11,921,415         $  8,717,518
============         ============

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) 
Current liabilities:
Accounts payable                                                         $  4,772,530         $    631,662
Accrued expenses and other current liabilities                              1,819,758            1,402,541
Deferred revenue                                                            4,438,418            5,558,924
Due to stockholder                                                            460,269            1,530,000
------------         ------------
Total current liabilities                                                    11,490,975            9,123,127

Long-term debt, less current portion                                          1,219,500                   --

Stockholder's equity (deficit)
Common stock, $1 par value; 100,000 shares
authorized, 3,500 shares issued and outstanding                               3,500                3,500
Retained earnings (deficit)                                                    (792,560)            (409,109)
------------         ------------
Total stockholder's equity (deficit)                                           (789,060)            (405,609)
------------         ------------
Total liabilities and stockholder's equity (deficit)                       $ 11,921,415         $  8,717,518
============         ============

See accompanying notes.

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(Preliminary Copy)

MCI Performance Group, Inc.

Statements of Income

YEAR ENDED DECEMBER 31
1996              1997              1998
------------      ------------       ------------
(Restated)

NET REVENUES                                $ 33,361,277      $ 42,294,074       $ 33,195,765
Cost of revenues                              26,351,322        31,722,284         26,107,705
------------      ------------       ------------
Gross profit                                   7,009,955        10,571,790          7,088,060

OPERATING EXPENSES
Selling, general and administrative
expenses                                     6,570,962         9,757,239          6,781,306
------------      ------------       ------------
Operating income                                 438,993           814,551            306,754

OTHER INCOME (EXPENSE)
Interest income (expense), net                     3,899           (43,374)            76,697
------------      ------------       ------------
Net income                                  $    442,892      $    771,177       $    383,451
============      ============       ============

UNAUDITED PRO FORMA INFORMATION
Net income before income tax provision      $    442,892      $    771,177       $    383,451
Pro forma income tax provision                        --                --                 --
------------      ------------       ------------
Pro forma net income (See Note 2)           $    442,892      $    771,177       $    383,451
============      ============       ============

See accompanying notes.

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(Preliminary Copy)

MCI Performance Group, Inc.

Statements of Stockholder's Equity (Deficit)

TOTAL
COMMON STOCK          RETAINED      STOCKHOLDER'S
---------------------     EARNINGS         EQUITY
SHARES      AMOUNT        (DEFICIT)       (DEFICIT)
------    -----------    -----------    -------------

Balance at December 31, 1995                     3,500    $     3,500    $(2,006,629)    $(2,003,129)
Net income                                        --             --        442,892         442,892
-----    -----------    -----------     ----------- 
Balance at December 31, 1996                     3,500          3,500     (1,563,737)     (1,560,237)
Net income (Restated)                             --             --        771,177         771,177
-----    -----------    -----------     ----------- 
Balance at December 31, 1997 (Restated)          3,500          3,500       (792,560)       (789,060)
Net income                                        --             --        383,451         383,451
-----    -----------    -----------     ----------- 
Balance at December 31, 1998                     3,500    $     3,500    $  (409,109)    $  (405,609)
=====    ===========    ===========     =========== 

See accompanying notes.

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(Preliminary Copy)

MCI Performance Group, Inc.

Statements of Cash Flows

YEAR ENDED DECEMBER 31
1996            1997            1998
-----------     -----------     -----------
(Restated)

OPERATING ACTIVITIES
Net income                                             $   442,892     $   771,177     $   383,451
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation                                           123,577         155,802         497,980
Changes in operating assets and liabilities:
Accounts receivable                                  611,622      (2,244,377)      2,038,917
Employee advances                                     13,158        (363,144)        (65,395)
Prepaid program costs                                (77,588)      2,047,996        (359,587)
Prepaid expenses and other current assets                502        (822,903)        195,142
Accounts payable                                     732,651       2,400,031      (4,140,868)
Accrued expenses and other current liabilities       626,481         409,833        (417,217)
Due to/from stockholder                           (1,555,859)      1,276,654      (1,226,541)
Deferred revenue                                     575,999      (1,168,272)      1,120,506
-----------     -----------     -----------
Net cash provided by (used in) operating activities      1,493,435       2,462,797      (1,973,612)

INVESTING ACTIVITIES
Net proceeds from disposal of property and
equipment                                                     --              --         839,839
Purchases of property and equipment                        (54,270)     (2,204,277)       (161,737)
-----------     -----------     -----------
Net cash used in investing activities                      (54,270)     (2,204,277)        678,102

FINANCING ACTIVITIES
Proceeds from note payable                                      --       1,219,500              --
Payment of note payable                                    (58,033)             --      (1,219,500)
-----------     -----------     -----------
Net cash (used in) provided by financing activities        (58,033)      1,219,500      (1,219,500)
-----------     -----------     -----------

Net increase (decrease) in cash and cash                 1,381,132       1,478,020      (2,515,010)
equivalents
Cash and cash equivalents at beginning of period           850,146       2,231,278       3,709,298
-----------     -----------     -----------
Cash and cash equivalents at end of period             $ 2,231,278     $ 3,709,298     $ 1,194,288
===========     ===========     ===========

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING
ACTIVITIES
Proceeds from sale of the property and equipment
received in the form of a note receivable            $        --     $        --     $   750,000
===========     ===========     ===========

See accompanying notes.

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(Preliminary Copy)

MCI Performance Group, Inc.

Notes to Financial Statements

December 31, 1998

1. BUSINESS AND ORGANIZATION

MCI Performance Group, Inc. ("MCI" or the "Company"), incorporated in Texas in
1987, specializes in designing and implementing premium incentives and managing
meetings and group travel for clients throughout the United States. MCI provides
a wide variety of consulting, creative, program administration and travel and
merchandise fulfillment services to companies seeking to motivate employees,
salespeople, dealers, distributors, retailers and consumers toward certain
action or objectives.

The Company changed its name from MCI Planners, Inc. to MCI Performance Group,
Inc. effective January 30, 1998.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION

The Company records revenues at the completion of the program. External direct
costs and cash received in advance of the program are deferred until the program
occurs. The programs are short-term in nature, typically one to six months in
duration from contract signing to event occurrence. Generally, a non-refundable
deposit is received from the customer upon contract execution. The customer is
billed periodically during the program preparation and the remaining amount owed
for services is payable upon the completion of the program. Costs typically
incurred in the months prior to the program are labor costs to develop the
program plan and to make necessary reservations and deposits for facilities,
transportation, and other required entertainment activities. Reimbursable travel
expenditures are netted against reimbursable receipts and are therefore excluded
from the statements of operations. Revenues may vary significantly, from period
to period, depending upon the type of programs and the timing of when programs
are completed. If a client cancels a program after costs have been expensed, the
client is billed for work performed and expenses incurred through the date of
cancellation.

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(Preliminary Copy)

MCI Performance Group, Inc.

Notes to Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company has entered into incentive commission program agreements with
certain airlines which provide for incentive payments ("override") based upon
the Company's achievement of stated targets. The override is payable in cash or
airline tickets, at the airline's option, and is recorded as revenue at the time
there is sufficient information, provided by the airline, to relate actual
performance to the targets to determine the amount earned. Override payable in
tickets is recorded at the fair market value of the tickets received. Override
revenue of approximately $440,000, $1,142,000 and $400,000 was recorded during
the years ended December 31, 1996, 1997 and 1998, respectively.

ADVERTISING COSTS

Advertising costs are expensed as incurred.

CASH EQUIVALENTS

The Company considers all highly liquid instruments purchased with maturities of
three months or less to be cash equivalents.

The Company maintains its cash and cash equivalents in bank deposit accounts
which, at times, may exceed federally insured limits. The Company has not
experienced any losses in such accounts.

The Company is required, by the airlines, to maintain a certificate of deposit
to guarantee payment of tickets booked by the Company. At December 31, 1997 and
1998, the Company had placed $77,740 and $81,370, respectively, in a short-term
investment account.

PROPERTY AND EQUIPMENT

Property and equipment, including leasehold improvements, are stated at cost.
Depreciation and amortization is calculated on a straight-line basis over
estimated useful lives of the related assets, which range from five to seven
years. Leasehold improvements are amortized over the shorter of their estimated
useful lives or lease term, using the straight-line method.

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(Preliminary Copy)

MCI Performance Group, Inc.

Notes to Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews the recoverability of long-lived assets, whenever events or
changes in circumstances indicate that the carrying amounts may not be
recoverable, in accordance with criteria established by Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets." A loss is recognized for the difference between the carrying amount and
the estimated fair value of the asset. The Company made no adjustment to the
carrying values of the assets during the years ended December 31, 1997 and 1998.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company believes that the carrying amount of its assets and liabilities
reported in the balance sheets approximates fair value.

CONCENTRATION OF CREDIT RISK AND OTHER RISKS

Financial instruments which potentially subject the Company to concentrations of
credit risk consist primarily of cash and cash equivalents and accounts
receivable. The Company places its cash and cash equivalents with high credit
quality financial institutions and investment grade short-term investments,
which limit the amount of credit exposure. For accounts receivable, the Company
does not require collateral; however, the Company monitors its exposure for
credit losses and maintains allowances for anticipated losses.

The Company may also be exposed to risk of loss with respect to credit card
transactions. The Company's risk relates to returned transactions, merchant and
fraud and transmissions of erroneous information. The Company has not incurred
significant losses for these risks to date.

One customer in 1996 and two customers in each of 1997 and 1998 represented
approximately 39%, 39% and 36% of net revenues, respectively.

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(Preliminary Copy)

MCI Performance Group, Inc.

Notes to Financial Statements (continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES

Historically, the Company has elected, by the consent of its stockholder, to be
taxed under the provisions of Subchapter S of the Internal Revenue Code (the
"Code"). Under the provisions of the Code, the stockholder includes the
Company's corporate income in his personal income tax returns. Accordingly, the
Company was not subject to corporate income tax during periods for which it was
an S Corporation.

The unaudited pro forma income tax information included in the statements of
operations is presented in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," as if the Company had been
subject to federal and state income taxes for all periods presented. There would
be no income tax expense on a pro forma basis for any of the years presented
because of the availability of pro forma net operating loss carrybacks.

USE OF ESTIMATES

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

3.      RELATED PARTY TRANSACTIONS

The Company leases office space from a partnership that is owned by the
Company's stockholder. The total amount of rent expense related to this lease
was $450,000, $456,000 and $450,000, during 1996, 1997 and 1998, respectively.

The Company's due to/from stockholder accounts are settled periodically and are
classified as a current asset or liability. Employee advances are also settled
periodically and are classified as a current asset. There are no formal terms of
settlement or interest expense associated with these accounts.

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(Preliminary Copy)

MCI Performance Group, Inc.

Notes to Financial Statements (continued)

4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

DECEMBER 31
1997                1998
-----------           -----------

Furniture and fixtures                                  $   360,202           $   376,176
Equipment                                                 1,564,595             1,579,408
Property held under capital leases                          164,916               164,916
Automobiles                                                  53,564                20,778
Charter yacht                                             1,960,846                25,000
Leasehold improvements                                      718,582               752,948
-----------           -----------
4,822,705             2,919,226
Less accumulated depreciation and amortization           (2,546,988)           (2,609,590)
-----------           -----------
$ 2,275,717           $   309,636
===========           ===========

5. LEASE COMMITMENTS

OPERATING LEASES

The Company leases certain facilities under non-cancelable operating lease
agreements. Rent expense, including rent paid to the former stockholder, was
approximately $479,000, 470,000 and $535,000 for the years ended December 31,
1996, 1997 and 1998, respectively. At December 31, 1998, future minimum
commitments under non-cancelable operating lease arrangements are as follows:

1999                                                      $44,000
2000                                                       20,000
-------
$64,000
=======

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(Preliminary Copy)

MCI Performance Group, Inc.

Notes to Financial Statements (continued)

5. LEASE COMMITMENTS (CONTINUED)

CAPITAL LEASES

The Company leases certain office and computer equipment under capital leases.
The assets and liabilities under capital leases are recorded at the lower of the
present value of the minimum lease payments or the fair market value of the
assets. Included in property and equipment are the following assets held under
capital leases:

DECEMBER 31,
1997                1998
---------           ---------

Computer equipment                         $ 164,916           $ 164,916
Less accumulated depreciation                (91,517)           (131,201)
---------           ---------
$  73,399           $  33,715
=========           =========

6. LONG-TERM DEBT

Long-term debt consisted of the following:

DECEMBER 31,
1997                1998
----------           ---------

Note payable to bank in monthly 
installments at 8.5% interest, 
collateralized by a charter yacht.     
The yacht was sold in 1998              $1,261,580           $      --
Less current portion                         (42,080)                 --
----------           ---------
Long-term debt, less current portion      $1,219,500           $      --
==========           =========

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(Preliminary Copy)

MCI Performance Group, Inc.

Notes to Financial Statements (continued)

7. EMPLOYEES' SAVINGS PLAN

Employees become eligible after attaining the age 20 1/2 years and having been
employed by the Company for six months. Employees may contribute up to 25% of
their annual compensation subject to limitations set forth in the Internal
Revenue Code. Employees' contributions vest immediately. The Company maintains a
401(k) plan under which the Company may contribute 25% of an employee's eligible
contributions up to the first 5% of annual compensation. The matching
contribution vests 20% after 3 years and in increments of 20% each additional
year. The Company's contributions for the years ended December 31, 1996, 1997
and 1998 were $12,576, $63,704 and $17,361, respectively.

8. CONTINGENCIES

LEGAL

The Company is a party to the various legal actions and administrative
proceedings arising in the normal course of business. In the opinion of
Company's management, dispositions of these matters are not anticipated to have
a material adverse effect on the financial position, results of operations or
cash flows of the Company.

9. YEAR 2000 READINESS DISCLOSURE (UNAUDITED)

The Company has conducted an assessment of its computer systems to identify the
systems that could be affected by the "Year 2000" issue. The problem results
from computer programs having been written to define the applicable year using
two digits rather than four digits. The Company believes, with modifications to
existing software, the Year 2000 issue will not pose significant operational
problems for its computer systems. The Company plans to complete any Year 2000
modifications by December 31, 1999. At present, the Company anticipates the
total costs to complete the Year 2000 project will be minimal. Further, the
Company is confident its planning efforts are adequate to ensure there are no
adverse effects on the Company's core business operations and that the
transactions with business partners are fully supported.

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(Preliminary Copy)

MCI Performance Group, Inc.

Notes to Financial Statements (continued)

10. SUBSEQUENT EVENT

SALE OF BUSINESS

On January 15, 1999, the Company completed the sale of substantially all of the
assets and certain liabilities to SPAR MCI Performance Group, Inc. The
transaction consisted of $1,800,000 cash and an $12,422,189 note receivable from
the buyer. The sale agreement provides for post closing adjustments whereby the
Company has guaranteed a minimum net worth of $1,500,000 for the Company at the
date of closing and additional contingent consideration will be receivable in
the event that the Company achieves $3,500,000 earning before taxes for the
twelve month period ending March 31, 1999.

The affiliate arrangements as described in Note 3 have been amended upon
consummation of the asset sale discussed above so that all continuing
obligations will be similar to terms and conditions of agreements/arrangements
with unaffiliated third parties.

11. RESTATEMENT

The Company has restated its 1997 financial statements to reflect costs related
to programs completed in 1997. The restatement resulted in an $841,000 reduction
of previously reported net income, an $841,000 increase to accrued expenses and
a corresponding decrease to shareholders' equity.

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(Preliminary Copy)

ANNEX A

AGREEMENT AND PLAN OF MERGER

A-1

145

ANNEX A

================================================================================

AGREEMENT

AND

PLAN OF MERGER

among

PIA Merchandising Services, Inc.,

SG Acquisition, Inc.,

PIA Merchandising Co., Inc.,

SPAR Acquisition, Inc.,

SPAR Marketing Inc., a Delaware corporation,

SPAR Marketing Force, Inc.,

SPAR Marketing, Inc., a Nevada Corporation,

SPAR, Inc.,

SPAR/Burgoyne Retail Services, Inc.,

SPAR Incentive Marketing, Inc.,

SPAR MCI Performance Group, Inc.

and

SPAR Trademarks, Inc.

Dated as of February 28, 1999

================================================================================

146

TABLE OF CONTENTS

ARTICLE I

THE MERGER

PAGE
----

Section 1.01.   The Merger......................................................3
Section 1.02.   Closing; Effective Time of the Merger...........................3
Section 1.03.   Name, Certificate of Incorporation, Bylaws, Board of Directors 
and Officers of the Surviving Corporation.......................3
Section 1.04.   Effects of the Merger...........................................3
Section 1.05.   Tax Consequences................................................3
Section 1.06.   Further Assurances..............................................4

ARTICLE II

MERGER CONSIDERATION

Section 2.01.   Conversion of Capital Stock, Etc................................4
Section 2.02.   Exchange Procedures.............................................4
Section 2.03.   No Fractional Shares............................................4
Section 2.04.   SAI Option Assumption and Exchange..............................4
Section 2.05.   Granting of New Stock Options under the PIA Stock Option Plan...5
Section 2.06.   Reservation and Registration of Option Shares...................5
Section 2.07.   Transfer Taxes..................................................5

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SPAR PARTIES

Section 3.01.   Corporate Existence.............................................5
Section 3.02.   Authorization and Enforceability................................6
Section 3.03.   Capital Stock of the SPAR Parties...............................6
Section 3.04.   No Violations...................................................7
Section 3.05.   Financial Statements............................................7
Section 3.06.   Permits.........................................................8
Section 3.07.   Real and Personal Property......................................8
Section 3.08.   Contracts and Commitments.......................................9
Section 3.09.   Insurance......................................................10
Section 3.10.   Employees......................................................10
Section 3.11.   Employee Benefit Plans and Arrangements........................10
Section 3.12.   Compliance with Law............................................12
Section 3.13.   Transactions With Affiliates...................................12
Section 3.14.   Litigation.....................................................12
Section 3.15.   Taxes..........................................................12
Section 3.16.   Intellectual Property Matters..................................13
Section 3.17.   Existing Condition.............................................14

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TABLE OF CONTENTS (Continued)

PAGE
----

Section 3.18.   Books of Account...............................................15
Section 3.19.   Environmental Matters..........................................15
Section 3.20.   No Illegal Payments............................................16
Section 3.21.   Brokers........................................................17

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PIA PARTIES

Section 4.01.   Corporate Existence............................................17
Section 4.02.   Authorization and Enforceability...............................17
Section 4.03.   Capital Stock of the PIA Parties...............................18
Section 4.04.   No Violations..................................................18
Section 4.05.   Financial Statements...........................................19
Section 4.06.   Permits........................................................19
Section 4.07.   Real and Personal Property.....................................19
Section 4.08.   Contracts and Commitments......................................20
Section 4.09.   Insurance......................................................21
Section 4.10.   Employees......................................................21
Section 4.11.   Employee Benefit Plans and Arrangements........................21
Section 4.12.   Compliance with Law............................................23
Section 4.13.   Transactions With Affiliates...................................23
Section 4.14.   Litigation.....................................................23
Section 4.15.   Taxes..........................................................23
Section 4.16.   Intellectual Property Matters..................................24
Section 4.17.   Existing Condition.............................................24
Section 4.18.   Books of Account...............................................25
Section 4.19.   Environmental Matters..........................................25
Section 4.20.   No Illegal Payments............................................26
Section 4.21.   Brokers........................................................26
Section 4.22.   SEC Filings....................................................26
Section 4.23.   No Misrepresentation by the PIA Parties........................26
Section 4.24.   Board Action; Opinion of Financial Advisor.....................27

ARTICLE V

COVENANTS

Section 5.01.   PIA Proxy Statement; Stockholders Meeting......................27
Section 5.02.   Conduct Prior to the Closing Date..............................27
Section 5.03.   Consummation of the SPAR Reorganization Transactions;
SPAR Stockholder Action........................................28
Section 5.04.   Access.........................................................28
Section 5.05.   Negotiations...................................................28
Section 5.06.   Press Releases and Other Communications........................28
Section 5.07.   Third Party Approvals..........................................29
Section 5.08.   Notice to Bargaining Agents....................................29
Section 5.09.   Notification of Certain Matters................................29
Section 5.10.   Closing Net Worth..............................................29

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TABLE OF CONTENTS (Continued)

PAGE
----

Section 5.11.   Post Merger Indemnification of
Officers and Directors by Parties..............................29
Section 5.12.   Further Assurances.............................................30

ARTICLE VI

CONDITIONS PRECEDENT

Section 6.01.   Conditions to Each Party's Obligations.........................30
Section 6.02.   Conditions Precedent to the Obligations of the SPAR Parties....31
Section 6.03.   Conditions Precedent to the Obligations of the PIA Parties.....32

ARTICLE VII

CLOSING NET WORTH; NONSURVIVAL OF REPRESENTATIONS

Section 7.01.   SPAR Closing Net Worth.........................................33
Section 7.02.   Survival of Representations and Warranties.....................34

ARTICLE VIII

TERMINATION OF AGREEMENT

Section 8.01.   Termination....................................................34
Section 8.02.   Effect of Termination..........................................35
Section 8.03.   Breakup Fee....................................................35

ARTICLE IX

GENERAL

Section 9.01.   Successors and Assigns; Assignment.............................35
Section 9.02.   No Third Party Rights..........................................35
Section 9.03.   Counterparts...................................................35
Section 9.04.   Expenses.......................................................35
Section 9.05.   Notices........................................................36
Section 9.06.   Governing Law..................................................37
Section 9.07.   Consent to Jurisdiction, Etc...................................37
Section 9.08.   Waiver of Jury Trial...........................................37
Section 9.09.   Exercise of Rights and Remedies................................37
Section 9.10.   Reformation and Severability...................................37
Section 9.11.   Remedies Cumulative............................................37
Section 9.12.   Captions.......................................................37
Section 9.13.   Amendments.....................................................37
Section 9.14.   Entire Agreement...............................................38

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TABLE OF CONTENTS (Continued)

PAGE
----

Exhibits:
- ---------

A                Articles of Merger
B                Special Purpose Option Plan
C                SPAR Trademark License
D                Business Manager Agreement
E                Proposed PIA Certificate of Amendment
F                Amended and Restated 1995 Stock Option Plan
G                Limited Indemnification Agreement
H                Indemnity Escrow Agreement

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150

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger, dated as of February 28, 1999 (as
the same may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided herein, this "Agreement"), is made 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
Marketing, Inc., a Nevada corporation ("SMNEV"), SPAR, Inc., a Nevada
corporation ("SINC"), SPAR/Burgoyne Retail Services, Inc., an Ohio corporation
("SBRS"), 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 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

A. ROBERT G. BROWN AND WILLIAM H. BARTELS (each a "SPAR Principal", and
collectively the "SPAR Principals") own a majority of all of the outstanding
shares of common stock of SAI, par value $0.01 per share ("SAI Stock"), and all
of the outstanding capital stock of the other SPAR Parties as of the date
hereof. The SPAR Principals together with other owners of SAI Stock are
sometimes referred to herein individually as a "SPAR Stockholder" and
collectively as the "SPAR Stockholders". Options to acquire shares of common
stock of SAI (each a "SAI Option" and collectively the "SAI Options") will be
held by certain employees of the SPAR Parties, certain others providing services
to the SPAR Parties and certain other persons (each a "SAI Option Holder" and
collectively the "SAI Option Holders") in the aggregate amount and on the terms
described in the SPAR Disclosure Letter.

B. The SPAR Principals also own all of the outstanding shares of capital
stock, and are officers and directors, of: (i) SPAR Marketing Services, Inc., a
Nevada Corporation ("SMS"), which provides certain field services pursuant to
Service Agreement dated as of January 4, 1999 (as the same may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein, the "Field Service Agreement"); (ii) SPAR InfoTech, Inc. ("SIT"), a
startup venture that provides certain programming services to the SPAR Marketing
Parties; and (iii) SPAR Group, Inc. ("SGI"), a Delaware corporation that will
change its name prior to the Effective Time. SMS, SIT, STM, SGI and any other
companies owned by the SPAR Principals (other than the SPAR Parties) and their
respective assets and properties are not part of the proposed merger
transactions.

C. On January 15, 1999, SMCI purchased substantially all of the assets
and assumed certain liabilities (the "MCI Acquisition") of MCI Performance
Group, Inc., a Texas corporation ("MCI"), pursuant to an Asset Purchase
Agreement dated as of December 22, 1998, among MCI, John H. Wile (the "MCI
Stockholder") and SMCI, as amended by a First Amendment dated as of January 15,
1999 (as amended, and as the same may be supplemented, modified, amended,
restated or replaced from time to time in the manner provided therein, the "MCI
Purchase Agreement"), under which SGI is a guarantor. The MCI Acquisition was
financed in part by SMCI's issuance of its Promissory Note to MCI dated as of
January 15, 1999 (as the same may be supplemented, modified, amended, restated
or replaced from time to time in the manner provided therein, the "MCI Note"),
which MCI Note is secured by the pledge to MCI of all of the stock of SMCI
pursuant to the Hypothecation Agreement from the SPAR Principals dated as of
January 15, 1999

-1-

151

(as the same may be supplemented, modified, amended, restated or replaced from
time to time in the manner provided therein, the "MCI Hypothecation"). The MCI
Purchase Agreement contains certain representations, warranties and
indemnifications of MCI and the MCI Stockholder with respect to the assets,
business and liabilities of MCI acquired by SMCI thereunder.

D. The SPAR Principals have entered into an agreement with the SPAR
Parties dated as of February 28, 1999 (as the same may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein, the "SPAR Reorganization Agreement"), pursuant to which (i) the SPAR
Principals have agreed to contribute to SAI all of their shares of STM, the SPAR
Marketing Parties and SPAR Incentive Parties in return for the issuance to them
of additional shares of SAI Stock as provided therein, and (ii) SAI would then
contribute the capital stock of SMCI to SIM and the capital stock of the SPAR
Marketing Companies to SMI, such that SAI will be the sole stockholder of STM,
SIM and SMI, SIM will be the sole stockholder of SMCI, and SMI will be the sole
stockholder of the SPAR Marketing Companies. The transactions to be effected
pursuant to the Reorganization Agreement will be referred to as the "SPAR
Reorganization Transactions" and collectively with the MCI Acquisition will be
referred to as the "SPAR Premerger Transactions". The MCI Purchase Agreement,
the MCI Note and related documents and the SPAR Reorganization Agreement may be
referred to individually as a "SPAR Premerger Agreement" and collectively as the
"SPAR Premerger Agreements".

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) 2.2546 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).

F. The SPAR Principals and the respective Boards of Directors of the
SPAR Parties have approved the SPAR Premerger Transactions.

G. PIA Acquisition and PIA California each is a direct wholly owned
subsidiary of PIA Delaware.

H. The respective Boards of Directors of the PIA Parties and of the SPAR
Parties deem it advisable and in the best interests of such corporations and
their respective stockholders that, following the consummation of the SPAR
Reorganization Transactions, PIA Acquisition merge with and into SAI (the
"Merger") pursuant to this Agreement and the applicable provisions of the
General Corporation Law of the State of Nevada (the "NGCL"). SAI and PIA
Acquisition are sometimes collectively referred to as the "Constituent
Corporations" and SAI, following the Merger, is sometimes referred to as the
"Surviving Corporation".

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 69.274% 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 30.726% of such post-Merger sum.

J. The respective Boards of Directors of PIA Delaware, PIA Acquisition
and SAI have approved the Merger on the terms and subject to the conditions set
forth herein.

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K. The Parties intend the Merger to qualify as a tax-free reorganization
within the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended (the "Code").

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 is hereby acknowledged by the Parties), the Parties hereto
hereby agree as follows:

ARTICLE I

THE MERGER

Section 1.01. The Merger. Upon the terms and conditions hereinafter set
forth and in accordance with the NGCL, at the Effective Time (as defined in
Section 1.02), PIA Acquisition shall be merged with and into SAI, and thereupon
the separate existence of PIA Acquisition shall cease, and SAI, as the Surviving
Corporation, shall continue to exist under and be governed by the NGCL.

Section 1.02. Closing; Effective Time of the Merger. The consummation of
the transactions contemplated by this Agreement (the "Closing") shall take place
at the offices of Parker Chapin Flattau & Klimpl, LLP, in New York, New York, at
10:00 a.m. on a date to be designated by mutual agreement of PIA Delaware and
SAI (the "Closing Date"), which shall be no later than the second business day
after the satisfaction (or, to the extent permitted by law, the waiver) of the
conditions set forth in Article VI. Concurrently with or as soon as practicable
after the Closing, PIA Delaware, PIA Acquisition and SAI will cause the Articles
of Merger in substantially the form of Exhibit A attached hereto (the "Articles
of Merger") to be executed and filed with the Secretary of State of the State of
Nevada as provided in Section 92A.200 of the NGCL. The Merger shall become
effective immediately upon such filing of the Articles of Merger with the
Secretary of State of the State of Nevada or at such other time as PIA
Acquisition and SAI shall agree and specify in the Articles of Merger. The time
of the effectiveness of the Merger is sometimes referred to as the "Effective
Time."

Section 1.03. Name, Certificate of Incorporation, Bylaws, Board of
Directors and Officers of the Surviving Corporation. Upon the effectiveness of
the Merger:

(a) the name of the Surviving Corporation shall be "SPAR
Acquisition, Inc."

(b) the Certificate of Incorporation of the Surviving Corporation
shall be the Certificate of Incorporation of SAI until thereafter duly amended
or restated;

(c) the Bylaws of the Surviving Corporation shall be the Bylaws of
SAI until thereafter duly amended or restated;

(d) the directors of SAI shall serve as the directors of the
Surviving Corporation until their respective successors have been duly elected
and qualified; and

(e) the officers of SAI shall serve as the officers of the Surviving
Corporation in the same capacity or capacities until their respective successors
have been duly appointed.

Section 1.04. Effects of the Merger. The Merger shall have the effects
set forth in Section 92A.250 of the NGCL. Without in any way limiting such 
effects, at and after the Effective Time (a) the Constituent

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Corporations shall merge and become and continue as part of a single
corporation, SAI, which is the Surviving Corporation, and (b) the Surviving
Corporation shall (to the same extent and with the same effect as was the case
with the applicable Constituent Corporation): (i) own and possess any and all
(A) financial assets, accounts, documents, instruments, equipment, inventory,
intellectual property, contracts, general intangibles, real property and
improvements, and other assets and properties of each Constituent Corporation,
and (B) rights, powers, privileges, security or other entitlements, licenses,
franchises and other interests of each Constituent Corporation, all of which
will be automatically vested in the Surviving Corporation at the Effective Time
(subject to any existing liens or encumbrances thereon, which shall continue
unimpaired), and none of which shall be impaired or otherwise adversely affected
by the Merger; and (ii) be liable for all of the debts, liabilities, obligations
and duties of each Constituent Corporation, all of which will continue
unimpaired and may be enforced against the Surviving Corporation to the same
extent as it would have been enforceable against the applicable Constituent
Corporation.

Section 1.05. Tax Consequences. The Merger is intended to constitute a
reorganization within the meaning of Section 368 of the Code for federal income
tax purposes, and the Parties will take all commercially reasonable steps in
furtherance thereof, including (without limitation) the making of all required
filings and the keeping of all required records. The parties to this Agreement
hereby adopt this Agreement as a "plan of reorganization" within the meaning of
ss.ss.1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.

Section 1.06. Further Assurances. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any further
deeds, assignments or assurances in law or any other acts are necessary,
desirable or proper to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, the title to any property or right of the Constituent
Corporations acquired or to be acquired by reason of, or as a result of, the
Merger, or otherwise to carry out the purposes of this Agreement, the Surviving
Corporation and its proper officers and directors (on behalf of PIA Acquisition
or SAI) shall execute and deliver all such deeds, assignments and assurances in
law and do all acts necessary, desirable or proper to vest, perfect or confirm
title to such property or right in the Surviving Corporation and otherwise to
carry out the purposes of this Agreement, and the proper officers and directors
of the Surviving Corporation are fully authorized to take any and all such
action.

ARTICLE II

MERGER CONSIDERATION

Section 2.01. Conversion of Capital Stock, Etc. At the Effective Time
and without any further action on the part of the holder thereof:

(a) each share of SAI Stock that is issued and outstanding immediately
prior to the Effective Time shall automatically be converted into the right to
receive one (1) fully paid and nonassessable share of PIA Delaware Stock (which
1:1 ratio will be referred to as the "Exchange Ratio"); and

(b) each share of common stock of PIA Acquisition, par value $.01 per
share, that is issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of PIA
Delaware as the holder thereof, be converted into and become one (1) share of
common stock of the Surviving Corporation, par value $.01 per share.

Section 2.02. Exchange Procedures. Following the Effective Time, upon
surrender to PIA Delaware of stock certificates representing outstanding shares
of SAI Stock (the "Certificates"), each holder of SAI Stock shall be entitled to
receive, in exchange therefor, one or more new stock certificates representing,
in the aggregate, that number of whole shares of PIA Delaware Stock which such
holder has the right to receive pursuant to Section 2.01(a) in respect of the
shares of SAI Stock evidenced by the Certificate surrendered, and each
Certificate so surrendered shall forthwith be canceled; provided, however, that
PIA Delaware shall cause ten percent (10%) of the

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shares which each SPAR Principal and their Family Members (as hereinafter
defined) would otherwise have had the right to receive pursuant to Section
2.01(a) (the "Share Escrow Amount") to be registered in the name of, and
delivered to, the Indemnity Escrow Agent (as such term is defined in Section
6.01(g) hereof) to be held in accordance with the provisions of the Limited
Indemnification Agreement and the Indemnity Escrow Agreement (as such terms are
defined in Section 6.01(g) hereof); and provided further that the Share Escrow
Amount may be satisfied by the shares of the SPAR Principals as opposed to the
shares of such Family Members.

Section 2.03. No Fractional Shares. Notwithstanding any other provision
of this Article II, no fractional shares of PIA Delaware Stock shall be issued
in connection with the Merger and any holder of SAI Stock entitled hereunder to
receive a fractional share of PIA Delaware Stock but for this Section shall be
entitled to receive from PIA Delaware a cash payment (rounded to the nearest
whole cent) equal to the product of such fraction multiplied by the last sale
price of PIA Delaware Stock as reported on the Nasdaq National Market on the
Closing Date.

Section 2.04. SAI Option Assumption and Exchange. As of the Effective
Time, PIA Delaware shall be deemed to have assumed all of the outstanding SAI
Options, in each case on the terms and conditions set forth in the written
option agreements (copies of which have been provided to PIA Delaware). PIA
Delaware shall issue to each holder of an outstanding SAI Option, against
delivery and cancellation of the agreement evidencing such outstanding SAI
Option, a new substitute option (a "Substitute Option") under PIA Delaware's
Special Purpose Stock Option Plan substantially in the form of Exhibit B hereto,
together with such changes therein as may be made with the approval of the PIA
Delaware Board and SAI (the "PIA Special Purpose Plan"). Each Substitute Option
shall entitle the SAI Option Holder to purchase the same number of shares of PIA
Delaware Stock as the number of shares of SAI Stock that could have been
purchased under the SAI Option (reflecting the 1:1 Exchange Ratio) and shall
otherwise be issued upon the same terms and conditions as set forth in the
written agreement evidencing the SAI Option so surrendered, including (without
limitation) the same per share exercise price and the same vesting (if any) as
the surrendered SAI Option. Each SAI Option so surrendered shall forthwith be
canceled.

Section 2.05. Granting of New Stock Options under the PIA Stock Option
Plan. Subject to the consummation of the Merger and the approval by the
stockholders of PIA Delaware of the Proposed Plan Amendment (as hereinafter
defined), effective as of the close of business on the date on which the Merger
is consummated, PIA Delaware shall issue, subject to the availability of shares
under PIA Delaware's Amended and Restated 1995 Stock Option Plan (the "PIA Stock
Option Plan"), stock options under the PIA Stock Option Plan (each a "New PIA
Option") to the persons and in the amounts (which may include unallocated
amounts for later allocation by SAI) listed in the letter of even date herewith
delivered to PIA Delaware (the "New Option Schedule") or in the terms of the
agreement governing such options, which stock options shall cover an aggregate
of 2,133,744 shares of PIA Delaware Stock). Except as otherwise indicated on the
New Option Schedule or in the terms of the agreements governing such options,
each New PIA Option shall (i) vest (become exercisable) in four equal annual
installments, (ii) have an exercise price equal to the last sale price for the
PIA Delaware Stock as reported on the Nasdaq National Market on the date of
issuance and (iii) have such other terms and conditions consistent with the PIA
Stock Option Plan as the Board of Directors of PIA Delaware may determine. The
New Option Schedule may be amended by SAI (by written notice to PIA Delaware) at
any time prior to the issuance of the affected New PIA Options to add or delete
names or to increase or decrease the number of shares to be covered by any
unissued proposed New PIA Option; provided, however, that the aggregate number
of shares of PIA Delaware Stock issuable upon exercise of all New PIA Options
(without regard to the vesting provisions thereof) shall not exceed 2,133,744
shares without the prior written consent of PIA Delaware; and provided further
that the terms and conditions of any New PIA Option indicated on the New Option
Schedule as of the date hereof may not be materially improved (other than a
reallocation of shares or allocation of previously unallocated shares to any
employee or other recipient permitted under the PIA Stock Plan) without the
prior written consent of PIA Delaware.

Section 2.06. Reservation and Registration of Option Shares. PIA
Delaware shall take all corporate action necessary to reserve for issuance a
sufficient number of shares of PIA Delaware Stock for delivery upon exercise of
the Substitute Options and the New PIA Options. As soon as practicable after the
Effective Time, to the extent such form is available therefor, PIA Delaware
shall file a registration statement on Form S-8 (or any successor form) with
respect to the shares of PIA Delaware Stock subject to the Substitute Options
and the New PIA Options (and any other PIA Options that the PIA Board may wish
to treat similarly). PIA Delaware shall use

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commercially reasonable efforts to maintain the effectiveness of such
registration statement(s) so long as any options covered thereby remain
outstanding and unexercised.

Section 2.07. Transfer Taxes. PIA Delaware shall pay any and all
transfer taxes incurred in connection the Merger and the stock and option
issuances and other transactions contemplated hereunder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SPAR PARTIES

Except as otherwise disclosed in that certain letter of even date
herewith delivered to PIA Delaware prior to the execution hereof (which letter
shall contain appropriate references and cross references to identify the
Sections hereof to which the information in such letter relates) (the "SPAR
Disclosure Letter"), each SPAR Party, jointly and severally, represents and
warrants to the PIA Parties as follows:

Section 3.01. Corporate Existence. Except as otherwise set forth in the
SPAR Disclosure Letter:

(a) Each SPAR Party is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation. Each SPAR
Party is duly qualified to conduct business and is in good standing as a foreign
corporation in each jurisdiction in which the conduct of its business requires
it to be so qualified, except where the failure to be so qualified would not
have a material adverse effect on the business, operations, properties, assets
or financial condition of the SPAR Parties taken as a whole (a "SPAR Material
Adverse Effect").

(b) As of the date hereof, neither SAI, SIM nor SMI has any assets or
liabilities or has conducted any business operations except in anticipation of
and in connection with the SPAR Reorganization Transactions and the other
transactions contemplated by the SPAR Reorganization Agreement and this
Agreement.

(c) As of the date of this Agreement, no SPAR Party has any subsidiary
or owns, of record or beneficially, or controls, directly or indirectly, any
other capital stock, any securities convertible into capital stock or any other
equity interest in any corporation, association or other business entity or is,
directly or indirectly, a participant in any joint venture, partnership or other
non-corporate entity. However, the Parties acknowledge and understand that
immediately prior to the Effective Time, upon the terms and subject to the
conditions set forth in the Reorganization Agreement, the Reorganization
Transactions described in the Recitals hereto will occur.

(d) The SPAR Disclosure Letter sets forth a list of (i) the names of all
predecessor companies of each SPAR Marketing Company, (ii) the names of all
entities from which any SPAR Party previously acquired any significant assets,
and (iii) all sales (other than in the ordinary course of business) and spinoffs
of significant assets by any SPAR Marketing Company since March 31, 1996.

Section 3.02. Authorization and Enforceability. Except as otherwise set
forth in the SPAR Disclosure Letter:

(a) Each SPAR Party has the corporate power, authority and legal right
to execute, deliver and perform (i) the SPAR Reorganization Agreement, (ii) this
Agreement, and (iii) to the extent a party thereto (A) the Business Manager
Agreement to be delivered pursuant to Section 6.01(f)(i) hereof, (B) the
Trademark License Agreements to be delivered pursuant to Section 6.01(f)(ii)
hereof, (C) the Limited Indemnification Agreement and the Indemnity Escrow
Agreement to be delivered pursuant to Section 6.01(g) hereof, and (D) the
releases from SPAR Principals to be delivered pursuant to Section 6.03(g)
(together with the SPAR Reorganization Agreement and this Agreement, each a
"Merger Document" and collectively the "Merger Documents"). The execution,
delivery and performance of the SPAR Reorganization Agreement, this Agreement
and the other Merger Documents by each SPAR

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Party (to the extent it is a party thereto) have been duly authorized by all
necessary corporate action and no further corporate action on the part of any
SPAR Party is necessary to authorize the SPAR Premerger Agreements to which it
is a party or this Agreement or any other Merger Document to which it is a party
or the performance of the transactions contemplated hereby or thereby .

(b) The SPAR Premerger Agreements and this Agreement (i) have been duly
executed and delivered on behalf of each SPAR Party (to the extent it is a party
thereto) and (ii) constitute legal, valid and binding obligations of such SPAR
Party, enforceable in accordance with their respective terms, except as may be
limited by (A) applicable bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization or other laws affecting any rights, powers, privileges,
remedies and interests of creditors generally, (B) rules or principles of equity
or public policy affecting the enforcement of obligations generally, whether at
law, in equity or otherwise, including (without limitation) those pertaining to
materiality, reasonableness, unconscionability, impossibility of performance,
redemption or other cure, surety rights or defenses, waiver, latches, estoppel,
or judicial deference, or (C) discretionary powers of any court or other
authority before which may be brought any proceeding seeking equitable or other
remedies, in each case whether at law, in equity or otherwise (the "Bankruptcy
Exceptions").

Section 3.03. Capital Stock of the SPAR Parties. Except as otherwise set
forth in the SPAR Disclosure Letter:

(a) As of the date of this Agreement, the authorized SAI Stock consists
of 50,000,000 shares of capital stock of SAI, which may be issued as either
common or preferred stock. The SPAR Disclosure Letter sets forth (i) the issued
and outstanding capital stock of SAI as of the date of this Agreement and (ii)
the names of each proposed SAI Option Holder and the number of shares of SAI
Stock purchasable pursuant to their respective SAI Options as of the date
hereof. The PIA Parties acknowledge and agree that the schedule of SAI Options
may be amended by SAI (by written notice to PIA Delaware) to add or delete names
or to increase or decrease the number of shares to be covered by any proposed
SAI Option at any time prior to (1) the mailing of the PIA Proxy Statement in
the case of any individual whose present or future holdings of shares of PIA
Delaware Stock or options to acquire such shares are disclosed in the PIA Proxy
Statement, or (2) the Effective Time in the case of any other person. Each of
the SAI Options will be evidenced by a written option agreement, copies of which
have been provided to PIA Delaware. The SPAR Disclosure Letter sets forth the
authorized and the issued and outstanding capital stock of each other SPAR Party
as of the date of this Agreement. As of the date of this Agreement, all of the
issued and outstanding shares of the capital stock of each SPAR Party are owned
beneficially and of record by the SPAR Stockholders in the case of SAI and by
the SPAR Principals in the case of all other SPAR Parties, free and clear of
all Restrictions (as hereinafter defined), and have been validly issued and are
fully paid and nonassessable. "Restrictions" shall mean any and all material
liens, security interests, pledges, charges, voting trusts, equities,
restrictions, encumbrances and claims of every kind, except for (A) restrictions
on sale or resale under the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (as the same may be supplemented,
modified, amended, restated or replaced from time to time, the "Securities
Act"), or state securities laws, (B) in the case of the SMCI shares, the pledge
of the SMCI shares pursuant to the MCI Hypothecation, and (C) in the case of the
SPAR Parties that certain Agreement dated December 14, 1992, by and between
Robert G. Brown, William H. Bartels and Donald R. Young as escrow agent (as
amended, the "Buy-Sell Agreement").

(b) Upon the consummation of the SPAR Reorganization Transactions upon
the terms and subject to the conditions set forth in the Reorganization
Agreement, (i) the outstanding shares of SAI Stock will be equal to the number
described in the Recitals, above, and will have been validly issued and will be
fully paid and nonassessable, (ii) the SPAR Stockholders will own beneficially
and of record all of the shares of capital stock of SAI in the amounts indicated
in the SPAR Disclosure Letter, free and clear of all Restrictions, (iii) SAI
will acquire all of the capital stock of the SPAR Marketing Companies and the
SPAR Incentive Companies (subject to the pledge of the SMCI shares pursuant to
the MCI Hypothecation), (iv) SIM will acquire all of the capital stock of SMCI
(subject to the pledge of the SMCI shares pursuant to the MCI Hypothecation),
and (v) SMI will acquire all of the capital stock of the SPAR Marketing
Companies.

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(c) Other than the proposed SAI Options or in connection with the SPAR
Reorganization Transactions or this Agreement, as of the date hereof: (i) there
are no outstanding rights, subscriptions, warrants, calls, convertible
securities, unsatisfied preemptive rights, options or other agreements of any
kind pursuant to which any SPAR Party is required to issue any of its authorized
but unissued capital stock; and (ii) no SPAR Party has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any
outstanding shares of capital stock or to pay any dividend or make any
distribution in respect thereof.

Section 3.04. No Violations. Except as otherwise set forth in the SPAR
Disclosure Letter:

(a) The execution, delivery and performance of the SPAR Premerger
Agreements and this Agreement by each SPAR Party (to the extent it is a party
thereto) do not and will not violate or result in the breach of any term,
condition or provision of, or require the consent of any other person under, (i)
any existing applicable law, ordinance, or governmental rule or regulation
("Applicable Law") to which any SPAR Party or any SPAR Principal is subject,
(ii) any judgment, order, writ, injunction, decree or award of any Governmental
Entity (as defined in Section 3.04(d) hereof) that is applicable to any SPAR
Party or any SPAR Principal (each a "SPAR Court Order"), (iii) the charter
documents of any SPAR Party, or (iv) any SPAR Contract (as defined in Section
3.08), SPAR Realty Lease (as defined in Section 3.07(a)), material SPAR
Personalty Lease (as defined in Section 3.07(b)) or other material mortgage,
indenture, agreement, contract, commitment, lease, permit, plan, authorization,
instrument or document to which any SPAR Marketing Company or any SPAR Principal
is a party, by which any SPAR Marketing Company or any SPAR Principal has any
rights or by which any of the properties or assets of any SPAR Marketing Company
is bound or subject (each a "Material SPAR Document").

(b) The execution, delivery and performance of the SPAR Premerger
Agreements and this Agreement by each SPAR Marketing Company (to the extent it
is a party thereto) will not be reasonably likely to result in (A) any
termination, cancellation or acceleration of any Material SPAR Document or (B)
termination, modification or other change in any material respect of the
existing rights and obligations of any SPAR Marketing Company under such
Material SPAR Document.

(c) No SPAR Marketing Company, and to the knowledge of each SPAR
Marketing Company, no other party thereto, is in default in any material respect
under any Material SPAR Document, and to the knowledge of each SPAR Marketing
Company, no event has occurred that with the giving of notice or lapse of time
(or both) would constitute such a default.

(d) Other than the filing of a pre-merger notification report under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the "HSR Act") and in connection with or
in compliance with the provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (as the same may
be supplemented, modified, amended, restated or replaced from time to time, the
"Exchange Act"), and the Securities Act, no authorization, approval or consent
of, and no registration or filing with, any Governmental Entity is required in
connection with the execution and delivery of the SPAR Premerger Agreements or
this Agreement by any SPAR Party or any SPAR Principal and the performance of
the transactions contemplated hereunder and thereunder. As used herein, the term
"Governmental Entity" means any court, administrative or regulatory agency or
commission, or other governmental authority or instrumentality, domestic,
foreign or supranational.

Section 3.05. Financial Statements. Except as otherwise set forth in the
SPAR Disclosure Letter:

(a) The SPAR Parties have delivered to PIA Delaware copies of (i) the
combined balance sheets of the SPAR Marketing Companies at March 31, 1998 (the
"Audited SPAR Marketing Balance Sheet Date"), and March 31, 1997, and the
related combined statements of income, cash flows and changes in stockholders'
equity for the fiscal years then ended, together with the report of Ernst &
Young, LLP thereon (the "Audited SPAR Marketing

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Financial Statements"); (ii) the unaudited (but reviewed) combined balance
sheets of the SPAR Marketing Companies at December 31, 1998 (the "Interim SPAR
Marketing Balance Sheet Date"), and the related combined statements of income
and cash flows for the nine month period then ended (the "Interim SPAR Marketing
Financial Statements" and together with the Audited SPAR Marketing Financial
Statements, the "SPAR Marketing Financial Statements"); and (iii) the balance
sheets of MCI at December 31, 1998 (the "Audited MCI Balance Sheet Date"), and
December 31, 1997, and the related combined statements of income, cash flows and
changes in stockholders' equity for the fiscal years then ended, together with
the report of Ernst & Young, LLP thereon (the "Audited MCI Financial
Statements"), in each case adjusted to exclude the MCI assets not acquired by
SMCI and the other pro forma adjustments contemplated by the MCI Purchase
Agreement. The SPAR Marketing Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied throughout the periods involved and fairly present the combined
financial position and the combined results of operations of the SPAR Marketing
Companies as of the dates and for the periods indicated, subject in the case of
the Interim SPAR Marketing Financial Statements to nonrecurring year end audit
adjustments, which adjustments would not in the aggregate be materially adverse
to the financial condition of the SPAR Marketing Companies. To the knowledge of
the SPAR Parties, based upon such audit, the Audited MCI Financial Statements
have been prepared in accordance with GAAP consistently applied throughout the
periods involved and fairly present the pro forma financial position and the
results of operations of MCI as of the dates and for the periods indicated.

(b) The Interim SPAR Marketing Financial Statements contain all
adjustments of a normal recurring nature, based upon historical operations of
the SPAR Marketing Companies and reporting determinations made with respect to
the most recent Audited SPAR Marketing Financial Statements, necessary to
present fairly the financial position for the periods then ended.

Section 3.06. Permits. Except as otherwise set forth in the SPAR
Disclosure Letter:

(a) Each SPAR Marketing Company owns, holds, possesses or lawfully uses
in the operation of its business all governmental franchises, licenses, permits,
easements, rights, applications, filings, registrations and other authorizations
that are necessary for it to conduct its business as now conducted in all
material respects or for the ownership and use of the material assets owned or
used by such SPAR Marketing Company in the conduct of its business (each a "SPAR
Permit" and collectively the "SPAR Permits").

(b) Each SPAR Permit is valid and in full force and effect, and no SPAR
Permit will be terminated or impaired in any material respect or become
terminable as a result of the SPAR Premerger Transactions, the Merger or any
other transaction contemplated by this Agreement.

Section 3.07. Real and Personal Property. Except as otherwise set forth
in the SPAR Disclosure Letter:

(a) All buildings, leasehold improvements, structures, facilities, and
fixtures used in any material respect by any SPAR Marketing Company in the
conduct of its business (limited in the case of leased property to the primary
demised premises) (each a "SPAR Premises") (i) are leased by any SPAR Marketing
Company pursuant to a valid lease (each a "SPAR Realty Lease" and collectively
the "SPAR Realty Leases"), except as may be limited by the Bankruptcy
Exceptions, (ii) are in good operating condition and repair (subject to normal
wear and tear, replacement, retirement, and maintenance), (iii) are usable in
the regular and ordinary course of business, and (iv) are used in compliance in
all material respects with all Applicable Laws and authorizations relating to
their construction (limited to tenant improvements in the case of leased
property), use and operation. A list of all SPAR Realty Leases is set forth in
the SPAR Disclosure Letter. No SPAR Marketing Company owns any real estate.

(b) All items of equipment and other tangible property and assets used
in any material respect by any SPAR Marketing Company in the conduct of its
business (i) are either (A) owned by any SPAR Marketing Company, or (B) leased
by any SPAR Marketing Company pursuant to a valid lease (each a "SPAR Personalty
Lease"

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and collectively the "SPAR Personalty Leases"), except as may be limited by the
Bankruptcy Exceptions, (ii) are in good operating condition and repair (subject
to normal wear and tear, replacement, retirement, and maintenance), (iii) are
usable in the regular and ordinary course of business, and (iv) comply in all
material respects with all Applicable Laws and authorizations relating to their
construction, use and operation. A list of all SPAR Personalty Leases is set
forth in the SPAR Disclosure Letter.

Section 3.08. Contracts and Commitments. The SPAR Disclosure Letter sets
forth an accurate, correct and complete list of all material agreements,
contracts, commitments, arrangements and understandings, written or oral,
including all amendments and supplements thereto, of each SPAR Marketing Company
(the "SPAR Contracts"), to which any SPAR Marketing Company is a party or is
bound, or by which any of their respective assets are bound, and which involve
any:

(a) agreement, contract, commitment or other legally binding arrangement
with any present or former (within the past two years) officer, employee or
material consultant involving annual salaries or minimum annual payments of
$100,000 or more (excluding normal salesmen's commissions);

(b) agreement, contract, commitment or other legally binding arrangement
for the future purchase of, or payment for, supplies or products, or for the
performance of services by a third party involving in any one case $100,000 or
more (other than those that may be terminated without penalty);

(c) agreement, contract, commitment or other legally binding arrangement
to sell or supply products or to perform services involving in any one case
$100,000 or more (other than those that may be terminated without penalty);

(d) agreement, contract, commitment or other legally binding arrangement
continuing over a period of more than twelve months from the date hereof and
requiring more than $100,000 in annual payments by a SPAR Marketing Company;

(e) sales representative, sales agency or similar agreement, contract,
commitment or other legally binding arrangement with any Person not under the
employ, control or direction of a SPAR Marketing Company;

(f) agreement, contract, commitment or other legally binding arrangement
containing a provision to indemnify any person or entity or assume any tax,
environmental or other non-ordinary course liability;

(g) agreement, contract, commitment or other legally binding arrangement
with any Governmental Entity (other than a SPAR Permit);

(h) note, debenture, bond, equipment trust agreement, letter of credit
agreement, loan agreement or other contract for the borrowing or lending of
money, or any guarantee, pledge or undertaking of or credit support for the
indebtedness of any other person by any SPAR Marketing Company;

(i) agreement, contract, commitment or other legally binding arrangement
for any charitable or political contribution;

(j) agreement, contract, commitment or other legally binding arrangement
for any capital expenditure or leasehold improvement in excess of $100,000;

(k) agreement, contract, commitment or other legally binding arrangement
limiting or restraining: (i) any SPAR Marketing Company or any successor thereto
from engaging in the businesses of the SPAR Parties or PIA Parties post Merger
(other than any customer contract not in excess of $100,000 that may contain
such

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a prohibition with respect to the performance of services for the customer's
competitors); or (ii) to the knowledge of any SPAR Marketing Company, any
employee of any SPAR Marketing Company from engaging in or competing with the
businesses of the SPAR Parties or PIA Parties post Merger on behalf of the
Parties; or

(l) agreement, contract, commitment or other legally binding arrangement
of any SPAR Marketing Company not made in the ordinary course of business (other
than as would have been disclosable in one of the preceding clauses but for the
amount or term thereof);

in each case excluding the SPAR Premerger Agreements, the SPAR Realty Leases,
the SPAR Personalty Leases, the SPAR Trademark Licenses, the SPAR Permits and
this Agreement (which are not intended, and shall not be deemed or construed, to
be SPAR Contracts). Except as otherwise set forth in the SPAR Disclosure Letter:
(A) each of the SPAR Contracts is valid and enforceable in all material
respects, except as may be limited by the Bankruptcy Exceptions; (B) each SPAR
Marketing Company is, and to the knowledge of such SPAR Marketing Company, all
other parties thereto are, in material compliance with the provisions thereof in
all material respects; and (C) no SPAR Marketing Company is nor has ever been a
party to any contract with any Governmental Entity subject to retroactive price
redetermination or renegotiation.

Section 3.09. Insurance. Except as otherwise set forth in the SPAR
Disclosure Letter: (a) the assets, properties and operations of each SPAR
Marketing Company are insured under various policies of general liability,
workers' compensation and other forms of insurance in amounts that are adequate
in the judgment of the SPAR Marketing Companies in relation to the business and
assets of such SPAR Marketing Company; (b) all such policies are in full force
and effect in accordance with their terms, no notice of cancellation has been
received, and to the knowledge of the SPAR Marketing Companies, with respect to
any such policy, there is no existing default or event that with the giving of
notice or lapse of time (or both), would constitute a material default under any
such policy; and (c) no SPAR Marketing Company has been refused any insurance,
nor has any SPAR Marketing Company's coverage been limited, by any insurance
carrier to which it has applied for insurance or with which it has carried
insurance during the past five years.

Section 3.10. Employees. Except as otherwise set forth in the SPAR
Disclosure Letter: (a) there have not been in the past five years and, to the
knowledge of the SPAR Marketing Companies, there are not pending, any organized
or coordinated labor disputes, work stoppages, requests for representation,
pickets or work slow-downs due to labor disagreements; (b) there are and have
been no unresolved material violations of any laws of any Governmental Entity
respecting the employment of any employees; (c) there is no unfair labor
practice, charge or complaint pending, unresolved or, to the knowledge of the
SPAR Marketing Companies, overtly threatened that would be reasonably likely to
be brought or filed with the National Labor Relations Board or similar body in
any foreign country; (d) the employees of the SPAR Marketing Companies are not
covered by any collective bargaining agreement; and (e) each SPAR Marketing
Company has paid or properly accrued in accordance with GAAP in the ordinary
course of business all wages and compensation due to employees, including all
vacations or vacation pay, holidays or holiday pay, sick days or sick pay, and
bonuses.

Section 3.11. Employee Benefit Plans and Arrangements. Except as
otherwise set forth in the SPAR Disclosure Letter:

(a) The SPAR Disclosure Letter sets forth a complete and accurate list
of each Benefit Plan covering any present or former officers, employees,
consultants, or directors of any SPAR Marketing Company (a "SPAR Benefit Plan").
As used in this Agreement: "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations promulgated
thereunder, as the same may be supplemented, modified, amended, restated or
replaced from time to time; "Pension Plan" of a referenced party shall mean each
"employee pension benefit plan" (as defined in Section 3(2) of ERISA) of the
referenced party; "Welfare Plan" of a referenced party shall mean each "employee
welfare benefit plan" (as defined in Section 3(i) of ERISA) of the referenced
party; "Other ERISA Benefit" of a referenced party shall mean any plan or
agreement governed by ERISA

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or the Code of the referenced party relating to deferred compensation, bonus and
performance compensation (other than salesmen commissions), stock purchase,
stock option, stock appreciation, severance, vacation, sick leave, holiday
fringe benefits, personnel policy, reimbursement program, insurance, welfare or
similar plan, program, policy or arrangement; and "Benefit Plan" of a referenced
party shall mean each Pension Plan, Welfare Plan and Other ERISA Benefit of the
referenced party; in each case to the extent maintained or contributed to, or
required to be maintained or contributed to, by or for which there otherwise is
any liability as of the Effective Time, of such party or its respective
affiliates or any other person or entity that, together with such party, is
treated as a single employer under Section 414(b), (c), (m) or (o) of the Code
(each, together with such party, a "Commonly Controlled Entity") for the benefit
of any present or former officer, employee, consultant or director.

(b) Each SPAR Benefit Plan is in substantial compliance with all
reporting, disclosure and other requirements applicable to such SPAR Benefit
Plan. Each SPAR Benefit Plan that is a Pension Plan and intended to be qualified
under Section 401(a) of the Code (each a "SPAR Pension Plan") has been
determined by the Internal Revenue Service to be so qualified and, to the
knowledge of the SPAR Marketing Companies, no condition exists or has occurred
that would adversely affect any such determination. Neither any SPAR Benefit
Plan, nor any SPAR Marketing Company, nor to the knowledge of any SPAR Marketing
Company any Commonly Controlled Entity of any SPAR Marketing Company or any
trustee or agent of any SPAR Benefit Plan, has been or is presently engaged in
any prohibited transactions as defined by Section 406 of ERISA or Section 4975
of the Code (i) for which an exemption is not applicable, or (ii) that would be
reasonably likely to subject any SPAR Marketing Company to a material amount of
tax or penalty imposed by Section 4975 of the Code or Section 502 of ERISA. To
the knowledge of the SPAR Marketing Companies, there is no event or condition
existing that would be deemed a "reportable event" (within the meaning of
Section 4043 of ERISA) with respect to which the thirty-day notice requirement
has not been waived. To the knowledge of the SPAR Marketing Companies, no
condition exists that would be reasonably likely to subject any SPAR Marketing
Company to a material amount of penalty under Section 4071 of ERISA.

(c) Neither any SPAR Marketing Company nor any Commonly Controlled
Entity of any SPAR Marketing Company is or has ever been party to any
"'multi-employer plan," as that term is defined in Section 3(37) of ERISA. True
and correct copies of (i) the most recent annual report (Form 5500 series) and
any attached schedules for each SPAR Benefit Plan (if any such report was
required by applicable law), (ii) the most recent summary plan description for
each SPAR Benefit Plan and (iii) the most recent determination letter issued by
the Internal Revenue Service for each SPAR Pension Plan have been provided to
PIA Delaware.

(d) With respect to each SPAR Benefit Plan, there are no actions, suits
or claims (other than routine claims for benefits in the ordinary course or
relating to qualified domestic relations orders within the meaning of Section
414(p) of the Code) pending or, to the knowledge of the SPAR Marketing
Companies, overtly threatened against any SPAR Benefit Plan, any SPAR Marketing
Company, any Commonly Controlled Entity of any SPAR Marketing Company or any
trustee or agent of any SPAR Benefit Plan, nor to the knowledge of the SPAR
Marketing Companies, is there any reasonable basis for such claims.

(e) With respect to each SPAR Benefit Plan to which any SPAR Marketing
Company or any Commonly Controlled Entity of any SPAR Marketing Company is a
party which constitutes a group health plan subject to Section 4980B of the
Code, each such SPAR Benefit Plan substantially complies, and in each case has
substantially complied, with all applicable requirements of Section 4980B of the
Code. There is no outstanding material liability (except for premiums that have
not become overdue) or other accrued but unpaid obligations under Title IV of
ERISA with respect to any SPAR Pension Plan, and no condition exists that would
be reasonably expected to result in any SPAR Marketing Company incurring a
material liability under Title IV of ERISA, either directly or with respect to
any Commonly Controlled Entity of any SPAR Marketing Company. All premiums
payable to the Pension Benefit Guaranty Corporation (the "PBGC") have been paid
prior to becoming overdue. Neither the PBGC nor any SPAR Marketing Company nor
any Commonly Controlled Entity of any SPAR Marketing Company has instituted
proceedings to terminate any SPAR Pension Plan that is subject to Title IV of
ERISA, and the PBGC has not informed any SPAR Marketing Company of its intent to
institute proceedings to terminate any such plan. Full payment has been

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made of all amounts that any SPAR Marketing Company or any Commonly Controlled
Entity of any SPAR Marketing Company was required to have paid as a contribution
to any SPAR Pension Plan that is subject to Title IV of ERISA (with
applicability determined as of the last day of the most recent fiscal year of
each of the SPAR Pension Plans ended prior to the date of this Agreement), and
none of the SPAR Pension Plans has incurred any material amount of "accumulated
funding deficiency" (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, as of the last day of the most recent fiscal year
of each such SPAR Pension Plan ended prior to the date of this Agreement.

(f) No SPAR Pension Plan is a defined benefit pension plan. Each SPAR
Benefit Plan is, and its administration is and at all times has been in
substantial compliance with, and no SPAR Marketing Company has received any
claim or notice that any such SPAR Benefit Plan is not in substantial compliance
with, its terms and all Applicable Laws, including without limitation, to the
extent applicable, the requirements of ERISA and the Code. No SPAR Marketing
Company and no Commonly Controlled Entity of any SPAR Marketing Company is in
default in any material respect in performing any of its contractual obligations
under any SPAR Benefit Plan or any related trust agreement or insurance
contract. There are no material outstanding liabilities of any SPAR Benefit Plan
other than liabilities for benefits to be paid to participants in any SPAR
Benefit Plan and their beneficiaries in accordance with the terms of such SPAR
Benefit Plan. Each SPAR Benefit Plan may be amended or modified or terminated by
the applicable SPAR Marketing Company or a Commonly Controlled Entity of a SPAR
Marketing Company at any time without liability except under any defined pension
benefit plan. No SPAR Benefit Plan other than a SPAR Pension Plan, retiree
medical plan or severance plan provides benefits to any individual after
termination of employment.

(g) The consummation of the transactions contemplated by the SPAR
Premerger Agreements and this Agreement will not: (A) entitle any employee of
any SPAR Marketing Company to severance pay, unemployment compensation or any
other payment or benefit; (B) accelerate the time of payment or vesting, or
increase the amount of compensation due to any such employee; (C) result in any
liability under Title IV of ERISA; (D) result in any prohibited transaction
described in Section 406 of ERISA or Section 4975 of the Code for which an
exemption is not available; or (E) result (either alone or in conjunction with
any other event) in the payment or series of payments by any SPAR Marketing
Company or any of its affiliates to any person of an "excess parachute payment"
within the meaning of Section 280G of the Code.

(h) With respect to each SPAR Benefit Plan that is funded wholly or
partially through an insurance policy, all material amounts of premiums required
to have been paid to date under the insurance policy have been paid, all
material amounts of premiums required to be paid under the insurance policy
through the Closing Date will have been paid on or before the Closing Date and,
as of the Closing Date, there will be no material amount of liability of any
SPAR Marketing Company or any Commonly Controlled Entity of any SPAR Marketing
Company under any insurance policy or ancillary agreement with respect to such
insurance policy in the nature of a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or partially
out of events occurring prior to the Closing Date.

(i) Each SPAR Benefit Plan that constitutes a "welfare benefit plan"
(within the meaning of Section 3(i) of ERISA) for which contributions are
claimed by any SPAR Marketing Company or any Commonly Controlled Entity of any
SPAR Marketing Company as deductions under any provision of the Code is in
material compliance with all applicable requirements pertaining to such
deduction. With respect to any "welfare benefit fund" (within the meaning of
Section 419 of the Code) related to such a welfare benefit plan, there is no
disqualified benefit (within the meaning of Section 4976(b) of the Code) that
would result in the imposition of a tax under Section 4976(a) of the Code. All
welfare benefit funds intended to be exempt from tax under Section 501(a) of the
Code have been determined by the Internal Revenue Service to be so exempt and no
event or condition exists or has occurred which would adversely affect any such
determination.

(j) No SPAR Marketing Company has any Benefit Plan outside of the United
States.

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(k) All persons classified by any SPAR Marketing Company as independent
contractors or "leased employees" within the meaning of Section 414(n) of the
Code ("SPAR Leased Employees") satisfy and have at all times satisfied the
requirements of applicable law to be so classified. Each SPAR Marketing Company
has fully and accurately reported their compensation on IRS Forms 1099 when
required to do so. No SPAR Marketing Company has any obligation to provide
benefits with respect to such independent contractors or SPAR Leased Employees
under any SPAR Benefit Plan or otherwise.

Section 3.12. Compliance with Law. Except as otherwise set forth in the
SPAR Disclosure Letter: each SPAR Marketing Company has complied in all material
respects with each, and is not in violation in any material respect of, any
Applicable Law to which such SPAR Marketing Company's business, operations,
assets or properties are subject.

Section 3.13. Transactions With Affiliates. Except as otherwise set
forth in the SPAR Disclosure Letter: (a) no stockholder and no director, officer
or employee of any SPAR Marketing Company, or any member of his or her immediate
family or any other of its, his or her affiliates, owns or has a 5% or more
ownership interest in any material business, corporation or other entity that is
or was during the last three years a party to, or in any property which is or
was during the last three years the subject of, any contract, agreement,
commitment or legally binding arrangement with such SPAR Marketing Company; and
(b) the SPAR Disclosure Letter includes a complete list as of the date hereof of
all amounts owed by any SPAR Marketing Company to any SPAR Principal (other than
salary and expense reimbursements in the normal course) or any affiliate of any
SPAR Principal (other than for goods purchased or services rendered in the
normal course) or owed on account of any loan or advance to any SPAR Marketing
Company by any SPAR Principal or any affiliate of any SPAR Principal (other than
for goods purchased or services rendered in the normal course).

Section 3.14. Litigation. Except as otherwise set forth in the SPAR
Disclosure Letter, as of the date hereof: (a) no litigation, including any
arbitration, investigation or other proceeding of or before any Governmental
Entity, is pending (or to the knowledge of the SPAR Marketing Companies) overtly
threatened against any SPAR Marketing Company, other than litigation that (i) is
not reasonably likely to be adversely determined or (ii) if reasonably likely to
be adversely determined, would not be reasonably likely to have, individually or
in the aggregate with other such litigation, a SPAR Material Adverse Effect; and
(b) no SPAR Marketing Company is a party to or subject to the provisions of any
SPAR Court Order.

Section 3.15. Taxes. Except as otherwise set forth in the SPAR
Disclosure Letter:

(a) All federal, state, local and foreign tax returns, reports,
statements and other similar filings required to be filed by any SPAR Marketing
Company (the "SPAR Tax Returns") with respect to any material federal, state,
local or foreign taxes, assessments, interest, penalties, deficiencies, fees and
other governmental charges or impositions (including without limitation all
income tax, unemployment compensation, social security, payroll, withholding,
sales and use, excise, privilege, property, ad valorem, franchise, license,
school and any other tax or similar governmental charge or imposition, and
interest and penalties therein, under the Applicable Laws of the United States
or any state or Municipal or political subdivision thereof or any foreign
country or political subdivision thereon ("Taxes") have been timely filed with
the appropriate governmental agencies in all jurisdictions in which such SPAR
Tax Returns are required to be filed, and all such SPAR Tax Returns are true,
complete and correct in all material respects and fairly reflect the liabilities
of the SPAR Marketing Companies for Taxes for the periods, property or events
covered thereby.

(b) All Taxes, including (without limitation) those called for by the
SPAR Tax Returns, required to be paid or withheld by any SPAR Marketing Company
and any deficiency assessments, penalties and interest for which a notice of
assessment has been received (other than as may have been settled and paid in
full in accordance therewith, and other than those being contested, if any, as
set forth in the SPAR Disclosure Letter) have been timely paid or withheld.

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(c) The accruals for Taxes contained in the Interim SPAR Marketing
Financial Statements for the Tax liabilities of the SPAR Marketing Companies
have been made in accordance with GAAP as of that date and include adequate
provision under GAAP for all deferred Taxes (other than necessary increments due
to the passage of time), except that no accruals have been made for income Taxes
for SINC and SBRS, which are Subchapter S corporations under the Code. SMF
utilizes the accrual method of accounting for income tax purposes, SINC and SBRS
utilize the cash method of accounting for income tax purposes, and none of them
has changed its method of accounting for income tax purposes in the past five
years. Each SPAR Marketing Company that has filed SPAR Tax Returns under
Subchapter S of the Code has made a timely and effective election to be taxed
under the provisions of Subchapter S of the Code and has at no time been taxable
under the provisions of Subchapter C of the Code. No such SPAR Marketing Company
has any net unrealized built-in gain that has not been recognized within the
meaning of Section 1374 of the Code.

(d) No SPAR Marketing Company is or has at any time ever been a party to
a Tax sharing, Tax indemnity or Tax allocation agreement, and no SPAR Marketing
Company has assumed any Tax liability of any other person or entity under
contract.

(e) No SPAR Marketing Company has received any notice of assessment or
proposed assessment in connection with any SPAR Tax Returns, other than as may
have been settled and paid in full in accordance therewith, and there are no
pending tax examinations of or material tax claims asserted against any SPAR
Marketing Company or any of its assets or properties. No SPAR Marketing Company
has extended, or waived the application of, any statute of limitations of any
jurisdiction regarding the assessment or collection of any Taxes.

(f) There are now, and as of immediately following the Effective Time
there will be, no liens (other than any lien for Taxes not yet overdue and
payable) on any of the assets or properties of any SPAR Marketing Company
relating to or attributable to Taxes. To the knowledge of the SPAR Marketing
Companies, there is no reasonable basis for the assertion of any claim relating
to or attributable to Taxes that, if adversely determined, would result in any
lien on the assets of any SPAR Marketing Company or otherwise have a SPAR
Material Adverse Effect.

(g) None of the SPAR Marketing Companies has any knowledge of any
reasonable basis for any additional assessment of any Taxes for any period
ending on or before the Closing Date (other than increased Taxes based upon
increased business units, business sites, payroll, profits or other taxable
attribute relating to an expanding enterprise prior to the Closing Date). All
Tax payments related to employees, including income tax withholding, FICA, FUTA,
unemployment and worker's compensation, required to be made by the SPAR
Marketing Companies, have been fully and properly paid, withheld, accrued or
recorded.

Section 3.16. Intellectual Property Matters. Except as otherwise set
forth in the SPAR Disclosure Letter:

(a) The SPAR Disclosure Letter sets forth all patents, trademarks, trade
names, service marks, copyrights, software, material trade secrets or material
know-how owned or used in any material respect by any SPAR Marketing Company in
the conduct of its business (the "SPAR Intellectual Property"), excluding,
however, all readily commercially available software programs licensed to a SPAR
Marketing Company (for example, without limitation, Windows, Windows NT, MS
Word, MS Excel, and MS Explorer) ("Commercial Software"), which Commercial
Software need not be set forth on such schedule. All of the SPAR Intellectual
Property is (or will be as of the Effective Time) owned by or licensed to STM or
one of the SPAR Marketing Companies free and clear of any liens (except insofar
as a license or the restrictions thereunder may constitute a lien, and except
for the SPAR Trademark Licenses and the Business Manager Agreement). At or
before the Closing, (i) SIT and SMS will enter into non-exclusive perpetual
royalty free licenses with STM respecting their use of the name "SPAR" and
certain other trademarks and related rights owned or to be owned by STM (the
"SPAR Trademark Licenses") such agreement to be substantially in the form
attached as Exhibit C hereto, and (ii) SMF, SMS and SIT will enter into a
Software Ownership Agreement

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with respect to the Internet job scheduling software (called "Business Manager")
jointly developed and owned by them, such agreement to be substantially in the
form attached as Exhibit D hereto (the "Business Manager Agreement").

(b) There are no ongoing royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements from any SPAR Marketing Company as a
licensor, pertaining to the current use of the SPAR Intellectual Property,
except as may be applicable under the Commercial Software, the SPAR Trademark
Licenses and the Business Manager Agreement.

(c) No SPAR Marketing Company infringes upon or unlawfully or wrongfully
uses any patent, trademark, trade name, service mark, copyright or trade secret
owned or claimed by any other person or entity. No action, suit, proceeding or
investigation has been instituted or, to the knowledge of the SPAR Marketing
Companies, overtly threatened relating to any, patent, trademark, trade name,
service mark, copyright or trade secret formerly or currently used by any SPAR
Marketing Company. None of the SPAR Intellectual Property is subject to any
outstanding order, decree or judgment. No SPAR Marketing Company has agreed to
indemnify any person or entity for or against any infringement of or by the SPAR
Intellectual Property. Except for (i) the SPAR Intellectual Property licensed or
to be licensed to SMS and SIT by STM, (ii) the common ownership of the software
reflected in the Business Manager Agreement, and (iii) the ownership of and
director and officer positions in the SPAR Marketing Companies, SGI, SMS, SIT,
STM and the SPAR Parties, no present or former employee of any SPAR Marketing
Company, and no person or entity other than SGI, SMS, SIT, STM and the SPAR
Parties (and the SPAR Principals solely as the officers and shareholders
thereof), directly or indirectly owns or has any proprietary, financial or other
interest in, in whole or in part, any SPAR Intellectual Property.

(d) All SPAR Intellectual Property in the form of computer software that
is utilized by any SPAR Marketing Company in the operation of its business is
capable of processing date data between and within the twentieth and
twenty-first centuries or can be rendered capable of processing such data prior
to the date necessary to avoid disruption of its business by utilizing the
employees of one or more of the SPAR Marketing Companies in the normal course of
business and by expenditure of not more than $100,000 in excess of the cost of
software purchased for reasons other than the failure of existing software to be
capable of such processing.

Section 3.17. Existing Condition. Except as otherwise set forth in the
SPAR Disclosure Letter, since the Interim SPAR Marketing Balance Sheet Date, no
SPAR Marketing Company has:

(a) incurred any liabilities, other than liabilities incurred in the
ordinary course of business consistent with past practice (including, without
limitation, advances under its commitments and lines of credit), the liabilities
contemplated under the SPAR Premerger Agreements;

(b) discharged or satisfied any lien or encumbrance or paid any
liabilities, other than in the ordinary course of business consistent with past
practice (including, without limitation, repayments under its commitments and
lines of credit), or failed to pay or discharge when due any liabilities, other
than in the ordinary course of business consistent with past practice, or where
the obligation is being contested in good faith, and the failure to pay or
discharge has not caused and would not be reasonably likely to cause any SPAR
Material Adverse Effect;

(c) sold, encumbered, assigned or transferred any assets, properties or
rights or any interest therein, or made any agreement or commitment or granted
any option or right with, of or to any person to acquire any assets, properties
or rights of any SPAR Marketing Company or any interest therein, except for
sales and dispositions in the ordinary course of business consistent with past
practice, and except for the transactions contemplated under the SPAR Premerger
Agreements and this Agreement;

(d) created, incurred, assumed or guaranteed any indebtedness for money
borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage,
lien, pledge, security interest, conditional sales contract or other encumbrance
of any nature whatsoever, other than (i) in the ordinary course of business
(including,

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without limitation, future advances and floating liens under existing, increased
or replacement credit facilities), or (ii) in connection with the financing of
the MCI Acquisition;

(e) made or suffered any early cancellation or termination of any
Material SPAR Document (other than in the ordinary course of business with a
vendor to a SPAR Marketing Company); or amended, modified or waived any
substantial debts or claims held by it under any Material SPAR Document other
than in the ordinary course of business;

(f) declared, set aside or paid any dividend or made or agreed to make
any other distribution or payment in respect of its capital shares or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase or acquire any of
shares of its capital stock or its other ownership interests;

(g) suffered any damage, destruction or loss that has had or will have
(i) a SPAR Material Adverse Effect, or (ii) a replacement cost individually or
in the aggregate at more than $100,000;

(h) suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;

(i) suffered any material adverse change in the business, operations,
properties, assets or financial condition of the SPAR Marketing Companies taken
as a whole;

(j) received notice or had knowledge of any actual or overtly threatened
organized or coordinated labor trouble, strike or other similar occurrence,
event or condition of any similar character that has had or would be reasonably
likely to have a SPAR Material Adverse Effect;

(k) increased the salaries or other compensation of, or made any advance
(excluding advances for ordinary and necessary business expenses) or loan to,
any of its employees or made any increase in, or any addition to, other benefits
to which any of its employees are entitled (in each case other than increases in
salaries or other compensation in the ordinary course of business consistent
with past practice and that in the aggregate have not resulted in a SPAR
Material Adverse Effect);

(l) changed any of the accounting principles followed by it or the
methods of applying such principles, other than the contemplated change for
certain of the SPAR Marketing Companies from "subchapter s" status to
"subchapter c" status for federal income tax purposes (to be effected shortly
before the Effective Time) and other changes in implementing the SPAR Premerger
Transactions;

(m) except as contemplated by the SPAR Premerger Agreements or this
Agreement, entered into any transaction other than in the ordinary course of
business consistent with past practice;

(n) except as contemplated by the SPAR Premerger Agreements or this
Agreement, changed its authorized capital or its securities outstanding or
otherwise changed its ownership interests, or granted any options, warrants,
calls, conversion rights or commitments with respect to any of its capital stock
or other ownership interests; or

(o) agreed to take any of the actions referred to above.

Section 3.18. Books of Account. Except as otherwise set forth in the
SPAR Disclosure Letter: (a) the books, records and accounts of each SPAR
Marketing Company accurately and fairly reflect, in reasonable detail, the
transactions and the assets and liabilities of such SPAR Marketing Company; and
(b) no SPAR Marketing Company has engaged in any transaction, maintained any
bank account or used any of the funds of such SPAR

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Marketing Company except for transactions, bank accounts and funds that have
been and are fairly reflected in the normally maintained books and records of
the business.

Section 3.19. Environmental Matters. Except as otherwise set forth in
the SPAR Disclosure Letter:

(a) Each SPAR Marketing Company has secured, and is in compliance in all
material respects with, all Environmental Permits (as such term is defined
below), with respect to any premises on which its business is operated. Each
SPAR Marketing Company is in compliance in all material respects with all
applicable Environmental Laws (as hereinafter defined).

(b) As used herein: (i) "Environmental Laws" shall mean any and all
treaties, laws, regulations, ordinances, enforceable requirements, binding
determinations, orders, decrees, judgments, injunctions, permits, approvals,
authorizations, licenses or binding agreements issued, promulgated or entered
into by any Governmental Entity, relating to the environment, preservation or
reclamation of natural resources, or to the management, Release (as defined
below) or overtly threatened Release of or exposure to Hazardous Substances (as
such term is defined below), including, CERCLA (as such term is defined below),
the Resource Conservation and Recovery Act. 42 U.S.C. Section 6901 et seq., the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Clean
Air Act, 42 U.S.C. Section 7401 et seq., the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq., the Occupational Safety and Health Act, 29 U.S.C.
Section 651 et seq., the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et. seq., the Safe Drinking Water Act, 42 U.S.C.
Section 300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq., and any similar or implementing state or local law and all
amendments or regulations promulgated thereunder; (ii) "Release" shall mean any
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching, emanation or migration of any Hazardous Substance in, into,
onto or through the environment (including ambient air, surface water, ground
water, soils, land surface, subsurface strata, workplace or structure); (iii)
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 et seq.; (iv) "Hazardous Substances" shall
mean any waste or other substance that is listed, defined, designated, or
classified as, or otherwise determined to be, hazardous, radioactive, or toxic
under or pursuant to any Environmental Law, including any admixture or solution
thereof, and specifically including petroleum and all derivatives thereof or
synthetic substitutes therefor and asbestos or asbestos-containing materials;
and (v) the term "Environmental Permits" means all permits, licenses, approvals
or authorizations from any Governmental Entity required under Environmental
Laws.

(c) No SPAR Marketing Company has: (x) received any written
communication from any Governmental Entity that alleges that any SPAR Marketing
Company is not in compliance in any material respect with any Environmental Laws
or Environmental Permits; (y) entered into or agreed to any court decree or
order, and no SPAR Marketing Company is subject to any judgment, decree or
order, relating to compliance with any Environmental Law or to investigation or
cleanup of a Hazardous Substance under any Environmental Law in any material
respect; or (z) received a CERCLA 104(e) information request or has been named a
potentially responsible party for any National Priorities List site under CERCLA
or any site under analogous state law or received an analogous notice or request
from any non-U.S. Governmental Entity, which notice, request or any resulting
inquiry or litigation has not been fully and finally resolved without
possibility of reopening. No lien, charge, interest or encumbrance has been
attached, asserted, or to the knowledge of the SPAR Marketing Companies, overtly
threatened to or against any material assets or properties of any SPAR Marketing
Company pursuant to any Environmental Law.

(d) To the knowledge of the SPAR Marketing Companies: (i) there has been
no unlawful treatment, storage, disposal or release by any SPAR Marketing
Company or any of its representatives of any Hazardous Substance on any SPAR
Premises; (ii) there has been no unlawful treatment, storage, disposal or
release of any Hazardous Substance on any SPAR Premises; (iii) there are no
aboveground storage tanks located on or underground storage tanks located within
any SPAR Premises; (iv) each aboveground storage tank formerly located on or
underground storage tank formerly located within any SPAR Premises (if any) have
been removed in accordance with

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all Environmental Laws and no residual contamination from any Hazardous
Substance, if any, remains at such sites in excess of applicable standards under
Applicable Law; (v) there are no polychlorinated biphenyls ("PCBs") leaking from
any article, container or equipment located on or under any SPAR Premises, and
there are no such articles, containers or equipment containing leaking PCBs; and
(vi) there is no asbestos containing material not contained in a manner
reasonably acceptable under Applicable Law in any material respect located on or
under any SPAR Premises.

Section 3.20. No Illegal Payments. No SPAR Marketing Company and, to the
knowledge of the SPAR Marketing Companies, no affiliate, officer, agent or
employee of any SPAR Marketing Company, has directly or indirectly on behalf of
or with respect to any SPAR Marketing Company during the past five years, (a)
made any unlawful domestic or foreign political contributions, (b) made any
payment or provided services that were unlawful in any material respect for such
Person to make or provide or for the recipient to receive, (c) received any
payment or services that were unlawful in any material respect for the payer or
the provider of such services to make or provide, or (d) made any payment to any
person or entity, or agent or employee thereof, in connection with any SPAR
Contract to induce such person or entity to enter into such SPAR Contract that
were unlawful in any material respect for the payer to make or provide or the
recipient to receive. No SPAR Marketing Company has during the past five years,
(i) had any transactions or payments not recorded in their accounting books and
records in accordance with GAAP in any material respect, or (ii) had any
off-book bank or cash accounts or "slush funds" related to any SPAR Marketing
Company.

Section 3.21. Brokers. The SPAR Disclosure Letter lists all investment
banking fees, finders' fees, brokers' commissions and similar payments which any
SPAR Marketing Company or (to the knowledge of any SPAR Marketing Company) any
SPAR Principal has paid or will be obligated to pay in connection with the
transactions contemplated by the SPAR Premerger Agreements or this Agreement.

Section 3.22. No Misrepresentation by the SPAR Marketing Companies. The
representations and warranties of the SPAR Marketing Companies made or contained
in this Agreement (whether with respect to any SPAR Marketing Company or
otherwise), and the information contained in the SPAR Disclosure Letter and the
other certificates, schedules and documents furnished by or on behalf of any
SPAR Marketing Company in connection with the transactions contemplated by this
Agreement (whether with respect to any SPAR Marketing Company or otherwise), do
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein in order to make it, in the light of
the circumstances under which made, not misleading.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PIA PARTIES

Except as otherwise disclosed in that certain letter of even date
herewith delivered to the SPAR Parties prior to the execution hereof (which
letter shall contain appropriate references and cross references to identify the
Sections hereof to which the information in such letter relates) (the "PIA
Disclosure Letter"), each PIA Party, jointly and severally, represents and
warrants to the SPAR Parties as follows:

Section 4.01. Corporate Existence. Except as otherwise disclosed in the
PIA Disclosure Letter:

(a) Each PIA Party is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation. PIA Delaware has
no subsidiaries other than PIA California. The PIA Disclosure Letter sets forth
a complete list of the subsidiaries of PIA California (individually, a "PIA
Subsidiary" and collectively, the "PIA Subsidiaries") and the owner of each.

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(b) Each PIA Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. PIA Delaware, PIA California, and the PIA Subsidiaries are
sometimes collectively referred to individually as a "PIA Company" and
collectively as the "PIA Companies".

(c) Each PIA Company is duly qualified to conduct business and is in
good standing as a foreign corporation in each jurisdiction in which the conduct
of its business requires it to be so qualified, except where the failure to be
so qualified would not have a material adverse effect on the business,
operations, properties, assets or financial condition of the PIA Companies taken
as a whole (a "PIA Material Adverse Effect").

(d) As of the date of this Agreement, except to the extent it is the
sole stockholder of another PIA Company, no PIA Company owns, of record or
beneficially, or controls, directly or indirectly, any capital stock, any
securities convertible into capital stock or any other equity interest in any
corporation, association or other business entity or is, directly or indirectly,
a participant in any joint venture, partnership or other non-corporate entity.

Section 4.02. Authorization and Enforceability. Except as otherwise
disclosed in the PIA Disclosure Letter:

(a) Each PIA Party has the corporate power , authority and legal right
to execute, deliver and perform this Agreement and the other Merger Documents to
which it is a party.

(b) The execution, delivery and performance of this Agreement and each
of the other Merger Documents by each PIA Party (to the extent it is a party
thereto) have been duly authorized by all necessary corporate action and no
further corporate action on the part of any PIA Party is necessary to authorize
this Agreement or any other Merger Document to which it is a party or the
performance of the transactions contemplated hereby or thereby; provided
however, that the issuance of the shares of PIA Delaware Stock pursuant to
Section 2.01(a) (the "Share Issuance") (i) must be approved by the stockholders
of PIA Delaware in accordance with Rule 4310(c)(25) of The Nasdaq Stock Market
(the "Nasdaq Rules") and (ii) cannot be effected prior to the approval of the
Proposed PIA Certificate of Amendment (as defined in Section 4.03(b) hereof) by
the stockholders of PIA Delaware as required by the General Corporation Law of
the State of Delaware (the "DGCL").

(c) This Agreement has been duly executed and delivered on behalf of
each PIA Party and constitutes a legal, valid and binding obligation of each PIA
Party, enforceable in accordance with its terms, except as may be limited by the
Bankruptcy Exceptions.

Section 4.03. Capital Stock of the PIA Parties. Except as otherwise
disclosed in the PIA Disclosure Letter:

(a) As of the date of this Agreement, the authorized capital stock of
PIA Delaware consists of (i) 15,000,000 shares of PIA Delaware Stock, of which
5,478,458 shares are issued and outstanding and fully paid and non assessable,
and (ii) 3,000,000 shares of preferred stock, $0.01 par value per share, of
which none have been issued or are outstanding. All of the issued and
outstanding shares of capital stock of PIA California are owned beneficially and
of record by PIA Delaware, all of the issued and outstanding shares of capital
stock of each of the PIA Subsidiaries are owned beneficially and of record by
PIA California, and all such shares of capital stock are free and clear of all
Restrictions and have been validly issued and are fully paid and nonassessable.

(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 "Proposed
PIA Certificate of Amendment"), which (among other things) provides for an
increase in the authorized number of shares of PIA Delaware Stock to 47,000,000
shares and changes the name of PIA Delaware to "SPAR GROUP, INC." (or such other
name as the Parties may mutually agree

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prior to the mailing of the PIA Proxy Materials) and deletes Article Tenth
containing the prohibition against actions by stockholders without a meeting,
and (ii) 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
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.

(c) The PIA Disclosure Letter sets forth a complete list of all
outstanding rights, subscriptions, warrants, calls, convertible securities,
unsatisfied preemptive rights, options or other agreements or arrangements of
any kind pursuant to which any PIA Company may be required to issue any of its
authorized but unissued capital stock. No PIA Company has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any
outstanding shares of capital stock or to pay any dividend or make any
distribution in respect thereto. The PIA Delaware Board has approved the
adoption of the PIA Special Purpose Plan, a copy of which is annexed hereto as
Exhibit B, pursuant to which the Substitute Options will be issued as provided
in Section 2.04 hereof. The PIA Delaware Board has also approved an amendment
and restatement of the PIA 1995 Stock Option Plan, a copy of which is annexed
hereto as Exhibit F (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 "Proposed Plan Amendment"), that would (among other
things) increase the number of shares of Common Stock issuable upon the exercise
of options granted thereunder from 1,300,000 shares to 3,500,000 shares, subject
to the consummation of the Merger.

Section 4.04. No Violations. Except as otherwise disclosed in the PIA
Disclosure Letter:

(a) The execution, delivery and performance of this Agreement by the PIA
Parties do not and will not violate or result in the breach of any term,
condition or provision of, or require the consent of any other person under (i)
any existing Applicable Law to which any PIA Company is subject, (ii) any
judgment, order, writ, injunction, decree or award of any Governmental Entity
that is applicable to any PIA Company (each a "PIA Court Order"), (iii) the
charter documents of any PIA Company, or (iv) any PIA Contract, PIA Realty
Lease, material PIA Personalty Lease or other material mortgage, indenture,
agreement, contract, commitment, lease, permit, plan, authorization, instrument
or document to which any PIA Company is a party, by which any PIA Company has
any rights or by which any of the properties or assets of any PIA Company is
bound or subject (each a "Material PIA Document").

(b) The execution, delivery and performance of this Agreement by each
PIA Party (to the extent it is a party thereto) will not be reasonably likely to
result in (A) any termination, cancellation or acceleration of any Material PIA
Document or (B) termination, modification or other change in any material
respect of the existing rights and obligations of any PIA Party under such
Material PIA Document.

(c) No PIA Company, and to the knowledge of each PIA Party, no other
party thereto, is in default in any material respect under any Material PIA
Document, and to the knowledge of each PIA Party, no event has occurred that
with the giving of notice or lapse of time (or both) would constitute such a
default.

(d) Other than the filing of a pre-merger notification report under the
HSR Act and in connection with or in compliance with the provisions of the
Securities Act and the Exchange Act, no authorization, approval or consent of,
and no registration or filing with, any Governmental Entity is required in
connection with the execution and delivery of this Agreement by any PIA Party
and the performance of the transactions contemplated hereunder .

Section 4.05. Financial Statements. Except as otherwise disclosed in the
PIA Disclosure Letter: PIA Delaware has delivered to the SPAR Parties copies of
the consolidated balance sheets of the PIA Companies at December 31, 1998 (the
"PIA Balance Sheet Date"), and December 31, 1997, and the related consolidated
statements of income, cash flows and changes in stockholder's equity for the
fiscal years then ended, together with the report of Deloitte & Touche LLP
thereon (the "PIA Financial Statements"). The PIA Financial Statements have been
prepared

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in accordance with GAAP consistently applied throughout the periods involved and
fairly present the consolidated financial position and the consolidated results
of operations of the PIA Companies as of the dates and for the periods
indicated.

Section 4.06. Permits. Except as otherwise disclosed in the PIA
Disclosure Letter:

(a) Each PIA Company owns, holds, possesses or lawfully uses in the
operation of its business all governmental franchises, licenses, permits,
easements, rights, applications, filings, registrations and other authorizations
that are necessary for it to conduct its business as now conducted in all
material respects or for the ownership and use of the material assets owned or
used by such PIA Company in the conduct of its business (each a "PIA Permit" and
collectively the "PIA Permits").

(b) Each PIA Permit is valid and in full force and effect and no PIA
Permit will be terminated or impaired in any material respect or become
terminable as a result of the Merger or any other transaction contemplated by
this Agreement.

Section 4.07. Real and Personal Property. Except as otherwise set forth
in the PIA Disclosure Letter:

(a) All buildings, leasehold improvements, structures, facilities, and
fixtures used in any material respect by any PIA Company in the conduct of its
business (limited in the case of leased property to the primary demised
premises) (each a "PIA Premises") (i) are leased by a PIA Party pursuant to a
valid lease (each a "PIA Realty Lease" and collectively the "PIA Realty
Leases"), except as may be limited by the Bankruptcy Exceptions, (ii) are in
good operating condition and repair (subject to normal wear and tear,
replacement, retirement, and maintenance), (iii) are usable in the regular and
ordinary course of business, and (iv) used in compliance in all material
respects with all Applicable Laws and authorizations relating to their
construction (limited to tenant improvements in the case of leased property),
use and operation. A list of all PIA Realty Leases is set forth in the PIA
Disclosure Letter. No PIA Company owns any real estate.

(b) All items of equipment and other tangible property and assets used
in any material respect by any PIA Company in the conduct of its business (i)
are either (A) owned by a PIA Company, or (B) leased by a PIA Company pursuant
to a valid lease (each a "PIA Personalty Lease" and collectively the "PIA
Personalty Leases"), except as may be limited by the Bankruptcy Exceptions, (ii)
are in good operating condition and repair (subject to normal wear and tear,
replacement, retirement, and maintenance), (iii) are usable in the regular and
ordinary course of business, and (iv) comply in all material respects with all
Applicable Laws and authorizations relating to their use and operation. A list
of all PIA Personalty Leases is set forth in the PIA Disclosure Letter.

Section 4.08. Contracts and Commitments. The PIA Disclosure Letter sets
forth an accurate, correct and complete list of all material agreements,
contracts, commitments, arrangements and understandings, written or oral,
including all amendments and supplements thereto, of each PIA Company (the "PIA
Contracts"), to which any PIA Company is a party or is bound, or by which any of
their respective assets are bound, and which involve any:

(a) agreement, contract, commitment or other legally binding arrangement
with any present or former (within the past two years) officer, employee or
material consultant involving annual salaries or minimum annual payments of
$100,000 or more (excluding normal salesmen's commissions);

(b) agreement, contract, commitment or other legally binding arrangement
for the future purchase of, or payment for, supplies or products, or for the
performance of services by a third party involving in any one case $100,000 or
more (other than those that may be terminated without penalty);

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(c) agreement, contract, commitment or other legally binding arrangement
to sell or supply products or to perform services involving in any one case
$100,000 or more (other than those that may be terminated without penalty);

(d) agreement, contract, commitment or other legally binding arrangement
continuing over a period of more than twelve months from the date hereof and
requiring more than $100,000 in annual payments by a PIA Company;

(e) sales representative, sales agency or similar agreement, contract,
commitment or other legally binding arrangement with any Person not under the
employ, control or direction of a PIA Company;

(f) agreement, contract, commitment or other legally binding arrangement
containing, a provision to indemnify any person or entity or assume any tax,
environmental or other non-ordinary course liability;

(g) agreement, contract, commitment or other legally binding arrangement
with any Governmental Entity (other than a PIA Permit);

(h) note, debenture, bond, equipment trust agreement, letter of credit
agreement, loan agreement or other contract for the borrowing or lending of
money, or any guarantee, pledge or undertaking of or credit support for the
indebtedness of any other person by any PIA Company;

(i) agreement, contract, commitment or other legally binding arrangement
for any charitable or political contribution;

(j) agreement, contract, commitment or other legally binding arrangement
for any capital expenditure or leasehold improvement in excess of $100,000;

(k) agreement, contract, commitment or other legally binding arrangement
limiting or restraining: (i) any PIA Company or any successor thereto from
engaging in the businesses of the SPAR Parties or PIA Parties post Merger (other
than any customer contract not in excess of $100,000 that may contain such a
prohibition with respect to the performance of services for the customer's
competitors); or (ii) to the knowledge of any PIA Delaware or PIA California,
any employee of any PIA Company from engaging in or competing with the
businesses of the SPAR Parties or PIA Parties post Merger on behalf of the
Parties; or

(l) agreement, contract, commitment or other legally binding arrangement
of any PIA Company not made in the ordinary course of business (other than as
would have been disclosable in one of the preceding clauses but for the amount
or term thereof).

in each case excluding the PIA Realty Leases, the PIA Personalty Leases and this
Agreement (which are not intended, and shall not be deemed or construed, to be
PIA Contracts). Each of the PIA Contracts is valid and enforceable in all
material respects, except as may be limited by the Bankruptcy Exceptions. No PIA
Company is nor has ever been a party to any contract with any Governmental
Entity subject to retroactive price redetermination or renegotiation.

Section 4.09. Insurance. Except as otherwise disclosed in the PIA
Disclosure Letter: (a) the assets, properties and operations of each PIA Company
are insured under various policies of general liability, workers' compensation
and other forms of insurance in amounts which are adequate in the judgment of
the PIA Companies in relation to the business and assets of such PIA Company;
(b) all such policies are in full force and effect in accordance with their
terms, no notice of cancellation has been received and to the knowledge of the
PIA Companies with respect to any such policy, and there is no existing default
or event that with the giving of notice or lapse of time (or both) would
constitute a material default under any such policy; and (c) no PIA Company has
been refused any

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insurance, nor has any Company's coverage been limited, by any insurance carrier
to which it has applied for insurance or with which it has carried insurance
during the past five years.

Section 4.10. Employees. Except as otherwise disclosed in the PIA
Disclosure Letter: (a) there have not been in the past five years and, to the
knowledge of the PIA Parties, there are not pending, any organized or
coordinated labor disputes, work stoppages, requests for representation, pickets
or work slow-downs due to labor disagreements; (b) there are and have been no
unresolved material violations of any laws of any Governmental Entity respecting
the employment of any employees; (c) there is no unfair labor practice, charge
or complaint pending, unresolved or, to the knowledge of the PIA Parties,
overtly threatened that would be reasonably likely to be brought or filed with
the National Labor Relations Board or similar body in any foreign country; (d)
the PIA Disclosure Letter describes each collective bargaining agreement which
covers any employees of any PIA Company; and (e) each PIA Company has paid or
properly accrued in accordance with GAAP in the ordinary course of business all
wages and compensation due to employees, including all vacations or vacation
pay, holidays or holiday pay, sick days or sick pay, and bonuses.

Section 4.11. Employee Benefit Plans and Arrangements. Except as
otherwise disclosed in the PIA Disclosure Letter:

(a) The PIA Disclosure Letter sets forth a complete and accurate list of
each Benefit Plan covering any present or former officers, employees,
consultants or directors of any PIA Company (a "PIA Benefit Plan"). ERISA,
Benefit Plan, Welfare Plan, Pension Plan and Commonly Controlled Entity are
defined in Section 3.11.

(b) Each PIA Benefit Plan is in substantial compliance with all
reporting, disclosure and other requirements applicable to such PIA Benefit
Plan. Each PIA Benefit Plan that is a Pension Plan (a "PIA Pension Plan") and
that is intended to be qualified under Section 401(a) of the Code, has been
determined by the Internal Revenue Service to be so qualified and, to the
knowledge of the PIA Parties, no condition exists or has occurred that would
adversely affect any such determination. Neither any PIA Benefit Plan nor any
PIA Company, nor to the knowledge of any PIA Company any Commonly Controlled
Entity of any PIA Company or any trustee or agent of any PIA Benefit Plan, has
been or is presently engaged in any prohibited transactions as defined by
Section 406 of ERISA or Section 4975 of the Code for which an exemption is not
applicable which would be reasonably likely to subject any PIA Company to a
material amount of tax or penalty imposed by Section 4975 of the Code or Section
502 of ERISA. To the knowledge of the PIA Companies, there is no event or
condition existing that would be deemed a "reportable event" (within the meaning
of Section 4043 of ERISA) with respect to which the thirty-day notice
requirement has not been waived. To the knowledge of the PIA Parties, no
condition exists that would be reasonably likely to subject any PIA Company to a
material amount of penalty under Section 4071 of ERISA.

(c) Neither any PIA Company nor any Commonly Controlled Entity of any
PIA Company is or has ever been party to any "'multi-employer plan," as that
term is defined in Section 3(37) of ERISA. True and correct copies of (i) the
most recent annual report (Form 5500 series) and any attached schedules for each
PIA Benefit Plan (if any such report was required by applicable law), (ii) the
most recent summary plan description for each PIA Benefit Plan and (iii) the
most recent determination letter issued by the Internal Revenue Service for each
PIA Pension Plan have been provided to the SPAR Parties.

(d) With respect to each PIA Benefit Plan, there are no actions. suits
or claims (other than routine claims for benefits in the ordinary course or
relating to qualified domestic relations orders within the meaning of Section
414(p) of the Code) pending or, to the knowledge of the PIA Parties, overtly
threatened against any PIA Benefit Plan, any PIA Company, any Commonly
Controlled Entity of any PIA Company or any trustee or agent of any PIA Benefit
Plan, nor to the knowledge of the PIA Parties is there any reasonable basis for
such claims.

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(e) With respect to each PIA Benefit Plan to which any PIA Company or
any Commonly Controlled Entity of any PIA Company is a party which constitutes a
group health plan subject to Section 4980B of the Code, each such PIA Benefit
Plan substantially complies, and in each case has substantially complied, with
all applicable requirements of Section 4980B of the Code. There is no
outstanding material liability (except for premiums that have not become
overdue) or other accrued but unpaid obligations under Title IV of ERISA with
respect to any PIA Pension Plan and no condition exists that would be reasonably
expected to result in any PIA Company incurring a material liability under Title
IV of ERISA, either directly or with respect to any Commonly Controlled Entity
of any PIA Company. All premiums payable to the PBGC have been paid when due.
Neither the PBGC nor any PIA Company nor any Commonly Controlled Entity of any
PIA Company has instituted proceedings to terminate any PIA Pension Plan that is
subject to Title IV of ERISA and the PBGC has not informed any PIA Company of
its intent to institute proceedings to terminate any such plan. Full payment has
been made of all amounts that any PIA Company or any Commonly Controlled Entity
of any PIA Company was required to have paid as a contribution to any PIA
Pension Plan that is subject to Title IV of ERISA (with applicability determined
as of the last day of the most recent fiscal year of each of the PIA Pension
Plans ended prior to the date of this Agreement), and none of any PIA Pension
Plans has incurred any "accumulated funding deficiency" (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, as of the last
day of the most recent fiscal year of each such PIA Pension Plan ended prior to
the date of this Agreement.

(f) To the knowledge of the PIA Parties, the actuarial assumptions
utilized, where appropriate, in connection with determining the funding of each
PIA Pension Plan that is a defined benefit pension plan (as set forth in the
actuarial report for such PIA Pension Plan) are reasonable. Copies of the most
recent actuarial reports have been furnished to the SPAR Parties. Based on such
actuarial assumptions, as of the PIA Balance Sheet Date, the fair market value
of the assets or properties held under each such PIA Pension Plan exceeds the
actuarially determined present value of all accrued benefits of such PIA Pension
Plan (whether or not vested) determined on an ongoing basis. Each PIA Benefit
Plan is, and its administration is and at all times has been in substantial
compliance with, and no PIA Company has received any claim or notice that any
such PIA Benefit Plan is not in substantial compliance with, its terms and all
Applicable Laws, including without limitation, to the extent applicable, the
requirements of ERISA and the Code. No PIA Company and no Commonly Controlled
Entity of any PIA Company is in default in any material respect in performing
any of its contractual obligations under any PIA Benefit Plan or any related
trust agreement or insurance contract. There are no material outstanding
liabilities of any PIA Benefit Plan other than liabilities for benefits to be
paid to participants in such PIA Benefit Plan and their beneficiaries in
accordance with the terms of such PIA Benefit Plan. Each PIA Benefit Plan may be
amended or modified or terminated by the applicable PIA Company or a Commonly
Controlled Entity of a PIA Company at any time without liability except under
any defined pension benefit plan. No PIA Benefit Plan other than a PIA Pension
Plan, retiree medical plan or severance plan provides benefits to any individual
after termination of employment.

(g) The consummation of the transactions contemplated by this Agreement
will not (A) entitle any employee of any PIA Company to severance pay,
unemployment compensation or any other payment or benefit; (B) accelerate the
time of payment or vesting, or increase the amount of compensation due to any
such employee; (C) result in any liability under Title IV of ERISA; (D) result
in any prohibited transaction described in Section 406 of ERISA or Section 4975
of the Code for which an exemption is not available; or (E) result (either alone
or in conjunction with any other event) in the payment or series of payments by
any PIA Company or any of its affiliates to any person of an "excess parachute
payment" within the meaning of Section 280G of the Code.

(h) With respect to each PIA Benefit Plan that is funded wholly or
partially through an insurance policy, all material amounts of premiums required
to have been paid to date under the insurance policy have been paid, all
material amounts of premiums required to be paid under the insurance policy
through the Closing Date will have been paid on or before the Closing Date and,
as of the Closing Date, there will be no material amount of liability of any PIA
Company or any Commonly Controlled Entity of any PIA Company under any insurance
policy or ancillary agreement with respect to such insurance policy in the
nature of a retroactive rate adjustment, loss sharing

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arrangement or other actual or contingent liability arising wholly or partially
out of events occurring prior to the Closing Date.

(i) Each PIA Benefit Plan that constitutes a "welfare benefit plan,"
within the meaning of Section 3(i) of ERISA, for which contributions are claimed
by any PIA Company or any Commonly Controlled Entity of any PIA Company as
deductions under any provision of the Code, is in material compliance with all
applicable requirements pertaining to such deduction. With respect to any
welfare benefit fund (within the meaning of Section 419 of the Code) related to
a welfare benefit plan, there is no disqualified benefit (within the meaning of
Section 4976(b) of the Code) that would result in the imposition of a tax under
Section 4976(a) of the Code. All welfare benefit funds intended to be exempt
from tax under Section 501(a) of the Code have been determined by the Internal
Revenue Service to be so exempt and no event or condition exists or has occurred
which would adversely affect any such determination. No PIA Company has any
Benefit Plan outside of the United States.

(j) No PIA Company has any Benefit Plan outside of the United States.

(k) All persons classified by any PIA Company as independent contractors
or leased employees within the meaning of Section 414(n) of the Code ("PIA
Leased Employees") satisfy and have at all times satisfied the requirements of
applicable law to be so classified. Each PIA Company has fully and accurately
reported their compensation on IRS Forms 1099 when required to do so. No PIA
Company has any obligation to provide benefits with respect to such independent
contractors or PIA Leased Employees under any PIA Benefit Plan or otherwise.

Section 4.12. Compliance with Law. Except as otherwise disclosed in the
PIA Disclosure Letter, each PIA Company has complied in all material respects
with each, and is not in violation in any material respect of, any Applicable
Law to which such PIA Company's business, operations, assets or properties are
subject.

Section 4.13. Transactions With Affiliates. Except as otherwise
disclosed in the PIA Disclosure Letter, no stockholder and no director, officer
or employee of any PIA Company, or any member of his or her immediate family or
any other of its, his or her affiliates, owns or has a 5% or more ownership
interest in any material business, corporation or other entity that is or was
during the last three years a party to, or in any property which is or was
during the last three years the subject of, any contract, agreement, commitment
or legally binding arrangement with such PIA Company; and (b) the PIA Disclosure
Letter includes a complete list as of the date hereof of all material amounts
owed by any PIA Company to any PIA officer, director (other than salary and
expense reimbursements in the normal course) or affiliate or owed to any PIA
Company by any PIA officer, director or affiliate.

Section 4.14. Litigation. Except as otherwise disclosed in the PIA
Disclosure Letter: (a) no litigation, including any arbitration, investigation
or other proceeding of or before any Governmental Entity is pending (or to the
knowledge of the PIA Parties) overtly threatened against any PIA Company, other
than litigation that (i) is not reasonably likely to be adversely determined or
(ii) if reasonably likely to be adversely determined, would not be reasonably
likely to have, individually or in the aggregate with other such litigation, a
PIA Material Adverse Effect; and (b) no PIA Company is a party to or subject to
the provisions of any PIA Court Order.

Section 4.15. Taxes. Except as otherwise disclosed in the PIA Disclosure
Letter:

(a) All federal, state, local and foreign tax returns, reports,
statements and other similar filings required to be filed by any PIA Company
(the "PIA Tax Returns") with respect to any Taxes have been timely filed with
the appropriate governmental agencies in all jurisdictions in which such PIA Tax
Returns are required to be filed, and all such PIA Tax Returns are true,
complete and correct in all material respects and properly reflect the
liabilities of the PIA Companies for Taxes for the periods, property or events
covered thereby.

(b) All Taxes, including (without limitation) those called for by the
PIA Tax Returns, required to be paid or withheld by any PIA Company and any
deficiency assessments, penalties and interest for which a notice

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of assessment has been received (other than as may have been settled and paid in
full in accordance therewith) and other than those being contested, if any, as
set forth in the PIA Disclosure Letter, have been timely paid or withheld.

(c) The accruals for Taxes contained in the PIA Financial Statements for
the Tax liabilities of the PIA Companies have been made in accordance with GAAP
as of that date and include adequate provision under GAAP for all deferred Taxes
(other than necessary increments due to the passage of time).

(d) No PIA Company is or has at any time ever been a party to a Tax
sharing, Tax indemnity or Tax allocation agreement, and no PIA Company has
assumed any Tax liability of any other person or entity under contract. No PIA
Company has received any notice of assessment or proposed assessment in
connection with any PIA Tax Returns other than as may have been settled and paid
in full in accordance therewith, and there are no pending tax examinations of or
material tax claims asserted against any PIA Company or any of its assets or
properties. No PIA Company has extended or waived the application of, any
statute of limitations of any jurisdiction regarding the assessment or
collection of any Taxes. There are now (and as of immediately, following the
Effective Time there will be no liens (other than any lien for Taxes not yet
overdue and payable) on any of the assets or properties of any PIA Company
relating, to or attributable to Taxes. To the knowledge of the PIA Parties,
there is no reasonable basis for the assertion of any claim relating to or
attributable to Taxes that, if adversely determined, would result in any lien on
the assets of any PIA Company or otherwise have a PIA Material Adverse Effect.

(e) None of the PIA Companies has any knowledge of any reasonable basis
for any additional assessment of any Taxes for any period ending on or before
the Closing Date (other than increased Taxes based upon increased business
units, business sites, payroll, profits or other taxable attribute relating to
an expanding enterprise prior to the Closing Date). All Tax payments related to
employees, including income tax withholding, FICA, FUTA, unemployment and
worker's compensation, required to be made by the PIA Companies have been fully
and properly paid, withheld, accrued or recorded.

Section 4.16. Intellectual Property Matters. Except as otherwise
disclosed in the PIA Disclosure Letter:

(a) The PIA Disclosure Letter sets forth all patents, trademarks, trade
names, service marks, copyrights, software, material trade secrets or material
know-how owned or used in any material respect by any PIA Company in the conduct
of its business (the "PIA Intellectual Property"), excluding, however, all
Commercial Software, which Commercial Software need not be set forth on such
schedule. All of the PIA Intellectual Property is owned by or licensed to one of
the PIA Companies free and clear of any liens (except insofar as a license or
the restrictions thereunder may constitute a lien).

(b) There are no ongoing royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements, from any PIA Company as licensor,
pertaining to the current use of the PIA Intellectual Property, except as may be
applicable under the Commercial Software.

(c) No PIA Company infringes upon or unlawfully or wrongfully uses any
patent, trademark, trade name, service mark, copyright or trade secret owned or
claimed by any other person or entity. No action, suit, proceeding or
investigation has been instituted or, to the knowledge of the PIA Parties,
overtly threatened relating to any, patent, trademark, trade name, service mark,
copyright or trade secret formerly or currently used by any PIA Company. None of
the PIA Intellectual Property is subject to any outstanding order, decree or
judgment. No PIA Company has agreed to indemnify any person or entity for or
against any infringement of or by the PIA Intellectual Property. No present or
former employee of any PIA Company and no other person or entity owns or has any
proprietary, financial or other interest, direct or indirect, in whole or in
part, in any patent, trademark, trade name, service mark or copyright, or in any
application therefor, or in any trade secret, which any PIA Company owns,
possesses or uses in its operations as now or heretofore conducted.

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(d) All PIA Intellectual Property in the form of computer software that
is utilized by any PIA Company in the operation of its business is capable of
processing date data between and within the twentieth and twenty-first centuries
or can be rendered capable of processing such data prior to the date necessary
to avoid disruption of its business by utilizing the employees of one or more of
the PIA Companies in the normal course of business and by expenditure of not
more than $100,000 in excess of the cost of software purchased for reasons other
than the failure of existing software to be capable of such processing.

Section 4.17. Existing Condition. Except as otherwise disclosed in the
PIA Disclosure Letter, since the PIA Balance Sheet Date, no PIA Company has:

(a) incurred any liabilities, other than liabilities incurred in the
ordinary course of business consistent with past practice;

(b) discharged or satisfied any lien or encumbrance or paid any
liabilities, other than in the ordinary course of business consistent with past
practice, or failed to pay or discharge when due any liabilities, other than in
the ordinary course of business consistent with past practice, or where the
obligation is being contested in good faith, and the failure to pay or discharge
has not caused and would not be reasonably likely to cause any PIA Material
Adverse Effect;

(c) sold, encumbered, assigned or transferred any assets, properties or
rights or any interest therein, or made any agreement or commitment or granted
any option or right with, of or to any person to acquire any assets, properties
or rights of any PIA Company or any interest therein, except for sales and
dispositions in the ordinary course of business consistent with past practice
and except for the transactions contemplated under this Agreement;

(d) created, incurred, assumed or guaranteed any indebtedness for money
borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage,
lien, pledge, security interest, conditional sales contract or other encumbrance
of any nature whatsoever other than in the ordinary course of business
(including, without limitation, future advances and floating liens under
existing or replacement credit facilities);

(e) made or suffered any early cancellation or termination of any
Material PIA Document (other than in the ordinary course of business with a
vendor to a PIA Company); or amended, modified or waived any substantial debts
or claims held by it under any Material PIA Document other than in the ordinary
course of business;

(f) declared, set aside or paid any dividend or made or agreed to make
any other distribution or payment in respect of its capital shares or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase or acquire any
shares of its capital stock or its other ownership interests;

(g) suffered any damage, destruction or loss that has had or will have
(i) a PIA Material Adverse Effect, or (ii) a replacement cost individually or in
the aggregate at more than $100,000;

(h) suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct its
business and operations;

(i) suffered any material adverse change in the business, operations,
properties, assets or financial condition of the PIA Parties taken as a whole;

(j) received notice or had knowledge of any actual or overtly threatened
organized or coordinated labor trouble, strike or other similar occurrence,
event or condition of any similar character that has had or would be reasonably
likely to have a PIA Material Adverse Effect;

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(k) increased the salaries or other compensation of, or made any advance
(excluding advances for ordinary and necessary business expenses) or loan to,
any of its employees or made any increase in, or any addition to, other benefits
to which any of its employees are entitled (in each case other than increases in
salaries or other compensation in the ordinary course of business consistent
with past practice and that in the aggregate have not resulted in a PIA Material
Adverse Effect);

(l) changed any of the accounting principles followed by it or the
methods of applying such principles;

(m) except as contemplated by this Agreement, entered into any
transaction other than in the ordinary course of business consistent with past
practice;

(n) except as contemplated by this Agreement, changed its authorized
capital or its securities outstanding or otherwise changed its ownership
interests, or granted any options, warrants, calls, conversion rights or
commitments with respect to any of its capital stock or other ownership
interests; or

(o) agreed to take any of the actions referred to above.

Section 4.18. Books of Account. Except as otherwise disclosed in the PIA
Disclosure Letter: (a) the books, records and accounts of each PIA Company
accurately and fairly reflect, in reasonable detail, the transactions and the
assets and liabilities of such PIA Company; and (b) no PIA Company has engaged
in any transaction, maintained any bank account or used any of the funds of such
PIA Company except for transactions, bank accounts and funds that have been and
are reflected in the normally maintained books and records of the business.

Section 4.19. Environmental Matters. Except as otherwise disclosed in
the PIA Disclosure Letter:

(a) Each PIA Company has secured, and is in compliance in all material
respects with, all Environmental Permits, with respect to any premises on which
its business is operated. Each PIA Company is in compliance in all material
respects with all applicable Environmental Laws.

(b) No PIA Party has (x) received any written communication from any
Governmental Entity that alleges that any PIA Company is not in compliance in
any material respect with any Environmental Laws or Environmental Permits; (y)
entered into or agreed to any court decree or order, and no PIA Company is
subject to any judgment, decree or order, relating to compliance with any
Environmental Law or to investigation or cleanup of a Hazardous Substance under
any Environmental Law in any material respect; (z) received a CERCLA 104(e)
information request or has been named a potentially responsible party for any
National Priorities List site under CERCLA or any site under analogous state law
or received an analogous notice or request from any non-U.S. Governmental
Entity, which notice, request or any resulting inquiry or litigation has not
been fully and finally resolved without possibility of reopening. No lien,
charge, interest or encumbrance has been attached, asserted, or to the knowledge
of the PIA Parties, overtly threatened to or against any assets or properties of
any PIA Company pursuant to any Environmental Law.

(c) To the knowledge of the PIA Companies: (i) there has been no
unlawful treatment, storage, disposal or release of any Hazardous Substance on
any PIA Premises; (ii) there has been no unlawful treatment, storage, disposal
or release of any Hazardous Substance on any PIA Premises; (iii) there are no
aboveground storage tanks located on or underground storage tanks located within
any PIA Premises; (iv) each aboveground storage tank formerly located on or
underground storage tank formerly located within any PIA Premises (if any) have
been removed in accordance with all Environmental Laws and no residual
contamination from any Hazardous Substance, if any, remains at such sites in
excess of applicable standards under Applicable Law; (v) there are no PCBs
leaking from any article, container or equipment located on or under any PIA
Premises and there are no such articles, containers or

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equipment containing leaking PCBs; and (vi) there is no asbestos containing
material not contained in a manner reasonably acceptable under Applicable Law in
any material respect located on or under any PIA Premises.

Section 4.20. No Illegal Payments. Except as otherwise disclosed in the
PIA Disclosure Letter: (a) no PIA Company and, to the knowledge of the PIA
Parties, no affiliate, officer, agent or employee of any PIA Company, has
directly or indirectly on behalf of or with respect to any PIA Company during
the past five years, (i) made any unlawful domestic or foreign political
contributions, (ii) made any payment or provided services that were unlawful in
any material respect for such Person to make or provide or for the recipient to
receive, (iii) received any payment or services that were unlawful in any
material respect for the payer to make or provide, or (iv) made any payment to
any person or entity, or agent or employee thereof, in connection with any PIA
Contract to induce such person or entity to enter into such PIA Contract that
were unlawful in any material respect for the payer to make or provide or the
recipient to receive; and (b) no PIA Company has during the past five years (i)
had any transactions or payments not recorded in their accounting books and
records in accordance with GAAP , or (ii) had any off-book bank or cash accounts
or "slush funds" related to any PIA Company.

Section 4.21. Brokers. The PIA Disclosure Letter lists all investment
banking fees, finders' fees, brokers' commissions and similar payments which any
PIA Company has paid or will be obligated to pay in connection with the
transactions contemplated by this Agreement.

Section 4.22. SEC Filings. PIA Delaware has delivered to the SPAR
Parties true and complete copies of (i) PIA Delaware's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 (the "PIA 10- K") as filed with
the Securities and Exchange Commission (the "Commission"), (ii) PIA's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1998, June 30, 1998 and
October 2, 1998, and (iii) PIA's proxy statement relating to the annual meeting
of its stockholders held on May 12, 1998 (collectively, the "PIA SEC Filings").
As of the respective times such documents were filed or, as applicable, became
effective, the PIA SEC Filings did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

Section 4.23. No Misrepresentation by the PIA Parties. The
representations and warranties of the PIA Parties made or contained in this
Agreement (whether with respect to any PIA Company or otherwise), and the
information contained in the PIA Disclosure Letter and the other certificates,
schedules and documents furnished by or on behalf of any PIA Party in connection
with the transactions contemplated by this Agreement (whether with respect to
any PIA Company or otherwise), do not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein in order
to make it, in the light of the circumstances under which made, not misleading.

Section 4.24. Board Action; Opinion of Financial Advisor. The PIA
Delaware Board has unanimously determined that the transactions contemplated by
this Agreement are fair to and in the best interests of PIA Delaware's
stockholders and has resolved to recommend in the PIA Proxy Statement the
approval by PIA Delaware's stockholders of (i) the Share Issuance, (ii) the
Proposed PIA Certificate of Amendment, and (iii) the Proposed Plan Amendment.
PIA Delaware has received the opinion of ING Baring Furman Selz LLC, dated the
date of this Agreement, substantially to the effect that the Exchange Ratio is
fair to PIA Delaware and its stockholders from a financial point of view.

ARTICLE V

COVENANTS

Section 5.01. PIA Proxy Statement; Stockholders Meeting. As promptly as
practicable after the execution of this Agreement, but in no event later than
April 8, 1999, PIA Delaware will file with the Commission preliminary proxy
materials ("Preliminary Proxy Materials") relating to the solicitation of

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proxies for a special meeting of PIA Delaware's stockholders (the "PIA
Stockholders Meeting") seeking (among other things) stockholder approval of the
Share Issuance, the Proposed PIA Certificate of Amendment and the Proposed Plan
Amendment. PIA Delaware shall respond promptly to any comments made by the
Commission with respect to such preliminary proxy materials and cause a
definitive proxy statement (the "PIA Proxy Statement") and proxy to be mailed to
its stockholders at the earliest practicable time calling for the PIA
Stockholders Meeting at the earliest practicable time. PIA Delaware shall submit
the Share Issuance, the Proposed PIA Certificate of Amendment and the Proposed
Plan Amendment to its stockholders for approval at the PIA Stockholders Meeting.
The PIA Delaware Board shall recommend in the PIA Proxy Statement the approval
of (i) the Share Issuance, (ii) the Proposed PIA Certificate of Amendment, and
(iii) the Proposed Plan Amendment by its stockholders. Each SPAR Party and each
SPAR Principal will cooperate in the preparation of the PIA Proxy Statement and
shall provide PIA Delaware with all information reasonably requested by PIA
Delaware for inclusion in the PIA Proxy Statement. The PIA Parties and the SPAR
Parties shall use their reasonable best efforts to ensure that the PIA Proxy
Statement is not false or misleading with respect to any material fact, and does
not omit to state any material fact necessary in order to make the statements
therein not misleading. If, at any time prior to the date of the PIA
Stockholders Meeting, any event relating to any PIA Company is discovered by any
PIA Party that should be set forth in a supplement to the PIA Proxy Statement,
such PIA Party will promptly inform the SPAR Parties, and such amendment or
supplement shall be promptly filed with the Commission and disseminated to the
stockholders of PIA Delaware, to the extent required by applicable law. If, at
any time prior to the date of the PIA Stockholders Meeting, any event relating
to any SPAR Party is discovered by any SPAR Party that should be set forth in a
supplement to the PIA Proxy Statement, such SPAR Party will promptly inform PIA,
and such amendment or supplement shall be promptly filed with the Commission and
disseminated to the stockholders of PIA Delaware, to the extent required by
applicable law.

Section 5.02. Conduct Prior to the Closing Date.

(a) Except as otherwise contemplated in the SPAR Disclosure Letter, from
and after the date of this Agreement through the Closing Date, each SPAR Party
shall, and shall cause each other SPAR Party to, and each PIA Party shall, and
shall cause each other PIA Company to, use their respective reasonable best
efforts to: (i) conduct their respective businesses in the ordinary course and
consistent in all material respects with past practice; (ii) maintain and
service their respective properties and assets in order to preserve their value
and usefulness in the conduct of their respective business consistent with past
practice and commercially reasonable standards; (iii) keep available the
services of their current employees and agents and maintain their relations and
goodwill with suppliers, customers, distributors and any others with whom or
with which they have business relations; (iv) comply in all material respects
with all laws, ordinances, rules, regulations and orders; and (v) cause all of
the conditions to the consummation of the transactions contemplated by this
Agreement to be satisfied on or prior to the Closing Date.

(b) Without limiting the generality of subsection (a) of this Section,
no PIA Party and no SPAR Party shall, without the prior written consent of SAI
in the case of any proposed action by a PIA Party, or PIA Delaware in the case
of any proposed action by a SPAR Party: (A) enter into any agreement or other
legally binding arrangement with respect to the acquisition or proposed
acquisition of any other corporation, business or entity, whether by means of an
asset purchase, stock purchase, merger or otherwise; (B) except as expressly
contemplated by this Agreement or upon the exercise of stock options outstanding
on the date hereof, issue or agree to issue, any shares of, or rights of any
kind to acquire any shares of its capital stock; (C) increase the compensation
payable or to become payable to any officer or director except in accordance
with employment agreements or benefit plans in effect on the date hereof and
except for increases consistent with past practice; (D) adopt or enter into any
bonus, profit sharing, pension, retirement, deferred compensation, employment or
other payment or employee compensation plan, agreement or arrangement except for
individual employment agreements and arrangements in the ordinary course of
business consistent with past practice; (E) make any loan or advance to, or
enter into any non-employment contract, lease or commitment with, any officer or
director; (F) assume, guarantee, endorse or otherwise become responsible for any
material obligations of any other individual, firm or corporation or make any
material loans or advances to any individual, firm or corporation (other than
pursuant to existing agreements disclosed to the other hereunder); (G) modify or
amend in any material respect or take any action to voluntarily terminate any
material contract (including, without limitation, in the case of

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the SPAR Parties, any amendment to any agreement related to the MCI
Acquisition) or any amendment to the Field Service Agreement; (H) waive,
release, grant or (ii) for transfers of capital stock by the SPAR Principals to
each spouse, child, sibling, lineal descendant or ancestor whether by blood,
marriage or adoption, or anyone related by blood, marriage or adoption to such
individual, each trust, foundation, partnership, limited liability company or
other entity organized for gift or estate planning or other similar purposes, in
each case created principally for the benefit of one or more of the foregoing
persons, and each custodian or guardian of any property of one or more of the
foregoing persons in his capacity as such custodian or guardian (the "Family
Members"), or (iii) transfer any rights of material value except (i) in the
ordinary course of business or as contemplated under the Reorganization
Agreement or this Agreement; (I) transfer, lease, license, sell, mortgage,
pledge, dispose of or encumber any material assets other than in the ordinary
course of business and consistent with past practice; (J) take any action, other
than reasonable and usual actions in the ordinary course of business and
consistent with past practice, with respect to accounting policies or
procedures, except for changes required by GAAP; (K) settle or compromise any
material federal, state, local or foreign income tax proceeding or audit with
respect to such Party; or (L) enter into an agreement to do any of the
foregoing.

Section 5.03. Consummation of the SPAR Reorganization Transactions; SPAR
Principal Action. The SPAR Parties shall cause the SPAR Reorganization
Transaction to be consummated no later than the Effective Time, in accordance
with the terms and provisions of the SPAR Reorganization Agreement and shall
cause the SPAR Principals to execute such written consents prior to the mailing
of the PIA Proxy Statement as shall be necessary to approve the SPAR
Reorganization Transactions and the Merger (the "SPAR Stockholder Action").

Section 5.04. Access. Each Party (and in the case of the PIA Parties,
each PIA Company) shall give the other Party's officers, employees, counsel,
accountants and other representatives free and full access to and the right to
audit and inspect, during normal business hours with reasonable advance notice,
all of the premises, properties, assets, records, contracts and other documents
relating to such Party or company and shall permit them to consult with the
officers, employees, accountants, counsel and agents of such Party or company
for the purpose of making such investigation as the other Party shall desire to
make; provided, however, that such investigation shall not unreasonably
interfere with any Party's or company's business operations. Each Party (and in
the case of the PIA Parties, each PIA Company) shall furnish to the other Party
all such documents and copies of documents and records and information with
respect to the affairs of such Party or company and copies of any working papers
relating thereto as shall from time to time reasonably request. No information
or knowledge obtained in any investigation by any Party or any of its
representatives or affiliates pursuant to this Section or otherwise shall affect
or be deemed to modify any representation or warranty contained in this
Agreement or the conditions to the obligations of the parties to consummate the
Merger.

Section 5.05. Negotiations. Except in the furtherance of the
transactions contemplated hereby, prior to the Closing Date, no PIA Party shall
or shall direct and cause its respective directors, officers, employees,
representatives or agents to, directly or indirectly, initiate, solicit or
encourage any inquiries or the making or implementation of any proposal or
offer, with respect to any merger, acquisition, consolidation, share exchange,
business combination or other transaction involving, or which would result in,
(A) the acquisition of a majority of the outstanding equity securities of any
PIA Company, (B) the issuance by any PIA Company, in a single transaction or a
series of related transactions, of equity securities which would represent upon
issuance a majority of the outstanding equity securities of PIA Party, or (C)
the acquisition of a majority of the consolidated assets of any PIA Company (any
such proposal or offer being hereinafter referred to as an"Acquisition
Proposal"), or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person or
entity relating to an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal; provided, however, that
nothing contained in this Section shall prohibit the PIA Delaware Board from
exercising their respective fiduciary duties by (i) to the extent applicable,
complying with Rule 14e-2 promulgated under the Exchange Act with regard to an
Acquisition Proposal, or (ii) furnishing information to or entering into
discussions or negotiations with any person or entity that makes an unsolicited
bona fide Acquisition Proposal.

Section 5.06. Press Releases and Other Communications. Except to the
extent required by law or by any listing agreement with the Nasdaq Stock Market,
no Party shall issue any press release or otherwise making any public statement
with respect to any of the transactions contemplated hereby without prior
consultation with the other Parties.

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Section 5.07. Third Party Approvals. Prior to the Closing, Date, each
Party shall use its best efforts to satisfy any requirement for notice and
approval of the transactions contemplated by this Agreement under all SPAR
Material Documents and all PIA Material Documents.

Section 5.08. Notice to Bargaining Agents. Prior to the Closing Date,
each Party shall satisfy any requirement for notice of the transactions
contemplated by this Agreement under any applicable collective bargaining
agreement.

Section 5.09. Notification of Certain Matters.

(a) Each Party shall give prompt notice to each other Party of (i) the
occurrence or non- occurrence of any event known to such Party which would be
likely to cause any representation or warranty of such Party contained in this
Agreement to be untrue or inaccurate in any material respect at or prior to the
Closing Date, and (ii) any failure of such Party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by such Party
hereunder in any material respect.

(b) Each Party shall have the continuing obligation until the Closing
Date to supplement or amend promptly its Disclosure Letter delivered to the
other Party group with respect to any matter hereafter arising or discovered
that, if existing or known at the date of this Agreement, would have been
required to have been set forth or described in such Disclosure Letter (in each
case, "Amended Disclosure") in order that the corresponding representation or
warranty would not have been untrue in any material respect, which may include
supplemental disclosure to a representation or warranty with respect to which no
disclosure was made previously. Any Amended Disclosure that would constitute a
failure to satisfy the condition precedent set forth in Section 6.02(a), (b) or
(c) or in Section 6.03(a), (b) or (c) shall not be effective unless consented to
in the sole discretion of the other Party group (i.e., by SPAR in the case of a
failure to satisfy Section 6.02(a), (b) or (c) and by PIA Delaware in the case
of a failure to satisfy Section 6.03(a), (b) or (c)). To the extent such consent
is obtained, or to the extent the condition precedent is waived on the Closing
Date, the Amended Disclosure shall be deemed effective.

Section 5.10. Closing Net Worth. The SPAR Parties shall use their
reasonable best efforts to ensure that the Closing Net Worth (as such term is
defined in Section 7.01) is not less than the Target Amount (as such term is
defined in Section 7.01(b) hereof).

Section 5.11. Post Merger Indemnification of Officers and Directors by
Parties.

(a) For a period of six years following the Closing Date, no PIA Party
will (or will permit any other PIA Company to) and no SPAR Party will, amend,
repeal or limit in any way the provisions limiting the personal liability of any
present or former director, officer, employee or agent (and their respective
heirs and assigns) of any PIA Company or any SPAR Party (the "Indemnified
Parties"), as set forth in the certificate of incorporation or by-laws or such
company or party as of the date of this Agreement. In addition, for a period of
six years following the Closing Date, the PIA Parties shall, and shall cause
each of the other PIA Companies to, indemnify, to the fullest extent permitted
by applicable law, (i) the directors of each PIA Company as of the date of this
Agreement, (ii) any persons who served as directors of any PIA Company prior to
the date of this Agreement, (iii) all officers holding the title of Senior Vice
President or any higher office with any PIA Company as of the date of this
Agreement, in each case from and against any and all amounts for which an
employee may be indemnified under the corporate laws of its state of
incorporation. Without limiting the generality of the foregoing, costs and
expenses (including reasonable attorney's fees and expenses) incurred by such
indemnified person shall be advanced to or on behalf such indemnified person (in
advance of any final disposition of such matter) if such indemnified person (A)
agrees in writing with the indemnitor to repay all such advances in the event
that it is ultimately determined that he or she is not entitled to such
indemnification hereunder or under applicable law, and (B) furnishes reasonable
documentation with respect to such amounts.

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(b) This Section is expressly intended to benefit each of the
Indemnified Parties (each of whom shall be entitled to enforce the provisions of
this Section).

(c) For a period of six years following the Closing Date, the PIA
Parties and the SPAR Parties shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained as of the
Closing Date (or substitute policies with reputable and financially sound
carriers of at least the same coverage and amounts containing terms and
conditions which are not materially less advantageous in the aggregate) with
respect to claims arising from or related to facts or events which occurred at
or prior to the Effective Time; provided, however, that no Party shall be
obligated to make annual premium payments for such insurance to the extent such
premiums exceed 150% of the annual premiums paid by such Party as of the date
hereof for such insurance (such 150% amount, the "Maximum Premium"). If such
insurance coverage cannot be obtained at all, or can only be obtained at an
annual premium in excess of the Maximum Premium, such Party shall maintain the
most advantageous policies of directors' and officers' insurance obtainable for
an annual premium equal to the Maximum Premium.

Section 5.12. Further Assurances. The SPAR Parties shall at any time
after the Effective Time, upon request, take such further action and execute
such further agreements as may be necessary, desirable or proper to give effect
to the intentions of the parties as set forth in Section 6.03(g), (h), (i), (j),
and (k).

ARTICLE VI

CONDITIONS PRECEDENT

Section 6.01. Conditions to Each Party's Obligations. The respective
obligations of each Party hereunder are subject to the satisfaction (or to the
extent permitted by law, the waiver) at or prior to the Closing Date of the
following conditions:

(a) Stockholder Approvals.

(i) The Proposed PIA Certificate of Amendment shall have been
approved at the PIA Stockholders Meeting by the vote of a majority of the
outstanding shares of PIA Delaware Stock as required by Section 242 of the DGCL
and the Share Issuance shall have been approved at the PIA Stockholder Meeting
by the vote of a majority of the total votes cast with respect thereto.

(ii) The Proposed Agreement and Plan Merger shall have been approved
by the vote of a majority of the outstanding shares of PIA Acquisition as
required by Section 92A.120 of the NGCL, and PIA Delaware (as the sole
shareholder of PIA Acquisition) hereby covenants and agrees that it will vote in
favor thereof.

(iii) The Proposed Agreement and Plan Merger shall have been
approved pursuant to the SPAR Principals Action by the vote of a majority of
the outstanding shares of SAI Stock as required by Section 92A.120 of the NGCL.

(b) Filing of the PIA Restated Certificate. The Proposed PIA Certificate
of Amendment shall have been duly filed with the Secretary of State of the State
of Delaware and become effective.

(c) HSR. Any waiting period applicable to the Merger under the HSR Act
shall have expired or been terminated.

(d) Nasdaq Approval. The shares of PIA Delaware Stock issuable in
connection with the Merger as contemplated by this Agreement shall have been
authorized for listing on the Nasdaq Stock Market, upon official notice of
issuance, and the existing shares of PIA Delaware Stock shall continue to be
traded on such market.

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(e) No Injunctions. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, injunction or other
order (whether temporary, preliminary or permanent) which is in effect and has
the effect of making illegal or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement.

(f) SPAR Intellectual Property.

(i) SMF, SMS and SIT shall have entered into the Business Manager
Agreement.

(ii) STM shall have received the assignment of the SPAR trademark
registrations in the United States and Canada.

(iii) STM shall have executed the SPAR Trademark Licenses with the
SMS and SIT.

(g) Indemnity Agreement and Indemnity Escrow Agreement. The PIA Parties
and the SPAR Parties shall have executed and delivered the Limited
Indemnification Agreement with the SPAR Principals in substantially in the form
annexed hereto as Exhibit G with respect to the SMS tax litigation and ADVO
matters (the "Limited Indemnification Agreement"); and the Surviving
Corporation, the PIA Parties, the SPAR Marketing Companies and Parker Chapin
Flattau & Klimpl, LLP (the "Indemnity Escrow Agent"), shall have executed and
delivered to the SPAR Principals the Indemnity Escrow Agreement substantially in
the form annexed hereto as Exhibit H (the "Indemnity Escrow Agreement").

Section 6.02. Conditions Precedent to the Obligations of the SPAR
Parties. The obligations of the SPAR Parties hereunder are subject to the
satisfaction (or waiver) on or prior to the Closing Date of the following
conditions:

(a) Representations and Warranties. The representations and warranties
of the PIA Parties contained in this Agreement (other than as contained in
Section 4.17(i) hereof, which is addressed by Section 6.02(c), below) shall be
accurate in all material respects as of the Closing Date (other than as a result
of (i) any proposed or pending transactions described in the PIA Disclosure
Letter and this Agreement or (ii) any adverse change(s) in the overall economy
or in the market segments in which such parties do business) as though such
representations and warranties had been made as of such time.

(b) Performance of Obligations. All of the terms, covenants and
conditions of this Agreement to be complied with and performed by any PIA Party
on or before the Closing Date shall have been duty complied with and performed
in all material respects.

(c) No Material Adverse Change. Except as previously disclosed in the
PIA Disclosure Letter: no material adverse change in the business, operations,
assets, properties or condition (financial or otherwise) of the PIA Companies
taken as a whole (a "PIA Material Adverse Change") shall have occurred since
December 31, 1998 (other than as a result of adverse change(s) in the overall
economy or in the market segments in which such parties do business, and with
the understanding that the loss of a single material customer as a result of the
announcement of the transactions contemplated by this agreement shall not
constitute a PIA Material Adverse Change); and since the PIA Balance Sheet Date
the PIA Companies (taken as a whole) shall not have suffered any material
uninsured loss or damage to any of its properties or assets that would be
reasonably likely to materially affect or impair the ability of the PIA
Companies to conduct their business as now conducted or as proposed to be
conducted.

(d) Officer's Certificate. A certificate dated the Closing Date and
signed by the President or any Vice President of PIA Delaware shall have been
delivered to the SPAR Parties certifying that the conditions specified in the
foregoing clauses (a), (b) and (c) have been satisfied.

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(e) Election of Directors. The members of the PIA Delaware Board shall have
taken all necessary action to cause the PIA Delaware Board and the PIA
California Board, from and after the Effective Time, until duly changed, to be
comprised of seven members and to cause the following persons to be elected to
serve as the members of the PIA Delaware Board and of the PIA California Board,
until the next annual meeting or until their successors shall have been duly
elected and qualified: Robert G. Brown, William H. Bartels, Patrick W. Collins,
one person nominated by PIA Delaware (the "PIA Nominee") and one person
nominated by the SPAR Principals (the "SPAR Nominee") who is reasonably
acceptable to PIA Delaware. The PIA Nominee and the SPAR Nominee shall be
identified prior to the mailing of the PIA Proxy Statement and named therein.
Without limiting the generality of the foregoing, each member of the PIA
Delaware Board and each member of the PIA California Board who will not continue
in such capacity after the Effective Time, and each member of the Board of
Directors of each PIA Subsidiary, shall have delivered to the SPAR Parties a
resignation from such Board of Directors dated the Closing Date which shall
become effective at the Effective Time.

(f) Appointment of Officers. The PIA Delaware Board shall have taken all
necessary action to cause the following persons to be appointed to the offices
indicated as of the Effective Time to serve until their successors shall have 
been duly elected and qualified:

Name                                          Office
----                                          ------

Robert G. Brown             Chairman, Chief Executive Officer and President
William H. Bartels          Vice Chairman
Terry R. Peets              Vice Chairman
Cathy L. Wood               Chief Financial Officer and Executive Vice President
James R. Ross               Treasurer

(g) Opinion of Counsel. The SPAR Parties shall have received an opinion
from Riordan & McKinzie, counsel for the PIA Companies, dated the Closing Date
in form and substance reasonably satisfactory to the SPAR Parties.

(h) Good Standing Certificates. The PIA Parties shall have delivered to
the SPAR Parties certificates, dated as of a date no earlier than five days
prior to the Closing Date, duly issued by the appropriate governmental authority
in each PIA Company's jurisdiction of incorporation and in each state in which
each PIA Company is qualified to do business, showing that each PIA Party is in
good standing and qualified to do business and that all state franchise and/or
income tax returns and taxes for such PIA Party for all periods prior to the
dates of such certificates have been filed and paid.

Section 6.03. Conditions Precedent to the Obligations of the PIA
Parties. The obligations of the PIA Parties hereunder are subject to the
satisfaction (or waiver) on or prior to the Closing Date of the following
conditions:

(a) Representations and Warranties. The representations and warranties
of the SPAR Parties contained in this Agreement (other than as contained in
Section 3.17(i) hereof, which is addressed by Section 6.03(c), below) shall be
accurate in all material respects as of the Closing Date (other than as a result
of any proposed or pending transactions described in the SPAR Disclosure Letter,
this Agreement and the SPAR Premerger Agreements or (ii) any adverse change(s)
in the overall economy or in the market segments in which such parties do
business) as though such representations and warranties had been made as of such
time.

(b) Performance of Obligations. All of the terms, covenants and
conditions of this Agreement to be complied with and performed by any SPAR Party
on or before the Closing Date shall have been duly complied with and performed
in all material respects.

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(c) No Material Adverse Change. Except as previously disclosed in the
SPAR Disclosure Letter: no material adverse change in the business, operations,
assets, properties, prospects or condition (financial or otherwise) of the SPAR
Parties taken as a whole (a "SPAR Material Adverse Change") shall have occurred
since December 31, 1998 (other than as a result of adverse change(s) in the
overall economy or in the market segments in which such parties do business, and
with the understanding that the loss of a single material customer as a result
of the announcement of the transactions contemplated by this agreement shall not
constitute a SPAR Material Adverse Change); and since the Interim SPAR Marketing
Balance Sheet Date the SPAR Parties (taken as a whole) shall not have suffered
any material uninsured loss or damage to their assets and properties that would
be reasonably likely to materially affect or impair the ability of the SPAR
Parties to conduct their business as now conducted or as proposed to be
conducted.

(d) Certificate of the SPAR Parties. A certificate dated the Closing
Date and signed by each SPAR Party shall have been delivered to the PIA Parties
certifying that the conditions specified in the foregoing clauses (a), (b) and
(c) have been satisfied.

(e) Opinion of Counsel. The PIA Parties shall have received an opinion
from Parker Chapin Flattau & Klimpl, LLP, counsel to the SPAR Parties and the
SPAR Principals, dated the Closing Date, in form and substance reasonably
satisfactory to the PIA Parties.

(f) Good Standing Certificates. The SPAR Parties shall have delivered to
the PIA Parties certificates, dated as of a date no earlier than ten days prior
to the Closing Date (30 days in the case of separate tax certificates), duly
issued by the appropriate governmental authority in each SPAR Party's state of
incorporation and in each state in which each SPAR Party is qualified to do
business, showing that each SPAR Party is in good standing and qualified to do
business and that all state franchise and/or income tax returns and taxes for
such SPAR Party for all periods prior to the dates of such certificates have
been filed and paid.

(g) SPAR Principals' and Parties' Mutual Releases. The SPAR Principals
shall have delivered to the PIA Parties a mutual release dated the Closing Date
releasing each SPAR Party from any and all claims of the SPAR Principals against
each such SPAR Party with respect to matters preceding the Closing Date.

(h) Transfer of Other Assets. All assets and properties currently used
by any SPAR Party in the conduct of its business that are not owned (in whole or
in part) by, licensed to or leased by a SPAR Party as of the date of this
Agreement (if any) shall have been transferred or assigned to a SPAR Party
without the payment of any consideration therefor, as evidenced by the
certificate of the SPAR Parties and copies of all such assignments (if any).

(i) Termination of Phantom Stock Plan. PIA Delaware shall have received
evidence reasonably satisfactory to it that the SPAR Phantom Stock Plan (the
"Phantom Plan") has been terminated and that all obligations of any SPAR Party
thereunder have been satisfied in full by the SPAR Parties, without any further
recourse to or liability any SPAR Party or the Surviving Corporation thereunder.

(j) Termination or Separation of SPAR Benefit Plans. PIA Delaware shall
have received evidence reasonably satisfactory to it that either (at the option
of the SPAR Parties) (i) each SPAR Benefit Plan (A) has been terminated, or (B)
has been modified to exclude any employer other than a SPAR Party, or (ii) each
non- SPAR Party to a SPAR Benefit Plan shall have entered into a separation,
reimbursement and indemnity agreement with such SPAR Party on terms and
provisions reasonably acceptable to PIA Delaware providing for the eventual
exclusion of such person from the applicable SPAR Benefit Plan.

(k) Termination of Buy-Sell Agreement. The SPAR Principals shall have
amended the Buy-Sell Agreement to terminate its applicability to the stock of
any SPAR Party.

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ARTICLE VII

CLOSING NET WORTH; NONSURVIVAL OF REPRESENTATIONS

Section 7.01. SPAR Closing Net Worth.

(a) As soon as practicable, but in any event within thirty (30) days
following, the Closing Date, PIA Delaware shall cause Ernst & Young LLP to audit
the books of SAI and its subsidiaries to determine the SPAR Net Worth (as
hereinafter defined) immediately prior to the Merger (the "Closing Net Worth").
"SPAR Net Worth" shall mean the consolidated net worth of SAI and its
subsidiaries, calculated in accordance with generally accepted accounting
principles ("GAAP") consistently applied, excluding (i.e., without taking into
account) (i) up to $300,000 of non-capitalizable merger transaction charges and
other one time expenses, reserves or accruals related to the SPAR Reorganization
Transactions or the Merger, and (ii) any tax accruals and similar adjustments
necessitated by the SPAR Premerger Transaction.

(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 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 five hundred thousand
dollars ($500,000) (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 Mr. Brown and 28/72 by Mr. Bartels), 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.

(c) If the SPAR Principals provide PIA Delaware with written objection
(which objection shall specify the basis for such objection in reasonable
detail) to the calculation of the Closing Net Worth prior to the expiration of
the Review Period, PIA Delaware and the SPAR Principals shall attempt to resolve
such dispute through good faith negotiations for a period of at least thirty
(30) days (or such longer period as PIA Delaware and the SPAR Principals may
agree). If PIA Delaware and the SPAR Principals cannot resolve such dispute in
such period, then such dispute shall be resolved by an independent nationally
recognized accounting firm which is reasonably acceptable to PIA Delaware and
the SPAR Principals (the "Independent Accounting Firm"). The Independent
Accounting Firm shall make its determination of the Closing Date Net Worth
within thirty (30) days of its selection. The determination made by the
Independent Accounting Firm shall be final and binding on the parties hereto.
The costs of the Independent Accounting Firm shall be borne by PIA Delaware.

Section 7.02. Survival of Representations and Warranties. If the Merger
occurs, the representations and warranties made by the parties in this
Agreement, or in any certificate or other instrument delivered pursuant to this
Agreement, shall not survive the Merger, but rather shall terminate at the
Effective Time.

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ARTICLE VIII

TERMINATION OF AGREEMENT

Section 8.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time:

(a) by the mutual written agreement of PIA Delaware and SAI;

(b) by PIA Delaware, on forty eight (48) hours' written notice to SAI,
if there is a breach of any of the representations and warranties of any SPAR
Party (other than as a result of (i) the conduct of their businesses as
permitted and required hereunder, (ii) the culmination of any proposed or
pending transactions described in the SPAR Disclosure Letter, this Agreement and
the SPAR Premerger Agreements, or (iii) any adverse change(s) in the overall
economy or in the market segments in which such parties do business), or if any
SPAR Party fails to comply after notice with any of its covenants or agreements
contained herein, which breaches or failures, as the case may be, are, in the
aggregate, material in the context of the transactions contemplated by this
Agreement and cannot reasonably be anticipated to be cured within thirty (30)
days of the date of such notice;

(c) by SAI, on forty eight (48) hours' written notice to PIA Delaware,
if there is a breach of any of the representations and warranties of any PIA
Party (other than as a result of (i) the conduct of their businesses as
permitted and required hereunder, (ii) the culmination of any proposed or
pending transactions described in the PIA Disclosure Letter and this Agreement,
or (iii) any adverse change(s) in the overall economy or in the market segments
in which such parties do business), or if any PIA Party fails to comply after
notice with any of its covenants or agreements contained herein, which breaches
or failures, as the case may be, are, in the aggregate, material in the context
of the transactions contemplated by this Agreement and cannot reasonably be
anticipated to be cured within thirty (30) days of the date of such notice;

(d) by PIA Delaware on written notice to SAI, if (i) an Acquisition
Proposal has been made and not withdrawn, (ii) a majority of disinterested
members of the PIA Delaware Board determines in good faith (with the advice of
independent financial advisors and legal counsel) that such Acquisition Proposal
is superior for PIA Delaware's stockholders to the transaction contemplated by
this Agreement, (iii) PIA Delaware has notified SAI in writing of the
determination described in clause (ii) above, (iv) at least five (5) business
days have elapsed following receipt by SAI of such written notice and (taking
into account any revised proposal made by SAI since receipt of such written
notice) such Acquisition Proposal remains an Acquisition Proposal and a majority
of the disinterested directors of the PIA Delaware Board has again made the
determination referred to in clause (ii) above, (v) the PIA Delaware Board
concurrently approves, and (vii) PIA Delaware concurrently enters into a
definitive agreement providing for the implementation of such Acquisition
Proposal, subject to the payment by the PIA Parties of the breakup fee and
expense reimbursement as provided below in Section 8.03;

(e) by either PIA Delaware or SAI, on written notice to the other, if
the Merger shall not have been consummated on or before June 30, 1999; provided,
however, that (i) PIA Delaware may not terminate this Agreement pursuant to this
clause (e) if such failure to consummate the Merger is the result of a failure
to satisfy any of the conditions to the obligation of the SPAR Parties to effect
the Merger set forth in Section 6.02 and (ii) SAI may not terminate this
Agreement pursuant to this clause (e) if such failure to consummate the Merger
is the result of a failure to satisfy any of the conditions to PIA Delaware's
obligation to effect the Merger set forth in Section 6.03;

(f) by either PIA Delaware or SAI, on written notice to the other, if a
Governmental Entity shall have enacted, issued, promulgated, enforced, or
entered any law, rule, regulation, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and has the effect of making illegal
or otherwise prohibiting the consummation of the transactions contemplated by
this Agreement; and

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(g) by SAI or PIA Delaware, if upon a vote at the PIA Stockholders
Meeting, PIA Delaware's stockholders do not approve, (i) the Share Issuance as
required under the Nasdaq Rules or (ii) the Proposed PIA Certificate of
Amendment as required under the DGCL.

Section 8.02. Effect of Termination. Except as otherwise provided in
Section 8.03 with respect to any termination by PIA Delaware pursuant to
subsection (d) of Section 8.01, in the event of any termination of this
Agreement pursuant to subsection (a), (d), (e), (f) or (g) or of Section 8.01,
no Party hereto (or any of its directors or officers) shall have any liability
or further obligation to any other Party to this Agreement. In the event of any
termination of this Agreement pursuant to clauses (b) or (c) of Section 8.01,
such termination shall not limit or affect in any way the ability of the
non-breaching Parties to seek damages from the breaching Parties for any breach
of this Agreement.

Section 8.03. Breakup Fee. In the event of any termination of this
Agreement pursuant to Section 8.01(d) by PIA Delaware, PIA Delaware shall within
five Business Days pay (or cause to be paid) to the SPAR Parties (a) a breakup
fee equal to the product of (i) 0.035 times (ii) the Value Per Share (as defined
below) times the number of shares of PIA Delaware Stock then outstanding
(without giving effect to any shares of PIA Delaware Stock to be issued in such
transaction), and (b) the amount of the reasonable costs and expenses of the
SPAR Parties and the SPAR Principals incurred in connection with the
preparation, negotiation, execution and performance of this Agreement and all
related instruments and documents and all securities, anti-trust and other
governmental filings, including (without limitation) the reasonable fees,
disbursements and expenses of attorneys, accountants and other professionals,
subject to receipt of appropriate invoices and other documentation therefor.
"Value Per Share" shall mean (A) the cash purchase price per share of PIA
Delaware Stock where all or a majority of the outstanding shares of PIA Delaware
Stock are to be purchased for cash, or (B) in all other cases, the value of each
share of PIA Delaware Stock, as valued in good faith by the Board of Directors
of PIA Delaware (based on the fairness opinion or other valuation furnished to
them by the investment bankers or others providing comfort to the PIA Delaware
Board in connection with the alternative Acquisition Proposal), but in any event
not less than the average of the last sale price for PIA Delaware Stock on the
Nasdaq Stock Market for the five trading days preceding the effective date of
the termination of this Agreement.

ARTICLE IX

GENERAL

Section 9.01. Successors and Assigns; Assignment. Whenever in this
Agreement or any other Merger Document reference is made to any Party or other
person, such reference shall be deemed to include the successors, assigns, heirs
and legal representatives of such person, and, without limiting the generality
of the foregoing, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided that the rights of a Party hereunder may not be assigned without the
consent of the other parties hereto.

Section 9.02. No Third Party Rights. The representations, warranties and
other terms and provisions of this Agreement and the other Merger Documents are
for the exclusive benefit of the Parties hereto, and, except as otherwise
expressly provided herein or therein, no other person, including creditors of
any Party hereto, shall have any right or claim against any Party by reason of
any of those terms and provisions or be entitled to enforce any of those terms
and provisions against any Party.

Section 9.03. Counterparts. This Agreement may be executed 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.

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Section 9.04. Expenses. Except as otherwise expressly provided herein,
whether or not the transactions herein contemplated shall be consummated, (i)
the PIA Parties shall pay the fees, expenses and disbursements of the PIA
Parties and their respective agents, representatives, accountants and counsel
incurred in connection with the preparation and negotiation of this Agreement
and the consummation of the transactions contemplated hereby and (ii) the SPAR
Parties shall pay the fees, expenses and disbursements of the SPAR Parties and
the SPAR Principals and their respective agents, representatives, accountants
and counsel incurred in connection with the preparation and negotiation of this
Agreement and the consummation of the transactions contemplated hereby. The PIA
Parties and the SPAR Parties shall each pay one-half of the filing fee required
to be paid in connection with any filings required to be made by any Party under
the HSR Act with respect to the Merger.

Section 9.05. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be sent, delivered or mailed as follows:

(a)   If to any PIA Party:
Terry R. Peets, President and Chief Executive Officer
PIA Merchandising Services, Inc.
19900 MacArthur Blvd., Suite 900
Irvine, California 92612
Telephone:              (949) 474-3506
Telecopier:             (949) 474-3570
E-Mail:                 Terry.Peets@PIAmerch.com

with a copy to:
James W. Loss, Esq.
Riordan & McKinzie
695 Town Center Drive, Suite 1500
Costa Mesa, CA  92626
Telephone:              (714) 433-2900
Telecopier:             (714) 549-3244
E-Mail:                 jwl@riordan.com

And a copy to:
Lawrence David Swift, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, NY 10036-8735
Telephone:              (212) 704-6147
Telecopier:             (212) 704-6159
E-Mail:                 LDSwift@PCFK.com

(b)   If to any SPAR Party:
Robert G. Brown, Chairman and Chief Executive Officer
SPAR Marketing Force, Inc.
303 South Broadway, Suite 140
Tarrytown, New York 10591
Telephone:              (914) 332-4100
Telefax:                (914) 332-0741
E-Mail:                 RBrown@MSN.com

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With a copy to:
William H. Bartels, Vice Chairman and Senior Vice President
SPAR Marketing Force, Inc.
303 South Broadway, Suite 140
Tarrytown, New York 10591
Telephone:              (914) 332-4100
Telefax:                (914) 332-0741
E-Mail:                 BBartels@SPARinc.com

with a copy, in either case, to:
Lawrence David Swift, Esq.
Parker Chapin Flattau & Klimpl, LLP
121 1 Avenue of the Americas
New York, NY 10036-8735
Telephone:              (212) 704-6147
Telecopier:             (212) 704-6159
E-Mail:                 LDSwift@PCFK.com

Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telecopier, receipt
confirmed. Each such notice, request or communication shall be effective (i) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section (or in accordance with the latest
unrevoked written direction from such Party) and (ii) if given by telecopier,
when such telecopy is transmitted to the telecopier number specified in this
Section (or in accordance with the latest unrevoked written direction from such
Party), and the appropriate confirmation is received.

Section 9.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the Applicable Laws pertaining in the State of New
York (other than those laws that would defer to the substantive laws of another
jurisdiction); provided, however, that the approval by the Constituent
Corporations, the Articles of Merger and filing, the effects of the Merger, and
other corporate organization and governance matters pertaining to the
Constituent Corporations shall be governed by and construed in accordance with
the Applicable Laws pertaining in the State of Nevada. Without in any way
limiting the preceding choice of law, the parties intend (among other things) to
thereby avail themselves of the benefit of Section 5-1401 of the General
Obligations Law of the State of New York.

Section 9.07. Consent to Jurisdiction, Etc. The Parties each hereby
consent and agree that the Supreme Court of the State of New York for the County
of Westchester and the United States District Court for Westchester County, New
York, and the Superior Court of the County of Orange, California, and the United
States District Court for the Central District of California, each shall have
personal jurisdiction and proper venue with respect to any dispute between the
Parties; provided that the foregoing consent shall not deprive any Party of the
right to voluntarily commence or participate in any action, suit or proceeding
in any other court having jurisdiction and venue over the other Parties. In any
dispute with the SPAR Parties, the PIA Parties will not raise, and each hereby
expressly waives, any objection or defense to any such New York jurisdiction as
an inconvenient forum. Without in any way limiting the preceding consents to
jurisdiction and venue, the parties intend (among other things) to thereby avail
themselves of the benefit of Section 5-1402 of the General Obligations Law of
the State of New York.

Section 9.08. Waiver of Jury Trial. In any action, suit or proceeding in
any jurisdiction, the Parties each hereby expressly waive trial by jury.

Section 9.09. Exercise of Rights and Remedies. Except as otherwise
provided herein, no delay of or omission in the exercise of any right, power or
remedy accruing to any Party as a result of any breach or default by any other
Party under this Agreement shall impair any such right, power or remedy, nor
shall it be construed as a

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waiver of or acquiescence in any such breach or default, or of any similar
breach or default occurring later. No waiver of any single breach or default
shall be deemed a waiver of any other breach or default occurring before or
after such waiver.

Section 9.10. Reformation and Severability. In case any provision of
this Agreement shall be invalid, illegal or unenforceable, it shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the parties, and if
such modification is not possible, such provision shall be severed from this
Agreement, and in either case, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.

Section 9.11. Remedies Cumulative. No right, remedy or election given by
any term of this Agreement shall be deemed exclusive, but each shall be
cumulative with all other rights, remedies and elections available at law or in
equity.

Section 9.12. Captions. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.

Section 9.13. Amendments. This Agreement may be modified or amended only
by a written instrument executed by the SPAR Parties and the PIA Parties.

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Section 9.14. Entire Agreement. This Agreement, the SPAR Disclosure
Letter, the PIA Disclosure Letter, and the other Merger Documents constitute the
entire agreement and understanding among the parties, and supersede any prior
agreements and understandings, relating to the subject matter of this Agreement
and the other Merger Documents.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

PIA Merchandising Services, Inc.            SPAR Acquisition, Inc.

By: /s/ Terry R. Peets                      By: /s/ Robert G. Brown
------------------------------------        --------------------------------
Name: Terry R. Peets                        Name: Robert G. Brown
Title: President and Chief Executive        Title: Chairman, Chief Executive
Officer                                     Officer and President

SG Acquisition, Inc.                        SPAR Marketing Force, Inc.

By: /s/ Terry R. Peets                      By: /s/ Robert G. Brown
------------------------------------        --------------------------------
Name: Terry R. Peets                        Name: Robert G. Brown
Title: President and Chief Executive        Title: Chairman, Chief Executive
Officer                                     Officer and President

PIA Merchandising Co., Inc.                 SPAR, Inc., a Delaware corporation

By: /s/ Terry R. Peets                      By: /s/ Robert G. Brown
------------------------------------        --------------------------------
Name: Terry R. Peets                        Name: Robert G. Brown
Title: President and Chief Executive        Title: Chairman, Chief Executive
Officer                                     Officer and President

SPAR/Burgoyne Retail Services, Inc.         SPAR Marketing, Inc.

By: /s/ Robert G. Brown                     By: /s/ Robert G. Brown
------------------------------------        --------------------------------
Name: Robert G. Brown                   Name: Robert G. Brown
Title: Chairman, Chief Executive        Title: Chairman, Chief Executive
Officer and President                   Officer and President

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SPAR Incentive Marketing, Inc.             SPAR MCI Performance Group, Inc.

By: /s/ Robert G. Brown                    By: /s/ Robert G. Brown
-----------------------------------        --------------------------------
Name: Robert G. Brown                      Name: Robert G. Brown
Title: Chairman, Chief Executive           Title: Chairman and Chief
Officer and President                      Executive Officer

SPAR Trademarks, Inc.                      SPAR Marketing, Inc., a Nevada
corporation

By: /s/ Robert G. Brown                    By:  /s/ Robert G. Brown
-----------------------------------         --------------------------------
Name: Robert G. Brown                       Name: Robert G. Brown
Title: Chairman, Chief Executive            Title: Chairman, Chief Executive
Officer and President                       Officer and President

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EXHIBIT A

ARTICLES OF MERGER

OF

SG ACQUISITION, INC.

AND

SPAR ACQUISITION, INC.

To the Secretary of State, State of Nevada

Pursuant to the provisions of Chapters 78 and 92A, Nevada Revised
Statutes, the domestic corporations herein named do hereby adopt the following
Articles of Merger.

FIRST: Effective upon the filing of these Articles of Merger, SG
Acquisition, Inc. ("SG Acquisition"), a corporation for profit organized under
the laws of the State of Nevada, shall merge into SPAR Acquisition, Inc. ("SPAR
Acquisition"), a corporation for profit organized under the laws of the State of
Nevada, pursuant to and in accordance with the Agreement and Plan of Merger,
dated as of February 28, 1999 (the "Agreement and Plan of Merger"), made by and
among SPAR Acquisition, SG Acquisition, PIA Merchandising Services, Inc., a
Delaware corporation ("PIA Delaware"), PIA Merchandising Co., Inc., a California
corporation ("PIA California"), SPAR Marketing, Inc., a Delaware corporation
("SMI"), SPAR Marketing, Inc., a Nevada corporation ("SMNEV"), SPAR Marketing
Force, Inc., a Nevada corporation ("SMF"), SPAR, Inc., a Nevada corporation
("SINC"), SPAR/Burgoyne Retail Services, Inc., an Ohio corporation ("SBRS"),
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").

SECOND: SPAR Acquisition is the surviving corporation.

THIRD: The complete, executed Agreement and Plan of Merger is on file at
the office of the registered agent of SPAR Acquisition located at Capitol
Document Services, Inc., 202 South Minnesota Street, Carson City, Nevada 89703
and at 303 South Broadway, Suite 140, Tarrytown, NY 10591.

FOURTH: The said Agreement and Plan of Merger has been adopted by the
unanimous consent of the Board of Directors of each of SG Acquisition and SPAR
Acquisition.

FIFTH: The said Agreement and Plan of Merger was approved by the
unanimous consents of the stockholders of each of SG Acquisition and SPAR
Acquisition, pursuant to the provisions of Chapter 78, Nevada Revised Statutes.

SIXTH: The Articles of Incorporation and By-laws of SPAR Acquisition
shall be the Articles of Incorporation and By-laws of the surviving corporation
upon the effectiveness of the merger herein provided for.

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SEVENTH: Each of the issued and outstanding shares of common stock of SG
Acquisition shall be converted into one share of common stock of the surviving
corporation upon the effectiveness of the merger herein provided for.

Executed on this __ day of _________, 1999.

SG Acquisition, Inc.                          SPAR Acquisition, Inc.

By:                                           By:
------------------------------------          -------------------------------
Terry R. Peets, President                     Robert G. Brown, President

By:                                           By:
------------------------------------          -------------------------------
Cathy L. Wood, Secretary                      William H. Bartels, Secretary

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STATE OF             )
)SS.:
COUNTY OF            )

On the _____ day of _________ in the year 1999 before me, the
undersigned, a Notary Public in and for said State, personally appeared Terry R.
Peets, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity (i.e., as
President), and that by his signature on the instrument, the person upon behalf
of which the individual acted (i.e., SG Acquisition, Inc.), executed the
instrument.

-----------------------------------------------------------
(Signature and office of individual taking acknowledgment.)

STATE OF             )
)SS.:
COUNTY OF            )

On the _____ day of _________ in the year 1999 before me, the
undersigned, a Notary Public in and for said State, personally appeared Cathy L.
Wood, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity (i.e., as
Secretary), and that by his signature on the instrument, the person upon behalf
of which the individual acted (i.e., SG Acquisition, Inc.), executed the
instrument.

-----------------------------------------------------------
(Signature and office of individual taking acknowledgment.)

STATE OF             )
)SS.:
COUNTY OF            )

On the _____ day of _________ in the year 1999 before me, the
undersigned, a Notary Public in and for said State, personally appeared Robert
G. Brown, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity (i.e., as
President), and that by his signature on the instrument, the person upon behalf
of which the individual acted (i.e., SPAR Acquisition, Inc.), executed the
instrument.

-----------------------------------------------------------
(Signature and office of individual taking acknowledgment.)

STATE OF             )
)SS.:
COUNTY OF            )

On the _____ day of _________ in the year 1999 before me, the
undersigned, a Notary Public in and for said State, personally appeared William
H. Bartels, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity (i.e., as
Secretary), and that by his signature on the instrument, the person upon behalf
of which the individual acted (i.e., SPAR Acquisition, Inc.), executed the
instrument.

-----------------------------------------------------------
(Signature and office of individual taking acknowledgment.)

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EXHIBIT B

PIA MERCHANDISING SERVICES, INC.

SPECIAL PURPOSE STOCK OPTION PLAN

Section 1. Description and Purpose of this Plan. This is the Special
Purpose Stock Option Plan of PIA Merchandising Services, Inc., a Delaware
corporation (the "Company"). This Plan has been created to provide for the
issuance of substitute options ("Substitute Options") to the holders of
outstanding stock options ("SAI Options") granted by SPAR Acquisition, Inc., a
Nevada corporation ("SAI"), as required by the terms of that certain Agreement
and Plan of Merger dated as of February 28, 1999 by and among the Company, SAI
and certain other parties named therein (the "Merger Agreement"). Substitute
Options granted under this Plan will not qualify as incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

Section 2. Issuance of Substitute Options. As required by Section 2.04
of the Merger Agreement, the Company shall, promptly following the Effective
Time (as such term is defined in the Merger Agreement) execute and deliver to
each holder of an SAI Option, against delivery and cancellation of such SAI
Option, a Substitute Option containing substantially the same provisions as the
SAI Option being canceled, including, without limitation, (i) the same per share
exercise price and (ii) providing for the right to purchase such number of
shares of the Company's common stock ("Common Stock") as shall be equal to the
number of shares of SAI's common stock that such holder was entitled to purchase
pursuant to the SAI Option being surrendered (a "Substitute Option Agreement").
The persons receiving Substitute Options under this Plan are hereinafter
referred to as the "Participants.") The Company shall have no obligations to
issue any Substitute Options to any Participant prior to the Effective Time.
This Plan shall terminate immediately upon the termination of the Merger
Agreement in accordance with its terms.

Section 3. Shares Subject to this Plan. The number of shares of Common
Stock in respect of which Substitute Options may be granted under this Plan is
___________, subject to adjustment as provided in Section 6 hereof. After the
initial grant of Substitute Options as provided in the Merger Agreement, no
further Substitute Options may be granted under this Plan.

Section 4. Administration. This Plan shall be administered by the Board
of Directors of the Company (the "Board"). The Board shall have the exclusive
and binding right to (i) interpret this Plan, (ii) prescribe, amend and rescind
rules relating to this Plan; (iii) authorize any person to execute on behalf of
the Company any instrument required to effectuate the grant of an Substitute
Option; (iv) determine the rights and obligations of Participants under this
Plan; and (v) make all other determinations deemed necessary or advisable for
the administration of this Plan. The good faith interpretation and construction
by the Board of any provision of this Plan or of any Substitute Option shall be
final, conclusive and binding. No member of the Board shall be liable for any
action or determination made in good faith with respect to this Plan or any
Substitute Option.

Section 5. Issuance of Common Stock. The Company's obligation to issue
shares of its Common Stock upon exercise of a Substitute Option by any
Participant is expressly conditioned upon the compliance by the Company with any
registration or other qualification obligations with respect to such shares
under any state or federal law or rulings and regulations of any government
regulatory body and the making of such investment representations or other
representations and undertakings by such Participant (or such Participant's
legal representative, heir or legatee, as the case may be) in order to comply
with the requirements of any exemption from any such registration or other
qualification obligations with respect to such shares which the Company in its
sole discretion shall deem necessary or advisable. Such required representations
and undertakings may include representations and agreements that such
Participant (or such Participant's legal representative, heir or legatee) (i) is
purchasing such shares for investment and not with any present intention of
selling or otherwise disposing of such shares and (ii) agrees to have a legend
placed upon the face and reverse of any certificates evidencing such shares (or,
if applicable, an appropriate data entry made in the ownership records of the
Company) setting forth (A) any representations and undertakings

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which such Participant has given to the Company or a reference thereto, and (B)
that, prior to effecting any sale or other disposition of any such shares, such
Participant must furnish to the Company an opinion of counsel, satisfactory to
the Company and its counsel, to the effect that such sale or disposition will
not violate the applicable requirements of state and federal laws and regulatory
agencies; provided, however, that any such legend or data entry shall be removed
when no longer applicable. The Company, during the term of this Plan, will at
all times reserve and keep available, and will use its reasonable efforts to
obtain from any regulatory body having jurisdiction any requisite authority in
order to issue and sell such number of shares of Common Stock as shall be
sufficient to satisfy the requirements of this Plan. The inability of the
Company to obtain, from any regulatory body having jurisdiction, authority
reasonably deemed by the Company's counsel to be necessary for the lawful
issuance and sale of any shares hereunder shall relieve the Company of any
liability in respect of the non-issuance or sale of such shares as to which such
requisite authority shall not have been obtained.

Section 6. Adjustments Upon Capitalization and Corporate Changes. If the
outstanding shares of the Common Stock are changed into, or exchanged for, a
different number or kind of shares or securities of the Company through
reorganization, merger, recapitalization or reclassification, or if the number
of outstanding shares is changed through a stock split, stock dividend, stock
consolidation or like capital adjustment, or if the Company makes a distribution
in partial liquidation or any other comparable extraordinary distribution with
respect to its Common Stock, an appropriate adjustment shall be made by the
Board in the number, kind or exercise price of shares with respect to which
unexercised Substitute Options have been granted; provided, however, that in no
event shall the exercise price be less than the par value of the Common Stock at
such time. In making such adjustments, or in determining that no such
adjustments are necessary, the Board may rely upon the advice of counsel and
accountants to the Company, and the good faith determination of the Board shall
be final, conclusive and binding.

Section 7. Rights as a Stockholder. A Participant shall have no rights
as a stockholder with respect to any shares covered by a Substitute Option until
the date of an entry evidencing such ownership is made in the stock transfer
books of the Company (the "Exercise Date"). Except as otherwise provided in
Section 6, no adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the Exercise Date. Upon (i) the
dissolution, liquidation or sale of all or substantially all of the business,
properties and assets of the Company, (ii) upon any reorganization, merger or
consolidation in which the Company does not survive, (iii) upon any
reorganization, merger, consolidation or exchange of securities in which the
Company does survive and any of the Company's stockholders have the opportunity
to receive cash, securities of another corporation and/or other property in
exchange for their capital stock of the Company, or (iv) upon any acquisition by
any person or group (as defined in Section 13(d) of the Securities Act of 1934)
of beneficial ownership of more than fifty percent (50%) of the Company's then
outstanding shares of Common Stock (each of the events described in clauses (i),
(ii), (iii) or (iv) is referred to herein individually as an "Extraordinary
Event"), this Plan and each outstanding Substitute Option shall terminate. In
such event each Participant shall have the right until 10 days before the
effective date of the Extraordinary Event to exercise, in whole or in part, any
unexpired Substitute Option held by such Participant to the extent that such
Substitute Option is then vested and exercisable pursuant to the provisions
thereof.

Section 8. Withholding of Taxes. The Company, or a Subsidiary, as the
case may be, may deduct and withhold from the wages, salary, bonus and other
income paid by the Company or such Subsidiary to any Participant the requisite
tax upon the amount of taxable income, if any, recognized by such Participant in
connection with the exercise in whole or in part of any Substitute Option, or
the sale of Common Stock issued to any Participant upon the exercise of any
Substitute Option, as may be required from time to time under any federal or
state tax laws and regulations. This withholding of tax shall be made from the
Company's (or such Subsidiary's) concurrent or next payment of wages, salary,
bonus or other income to such Participant or by payment to the Company (or such
Subsidiary) by such Participant of the required withholding tax, as the Board
may determine.

Section 9. Amendment of this Plan. The Board may (a) make such changes
in the terms and conditions of outstanding Substitute Options as it deems
advisable, provided each Participant adversely affected by such

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change consents thereto, and (b) make such amendments to this Plan as it deems
advisable. The Board may obtain shareholder approval of any amendment to this
Plan for any reason (including in order to take advantage of certain exemptions
under Code Section 162(m)), but shall not be required to do so unless required
by law or by the rules of the Nasdaq National Market or any stock exchange on
which the Common Stock may then be listed.

Section 10. Governing Law. This Plan and any Substitute Option granted
pursuant to this Plan shall be construed under and governed by the laws of the
State of Delaware without regard to conflict of law provisions thereof.

Section 11. Not an Employment or Other Agreement. Nothing contained in
this Plan or in any Substitute Option Agreement shall confer, intend to confer
or imply any rights of employment or any rights to any other relationship or
rights to continued employment by, or rights to a continued consulting
relationship with, the Company or any Subsidiary in favor of any Participant or
limit the ability of the Company or any Subsidiary to terminate, with or without
cause, in its sole and absolute discretion, the employment of, or relationship
with, any Participant, subject to the terms of any written employment or other
agreement to which such Participant is a party.

Section 12. Indemnification. In addition to such other rights of
indemnification as they may have as directors, the members of the Board shall be
indemnified by the Company to the fullest extent permitted by law against the
reasonable expenses, including reasonable attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with this Plan or any Substitute Option granted hereunder, and
against all amounts paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit or proceeding that such Board member is not
entitled to indemnification under applicable law.

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EXHIBIT C

TRADEMARK LICENSE AGREEMENT

Introduction

This Trademark License Agreement, dated as of ________ __, 1999 (as the
same may be supplemented, modified, amended, restated or replaced from time to
time in the manner provided herein, this "Agreement"), is by and between SPAR
Infotech, Inc., a Nevada corporation currently having an address at 303 South
Broadway, Suite 140, Tarrytown, New York 10591(the "Licensee"), and SPAR
Trademarks, Inc., a Nevada corporation currently having an address at 303 South
Broadway, Suite 140, Tarrytown, New York 10591 (the "Licensor"). The Licensor
and the Licensee are sometimes referred to herein individually as a "Party" and
collectively as the "Parties".

Recitals

The Licensor is the owner of the Trademarks (as these and the other
capitalized terms used in these Recitals are defined in Section 1, below) with
respect to the Products and Services, amd the Licensee desire to use the
Trademarks in the Territory in connection with the Products and Services. The
Licensor is willing to grant to the Licensee the nonexclusive right and license
to use the Trademarks on and in connection with the Products and Services in the
Territory, all upon the terms and provisions and subject to the conditions set
forth in this Agreement.

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 is hereby acknowledged by the Parties), the Parties hereto
hereby agree as follows:

Section 1. Definitions. Each use in this Agreement of a neuter pronoun
shall be deemed to include references to the masculine and feminine variations
thereof, and vice versa, and a singular pronoun shall be deemed to include a
reference to the plural variation thereof, and vice versa, in each case as the
context may permit or require. As used in this Agreement, the following
capitalized terms and non-capitalized words and phrases shall have the meanings
respectively assigned to them below, which meanings shall be applicable equally
to the singular and plural forms of the terms so defined:

(a) "Business Competitive With the Licensee" shall mean any substantial
business activity in collecting, analyzing and/or disseminating scanner data,
ex-factory shipment data and/or other similar information.

(b) "Business Competitive With Marketing Force" shall mean any
substantial business activity conducted by any person that is competitive with
any substantial business activity conducted by any SPAR Company or PIA Company
at the Merger Effective Time (whether or not such person's activity is actually
conducted in competition with any SPAR Company or PIA Company), excluding,
however, any Business Competitive With the Licensee (whether or not so conducted
by any SPAR Company or PIA Company).

(c) "Merger Effective Time" shall mean the "Effective Time" under (and
as defined in) the Agreement and Plan of Merger dated as of February 28, 1999,
among the SPAR Companies and the PIA Companies (which is the time the merger
thereunder takes effect and the SPAR Companies and PIA Companies come under
common control), as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein.

(d) "PIA Company" and "PIA Companies" shall respectively mean any one or
more of PIA Merchandising Services, Inc., a Delaware corporation, SG
Acquisition, Inc., a Nevada corporation (which is merging into SPAR Acquisition,
Inc.), PIA Merchandising Co., Inc., a California corporation, and their
respective subsidiaries as of the Merger Effective Time.

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(e) "Products" shall mean the products claimed in the registrations for
the Trademarks listed in Exhibit A hereto and any other products for which the
Licensor has such Trademark rights.

(f) "Representative" of any Party shall mean any of its directors,
officers, employees, attorneys, heirs, executors, administrators, or agents, any
of such Party's sublicensees, affiliates, successors and assigns, or any of
their respective directors, officers, employees, attorneys, heirs, executors,
administrators, or agents.

(g) "Services" shall mean the services claimed in the registrations for
the Trademarks listed in Exhibit A hereto and any other services for which the
Licensor has such Trademark rights.

(h) "SPAR Company" and "SPAR Companies" shall respectively mean any one
or more of SPAR Acquisition, Inc., a Nevada corporation, SPAR Marketing, Inc., a
Delaware corporation, SPAR Marketing, Inc., a Nevada corporation, SPAR Marketing
Force, Inc., a Nevada corporation, SPAR, Inc., a Nevada corporation,
SPAR/Burgoyne Retail Services, Inc., an Ohio corporation, SPAR Incentive
Marketing, Inc., a Delaware corporation, SPAR MCI Performance Group, Inc., a
Delaware corporation, and SPAR Trademarks, Inc., a Nevada corporation.

(i) "Territory" shall mean the United States and Canada.

(j) "Trademark" and "Trademarks" shall respectively mean any and all of
the registered trademarks of the Licensor registered in the United States and
Canada listed in Exhibit A hereto, any additional registered trademarks of the
Licensor deriving or containing any Trademark, and any and all renewals thereof.

Section 2. Grant of License and Affiliate Sublicenses; Limits on Use.

(a) License. Subject to the terms and conditions herein contained, the
Licensor hereby grants to the Licensee a royalty-free, nonexclusive license to
use: (i) the Trademarks (alone or as part of other words or phrases) on and in
connection the Products and Services in the Territory; and (ii) to the extent
the Licensor has any right, title or interest therein, the name "SPAR" (alone or
as part of other words or phrases) in its legal and/or trade name and on or in
connection with any products or services other than the Products and Services.

(b) Sublicenses. The Licensee from time to time may add one or more
subsidiaries or affiliates (but only those under common ownership and control
with the Licensee) as a sublicensee under this Agreement (each a "Sublicensee"
and collectively "Sublicensees"). Each Sublicensee hereby assumes and agrees to
be bound by the terms, provisions and conditions as set forth in this Agreement
as if it were the "Licensee" and a "Party" hereunder. In the event the control
or ownership of any Sublicensee, its business or substantially all of its assets
are sold or transferred so that such Sublicensee, business or assets cease to be
under common ownership and control with the Licensee, such subsidiary or
affiliate shall automatically cease to be a Sublicensee hereunder from and after
such sale or transfer, without, however, relieving or otherwise affecting any of
the obligations of such former Sublicensees with respect to its obligations with
respect to actions or events arising prior to such sale or transfer.

(c) License May Follow Group Sale. In the event that the control or
ownership of all or substantially all of the Licensee and Sublicensees or all or
substantially all of their businesses or assets are sold or transferred (a
"Group Sale"), this Agreement may be transferred (in whole) as part of such
Group Sale by written notice to the Licensor and (if an asset sale) the
assumption of this Agreement by the purchasers by the delivery to the Licensor
of an assumption agreement in form and substance reasonably acceptable to the
Licensor, duly executed by the new Licensee; provided, however, that this
Agreement may not be so transferred to anyone whose business is in any material
respect a Business Competitive With Marketing Force. Any entity not included in
the Group Sale shall automatically cease to be a Licensee or Sublicensee
hereunder from and after such sale or transfer, without, however, relieving or
otherwise affecting any of its obligations with respect to actions or events
arising prior to such sale or transfer.

(d) Limits on the Licensee's Use of Trademarks. Neither the Licensee nor
any of its Sublicensees shall use any Trademark in any material respect in any
Business Competitive With Marketing Force.

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(e) No Unpermitted Users. No Party shall cause, suffer, or permit any of
its affiliates or cause any other person to use any Trademark in any material
respect unless such person is a permitted Licensee or Sublicensee hereunder.

Section 3. Term. The term of this Agreement shall commence on the date
of this Agreement and continue through December 31, 2098 (as and if extended
pursuant to this Section, the "Term"). The Term of this Agreement is
automatically renewable for additional consecutive ninety-nine year terms. If
the Licensee (in the Licensee's sole and absolute discretion) chooses not to
renew, a written request from the Licensee seeking termination must be received
by the Licensor at least 90 days prior to the scheduled end of the then current
Term. The Term is also subject to earlier termination as provided in this
Agreement. Upon the termination of this Agreement by the Licensee, (i) the right
and license to use the Trademarks granted to the Licensee hereunder shall
forthwith terminate, (ii) the Licensee shall promptly thereafter shall cease and
desist from using the marks on or in connection with the Products or Services,
and (iii) the Licensee shall, promptly upon receipt of the written request of
the Licensor, without charge, execute any and all documents, and record them
with any and all appropriate governmental agencies within the Territory, as may
be necessary to remove the Trademarks from its company name and to otherwise
reasonably evidence that the Licensee no longer has the right and license to use
the Trademarks; provided, however, that upon such termination of this Agreement,
the Licensee shall have the right to continue to sell any existing inventory of
the Products and to use the Trademarks in connection with such sale for a period
of up to three months after the effective date of termination of this Agreement.

Section 4. Non-Exclusivity of License; Limits on Licensor's Use and
Licensing Rights: Validity of Trademarks.

(a) Retained Rights and Limits on Use. The Licensee acknowledges and
agrees that, all rights in the Trademarks, other than those specifically granted
in this Agreement, are reserved by the Licensor, and the Licensor may (during
the Term or thereafter) specifically grant other licenses to use the Trademarks
on or in connection with (i) any one or more of the Products and Services within
or outside the Territory or (ii) any other products or services within or
outside the Territory to the extent it has rights therein; provided, however,
that the Licensor covenants and agrees that neither the Licensor nor any of its
affiliates (as sublicensees or otherwise) shall (A) use any Trademark in any
material respect in any Business Competitive With the Licensee, or (B) license
or otherwise grant any rights in or to any Trademark to any person whose
business is in any material respect a Business Competitive With the Licensee.

(b) Ownership and Validity of Trademarks. The Licensee acknowledges and
agrees that the Licensor is the legal, valid and exclusive owner of the
Trademarks. The Licensee covenants and agrees that it will not, individually or
with any other licensee or person, at any time during the term of this Agreement
or thereafter, directly or indirectly, challenge, contest or aid in challenging
or contesting (i) the legality or validity of any of the Trademarks, (ii) the
ownership by the Licensor of any of the Trademarks, or (iii) the title of or
registration by the Licensor of any of the Trademarks, in each case whether such
Trademarks are now existing or hereafter acquired, created or obtained and all
renewals thereof.

Section 5. Compliance with Applicable Law. The Licensee covenants and
agrees with the Licensor that, during the Term of this Agreement, unless the
Licensor (in its sole and absolute discretion) consents otherwise in writing,
the Licensee shall comply with all applicable laws, rules, regulations and
ordinances in effect at any time and from time to time in the Territory in
connection with the Products and Services utilizing any of the Trademarks if the
non-compliance therewith would materially impair the prestige and goodwill of
the Trademarks.

Section 6. Standards of Quality. The Licensee acknowledges to and
covenants and agrees with the Licensor that, during the Term of this Agreement,
unless the Licensor (in its sole and absolute discretion) consents otherwise in
writing: (a) none of the Products or Services shall fail in any material respect
to meet the standards of quality with respect to the Trademarks in place at the
time of commencement of this Agreement ("Standards of Quality") if such failure
would materially impair the prestige and goodwill of the Trademarks; and (b)
none of the Products or Services of the Licensee shall otherwise materially
impair the prestige and goodwill of the Trademarks.

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Section 7. Registration for the Trademarks in the Territory.

(a) Registration Maintenance During the term of this Agreement, the
Licensor shall undertake, in its own name, to renew and maintain registration
for the Trademarks in the Territory. The Licensee shall cooperate with the
Licensor in the execution, filing and prosecution of any such instrument(s) or
document(s) as the Licensor from time to time may reasonably request (i) to
obtain renewal and/or maintain registration for the Trademarks in the Territory
and (ii) to confirm the Licensor's ownership rights therein. The Licensor makes
no representation or warranty hereby that the registrations for the Trademarks
will be renewable or maintainable in the Territory, and the failure to renew or
maintain the registrations thereof shall not be deemed a breach hereof by the
Licensor.

(b) Costs and Expenses. Any and all costs and expenses (including,
without limitation, the fees and expenses of attorneys and other professionals)
incurred by the Licensor in the renewal or maintenance of any of the Trademarks
in the Territory shall be borne by the Licensor.

Section 8. Royalties. The license granted under this Agreement is
royalty-free. The Licensee shall not be required to account to the Licensor with
respect to its use of the Trademarks.

Section 9. Representations and Warranties Respecting the Licensee. The
Licensee represents and warrants to the Licensor that, as of the date hereof and
as of the date of each amendment, renewal or extension hereof or assumption
hereof, except as otherwise disclosed to the Licensor in writing: (a) the
Licensee is a corporation duly incorporated, validly existing and in good
standing under the laws its state of incorporation; (b) the Licensee has the
legal capacity, power, authority and unrestricted right to execute and deliver
this Agreement and to perform all of its obligations hereunder; (c) the
execution and delivery by the Licensee of this Agreement and the performance by
the Licensee of all of its obligations hereunder will not violate or be in
conflict with any term or provision of (i) any applicable law, (ii) any
judgment, order, writ, injunction, decree or consent of any court or other
judicial authority applicable to the Licensee or any material part of the
Licensee's assets and properties, (iii) any of its organizational documents, or
(iv) any material agreement or document to which it is a party or subject or
that applies to any material part of the Licensee's assets and properties; (d)
no consent, approval or authorization of, or registration, declaration or filing
with, any governmental authority or other person is required as a condition
precedent, concurrent or subsequent to or in connection with the due and valid
execution, delivery and performance by the Licensee of this Agreement or the
legality, validity, binding effect or enforceability of any of the terms and
provisions of this Agreement; and (e) this Agreement is a legal, valid and
binding obligation of the Licensee, enforceable against the Licensee in
accordance with its terms and provisions.

Section 10. Representations and Warranties Respecting the Licensor. The
Licensor represents and warrants to the Licensee that, as of the date hereof and
as of the date of each amendment, renewal or extension hereof or assumption
hereof, except as otherwise disclosed to the Licensee in writing: (a) the
Licensor is a corporation duly incorporated, validly existing and in good
standing under the laws its state of incorporation; (b) the Licensor has the
legal capacity, power, authority and unrestricted right to execute and deliver
this Agreement and to perform all of its obligations hereunder; (c) the
execution and delivery by the Licensor of this Agreement and the performance by
the Licensor of all of its obligations hereunder will not violate or be in
conflict with any term or provision of (i) any applicable law, (ii) any
judgment, order, writ, injunction, decree or consent of any court or other
judicial authority applicable to the Licensor or any material part of the
Licensor's assets and properties, (iii) any of its organizational documents, or
(iv) any material agreement or document to which it is a party or subject or
that applies to any material part of the Licensor's assets and properties; (d)
no consent, approval or authorization of, or registration, declaration or filing
with, any governmental authority or other person is required as a condition
precedent, concurrent or subsequent to or in connection with the due and valid
execution, delivery and performance by the Licensor of this Agreement or the
legality, validity, binding effect or enforceability of any of the terms and
provisions of this Agreement; (e) this Agreement is a legal, valid and binding
obligation of the Licensor, enforceable against the Licensor in accordance with
its terms and provisions; (f) the Licensor is the registered, legal and
beneficial owner of the Trademarks; (g) the Licensor has full power and
authority and the unrestricted right to grant the licenses contemplated
hereunder; (h) the license of the Tradmarks hereunder is made free and clear of
any and all liens or encumbrances; (i) the Trademark registrations are in full
force and effect; and (j) the Licensor has no knowledge of any infringements or
competing claims with respect to any Trademark.

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Section 11. Termination.

(a) Termination for Cause. The Licensor shall have the right to
terminate this Agreement (and the licenses and other rights, remedies and
interests granted to the Licensee hereunder), and end the Term, by written
notice to the Licensee in the event the Licensee shall default in the
performance or satisfaction of any of the terms and provisions of this
Agreement, which violation or failure shall have continued for more than thirty
(30) days after notice thereof by the Licensor to the Licensee and which
violation or failure has materially impaired the prestige and goodwill of the
Trademarks, provided, however, that if such default is capable of being cured
and if the Licensee shall have commenced to cure such default within such period
and shall proceed continuously in good faith and with due diligence to cure such
default, then such thirty day period shall instead be such longer period as may
be reasonably necessary to effect such cure (not to exceed 180 days).

(b) Termination Without Prejudice; Certain Continuing Provisions. The
termination of this Agreement (and the licenses and other rights, remedies and
interests granted to the Licensee hereunder), for any reason, shall be without
prejudice to any other right or remedy the Licensor may have, including (without
limitation) the right of the Licensor to recover from the Licensee any and all
(i) damages to which it may be entitled by reason of the happening of the event
giving rise to such termination or any other event and (ii) reimbursements,
indemnifications and other amounts that remain unsatisfied by the Licensors
hereunder, which rights and remedies all shall survive any such termination
hereunder. In addition, the terms and provisions of this subsection and Sections
12 through 21 hereof shall survive any such termination hereunder.

Section 12. Infringement.

(a) Defense of Infringements. In the event that legal proceeding shall
be instituted by any third party with respect to the alleged infringement by the
Trademarks on the rights of any third party, the Licensor shall have the right,
at its option and expense and either in its name, in the name of the Licensee,
or in the name of both the Licensor and the Licensee, to be represented by
counsel selected by the Licensor, and to defend against, negotiate, settle or
otherwise deal with such proceeding. The Licensee may participate in or (if the
Licensor elects not to do so) defend any such proceeding at its own cost and
expense (subject to reimbursement by the Licensor of reasonable costs and
expenses if the Licensee prevails in such proceeding) and with counsel of its
choice; provided, however, that if the Licensor defends the proceeding, the
Licensor shall control such proceeding. The Licensee shall not settle such
proceeding, or any claim or demand, admit liability or take any action with
respect thereto without the prior written consent of the Licensor, which shall
not be unreasonably withheld.

(b) No Liability for Continuing Unauthorized Use. If any of the
Trademarks shall be declared by a court of competent jurisdiction to be an
infringement on the rights of any third party so that the Licensee may not
thereafter continue in the use thereof, or if the Licensee shall unlawfully use
any of the Trademarks after the Term, the Licensor shall not be liable to the
Licensee or any other person or entity for any damages or otherwise as a result
of continuing use by the Licensee after such declaration or the end of the Term.

(c) Notice and Prosecution of Infringement. The Licensee shall promptly
notify the Licensor of any infringement, counterfeiting or passing-off of any of
the Trademarks of which it has actual knowledge, whether by the use of any of
the Trademarks or otherwise, but shall not take any action, legal or otherwise,
with respect to such infringement, counterfeiting or passing-off without prior
notice to the Licensor. In the event that the Licensee deems legal proceedings
to be reasonably necessary to enjoin any third party with respect to the alleged
infringement, counterfeiting or passing-off of any of the Trademarks, the
Licensor shall have the right, at its option and expense and either in its name,
in the name of the Licensee, or in the name of both the Licensor and the
Licensee, to be represented by counsel selected by the Licensor, and to
prosecute, negotiate, settle or otherwise deal with such proceeding. The
Licensee may participate in or (if the Licensor elects not to do so) prosecute
any such proceeding at its own cost and expense (subject to reimbursement by the
Licensor of reasonable costs and expenses if the Licensee prevails in such
proceeding) and with counsel of its choice; provided, however, that if the
Licensor prosecutes the proceeding, the Licensor shall control such proceeding.
The Licensee shall not settle such proceeding, or any claim or demand, release
any liability or take any action with respect thereto without the prior written
consent of the Licensor, which shall not be unreasonably withheld.

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(d) Licensee and Licensor Cooperation. The Licensee will cooperate fully
with the Licensor at the Licensor's expense in any such action the Licensor may
decide to take, and, if requested by the Licensor, shall join with the Licensor
in such actions as the Licensor may deem advisable for the protection of the
Trademarks or the Licensor's rights. The Licensor will cooperate fully with the
Licensor at the Licensee's expense (subject to reimbursement as provided above)
in any such permitted action the Licensee may decide to take, and, if requested
by the Licensee, shall join with the Licensee in such actions as the Licensor
may deem advisable for the protection of the Trademarks or the Licensee's
rights.

(e) Costs and Expenses. Except as otherwise provided above, any and all
costs and expenses (including, without limitation, the fees and expenses of
attorneys and other professionals) incurred in the protection or defense of any
of the Trademarks in the Territory, or the defense of any use or application of
the Trademarks, shall be borne by the Licensor.

Section 13. Expenses of and Indemnity by the Licensee.

(a) The Licensee will pay and discharge, at its own expense, any and all
expenses, charges, fees and taxes (other than as provided in subsection (b) of
this Section and Section 6 hereof) arising out of or incidental to the carrying
on of the Licensee's business, and the Licensee will indemnify and hold the
Licensor harmless from any and all claims that may be imposed on the Licensor
for such expenses, charges, fees and taxes.

(b) Except as otherwise provided in Section 10 hereof, the Licensee
shall indemnify, defend (with counsel selected by the Licensee and reasonably
acceptable to the Licensor) and hold the Licensor and its representatives and
agents harmless from, against and with respect to any claim, suit, loss, damage,
demands, injuries or expense (including the reasonable fees and expenses of
attorneys and other professionals) arising out of or related directly or
indirectly to any Product, Service, or other Trademark bearing item sold or
provided by the Licensee or any other act or omission of the Licensee, except to
the extent attributable to the bad faith, negligence or willful misconduct of
the Licensor or its representatives.

Section 14. Relationship between the Parties. The rights, powers,
privileges, remedies and interests accorded to the Licensor under this Agreement
and applicable law are for the protection of the Licensor, not the Licensee, and
no term or provision of this Agreement is intended (or shall be deemed or
construed) to impose on the Licensor any duty or obligation to the Licensee to
monitor or police any of the activities of the Licensee. No term or provision of
this Agreement is intended to create, nor shall any such term or provision be
deemed or construed to have created, any employment, joint venture, partnership,
trust, agency or other fiduciary relationship between the Licensee and the
Licensor or constitute the Licensee as an employee, joint venturer, partner,
trustee, agent or other representative for or of the Licensor. The Licensee
shall not be entitled or have any power or authority to bind or obligate the
Licensor in any manner whatsoever or to hold itself out as an employee, joint
venturer, partner, trustee, agent or other representative for or of the
Licensor.

Section 15. Waiver of Jury Trial. In any action, suit or proceeding in
any jurisdiction brought against any Party by any other Party, each Party hereby
irrevocably waives trial by jury.

Section 16. Consent to New York Jurisdiction and Venue, Etc. Each Party
hereby consents and agrees that the Supreme Court of the State of New York for
the County of Westchester and the United States District Court for the Southern
District of New York each shall have personal jurisdiction and proper venue with
respect to any dispute between the Parties; provided that the foregoing consent
shall not deprive any Party of the right in its discretion to voluntarily
commence or participate in any other forum having jurisdiction and venue. In any
dispute, no Party will raise, and each Party hereby expressly and irrevocably
waives, any objection or defense to any such jurisdiction as an inconvenient
forum.

Section 17. Notices. Except as otherwise expressly provided, any notice,
request, demand or other communication permitted or required to be given under
this Agreement shall be in writing, shall be sent by one of the following means
to the addressee at the address set forth above (or at such other address as
shall be designated hereunder by notice to the other parties and persons
receiving copies, effective upon actual receipt) and shall be

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deemed con clusively to have been given: (i) on the first Business Day following
the day timely deposited with Federal Express (or other equivalent national
overnight courier) or United States Express Mail, with the cost of delivery
prepaid or for the account of the sender; (ii) on the fifth Business Day
following the day duly sent by certified or registered United States mail,
postage prepaid and return receipt requested; or (iii) when otherwise actually
received by the addressee on a Business Day (or on the next Business Day if
received after the close of normal business hours or on any non-business day).

Section 18. Further Assurances. Each Party agrees to do such further
acts and things and to execute and deliver such statements, assignments,
agreements, instruments and other documents as the other Party from time to time
reasonably may request in order to (a) evidence or confirm the transfer or
issuance of any stock or Asset or (b) effectuate the purpose and the terms and
provisions of this Agreement, each in such form and substance as may be
acceptable to the Parties.

Section 19. Interpretation, Headings, Severability, Etc. The parties
acknowledge and agree that the terms and provisions of this Agreement have been
negotiated, shall be construed fairly as to all parties hereto, and shall not be
construed in favor of or against any party. The section headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement. In the event that any term or provision of
this Agreement (other than Section 1 hereof) shall be finally determined to be
superseded, invalid, illegal or otherwise unenforceable pursuant to applicable
law by a governmental authority having jurisdiction and venue, that
determination shall not impair or otherwise affect the validity, legality or
enforceability (a) by or before that authority of the remaining terms and
provisions of this Agreement, which shall be enforced as if the unenforceable
term or provision were deleted or reduced pursuant to the next sentence, as
applicable, or (b) by or before any other authority of any of the terms and
provisions of this Agreement. If any term or provision of this Agreement is held
to be unenforceable because of the scope or duration of any such provision, the
parties agree that any court making such determination shall have the power, and
is hereby requested, to reduce the scope or duration of such term or provision
to the maximum permissible under applicable law so that said term or provision
shall be enforceable in such reduced form.

Section 20. Successors and Assigns; Assignment; Intended Beneficiaries.
Whenever in this Agreement reference is made to any person, such reference shall
be deemed to include the successors, assigns, heirs and legal representatives of
such person, and, without limiting the generality of the foregoing, all
representations, warranties, covenants and other agreements made by or on behalf
of any Party in this Agreement shall inure to the benefit of the successors,
assigns, heirs and legal representatives of each other Party; provided, however,
that nothing herein shall be deemed to authorize or permit the Licensee to
assign any of its rights or obligations under this Agreement to any other
person, and the Licensee covenants and agrees that it shall not make any such
assignment, except as otherwise provided in Section 1 hereof or with the prior
written consent of the Licensor. The representations, warranties and other terms
and provisions of this Agreement are for the exclusive benefit of the Parties
hereto, and, except as otherwise expressly provided herein, no other person
(including creditors of any party hereto) shall have any right or claim against
any Party by reason of any of those terms and provisions or be entitled to
enforce any of those terms and provisions against any Party.

Section 21. No Waiver by Action, Etc. Any waiver or consent respecting
any representation, warranty, covenant or other term or provision of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given and shall not be deemed, regardless of frequency given,
to be a further or continuing waiver or consent. The failure or delay of a Party
at any time or times to require performance of, or to exercise its rights with
respect to, any representation, warranty, covenant or other term or provision of
this Agreement in no manner (except as otherwise expressly provided herein)
shall affect its right at a later time to enforce any such provision. No notice
to or demand on any Party in any case shall entitle such Party to any other or
further notice or demand in the same, similar or other circumstances. All
rights, powers, privileges, remedies and other interests of each Party hereunder
are cumulative and not alternatives, and they are in addition to and shall not
limit (except as other wise expressly provided herein) any other right, power,
privilege, remedy or other interest of such Party under this Agreement or
applicable law.

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Section 22. Counterparts; New York Governing Law; Amendments; Entire
Agreement. This Agreement shall be effective as of the date first written above
when executed by Parties and delivered to the Licensor. This Agreement may have
been executed 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. This Agreement shall be
governed by and construed in accordance with the applicable laws pertaining in
the State of New York (other than those that would defer to the substantive laws
of another jurisdiction). Each and every modification and amendment of this
Agreement shall be in writing and signed by all of the Parties, and each and
every waiver of, or consent to any departure from, any representation, warranty,
covenant or other term or provision of this Agreement shall be in writing and
signed by each affected Party. This Agreement contains the entire agreement of
the parties and supersedes all prior and other representations, agreements and
understandings (oral or otherwise) between the parties with respect to the
matters contained herein.

IN WITNESS WHEREOF, the Parties have duly executed and delivered this
Agreement as of the date first above written.

SPAR Infotech, Inc.

By: __________________________________
Title:

SPAR Trademarks, Inc.

By: __________________________________
Title:

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SCHEDULE A

United States

Mark                          Reg. No.                      Reg. Date
- ----                          --------                      ---------

SPAR                         1,357,128                      August 27, 1985
SPAR & design                1,357,132                      August 27, 1985
SPAR & design                1,387,743                      March 25, 1986
SPAR                         1,441,909                      June 9, 1987
SPAR                         1,597,275                      May 22, 1990

Canada

Mark                          Reg. No.                      Reg. Date
- ----                          --------                      ---------

SPAR                          337,986                       March 11, 1988
SPAR & design                 337,987                       March 11, 1988
SPAR & design                 341,996                       June 23, 1988
SPAR                          349,073                       December 16, 1988
SPAR & design                 390,182                       November 15, 1991

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EXHIBIT D

BUSINESS MANAGER AGREEMENT

Introduction

This Business Manager Agreement, dated as of ________ __, 1999 (as the
same may be supplemented, modified, amended, restated or replaced from time to
time in the manner provided herein, this "Agreement"), is by and between SPAR
Infotech, Inc., a Nevada corporation currently having an address at 303 South
Broadway, Suite 140, Tarrytown, New York 10591 ("Infotech"), SPAR Marketing
Force, Inc., a Nevada corporation currently having an address at 303 South
Broadway, Suite 140, Tarrytown, New York 10591 ("Marketing Force"), and SPAR
Marketing Services, Inc.,a Nevada corporation currently having an address at 303
South Broadway, Suite 140, Tarrytown, New York 10591 ("SMS"). The above entities
are sometimes referred to herein individually as a "Party" and collectively as
the "Parties".

Recitals

The efforts of the Parties prior to the date of this Agreement resulted
in the creation of certain Confidential Information, Software and Program
Documentation (collectively referred to herein as the "Joint Works"). The
Parties have determined that it is in their best interests to resolve any
existing or potential disputes concerning their respective rights in the Joint
Works, all upon the terms and provisions and subject to the conditions set forth
in this Agreement.

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 is hereby acknowledged by the Parties), the Parties hereto
hereby agree as follows:

Section 1. Definitions. Each use in this Agreement of a neuter pronoun
shall be deemed to include references to the masculine and feminine variations
thereof, and vice versa, and a singular pronoun shall be deemed to include a
reference to the plural variation thereof, and vice versa, in each case as the
context may permit or require. As used in this Agreement, the following
capitalized terms and non-capitalized words and phrases shall have the meanings
respectively assigned to them below, which meanings shall be applicable equally
to the singular and plural forms of the terms so defined:

(a) "Business Competitive With Infotech" shall mean any substantial
business activity in collecting, analyzing and/or disseminating scanner data,
ex-factory shipment data and/or other similar information.

(b) "Business Competitive With Marketing Force" shall mean any
substantial business activity conducted by any person that is competitive with
any substantial business activity conducted by any SPAR Company or PIA Company
at the Merger Effective Time (whether or not such person's activity is actually
conducted in competition with any SPAR Company or PIA Company), excluding,
however, any Business Competitive With Infotech (whether or not so conducted by
any SPAR Company or PIA Company).

(c) "Confidential Information" includes all field and file definitions
and source code relating to the Software and the Program Documentation (as each
are hereinafter defined), including (without limitation) the designs, methods,
layouts, processing procedures, programming techniques used or employed by the
Parties, including combinations thereof, in conjunction therewith, and encompass
interactive data entry, file handling, report generation and all other aspects
of operation.

(d) "Merger Effective Time" shall mean the "Effective Time" under (and
as defined in) the Agreement and Plan of Merger dated as of February 28, 1999,
among the SPAR Companies and the PIA Companies (which is the time the merger
thereunder takes effect and the SPAR Companies and PIA Companies come under
common control), as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein.

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211

(e) "PIA Company" and "PIA Companies" shall respectively mean any one or
more of PIA Merchandising Services, Inc., a Delaware corporation, SG
Acquisition, Inc., a Nevada corporation (which is merging into SPAR Acquisition,
Inc.), PIA Merchandising Co., Inc., a California corporation, and their
respective subsidiaries as of the Merger Effective Time.

(f) "Program Documentation" means the user manuals, handbooks and other
written materials relating to the Software, and any subsequent updates or
revisions to such scheduling software.

(g) "Representative" of any Party shall mean any of its directors,
officers, employees, attorneys, heirs, executors, administrators, or agents, any
of such Party's sublicensees, affiliates, successors and assigns, or any of
their respective directors, officers, employees, attorneys, heirs, executors,
administrators, or agents.

(h) "Software" means the application software program(s) respecting the
"Business Manager" Internet scheduling software consisting of executable object
code programs for such scheduling software and related screen formats programmed
to operate on the systems of the Parties, and any subsequent updates or
revisions to such scheduling software.

(i) "SPAR Company" and "SPAR Companies" shall respectively mean any one
or more of SPAR Acquisition, Inc., a Nevada corporation, SPAR Marketing, Inc., a
Delaware corporation, SPAR Marketing, Inc., a Nevada corporation, SPAR Marketing
Force, Inc., a Nevada corporation, SPAR, Inc., a Nevada corporation,
SPAR/Burgoyne Retail Services, Inc., an Ohio corporation, SPAR Incentive
Marketing, Inc., a Delaware corporation, SPAR MCI Performance Group, Inc., a
Delaware corporation, and SPAR Trademarks, Inc., a Nevada corporation.

Section 2. The Joint Works; Future Development; Sublicenses; Limits on
Use.

(a) The Parties as Co-Owners of the Joint Works. In consideration for
the promises made to it under this Agreement, each Party hereby grants and
conveys to the other any and all right, title and interest in and to the Joint
Works that it may have as may be required to render any other Party a co-owner
of the Joint Works. Each party hereby acknowledges and agrees that each party is
now and at all times has been a co-owner of all right, title and interest in and
to the Joint Works, including (without limitation), the United States and
international copyright interests therein, and any and all moral rights in the
Joint Works recognized by applicable law, such that the Parties each has and
shall each continue to have, for any and all purposes, the right to transfer,
develop, license, control and otherwise exploit the Joint Works, in whole or in
any part, as each of them may see fit, in any and all media subject to the terms
and conditions set forth in this Agreement. Each party covenants and agrees that
it shall in all future publications of the Joint Works, refer to its author as
"SPAR Infotech, Inc., SPAR Marketing Force, Inc. and SPAR Marketing Services,
Inc." and state its copyright as "(C) [Date of Publication] SPAR Infotech, Inc.,
SPAR Marketing Force, Inc. and SPAR Marketing Services, Inc." "All rights
reserved."

(b) Waiver of Claims and Rights of Participation and Accounting. Each of
the Parties hereby knowingly and intentionally waives whatever claims it may now
have or may ever have against the other Parties and their respective
Representatives for any claim related to rights of exploitation of the Joint
Works, including (without limitation) claims for authorship or copyright
infringement. Each of the Parties knowingly and intentionally waives any and all
claims or rights that it may have or may ever have against the other Parties and
their respective Representatives for any right of participation in, or
accounting for, the revenues that the other party may derive from its use or
exploitation of the Joint Works, in whole or in part, without limitation.

(c) Future Development. The Parties acknowledge and agree that any Party
may engage any other Party from time to time to provide programming services,
system work and other assistance in developing, revising and improving the
Software and/or the Program Documentation, which shall be deemed and construed
to be for the benefit of all of the Parties. The Parties agree that their
respective contributions to all such improvements, revisions and developments
shall be included within the scope of the term "Software" and the term "Program
Documentation," respectively, as such terms are used in this Agreement and shall
not be the sole property of any Party hereto.

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(d) Sublicenses. Each Party from time to time may add one or more
subsidiaries or affiliates (but only those under common ownership and control
with the Parties) as a sublicensee under this Agreement (each a "Sublicensee"
and collectively "Sublicensees"). Each Sublicensee hereby assumes and agrees to
be bound by the terms, provisions and conditions as set forth in this Agreement
as if it were a "Party" hereunder. In the event the control or ownership of any
Sublicensee, its business or substantially all of its assets are sold or
transferred so that such Sublicensee, business or assets cease to be under
common ownership and control with the sublicensing Party, such subsidiary or
affiliate shall automatically cease to be a Sublicensee hereunder from and after
such sale or transfer, without, however, relieving or otherwise affecting any of
the obligations of such former Sublicensees with respect to its obligations with
respect to actions or events arising prior to such sale or transfer.

(e) Certain Limits on Use by Parties. Neither Infotech nor any of its
Sublicensees shall use the Software or the Program Documentation in any material
respect in any Business Competitive With Marketing Force; and neither Marketing
Force nor SMS nor any of their respective Sublicensees shall use the Software or
the Program Documentation in any material respect in any Business Competitive
With Infotech. The Parties acknowledge and agree that such limitation shall not
preclude any Party or its Sublicensees from using the Software and the Program
Documentation for any other purpose whatsoever (subject to the licensing
limitations of Section 5 hereof).

(f) No Unpermitted Users. No Party shall cause, suffer or permit any of
its affiliates or cause or enable any other person to use the Software or the
Program Documentation in any material respect unless such person is a permitted
Licensee or Sublicensee hereunder.

Section 3. Term. The term of this Agreement shall be perpetual.

Section 4. Mutual Exculpation and Release. No Party nor any of its
Representatives shall incur any liability to any other Party or any of its
Representatives for any acts or omissions arising out of or related directly or
indirectly to any of the Software, Program Documentation or Confidential
Information, any license, use or application thereof, or any claims or actions
(including, without limitation, claims for malfunction or infringement) and any
resulting losses or expenses with respect thereto of any Party or any of their
respective Representatives of any kind or nature whatsoever, whether known or
unknown, in law or equity or otherwise; and each Party (on behalf of itself and
each of its Representatives) hereby expressly waives any and all such claims,
actions, losses and expenses against each of the releasing Party and its
Representatives ever had, now have or hereafter can, shall or may have, against
the each other Party and its Representatives by reason of any matter, cause or
thing whatsoever from the beginning to the end of the world; provided, however,
that the foregoing release shall not apply to the Parties' respective
obligations set forth in this Agreement.

Section 5. Third Party Licensing.. Subject to the terms and conditions
herein contained, each Party (but not its Sublicensees) may grant licenses to
make, use or sell the Software and Program Documentation (a "License") to one or
more third parties (each a "Licensee" and collectively "Licensees") on such
terms and conditions as such Party may elect, provided, however, that (a)
Infotech shall not grant any License to make, use or sell the Software or the
Program Documentation to any Licensee whose business is a Business Competitive
With Marketing Force; and (b) neither Marketing Force nor SMS shall grant any
License to make, use or sell the Software or the Program Documentation to any
Licensee whose business is a Business Competitive With Infotech.

Section 6. Representations and Warranties Respecting the Parties. Each
Party represents and warrants to the each of the other Parties that, as of the
date hereof that: (a) such Party is a corporation duly incorporated, validly
existing and in good standing under the laws its state of incorporation; (b)
such Party has the legal capacity, power, authority and unrestricted right to
execute and deliver this Agreement and to perform all of its obligations
hereunder; (c) the execution and delivery by such Party of this Agreement and
the performance by such Party of all of its obligations hereunder will not
violate or be in conflict with any term or provision of (i) any applicable law,
(ii) any judgment, order, writ, injunction, decree or consent of any court or
other judicial authority applicable to such Party or any material part of such
Party's assets and properties, (iii) any of its organizational documents, or
(iv) any material agreement or document to which such Party is a party or
subject or that applies to any material part of such Party's assets and
properties; (d) no consent, approval or authorization of, or registration,
declaration or filing with, any governmental authority or other person is
required as a condition precedent, concurrent or subsequent to or in connection
with the due and valid execution, delivery and performance by such Party of this
Agreement or the legality, validity, binding effect or enforceability of any

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of the terms and provisions of this Agreement; and (e) this Agreement is a
legal, valid and binding obligation of such Party, enforceable against such
Party in accordance with its terms and provisions.

Section 7. Relationship Among the Parties. No term or provision of this
Agreement is intended to create, nor shall any such term or provision be deemed
or construed to have created, any employment, joint venture, partnership, trust,
agency or other fiduciary relationship between the Parties and no Party shall be
considered as an employee, joint venturer, partner, trustee, agent or other
representative for or of any other Party. No Party shall not be entitled or have
any power or authority to bind or obligate any other Party in any manner
whatsoever or to hold itself out as an employee, joint venturer, partner,
trustee, agent or other representative of any other Party.

Section 8. Waiver of Jury Trial. In any action, suit or proceeding in
any jurisdiction brought against any Party by any other Party, each Party hereby
irrevocably waives trial by jury.

Section 9. Consent to New York Jurisdiction and Venue, Etc. Each Party
hereby consents and agrees that the Supreme Court of the State of New York for
the County of Westchester and the United States District Court for the Southern
District of New York each shall have personal jurisdiction and proper venue with
respect to any dispute between the Parties; provided that the foregoing consent
shall not deprive any Party of the right in its discretion to voluntarily
commence or participate in any other forum having jurisdiction and venue. In any
dispute, no Party will raise, and each Party hereby expressly and irrevocably
waives, any objection or defense to any such jurisdiction as an inconvenient
forum.

Section 10. Notices. Except as otherwise expressly provided, any notice,
request, demand or other communication permitted or required to be given under
this Agreement shall be in writing, shall be sent by one of the following means
to the addressee at the address set forth above (or at such other address as
shall be designated hereunder by notice to the other parties and persons
receiving copies, effective upon actual receipt) and shall be deemed
conclusively to have been given: (i) on the first business day following the day
timely deposited with Federal Express (or other equivalent national overnight
courier) or United States Express Mail, with the cost of delivery prepaid or for
the account of the sender; (ii) on the fifth business day following the day duly
sent by certified or registered United States mail, postage prepaid and return
receipt requested; or (iii) when otherwise actually received by the addressee on
a business day (or on the next business day if received after the close of
normal business hours or on any non-business day).

Section 11. Further Assurances. Each Party agrees to do such further
acts and things and to execute and deliver such statements, assignments,
agreements, instruments and other documents as the other Party from time to time
reasonably may request in order to effectuate the purpose and the terms and
provisions of this Agreement, each in such form and substance as may be
acceptable to the Parties. Without limiting the generality of the foregoing,
each Party hereto will provide each other Party hereto, at such other Party's
request and expense, with copies of the source or object code version of the
Software and any and all related documentation to enable such requesting Party
to develop and enhance the Software and the Program Documentation.

Section 12. Interpretation, Headings, Severability, Etc. The Parties
acknowledge and agree that the terms and provisions of this Agreement have been
negotiated, shall be construed fairly as to all parties hereto, and shall not be
construed in favor of or against any party. The section headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement. In the event that any term or provision of
this Agreement (other than Section 1 hereof) shall be finally determined to be
superseded, invalid, illegal or otherwise unenforceable pursuant to applicable
law by a governmental authority having jurisdiction and venue, that
determination shall not impair or otherwise affect the validity, legality or
enforceability (a) by or before that authority of the remaining terms and
provisions of this Agreement, which shall be enforced as if the unenforceable
term or provision were deleted or reduced pursuant to the next sentence, as
applicable, or (b) by or before any other authority of any of the terms and
provisions of this Agreement. If any term or provision of this Agreement is held
to be unenforceable because of the scope or duration of any such provision, the
Parties agree that any court making such determination shall have the power, and
is hereby requested, to reduce the scope or duration of such term or provision
to the maximum permissible under applicable law so that said term or provision
shall be enforceable in such reduced form.

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Section 13. Successors and Assigns; Assignment; Intended Beneficiaries.
Whenever in this Agreement reference is made to any person, such reference shall
be deemed to include the successors, assigns, heirs and legal representatives of
such person, and, without limiting the generality of the foregoing, all
representations, warranties, covenants and other agreements made by or on behalf
of any Party in this Agreement shall inure to the benefit of the successors,
assigns, heirs and legal representatives of each other Party; provided, however,
that nothing herein shall be deemed to authorize or permit any Party to assign
any of its rights or obliga tions under this Agreement to any other person, and
each Party covenants and agrees that it shall not make any such assignment,
except as otherwise provided in Section 5 hereof or with the prior written
consent of the other Parties. The representations, warranties and other terms
and provisions of this Agreement are for the exclusive benefit of the Parties
hereto, and, except as otherwise expressly provided herein, no other person
(including creditors of any party hereto) shall have any right or claim against
any Party by reason of any of those terms and provisions or be entitled to
enforce any of those terms and provisions against any Party.

Section 14. No Waiver by Action, Etc. Any waiver or consent respecting
any representation, warranty, covenant or other term or provision of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given and shall not be deemed, regardless of frequency given,
to be a further or continuing waiver or consent. The failure or delay of a Party
at any time or times to require performance of, or to exercise its rights with
respect to, any representation, warranty, covenant or other term or provision of
this Agreement in no manner (except as otherwise expressly provided herein)
shall affect its right at a later time to enforce any such provision. No notice
to or demand on any Party in any case shall entitle such Party to any other or
further notice or demand in the same, similar or other circumstances. All
rights, powers, privileges, remedies and other interests of each Party hereunder
are cumulative and not alternatives, and they are in addition to and shall not
limit (except as otherwise expressly provided herein) any other right, power,
privilege, remedy or other interest of such Party under this Agreement or
applicable law.

Section 15. Counterparts; New York Governing Law; Amendments; Entire
Agreement. This Agreement shall be effective as of the date first written above
when executed by all of the Parties. This Agreement may have been executed 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. This Agreement shall be
governed by and construed in accordance with the applicable laws pertaining in
the State of New York (other than those that would defer to the substantive laws
of another jurisdiction). Each and every modification and amendment of this
Agreement shall be in writing and signed by all of the Parties, and each and
every waiver of, or consent to any departure from, any representation, warranty,
covenant or other term or provision of this Agreement shall be in writing and
signed by each affected Party. This Agreement contains the entire agreement of
the parties and supersedes all prior and other representations, agreements and
understandings (oral or otherwise) between the parties with respect to the
matters contained herein.

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[Signature Page to Business Manager Agreement]

IN WITNESS WHEREOF, the Parties have duly executed and delivered this
Agreement as of the date first above written.

SPAR Infotech, Inc.

By:____________________________________
Title:

SPAR Marketing Force, Inc.

By:___________________________________
Title:

SPAR Marketing Services, Inc.

By:___________________________________
Title:

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EXHIBIT E

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PIA MERCHANDISING SERVICES, INC.

The undersigned corporation, organized and existing under and by virtue
of the General Corporation Law of the State of Delaware does hereby certify as
follows:

1. That Cathy L. Wood is the duly elected and acting Secretary and Chief
Financial Officer of PIA Merchandising Services, Inc., a Delaware corporation
(the "Corporation").

2. That Article FIRST of the Certificate of Incorporation of the
Corporation is amended to read in full as follows:

"FIRST: The name of the Corporation is SPAR Group, Inc."

3. That Article FOURTH of the Certificate of Incorporation of the
Corporation is amended to read in full as follows:

"FOURTH: The total number of shares of stock which the Corporation shall
have the authority to issue is 50,000,000, consisting of 47,000,00 shares of
common stock, par value $.01 per share, and 3,000,000 shares of preferred stock,
par value $.01 per share. The preferred stock may be issued at any time, and
from time to time, in one or more series pursuant hereto or to a resolution or
resolutions providing for such issue duly adopted by the board of directors (the
"Board") of the Corporation (authority to do so being hereby expressly vested in
the Board), and such resolution or resolutions shall also set forth the voting
powers, full or limited, or none, of each such series of preferred stock and
shall fix the designations, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions of each
such series of preferred stock."

4. That Article TENTH of the Certificate of Incorporation of the 
Corporation is hereby deleted and Article ELEVENTH is hereby renumbered as 
Article TENTH.

5. That this Certificate of Amendment of Certificate of Incorporation
has been duly approved by the Board of Directors of the Corporation.

6. That this Certificate of Amendment of Certificate of Incorporation 
has been duly approved by the holders of a majority of the outstanding shares of
common stock, $.01 par value per share, of the Corporation in accordance with
the applicable provisions of Section 242 of the General Corporation Law of the
State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Cathy L. Wood this __ day of _____________ 1999.

PIA MERCHANDISING SERVICES, INC.

By:
-------------------------------------
Cathy L. Wood,
Secretary and Chief Financial Officer

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EXHIBIT F

PIA MERCHANDISING SERVICES, INC.

AMENDED AND RESTATED 1995 STOCK OPTION PLAN

Section 1. Description of this Plan. This is the 1995 Stock Option Plan,
dated December 5, 1995, as amended and restated effective as of February 28,
1999 (this "Plan"), of PIA Merchandising Services, Inc., a Delaware corporation
(the "Company"). Under this Plan, officers, directors, key employees and
consultants of the Company or its wholly-owned Subsidiaries (as defined below),
and other persons directly or indirectly providing valuable services to the
Company and the Subsidiaries, to be selected as set forth below, may be granted
options ("Options") to purchase shares of the common stock, par value $0.01 per
share, of the Company ("Common Stock"). This Plan permits the granting of both
Options that qualify for treatment as incentive stock options ("Incentive Stock
Options") under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), and Options that do not qualify as Incentive Stock Options
("Nonqualified Stock Options"). For purposes of this Plan, the term "Subsidiary"
shall mean any corporation or other entity of which 50% or more of the voting
stock (or equivalent thereof) is owned by the Company or by another Subsidiary
(as so defined) of the Company.

Section 2. Purpose of this Plan. The purpose of this Plan and of
granting Options to specified persons is to further the growth, development and
financial success of the Company and the Subsidiaries by providing additional
incentives to certain officers, directors, key employees and consultants of, and
other persons directly or indirectly providing valuable services to, the Company
and the Subsidiaries. By assisting such persons in acquiring shares of Common
Stock, the Company can ensure that such persons will themselves benefit directly
from the Company's and the Subsidiaries' growth, development and financial
success.

Section 3. Eligibility. The persons who shall be eligible to receive
grants of Options under this Plan shall be, at the time of the grant, the
officers, directors, key employees and consultants of, and other persons
directly or indirectly providing valuable services to, the Company and the
Subsidiaries. Notwithstanding the preceding sentence, only persons who are
employees of the Company and the Subsidiaries shall be eligible to receive
grants of Incentive Stock Options under this Plan. A person who holds an Option
is herein referred to as a "Participant." More than one Option may be granted to
any Participant, grants of Options may be made on more than one occasion to any
Participant and any individual Participant may receive grants of Options on up
to 1,000,000 shares of Common Stock. Such grants of Options under this Plan may
include an Incentive Stock Option, Nonqualified Stock Option, or any combination
thereof.

Section 4. Administration. This Plan shall be administered by the Board
of Directors (the "Board") or by the Compensation Committee established by the
Board. (The entity actually administering this Plan at any time, whether the
Board or the Compensation Committee, is referred to herein as the "Committee.")
If the Compensation Committee is authorized to administer this Plan at any time,
it shall, if possible, be composed solely of two or more Non-Employee Directors,
as such term is defined in Rule 16b-3(b)(3) under the Securities Exchange Act of
1934 (the "Exchange Act") and of persons who are "outside directors" within the
meaning of Code Section 162(m). The Committee shall meet at such times and
places as it determines and may meet through a telephone conference call. A
majority of its members shall constitute a quorum, and the decision of a
majority of those present at any meeting at which a quorum is present shall
constitute the decision of the Committee. A memorandum signed by all the members
of the Committee shall constitute the decision of the Committee without
necessity, in such event, for holding an actual meeting. The Committee is
authorized and empowered to administer this Plan and, subject to this Plan (a)
to select the Participants, to specify the number of shares of Common Stock with
respect to which Options are granted to each Participant, to specify the terms
of the Options and whether such Options shall be Incentive Stock Options or
Nonqualified Stock Options, and in general to grant Options; (b) to determine
the dates upon which Options shall be granted and the terms and conditions
thereof in a manner consistent with this Plan, which terms and conditions need
not be identical as to the various Options granted; (c) to interpret this Plan;
(d) to prescribe, amend and rescind rules relating to this Plan; (e) to
authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the Committee; (f) to
determine the rights and obligations of Participants under this Plan; (g) to
specify the Option Price (as hereinafter defined); (h) to accelerate the time
during which an Option may be exercised, including, but not limited to, upon a
change of control of the Company, and to otherwise accelerate the time or extend
the post-termination exercise period during which an Option may be exercised, in
each case notwithstanding the provisions in the Option Agreement (as defined in
Section 13) stating the time during which it may be exercised; and (i) to make
all other determinations deemed necessary or advisable for the administration of
this Plan. The good faith interpretation and construction by the Committee of
any provision of this Plan or of any Option granted under it shall be final,
conclusive and binding. No member of the Committee shall be liable for any
action or determination made in good faith with respect to this Plan or any
Option granted under it.

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Section 5. Shares Subject to this Plan. The number of shares of Common
Stock in respect of which Options may be granted under this Plan is 3,500,000,
subject to adjustment as provided in Section 12 hereof. Upon the expiration,
termination or cancellation, in whole or in part, for any reason of an
outstanding Option or any portion thereof which shall not have vested or shall
not have been exercised in full, any shares of Common Stock then remaining
unissued which shall have been reserved for issuance upon such exercise shall
again become available for the granting of additional Options under this Plan.
Notwithstanding the foregoing, shares subject to a terminated Option shall
continue to be considered to be outstanding for purposes of determining the
maximum number of shares that may be issued to a Participant. Similarly, the
repricing of an Option will be considered the grant of a new Option for this
purpose.

Section 6. Option Price. Except as provided in Section 12 hereof, the
purchase price per share (the "Option Price") of the shares of Common Stock
underlying each Incentive Stock Option shall be not less than the fair market
value of such shares on the date of granting of the Incentive Stock Option;
provided, however, that if the Participant is a ten percent (10%) stockholder of
the Company as detailed in Code Section 422(b)(6) at the time such Option is
granted (determined after taking into account the constructive ownership rules
of Section 424(d) of the Code), the Option Price shall be not less than 110
percent (110%) of said fair market value. The Option Price of the shares of
Common Stock underlying each Nonqualified Stock Option shall be not less than
eighty-five percent (85%) of the fair market value of such shares on the date of
granting of the Nonqualified Stock Option; provided, however, that with respect
to any Nonqualified Stock Option granted to a "covered employee" (as such term
is defined in Section 162(m) of the Code), the Option Price of the shares of
Common Stock underlying such Nonqualified Stock Option shall be not less than
the fair market value of such shares on the date of granting of such
Nonqualified Stock Option. The fair market value of such shares shall, unless
otherwise expressly determined by the Committee for good reason, shall be (i)
the last reported sale price of the Common Stock on the Nasdaq National Market,
if the Common Stock is quoted on the Nasdaq National Market, (ii) the last
reported sale price of the Common Stock on a national securities exchange, if
the Common Stock is listed on a national securities exchange, or (iii) if the
Common Stock is not so reported or listed, the average of the last reported bid
and asked price of the Common Stock in such market as the Common Stock may be
traded.

Section 7. Restrictions on Grants; Vesting of Options. Notwithstanding
any other provisions set forth herein or in any Option Agreement, no Options may
be granted under this Plan subsequent to December 5, 2005. All Options granted
pursuant to this Plan shall be granted pursuant to Option Agreements, as
described in Section 13 hereof. The vesting of all Options may be based on the
Company's attaining of performance criteria as specified at the time of the
granting thereof and/or may also be based on the passage of time. The Committee
shall determine the performance criteria, the performance measurement period and
the vesting schedule applicable to each Option or group of Options in a
schedule, a copy of which shall be filed with the records of the Committee and
attached to each Option Agreement to which the same applies. The performance
criteria, the performance measurement period and the vesting schedule and period
of exercisability need not be identical for all Options granted hereunder.
Following the conclusion of each applicable performance measurement period, the
Committee shall determine, in its sole good faith judgment, the extent, if at
all, that each Option subject thereto shall have vested based upon the
applicable performance criteria and vesting schedule. To the extent any Option
shall not have vested, because the applicable performance criteria has not been
met, and does not also vest based on the passage of time, it shall, to that
extent, automatically terminate and cease to be exercisable to such extent
notwithstanding the stated term during which it may be exercised. The Committee
shall promptly notify each affected Participant of such determination. The
Committee may periodically review the performance criteria applicable to any
Option or Options and, in its sole good faith judgment, may adjust the same to
reflect unanticipated major events, such as catastrophic occurrences, mergers,
acquisitions and the like.

Section 8. Special Limitations on Incentive Stock Options. To the extent
that the aggregate fair market value (determined at the time the respective
Incentive Stock Option is granted) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year under all incentive stock option plans of the Company
and the Subsidiaries exceeds $100,000, or such other limit as may be required by
the Code, such excess Incentive Stock Options shall be treated as Nonqualified
Stock Options. The Committee shall determine, in accordance with applicable
provisions of the Code, Treasury Regulations and other administrative
pronouncements, which of a Participant's Incentive Stock Options will not
constitute Incentive Stock Options because of such limitation and shall notify
the Participant of such determination as soon as practicable after such
determination.

Section 9. Exercise of Options. Subject to all other provisions of this
Plan, once vested, each Option shall be exercisable for the full number of
shares of Common Stock subject thereto, or any part thereof, in such
installments and at such intervals as the Committee may determine in granting
such Option, provided that no option may be exercisable subsequent to its
termination date. Once vested, and prior to its termination date, an Option may
be exercised by the Participant by giving written notice to the Company
specifying the number of full shares to be purchased and accompanied by payment
of the full purchase price therefor in cash, by check or in such other form of
lawful consideration as the Committee may approve from time to time, including,
without limitation and in the sole discretion of the Committee, the assignment
and transfer by the Participant to the Company of outstanding shares of Common
Stock theretofore held by the Participant. In connection with such assignment
and transfer, the Company shall have the right to deduct any 

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fractional share to be paid to the Participant. Once vested, and prior to its
termination date, an Option may only be exercised by the Participant or, in the
event of death of the Participant, by the person or persons (including the
deceased Participant's estate) to whom the deceased Participant's rights under
such Option shall have passed by will or the laws of descent and distribution.
Notwithstanding the foregoing in the immediately preceding sentence, in the
event of disability (within the meaning of Section 22(e)(3) of the Code) of a
Participant, a designee, or if the Participant has no designee, the legal
representative, of such Participant may exercise the Option on behalf of such
Participant (provided such Option would have been exercisable by such
Participant) until the right to exercise such Option expires, as set forth in
such Participant's particular Option Agreement.

Section 10. Issuance of Common Stock. The Company's obligation to issue
shares of its Common Stock upon exercise of an Option is expressly conditioned
upon the compliance by the Company with any registration or other qualification
obligations with respect to such shares under any state or federal law or
rulings and regulations of any government regulatory body and the making of such
investment representations or other representations and undertakings by the
Participant (or the Participant's legal representative, heir or legatee, as the
case may be) in order to comply with the requirements of any exemption from any
such registration or other qualification obligations with respect to such shares
which the Company in its sole discretion shall deem necessary or advisable. Such
required representations and undertakings may include representations and
agreements that such Participant (or the Participant's legal representative,
heir or legatee): (a) is purchasing such shares for investment and not with any
present intention of selling or otherwise disposing of such shares; and (b)
agrees to have a legend placed upon the face and reverse of any certificates
evidencing such shares (or, if applicable, an appropriate data entry made in the
ownership records of the Company) setting forth (i) any representations and
undertakings which such Participant has given to the Company or a reference
thereto, and (ii) that, prior to effecting any sale or other disposition of any
such shares, the Participant must furnish to the Company an opinion of counsel,
satisfactory to the Company and its counsel, to the effect that such sale or
disposition will not violate the applicable requirements of state and federal
laws and regulatory agencies; provided, however, that any such legend or data
entry shall be removed when no longer applicable. The Company, during the term
of this Plan, will at all times reserve and keep available, and will use its
reasonable efforts to obtain from any regulatory body having jurisdiction any
requisite authority in order to issue and sell such number of shares of Common
Stock as shall be sufficient to satisfy the requirements of this Plan. The
inability of the Company to obtain, from any regulatory body having
jurisdiction, authority reasonably deemed by the Company's counsel to be
necessary for the lawful issuance and sale of any shares hereunder shall relieve
the Company of any liability in respect of the non-issuance or sale of such
shares as to which such requisite authority shall not have been obtained.

Section 11. Non-transferability. Except as otherwise provided below, an
Option may not be sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent or distribution.
The Committee may, in its discretion, authorize all or a portion of any
Nonqualified Stock Option granted to a Participant to be on terms which permit
transfer by such Participant to (a) the spouse, children or grandchildren of the
optionee ("Immediate Family Members"), (b) a trust or trusts for the exclusive
benefit of such Immediate Family Members, or (c) a partnership in which such
Immediate Family Members are the only partners, provided that (i) there may be
no consideration for any such transfer, and (ii) the Option Agreement (defined
below) pursuant to which such Options are granted must be approved by the
Committee, and must expressly provide for transferability in a manner consistent
with this Section 11. Following transfer, any such Options shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of Sections 9 and 10 hereof the term
"Participants" shall be deemed to refer to the transferee. The events of
termination of employment of Section 25 hereof shall continue to be applied with
respect to the original Participant, following which the Options shall be
exercisable by the transferee only to the extent, and for the periods specified
in the Option Agreement. Any permitted transferee shall be required prior to any
transfer of an Option or shares of Common Stock acquired pursuant to the
exercise of an Option to execute a written undertaking to be bound by the
provisions of the applicable Option Agreement.

Section 12. Adjustments Upon Capitalization and Corporate Changes;
Substitute Options. Subject to Section 15(b) hereof, if the outstanding shares
of the Common Stock of the Company are changed into, or exchanged for, a
different number or kind of shares or securities of the Company through
reorganization, merger, recapitalization or reclassification, or if the number
of outstanding shares is changed through a stock split, stock dividend, stock
consolidation or like capital adjustment, or if the Company makes a distribution
in partial liquidation or any other comparable extraordinary distribution with
respect to its Common Stock, an appropriate adjustment shall be made by the
Committee in the number, kind or Option Price of shares as to which Options may
be granted. A corresponding adjustment shall likewise be made in the number,
kind or Option Price of shares with respect to which unexercised Options have
theretofore been granted. Any such adjustment in an outstanding Option, however,
shall be made without change in the total price applicable to the unexercised
portion of the Option but with a corresponding adjustment in the price for each
share covered by the Option. In making such adjustments, or in determining that
no such adjustments are necessary, the Committee may rely upon the advice of
counsel and accountants to the Company, and the good faith determination of the
Committee shall be final, conclusive and binding. No fractional shares of stock
shall be issued under this Plan on account of any such adjustment.

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If the Company at any time should succeed to the business of another
corporation through a merger or consolidation, or through the acquisition of
stock or assets of such corporation or its subsidiaries, Options may be granted
under this Plan to option holders of such corporation or its subsidiaries, in
substitution for options to purchase stock of such corporation held by them at
the time of succession. The Committee, in its sole and absolute discretion,
shall determine the extent to which such substitute Options shall be granted (if
at all), the person or persons to receive such substitute Options (who need not
be all option holders of such corporation), the number of Options to be received
by each such person, the Option Price of such Option (which may be determined
without regard to Section 6 hereof) and the terms and conditions of such
substitute Options; provided, however, that the Option Price of each such
substituted Option which is an Incentive Stock Option shall be an amount such
that, in the sole and absolute judgment of the Committee (and in compliance with
Section 424(a) of the Code in the case of an Incentive Stock Option), the
economic benefit provided by such Option is not greater than the economic
benefit represented by the option in the acquired corporation as of the date of
the Company's acquisition of such corporation.

Section 13. Option Agreement. Each Option granted under this Plan shall
be evidenced by a written stock option agreement (an "Option Agreement")
executed by the Company and the Participant which (a) shall contain each of the
provisions and agreements herein specifically required to be contained therein,
(b) shall indicate whether such Option is to be an Incentive Stock Option or a
Nonqualified Stock Option, and if an Incentive Stock Option, shall contain terms
and conditions permitting such Option to qualify for treatment as an incentive
stock option under Section 422 of the Code, and (c) may contain such other terms
and conditions as the Committee deems desirable and which are not inconsistent
with this Plan.

Section 14. Rights as a Stockholder. A Participant or permitted
transferee of a Participant shall have no rights as a stockholder with respect
to any shares covered by an Option until the date of an entry evidencing such
ownership is made in the stock transfer books of the Company (the "Exercise
Date"). No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the Exercise Date.

Section 15. Termination of Options, Acceleration of Options.

(a) Each Option shall terminate and expire, and shall no longer be
subject to exercise, as the Committee may determine in granting such Option, and
each Option granted under this Plan shall set forth a termination date thereof,
which, subject to earlier termination as set forth in Section 7 hereof or this
Section 15, or as otherwise set forth in any particular Option Agreement, with
respect to Nonqualified Stock Options, shall be no later than ten years from the
date such Option is granted, and with respect to Incentive Stock Options, shall
also be no later than ten years from the date such Option is granted unless the
Participant is a ten percent (10%) stockholder of the Company (as described in
Section 422(b)(6) of the Code, and determined after taking into account the
constructive ownership rules of Section 424(d) of the Code) at the time such
Option is granted, in which case the Option shall terminate and expire no later
than five years from the date of the grant thereof. An Incentive Stock Option
shall contain any additional termination events required by Section 422 of the
Code.

(b) Subject to Section 15(c) hereof, unless the Committee shall, in its
sole discretion, determine otherwise, upon (i) the dissolution, liquidation or
sale of all or substantially all of the business, properties and assets of the
Company, (ii) upon any reorganization, merger or consolidation in which the
Company does not survive, (iii) upon any reorganization, merger, consolidation
or exchange of securities in which the Company does survive and any of the
Company's stockholders have the opportunity to receive cash, securities of
another corporation and/or other property in exchange for their capital stock of
the Company, or (iv) upon any acquisition by any person or group (as defined in
Section 13(d) of the Securities Act of 1934) of beneficial ownership of more
than fifty percent (50%) of the Company's then outstanding shares of Common
Stock (each of the events described in clauses (i), (ii), (iii) or (iv) is
referred to herein individually as an "Extraordinary Event"), this Plan and each
outstanding Option shall terminate. In such event each Participant shall have
the right until 10 days before the effective date of the Extraordinary Event to
exercise, in whole or in part, any unexpired Option or Options issued to the
Participant, to the extent that said Option is then vested and exercisable
pursuant to the provisions of said Option or Options and of Section 7 hereof.
The termination of employment of, or the termination of a consulting or other
relationship with, a Participant for any reason shall not accelerate or
otherwise affect the number of shares with respect to which an Option may be
exercised; provided, however, that the Option may only be exercised with respect
to that number of shares which could have been purchased under the Option had
the Option been exercised by the Participant on the date of such termination.

(c) Notwithstanding the provisions of Section 7 or paragraphs (a) or (b)
of this Section 15, or any provision to the contrary contained in a particular
Option Agreement, the Committee, in its sole discretion, at any time, or from
time to time, may elect to accelerate the vesting of all or any portion of any
Option then outstanding. The decision by the Committee to accelerate an Option
or to decline to accelerate an Option shall be final, conclusive and binding. In
the event of the acceleration of the exercisability of Options as the result of
a decision by the Committee pursuant to this 

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Section 15(c), each outstanding Option so accelerated shall be exercisable for a
period from and after the date of such acceleration and upon such other terms
and conditions as the Committee may determine in its sole discretion; provided,
however, that such terms and conditions (other than terms and conditions
relating solely to the acceleration of exercisability and the related
termination of an Option) may not adversely affect the rights of any Participant
without the consent of the Participant so adversely affected. Any outstanding
Option which has not been exercised by the holder at the end of such stated
period shall terminate automatically and become null and void.

Section 16. Withholding of Taxes. The Company, or a Subsidiary, as the
case may be, may deduct and withhold from the wages, salary, bonus and other
income paid by the Company or such Subsidiary to the Participant the requisite
tax upon the amount of taxable income, if any, recognized by the Participant in
connection with the exercise in whole or in part of any Option, or the sale of
Common Stock issued to the Participant upon the exercise of an Option, as may be
required from time to time under any federal or state tax laws and regulations.
This withholding of tax shall be made from the Company's (or such Subsidiaries')
concurrent or next payment of wages, salary, bonus or other income to the
Participant or by payment to the Company (or such Subsidiaries) by the
Participant of the required withholding tax, as the Committee may determine. The
Company may permit the Participant to elect to surrender, or authorize the
Company to withhold, shares of Common Stock (valued at their fair market value
on the date of surrender or withholding of such shares) in satisfaction of the
Company's withholding obligation, however, no fractional shares of Common Stock
shall be delivered, nor shall any cash in lieu of fractional shares be paid, by
the Company. The Company shall have the right to deduct fractional shares to be
paid to the Participant as a result of such surrender or withholding of shares.

Section 17. Effectiveness and Termination of this Plan. This Plan became
effective on the date on which it was adopted by the Board and was approved by
approved by the stockholders of the Company within 12 months of December 5,
1995. This Plan shall terminate at the earliest of the time when all shares of
Common Stock which may be issued hereunder have been so issued, or at such time
as set forth in Section 15(b) hereof; provided, however, that the Board may in
its sole discretion terminate this Plan at any other time. Unless earlier
terminated by the Board, this Plan shall terminate on December 5, 2005. Subject
to Section 15(b) hereof, no such termination shall in any way affect any Option
then outstanding.

Section 18. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Committee makes the
determination granting such Option. Notice of the determination shall be given
to each Participant to whom an Option is so granted within a reasonable time
after the date of such grant.

Section 19. Amendment of this Plan. The Board may (a) make such changes
in the terms and conditions of granted Options as it deems advisable, provided
each Participant adversely affected by such change consents thereto, and (b)
make such amendments to this Plan as it deems advisable. Such amendments and
changes shall include, but not be limited to, acceleration of the time at which
an Option may be exercised. The Board may obtain stockholder approval of any
amendment to this Plan for any reason (including in order to take advantage of
certain exemptions under Code Section 162(m) or Code Section 422), but shall not
be required to do so unless required by law or by the rules of the Nasdaq
National Market or any stock exchange on which the Common Stock may then be
listed.

Section 20. Transfers and Leaves of Absence. For purposes of this Plan,
(a) a transfer of a Participant's employment or consulting relationship, without
an intervening period, between the Company and a Subsidiary shall not be deemed
a termination of employment or a termination of a consulting relationship, and
(b) a Participant who is granted in writing a leave of absence shall be deemed
to have remained in the employ of, or in a consulting relationship with, the
Company (or a Subsidiary, whichever is applicable) during such leave of absence.
Notwithstanding the foregoing, for purposes of determining the exercisability of
an Incentive Stock Option, a Participant who is on a leave of absence that
exceeds 90 days will be considered to have terminated his or her employment on
the 91st day of the leave of absence, unless the Participant's rights to
reemployment are guaranteed by statute or contract.

Section 21. No Obligation to Exercise Option. The granting of an Option
shall impose no obligation on the Participant to exercise such Option.

Section 22. Governing Law. This Plan and any Option granted pursuant to
this Plan shall be construed under and governed by the laws of the State of
Delaware without regard to conflict of law provisions thereof.

Section 23. Not an Employment or Other Agreement. Nothing contained in
this Plan or in any Option Agreement shall confer, intend to confer or imply any
rights of employment or any rights to any other relationship or rights to
continued employment by, or rights to a continued consulting relationship with,
the Company or any Subsidiaries in favor of any Participant or limit the ability
of the Company or any Subsidiaries to terminate, with or without cause, in its
sole and absolute discretion, the employment of, or relationship with, any
Participant, subject to the terms of any written employment or other agreement
to which a Participant is a party.

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Section 24. Termination of Employment. The terms and conditions under
which an Option may be exercised after a Participant's termination of employment
shall be determined by the Committee and shall be specified in the Option
Agreement. The conditions under which such post-termination exercises shall be
permitted with respect to Incentive Stock Options shall be determined in
accordance with the provisions of Section 422 of the Code.

Section 25. Indemnification. In addition to such other rights of
indemnification as they may have as directors, the members of the Committee
shall be indemnified by the Company to the fullest extent permitted by law
against the reasonable expenses, including reasonable attorneys' fees, actually
and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with this Plan or any Option granted thereunder, and against all
amounts paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such Committee member is not entitled to
indemnification under applicable law; provided that within 60 days after
institution of any such action, suit or proceeding such Committee member shall
in writing offer the Company the opportunity, at the Company's expense, to
handle and defend the same.

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EXHIBIT G

LIMITED INDEMNIFICATION AGREEMENT

Introduction

This Limited Indemnification Agreement, dated as of ______ __, 1999 (as
the same may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided herein, this "Agreement"), 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") (PIA Delaware, PIA
Acquisition and PIA California are sometimes referred to herein individually as
a "PIA Party" and collectively as the "PIA Parties"), SPAR Acquisition, Inc., a
Nevada corporation ("SAI"), SPAR Marketing, Inc., a Delaware corporation
("SMI"), SPAR Marketing, Inc., a Nevada Corporation ("SMNEV"), SPAR Marketing
Force, Inc., a Nevada corporation ("SMF"), SPAR, Inc., a Nevada corporation
("SINC"), SPAR/Burgoyne Retail Services, Inc., an Ohio corporation ("SBRS"),
SPAR Incentive Marketing, Inc., a Delaware corporation ("SIM"), SPAR Trademarks,
Inc. ("STM") and SPAR MCI Performance Group, Inc., a Delaware corporation
("SMCI") (SAI, SMI, SMNEV, SMF, SINC, SBRS, SIM, STM and SMCI are sometimes
referred to herein individually as a "SPAR Party" and collectively as the "SPAR
Parties"), and Robert G. Brown and William H. Bartels (each a "SPAR
Principal,"and collectively the "SPAR Principals"). SMNEV, SMF, SINC and SBRS
are sometimes referred to herein individually as a "SPAR Marketing Company" and
collectively as the "SPAR Marketing Companies". The PIA Parties and the SPAR
Parties are sometimes referred to herein individually as a "Merger Party" and
collectively as the "Merger Parties". The Merger Parties and the SPAR Principals
are sometimes referred to herein individually as a "Party" and collectively as
the "Parties".

Recitals

A. The PIA Parties have entered into the Merger Agreement with the SPAR
Parties (as "Merger Agreement" and the other capitalized terms used and not
otherwise defined in these Recitals are defined in Article I, below).

B. The SPAR Principals collectively own a majority of the issued and 
outstanding shares of capital stock of the SPAR Parties.

C. The SPAR Principals also own all of the issued and outstanding shares
of capital stock, and are officers and directors, of SPAR Marketing Services,
Inc. ("SMS"), which provides certain field services to the SPAR Marketing
Companies pursuant to the Field Service Agreement. SMS is not a party to the
Merger Agreement, will remain an independent company, and will continue to
provide certain field services to the SPAR Marketing Companies pursuant to the
Field Services Agreement.

D. SMS has historically provided certain field services to the SPAR
Marketing Companies though persons classified by SMS as independent contractors.
The IRS has sought to reclassify certain independent contractors of SMS to
employees, which SMS believes inconsistent with law and fact and is vigorously
contesting.

E. SMF is the issuer of the ADVO Note, which is "payable in an amount
equal to ten percent (10.00%) of, and solely out of, any Equity Proceeds raised
through December 31, 1999, up to a maximum contingent payment of
$3,000,000.00...", with "Equity Proceeds" defined as "the net proceeds raised in
any public offerings or private placements of equity securities issued by..."
SMF.

F. In order to induce the Merger Parties to enter into the Merger
Agreement, to permit the SPAR Principals to continue to contest the
reclassification of certain independent contractors of SMS sought by the IRS,
and to permit the SPAR Principals to contest any claim for payment under the
ADVO Note, the SPAR Principals have agreed to indemnify the Merger Parties under
certain circumstances, all upon the terms and provisions and subject to the
conditions set forth herein.

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 is hereby acknowledged by the Parties), the Parties hereto
hereby agree as follows:

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ARTICLE I

DEFINITIONS

Capitalized terms used and not otherwise defined herein shall have the
meanings respectively assigned to them in the Merger Agreement. Each use in this
Agreement of a neuter pronoun shall be deemed to include references to the
masculine and feminine variations thereof, and vice versa, and a singular
pronoun shall be deemed to include a reference to the plural variation thereof,
and vice versa, in each case as the context may permit or require. As used in
this Agreement, the following capitalized terms and non-capitalized words and
phrases shall have the meanings respectively assigned to them below, which
meanings shall be applicable equally to the singular and plural forms of the
terms so defined:

"ADVO Claim" shall have the meaning assigned to it in Section 3.03
hereof.

"ADVO Defense Expense" shall mean any cost or expense of any SPAR
Principal or any other person authorized by any SPAR Principal incurred in any
ADVO Defense Proceeding, including (without limitation) any and all reasonable
fees, disbursements and expenses of attorneys, accountants and other
professionals and expenses of investigation.

"ADVO Note" shall mean the Amended and Restated Contingent Subordinated
Promissory Note in the maximum principal amount of $3,000,000.00 dated as of
June 30, 1997, issued by SMF to the MF Sellers to evidence the remaining
deferred portion of the "Cash Purchase Price" payable under (and as defined in)
Section 1(C) and 1 (D) of the ADVO Purchase Amendment, as the same may be
modified, amended or restated from time to time in the manner provided therein.

"ADVO Note Claim" shall have the meaning assigned to it in Section 3.02
hereof.

"ADVO Defense Proceeding" shall mean any effort by any SPAR Principal or
any other person authorized by any SPAR Principal (i) to oppose or otherwise
contest any legal proceeding by any MF Seller to enforce any claim for payment
under the ADVO Note or (ii) to seek a declaratory judgment that no amount is due
or owing under the ADVO Note, including (without limitation) proceedings
declaratory judgments and similar relief.

"ADVO Purchase Agreement" shall mean the Asset Purchase and Sale
Agreement dated as of March 1, 1996, among Stighen, Inc., a Delaware
corporation, ADVO Investment Company, Inc., a Delaware corporation, and ADVO,
Inc., a Delaware corporation (each a "MF Seller" and collectively the "MF
Sellers"), and SMF as purchaser, as amended by the ADVO Purchase Amendment, and
as the same may be supplemented, modified, amended, restated or replaced from
time to time in the manner provided therein.

"ADVO Purchase Amendment" shall mean the First Amendment to Asset
Purchase and Sale Agreement among the MF Sellers and SMF dated as of June 30,
1997.

"Applicable Law" shall mean any applicable law, ordinance, or
governmental rule or regulation.

"Authority" shall mean the Internal Revenue Service, any state tax
authority, the Pension Benefit Guaranty Corporation, any federal or state court,
or any other governmental authority having jurisdiction over any SMS Employment
Tax or SMS Benefit Claim.

"Benefit Plan" of a referenced party shall mean each Pension Plan,
Welfare Plan and Other ERISA Benefit of the referenced party.

"Code" shall mean the Internal Revenue Code of 1986, as amended, , and
the rules and regulations promulgated thereunder, as the same may be
supplemented, modified, amended, restated or replaced from time to time.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder, as the same
may be supplemented, modified, amended, restated or replaced from time to time.

"Field Service Agreement" shall mean the Service Agreement between SMF
and SMS dated as of January 4, 1999, as the same may be supplemented, modified,
amended, restated or replaced from time to time in the manner provided therein.

"Losses" shall mean any and all claims, damages, losses, liabilities,
actions, suits, proceedings, demands, assessments, adjustments, costs and
expenses, including (without limitation) reasonable fees, disbursements and
expenses

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of attorneys, accountants and other professionals and expenses of investigation
(including, without limitation, all reasonable fees, disbursements and expenses
incurred in seeking to enforce any provision of this Agreement), but excluding
any consequential, special and punitive damages.

"Merger Agreement" shall mean the Agreement and Plan of Merger among the
PIA Parties and the SPAR Parties dated as of February [date], 1999, as the same
may be supplemented, modified, amended, restated or replaced from time to time
in the manner provided therein.

"Merger Party" and "Merger Parties" shall have the meanings respectively
assigned to them in the Introduction, above.

"Merger Party Benefit Claim" shall have the meaning assigned to it in
Section 2.03(b) hereof.

"Merger Party Claim" shall have the meaning assigned to it in Section
2.05(b) hereof.

"Merger Party Expense Claim" shall have the meaning assigned to it in
Section 2.04(b) hereof.

"Merger Party Plan" shall mean any Benefit Plan or the assets of any
Benefit Plan sponsored or maintained after the Closing by any of the Merger
Parties or their affiliates.

"Merger Party Tax Claim" shall have the meaning assigned to it in
Section 2.02(b) hereof.

"Other ERISA Benefit" of a referenced party shall mean any material plan
or agreement governed by ERISA or the Code of the referenced party relating to
deferred compensation, bonus and performance compensation (other than salesmen
commissions), stock purchase, stock option, stock appreciation, severance,
vacation, sick leave, holiday fringe benefits, personnel policy, reimbursement
program, insurance, welfare or similar plan, program, policy or arrangement.

"Pension Plan" of a referenced party shall mean each material "employee
pension benefit plan" (as defined in Section 3(2) of ERISA) of the referenced
party.

"PIA Acquisition" shall have the meaning assigned to it in the
Introduction, above.

"PIA Delaware" shall have the meaning assigned to it in the
Introduction, above.

"PIA California" shall have the meaning assigned to it in the
Introduction, above.

"PIA Party" and "PIA Parties" shall have the meanings respectively
assigned to them in the Introduction, above.

"Representatives" shall mean any and all of a referenced person's
officers, directors, employees, stockholders, subsidiaries, affiliates,
attorneys, agents, successors and assigns.

"SAI" shall have the meaning assigned to it in the Introduction, above.

"SBRS" shall have the meaning assigned to it in the Introduction, above.

"SIM" shall have the meaning assigned to it in the Introduction, above.

"SINC" shall have the meaning assigned to it in the Introduction, above.

"SMF" shall have the meaning assigned to it in the Introduction, above.

"SMI" shall have the meaning assigned to it in the Introduction, above.

"SMNEV" shall have the meaning assigned to it in the Introduction, 
above.

"SMS" shall have the meaning assigned to it in the Recitals, above.

"SMS Benefit Claim" shall have the meaning assigned to it in Section
2.03(a) hereof.

"SMS Benefit Liability" shall mean any liability with respect to any SMS
Benefit Plan imposed under the Code, ERISA or any other Applicable Law on SMS,
the SPAR Marketing Companies, any pre-merger affiliate of any of the SPAR
Parties, or the SPAR Principals (as stockholders of SMS) with respect to any
period (or partial period) ending on or prior to the Closing Date as a result of
any SMS Field Reclassification.

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"SMS Benefit Plan" shall mean any Benefit Plan of SMS, the SPAR
Marketing Companies, any pre- merger affiliate of any of the SPAR Parties;
excluding, however, any and all employee stock options disclosed or issued
pursuant to the Merger Agreement.

"SMS Claim" shall have the meaning assigned to it in Section 2.05(a)
hereof.

"SMS Defense Expense" shall mean any cost or expense of SMS, any SPAR
Principal or any other person authorized by SMS or any SPAR Principal incurred
in any SMS Tax Proceeding, including (without limitation) any and all reasonable
fees, disbursements and expenses of attorneys, accountants and other
professionals and expenses of investigation.

"SMS Employment Tax" shall mean any Tax imposed under the Code or any
other Applicable Law (including, without limitation, any social security (FICA),
federal or state unemployment (FUTA), federal or state withholding or payroll,
or any similar tax) on SMS, the SPAR Marketing Companies, any pre-merger
affiliate of any of the SPAR Parties, or the SPAR Principals (as stockholders of
SMS) with respect to any Tax period (or partial period) ending on or prior to
the Closing Date.

"SMS Expense Claim" shall have the meaning assigned to it in Section
2.04(a) hereof.

"SMS Field Reclassification" shall mean any reclassification of the
independent contractors engaged as field representatives by SMS from independent
contractors to employees of SMS, whether such change was to apply either
prospectively or retroactively, and whether such change in status would affect
periods before or after the Closing Date.

"SMS Tax Claim" shall have the meaning assigned to it in Section 2.02(a)
hereof.

"SMS Tax Proceeding" shall mean any efforts by SMS, any SPAR Principal
or any other person authorized by SMS or any SPAR Principal to oppose or
otherwise contest any efforts by the IRS or any other Authority (i) to effect an
SMS Field Reclassification or (ii) to impose any SMS Employment Tax or SMS
Benefit Liability that would result from an SMS Field Reclassification,
including (without limitation) proceedings seeking refunds, declaratory
judgments and similar relief.

"SMCI" shall have the meaning assigned to it in the Introduction, above.

"SPAR Marketing Company" and "SPAR Marketing Companies" shall have the
meanings respectively assigned to them in the Introduction, above.

"SPAR Party" and "SPAR Parties" shall have the meanings respectively
assigned to them in the Introduction, above.

"STM" shall have the meaning assigned to it in the Introduction, above.

"Tax" and "Taxes" shall respectively mean any and all federal, state,
local or foreign taxes, assessments, interest, fines, penalties, deficiencies,
fees and other governmental charges or impositions (including without limitation
all income tax, unemployment compensation, social security, payroll,
withholding, sales and use, excise, privilege, property, ad valorem, franchise,
license, school and any other tax or similar governmental charge or imposition),
and interest and penalties therein, under the Applicable Laws of the United
States or any state or Municipal or political subdivision thereof or any foreign
country or political subdivision thereon.

"Tax Return" shall mean any federal, state, local or foreign tax return,
report, statement or other similar filing required to be filed by any SPAR Party
with respect to any Tax.

"Welfare Plan" of a referenced party shall mean each material "employee
welfare benefit plan" (as defined in Section 3(i) of ERISA) of the referenced
party.

ARTICLE II

SMS FIELD RECLASSIFICATION INDEMNIFICATION

From and after the Closing Date (but if and only if the Merger shall
have occurred under the Merger Agreement):

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Section 2.01. Indemnification by the SPAR Principals respecting a SMS
Field Reclassification. The SPAR Principals, jointly and severally, shall
indemnify, defend and hold harmless the Merger Parties and their respective
Representatives from and against any and all Taxes and related Losses incurred
by any of them with respect to any period (or partial period) ending on or
before the Closing Date as a result of any SMS Employment Tax, SMS Benefit
Liability or SMS Defense Expense not paid or otherwise satisfied by SMS or the
SPAR Principals (as the case may be) to the extent finally determined to be due
as a result of or related to any applicable SMS Field Reclassification or
related SMS Tax Proceeding. The SPAR Principals' obligation to indemnify, defend
or hold harmless the Merger Parties and their respective Representatives from
any such liability shall terminate 30 days after the expiration of the
applicable statute of limitations in respect of such liability (other than with
respect to proceedings pending at the time of expiration, which shall continue
with respect to such proceedings until such proceedings are finally resolved).

Section 2.02. Notice of Indemnifiable Employment Tax Claims

(a) If a claim by any taxing Authority should be made against SMS or any
other entity that is or was under common control at any time with SMS or any of
the SPAR Parties seeking, if and to the extent determined adversely to SMS, a
SMS Field Reclassification and resulting payment of any SMS Employment Taxes
(including any such claims existing on the Closing Date, a "SMS Tax Claim"), the
SPAR Principals shall promptly (but in any event within ten Business Days) give
written notice to PIA Delaware of such claim (except for the continuation of the
SMS Tax Claim and related proceedings disclosed in the SPAR Disclosure Letter);
provided, however, that the failure to give such notice shall not affect the
indemnification provided hereunder except to the extent the Merger Parties have
actually been prejudiced as a result of such failure.

(b) If a claim should be made against any of the Merger Parties or their
subsidiaries by any taxing Authority for payment by any Merger Party of any SMS
Employment Taxes that, if and to the extent determined adversely to such Merger
Party, would result in an indemnity payment to the Merger Parties or any of
their affiliates pursuant to Section 2.01 hereof (a "Merger Party Tax Claim"),
the Merger Parties shall give written notice to the SPAR Principals of such
claim within ten Business Days; provided, however, that the failure to give such
notice shall not affect the indemnification provided hereunder except to the
extent the SPAR Principals have actually been prejudiced as a result of such
failure.

Section 2.03. Notice of Indemnifiable Benefit Plan Claims.

(a) If a claim by any taxing Authority or other person(s) should be made
against SMS or any other any other entity that is or was under common control at
any time with any of the SPAR Parties seeking, if and to the extent determined
adversely to SMS, a SMS Field Reclassification with respect to any SMS Benefit
Plan and resulting payment of any SMS Benefit Liability (a "SMS Benefit Claim"),
the SPAR Principals shall promptly (but in any event within ten Business Days)
give written notice to PIA Delaware of such claim; provided, however, that the
failure to give such notice shall not affect the indemnification provided
hereunder except to the extent the Merger Parties have actually been prejudiced
as a result of such failure.

(b) If a claim should be made against any of the Merger Parties or their
subsidiaries, or against any Merger Party Plan, by any taxing Authority or other
person(s) for payment by any Merger Party or Merger Party Plan of any SMS
Benefit Liability that, if and to the extent determined adversely to such Merger
Party or Merger Party Plan, would result in an indemnity payment to the Merger
Parties or any of their affiliates pursuant to Section 2.01 hereof (a "Merger
Party Benefit Claim"), the Merger Parties shall give written notice to the SPAR
Principals of such claim within ten Business Days; provided, however, that the
failure to give such notice shall not affect the indemnification provided
hereunder except to the extent the SPAR Principals have actually been prejudiced
as a result of such failure.

Section 2.04. Notice of Indemnifiable SMS Defense Expense Claims

(a) If a claim by any person should be made against SMS or the SPAR
Principals seeking legal enforcement of any unpaid bona fide SMS Defense Expense
amount contested by SMS or the SPAR Principals (including any such claims
existing on the Closing Date, a "SMS Expense Claim"), the SPAR Principals shall
promptly (but in any event within ten Business Days) give written notice to PIA
Delaware of such claim; provided, however, that the failure to give such notice
shall not affect the indemnification provided hereunder except to the extent the
Merger Parties have actually been prejudiced as a result of such failure.

(b) If a claim should be made seeking collection or legal enforcement
against any Merger Party of any unpaid bona fide SMS Defense Expense amount not
paid by SMS or the SPAR Principals that, if and to the extent determined
adversely to such Merger Party, would result in an indemnity payment to the
Merger Parties or any of their affiliates pursuant to Section 2.01 hereof (a
"Merger Party Expense Claim"), the Merger Parties shall give written notice to
the SPAR Principals of such claim within ten Business Days; provided, however,
that the failure to give such notice shall

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not affect the indemnification provided hereunder except to the extent the SPAR
Principals have actually been prejudiced as a result of such failure.

Section 2.05. Procedures regarding SMS Tax and Benefit Claims

(a) With respect to any SMS Tax Claim, SMS Benefit Claim or SMS Expense
Claim (each an "SMS Claim") and each Merger Party Tax Claim, Merger Party
Benefit Claim or Merger Party Expense Claim (each a "Merger Party Claim"), the
SPAR Principals (i) shall control all proceedings, (ii) shall make all decisions
taken in connection with such SMS Claim or Merger Party Claim, including
(without limitation) selection of counsel and whether to pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with any
taxing Authority with respect thereto, (iii) shall decide whether (A) to pay any
or otherwise satisfy any Tax or benefit claimed, (B) to settle such SMS Claim or
Merger Party Claim (subject to subsection (b) of this Section, below), (C) to
sue for a refund where applicable law permits such refund suits, or (D) to
contest the SMS Claim or Merger Party Claim in any permissible manner, and (iv)
shall pay or otherwise settle any and all bonafide SMS Defense Expenses, and the
costs of contesting or settling the same, not paid by SMS. This provision will
not reduce or otherwise alter the Merger Parties' rights or the SPAR Principals'
obligations regarding indemnification of any Merger Party pursuant to Section
2.01 or 2.02 hereof, respectively.

(b) If SMS or the SPAR Principals desire to enter into a settlement or
resolution with the relevant taxing Authority regarding any Merger Party Claim
and are permitted to do so, or not restricted from doing so, under this Section,
SMS or the SPAR Principals may enter such settlement or resolve such Merger
Party Claim if the terms of such settlement or resolution (1) provides that no
person (other than any person that was engaged as an independent contractor,
notwithstanding any reclassification of status, by SMS with respect to his or
her own Taxes and SMS pursuant to such settlement) shall have any further
obligation to the taxing Authority with respect to such Merger Party Claim, (2)
requires that SMS or the SPAR Principals pay the taxing Authority any amounts
due under the terms of the settlement or resolution, and (3) does not purport to
bind any Merger Party to act in any manner, including (without limitation)
requiring any Merger to reclassify as an employee any person engaged by it as an
independent contractor, unless such Merger Party has agreed to be so bound in
such Merger Party's sole discretion.

(c) PIA Delaware shall have the right to join in the defense of any
Merger Party Claim at its own expense. The SPAR Principals shall make available
to PIA Delaware all documents and any other items or information reasonably
requested by it for full and active participation in such defense by PIA
Delaware.

(d) The Merger Parties shall not pay or offer or agree to pay, settle or
otherwise resolve any Merger Party Claim without the SPAR Principals' express
written consent, which consent shall not be withheld unreasonably. If PIA
Delaware gives written notice to the SPAR Principals of the Merger Parties'
desire to accept a settlement or resolution of any Merger Party Claim, and the
SPAR Principals elect not to approve or enter into such settlement or resolution
(as applicable), then: (i) the SPAR Principals shall have two years from the
date of receipt by the SPAR Principals of the notice to settle or otherwise
resolve the Merger Party Claim; and (ii) if after the expiration of such two
year period the SPAR Principals have not resolved such Merger Party Claim, PIA
Delaware shall be permitted to settle such Merger Party Claim if the terms of
such settlement or resolution (1) does not concede or agree to a SMS Field
Reclassification, (2) are on terms substantially similar (but including any
additional interest and penalties accrued during the two year period) to those
offered at the time PIA Delaware provided notice to the SPAR Principals of PIA
Delaware's desire to settle, and (3) requires that PIA Delaware pay the taxing
Authority any amounts due under the terms of the settlement or resolution,
subject to its right to indemnification hereunder. This provision will not
reduce or otherwise alter the Merger Parties' rights or the SPAR Principals'
obligations regarding indemnification of any Merger Party pursuant to Section
2.01 hereof.

(e) No Effect on the Parties. This Agreement is not intended to, and
shall not be construed to, limit in any way the right of any Party to conduct
its business in any manner it may elect, including (without limitation)
classifying persons engaged by such Party to provide services as employees or
independent contractors as such Party may deem appropriate.

ARTICLE III

ADVO NOTE INDEMNIFICATION

From and after the Closing Date (but if and only if the Merger shall
have occurred under the Merger Agreement):

Section 3.01. ADVO Note Indemnification. The SPAR Principals, jointly
and severally, shall indemnify, defend and hold harmless the Merger Parties and
their respective Representatives from and against any and all Losses incurred by
any of them as a result of any ADVO Note Claim or ADVO Expense Claim not paid or
otherwise

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satisfied by SMS or the SPAR Principals (as the case may be) to the extent and
in the amount finally determined to be due (if and to the extent determined
adversely to SMS). The SPAR Principals' obligation to indemnify, defend or hold
harmless the Merger Parties and their respective Representatives from any such
liability shall terminate 30 days after the expiration of the applicable statute
of limitations in respect of such liability (other than with respect to
proceedings pending at the time of expiration, which shall continue with respect
to such proceedings until such proceedings are finally resolved).

Section 3.02. Notice of ADVO Note Claim.

(a) If a claim should be made by any MF Seller seeking collection or
legal enforcement against any Merger Party of any amount under the ADVO Note not
paid or otherwise satisfied by SMS or the SPAR Principals (an "ADVO Note
Claim"), the Merger Parties shall give written notice to the SPAR Principals of
such claim within ten Business Days; provided, however, that the failure to give
such notice shall not affect the indemnification provided hereunder except to
the extent the SPAR Principals have actually been prejudiced as a result of such
failure.

(b) If a claim should be made seeking collection or legal enforcement
against any Merger Party of any bona fide ADVO Defense Expense amount not paid
or otherwise satisfied by SMS or the SPAR Principals (an "ADVO Expense Claim"),
the Merger Parties shall give written notice to the SPAR Principals of such
claim within ten Business Days; provided, however, that the failure to give such
notice shall not affect the indemnification provided hereunder except to the
extent the SPAR Principals have actually been prejudiced as a result of such
failure.

Section 3.03 Procedures regarding ADVO Note Claims.

(a) The SPAR Principals (i) shall control all proceedings, (ii) shall
make all decisions taken in connection with any ADVO Note Claim or ADVO Expense
Claim (each an "ADVO Claim"), including (without limitation) selection of
counsel and whether to pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with any court or other judicial Authority
with respect thereto, (iii) shall decide whether (A) to pay any or otherwise
satisfy any amount claimed, (B) to settle such ADVO Claim, or (C) to contest the
ADVO Claim in any permissible manner, and (iv) shall pay or otherwise settle any
and all bonafide ADVO Defense Expenses, and the costs of contesting or settling
the same, not paid by SMS. This provision will not reduce or otherwise alter the
Merger Parties' rights or the SPAR Principals' obligations regarding
indemnification of any Merger Party pursuant to Section 3.01 hereof.

(b) If SMS or the SPAR Principals desire to enter into a settlement or
resolution with the relevant MF Sellers, SMS or the SPAR Principals may enter
such settlement or resolve such ADVO Claim if the terms of such settlement or
resolution (1) provides that no person shall have any further obligation to the
MF Sellers with respect to the ADVO Claim or the ADVO Note, and (2) requires
that SMS or the SPAR Principals pay any amounts due under the terms of the
settlement or resolution.

(c) PIA Delaware shall have the right to join in the defense of any ADVO
Claim at its own expense. The SPAR Principals shall make available to PIA
Delaware all documents and any other items or information reasonably requested
by it for full and active participation in such defense by PIA Delaware.

(d) The Merger Parties shall not pay or offer or agree to pay, settle or
otherwise resolve any ADVO Claim without the SPAR Principals' express written
consent, which consent shall not be withheld unreasonably.

ARTICLE IV

LIMITS ON INDEMNIFICATIONS

Notwithstanding the provisions of Articles II and III hereof:

Section 4.01. Related Group as Single Indemnified Party. For purposes of
this Agreement, the Merger Parties and their Representatives (collectively, the
"Indemnified Parties") shall be considered to be a single indemnified Party.

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ARTICLE V

GENERAL

Section 5.01. Successors and Assigns; Assignment. Whenever in this
Agreement reference is made to any Party or other person, such reference shall
be deemed to include the successors, assigns, heirs and legal representatives of
such person, and, without limiting the generality of the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the Parties
hereto and their respective successors and assigns; provided that the rights of
a Party hereunder may not be assigned without the consent of the other Parties
hereto.

Section 5.02. No Third Party Rights. The representations, warranties and
other terms and provisions of this Agreement are for the exclusive benefit of
the Parties hereto and the persons entitled to indemnification hereunder, and,
except as otherwise expressly provided herein or therein, no other person,
including creditors of any Party or any such indemnifiable person, shall have
any right or claim against any Party by reason of any of those terms and
provisions or be entitled to enforce any of those terms and provisions against
any Party.

Section 5.03. Counterparts. This Agreement may be executed 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 5.04. Expenses. The PIA Parties shall pay the fees, expenses and
disbursements of the PIA Parties and their respective Representatives incurred
in connection with the preparation and negotiation of this Agreement; and the
SPAR Principals shall pay the fees, expenses and disbursements of the SPAR
Principals and their respective Representatives incurred in connection with the
preparation and negotiation of this Agreement.

Section 5.05. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be sent, delivered or mailed as follows:

(a)         If to any PIA Party:
Terry R. Peets, President and Chief Executive Officer
PIA Merchandising Services, Inc.
19900 MacArthur Blvd., Suite 900
Irvine, California 92612
Telephone:              (949) 474-3506
Telecopier:             (949) 474-3570
E-Mail:                 Terry.Peets@PIAmerch.com

with a copy to:
James W. Loss, Esq.
Riordan & McKinzie
695 Town Center Drive, Suite 1500
Costa Mesa, CA  92626
Telephone:              (714) 433-2900
Telecopier:             (714) 549-3244
E-Mail:                 jwl@riordan.com

And a copy to:
Lawrence David Swift, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, NY 10036-8735
Telephone:              (212) 704-6147
Telecopier:             (212) 704-6159
E-Mail:                 LDSwift@PCFK.com

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(b)         If to any SPAR Party:
Robert G. Brown, Chairman, Chief Executive Officer
SPAR Marketing Force, Inc.
303 South Broadway, Suite 140
Tarrytown, New York 10591
Telephone:              (914) 332-4100
Telefax:                (914) 332-0741
E-Mail:                 RBrown@MSN.com

With a copy to:
William H. Bartels, Vice Chairman and Senior Vice President
SPAR Marketing Force, Inc.
303 South Broadway, Suite 140
Tarrytown, New York 10591
Telephone:              (914) 332-4100
Telefax:                (914) 332-0741
E-Mail:                 BBartels@SPARinc.com

and a copy to:
Lawrence David Swift, Esq.
Parker Chapin Flattau & Klimpl, LLP
121 1 Avenue of the Americas
New York, NY 10036-8735
Telephone:              (212) 704-6147
Telecopier:             (212) 704-6159
E-Mail:                 LDSwift@PCFK.com

(c)         If to Robert G. Brown:
Robert G. Brown, Chairman, Chief Executive Officer
c/o SPAR Marketing Force, Inc.
303 South Broadway, Suite 140
Tarrytown, New York 10591
Telephone:              (914) 332-4100
Telefax:                (914) 332-0741
E-Mail:                 RBrown@MSN.com

If to William H. Bartels:
William H. Bartels, Vice Chairman and Senior Vice President
SPAR Marketing Force, Inc.
303 South Broadway, Suite 140
Tarrytown, New York 10591
Telephone:              (914) 332-4100
Telefax:                (914) 332-0741
E-Mail:                 BBartels@SPARinc.com

with a copy, in either case, to:

Lawrence David Swift, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, NY 10036-8735
Telephone:              (212) 704-6147
Telecopier:             (212) 704-6159

Each such notice, request or other communication shall be given by hand
delivery, by nationally recognized courier service or by telecopier, receipt
confirmed. Each such notice, request or communication shall be effective (i) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section (or in accordance with the latest
unrevoked written direction from such Party) and (ii) if given by telecopier,
when such telecopy is transmitted to the telecopier number specified in this
Section (or in accordance with the latest unrevoked written direction from such
Party), and the appropriate confirmation is received.

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Section 5.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the Applicable Laws pertaining in the State of New
York (other than those laws that would defer to the substantive laws of another
jurisdiction). Without in any way limiting the preceding choice of law, the
parties intend (among other things) to thereby avail themselves of the benefit
of Section 5-1401 of the General Obligations Law of the State of New York.

Section 5.07. Consent to Jurisdiction, Etc. The Parties each hereby
consent and agree that the Supreme Court of the State of New York for the County
of Westchester and the United States District Court for Westchester County, New
York, each shall have personal jurisdiction and proper venue with respect to any
dispute between the Parties; provided that the foregoing consent shall not
deprive any Party of the right to voluntarily commence or participate in any
action, suit or proceeding in any other court having jurisdiction and venue over
the other Parties. In any dispute with the SPAR Principals, the PIA Parties will
not raise, and each hereby expressly waives, any objection or defense to any
such New York jurisdiction as an inconvenient forum. Without in any way limiting
the preceding consents to jurisdiction and venue, the parties intend (among
other things) to thereby avail themselves of the benefit of Section 5-1402 of
the General Obligations Law of the State of New York.

Section 5.08. Waiver of Jury Trial. In any action, suit or proceeding in
any jurisdiction, the Parties each hereby expressly waive trial by jury.

Section 5.09. Exercise of Rights and Remedies. Except as otherwise
provided herein, no delay of or omission in the exercise of any right, power or
remedy accruing to any Party as a result of any breach or default by any other
Party under this Agreement shall impair any such right, power or remedy, nor
shall it be construed as a waiver of or acquiescence in any such breach or
default, or of any similar breach or default occurring later. No waiver of any
single breach or default shall be deemed a waiver of any other breach or default
occurring before or after such waiver.

Section 5.10. Reformation and Severability. In case any provision of
this Agreement shall be invalid, illegal or unenforceable, it shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the parties, and if
such modification is not possible, such provision shall be severed from this
Agreement, and in either case, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.

Section 5.11. Remedies Cumulative. No right, remedy or election given by
any term of this Agreement shall be deemed exclusive, but each shall be
cumulative with all other rights, remedies and elections available at law or in
equity.

Section 5.12. Captions. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.

Section 5.13. Amendments. This Agreement may be modified or amended only
by a written instrument executed by the SPAR Principals and the PIA Parties.

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Section 5.14. Entire Agreement. This Agreement and the other Merger
Documents to which the Parties are a party constitute the entire agreement and
understanding among the Parties, and supersede any prior agreements and
understandings, relating to the subject matter of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

PIA Merchandising Services, Inc.          SPAR Acquisition, Inc.

By:                                       By:
----------------------------------        ----------------------------------
Name: AAA                                 Name: Robert G. Brown
Title: President and Chief Executive      Title: Chairman, Chief Executive 
Officer                                   Officer and President

SG Acquisition, Inc.                          SPAR Marketing Force, Inc.

By:                                       By:
----------------------------------        ----------------------------------
Name: Terry R. Peets                      Name: Robert G. Brown
Title: President and Chief Executive      Title: Chairman, Chief Executive 
Officer                                   Officer and President

PIA Merchandising Co., Inc.               SPAR, Inc.

By:                                       By:
----------------------------------        ----------------------------------
Name: Terry R. Peets                      Name: Robert G. Brown
Title: President and Chief Executive      Title: Chairman, Chief Executive 
Officer                                   Officer and President

SPAR/Burgoyne Retail Services, Inc.       SPAR Marketing, Inc., a Delaware 
corporation

By:                                       By:
----------------------------------        ----------------------------------
Name: Robert G. Brown                     Name: Robert G. Brown
Title: Chairman, Chief Executive          Title: Chairman, Chief Executive 
Officer and President                     Officer and President

SPAR MCI Retail Services, Inc.            SPAR Trademarks, Inc.

By:                                       By:
----------------------------------        ----------------------------------
Name: Robert G. Brown                     Name: Robert G. Brown
Title: Chairman, Chief Executive          Title: Chairman, Chief Executive 
Officer and President                     Officer and President

SPAR Marketing, Inc., a Nevada corporation

By:                                      
----------------------------------   
Name: Robert G. Brown                
Title: Chairman and Chief Executive     
Officer         

- ---------------------------------------    -------------------------------------
Robert G. Brown                             William H. Bartels

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EXHIBIT H

INDEMNITY ESCROW AGREEMENT

Introduction

This Indemnity Escrow Agreement, dated as of [Closing Date], 1999 (as
the same may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided herein, this "Agreement"), 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") (PIA Delaware, PIA
Acquisition and PIA California are sometimes referred to herein individually as
a "PIA Party" and collectively as the "PIA Parties"), SPAR ACQUISITION, INC., a
Nevada corporation ("SAI"), SPAR MARKETING, INC., a Delaware corporation
("SMI"), SPAR Marketing, Inc., a Nevada corporation ("SMNEV"), SPAR MARKETING
FORCE, INC., a Nevada corporation ("SMF"), SPAR, INC., a Nevada corporation
("SINC"), SPAR/BURGOYNE RETAIL SERVICES, INC., an Ohio corporation ("SBRS"),
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") (SAI, SMI, SMNEV, SMF, SINC, SBRS, SIM, SMCI
and STM are sometimes referred to herein individually as a "SPAR Party" and
collectively as the "SPAR Parties"), and ROBERT G. BROWN and WILLIAM H. BARTELS
(each a "SPAR Principal,"and collectively the "SPAR Principals"), and PARKER
CHAPIN FLATTAU & KLIMPL, LLP, a New York limited liability partnership having an
address at 1211 Avenue of the Americas, New York, New York 10036, as Escrow
Agent (the "Indemnity Escrow Agent"). The PIA Parties and the SPAR Parties are
sometimes referred to herein individually as a "Merger Party" and collectively
as the "Merger Parties". The Merger Parties and the SPAR Principals are
sometimes referred to herein individually as a "Beneficiary" and collectively as
the "Beneficiaries". The Beneficiaries and the Indemnity Escrow Agent are
sometimes referred to herein individually as a "Party" and collectively as the
"Parties".

RECITALS

A. The Merger Parties have entered into the Agreement and Plan of Merger
dated as of February 28, 1999 (as the same may be supplemented, modified,
amended, restated or replaced from time to time in the manner provided therein,
the "Merger Agreement"), and the Merger Parties and the SPAR Principals (I.E.,
the Beneficiaries) have entered into the Limited Indemnification Agreement dated
as of [Closing Date], 1999 (as the same may be supplemented, modified, amended,
restated or replaced from time to time in the manner provided therein, the
"Limited Indemnification Agreement").

B. The Beneficiaries desire to have shares of common stock of PIA
Delaware ("PIA Delaware Stock") deposited in escrow in accordance with Section
2.02 of the Merger Agreement and held and disbursed by the Indemnity Escrow
Agent in accordance with this Agreement in order to secure the obligations of
the SPAR Principals to the Merger Parties under the Limited Indemnification
Agreement, and the Indemnity Escrow Agent has agreed to receive, hold and
disburse such stock, all upon the terms and subject to the conditions
hereinafter set forth.

AGREEMENT

In consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth, the parties hereto hereby agree as follows:

Section 1. Escrow of Instruments. (a) In accordance with the provisions
of Section 2.02 of the Merger Agreement, (i) PIA Delaware shall cause ten
percent (10%) of the shares of PIA Delaware Stock that each SPAR Principal and
their Family Members (as defined in the Merger Agreement) would otherwise have
had the right to receive pursuant to Section 2.01(a) (the "Share Escrow Amount")
of the Merger Agreement (the "Escrow Shares") to be registered in the name of
the applicable SPAR Principal and delivered to the Indemnity Escrow Agent,
provided however that the Share Escrow Amount may be satisfied by the shares of
the SPAR Principals as opposed to the shares of such Family Members; and (ii)
each SPAR Principal shall deposit with the Indemnity Escrow Agent four stock
powers (separate from the

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certificates) endorsed to PIA Delaware, all of which shall be held in accordance
with the provisions of the Limited Indemnity Agreement and this Agreement.

(b) The SPAR Principals shall be entitled to vote the Escrow Shares in
accordance with their respective interests therein on all matters submitted to a
vote of the stockholders of PIA Delaware so long as such Escrow Shares are held
in escrow pursuant to the term of this Agreement.

(c) Capitalized terms used and not otherwise defined herein shall have
the meanings respectively assigned to them in the Merger Agreement or the
Limited Indemnification Agreement, as applicable. However, no reference to the
Merger Agreement or the Limited Indemnification Agreement or any other
instrument or document shall be deemed to incorporate any term or provision
thereof into this Agreement unless expressly so provided.

Section 2. Investment of Funds. The Indemnity Escrow Agent may invest or
deposit any dividends or other distributions paid with respect to the Escrow
Shares (the "Escrow Funds"; collectively, with the Escrow Shares, the "Escrow
Deposit"), in (a) one of its normal interest bearing escrow deposit accounts
with Citibank, N.A., The Chase Manhattan Bank, or their respective affiliates,
(b) securities issued or guarantied by the United States of America, or (c)
other interest bearing deposit accounts in, or certificates of deposit,
commercial paper or similar products of, or money market mutual funds affiliated
with, (i) domestic commercial banks that have, or are members of a group of
domestic commercial banks that has, consolidated total assets of at least
$1,000,000,000, or (ii) such other banks or other financial institutions as may
be acceptable to the Beneficiaries.

Section 3. Release of Funds and Documents. The Indemnity Escrow Agent
shall release the Escrow Shares and other property in the escrow created
hereunder as follows:

(a)     the Indemnity Escrow Agent shall release all of the then remaining
Escrow Shares and other property in the Escrow Deposit to the SPAR
Principals, in accordance with their respective interests therein, on
the second Business Day after receipt by the Indemnity Escrow Agent of
written notice from PIA Delaware certifying that the obligations of the
SPAR Principals under the Limited Indemnity Agreement have been
satisfied in full;

(b)     the Indemnity Escrow Agent shall release all of the then remaining
Escrow Shares and other property in the Escrow Deposit to the SPAR
Principals, in accordance with their respective interests therein, on
the eleventh Business Day after receipt by the Indemnity Escrow Agent of
written notice (a "Release Notice") from any SPAR Principal certifying
that the obligations of the SPAR Principals under the Limited Indemnity
Agreement have been satisfied in full and certifying that PIA Delaware
has concurrently been given a copy of such Release Notice; provided,
however, that the Escrow Deposit shall not be so released if PIA
Delaware delivers written objection to such release to the Indemnity
Escrow Agent prior to the close of business on the tenth Business Day
after the Indemnity Escrow Agent's receipt of such Release Notice, in
which event the Parties shall resolve such dispute in the manner
provided in Section 7 hereof;

(c)     the Indemnity Escrow Agent shall release such portion of the Escrow
Shares and/or other property then held in the Escrow Deposit to PIA
Delaware as shall be specified by written notice from PIA Delaware, on
the eleventh Business Day following receipt by the Indemnity Escrow
Agent of such written request from PIA Delaware, acting in its own name
or as agent for any other Beneficiary (an "Indemnity Claim Notice"),
which notice shall (i) concurrently be delivered to the SPAR Principals
and the Indemnity Escrow Agent (and shall include a certification to
such effect), (ii) state that the Escrow Shares and other property
requested to be released are required to satisfy an unpaid claim for
indemnification under the Limited Indemnification Agreement, (iii) set
forth the dollar amount of the claim for indemnification, and (iv)
contain such facts and information as are then reasonably available
concerning the basis for the claim for indemnification; provided,
however, that the Indemnity Escrow Agent shall not release such Escrow
Shares or other property as requested if one or both of the SPAR
Principals has delivered written objection to such release to the
Indemnity Escrow Agent prior to the close of business on the tenth
Business Day following the receipt of such Indemnity Claim Notice, in
which event the Parties shall resolve such dispute in the manner
provided in Section 7 hereof;

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(d)     the Indemnity Escrow Agent shall release one half of the then remaining
Escrow Shares and Escrow Funds and other property attributable thereto
in the Escrow Deposit to the SPAR Principals, in accordance with their
respective interests therein, if by the close of business on March 31,
2000, the Indemnity Escrow Agent has not received an Indemnity Claim
Notice under Article III of the Limited Indemnification Agreement that
then to its knowledge remains unsatisfied or in dispute (which the
Indemnity Escrow Agent may in its discretion confirm through notices to
the Beneficiaries); provided, however, that the Escrow Deposit shall not
be so released if PIA Delaware delivers written objection to such
release and an Indemnity Claim Notice under Article III of the Limited
Indemnification Agreement to the Indemnity Escrow Agent prior to the
close of business on March 29, 2000, in which event the Parties shall
resolve such dispute in the manner provided in Section 7 hereof;

(e)     the Board of Directors of PIA Delaware shall in their board meetings
preceding the second, third and fourth anniversaries of the date of this
Agreement evaluate the amount of collateral reasonably necessary to
continue to secure the SPAR Principals' obligations under the Limited
Indemnification Agreement (the "Continuing Amount"), not to exceed
$1,500,000, and give written notice to the Indemnity Escrow Agent of the
Continuing Amount; and the Indemnity Escrow Agent shall retain Escrow
Shares having a Fair Market Value (as hereinafter defined) equal to the
Continuing Amount and release all the then remaining Escrow Shares and
other property in the Escrow Deposit in excess of the Continuing Amount
to the SPAR Principals, in accordance with their respective interests
therein, if the Indemnity Escrow Agent has received that notice and the
Indemnity Escrow Agent has not received an Indemnity Claim Notice under
Article II of the Limited Indemnification Agreement that then to its
knowledge remains unsatisfied or in dispute (which the Indemnity Escrow
Agent may in its discretion confirm through notices to the
Beneficiaries); provided, however, that the Escrow Deposit shall not be
so released if PIA Delaware delivers written objection to such release
and an Indemnity Claim Notice under Article II of the Limited
Indemnification Agreement to the Indemnity Escrow Agent prior to the
close of business on the tenth Business Day prior to the applicable
anniversary of the date hereof, in which event the Parties shall resolve
such dispute in the manner provided in Section 7 hereof; and

(f)     the Indemnity Escrow Agent shall release all of the then remaining
Escrow Shares and other property in the Escrow Deposit to the SPAR
Principals, in accordance with their respective interests therein, if by
the close of business on the eleventh Business Day following the fifth
anniversary of the date of this Agreement the Indemnity Escrow Agent has
not received an Indemnity Claim Notice under Article II of the Limited
Indemnification Agreement that then to its knowledge remains unsatisfied
or in dispute (which the Indemnity Escrow Agent may in its discretion
confirm through notices to the Beneficiaries); provided, however, that
the Escrow Deposit shall not be so released if PIA Delaware delivers
written objection to such release and an Indemnity Claim Notice under
Article II of the Limited Indemnification Agreement to the Indemnity
Escrow Agent prior to the close of business on the tenth Business Day
after the fifth anniversary of the date of this Agreement, in which
event the Parties shall resolve such dispute in the manner provided in
Section 7 hereof.

In determining the number of Escrow Shares to be transferred in satisfaction of
any claim against the Escrow Property pursuant to the foregoing clause (c) or
retained in escrow (if any) under the foregoing clause (e), each Escrow Share
shall be valued at the average last sale price on the Nasdaq National Market for
the PIA Delaware Stock for the twenty (20) trading days ending two trading days
prior to the date on which such shares are to be transferred or released (the
"Fair Market Value"). PIA Delaware shall notify the Indemnity Escrow Agent in
writing of the appropriate valuation for the Escrow Shares for such purposes.
Each of the SPAR Principals and other Beneficiaries hereby expressly authorizes
and instructs the Indemnity Escrow Agent to take any and all action required to
effect any transfer of Escrow Shares and/or other property pursuant to the terms
of this Agreement, including, without limitation, completing and delivering one
or more of the executed stock powers delivered to the Indemnity Escrow Agent
pursuant to Section 1.

Section 4. Substitution of Cash for Escrow Shares. The SPAR Principals
shall have the right at any time and from time to time to substitute cash for
Escrow Shares as follows: (i) the SPAR Principals shall give written notice to
the Indemnity Escrow Agent and the Merger Parties at least ten days prior to any
requested substitution; (ii) on or before the proposed substitution date, the
SPAR Principals shall deliver $_____ [THE PER SHARE FAIR MARKET VALUE AS OF THE
EFFECTIVE TIME] per share in immediately available funds to the Indemnity Escrow
Agent for each share of PIA Delaware Stock to be released in substitution,
provided, however, that to the extent the amount of the Escrow Shares has been
reduced pursuant to Section 3(e) hereof, the per share substitution price for
the each share of PIA

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Delaware Stock in the Continuing Amount shall instead be the Fair Market Value
as of the business day immediately preceding the day such written notice is
sent; and (iii) upon receipt of such funds by the Indemnity Escrow Agent, the
Indemnity Escrow Agent shall release the corresponding shares of PIA Delaware
Stock to the SPAR Principals, in accordance with their respective interests
therein, whether or not any Indemnity Claim Notice has been received by the
Indemnity Escrow Agent.

Section 5. Further Assurances. Each Beneficiary agrees to do such
further acts and things and to execute and deliver such statements, assignments,
agreements, instruments and other documents as the Indemnity Escrow Agent from
time to time reasonably may request in order to effectuate the purpose and the
terms and provisions of this Agreement, each in such form and substance as may
be acceptable to the Indemnity Escrow Agent.

Section 6. Invalidation of Distributions, Etc. In the event any amount
or document released to any Beneficiary under this Agreement is invalidated,
declared to be fraudulent or preferential or must otherwise be restored or
returned by the Indemnity Escrow Agent in connection with the insolvency,
bankruptcy or reorganization of any Beneficiary or other person, whether by
order of or settlement before any court or other authority or otherwise: (a)
each Beneficiary shall contribute back to the Indemnity Escrow Agent an amount
received by it such that each Beneficiary will be affected by that invalidation,
declaration, restoration or return ratably in proportion to the distributions it
received under this Agreement; and (b) each Beneficiary will return any document
so affected, together with any related assignment, release or other instrument
or document the Indemnity Escrow Agent may request to restore the status quo
ante.

Section 7. Conflicting Demands.

(a) In the event that one or both of the SPAR Principals or PIA Delaware
timely objects to any requested release of or claim against any of the Escrow
Shares or other property pursuant to Section 3, then PIA Delaware and the SPAR
Principals shall, for a period of at least thirty days, negotiate in good faith
in an effort to resolve such dispute. If PIA Delaware and the SPAR Principals
are unable to resolve such dispute within such thirty day period (or such longer
period as they may mutually agree upon), then the Beneficiaries may pursue
non-binding mediation if they mutually agree, or any Beneficiary may commence an
action, to finally resolve any conflicting claims hereunder. The final decision
of any court proceeding shall be furnished in writing to the Indemnity Escrow
Agent.

(b) If conflicting or adverse claims or demands are made or notices
served upon the Indemnity Escrow Agent with respect to the escrow provided for
herein, the Beneficiaries agree that the Indemnity Escrow Agent shall be
entitled to refuse to comply with any such claim or demand and to withhold and
stop all further performance of this escrow so long as such disagreement shall
continue. In so doing, the Indemnity Escrow Agent shall not be or become liable
for damages, losses, expenses or interest to any Beneficiary or any other person
for its failure to comply with such conflicting or adverse demands. The
Indemnity Escrow Agent shall be entitled to continue to so refrain and refuse to
so act until: (a) the rights of the adverse claimants have been finally
adjudicated in a court assuming and having jurisdiction and venue over the
parties and/or the documents, instruments or funds involved herein or affected
hereby; and/or (b) the Indemnity Escrow Agent shall have received an executed
copy of a dispositive settlement agreement to which the Beneficiaries and all
other adverse claimants, if any, are parties and signatories.

(c) If conflicting or adverse claims or demands are made or notices
served upon the Indemnity Escrow Agent with respect to the escrow provided for
herein, the Beneficiaries agree that the Indemnity Escrow Agent also may elect
to commence an interpleader or other action for declaratory judgment for the
purpose of having the respective rights of the claimants adjudicated, and may
deposit with the court all funds and documents held hereunder pursuant to this
Agreement; and if it so commences and deposits, the Indemnity Escrow Agent shall
be relieved and discharged from any further duties and obligations under this
Agreement. PIA Delaware shall pay all costs, expenses and attorneys' fees and
expenses incurred by the Indemnity Escrow Agent in seeking any such judgment.

Section 8. Consent to Jurisdiction, Etc. Each Beneficiary hereby
covenants and agrees that the Supreme Court of the State of New York for the
County of Westchester or (in a case involving diversity of citizenship) the
United States District Court for the Southern District of New York shall have
personal jurisdiction and proper venue over any dispute with the Indemnity
Escrow Agent; provided that the foregoing consent to jurisdiction and venue by
the other parties shall not deprive the Indemnity Escrow Agent of the right in
its discretion to voluntarily commence or participate

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in any action, suit or proceeding in any other court having jurisdiction and
venue over the Beneficiaries. In any dispute with the Indemnity Escrow Agent, no
Beneficiary will raise, and each Beneficiary hereby expressly waives, any
objection or defense to any such jurisdiction as an inconvenient forum. Without
in any way limiting the preceding consents to jurisdiction and venue, the
parties intend (among other things) to thereby avail themselves of the benefit
of Section 5-1402 of the General Obligations Law of the State of New York. In
addition to (and without limitation of) any delivery permitted under applicable
law, each Beneficiary agrees that service of process may be made at his or its
office in Westchester County, New York.

Section 9. Waiver of Jury Trial. In any action or proceeding involving
the Indemnity Escrow Agent in any jurisdiction, the Parties each waive trial by
jury.

Section 10. Expenses of the Indemnity Escrow Agent. PIA Delaware shall
pay any and all costs and expenses incurred by the Indemnity Escrow Agent in
connection with the administration and holding of the Escrow Deposit and the
investment of any Escrow Funds, and the enforcement, protection and adjudication
of the parties' rights hereunder by the Indemnity Escrow Agent, including,
without limitation, the disbursements, expenses and fees of the Indemnity Escrow
Agent itself and those of other attorneys it may retain, if any.

Section 11. Reliance on Documents and Experts. The Indemnity Escrow
Agent shall be entitled to rely upon any notice, consent, certificate,
affidavit, statement, paper, document, writing or communication (which to the
extent permitted hereunder may be by telegram, cable, telex, telecopier, or
telephone) reasonably believed by it to be genuine and to have been signed, sent
or made by the proper person or persons, and upon opinions and advice of legal
counsel (including itself or counsel for any party hereto), independent public
accountants and other experts selected by the Indemnity Escrow Agent.

Section 12. Status of the Indemnity Escrow Agent, Etc. The Indemnity
Escrow Agent is acting under this Agreement as a stakeholder only and shall be
considered an independent contractor with respect to each Beneficiary. No term
or provision of this Agreement is intended to create, nor shall any such term or
provision be deemed to have created, any principal-agent, trust, joint venture,
partnership, debtor-creditor or attorney-client relationship between or among
the Indemnity Escrow Agent and any of the Beneficiaries. This Agreement shall
not be deemed to prohibit or in any way restrict the Indemnity Escrow Agent's
representation of any Beneficiary, who may be advised by the Indemnity Escrow
Agent on any and all matters pertaining to this Agreement and the Escrow
Deposit. To the extent one or more of the Beneficiaries have been, are and/or
will be represented by the Indemnity Escrow Agent, each such Beneficiary hereby
waives any conflict of interest and irrevocably authorizes and directs the
Indemnity Escrow Agent to carry out the terms and provisions of this Agreement,
in each case without regard to any representation of any such Beneficiary, with
deference to no party and fairly as to all parties, and irrespective of the
impact upon or any conflicting communication from any such Beneficiary. The
Indemnity Escrow Agent's only duties are those expressly set forth in this
Agreement, and each Beneficiary authorizes the Indemnity Escrow Agent to perform
those duties in accordance with its usual practices in holding funds and
documents of its own or those of other escrows. The Indemnity Escrow Agent may
exercise or otherwise enforce any of its rights, powers, privileges, remedies
and interests under this Agreement and applicable law or perform any of its
duties under this Agreement by or through its directors, officers, partners,
employees, attorneys, agents or designees.

Section 13. Exculpation. The Indemnity Escrow Agent and its designees,
and their respective directors, officers, partners, counsel, employees,
attorneys and agents, shall not incur any liability whatsoever for (a) the
investment or disposition of funds, the holding or delivery of documents or the
taking of any other action, in each case in accordance with the terms and
provisions of this Agreement, (b) any mistake or error in judgment, (c)
compliance with any applicable law or any attachment, order or other directive
of any court or other authority (irrespective of any conflicting term or
provision of this Agreement), or (d) any other act or omission of any other
independent person engaged by the Indemnity Escrow Agent in connection with this
Agreement; and each Beneficiary hereby waives any and all claims and actions
whatsoever against the Indemnity Escrow Agent and its designees, and their
respective directors, officers, partners, employees, attorneys and agents,
arising out of or related directly or indirectly to any and all of the foregoing
acts, omissions and circumstances. Furthermore, the Indemnity Escrow Agent and
its designees, and their respective directors, officers, partners, employees,
attorneys and agents, shall not incur any liability (other than for a person's
own acts or omissions breaching a duty or contractual obligation owed to the
claimant and amounting to gross negligence or willful

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misconduct as finally determined pursuant to applicable law by a governmental
authority having jurisdiction) for other acts and omissions arising out of or
related directly or indirectly to this Agreement or the Escrow Deposit; and each
Beneficiary hereby expressly waives any and all claims and actions (other than
those attributable to a person's own acts or omissions breaching a duty or
contractual obligation owed to the claimant and amounting to gross negligence or
willful misconduct as finally determined pursuant to applicable law by a
governmental authority having jurisdiction) against the Indemnity Escrow Agent
and its designees, and their respective directors, officers, partners,
employees, attorneys and agents, arising out of or related directly or
indirectly to any and all of the foregoing acts, omissions and circumstances.

Section 14. Indemnification. The Indemnity Escrow Agent and its
designees, and their respective directors, officers, partners, employees,
attorneys and agents, shall be indemnified, reimbursed, held harmless and, at
the request of the Indemnity Escrow Agent, defended by the Beneficiaries,
jointly and severally, from and against any and all claims, liabilities, losses
and expenses (including, without limitation, the disbursements, expenses and
fees of their respective attorneys) that may be imposed upon, incurred by, or
asserted against any of them, or any of their respective directors, officers,
partners, employees, attorneys or agents, arising out of or related directly or
indirectly to this Agreement or the Escrow Deposit, except such as are
occasioned by the indemnified person's own acts and omissions breaching a duty
or contractual obligation owed to the claimant and amounting to gross negligence
or willful misconduct as finally determined pursuant to applicable law by a
governmental authority having jurisdiction.

Section 15. Notice. Any notice, request, demand or other communication
permitted or required to be given hereunder shall be in writing, shall be signed
by the party giving it, shall be sent by one of the following means to the
addressee at the address set forth above (or at such other address as shall be
designated hereunder by notice to the other parties and persons receiving
copies, effective upon actual receipt) and shall be deemed conclusively to have
been given: (i) on the first business day following the day timely deposited
with Federal Express (or other equivalent national overnight courier) or United
States Express Mail for overnight delivery, with the cost of overnight delivery
prepaid or for the account of the sender; (ii) on the fifth business day
following the day duly sent by certified or registered United States mail,
postage prepaid and return receipt requested, or (iii) when otherwise actually
received by the addressee on a business day (or on the next business day if
received after the close of normal business hours or on any non-business day).
Any notice, request, demand or other communication instead may be sent by
telecopy, with the cost of transmission prepaid or for the account of the
sender, and shall be deemed conclusively to have been given on the first
business day following the day duly sent, provided that the giving party also
sends a copy thereof by one of the other means referenced above. Refusal to
accept delivery of any item shall be deemed to be receipt of such item by the
refusing party. Copies may be sent by regular first-class mail, postage prepaid,
to such person(s) as a party may direct from time to time by notice to the
others, but failure or delay in sending copies shall not affect the validity of
any such notice, request, demand or other communication so given to a party.

Section 16. Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.

Section 17. Governing Law. This Agreement: has been executed and
delivered in the State of New York; and shall be governed by and construed in
accordance with the applicable laws pertaining in the State of New York (other
than those that would defer to the substantive laws of another jurisdiction).
Without in any way limiting the preceding choice of law, the parties intend
(among other things) to thereby avail themselves of the benefit of Section 5-
1401 of the General Obligations Law of the State of New York.

Section 18. Severability. In the event that any term or provision of
this Agreement shall be finally determined to be superseded, invalid, illegal or
otherwise unenforceable pursuant to applicable law by a governmental authority
having jurisdiction and venue, that determination shall not impair or otherwise
affect the validity, legality or enforceability (a) by or before that authority
of the remaining terms and provisions of this Agreement, which shall be enforced
as if the unenforceable term or provision were deleted, or (b) by or before any
other authority of any of the terms and provisions of this Agreement.

Section 19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which may be executed by one or more of the parties
hereto, but all of which, when taken together, shall constitute but one
agreement binding upon all of the parties hereto.

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Section 20. Effective Date. This Agreement shall be effective on the
date as of which this Agreement shall be executed by all the parties hereto and
delivered to the Indemnity Escrow Agent.

Section 21. Successors and Assigns; Assignment. Whenever in this
Agreement reference is made to any party, such reference shall be deemed to
include the successors, assigns, heirs and legal representatives of such party,
and, without limiting the generality of the foregoing, all representations,
warranties, covenants and other agreements made by or on behalf of each
Beneficiary in this Agreement shall inure to the benefit of the successors and
assigns of the Indemnity Escrow Agent; provided, however, that nothing herein
shall be deemed to authorize or permit any Beneficiary to assign any of its
rights or obligations hereunder to any other person (whether or not an affiliate
of the Beneficiary), and each Beneficiary covenants and agrees that it shall not
make any such assignment.

Section 22. No Third Party Rights. The representations, warranties and
other terms and provisions of this Agreement are for the exclusive benefit of
the parties hereto, and no other person, including creditors of any Beneficiary,
shall have any right or claim against any party by reason of any of those terms
and provisions or be entitled to enforce any of those terms and provisions
against any party.

Section 23. No Waiver by Action, Etc. Any waiver or consent respecting
any representation, warranty, covenant or other term or provision of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given and shall not be deemed, regardless of frequency given,
to be a further or continuing waiver or consent. The failure or delay of a party
at any time or times to require performance of, or to exercise its rights with
respect to, any representation, warranty, covenant or other term or provision of
this Agreement in no manner (except as otherwise expressly provided herein)
shall affect its right at a later time to enforce any such term or provision. No
notice to or demand on any Party in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
All rights, powers, privileges, remedies and interests of the Indemnity Escrow
Agent under this Agreement are cumulative and not alternatives, and they are in
addition to and shall not limit (except as otherwise expressly provided herein)
any other right, power, privilege, remedy or interest of the Indemnity Escrow
Agent under this Agreement or applicable law.

Section 24. Modification, Amendment, Etc. Each and every modification
and amendment of this Agreement shall be in writing and signed by all of the
parties hereto, and each and every waiver of, or consent to any departure from,
any covenant, representation, warranty or other provision of this Agreement
shall be in writing and signed by each party affected thereby.

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Section 25. Entire Agreement. This Agreement contains the entire
agreement of the parties and supersedes all other representations, agreements
and understandings, oral or otherwise, among the parties with respect to the
matters contained herein.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first written above.

THE BENEFICIARIES:                         PIA MERCHANDISING SERVICES, INC.

By: _________________________________
Name:
Title:

SG ACQUISITION, INC.

By: _________________________________
Name:
Title:

PIA MERCHANDISING CO., INC.

By: _________________________________
Name:
Title:

SPAR ACQUISITION, INC., a Delaware 
corporation

By: _________________________________
Name:
Title:

SPAR MARKETING, INC., a Delaware 
corporation

By: _________________________________
Name:
Title:

SPAR MARKETING FORCE, INC.

By: _________________________________
Name:
Title:

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242

SPAR, INC.

By: _________________________________
Name:
Title:

SPAR/BURGOYNE RETAIL SERVICES, INC.

By: _________________________________
Name:
Title:

SPAR  MARKETING, INC.,
a Nevada corporation

By: _________________________________
Name:
Title:

SPAR INCENTIVE MARKETING, INC.

By: _________________________________
Name:
Title:

SPAR MCI PERFORMANCE GROUP, INC.

By: _________________________________
Name:
Title:

SPAR TRADEMARKS, INC.

By: _________________________________
Name:
Title:

_________________________________
ROBERT G. BROWN

_________________________________
WILLIAM H. BARTELS

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THE INDEMNITY ESCROW AGENT:                PARKER CHAPIN FLATTAU & KLIMPL, LLP

By:__________________________________

___________________________________
ROBERT G. BROWN

___________________________________
WILLIAM H. BARTELS

THE INDEMNITY ESCROW AGENT:                PARKER CHAPIN FLATTAU & KLIMPL, LLP

By: _______________________________

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(Preliminary Copy)

ANNEX B

FORM OF
AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
PIA MERCHANDISING SERVICES, INC.

Article FIRST of the Certificate of Incorporation of PIA Merchandising
Services, Inc. is amended to read in full as follows:

FIRST: The name of the Corporation is SPAR Group, Inc.

Article FOURTH of the Certificate of Incorporation of PIA Merchandising
Services, Inc. is amended to read in full as follows:

FOURTH: The total number of shares of stock which the
Corporation shall have the authority to issue is 50,000,000, consisting
of 47,000,00 shares of common stock, par value $.01 per share, and
3,000,000 shares of preferred stock, par value $.01 per share. The
preferred stock may be issued at any time, and from time to time, in one
or more series pursuant hereto or to a resolution or resolutions
providing for such issue duly adopted by the board of directors (the
"Board") of the Corporation (authority to do so being hereby expressly
vested in the Board), and such resolution or resolutions shall also set
forth the voting powers, full or limited, or none, of each such series
of preferred stock and shall fix the designations, preferences and
relative, participating, optional or other special rights and
qualifications, limitations or restrictions of each such series of
preferred stock.

Article TENTH of the Certificate of Incorporation of PIA Merchandising
Services, Inc. is hereby deleted and Article ELEVENTH is hereby renumbered as
Article TENTH.

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245
(Preliminary Copy)

ANNEX C

PIA MERCHANDISING SERVICES, INC.
AMENDED AND RESTATED 1995 STOCK OPTION PLAN

Section 1. Description of this Plan. This is the 1995 Stock Option Plan,
dated December 5, 1995, as amended and restated effective as of February 28,
1999 (this "Plan"), of PIA Merchandising Services, Inc., a Delaware corporation
(the "Company"). Under this Plan, officers, directors, key employees and
consultants of the Company or its wholly-owned Subsidiaries (as defined below),
and other persons directly or indirectly providing valuable services to the
Company and the Subsidiaries, to be selected as set forth below, may be granted
options ("Options") to purchase shares of the common stock, par value $0.01 per
share, of the Company ("Common Stock"). This Plan permits the granting of both
Options that qualify for treatment as incentive stock options ("Incentive Stock
Options") under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), and Options that do not qualify as Incentive Stock Options
("Nonqualified Stock Options"). For purposes of this Plan, the term "Subsidiary"
shall mean any corporation or other entity of which 50% or more of the voting
stock (or equivalent thereof) is owned by the Company or by another Subsidiary
(as so defined) of the Company.

Section 2. Purpose of this Plan. The purpose of this Plan and of
granting Options to specified persons is to further the growth, development and
financial success of the Company and the Subsidiaries by providing additional
incentives to certain officers, directors, key employees and consultants of, and
other persons directly or indirectly providing valuable services to, the Company
and the Subsidiaries. By assisting such persons in acquiring shares of Common
Stock, the Company can ensure that such persons will themselves benefit directly
from the Company's and the Subsidiaries' growth, development and financial
success.

Section 3. Eligibility. The persons who shall be eligible to receive
grants of Options under this Plan shall be, at the time of the grant, the
officers, directors, key employees and consultants of, and other persons
directly or indirectly providing valuable services to, the Company and the
Subsidiaries. Notwithstanding the preceding sentence, only persons who are
employees of the Company and the Subsidiaries shall be eligible to receive
grants of Incentive Stock Options under this Plan. A person who holds an Option
is herein referred to as a "Participant." More than one Option may be granted to
any Participant, grants of Options may be made on more than one occasion to any
Participant and any individual Participant may receive grants of Options on up
to 1,000,000 shares of Common Stock. Such grants of Options under this Plan may
include an Incentive Stock Option, Nonqualified Stock Option, or any combination
thereof.

Section 4. Administration. This Plan shall be administered by the Board
of Directors (the "Board") or by the Compensation Committee established by the
Board. (The entity actually administering this Plan at any time, whether the
Board or the Compensation Committee, is referred to herein as the "Committee.")
If the Compensation Committee is authorized to administer this Plan at any time,
it shall, if possible, be composed solely of two or more Non-Employee Directors,
as such term is defined in Rule 16b-3(b)(3) under the Securities Exchange Act of
1934 (the "Exchange Act") and of persons who are "outside directors" within the
meaning of Code Section 162(m). The Committee shall meet at such times and
places as it determines and may meet through a telephone conference call. A
majority of its members shall constitute a quorum, and the decision of a
majority of those present at any meeting at which a quorum is present shall
constitute the decision of the Committee. A memorandum signed by all the members
of the Committee shall constitute the decision of the Committee without
necessity, in such event, for holding an actual meeting. The Committee is
authorized and empowered to administer this Plan and, subject to this Plan (a)
to select the Participants, to specify the number of shares of Common Stock with
respect to which Options are granted to each Participant, to specify the terms
of the Options and whether such Options shall be Incentive Stock Options or
Nonqualified Stock Options, and in general to grant Options; (b) to determine
the dates upon which Options shall be

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(Preliminary Copy)

granted and the terms and conditions thereof in a manner consistent with this
Plan, which terms and conditions need not be identical as to the various Options
granted; (c) to interpret this Plan; (d) to prescribe, amend and rescind rules
relating to this Plan; (e) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted by the Committee; (f) to determine the rights and obligations of
Participants under this Plan; (g) to specify the Option Price (as hereinafter
defined); (h) to accelerate the time during which an Option may be exercised,
including, but not limited to, upon a change of control of the Company, and to
otherwise accelerate the time or extend the post-termination exercise period
during which an Option may be exercised, in each case notwithstanding the
provisions in the Option Agreement (as defined in Section 13) stating the time
during which it may be exercised; and (i) to make all other determinations
deemed necessary or advisable for the administration of this Plan. The good
faith interpretation and construction by the Committee of any provision of this
Plan or of any Option granted under it shall be final, conclusive and binding.
No member of the Committee shall be liable for any action or determination made
in good faith with respect to this Plan or any Option granted under it.

Section 5. Shares Subject to this Plan. The number of shares of Common
Stock in respect of which Options may be granted under this Plan is 3,500,000,
subject to adjustment as provided in Section 12 hereof. Upon the expiration,
termination or cancellation, in whole or in part, for any reason of an
outstanding Option or any portion thereof which shall not have vested or shall
not have been exercised in full, any shares of Common Stock then remaining
unissued which shall have been reserved for issuance upon such exercise shall
again become available for the granting of additional Options under this Plan.
Notwithstanding the foregoing, shares subject to a terminated Option shall
continue to be considered to be outstanding for purposes of determining the
maximum number of shares that may be issued to a Participant. Similarly, the
repricing of an Option will be considered the grant of a new Option for this
purpose.

Section 6. Option Price. Except as provided in Section 12 hereof, the
purchase price per share (the "Option Price") of the shares of Common Stock
underlying each Incentive Stock Option shall be not less than the fair market
value of such shares on the date of granting of the Incentive Stock Option;
provided, however, that if the Participant is a ten percent (10%) stockholder of
the Company as detailed in Code Section 422(b)(6) at the time such Option is
granted (determined after taking into account the constructive ownership rules
of Section 424(d) of the Code), the Option Price shall be not less than 110
percent (110%) of said fair market value. The Option Price of the shares of
Common Stock underlying each Nonqualified Stock Option shall be not less than
eighty-five percent (85%) of the fair market value of such shares on the date of
granting of the Nonqualified Stock Option; provided, however, that with respect
to any Nonqualified Stock Option granted to a "covered employee" (as such term
is defined in Section 162(m) of the Code), the Option Price of the shares of
Common Stock underlying such Nonqualified Stock Option shall be not less than
the fair market value of such shares on the date of granting of such
Nonqualified Stock Option. The fair market value of such shares shall, unless
otherwise expressly determined by the Committee for good reason, shall be (i)
the last reported sale price of the Common Stock on the Nasdaq National Market,
if the Common Stock is quoted on the Nasdaq National Market, (ii) the last
reported sale price of the Common Stock on a national securities exchange, if
the Common Stock is listed on a national securities exchange, or (iii) if the
Common Stock is not so reported or listed, the average of the last reported bid
and asked price of the Common Stock in such market as the Common Stock may be
traded.

Section 7. Restrictions on Grants; Vesting of Options. Notwithstanding
any other provisions set forth herein or in any Option Agreement, no Options may
be granted under this Plan subsequent to December 5, 2005. All Options granted
pursuant to this Plan shall be granted pursuant to Option Agreements, as
described in Section 13 hereof. The vesting of all Options may be based on the
Company's attaining of performance criteria as specified at the time of the
granting thereof and/or may also be based on the passage of time. The Committee
shall determine the performance criteria, the performance measurement period and
the vesting schedule applicable to each Option or group of Options in a 
schedule, a copy of which shall be filed with the records of the Committee and
attached to each Option Agreement to which the same applies. The performance
criteria, the performance measurement period and the vesting 

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schedule and period of exercisability need not be identical for all Options
granted hereunder. Following the conclusion of each applicable performance
measurement period, the Committee shall determine, in its sole good faith
judgment, the extent, if at all, that each Option subject thereto shall have
vested based upon the applicable performance criteria and vesting schedule. To
the extent any Option shall not have vested, because the applicable performance
criteria has not been met, and does not also vest based on the passage of time,
it shall, to that extent, automatically terminate and cease to be exercisable to
such extent notwithstanding the stated term during which it may be exercised.
The Committee shall promptly notify each affected Participant of such
determination. The Committee may periodically review the performance criteria
applicable to any Option or Options and, in its sole good faith judgment, may
adjust the same to reflect unanticipated major events, such as catastrophic
occurrences, mergers, acquisitions and the like.

Section 8. Special Limitations on Incentive Stock Options. To the extent
that the aggregate fair market value (determined at the time the respective
Incentive Stock Option is granted) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year under all incentive stock option plans of the Company
and the Subsidiaries exceeds $100,000, or such other limit as may be required by
the Code, such excess Incentive Stock Options shall be treated as Nonqualified
Stock Options. The Committee shall determine, in accordance with applicable
provisions of the Code, Treasury Regulations and other administrative
pronouncements, which of a Participant's Incentive Stock Options will not
constitute Incentive Stock Options because of such limitation and shall notify
the Participant of such determination as soon as practicable after such
determination.

Section 9. Exercise of Options. Subject to all other provisions of this
Plan, once vested, each Option shall be exercisable for the full number of
shares of Common Stock subject thereto, or any part thereof, in such
installments and at such intervals as the Committee may determine in granting
such Option, provided that no option may be exercisable subsequent to its
termination date. Once vested, and prior to its termination date, an Option may
be exercised by the Participant by giving written notice to the Company
specifying the number of full shares to be purchased and accompanied by payment
of the full purchase price therefor in cash, by check or in such other form of
lawful consideration as the Committee may approve from time to time, including,
without limitation and in the sole discretion of the Committee, the assignment
and transfer by the Participant to the Company of outstanding shares of Common
Stock theretofore held by the Participant. In connection with such assignment
and transfer, the Company shall have the right to deduct any fractional share to
be paid to the Participant. Once vested, and prior to its termination date, an
Option may only be exercised by the Participant or, in the event of death of the
Participant, by the person or persons (including the deceased Participant's
estate) to whom the deceased Participant's rights under such Option shall have
passed by will or the laws of descent and distribution. Notwithstanding the
foregoing in the immediately preceding sentence, in the event of disability
(within the meaning of Section 22(e)(3) of the Code) of a Participant, a
designee, or if the Participant has no designee, the legal representative, of
such Participant may exercise the Option on behalf of such Participant (provided
such Option would have been exercisable by such Participant) until the right to
exercise such Option expires, as set forth in such Participant's particular
Option Agreement.

Section 10. Issuance of Common Stock. The Company's obligation to issue
shares of its Common Stock upon exercise of an Option is expressly conditioned
upon the compliance by the Company with any registration or other qualification
obligations with respect to such shares under any state or federal law or
rulings and regulations of any government regulatory body and the making of such
investment representations or other representations and undertakings by the
Participant (or the Participant's legal representative, heir or legatee, as the
case may be) in order to comply with the requirements of any exemption from any
such registration or other qualification obligations with respect to such shares
which the Company in its sole discretion shall deem necessary or advisable. Such
required representations and undertakings may include representations and
agreements that such Participant (or the Participant's legal representative,
heir or legatee): (a) is purchasing such shares for investment and not with any
present intention of selling or otherwise disposing of such shares; and (b)
agrees to have a legend placed upon the face and reverse of any certificates
evidencing such shares (or, if applicable, an appropriate data entry made in the
ownership records of the Company) setting forth (i) any representations and
undertakings which such Participant has given to the Company

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or a reference thereto, and (ii) that, prior to effecting any sale or other
disposition of any such shares, the Participant must furnish to the Company an
opinion of counsel, satisfactory to the Company and its counsel, to the effect
that such sale or disposition will not violate the applicable requirements of
state and federal laws and regulatory agencies; provided, however, that any such
legend or data entry shall be removed when no longer applicable. The Company,
during the term of this Plan, will at all times reserve and keep available, and
will use its reasonable efforts to obtain from any regulatory body having
jurisdiction any requisite authority in order to issue and sell such number of
shares of Common Stock as shall be sufficient to satisfy the requirements of
this Plan. The inability of the Company to obtain, from any regulatory body
having jurisdiction, authority reasonably deemed by the Company's counsel to be
necessary for the lawful issuance and sale of any shares hereunder shall relieve
the Company of any liability in respect of the non-issuance or sale of such
shares as to which such requisite authority shall not have been obtained.

Section 11. Non-transferability. Except as otherwise provided below, an
Option may not be sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent or distribution.
The Committee may, in its discretion, authorize all or a portion of any
Nonqualified Stock Option granted to a Participant to be on terms which permit
transfer by such Participant to (a) the spouse, children or grandchildren of the
optionee ("Immediate Family Members"), (b) a trust or trusts for the exclusive
benefit of such Immediate Family Members, or (c) a partnership in which such
Immediate Family Members are the only partners, provided that (i) there may be
no consideration for any such transfer, and (ii) the Option Agreement (defined
below) pursuant to which such Options are granted must be approved by the
Committee, and must expressly provide for transferability in a manner consistent
with this Section 11. Following transfer, any such Options shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of Sections 9 and 10 hereof the term
"Participants" shall be deemed to refer to the transferee. The events of
termination of employment of Section 25 hereof shall continue to be applied with
respect to the original Participant, following which the Options shall be
exercisable by the transferee only to the extent, and for the periods specified
in the Option Agreement. Any permitted transferee shall be required prior to any
transfer of an Option or shares of Common Stock acquired pursuant to the
exercise of an Option to execute a written undertaking to be bound by the
provisions of the applicable Option Agreement.

Section 12. Adjustments Upon Capitalization and Corporate Changes;
Substitute Options. Subject to Section 15(b) hereof, if the outstanding shares
of the Common Stock of the Company are changed into, or exchanged for, a
different number or kind of shares or securities of the Company through
reorganization, merger, recapitalization or reclassification, or if the number
of outstanding shares is changed through a stock split, stock dividend, stock
consolidation or like capital adjustment, or if the Company makes a distribution
in partial liquidation or any other comparable extraordinary distribution with
respect to its Common Stock, an appropriate adjustment shall be made by the
Committee in the number, kind or Option Price of shares as to which Options may
be granted. A corresponding adjustment shall likewise be made in the number,
kind or Option Price of shares with respect to which unexercised Options have
theretofore been granted. Any such adjustment in an outstanding Option, however,
shall be made without change in the total price applicable to the unexercised
portion of the Option but with a corresponding adjustment in the price for each
share covered by the Option. In making such adjustments, or in determining that
no such adjustments are necessary, the Committee may rely upon the advice of
counsel and accountants to the Company, and the good faith determination of the
Committee shall be final, conclusive and binding. No fractional shares of stock
shall be issued under this Plan on account of any such adjustment.

If the Company at any time should succeed to the business of another
corporation through a merger or consolidation, or through the acquisition of
stock or assets of such corporation or its subsidiaries, Options may be granted
under this Plan to option holders of such corporation or its subsidiaries, in
substitution for options to purchase stock of such corporation held by them at
the time of succession. The Committee, in its sole and absolute discretion,
shall determine the extent to which such substitute Options shall be granted (if
at all), the person or persons to receive such substitute Options (who need not
be all option holders of such corporation), the number of Options to be received

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(Preliminary Copy)

by each such person, the Option Price of such Option (which may be determined
without regard to Section 6 hereof) and the terms and conditions of such
substitute Options; provided, however, that the Option Price of each such
substituted Option which is an Incentive Stock Option shall be an amount such
that, in the sole and absolute judgment of the Committee (and in compliance with
Section 424(a) of the Code in the case of an Incentive Stock Option), the
economic benefit provided by such Option is not greater than the economic
benefit represented by the option in the acquired corporation as of the date of
the Company's acquisition of such corporation.

Section 13. Option Agreement. Each Option granted under this Plan shall
be evidenced by a written stock option agreement (an "Option Agreement")
executed by the Company and the Participant which (a) shall contain each of the
provisions and agreements herein specifically required to be contained therein,
(b) shall indicate whether such Option is to be an Incentive Stock Option or a
Nonqualified Stock Option, and if an Incentive Stock Option, shall contain terms
and conditions permitting such Option to qualify for treatment as an incentive
stock option under Section 422 of the Code, and (c) may contain such other terms
and conditions as the Committee deems desirable and which are not inconsistent
with this Plan.

Section 14. Rights as a Stockholder. A Participant or permitted
transferee of a Participant shall have no rights as a stockholder with respect
to any shares covered by an Option until the date of an entry evidencing such
ownership is made in the stock transfer books of the Company (the "Exercise
Date"). No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the Exercise Date.

Section 15. Termination of Options, Acceleration of Options.

(a) Each Option shall terminate and expire, and shall no longer
be subject to exercise, as the Committee may determine in granting such Option,
and each Option granted under this Plan shall set forth a termination date
thereof, which, subject to earlier termination as set forth in Section 7 hereof
or this Section 15, or as otherwise set forth in any particular Option
Agreement, with respect to Nonqualified Stock Options, shall be no later than
ten years from the date such Option is granted, and with respect to Incentive
Stock Options, shall also be no later than ten years from the date such Option
is granted unless the Participant is a ten percent (10%) stockholder of the
Company (as described in Section 422(b)(6) of the Code, and determined after
taking into account the constructive ownership rules of Section 424(d) of the
Code) at the time such Option is granted, in which case the Option shall
terminate and expire no later than five years from the date of the grant
thereof. An Incentive Stock Option shall contain any additional termination
events required by Section 422 of the Code.

(b) Subject to Section 15(c) hereof, unless the Committee shall,
in its sole discretion, determine otherwise, upon (i) the dissolution,
liquidation or sale of all or substantially all of the business, properties and
assets of the Company, (ii) upon any reorganization, merger or consolidation in
which the Company does not survive, (iii) upon any reorganization, merger,
consolidation or exchange of securities in which the Company does survive and
any of the Company's stockholders have the opportunity to receive cash,
securities of another corporation and/or other property in exchange for their
capital stock of the Company, or (iv) upon any acquisition by any person or
group (as defined in Section 13(d) of the Securities Act of 1934) of beneficial
ownership of more than fifty percent (50%) of the Company's then outstanding
shares of Common Stock (each of the events described in clauses (i), (ii), (iii)
or (iv) is referred to herein individually as an "Extraordinary Event"), this
Plan and each outstanding Option shall terminate. In such event each Participant
shall have the right until 10 days before the effective date of the
Extraordinary Event to exercise, in whole or in part, any unexpired Option or
Options issued to the Participant, to the extent that said Option is then vested
and exercisable pursuant to the provisions of said Option or Options and of
Section 7 hereof. The termination of employment of, or the termination of a
consulting or other relationship with, a Participant for any reason shall not
accelerate or otherwise affect the number of shares with respect to which an
Option may be exercised;

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(Preliminary Copy)

provided, however, that the Option may only be exercised with respect to that
number of shares which could have been purchased under the Option had the Option
been exercised by the Participant on the date of such termination.

(c) Notwithstanding the provisions of Section 7 or paragraphs (a)
or (b) of this Section 15, or any provision to the contrary contained in a
particular Option Agreement, the Committee, in its sole discretion, at any time,
or from time to time, may elect to accelerate the vesting of all or any portion
of any Option then outstanding. The decision by the Committee to accelerate an
Option or to decline to accelerate an Option shall be final, conclusive and
binding. In the event of the acceleration of the exercisability of Options as
the result of a decision by the Committee pursuant to this Section 15(c), each
outstanding Option so accelerated shall be exercisable for a period from and
after the date of such acceleration and upon such other terms and conditions as
the Committee may determine in its sole discretion; provided, however, that such
terms and conditions (other than terms and conditions relating solely to the
acceleration of exercisability and the related termination of an Option) may not
adversely affect the rights of any Participant without the consent of the
Participant so adversely affected. Any outstanding Option which has not been
exercised by the holder at the end of such stated period shall terminate
automatically and become null and void.

Section 16. Withholding of Taxes. The Company, or a Subsidiary, as the
case may be, may deduct and withhold from the wages, salary, bonus and other
income paid by the Company or such Subsidiary to the Participant the requisite
tax upon the amount of taxable income, if any, recognized by the Participant in
connection with the exercise in whole or in part of any Option, or the sale of
Common Stock issued to the Participant upon the exercise of an Option, as may be
required from time to time under any federal or state tax laws and regulations.
This withholding of tax shall be made from the Company's (or such Subsidiaries')
concurrent or next payment of wages, salary, bonus or other income to the
Participant or by payment to the Company (or such Subsidiaries) by the
Participant of the required withholding tax, as the Committee may determine. The
Company may permit the Participant to elect to surrender, or authorize the
Company to withhold, shares of Common Stock (valued at their fair market value
on the date of surrender or withholding of such shares) in satisfaction of the
Company's withholding obligation, however, no fractional shares of Common Stock
shall be delivered, nor shall any cash in lieu of fractional shares be paid, by
the Company. The Company shall have the right to deduct fractional shares to be
paid to the Participant as a result of such surrender or withholding of shares.

Section 17. Effectiveness and Termination of this Plan. This Plan became
effective on the date on which it was adopted by the Board and was approved by
approved by the stockholders of the Company within 12 months of December 5,
1995. This Plan shall terminate at the earliest of the time when all shares of
Common Stock which may be issued hereunder have been so issued, or at such time
as set forth in Section 15(b) hereof; provided, however, that the Board may in
its sole discretion terminate this Plan at any other time. Unless earlier
terminated by the Board, this Plan shall terminate on December 5, 2005. Subject
to Section 15(b) hereof, no such termination shall in any way affect any Option
then outstanding.

Section 18. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Committee makes the
determination granting such Option. Notice of the determination shall be given
to each Participant to whom an Option is so granted within a reasonable time
after the date of such grant.

Section 19. Amendment of this Plan. The Board may (a) make such changes
in the terms and conditions of granted Options as it deems advisable, provided
each Participant adversely affected by such change consents thereto, and (b)
make such amendments to this Plan as it deems advisable. Such amendments and
changes shall include, but not be limited to, acceleration of the time at which
an Option may be exercised. The Board may obtain stockholder approval of any
amendment to this Plan for any reason (including in order to take advantage of
certain exemptions under Code Section 162(m) or Code Section 422), but shall not
be required to do so unless required

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(Preliminary Copy)

by law or by the rules of the Nasdaq National Market or any stock exchange on
which the Common Stock may then be listed.

Section 20. Transfers and Leaves of Absence. For purposes of this Plan,
(a) a transfer of a Participant's employment or consulting relationship, without
an intervening period, between the Company and a Subsidiary shall not be deemed
a termination of employment or a termination of a consulting relationship, and
(b) a Participant who is granted in writing a leave of absence shall be deemed
to have remained in the employ of, or in a consulting relationship with, the
Company (or a Subsidiary, whichever is applicable) during such leave of absence.
Notwithstanding the foregoing, for purposes of determining the exercisability of
an Incentive Stock Option, a Participant who is on a leave of absence that
exceeds 90 days will be considered to have terminated his or her employment on
the 91st day of the leave of absence, unless the Participant's rights to
reemployment are guaranteed by statute or contract.

Section 21. No Obligation to Exercise Option. The granting of an Option
shall impose no obligation on the Participant to exercise such Option.

Section 22. Governing Law. This Plan and any Option granted pursuant to
this Plan shall be construed under and governed by the laws of the State of
Delaware without regard to conflict of law provisions thereof.

Section 23. Not an Employment or Other Agreement. Nothing contained in
this Plan or in any Option Agreement shall confer, intend to confer or imply any
rights of employment or any rights to any other relationship or rights to
continued employment by, or rights to a continued consulting relationship with,
the Company or any Subsidiaries in favor of any Participant or limit the ability
of the Company or any Subsidiaries to terminate, with or without cause, in its
sole and absolute discretion, the employment of, or relationship with, any
Participant, subject to the terms of any written employment or other agreement
to which a Participant is a party.

Section 24. Termination of Employment. The terms and conditions under
which an Option may be exercised after a Participant's termination of employment
shall be determined by the Committee and shall be specified in the Option
Agreement. The conditions under which such post-termination exercises shall be
permitted with respect to Incentive Stock Options shall be determined in
accordance with the provisions of Section 422 of the Code.

Section 25. Indemnification. In addition to such other rights of
indemnification as they may have as directors, the members of the Committee
shall be indemnified by the Company to the fullest extent permitted by law
against the reasonable expenses, including reasonable attorneys' fees, actually
and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with this Plan or any Option granted thereunder, and against all
amounts paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such Committee member is not entitled to
indemnification under applicable law; provided that within 60 days after
institution of any such action, suit or proceeding such Committee member shall
in writing offer the Company the opportunity, at the Company's expense, to
handle and defend the same.

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ANNEX D

OPINION OF ING BARING FURMAN SELZ LLC

[Letterhead of ING Baring Furman Selz LLC]

February 28, 1999

The Board of Directors
PIA Merchandising Services, Inc.
19900 MacArthur Boulevard
Suite 900
Irvine, CA  92612

Gentlemen:

We understand that PIA Merchandising Services, Inc. (the "Company") and
SPAR Acquisition, Inc. ("SPAR") propose to enter into an agreement and plan of
merger (the "Agreement"), pursuant to which a wholly-owned subsidiary of the
Company will be merged with and into SPAR (the "Merger") in a transaction in
which each outstanding share and each outstanding option to purchase each such
share of common stock of SPAR, $.01 par value ("SPAR Common Stock"), will be
converted into the right to receive one share (the "Exchange Ratio") of common
stock of the Company, $.01 par value (the "Company Common Stock"), for an
aggregate of approximately 12.3 million shares of Company Common Stock or
approximately 2.25 times the number of shares of Company Common Stock currently
outstanding, based on the approximately 12.3 million outstanding shares and
options to purchase shares of SPAR Common Stock that you have advised us will be
outstanding immediately prior to the Merger, but excluding options to purchase
shares of Company Common Stock currently outstanding or to be granted upon the
closing of the Merger. Based on the foregoing, the former holders of SPAR Common
Stock and options to purchase such Common Stock will hold, or have the right to
acquire, approximately 69.3% of the outstanding shares of Company Common Stock
upon completion of the Merger. The Merger is subject to, among other things, the
approval of certain matters by the holders of a majority of the outstanding
shares of Company Common Stock and SPAR Common Stock voting at a special meeting
of stockholders to be called for such purpose. The terms and conditions of the
Merger will be set forth in more detail in the Agreement.

You have asked us whether, in our opinion, the Exchange Ratio is fair
from a financial point view to the stockholders of the Company.

In conducting our analysis and arriving at our opinion as described
herein, we have reviewed and analyzed, among other things, the following:

(i)     a draft of the Agreement as of February 27, 1999 by and between
the Company and SPAR;

(ii)    drafts of the other Merger Documents as defined in the
Agreement, as of February 27, 1999;

(iii)   SPAR's audited financial statements for the two fiscal years
ended March 31, 1998 and unaudited financial information for the
nine months ended December 31, 1998;

(iv)    the Asset Purchase Agreement (the "MCI Agreement") by and
between MCI Performance Group, Inc. ("MCI"), SPAR MCI
Performance Group, Inc. and John H. Wile dated December 22,
1998, as amended by a First Amendment dated January 15, 1999;

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253
The Board of Directors
PIA Merchandising Services, Inc.
February 28, 1999
Page 2

(v)     MCI's audited financial statements for the two fiscal years
ended December 31, 1997 and unaudited financial statements for
the fiscal year ended December 31, 1998;

(vi)    the Company's Forms 10-K and related financial information for
the two fiscal years ended December 31, 1997; the Company's Form
10-Q and related unaudited financial statements for the nine
months ended October 2, 1998; and unaudited financial
information for the fiscal year ended December 31, 1998;

(vii)   certain information, including financial forecasts, relating to
the business, earnings, cash flow, assets, liabilities and
prospects of SPAR and the Company, as well as related cost
savings and expenses expected to result from the Merger
furnished to us by SPAR and the Company, respectively;

(viii)  conducted discussions with members of senior management and
representatives of SPAR and the Company concerning their
respective businesses and prospects before and after giving
effect to the Merger;

(ix)    the historical and projected results of SPAR and the Company
with those of certain companies that we deemed relevant;

(x)     the proposed financial terms of the Merger and compared them to
the financial terms, to the extent publicly available, of
certain other transactions which we deemed to be relevant; and

(xi)    such other financial studies and analyses and took into account
such other matters as we deemed necessary, including our
assessment of general economic, market and monetary conditions.

In arriving at our opinion, we have assumed and relied on the accuracy
and completeness of all information supplied or otherwise made available to us
or publicly available. With respect to the financial forecast information
furnished to or discussed with us by SPAR and the Company, we have assumed that
such information has been reasonably prepared and reflects the best currently
available estimates and judgment of SPAR's or the Company's management as to the
expected future financial performance of SPAR or the Company, as the case may
be. We have assumed that the reserves established on the books and records of
each of the Company and SPAR are adequate to cover any threatened or pending
litigation. We also have assumed that the deferred payments due pursuant to the
MCI Agreement will be paid in cash. We have not assumed any responsibility for
independently verifying such information or undertaken an independent evaluation
or appraisal of any of the assets or liabilities of SPAR or the Company or been
furnished with any such evaluation or appraisal. In addition, we have not
conducted any physical inspection of the properties or facilities of SPAR or the
Company. We have assumed that the Merger will be consummated on the terms
substantially similar to those set forth in the draft of the Agreement as of
February 27, 1999, and that no adjustment with respect to the net worth of SPAR
will be made, as the amount of such adjustment, if any, is not presently
determinable.

Our opinion is necessarily based upon market, economic and other
conditions as they exist and can be evaluated on the date hereof. It should be
understood that subsequent developments may affect this opinion and that we do
not have any obligation to update, revise or reaffirm this opinion.

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The Board of Directors
PIA Merchandising Services, Inc.
February 28, 1999
Page 3

We do not express any view as to what the value of the Company Common
Stock will be upon completion of the Merger, or the price at which the Company
Common Stock will trade prior to or subsequent to the closing of the Merger.

We are acting as financial advisor to the Company in connection with the
Merger and will receive a fee from the Company for our services. In addition,
the Company has agreed to indemnify us for certain liabilities arising out of
our engagement. We have also performed various investment banking services for
the Company in the past five years and have received customary fees for such
services. In the ordinary course of our business, we may actively trade in the
equity securities of the Company for our own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.

This opinion is for the use and benefit of the Board of Directors of the
Company. Our opinion does not address the merits of the underlying decision by
the Company to engage in the Merger, and does not constitute a recommendation to
any stockholder as to how such stockholder should vote on the proposed Merger.
This opinion may not be disclosed, referred to, or communicated (in whole or in
part) to any third party for any purpose whatsoever except with our prior
written consent in each instance.

Based upon and subject to the foregoing, we are of the opinion that, as
of the date hereof, the Exchange Ratio is fair from a financial point of view to
the stockholders of the Company.

Very truly yours,

/s/ ING Baring Furman Selz LLC
ING Baring Furman Selz LLC

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255
ANNEX E

GLOSSARY

The following glossary includes definitions of certain general industry
terms as well as terms relating specifically to PIA and SPAR.

AD SPECIALTY- The use of products as promotional items that are given
away for free to stimulate corporate remembrance, which products are usually
imprinted with the Company's name, address and phone number.

CATEGORY - A segment or sub-segment of a department within a retail
outlet. For example, the health and beauty care department consists of several
categories such as oral care and shampoo; and the shampoo section is divided
into sub-categories such as salon formulas and dandruff control.

CATEGORY RESETS - Removing existing related products from the shelf and
replacing them with the same or other products in a different placement.

DATA COLLECTION - The systematic gathering of information for analysis
and interpretation.

DATABASE MANAGEMENT - The management of proprietary information in a way
that permits easy access, analysis and manipulation.

DATABASE MARKETING - Direct-response marketing that utilizes a list or
lists developed by a marketer with proprietary data.

DEMONSTRATION - Live exhibitions, typically in-store, of how a product
works.

DIRECT MARKETING - Marketing directly to consumers by mail catalog or
other home delivery, or attempting to solicit orders by mail or toll-free
telephone.

DIRECT PREMIUM OFFERS - The use of travel or merchandise awards in
conjunction with the purchase of a product or service (e.g. offering a free
putter with five car rentals).

IN-STORE INTELLIGENCE - Gathering information on store conditions, such
as out-of-stocks, products on display, pricing and number of product facings.

MASS MERCHANDISER - The segment of retailers that offers
multi-departments in a single location, each of which is typically quite large
(at least 75,000 square feet). Examples include Kmart and Wal*Mart.

MERCHANDISE FULFILLMENT - The segment of the premium incentive sector
concerned with providing merchandise as rewards in incentive programs.

MERCHANDISING - Service to enhance sales by making a client's products
more visible and available to consumers.

MYSTERY SHOPPING - Anonymous calls in retail outlets by marketer's
representatives to check distribution or display of a brand and to evaluate
products, services, clients or employees.

POINT-OF-PURCHASE DISPLAY - Displays located strategically throughout
retail stores to attract consumer attention to the product, to convey product
benefits and to promote product sales.

E-1

256

PREMIUM INCENTIVE - Performance determined awards to motivate employees,
salespeople, dealers and consumers, as well as to differentiate a product,
service or store.

RE-MERCHANDISING - A retail unit that is enhanced by the relocation of
sections, aisles and/or departments, and usually involves the total store.

REMODEL - A retail unit that is enhanced by enlargement and/or redesign.
Structural changes most often result in departments and/or services being added
or deleted, which requires the relocation of most products and sections within
the store.

RESET - Relocation of products within a given category or section of a
retail store. A reset typically involves removal of all products from the
retailer's shelves, restocking of products and reallocation of space.

RETAILER - An operator of retail stores or groups of retail stores that
are also referred to as chains.

RETAIL MERCHANDISING - The process of utilizing outsourced personnel to
provide added value sales-enhancing services to retailers, manufacturers and
other businesses. This includes, but is not limited to, product and display
placement, category resets and product replenishment/ordering.

SAMPLING - Providing free product by mail or in person to consumers to
create awareness and entice the use or consumption of the product.

SCHEMATIC - A diagram that lists the specific location and shelf space
to be allocated for all items within a section. The schematic also contains data
relating to merchandising such as width, depth of shelving, shelf elevations and
height of gondola.

SELF-LIQUIDATING PREMIUM - The use of travel or merchandise premiums
with consumers at a price which totally covers the marketer's cost of buying and
fulfilling the order.

SHARED SERVICES - A group of associates who perform specific functions
for multiple clients on each store visit.

SWEEPSTAKES - A promotion which requires only chance to win, and no
purchase or skill.

TELESERVICES - The use of telecommunications and telemarketers for
gathering and soliciting information.

TEST MARKETING - Testing promotion alternatives, new products and
advertising campaigns, as well as packaging, pricing and location changes at
store level.

TRAVEL FULFILLMENT - The segment of the premium incentive sector
concerned with providing travel as rewards in incentive programs.

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257
ANNEX F

[FORM OF PROXY]

PROXY

PIA MERCHANDISING SERVICES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned appoints Terry R. Peets and Cathy L. Wood, and each of
them, proxies with full power of substitution, to vote all shares of Common
Stock of PIA Merchandising Services, Inc. ("PIA") held of record by the
undersigned as of [__________], 1999, the record date with respect to this
solicitation, at the Annual Meeting of Stockholders of PIA to be held at [ ],
beginning at [_____], a.m., Pacific Time, on [_____], [__________], 1999, and at
any adjournments thereof, upon the following matters:

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:

1.      Approval of the issuance of shares of PIA's common stock (the "Merger
Shares") to the stockholders of SPAR Acquisition, Inc. ("SAI") and
options ("Substitute Options") to purchase an aggregate of 134,114
shares of PIA common stock to the holders of SAI options as
consideration for the merger in accordance with the terms of that
certain Agreement and Plan of Merger dated as of February 28, 1999 (the
"Merger Agreement") among PIA, PIA Merchandising Co., Inc., a California
corporation, SG Acquisition, Inc., a Nevada corporation ("PIA
Acquisition"), SAI, SPAR MCI Performance Group, Inc., a Delaware
corporation, SPAR Incentive Marketing, Inc., a Delaware corporation,
SPAR Marketing Force, Inc., a Nevada corporation, SPAR Marketing, Inc.,
a Delaware corporation, SPAR, Inc., a Nevada corporation, SPAR/Burgoyne
Retail Services, Inc., an Ohio corporation, SPAR Marketing, Inc, a
Nevada corporation, and SPAR Trademarks, Inc., a Nevada corporation
pursuant to which, among other things, PIA Acquisition will be merged
with and into SAI (the "Merger"). The issuance of the Merger Shares and
the Substitute Options pursuant to the terms of the Merger Agreement is
referred to as the "Share/Option Issuance."

[ ] FOR              [ ] AGAINST           [ ] ABSTAIN

2.      Approval of an amendment to PIA's Certificate of Incorporation to (i)
increase the number of authorized shares of PIA Common Stock from 15
million to 47 million, (ii) delete the prohibition on stockholder action
by written consent without a meeting under Delaware law, and (iii)
change the name of PIA Merchandising Services, Inc. to "SPAR Group,
Inc." (the "Charter Amendment").

[ ] FOR              [ ] AGAINST           [ ] ABSTAIN

3.      Approval of an amendment (the "Option Plan Amendment") to PIA's Amended
and Restated 1995 Stock Option Plan to increase the number of shares of
common stock of PIA reserved for issuance upon exercise of stock options
granted thereunder from 1.3 million shares to 3.5 million shares, as
described in the Proxy Statement.

[ ] FOR              [ ] AGAINST           [ ] ABSTAIN

APPROVAL OF THE SHARE/OPTION ISSUANCE, THE CHARTER AMENDMENT AND THE
OPTION PLAN AMENDMENT IS REQUIRED FOR THE MERGER TO BE CONSUMMATED. IF
ANY OF THE FOREGOING THREE PROPOSALS IS NOT APPROVED, EVEN IF ANY OF THE
OTHER TWO PROPOSALS IS APPROVED, THE MERGER CANNOT BE CONSUMMATED AND
NONE OF THE THREE PROPOSALS WILL BE APPROVED.

F-1

258
4.      ELECTION OF DIRECTORS

[ ] FOR all nominees listed below  [ ] WITHHOLD AUTHORITY 
(except as noted below)            to vote for all nominees 
listed below

(INSTRUCTIONS:   TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, LINE
THROUGH OR OTHERWISE STRIKE OUT THE NOMINEE'S NAME
BELOW.)

Clinton E. Owens     Joseph H. Coulombe     Terry R. Peets    Patrick C. Haden
Patrick W. Collins   J. Christopher Lewis   John A. Colwell

5.      OTHER MATTERS

IN THEIR DISCRETION, TERRY R. PEETS AND CATHY L. WOOD ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2, AND 3 ABOVE AND FOR THE NOMINEES NAMED IN PROPOSAL 4. IF ANY
DIRECTOR DECLINES OR IS UNABLE TO SERVE AS A DIRECTOR THEN THE PERSONS NAMED AS
PROXIES SHALL HAVE FULL DISCRETION TO VOTE FOR ANY OTHER PERSON DESIGNATED BY
THE BOARD OF DIRECTORS.

Dated                              , 1999
-----------------------------

-----------------------------------------
(Signature)

-----------------------------------------
(Signature)

Please sign exactly as your name appears
hereon. Joint owners should each sign.
When signing as an attorney, executor,
administrator, trustee, guardian or
corporate officer, please give full title
as such.

The signer hereby revokes all proxies
heretofore given by the signor to vote at
said meeting or any adjournments thereof.

F-2

259
================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

-----------------------

ANNUAL REPORT ON FORM 10-K

[X]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

For the year ended January 1, 1999

Commission file number 0-27824

PIA MERCHANDISING SERVICES, INC.

Delaware                                      33-0684451
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

19900 MACARTHUR BLVD, SUITE 900, IRVINE, CA 92612

Registrant's telephone number, including area code: (949) 476-2200

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $.01 per share

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

The aggregate market value of the Common Stock of the Registrant held by
non-affiliates of the Registrant on March 19, 1999, based on the closing price
of the Common Stock as reported by the Nasdaq National Market on such date, was
approximately $10,723,899.

The number of shares of the Registrant's Common Stock outstanding as of
March 19, 1999 was 5,477,846 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement to be filed with the Securities and Exchange
Commission within 120 days of January 1, 1999 in connection with the Annual
Meeting of Stockholders are incorporated by reference into Part III hereof.

================================================================================

260

PIA MERCHANDISING SERVICES, INC.

ANNUAL REPORT ON FORM 10-K

INDEX

PART I

PAGE 

Item 1.   Business                                                                  3 
Item 2.   Properties                                                               15 
Item 3.   Legal and Administrative Proceedings                                     15 
Item 4.   Submission of Matters to a Vote of Security Holders                      15 

PART II                                             

Item 5.   Market for Registrant's Common Equity and Related Shareholder Matters    16 
Item 6.   Selected Consolidated Financial Data                                     17 
Item 7.   Management's Discussion and Analysis of Financial Condition and             
Results of Operations                                                    18 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk               25 
Item 8.   Financial Statements and Supplementary Data                              25 
Item 9.   Changes in and Disagreements with Accountants on Accounting and             
Financial Disclosure                                                     25 

PART III                                             

Item 10.  Directors and Executive Officers of the Registrant                       26 
Item 11.  Executive Compensation                                                   26 
Item 12.  Security Ownership of Certain Beneficial Owners and Management           26 
Item 13.  Certain Relationships and Related Transactions                           26 

PART IV                                             
Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K          26 
Signatures                                                               28 

2

261

PART I

THIS ANNUAL REPORT ON FORM 10-K INCLUDES " FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE
EXCHANGE ACT INCLUDING, IN PARTICULAR, THE STATEMENTS ABOUT PIA'S PLANS AND
STRATEGIES UNDER THE HEADINGS "BUSINESS" AND "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS." ALTHOUGH PIA
BELIEVES THAT ITS PLANS, INTENTIONS AND EXPECTATIONS REFLECTED IN OR SUGGESTED
BY SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT CANNOT ASSURE THAT SUCH
PLANS, INTENTIONS OR EXPECTATIONS WILL BE ACHIEVED. IMPORTANT FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FORWARD-LOOKING STATEMENTS
MADE IN THIS ANNUAL REPORT ON FORM 10-K ARE SET FORTH UNDER THE HEADING "RISK
FACTORS" AND ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K. ALL FORWARD-LOOKING
STATEMENTS ATTRIBUTABLE TO PIA OR PERSONS ACTING ON ITS BEHALF ARE EXPRESSLY
QUALIFIED BY THE CAUTIONARY STATEMENTS CONTAINED IN THIS ANNUAL REPORT ON
FORM 10-K.

SEE THE GLOSSARY AT PAGE 13 FOR A DESCRIPTION OF CERTAIN TERMS THAT ARE
USED THROUGHOUT THIS ANNUAL REPORT ON FORM 10-K.

ITEM 1.  BUSINESS

GENERAL

PIA Merchandising Services, Inc. ("PIA" or the "Company") is a supplier
of in-store merchandising and sales services in the United States and Canada.
The Company provides these services primarily on behalf of consumer product
manufacturers, consumer service companies and retailers at approximately 17,000
retail grocery stores, 6,000 mass merchandiser and 8,800 drug stores.

The Company currently provides three principal types of services: shared
services, where an associate represents multiple clients; dedicated services,
where associates work for one specific client; and project services, where
associates perform specified in-store activities.

Shared services consist of regularly scheduled, routed merchandising
services provided at the stores for multiple manufacturers, primarily under
multi-year contracts. Shared services may include activities such as: ensuring
that client's products authorized for distribution are in stock and on the
shelf, adding in new products that are approved for distribution but not present
on the shelf, setting category shelves in accordance with approved store
schematics, ensuring that shelf tags are in place, checking for the overall
salability of clients' products and selling new product and promotional items.

In 1998, PIA developed a new strategy for routed merchandising services.
The stores are selected for routed merchandising services based on two sets of
criteria. The first is the store's weekly All Commodity Volume ("ACV"). The
higher the sales volume of a store, the greater the need for merchandising
services and more frequent visits to the store are required. The second
criterion is based on retailer discipline. This is a subjective determination
and therefore based on retail conditions, schematic discipline and competitive
activity. This new market strategy provides our clients with an added focused
approach to meeting their merchandising needs.

Dedicated services generally consist of merchandising services as
described above except that dedicated services are performed for a specific
retailer or manufacturer by a dedicated organization. The merchandisers and
management team work exclusively for that retailer or manufacturer. These
services are normally provided under multi-year contracts.

For both shared service clients and dedicated service clients, the Company
also performs project services. Project services consist primarily of specific
in-store services initiated by retailers and manufacturers, such as new product
launches, special seasonal or promotional merchandising, focused product support
and product recalls. These services typically are used for large-scale
implementations over 30 days. The Company also performs other project services,
such as new store sets and existing store resets, re-merchandising, remodels and
category implementations, under shared service contracts or stand-alone project
contracts.

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262

As part of its shared and dedicated services, PIA also collects and
provides to certain clients a variety of merchandising data that is category,
product and store specific.

PIA, organized in 1943, initially provided merchandising services in
grocery retail chains on behalf of manufacturers. In mid-1988, it was determined
that a national merchandising company could capitalize on developments within
the retail grocery industry by providing merchandising services to a variety of
manufacturers in the industry. Until 1989, the Company operated exclusively in
grocery retail chains in California and Arizona. In 1990, PIA implemented a
national expansion strategy to cover the grocery trade. In 1993, the Company
expanded to address additional retail channels, including mass merchandiser,
chain drug and discount drug stores. In 1994, PIA began offering dedicated
services to retailers and manufacturers. In 1997, the Company established a
corporate and division infrastructure for its project services business. The
Company currently performs its services primarily on behalf of approximately 805
consumer product manufacturers.

INDUSTRY OVERVIEW

A number of trends have impacted the retail industry and have created a
demand for providers of third party merchandising services such as those offered
by the Company.

SHIFT OF MERCHANDISING SERVICES

Historically, employees of retailers, consumer product manufacturers and
food brokers principally performed merchandising functions. Retailers staffed
their stores as needed to ensure in-stock conditions, the placement of new items
on shelves, and the maintenance of shelf schematics to approved standards.
Manufacturers typically deployed their own sales people in an effort to ensure
that their products were in distribution and properly positioned on the shelves.
However, the primary function of these sales people was to sell the
manufacturers' products and promotions, and not to perform significant in-store
services at the shelf level. In addition, food brokers performed retail
merchandise services on behalf of the manufacturer in conjunction with their
sales efforts. Brokers also often performed work at the shelf level at the
request of the retailer and their principal client, the manufacturer.

The average grocery store carries approximately 22,000 items. In an
effort to maintain or improve their margins, grocery retailers have broadened
their product offerings and services from traditional grocery, household and
health and beauty care products to include new product categories such as
general merchandise and service departments such as bakery, deli and prepared
fast foods. The Company believes that, as a result, these retailers have shifted
employee hours away from the traditional maintenance of packaged goods in order
to support these new categories and service departments. The Company further
believes retailers have converted many hours of basic merchandising work from
full-time professionals to part-time labor, who are generally less skilled and
trained. These trends have caused poorer shelf conditions and an increasing
number of out-of-stock items, resulting in lost sales. As a result, retailers
are increasingly relying on manufacturers and food brokers, among others, to
support their in-store needs such as new store sets and existing store resets,
re-merchandising, remodels and category implementations. Initially,
manufacturers deployed their sales professionals to perform these
retailer-mandated services. However, manufacturers found the deployment of sales
professionals to perform retail-merchandising services were expensive and not an
effective use of their resources. As manufacturers' costs to perform these
services grew and shelf integrity declined, manufacturers began to outsource
these merchandising activities to third parties such as the Company.

The outsourcing trend to third party merchandisers has resulted in an
increasing number of organizations providing services to manufacturers and
retailers. Certain retailers and manufacturers have chosen to consolidate in
order to reduce the number of third parties they have to manage, to achieve
consistent execution of their retail merchandising strategies, and to customize
the scope of services performed on their behalf.

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263

RETAILER CONSOLIDATION

As retailer-mandated activities have continued to increase in both
number and type, with a corresponding increase in the amount of labor required
to complete them, manufacturers have increased their use of third party
suppliers. For example, additional category implementation activities are
required to effect retailers' in-store schematics. Schematics are changing more
frequently as the result of a growing number of new product introductions each
year. Retailers continue to require numerous resets, re-merchandising, and
remodels in response to the increasing number of changes in the product mix. PIA
estimates that these activities have doubled over the last five years, so that
most stores are currently re-merchandised or remodeled every 24 months. In
certain areas of the country and with certain retailers, these activities are
conducted annually.

INCREASE IN MERCHANDISING SERVICES REQUIRED IN OTHER RETAIL CHANNELS

Unlike the merchandising services performed for grocery retailers, work
performed by manufacturers in mass merchandiser, chain drug and other retail
formats has historically been much less demanding. In these retail channels,
retailers performed most of their own merchandising work. However, the Company
believes that as these retailers become more competitive, they are attempting to
maintain their margins by requesting more support from the manufacturer
community to provide merchandising services similar to those provided to the
grocery retailers. These retailers have become increasingly important to
manufacturers, causing manufacturers to provide greater retail focus and support
to ensure out-of-stock conditions are reduced, authorized items are available,
and general product conditions are good. Manufacturers have become particularly
sensitive to the requirements of seasonal and promotional activities, which
require rapid and effective in-store support in order to maximize sales.

INCREASE IN USE OF INFORMATION TECHNOLOGIES

Information technology is playing an increasingly important role in the
retail industry, particularly in light of industry initiatives towards efficient
consumer response ("ECR") and category management. Retailers and manufacturers
have expanded their use of information technology to manage product distribution
in stores, item placements on the shelves, and off-shelf displays. In
particular, retailers and manufacturers are increasingly looking for causal data
(e.g., display, pricing and product adjacency information) that is category and
store specific. Both retailers and manufacturers use this information to make
decisions regarding ECR category management, shelf management, and new product
promotion plans. It also gives retailers the ability to tailor their stores to
regional demographics.

BUSINESS STRATEGY

PIA believes the increasing demand for national solutions to
manufacturers' diverse merchandising requirements, together with the
consolidation of the retail industry, has increased the growth of outsourcing.
The increase in required merchandising services, and the increased use of
information technology, will foster the growth of those companies that can
provide these solutions, have the flexibility to respond to the changing retail
environment and have the financial resources to provide rapid deployment of
merchandising resources. The Company has developed a strategy it believes will
address these industry trends. The major components of PIA's strategy are as
follows:

POSITION THE COMPANY AS A NATIONAL, FULL SERVICE RETAIL SOLUTIONS COMPANY

PIA's objective is to strengthen its position as a leading national
supplier of retail solutions by expanding the services it will offer including
category management, data gathering, interpretation and management, to both its
existing and prospective manufacturer clients and its newer and prospective
retailer clients, and to offer its existing and newer services in additional
retail channels.

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264

SERVE EMERGING DEMAND FOR DEDICATED SERVICES

PIA believes certain retailers and manufacturers will increasingly
prefer merchandising service on a dedicated basis, and the significant size of
such contracts requires substantial financial, recruitment, deployment,
reporting and management capabilities. The Company believes it is positioned
well to serve this emerging need for dedicated services.

INCREASE THE COMPANY'S UTILIZATION OF INFORMATION TECHNOLOGY

The Company has been focusing Information Technology resources on
applications, which help improve productivity of field merchandisers. PIA
believes a commitment to technology will provide a long term competitive
advantage. The Company believes the technology it develops will present
increased opportunities for PIA on project specific requests from manufacturers.
PIA also expects to use technology to expand its informational services and
consulting capabilities. Additionally, the Company will continue to provide its
proprietary software program, Merchandisers Toolbox, to certain retailers. This
program is designed to manage the deployment of manufacturer supplied labor, to
measure their performance against the retailers' in-store plans and to develop
databases that include a "blueprint" of a store by category. The Company also
expects its key account managers will continue to use various shelf technology
programs, which the Company licenses from A.C. Nielsen, IRI and Intactix.

DESCRIPTION OF SERVICES

The Company provides a broad array of merchandising services on a
national, regional and local basis to manufacturers and retailers. PIA believes
its full-line capability of developing plans at one centralized headquarters
location, executing chain wide, fully integrated national solutions and
implementing rapid, coordinated responses to needs on a real time basis
differentiates the Company from its competitors. The Company also believes its
centralized decision-making ability, local follow-through, ability to recruit,
train and supervise merchandisers, ability to perform large-scale initiatives on
short notice and strong retailer relationships provide it with a competitive
advantage over local, regional or retailer specific competitors.

The Company provides its merchandising and sales services primarily on
behalf of consumer product manufacturers at approximately 17,000 retail grocery,
6,000 mass merchandiser and 8,800 drug stores. PIA currently provides three
principal types of merchandising and sales services: shared services, dedicated
services and project services.

SHARED SERVICES

Shared services consist of regularly scheduled, routed merchandising
services provided at the store level for manufacturers. PIA's shared services
are performed for multiple manufacturers including, in some cases, manufacturers
whose products are in the same product category. Shared services may include
activities such as: 

-   Ensuring that client's products authorized for distribution are in
stock and on the shelf

-   Adding in new products that are approved for distribution but not
present on the shelf

-   Setting category shelves in accordance with approved store
schematics

-   Ensuring that shelf tags are in place

-   Checking for the overall salability of clients' products and

-   Selling new product and promotional items.

The Company's shared services are performed principally by full-time retail
sales merchandisers, retail sales specialists and key account managers, along
with district and division manager supervision.

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265

RETAIL SALES MERCHANDISERS

PIA's retail sales merchandisers ("RSM") perform shared service coverage
at the store level. These services include a review of the retailer's shelves
and the appropriate store (or chain) prepared shelf schematic to ensure all
clients' approved products are available for sale in the store, that such
products have the approved shelf placement and number of facings (the horizontal
and vertical space occupied by a package front) on the shelf, and the approved
shelf tag is in position. If a product is not in distribution, the RSM adds the
product to the shelf if it is available in the store's product storage area. If
a product is unavailable, the RSM prepares a place on the shelf for this product
and a shelf tag. The presence of a shelf tag is critical to a store's ability to
reorder an individual stock-keeping unit ("SKU") from the distribution center.
The RSM checks for the presence of and replaces, if necessary, the shelf tags
for all client SKUs. The RSM also reviews all SKUs for product freshness, if
appropriate, and for general salability.

KEY ACCOUNT MANAGERS

On behalf of its manufacturer clients, PIA selectively deploys key account
managers ("KAMs") inside of the major retail chains. These KAMs, assigned
exclusively to a single retailer, work with that retailer's headquarters staff
in the execution of category management initiatives and in the development and
implementation of shelf schematics. The KAMs provide both the manufacturer and
PIA with a headquarters' perspective of the retailer and its primary objectives
at the store level. The KAMs work with manufacturer clients to develop and
achieve their merchandising goals, including those related to product
distribution, shelf placement, the number of facings for particular products,
and product adjacencies. The KAMs also work with manufacturer clients to gain
retailer authorization for new products and approval of new category schematics
that are compatible with the retailer's own category management strategies. PIA
generally attempts to position its KAMs within the retailer's organization in a
leadership capacity, both in category management and vendor deployment
activities. The KAMs typically are placed within the retailer's shelf technology
department and are equipped with the specific shelf technology software utilized
by the retailer. The KAMs work with the retailer in the development of new shelf
schematics, category layouts and, in some cases, total store space plans. The
Company is also training its KAMs in category management in order to provide
further value to both the Companies' manufacturer clients and to the retailer.

DEDICATED SERVICES

Dedicated services consist of merchandising services, generally as
described above, that are performed for a specific retailer or manufacturer by a
dedicated organization, including a management team, working exclusively for
that retailer or manufacturer. These services provided are primarily based on
agreed hourly rates and fixed management fees under multi-year contracts.

The Company believes it pioneered the concept of dedicated service in 1994
with a program designed for Thrifty-PayLess Drug Stores. The program covered 995
stores, and PIA was responsible for implementing product selection changes and
resetting all categories to meet Thrifty-PayLess' category management plans. In
implementing the program, PIA was able to ensure placement of new products on
the shelf within five days of availability and completed section changes within
ten days. In 1996, Rite Aid acquired Thrifty-PayLess and the contract was not
renewed beyond December 1996.

In 1997, PIA started a dedicated program with CVS/Revco to convert Revco
stores to the CVS format. The conversion project was a total re-merchandising of
all Revco stores to the new CVS format. PIA moved gondolas, built new gondolas,
and installed new fixtures and re-planogramed all categories to the CVS
conversion plan. In 1999, PIA will be responsible for new store set ups and
special projects for CVS/Revco in the state of Ohio.

The Company has not expanded the dedicated service concept during fiscal
year 1998. Net revenues have decreased from 34.6% in 1997 to 31.9% in 1998,
primarily due to project completions of the CVS/Revco conversions.

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266

PROJECT SERVICES

Project services consist primarily of specific in-store services
initiated by retailers and manufacturers, such as new product launches, special
seasonal or promotional merchandising, focused product support and product
recalls. These services are used typically for large-scale implementations over
30 days. The Company also performs other project services, such as new store
sets and existing store resets, re-merchandising, remodels and category
implementations, under shared service contracts or stand-alone project
contracts.

RELATED SERVICES

INFORMATION TECHNOLOGY SERVICES

PIA has been focusing information systems resources on applications,
which help improve productivity of field merchandisers. The Labor Tracking
System ("LTS") was introduced to PIA's 12 service centers in 1998. This
proprietary application records actual time spent on each work initiative. The
benefits of the system include real-time reporting, improved client billing, and
more efficient management of the field labor.

In August 1998, the Work Generator System was implemented. This system
schedules shared services and project work from a central system. It reduces the
travel time by coordinating shared service work with project work. The system
provides associates with a daily schedule of work assignments and expected
completion times.

In September 1998, the Company began using Symbol scanners to capture
inventory and returned inventory data for Buena Vista Home Entertainment
("BVHE"). BVHE retrieves the scanner information daily via the Internet from
PIA's server. This information is used for daily updates to BVHE's vendor
managed inventory system.

PIA also expanded the use of its Interactive Voice Response ("IVR")
system. Hourly status updates can now be provided to clients on critical new
item launches, such as BVHE's video releases. The IVR system can process 2,500
calls per day. This gives the Company the ability to give clients
up-to-the-minute status on any work that uses the IVR system.

TELEMARKETING SERVICES

PIA owns 20% of Ameritel, Inc., a company that performs inbound and
outbound telemarketing services, including those on behalf of certain of PIA's
manufacturer clients. Ameritel provides telemarketing sales services for
manufacturers that sell directly into smaller, independent retail stores. The
Company believes that its affiliation with Ameritel provides an additional
merchandising solution for some packaged product manufacturers and retailer
clients.
The Company, in conjunction with Ameritel, developed an automated
interface between the Ameritel Vantive system and the LTS. PIA associates now
telephone work assignment completion information to Ameritel. PIA associates are
able to report hours, mileage, and other completion information for each work
assignment on a daily basis. The information is used to update the LTS the next
day. This provides the 12 service centers with daily, detailed tracking of work
completion.

RETAIL AND SECONDARY HEADQUARTERS SELLING SERVICES

The Company deploys retail sales specialists ("RSS") to provide product
selling support for certain manufacturers at the retail store and secondary
retailer's headquarters buying offices. These services are performed principally
for manufacturers that choose to outsource their sales function for calls on
wholesaler-supplied individual stores or small chains. Sales services performed
by the RSS's include product sales, selling point of sale promotions, discount
and allowance programs and shelf merchandising plans.

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SALES AND MARKETING

The Company's sales efforts are structured to develop new business in
national and local markets. At the national level, PIA's corporate business
development team directs its efforts toward the senior management of prospective
clients. At the regional level, sales efforts are principally guided through
PIA's 12 service center offices located nationwide.

The Company's corporate account executives play an important role in
PIA's new business development efforts within its existing manufacturer client
base. The corporate account executives are generally located in the clients'
corporate headquarters. The corporate account executives plan merchandising and
product introductions with the manufacturer so that PIA can achieve the
objectives of such clients' major new product and promotional initiatives. In
addition, the corporate account executives present PIA's services to the sales
and marketing executives of these clients, and utilize marketing data provided
by IRI, A.C. Nielsen and others in an effort to ascertain additional market
opportunities for such clients at the local level. Client service managers are
part of the Company's geographic division teams and work with the local
management of the Company's clients. The client service manager's primary
responsibility is to work with the client to establish specific, measurable
objectives for PIA, and to market additional services. As part of this process,
the division account executive is responsible for developing retail
merchandising solutions for such objectives.

As part of retailer consolidation, retailers are centralizing most
administrative functions, including operations, procurement and category
management. In response to this centralization and the growing importance of
large retailers, many manufacturers have reorganized their selling organizations
around a retailer team concept that focuses on a particular retailer. PIA has
also responded to this emerging trend by establishing client service offices
that are fully staffed to provide the PIA client and the retailer with access to
all of PIA's services. PIA currently has retailer teams in place at Wal*Mart
(Rogers, Arkansas), Kmart (Detroit, Michigan) and Eckerd Drug (Tampa, Florida).

The Company's business development process encompasses a due diligence
period to determine the objectives of the prospective client, the work to be
performed to satisfy those objectives and the market value of the work to be
performed. PIA employs a formal cost development and proposal process that
determines the cost of each element of work required to achieve the prospective
client's objectives. These costs, together with an analysis of market rates, are
used in the development of a quotation approval form that is presented to the
Company's proposal committee for approval. The pricing must meet PIA's
objectives for profitability, which are established as part of the business
planning process. After approval of this quotation by the proposal committee, a
detailed proposal is presented to the prospective client. Following agreement
regarding the elements of service and corresponding rates, a contract is
prepared and executed. See "--Customers."

CUSTOMERS

PIA currently represents approximately 805 manufacturer clients, including
approximately 648 branded product manufacturers and approximately 157 private
label manufacturers. Before 1993, the Company represented its manufacturer
clients primarily in the retail grocery industry. Beginning in 1993, the Company
found that additional opportunities to provide its services existed throughout
the much broader marketplace. This marketplace included mass merchandiser, chain
drug and deep discount drug stores, as well as in other retail trade groups such
as home improvement centers, computer/electronic stores, toy stores, convenience
stores and office supply stores. As a result, the Company has contracted with a
number of manufacturers to provide services in several additional retail
markets, and has agreed to provide services to a number of retailers directly.

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COMPETITION

The third-party merchandising industry is highly competitive and is
comprised of an increasing number of merchandising companies with either
specific retailer, retail channel or geographic coverage, as well as food
brokers. These companies tend to compete with the Company primarily in the
retail grocery channel, and some of them may have a greater presence in certain
of the retailers in whose stores the Company performs its services. The Company
also competes with several companies that are national in scope, such as
Powerforce, Alpha One, Pimms, and SPAR Marketing Force. These companies compete
with PIA principally in the mass merchandiser, chain drug and deep discount drug
retail channels. PIA believes the principal competitive factors within its
industry include development of technology breadth and quality of client
services, cost, and the ability to execute specific client priorities rapidly
and consistently over a wide geographic area.

PIA recently entered into an agreement with SPAR Marketing Force and
certain of its affiliates ("SPAR Group") in which PIA will essentially be
acquired by SPAR Group in a merger in which all the outstanding Common Stock of
SPAR will be exchanged for approximately 12.3 million shares of PIA Common
Stock. See "--Recent Transaction." After the merger, the SPAR Group shareholders
will own approximately 69% of PIA Common Stock.

TRADEMARKS

PIA(R) is a registered trademark of the Company. In addition, the
Company has recently commenced the process of registering the service mark for
the term Precision Merchandising. Although the Company believes its trademarks
may have value, the Company believes its services are sold primarily based on
breadth and quality of service, cost, and the ability to execute specific client
priorities rapidly and consistently over a wide geographic area. See "--Industry
Overview" and "--Competition."

EMPLOYEES

As of January 1, 1999, the Company employed approximately 1,109
full-time employees, of whom approximately 83 worked in executive,
administrative and clerical capacities at the Company's corporate headquarters,
and 1,026 of whom worked in division offices nationwide. In addition, the
Company employed 1,030 part-time employees. Approximately 180 of the Company's
employees are covered by contracts with labor unions. The Company considers its
relations with its employees and its employees' unions to be good. The Company
also uses the services of up to 3,000 flextime personnel whose payroll is
generated through a company not affiliated with PIA.

RECENT TRANSACTION

On February 28, 1999, PIA entered into an agreement with SPAR Group, a
privately held affiliated group of companies to merge in a stock transaction.
Under the agreement, PIA will issue approximately 12.3 million shares of PIA
Common Stock to the stockholders of SPAR Group. SPAR Group is a privately owned
provider of retail marketing and sales services offering merchandising support,
incentive and motivation marketing programs, information management, marketing
research, data base marketing and promotional analysis and forecasting. The
transaction will be accounted for as a reverse acquisition in which SPAR Group
is deemed to be the accounting acquirer. SPAR Group has annual revenues of
approximately $75 million. After the merger, SPAR Group stockholders will own
approximately 69% of PIA Common Stock. The transaction requires regulatory and
stockholder approval and is expected to close in May 1999.

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RISK FACTORS

The following risk factors should be carefully reviewed in addition to
the other information contained in this annual report on Form 10-K

HISTORY OF LOSSES

During the years ended December 31, 1997 and January 1, 1999, the
Company incurred significant losses and experienced substantial negative cash
flow. PIA had net losses of $15.1 million for the fiscal year ended 1997 and
$4.3 million for fiscal year 1998. Losses in 1997 were primarily caused by
margin reductions from the loss of shared service clients, inefficiencies in
field labor execution, poor pricing decisions for some client contracts and
higher business unit overhead costs. The recognition of $5.4 million in
restructuring and other charges was also responsible for the losses. Losses in
1998 primarily were caused by margin reductions and from a decline in revenues
due to loss of shared service clients and completion of dedicated projects. The
Company expects to have further losses for the first quarter of fiscal 1999. As
noted in Recent Transaction, the Company has entered into a merger agreement
with SPAR Group. Should this merger not be completed, the Company will be
required to significantly reduce its operating costs to minimize the effects of
further reductions in revenues and operating losses. PIA cannot guarantee that
it will not sustain further losses. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Overview."

LOSS OF BUSINESS

PIA's business mix has changed significantly over the last year, and is
expected to continue to change during 1999, in response to client needs, and the
evolving third party merchandising industry. Due in part to the completion of a
major dedicated client program, and the loss of several shared service clients,
sales have declined over the last 18 months, and no sizable new dedicated
business has been sold to compensate for these losses. The Company has reduced
its dedicated management and personnel infrastructure accordingly.

INDUSTRY CONSOLIDATION; CONCENTRATED CLIENT BASE

The retail and manufacturing industries are undergoing consolidation
processes that result in larger but fewer retailers and suppliers. PIA's success
depends in part upon its ability to maintain its existing clients and to obtain
new clients. Because of industry consolidation, PIA has lost certain clients,
and this trend could continue to have a negative effect on PIA's client base and
results of operations. PIA's ten largest clients generated approximately 75% of
PIA's net revenues for the year ended January 1, 1999, and approximately 69% for
the year ended December 31, 1997. During the year ended January 1, 1999 none of
PIA's manufacturer or retailer clients accounted for greater than 10% of net
revenues other than Eckerd Drug Stores, CVS Pharmacy Incorporated and Buena
Vista Home Entertainment, which account for 15.6%, 12.6% and 10.6%,
respectively. During the year ended December 31, 1997, none of PIA's
manufacturer or retailer clients accounted for greater than 10% of net revenues
other than Buena Vista Home Entertainment and Eckerd Drug Stores which
accounted for 16.0% and 13.6% of net revenues, respectively. The majority of the
Company's contracts with its clients for shared services have multi-year terms.
PIA believes the uncollectibility of amounts due from any of its large clients,
a significant reduction in business from such clients, or the inability to
attract new clients, could have a material adverse effect on the Company's
results of operations.

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UNCERTAINTY OF COMMISSION INCOME

Approximately 15% of the Company's net revenues for the year ended
January 1, 1999 were earned under commission-based contracts. These contracts
provide for commissions based on a percentage of the client's net sales of
certain of its products to designated retailers. Under certain of these
contracts, the Company generally receives a draw on a monthly or quarterly
basis, which is then applied against commissions earned. Adjustments are made on
a monthly or quarterly basis upon receipt of reconciliations between commissions
earned from the client and the draws previously received. The reconciliations
typically result in commissions owed to the Company in excess of previous draws;
however, the Company cannot predict with accuracy the level of its clients'
commission-based sales. Accordingly, the amount of commissions in excess of or
less than the draws previously received will fluctuate and can significantly
affect the Company's operating results in any quarter.

CONTROL BY CERTAIN STOCKHOLDERS

Riordan, Lewis & Haden ("RLH"), a private investment firm, beneficially
owns approximately 29.7% of PIA's outstanding Common Stock. PIA's directors and
officers, in the aggregate, beneficially own approximately 16.2% of PIA's
outstanding Common Stock (excluding the shares owned by Riordan, Lewis & Haden
which are deemed to be beneficially owned by Mr. Haden and Mr. Lewis). While not
controlling a majority of the outstanding shares, RLH, and the directors and
officers acting together generally will have significant influence with respect
to the election of directors and other matters submitted to the PIA
stockholders, including amendments to PIA's charter and Bylaws and approval of
certain mergers or similar transactions and sales of all or substantially all of
PIA's assets. If the merger with the SPAR Group is consummated the current
stockholders of SPAR Group will beneficially own approximately 69% of PIA's
outstanding Common Stock. Accordingly, if they act as a group they will
generally be able to elect all directors and they will have the power to prevent
or cause a change in control of PIA. Such concentration of ownership could have
the effect of making it more difficult for a third party to acquire control of
PIA in the future, and may discourage third parties from attempting to do so.

RESTRICTIONS ON DIVIDENDS

The Company has never paid dividends on its capital stock, and currently
intends to retain any earnings or other cash resources to finance future growth.

EFFECT OF CERTAIN CHARTER PROVISIONS; ANTI-TAKEOVER EFFECTS OF CERTIFICATE OF
INCORPORATION, BY-LAWS AND DELAWARE LAW

The Company's Board of Directors has the authority to issue up to 3,000,000
shares of Preferred Stock and to determine the price, rights, preferences,
privileges and restrictions, including voting rights, of those shares without
any further vote or action by the stockholders. The rights of the holders of
Common Stock will be subject to, and may be adversely affected by, the rights of
the holders of any Preferred Stock that may be issued in the future. The
issuance of Preferred Stock could have the effect of making it more difficult
for a third party to acquire a majority of the outstanding voting stock of PIA.
In addition, PIA is subject to the anti-takeover provisions of Section 203 of
the Delaware General Corporation Law, which will prohibit the Company from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved in
a prescribed manner. The application of Section 203 also could have the effect
of delaying or preventing a change of control of PIA. Certain provisions of
PIA's Certificate of Incorporation and Bylaws could delay or make more difficult
a merger, tender offer or proxy contest involving PIA. For example, PIA's
Bylaws, a special meeting of stockholders may be called only upon the request of
holders of at least 30% of the shares entitled to vote. Any delay in change of
control due to these provisions could adversely affect the market price of PIA's
Common Stock, which could adversely affect the market price of PIA 's Common
Stock.

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GLOSSARY

The following glossary includes definitions of certain general industry
terms as well as terms relating specifically to the company.

CATEGORY - A segment or sub-segment of a department within a retail
outlet. For example, the health and beauty care department consists of
several categories such as oral care and shampoo; and the shampoo section
is divided into sub-categories such as salon formulas and dandruff
control.

CATEGORY MANAGEMENT - A process for managing a retailer's or a
manufacturer's business that recognizes categories as strategic business
units for the purpose of planning sales and profit objectives.

CAUSAL DATA - Data that defines the factors within a retail outlet that
impact sales. These factors usually include display, pricing and product
adjacency information.

EFFICIENT CONSUMER RESPONSE (ECR) - A grocery industry strategy in which
retailers and manufacturers incorporate the principles of efficient
replenishment with effective assortment and promotion of products.

FACING - The horizontal and vertical space occupied by a package front
when displayed on a store shelf.

KEY ACCOUNT MANAGER (KAM) - A KAM is assigned exclusively to a single
retailer and works with that retailer's corporate headquarters staff in
the execution of category management initiatives and in the development
and implementation of shelf schematics.

MASS MERCHANDISER - The segment of retailers that offers multi-departments
in a single location, each of which is typically quite large (at least
75,000 square feet). Examples include Kmart and Wal*Mart.

NEW STORE SET - The initial merchandising of a new retail outlet that was
either built or acquired.

OUT-OF-STOCK - A situation that exists when a product normally carried by
a retailer is temporarily unavailable. This means that shelf allocation
exists, but inventory has been depleted.

RE-MERCHANDISING - A retail unit that is enhanced by the relocation of
sections, aisles and/or departments, and usually involves the total store.

REMODEL - A retail unit that is enhanced by enlargement and/or redesign.
Structural changes most often result in departments and/or services being
added or deleted, which requires the relocation of most products and
sections within the store.

RESET - Relocation of products within a given category or section of a
retail store. A reset typically involves removal of all products from the
retailer's shelves, restocking of products and reallocation of space.

RETAIL AND SECONDARY HEADQUARTERS SELLING - Refers to the selling of
products and/or taking of orders in chains which do not operate their own
warehouses and in stores having the authority to purchase and/or approve
orders.

RETAIL SALES MERCHANDISERS (RSM) - An RSM is a full-time associate who
performs shared service coverage at the store level.

RETAIL SALES SPECIALIST (RSS) - A retail sales specialist provides product
selling support for certain manufacturers at the retail store and
secondary retailers headquarters buying offices.

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272

RETAILER - An operator of retail stores or groups of retail stores that
are also referred to as chains.

SCHEMATIC - A diagram that lists the specific location and shelf space to
be allocated for all items within a section. The schematic also contains
data relating to merchandising such as width, depth of shelving, shelf
elevations and height of gondola.

SHARED SERVICES - A group of associates who perform specific functions for
multiple clients on each store visit.

STOCK KEEPING UNIT (SKU) - A unit of product having its own unique
size/weight and product description.

VOID - A situation that exists when a retailer does not carry a product
and there is no allocated space or reorder tag present.

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ITEM 2. PROPERTIES.

The Company maintains its corporate headquarters in approximately 20,000
square feet of leased office space located in Irvine, California, under a lease
with a term expiring in February 2000.

The Company leases certain office and storage facilities for its
divisions and subsidiaries under operating leases, which expire at various dates
during the next five years. Most of these leases require the Company to pay
minimum rents, subject to periodic adjustments, plus other charges including
utilities, real estate taxes and common area maintenance.

The following is a list of the locations where the Company maintains
leased facilities for its division offices and subsidiaries:

Scottsdale, Arizona                     Southfield, Michigan
Rogers, Arkansas                        Chesterfield Missouri
Irvine, California                      Edison, New Jersey
Pleasanton, California                  Albuquerque, New Mexico
Englewood, Colorado                     Blue Ash, Ohio
Tampa, Florida                          Cranberry Township, Pennsylvania        
Norcross, Georgia                       Carrollton, Texas
Oakwood Terrace, Illinois               Houston, Texas
Overland Park, Kansas                   Bellevue, Washington
Woburn, Massachusetts

Although the Company believes that its existing facilities are adequate
for its current business, new facilities may be added should the need arise in
the future. Certain of the above facilities may be closed or subleased as the
Company streamlines its operations.

ITEM 3. LEGAL AND ADMINISTRATIVE PROCEEDINGS.

On February 25, 1998, the Company and its Canadian subsidiary were
served with two Statements of Claim in the Ontario court (General Division) of
the Province of Ontario, Canada, filed by Merchandising Consultants Associates
("MCA") asserting claims for alleged breach of Confidentiality Agreements dated
October 19, 1996 and July 17, 1997. Both of these lawsuits assert that the
Company and its subsidiary improperly used confidential information provided by
MCA as part of the Company's due diligence concerning its proposed acquisition
of MCA, including alleged clientele, contracts, financial statements and
business opportunities of MCA. In addition, MCA contends that the Company
breached and allegedly reneged upon the terms for acquisition of MCA contained
in a Letter of Intent between the parties dated July 17, 1997, which by its
express terms was non-binding. The Statements of Claim seek damages totaling
$10.2 million.

The Company denies all wrongdoing and intends to defend itself
aggressively in this action. It is not possible to predict the outcome of this
action at this time.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

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274

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.

PRICE RANGE OF COMMON STOCK

The following table sets forth the reported high and low sales prices of
the Common Stock for the quarters indicated as reported on the Nasdaq National
Market. The Common Stock is traded on the Nasdaq National Market under the
symbol "PIAM".

1997                   1998
------------------       -----------------
High       Low         High        Low
-------     ------       ------     ------

First Quarter       $11.000     $5.125       $6.500     $5.000
Second Quarter        7.125      5.375        8.156      3.688
Third Quarter         8.250      5.125        6.844      4.125
Fourth Quarter        9.000      4.875        4.875      2.000

As of March 19, 1999, there were approximately 872 holders of record of
the Company's Common Stock.

The Company has never declared or paid any cash dividends on its capital
stock and does not anticipate paying cash dividends on its Common Stock in the
foreseeable future. The Company currently intends to retain future earnings to
finance its operations and fund the growth of its business. Any payment of
future dividends will be at the discretion of the Board of Directors of the
Company and will depend upon, among other things, the Company's earnings,
financial condition, capital requirements, level of indebtedness, contractual
restrictions in respect to the payment of dividends and other factors that the
Company's Board of Directors deems relevant.

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ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA.

The following selected consolidated financial data sets forth, for the
periods and the dates indicated, summary consolidated financial data of the
Company and its subsidiaries. Below, with respect to the three years ending
December 31, 1996, December 31, 1997 and January 1, 1999 is the consolidated
statement of operations and the consolidated balance sheet data as of December
31, 1997 and January 1, 1999 have derived from, and are qualified by reference
to the audited consolidated financial statements included elsewhere in this Form
10-K. These statements should be read in conjunction with such financial
statements and related notes thereto in "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

YEARS ENDED                         
-----------------------------------------------------------------  
DEC 31,        DEC 31,         DEC 31,      DEC 31,    JAN 1,    
1994           1995            1996         1997       1999     
---------      ---------        ---------   ---------   ---------  
(in thousands, except per share data)             

STATEMENT OF OPERATIONS DATA:                                                                                            
Net revenues                                          $  80,449      $ 104,791        $ 119,940   $ 128,208   $ 121,788  
Operating expenses:                                                                                                      
Field services costs                                  61,876         81,320           94,841     119,830     105,448  
Selling expenses                                       9,028         10,339           11,133      10,482       8,245  
General and administrative expenses                    5,800          6,810            8,081      10,234      11,788  
Restructure and other charges                             --             --               --       5,420          --  
Depreciation and amortization                            339            497              595         997       1,129  
---------      ---------        ---------   ---------   ---------  
Total operating expenses                          77,043         98,966          114,650     146,963     126,610  
---------      ---------        ---------   ---------   ---------  
Operating income (loss)                                   3,406          5,825            5,290     (18,755)     (4,822) 
Other income                                               (725)          (465)             895         895         611  
---------      ---------        ---------   ---------   ---------  
Income (loss) before provision (benefit)                                                                                 
for income taxes                                        2,681          5,360            6,185     (17,860)     (4,211) 
Income tax provision (benefit)                              101          1,829            2,426      (2,761)         55  
---------      ---------        ---------   ---------   ---------  
Net income (loss)                                     $   2,580      $   3,531        $   3,759   $ (15,099)  $  (4,266) 
=========      =========        =========   =========   =========  
Net income (loss) per share - basic(1)                $    0.88      $    1.13        $    0.70   $   (2.72)  $   (0.78) 
=========      =========        =========   =========   =========  
Weighted average shares - basic(1)                        2,923          3,117            5,370       5,551       5,439  
=========      =========        =========   =========   =========  
Net income (loss) per share - diluted(1)              $    0.68      $    0.89        $    0.63   $   (2.72)  $   (0.78) 
=========      =========        =========   =========   =========  
Weighted average shares - diluted(1)                      3,895          3,981            5,990       5,551       5,439  
=========      =========        =========   =========   =========  

Dec 31,        Dec 31,          Dec 31,     Dec 31,     Jan 1,    
1994           1995             1996        1997        1999     
--------       --------         --------    --------    --------  
(in thousands)                        

BALANCE SHEET DATA:                                                                                                      
Working capital                                       $ 3,642        $ 7,131          $32,737    $15,938      $13,844  
Total assets                                           10,224         16,086           47,672     36,467       26,054  
Current portion of long-term debt                         277             --               --         --           --  
Long-term debt, net of current portion                  3,274          3,400               --         --        2,000  
Total stockholders' equity                              2,481          5,988           36,718      18,67       14,724  

(1) Net income (loss) per share has been restated for all applicable periods
presented in accordance with the adoption of SFAS No. 128 Earnings per share.

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276

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

PIA provides merchandising services to manufacturers and retailers
principally in grocery, mass merchandiser and chain and discount drug stores.
For the years ended December 31, 1997, and January 1, 1999, the Company
generated approximately 74% and 59% of its net revenues from manufacturer
clients and 26% and 41% from retailer clients, respectively.

During the five years that ended January 1, 1999, none of the Company's
manufacturer or retailer clients accounted for greater than 10% of the Company's
net revenues, other than Thrifty-Payless, which accounted for approximately 13%
of net revenues for the year ended December 31, 1995, and BVHE and S.C. Johnson
which accounted for 11.7% and 10.3% of net revenues, respectively, for the year
ended December 31, 1996, and BVHE and Eckerd Drug Stores which accounted for
approximately 16.0% and 13.6% respectively, of net revenues for the year ended
December 31, 1997, and Eckerd Drug Store, CVS Pharmacy, and BVHE which accounted
for approximately 15.6%, 12.6% , and 10.6% respectively, of net revenues for the
year ended January 1, 1999.

During the fiscal year 1998, the Company continued to experience a
decline in its shared service business. Shared services consist of regularly
scheduled, routed merchandising services provided at the store level for
manufacturers, primarily under multi-year contracts. Due in part to industry
consolidation, increased competition, and performance, the Company lost a number
of shared service clients in 1997 and 1998. The Company has historically
required a significant fixed management and personnel infrastructure to support
shared services. Accordingly, the loss of shared services business, without
offsetting gains, had a material adverse effect on the Company's results of
operations in 1997 and 1998. These losses have been partially offset with
additional project revenue from shared service clients. In 1997 and 1998, shared
service client's accounted for $83.8 and $83.0 million in net revenue and
dedicated clients accounted for $44.4 and $38.8 million in net revenue,
respectively. The Company believes revenues in fiscal year 1999 from shared
service clients will decline as a result of the wind-down of the lost business.

The Company's profitability has been adversely affected by the loss of
its dedicated client services business in 1998. However, this decline has been
offset by an increase in gross margin, both in absolute amount and as a
percentage of net revenues, as a result of the effects of improved labor
productivity and service cost reduction in the field. Dedicated services consist
of merchandising services that are performed for a specific retailer or
manufacturer by a dedicated organization, including a management team, working
exclusively for that retailer or manufacturer. The net revenues associated with
dedicated clients decreased as a percentage of overall net revenues, from 34.6%
in 1997 to 31.9% in 1998.

Due to the change in business mix, and resulting negative impact on
margins, the Company realigned its cost structure, and, in the third quarter of
1997, recorded a charge of $5.4 million for restructuring and other costs
associated with the realignment of management structure and the organization.
The Company continues to review its organizational structure and the fixed and
variable costs associated with delivery of its services. It is anticipated that
further organizational changes will take place in the fiscal year 1999, as the
Company puts structure, programs and processes in place to reduce its fixed
overhead in line with lower revenue levels.

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277
The following table sets forth certain financial data as a percentage of net
revenues for the periods indicated:

YEARS ENDED
---------------------------------------------
DECEMBER 31,     DECEMBER 31,      JANUARY 1,
1996             1997              1999
------------     ------------      ----------

Net revenues                                                        100.0%           100.0%            100.0%
Operating expenses:
Field services costs                                          79.1             93.5              86.6
Selling expenses                                               9.3              8.2               6.8
General and administrative expenses                            6.7              8.0               9.7
Restructure and other charges                                  0.0              4.2               0.0
Depreciation and amortization                                  0.5              0.8               0.9
------           ------            ------
Total operating expenses                        95.6            114.7             104.0
------           ------            ------
Operating income (loss)                                               4.4            (14.7)             (4.0)
Other income                                                          0.8              0.7               0.5
------           ------            ------
Income (loss) before provision (benefit) for income taxes             5.2            (14.0)             (3.5)
Provision (benefit) for income taxes                                  2.0             (2.2)               --
------           ------            ------
Net income (loss)                                                     3.2%           (11.8)%            (3.5)%
======           ======            ======

YEAR ENDED JANUARY 1, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1997

NET REVENUES

For fiscal year 1998, net revenues were $121.8 million, compared to
$128.2 million in 1997, a 5.0% decrease. Shared service and project client net
revenues decreased from $83.8 million in 1997 to $83.0 million in 1998, a
decrease of $0.8 million or 1.0%. In 1998, the traditional shared services,
consisting of regularly scheduled routed merchandising service, decreased from
$44.9 million in 1997 to $40.1 million. This decrease of $4.8 million or 10.7%
was due in part to industry consolidation, increased competition and client
reorganization of marketing strategy. During the same period project revenues
for shared service clients increased by $4.0 million or 10.3% primarily due to a
major client switching from a dedicated program to a shared service program. The
Company's dedicated client net revenues declined from $44.4 million in 1997 to
$38.8 million in 1998, representing a 12.6% decrease. This decrease in dedicated
client net revenues resulted primarily from the completion of a major drug chain
dedicated program. Management expects that net revenues from dedicated clients
will decrease in 1999 due to the completion of a $15.0 million project in the
last quarter of 1998.

The following table sets forth net revenues by client type as a percentage of
net revenues for the periods indicated:

YEARS ENDED
------------------------------------------------------------------
DECEMBER 31,            JANUARY 1,
1997                   1999                     CHANGE
------------------     -------------------      ------------------
(dollars in millions)
AMOUNT       %         AMOUNT        %          AMOUNT       %
-------    -------     -------     -------      -------    -------

Shared service and project client net revenues    $  83.8      65.4%     $  83.0      68.1%       $ (0.8)      (1.0)%
Dedicated client net revenues                        44.4      34.6         38.8      31.9          (5.6)     (12.6)
-------     -----      -------     -----        ------      -----
Net revenues                                      $ 128.2     100.0%     $ 121.8     100.0%       $ (6.4)      (5.0)%
=======     =====      =======     =====        ======      =====

19

278
OPERATING EXPENSES

Field service costs were $105.4 million in the fiscal year 1998 compared
to $119.8 million in 1997, representing a decrease of $14.4 million, or 12.0%.
As a percentage of net revenues, field service costs were 93.5% of net revenues
in 1997 versus 86.6% of net revenues in 1998. Field service costs are comprised
principally of field labor and related costs and overhead expenses required to
provide services to both dedicated and shared service clients. The decrease in
field service costs is primarily due to significant labor efficiency savings
from new labor deployment systems and controls and a decline in services due to
the completion of a dedicated project in the third quarter 1998.

Selling expenses were $8.2 million in 1998, compared to $10.5 million in
the prior year. As a percentage of net revenues, selling expenses were 6.8% in
1998, compared to 8.2% in 1997. This decrease in costs, both in absolute amount
and as a percentage of net revenues, is a result of lower staffing and travel
expenses.

General and administrative expenses increased 15.2% in 1998 to $11.8
million, compared to $10.2 million in 1997. This increase was due primarily to
consulting and promotional expenses of $1.0 million, salary and salary related
expenses of $0.5 million to support technology advancements, office equipment
and leases of $0.7 million, offset by a reduction in bad debt provision of $0.8
million due to improved collection of outstanding accounts.

Restructuring and other charge payments of $5.0 million did not
significantly differ from the initial restructuring and other charges expense.
In addition, accrued liabilities for restructuring at January 1, 1999 of $0.4
million will be sufficient to pay remaining employee separation costs and
special computer equipment under long-term operating leases no longer in use.
(See Note F-12).

Depreciation and amortization expenses were $1.1 million in 1998
compared to $1.0 million in 1997, an increase of $0.1 million as a result of
depreciation, amortization on computer hardware, software development costs for
shelf technology and for general business purposes.

OTHER INCOME

Interest income decreased 42.2% or $0.3 million in 1998 compared to
1997, due to lower cash balances available for investment in 1998.

Equity in earnings of affiliate represents the Company's share of the
earnings of Ameritel, Inc., a full service telemarketing company. Equity of
earnings of affiliate increased 55.2% or 0.1 million in 1998 compared to 1997.
During 1996, the Company exercised its option to increase its ownership of
Ameritel to 20% and is now required for financial reporting purposes to
recognize its equity interest in Ameritel's earnings.

INCOME TAXES

Income tax expense was approximately $0.1 million in 1998, compared to
an income tax benefit of $2.8 million in 1997, representing an effective rate of
1.3% and (15.5)%, respectively. The 1998 tax rate differed from the expected
federal tax rate of 35% due to a valuation allowance of $1.6 million on the
Company's deferred tax asset, caused by a net operating loss carryforward
created in 1998 and the uncertainty over the future utilization of such 
carryforwards. An income tax benefit in 1997 was derived from carrying back 
net operating losses to previous years and obtaining an income tax refund of 
$2.9 million.

NET LOSS

The Company incurred a net loss of approximately $4.3 million in 1998,
$0.78 per diluted share, compared to a net loss of approximately $15.1 million,
or $2.72 per diluted share, in 1997. The improved performance during 1998 was
primarily due to labor efficiency savings from utilizing new labor systems and
controls, reduction in field service costs from the implementation of the 1997
restructure programs. The loss incurred in 1998 is primarily a result of margin
reductions because of reductions in dedicated clients and higher business unit
overhead rates.

20

279
NEW FINANCIAL MODEL

The Company has developed a new financial model with which its business
can be analyzed to assist in the understanding of the operating results and
impact of various cost functions within the organization. This model follows
more standard metrics and allows the Company to analyze and manage at the
business unit level. The following table illustrates this financial model for
the years ended December 31, 1997 and January 1, 1999.

Management expects to continue to review the business results based on
the comparable financial statement format contained in this Form 10-K until
comparisons can be made using the new financial model.

YEARS ENDED
--------------------------------------------------------
DECEMBER 31                      JANUARY 1
1997                            1999
-----------------------          -----------------------
(dollars in millions)
AMOUNT             %             AMOUNT              %
------           ------          ------           ------

Net revenues                                                  $128.2            100.0%         $121.8            100.0%

Direct business unit field expense                         98.7             77.0            88.9             73.0
------           ------          ------           ------
Gross margin                                                    29.5             23.0            32.9             27.0

Overhead and allocated field expense                       26.6             20.7            20.8             17.1
------           ------          ------           ------
Business unit margin                                             2.9              2.3            12.1              9.9
------           ------          ------           ------

Selling, general and administrative expenses               15.3             11.9            15.8             12.9
Restructure and non-recurring charges                       5.4              4.2             0.0              0.0
------           ------          ------           ------
Total selling, general and administrative expenses              20.7             16.1            15.8             12.9
------           ------          ------           ------

Earnings (loss) before interest, taxes, depreciation
and amortization  (EBITDA)                                     (17.8)           (13.8)           (3.7)            (3.0)

Depreciation and amortization                              (1.0)            (0.8)           (1.1)            (0.9)
Other income                                                0.9              0.7             0.6              0.5
Income tax benefit (provision)                              2.8              2.1            (0.1)            (0.1)
------           ------          ------           ------

Net loss                                                      $(15.1)           (11.8)%        $ (4.3)            (3.5)%
======           ======          ======           ======

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

NET REVENUES

For 1997, net revenues were $128.2 million, compared to $119.9 million
in 1996, a 6.9% increase. The Company's dedicated client net revenues had grown
from $21.9 million in 1996 to $44.4 million in 1997, a 102.7% increase. This
increase in dedicated client net revenues resulted from the addition of two
major new clients. Shared service and project client net revenues decreased from
$98.0 million in 1996 to $83.8 million in 1997, a decrease of $14.2 million or
14.5%. In 1997, the traditional shared services, consisting of regularly
scheduled routed merchandising services, decreased from $68.4 million in 1996 to
$44.9 million in 1997. Resulting in a decrease of $23.5 million or 34.4%, while
project revenues for shared clients increased to $9.3 million or 31.4%

21

280

The following table sets forth net revenues by client type as a percentage of
net revenues for the periods indicated:

YEARS ENDED
-------------------------------------------------------------------------
DECEMBER 31,              DECEMBER 31,
1996                       1997                     CHANGE
--------------------       -------------------       --------------------
(dollars in millions)
AMOUNT          %          AMOUNT          %         AMOUNT           %
------        ------       ------       ------       ------        ------

Shared service and project client net revenues   $ 98.0          81.7%      $ 83.8         65.4%      $(14.2)        (14.5)%
Dedicated client net revenues                      21.9          18.3         44.4         34.6         22.5         102.7
------        ------       ------       ------       ------        ------
Net revenues                                     $119.9         100.0%      $128.2        100.0%      $  8.3           6.9 %
======        ======       ======       ======       ======        ======

OPERATING EXPENSES

In 1997, field service costs increased $25.0 million, or 26.3%, to
$119.8 million, as compared to $94.8 million in 1996. As a percentage of net
revenues, field service costs were 79.1% of net revenues in 1996 versus 93.5% of
net revenues in 1997. Field service costs are comprised principally of field
labor and their related costs, and overhead expenses required to provide
services to both dedicated and shared service clients. The increase in field
service costs is due primarily to labor costs required to provide the necessary
level of business support for dedicated clients. In addition, the Company did
not adequately decrease shared client service labor and overhead costs as the
net revenue from this client base decreased.

Selling expenses were $10.5 million in 1997, compared to $11.1 million
in 1996. As a percentage of net revenues, selling expenses were 8.2% in 1997,
compared to 9.3% in 1996. This decrease in costs, both in absolute amount and as
a percentage of net revenues, is a result of lower staffing and travels.

General and administrative expenses increased 25.9% in 1997 to $10.2
million, compared to $8.1 million in 1996. The increase in general and
administrative expenses was due to increases in expenses that were required to
support overall business growth, including a larger dedicated client base. The
major increases included executive salaries and salary related expenses of $0.3
million, recruiting, employment and training of $0.3 million, and consulting,
legal and office lease expense of $0.6 million. In addition, increased costs
were experienced due to termination costs.

During 1997, the Company experienced declining gross margins, and
resultant operating losses, due to service performance issues and the loss of
several shared clients. This decline in margins has resulted in insufficient
margin dollars to cover the overhead structure, which had developed at the field
level and in the general corporate area. In the quarter ended September 30,
1997, the Company began to address these conditions by restructuring its
operations. The Company redirected its focus in the quarter ended September 30,
1997, on a more disciplined and functional structure. These strategies resulted
in a $5.4 million charge for the restructuring and other additional charges. The
restructure and other charges consisted of $1.5 million of identified severance,
lease costs in various management and administrative functions and $2.1 million
in write-downs and accruals associated with the redirection of the Company's
technology strategies. Additional charges consist primarily of $1.3 million of
reserves, write-offs related to unprofitable contracts and $0.5 million of costs
associated with changes in the Company's service delivery model.

Depreciation and amortization expenses were $1.0 million in 1997
compared to $0.6 million in 1996. The depreciation and amortization on computer
hardware and the software development costs for shelf technology increased this
expense $0.4 million.

22

281
OTHER INCOME

Interest income decreased slightly in 1997 compared to 1996, due to
lower cash balances available for investment in 1997. Other income included
interest income on the net proceeds from the Company's initial public offering,
which took place in March 1996.

Equity in earnings of affiliate represents the Company's share of the
earnings of Ameritel, Inc., a full service telemarketing company. Equity in
earnings of affiliate increased by 33.3% in 1997 compared to 1996. During 1996,
the Company exercised its option to increase its ownership of Ameritel to 20%
and is now required for financial reporting purposes to recognize its equity
interest in Ameritel earnings.

INCOME TAXES

Income tax benefit was approximately $2.8 million in 1997, compared to
income tax expense of $2.4 million in 1996, representing an effective rate of
(15.5%) and 39.2%, respectively. The 1997 tax benefit rates differed from the
expected Federal and tax rate of 35% due to a valuation allowance of $3.6
million on the Company's deferred tax asset, caused by a net operating loss
carryforward created in 1997.

NET LOSS

The Company incurred a net loss of approximately $15.1 million in 1997,
$2.72 per diluted share, compared to net income of approximately $3.8 million,
or $0.63 per diluted share, in 1996. The net loss for 1997 included the net
impact, after related tax benefit, of restructure and other charges of $4.6
million, or $0.83 per diluted share. The loss incurred in 1997 is primarily a
result of margin reductions due to reductions in shared service clients and
start up expenses on dedicated client services, inefficiencies in field labor
execution, poor pricing decisions for some client contracts, higher business
unit overhead costs and the recognition of restructure charges and other
non-reoccurring charges.

LIQUIDITY AND CAPITAL RESOURCES

On March 1, 1996, the Company completed an initial public offering of
its Common Stock, raising $26.5 million. Prior to this offering, the Company's
primary sources of financing were senior borrowings from a bank under a
revolving line of credit and subordinated borrowings from two stockholders. As
of January 1, 1999, the Company used the proceeds from the offering to repay
bank debt of $3.4 million, to repurchase 507,000 shares of the Company's stock
for approximately $3.0 million and to fund the Company's operating losses in
1997 and 1998. During the year ended January 1, 1999, the Company had a net
decrease in cash of $1.9 million, resulting from its operating losses and
restructure charge payments and a reduction in accounts payable, that were
offset partially by a reduction in accounts receivable, income tax receivable
and proceeds of $2.0 million from its line of credit.

In March 1997, the Company's Board of Directors approved a stock
repurchase program under which the Company was authorized to repurchase up to
1,000,000 shares of Common Stock from time to time in the open market, depending
on market conditions. This program was funded by proceeds from the initial
public offering. As of July 14, 1997, the Company repurchased an aggregate of
507,000 shares of its Common Stock for an aggregate price of approximately $3.0
million. No further repurchases are currently planned.

In December 1998, PIA Merchandising Co., Inc. ("PIA Co.") and another
subsidiary of PIA entered into a loan and security agreement with Mellon Bank,
N.A. The agreement provides for a revolving line of credit that allows maximum
borrowing of $20.0 million and requires PIA Co. to borrow and maintain a minimum
balance of $2.0 million. The three-year credit facility will be used for working
capital purposes and potential acquisitions.

Cash and cash equivalents totaled $11.1 million at January 1, 1999
compared with $13.0 million at December 31, 1997. At January 1, 1999 and
December 31, 1997, the Company had working capital of $13.8 million and $15.9
million, respectively, and current ratios of 2.50 and 1.95, respectively.

23

282

Net cash used in operating activities in 1998 was $3.4 million, compared
with $2.8 million in 1997. This use of cash for operating activities in 1998
resulted primarily from net operating losses of $4.3 million and a reduction in
accrued liabilities primarily attributed to the Company's 1997 restructuring and
other charges and a reduction in accounts payable of $2.2 million related to a
reduction in third party payroll liability. These uses were offset by an income
tax refund of $2.9 million outstanding in 1997 and a decrease in account
receivable of $5.1 million from improved collection of outstanding accounts. Net
cash used in investing activities for 1998 was $0.7 million compared to $0.8
million in 1997 from additions to property and equipment and internally
developed software. Net cash provided by financing activities for 1998 was $2.1
million, compared to net cash used in financing activities of $2.9 million in
1997. In 1998 the Company received net proceeds from the issuance of common
stock of $0.1 million and increased the line of credit by $2.0 million.

The above activity resulted in a decrease in cash and cash equivalents
of $1.9 million for the year ended January 1, 1999.

Cash and cash equivalents and the timely collection of its receivables
provide the Company's current liquidity. However, the potential uncollectibility
of receivables due from any of PIA's major clients, or a significant reduction
in business from such clients, or the inability to acquire new clients would
have an adverse material effect on the Company's cash resources and its ongoing
ability to fund operations.

The Company had a 4.3 million loss and experienced a decrease in cash
and cash equivalents of $1.9 million for the year ended January 1, 1999.
However, with the addition of the revolving line of credit, timely collection of
receivables, and the Company's positive working capital position, management
believes the funding of operations over the next twelve months will be
sufficient.

PIA may incur additional indebtedness in 1999 in connection with the
merger. SPAR Group acquired the assets of an incentive marketing company in
January 1999. A portion of the purchase price was paid through the issuance of a
promissory note in the principal amount of $12,422,189 (plus an earnout, if
any), which matures on September 15, 1999. In addition, the stockholders of SPAR
Group loaned SPAR Group $2,958,000 to facilitate the acquisition. If this
indebtedness is not repaid before the transaction with PIA is consummated, the
combined company will assume these obligations. PIA will also be obligated,
under certain circumstances, to pay severance compensation to its employees in
connection with the merger. Further, PIA will incur substantial costs in
connection with the transaction, including legal fees of approximately $0.4
million and investment banking fees of approximately $1.0 million. PIA has
entered into discussions with Mellon Bank to increase its credit line to enable
it to meet its cash needs in connection with the merger and future potential
acquisitions in 1999.

YEAR 2000 SOFTWARE COSTS

Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. As a result, many
date-sensitive computer applications will fail beginning January 1, 2000 because
they are unable to process dates properly beyond December 31, 1999. PIA has
reviewed its computer systems to identify areas that could be affected by Year
2000 issues and has implemented a plan to resolve these issues.

PIA has substantially completed the evaluation of its information
technology infrastructure, software, hardware and communications systems. PIA
believes that its critical hardware and software applications are currently Year
2000 compliant. Completion of PIA's plan to upgrade all hardware and software
applications to be Year 2000 compliant is expected by the third quarter of 1999.
Third party vendors are also being reviewed for Year 2000 compliance and PIA
expects this risk assessment to be complete by the second quarter of 1999. PIA's
assessment and evaluation efforts include testing systems, inquiries of third
parties and other research. By implementing significant systems upgrades, PIA
believes that it has substantially reduced its potential internal exposure to
Year 2000 problems.

In the event that certain systems fail to function properly, manual
processes will be implemented. Due to the nature of the business, PIA does not
anticipate a system failure to cease the operations, as operations are not
deemed to be systems dependent. Additionally, PIA plans to be capable of
operating in the event of a systems failure of any vendor.

24

283

PIA will utilize internal resources to reprogram, or replace and test
the software for Year 2000 modifications. The total cost of the Year 2000
project is estimated at $67,000 and is being funded through operating cash
flows. Of the total project cost, approximately $6,000 was expensed in the
fiscal year 1998 and the remaining $61,000 will be expensed in 1999. It is not
expected that these costs will have a material effect on the results of
operations.

The extent and magnitude of the Year 2000 problem as it will affect PIA
externally, both before and after January 1, 2000, is difficult to predict or
quantify for a number of reasons. These include the lack of control over systems
that are used by third parties that are critical to PIA's operation, the
complexity of testing inter-connected networks and applications that depend on
third party networks. If any of these third parties experience Year 2000
problems, it could have a material adverse effect on PIA.

PIA is not currently aware of any material operational issues associated
with preparing its internal systems for the Year 2000, or the adequacy of
critical third party systems. PIA has not developed a contingency plan in case
it does not achieve Year 2000 compliance on or before December 31, 1999. The
results of its evaluation and assessment efforts do not indicate a need for
contingency planning. PIA intends to continue assessing its Year 2000
compliance, implementing compliance plans and communicating with third parties
about their Year 2000 compliance. If PIA's continued efforts indicate that
contingency planning is prudent, PIA will undertake appropriate planning at that
time.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is exposed to market risk related to changes in interest
rates. A discussion of the Company's accounting policies for financial
instruments and further disclosures relating to financial instruments is
included in the Summary of Significant Accounting Policies in the Notes to
Consolidated Financial Statements. The Company's monitors the risks associated
with interest rates and financial instrument positions.

The Company's revenue derived from international operations is not
material and, therefore, the risk related to foreign currency exchange rates is
not material.

INVESTMENT PORTFOLIO

The Company has no derivative financial instruments or derivative
commodity instruments in its cash and cash equivalents and investments. The
Company invests its cash and cash equivalents and investments in high-quality
and highly liquid investments consisting of taxable money market instruments,
corporate bonds and some tax-exempt securities. The average yields on the
Company's investments in fiscal 1998 resulted primarily from investments and
averaged approximately 4.9%. As of January 1, 1999, PIA's cash and cash
equivalents and investments consisted primarily of taxable money market
instruments, corporate and tax-exempt securities with maturities of less than
one year with an average yield of approximately 3.7%.

DEBT

The Company's debt is comprised of a line of credit with Mellon Bank
N.A. and requires monthly interest payments based on a variable interest rate
applied to the outstanding loan balance. If there were a 1% change in the
interest rate based upon, the Company's minimum borrowing requirement of
$2,000,000, interest expense would increase or decrease by $20,000 per annum.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See Item 14 of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

25

284
PART III

ITEMS 10, 11, 12 AND 13.

The information required in these items 10, 11, 12 and 13 of this Form
10-K is incorporated by reference to those portions of the Company's 1999 Proxy
Statement which contains such information.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)   1. INDEX TO FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT:

Independent Auditors' Report                                                 F-1

Consolidated Balance Sheets as of December 31, 1997 and January 1, 1999      F-2

Consolidated Statements of Operations for the three years
in the period ended January 1, 1999                                      F-4

Consolidated Statements of Stockholders' Equity for the three years
in the period ended January 1, 1999                                      F-5

Consolidated Statements of Cash Flows for the three years in the period
ended January 1, 1999                                                    F-6

Notes to Consolidated Financial Statements for the three years
in the period ended January 1, 1999                                      F-8

2. FINANCIAL STATEMENT SCHEDULES.

Schedule II - Valuation and Qualifying Accounts for the three years in
the period ended January 1, 1999                                         F-25

3. EXHIBITS.

EXHIBIT
NUMBER             DESCRIPTION
------             -----------

3.1     *   Certificate of Incorporation of PIA

3.2     *   By-laws of PIA

4.1     *   Registration Rights Agreement entered into as of
January 21, 1992 by and between RVM Holding Corporation.
RVM/PIA, a California Limited Partnership, The Riordan
Foundation and Creditanstalt-Bankvering.

10.1     *   1990 Stock Option Plan

10.2         Amended and Restated 1995 Stock Option Plan (incorporated by
reference of Exhibit 10.2 to the Company's Form 10Q for the
2nd Quarter ended July 3, 1998).

10.3     *   1995 Stock Option Plan for Non-employee Directors

10.4         Employment Agreement dated as of June 25, 1997 between
PIA and Terry R. Peets (incorporated by reference to
Exhibit 10.5 to the Company's Form 10-Q for the 2nd
Quarter ended June 30, 1997)

10.5         Severance Agreement dated as of February 20, 1998
between PIA and Cathy L. Wood (incorporated by reference
to Exhibit 10.5 to the Company's Form 10-Q for the 1st
Quarter ended April 30, 1998)

26

285

EXHIBIT
NUMBER             DESCRIPTION
- ------             -----------

10.6         Severance Agreement dated as of August 10, 1998 between
PIA and Clinton E. Owens (incorporated by reference to
Exhibit 10.6 to the Company's Form 10-Q for the 3rd
Quarter ended October 2, 1998) 

10.7         Amendment No. 1 to Employment Agreement dated as of
October 1, 1998 between PIA and Terry R. Peets 
(filed herein)

10.8         Amended and Restated Severance Compensation Agreement
dated as of October 1, 1998 between PIA and Cathy L. Wood
(filed herein)

10.9         Loan and Security Agreement dated December 7, 1998 among Mellon 
Bank, N.A., PIA Merchandising Co., Inc., Pacific Indoor Display 
Co. and PIA. (filed herein)

10.10        Agreement and Plan of Merger dated as of February 28,
1999 among PIA, S.G. Acquisition, Inc., PIA
Merchandising Co., Inc., SPAR Acquisition, In., SPAR
Marketing, Inc., SPAR Marketing Force, Inc., SPAR, Inc.,
SPAR/Burgoyne Retail Services, Inc., SPAR Incentive
Marketing, Inc., SPAR MCI Performance Group, Inc. and
SPAR Trademarks, Inc. (filed herein)

10.11        Voting Agreement dated as of February 28, 1999 among
PIA, Clinton E. Owens, RVM/PIA, California limited
partnership, Robert G. Brown and William H. Bartels
(filed herein)

21.1     *   Subsidiaries of the Company

23.1         Consent of Deloitte & Touche LLP

27.1         Financial Data Schedule

*Filed as an Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-80429) on December 14, 1995.

(b) REPORTS ON FORM 8-K.

None

27

286

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1943, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

PIA MERCHANDISING SERVICES, INC.

By: /s/ Terry R. Peets
-------------------------------
Terry R. Peets
President, Chief Executive Officer and Director

Date:      March 30, 1999
-------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated.

SIGNATURE                    TITLE                                    DATE       
- ---------                    -----                                    ----       

/s/ Clinton E. Owens         Chairman of the Board                March 30, 1999
- -------------------------                                                          
Clinton E. Owens                                                               

/s/ Terry R. Peets           President, Chief Executive           March 30, 1999
- -------------------------    Officer and Director                 
Terry R. Peets                                      

/s/ Cathy L. Wood            Executive Vice President,            March 30, 1999
- -------------------------    Chief Financial Officer and            
Cathy L. Wood            Secretary (Principal Financial
and Accounting Officer)                               

/s/ Patrick W. Collins       Director                             March 30, 1999
- -------------------------
Patrick W. Collins

/s/ John A. Colwell          Director                             March 30, 1999
- -------------------------                                                          
John A. Colwell                                                                

/s/ Joseph H. Coulombe       Director                             March 30, 1999
- -------------------------                                                          
Joseph H. Coulombe                                           

/s/ Patrick C. Haden         Director                             March 30, 1999
- -------------------------                                                          
Patrick C. Haden                                                               

/s/ J. Christopher Lewis     Director                             March 30, 1999
- -------------------------
J. Christopher Lewis

28

287
PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

PAGE
----

INDEPENDENT AUDITORS' REPORT                                                 F-1

FINANCIAL STATEMENTS:

Consolidated balance sheets as of December 31, 1997 and January 1, 1999      F-2

Consolidated statements of operations for each of the three years
in the period ended January 1, 1999                                       F-4

Consolidated statements of stockholders' equity for each
of the three years in the period ended January 1, 1999                    F-5

Consolidated statements of cash flows for each of the three years
in the period ended January 1, 1999                                       F-6

Notes to consolidated financial statements for each of the three years
in the period ended January 1, 1999                                       F-8

Schedule II - Valuation and qualifying accounts                              F-25

29

288

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
PIA Merchandising Services, Inc.:

We have audited the accompanying consolidated balance sheets of PIA
Merchandising Services, Inc. and subsidiaries (the Company) as of December 31,
1997 and January 1, 1999, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended January 1, 1999. Our audits also included the financial statement schedule
listed in Item 14(a) 2. These consolidated financial statements and financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of PIA Merchandising
Services, Inc. and subsidiaries as of December 31, 1997 and January 1, 1999, and
the results of their operations and their cash flows for each of the three years
in the period ended January 1, 1999 in conformity with generally accepted
accounting principles. Also, in our opinion, such financial statement schedule,
when considered in relation to the financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

Deloitte & Touche LLP

Costa Mesa, California
February 18, 1999
(Except for Note 14, as to which the date is February 28, 1999)

F-1

289

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

DECEMBER 31,   JANUARY 1,
1997           1999
-----------    ----------

CURRENT ASSETS:
Cash and cash equivalents                              $   12,987     $  11,064
Accounts receivable, net (Note 3)                          16,053        11,222
Income tax refund receivable (Note 6)                       2,905            81
Prepaid expenses and other current assets                     816           712
----------     ---------

Total current assets                                   32,761        23,079

PROPERTY AND EQUIPMENT, net (Note 3)                        2,416         1,991

INVESTMENTS AND OTHER ASSETS:
Investment in affiliate (Note 4)                              418           553
Other assets                                                  872           431
----------     ---------

Total investments and other assets                      1,290           984
----------     ---------

Total assets                                       $   36,467     $  26,054
==========     =========

See notes to consolidated financial statements

F-2

290

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)

LIABILITIES AND STOCKHOLDERS' EQUITY

DECEMBER 31,      JANUARY 1,
1997             1999
------------      ----------

CURRENT LIABILITIES:
Accounts payable                                               $  3,442         $  1,194
Other current liabilities (Note 3)                               13,334            7,951
Income taxes payable (Note 6)                                        47               90
--------         --------

Total current liabilities                                    16,823            9,235

LINE OF CREDIT AND LONG-TERM LIABILITIES (Note 5)                   966            2,095

COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS' EQUITY (Notes 10 and 11):
Preferred stock, $.01 par value;
3,000,000 shares authorized; none issued and 
outstanding Common stock, $.01 par value;
15,000,000 shares authorized; 5,392,558 and 
5,477,846 shares issued and
outstanding as of December 31, 1997
and January 1, 1999, respectively                                  59               60
Additional paid-in capital                                       33,429           33,740
Accumulated deficit                                             (11,806)         (16,072)
Less treasury stock at cost (507,000 shares at 
December 31, 1997 and January 1, 1999)                         (3,004)          (3,004)
--------         --------

Total stockholders' equity                                   18,678           14,724
--------         --------

Total liabilities and stockholders' equity                 $ 36,467         $ 26,054
========         ========

See notes to consolidated financial statements

F-3

291

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

YEARS ENDED
----------------------------------------------- 
DECEMBER 31,      DECEMBER 31,       JANUARY 1,
1996              1997               1999
------------      ------------       ---------- 

NET REVENUES (Note 13)                                        $ 119,940         $ 128,208         $ 121,788

OPERATING EXPENSES:
Field service costs                                              94,841           119,830           105,448
Selling expenses                                                 11,133            10,482             8,245
General and administrative expenses (Notes 7, 8 and 9)            8,081            10,234            11,788
Restructuring and other charges (Note 2)                                            5,420
Depreciation and amortization                                       595               997             1,129
---------         ---------         ---------

Total operating expenses                                    114,650           146,963           126,610
---------         ---------         ---------

OPERATING INCOME (LOSS)                                           5,290           (18,755)           (4,822)

OTHER INCOME:
Interest expense                                                    (46)                                (25)
Interest income                                                     869               799               487
Equity in earnings of affiliate (Note 4)                             72                96               149
---------         ---------         ---------

Total other income                                             895               895               611
---------         ---------         ---------

INCOME (LOSS) BEFORE PROVISION (BENEFIT)
FOR INCOME TAXES                                                6,185           (17,860)           (4,211)

INCOME TAX PROVISION (BENEFIT) (Note 6)                           2,426            (2,761)               55
---------         ---------         ---------

NET INCOME (LOSS)                                             $   3,759         $ (15,099)        $  (4,266)
=========         =========         =========

BASIC EARNINGS (LOSS) PER SHARE (Note 12)                     $    0.70         $   (2.72)        $   (0.78)
=========         =========         =========

DILUTED EARNINGS (LOSS) PER SHARE (Note 12)                   $    0.63         $   (2.72)        $   (0.78)
=========         =========         =========

WEIGHTED AVERAGE COMMON SHARES - BASIC                            5,370             5,551             5,439
=========         =========         =========

WEIGHTED AVERAGE COMMON SHARES - DILUTED                          5,990             5,551             5,439
=========         =========         =========

See notes to consolidated financial statements

F-4

292

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

Years ended December 31, 1996 and 1997 and January 1, 1999

RETAINED
COMMON STOCK            TREASURY STOCK        ADDITIONAL   EARNINGS      TOTAL
---------------------     --------------------      PAID-IN  (ACCUMULATED STOCKHOLDERS'
SHARES       AMOUNT       SHARES      AMOUNT       CAPITAL    DEFICIT)      EQUITY
--------     --------     --------    --------    ---------  ------------ -------------

BALANCE, January 1, 1996                       3,564     $  6,454           --    $     --     $     --    $   (466)    $  5,988

Change in stated par value of
shares from no par to $.01                               (6,418)                                6,418                         
Stock issued to the public                     2,138           21                                26,499                   26,520
Stock options exercised                           58            1                                   334                      335
Tax benefit related to exercise of stock
options                                                                                           116                      116
Cashless exercise of warrants (Note 11)          131                                                                            
Net income                                                                                                    3,759        3,759
--------     --------     --------    --------     --------    --------     --------
BALANCE, December 31, 1996                     5,891           58                                33,367       3,293       36,718

Stock options exercised                            9            1                                    62                       63
Repurchase of common stock                      (507)                      507      (3,004)                               (3,004)
Net loss                                                                                                    (15,099)     (15,099)
--------     --------     --------    --------     --------    --------     --------
BALANCE, December 31, 1997                     5,393           59          507      (3,004)      33,429     (11,806)      18,678

Stock options exercised                           30                                                 88                       88
Employee stock purchases                          12                                                 45                       45
Shares issued as bonus (Note 10)                  43            1                                   178                      179
Net loss                                                                                                     (4,266)      (4,266)
--------     --------     --------    --------     --------    --------     --------
BALANCE, January 1, 1999                       5,478     $     60          507    $ (3,004)    $ 33,740    $(16,072)    $ 14,724
========     ========     ========    ========     ========    ========     ========

See notes to consolidated financial statements

F-5

293

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

YEARS ENDED
--------------------------------------------
DECEMBER 31,     DECEMBER 31,     JANUARY 1,
1996             1997             1999
------------    -------------     ----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                             $  3,759         $(15,099)        $ (4,266)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization                                    595              997            1,129
Equity in earnings of affiliate                                  (72)             (96)            (149)
Deferred income taxes, net                                      (167)             360
Provision for doubtful receivables and other, net                105              918             (270)
Restructuring and other charges (Note 2)                                        5,420
Changes in assets and liabilities:
Accounts receivable                                        (10,522)           5,659            5,101
Income tax refund receivable                                                   (2,905)           2,824
Prepaid expenses and other current assets                       74             (252)             104
Other assets                                                   213             (744)             441
Accounts payable                                            (1,066)           2,670           (2,248)
Other current liabilities                                    5,657              173           (5,204)
Income taxes payable                                          (228)             (64)              43
Other liabilities                                                               131             (871)
--------         --------         --------
Net cash used in operating activities                     (1,652)          (2,832)          (3,366)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                               (332)            (759)            (516)
Capitalization of software development costs                    (1,987)                             (174)
Investment in affiliate                                           (150)
--------         --------         --------

Net cash used in investing activities                     (2,469)            (759)            (690)

See notes to consolidated financial statements

F-6

294

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS)

YEARS ENDED
---------------------------------------------
DECEMBER 31,    DECEMBER 31,       JANUARY 1,
1996             1997             1999
------------    ------------       ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt                             $ (3,400)        $     --         $     --
Proceeds from long-term debt                                                                          2,000
Proceeds from issuance of common stock to the public               26,520
Proceeds from issuance of common stock                                335               63              133
Repurchase of common stock                                                          (3,004)
--------         --------         --------
Net cash provided by(used in) financing activities           23,455           (2,941)           2,133
--------         --------         --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS                                                 19,334           (6,532)          (1,923)

CASH AND CASH EQUIVALENTS, beginning of period                        185           19,519           12,987
--------         --------         --------
CASH AND CASH EQUIVALENTS, end of period                         $ 19,519         $ 12,987         $ 11,064
========         ========         ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION - Cash paid (refunded) during the year for:
Interest                                                       $     69         $     --         $     25
========         ========         ========
Income taxes                                                   $  2,853         $    129         $ (2,753)
========         ========         ========

See Notes 10 and 11 to consolidated financial statements for description of
noncash transactions.

See notes to consolidated financial statements

F-7

295

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company Description - PIA Merchandising Services, Inc. and subsidiaries
("Company") provides in-store merchandising services primarily on behalf
of branded product manufacturers at retail grocery stores, mass
merchandisers, drug stores and discount drug stores. The Company's
in-store services include checking for authorized distribution of client
products, cutting in products approved for distribution but not present on
the shelf, setting category shelves in accordance with approved store
schematics, ensuring shelf tags are in place, checking for the overall
salability of clients' products, and performing new product and promotion
selling. The Company also performs special in-store projects, such as new
store sets and existing store resets, remerchandisings, remodels and
category implementations, and executes and maintains point of purchase
displays and materials. In addition, the Company collects and provides to
certain clients a variety of merchandising data that is category and
store-specific. The Company is also a supplier of regularly scheduled,
shared merchandising services in the United States. The Company's
management has evaluated the allocation of resources in assessing
performance and determined the Company operates in three operating
segments, dedicated services, shared services, and project services (Note
13).

Principles of Consolidation - The consolidated financial statements
include the accounts of PIA Merchandising Services, Inc. and its wholly
owned subsidiaries. All significant intercompany accounts and transactions
have been eliminated in consolidation. The equity method of accounting is
used for the Company's investment in affiliate (Note 4).

Cash Equivalents - The Company considers all highly liquid short-term
investments with original maturities of three months or less to be cash
equivalents.

Accounts Receivable and Credit Risk - During the ordinary course of the
Company's business, the Company grants trade credit to its clients, which
consist primarily of packaged goods manufacturers and retailers. The
Company's ten largest clients generated approximately 57.0%, 69.0% and
75.0% of the Company's net revenues for the fiscal years ended December
31, 1996, December 31, 1997 and January 1, 1999, respectively.

During the fiscal year ended January 1, 1999, three of the Company's
clients accounted for 15.6%, 12.6% and 10.6% of the Company's net
revenues. During 1997, two clients accounted for 16.0% and 13.6% of the
Company's net revenues. Given the significant amount of net revenues
derived from certain clients, collectibility issues arising from financial
difficulties of any of these clients or the loss of any such clients could
have a material adverse effect on the Company's business. Unbilled
accounts receivable represent merchandising services performed that are
pending billing until the requisite documents have been processed or
projects have been completed (Note 3).

Property and Equipment - Property and equipment are stated at cost and
depreciated on the straight-line method over estimated useful lives,
ranging from three to seven years. Leasehold improvements are amortized
over the estimated useful life of the asset or the term of the lease,
whichever is shorter.

F-8

296

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

The Company has chosen to early adopt Statement of Position ("SOP") No. 98
-1, Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use as of January 1, 1998. The SOP provides guidance in
accounting for the costs of computer software developed or obtained for
internal use. The effects of the adoption of the SOP have been reflected
in the 1998 consolidated financial statements and are not material.

Other Assets - Other assets consist primarily of refundable deposits.

Deferred Revenue - Client payments received in advance of merchandising
services performed are classified as deferred revenue (Note 3).

Amounts Held on Behalf of Third Parties - Amounts held on behalf of third
parties arise from agreements with retailers to provide services for their
private label manufacturers' products and represent amounts to be utilized
for certain future services including merchandising-related expenditures
on behalf of the retailers (Note 3). These agreements renew annually and
are cancelable on December 31 of each year or upon ninety-day written
notice by either party.

Revenue Recognition - The Company's services are provided under various
types of contracts, which consist primarily of fixed fee and
commission-based arrangements. Under fixed fee arrangements, revenues are
recognized monthly based on a fixed fee per month over a service period of
typically one year, as defined in the contract.

The Company's commission-based contracts provide for commissions to be
earned based on a specified percentage of the client's net sales of
certain products to designated retail chains. In conjunction with these
commission arrangements, the Company receives draws on a monthly basis,
which are to be applied against commissions earned. These draws
approximate estimated minimum revenue to be earned on the contract and are
recognized on a monthly basis, over a service period of typically
one-year. The Company recognizes adjustments on commission-based sales in
the period such amounts become determinable. Commissions are usually owed
to the Company in excess of draws received.

The Company also performs services on a specific project basis. Revenues
related to these projects are recognized as services are performed or
costs are incurred. Certain of the Company's contracts are to perform
project work over a specified period ranging from one to twelve months.
Revenue under these types of contracts is recognized essentially on the
percentage of completion method. Provisions for estimated losses on
uncompleted contracts are recorded in the period in which such losses are
determinable.

Field Service Costs - Field service costs are comprised principally of
field labor and related costs and expenses required to provide shared
services, project activities, key account management and related
technology costs, as well as field overhead required to support the
activities of these groups of employees.

F-9

297

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

Accounting for Stock-Based Compensation - Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation, requires disclosure of fair value method of accounting for
stock options and other equity instruments. Under the fair value method,
compensation cost is measured at the grant date based on the fair value of
the award and is recognized over the service period, which is usually the
vesting period. The Company has chosen, under the provisions of SFAS No.
123, to continue to account for employee stock-based transactions under
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock
Issued to Employees. The Company has disclosed in Note 11 to the
consolidated financial statements pro forma diluted net income (loss) and
net income (loss) per share as if the Company had applied the fair value
method of accounting.

Income Taxes - Income taxes are provided for the tax effects of
transactions reported in the financial statements and consist of taxes
currently due plus deferred taxes related primarily to differences between
the basis of assets and liabilities for financial and tax reporting. The
deferred tax assets and liabilities represent the future tax return
consequences of those differences, which will either be taxable or
deductible when the assets and liabilities are recovered or settled.
Deferred taxes are also recognized for operating losses that are available
to offset future taxable income and tax credits that are available to
offset future income taxes. In the event the future consequences of
differences between financial reporting bases and tax bases of the
Company's assets and liabilities result in deferred tax assets, an
evaluation of the probability of being able to realize the future benefits
indicated by such asset is required. A valuation allowance is provided
when it is more likely than not that some portion or the entire deferred
tax asset will not be realized.

Comprehensive Income - The Company has adopted SFAS No. 130, Reporting
Comprehensive Income. For the years ended January 1, 1999, December 31,
1997 and December 31, 1996, the Company has no reported differences
between net income (loss) and comprehensive income (loss). Therefore,
statements of comprehensive income (loss) have not been presented.

Earnings Per Share - The Company has adopted SFAS No. 128, Earnings per
Share, which replaces the presentation of "Primary" earnings per share
with "Basic" earnings per share and the presentation of "Fully Diluted"
earnings per share with "Diluted" earnings per share. Prior periods have
been restated to reflect the change in presentation.

Basic earnings per share amounts are based upon the weighted-average
number of common shares outstanding. Diluted earnings per share amounts
are based upon the weighted-average number of common and potential common
shares for each period presented. Potential common shares include stock
options, using the treasury stock method.

Vendor Concentration - In addition to the Company's own employees, the
Company utilizes a force of trained merchandisers employed by a
third-party payrolling company engaged principally in the performance of
retailer-mandated and project activities. For the fiscal years ended
December 31, 1996, December 31, 1997 and January 1, 1999, the Company
paid this payrolling company approximately $31,145,000, $38,936,000 and
$32,213,000, respectively (Note 3).

F-10

298

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
these estimates.

Fair Value of Financial Instruments - The Company's consolidated balance
sheets include the following financial instruments: cash and cash
equivalents, accounts receivable, accounts payable and long term debt. The
Company considers carrying amounts of current assets and liabilities in
the consolidated financial statements to approximate the fair value for
these financial instruments, because of the relatively short period of
time between origination of the instruments and their expected
realization. The carrying amounts of long-term debt approximate fair value
because the obligation bears interest at a floating rate.

Change in Fiscal Year - Effective January 1, 1998, the Company changed its
fiscal year end for financial statement purposes from a calendar year to a
52/53-week fiscal year. Beginning with fiscal year 1998, the Company's
fiscal year will end on the Friday closest to December 31. The years ended
December 31, 1997 and January 1, 1999 each consist of approximately 52
weeks. The Company does not believe that this change has a material impact
on the financial statements.

New Accounting Pronouncements - The Company has adopted SFAS No. 131.
Disclosure About Segments of an Enterprise and Related Information. In
accordance with SFAS No. 131, the Company has disclosed in Note 13 certain
information about the Company's products and major customers.

In June 1998, the Financial Accounting Standards Board (the "FASB") issued
SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, which the Company is required to adopt effective in its fiscal
year 2000. SFAS No. 133 will require the Company to record all derivatives
on the balance sheet at fair value. The Company does not currently engage
in hedging activities and will continue to evaluate the effect of adopting
SFAS No. 133. The Company is expected to adopt SFAS No. 133 in its fiscal
year 2000.

F-11

299

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

2.    RESTRUCTURING AND OTHER CHARGES

During 1997, the Company experienced declining gross margins and resultant
operating losses, due to service performance issues and the loss of several
shared clients. This decline in margins has resulted in insufficient margin
dollars to cover the overhead structure, which had developed at the field level
and in the general corporate area. In the quarter ended September 30, 1997, the
Company addressed these conditions by restructuring its operations, focusing on
a more disciplined and functional operational structure, and redirecting its
technology strategies, resulting in a $5,420,000 charge for restructuring and
other charges. The restructuring charges consist of $1,522,000 identified
severance of corporate and field employees and lease costs in various management
and administrative functions. The restructuring charges also include $2,121,000
in the write downs and accruals associated with the abandonment of certain
internally developed software and specialized computer equipment under long-term
operating leases due to a redirection of the Company's technology strategies
(Note 3). Other charges consisted primarily of $1,297,000 of reserves and write
offs related to unprofitable contracts, and $480,000 of costs associated with
changes in the Company's service delivery model. At January 1, 1999, $428,000 is
remaining in accrued liabilities in the accompanying consolidated balance sheet
consisting of $410,000 to specialized computer equipment under long-term
operating leases no longer in use and $18,000 to employee separation costs.

The following table displays a rollforward of the liabilities for restructuring
and other charges from December 31, 1996 to January 1, 1999 (in thousands):

INITIAL                        DECEMBER 31,                     JANUARY 1,
RESTRUCTURING         1997           1997            1998            1999
TYPE OF COST                         AND OTHER CHARGES   DEDUCTIONS       BALANCE        DEDUCTIONS       BALANCE
- ----------------------------------  ------------------- ------------   --------------   ------------    ------------

Employee Separation                     $ 1,372         $  (885)        $   487         $  (469)        $    18
Facility Closing                            150                            150             (150)
Technology writedown
and related operating leases          2,121          (1,086)          1,035            (625)            410
Unprofitable Contracts                    1,297            (797)            500            (500)
Other                                       480            (338)            142            (142)
-------         -------         -------         -------         -------
$ 5,420         $(3,106)        $ 2,314         $(1,886)        $   428
=======         =======         =======         =======         =======

Management believes that the remaining reserves for restructuring are adequate
to complete its plan.

F-12

300
PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

3.    SUPPLEMENTAL BALANCE SHEET INFORMATION

Accounts receivable, net, consist of the following (in thousands):

DECEMBER 31,      JANUARY 1,
1997             1999
------------      ----------

Trade                                            $ 15,411         $  9,511
Unbilled                                            2,034            2,358
Non-trade                                              59              174
--------         --------

17,504           12,043
Allowance for doubtful accounts and other          (1,451)            (821)
--------         --------

$ 16,053         $ 11,222
========         ========

Property and equipment, net, consist of the following (in thousands):

DECEMBER 31,      JANUARY 1,
1997             1999
------------      ----------

Equipment                                        $  3,680         $  3,873
Furniture and fixtures                                662              719
Leasehold improvements                                160              165
Capitalized software development costs                902            1,076
--------         --------

5,404            5,833
Less accumulated depreciation and amortization     (2,988)          (3,842)
--------         --------

$  2,416         $  1,991
========         ========

During 1997, the Company recorded certain restructuring charges (Note 2).
In connection with the restructuring, the Company recorded a charge of
approximately $1,000,000 for the impairment of capitalized software costs.

F-13

301
PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

Other current liabilities consist of the following (in thousands):

DECEMBER 31,    JANUARY 1,
1997           1999
------------    ----------

Accrued salaries and other related costs          $ 1,237        $ 1,123
Accrued payroll to third party                      2,847          1,557
Accrued medical and compensation insurance          1,456          1,906
Deferred revenue                                    1,039            426
Amounts held on behalf of third parties             1,116            641
Accrued rebate                                      2,200
Restructuring costs                                 1,475            428
Other                                               1,964          1,870
-------        -------
$13,334        $ 7,951
=======        =======

4.    INVESTMENT IN AFFILIATE

During 1996, the Company increased its voting ownership in Ameritel
Corporation, a full-service telemarketing company, to 20%. Accordingly,
the Company changed its method of carrying the investment from cost to
equity as required by generally accepted accounting principles. The change
in method was not material to the carrying value of the investment in the
accompanying financial statements.

Following is a summary of condensed unaudited financial information
pertaining to Ameritel Corporation (in thousands):

DECEMBER 31,    JANUARY 1, 
1997           1999    
------------    ---------- 

Current assets                                     $1,545         $2,816   
Noncurrent assets                                   1,252          3,786   
Current liabilities                                 1,443          1,827   
Long-term liabilities                                 128          2,803   
Stockholders' equity                                1,226          1,972   
Net income for the year                               523            746   

F-14

302

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

5.    LINE OF CREDIT

On December 10, 1998, the Company entered a long-term revolving line of
credit agreement a bank to provide an asset-based credit facility with
maximum borrowing up to $20.0 million. Under this agreement, the line is
to expire on December 7, 2001. All revolving credit loans bear interest at
the agent bank's prime rate plus 0.25 % (7.75% at January 1, 1999, or
8.0%), or the London Interbank Offered Rate ("LIBOR") plus 2.75% (5.06% at
January 1, 1999, or 7.81%) at the Company's option. As of January 1, 1999,
the outstanding balance on the line of credit was $2,000,000. The
Company's available borrowing is the sum of 80% of all eligible accounts
receivable, plus 100% of eligible cash collateral less outstanding
revolving credit loan.

Under the terms of the long-term debt agreement, the Company is subject to
certain financial covenants. Key covenants require the Company to maintain
a minimum current ratio, total liabilities to tangible net worth ratio,
tangible net worth, working capital, and net income. At January 1, 1999,
the Company complied with all such covenants. As of January 1, 1999,
available borrowings were $4,796,000.

6.    INCOME TAXES

The provision (benefit) for income taxes is summarized below for the years
ended December 31, 1996, December 31, 1997 and January 1, 1999 (in
thousands):

YEARS ENDED                 
------------------------------------------- 
DECEMBER 31,    DECEMBER 31,     JANUARY 1, 
1996            1997            1999     
------------    ------------     ---------- 

Current income taxes:                                                              
Federal                                $ 2,163         $(3,082)        $    --   
State                                      430             (19)             55   
-------         -------         -------   

2,593          (3,101)             55   
Deferred income taxes:                                                             
Federal                                   (135)         (2,846)         (1,554)  
State                                      (32)           (380)             (1)  
-------         -------         -------   

(167)         (3,226)         (1,555)  
Increase in valuation allowance                            3,566           1,555   
-------         -------         -------   

Provision (benefit) for income taxes     $ 2,426         $(2,761)        $    55   
=======         =======         =======   

F-15

303
PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

Reconciliation between the provision (benefit) for income taxes as
required by applying the federal statutory rate of 35% to that included in
the financial statements is as follows (in thousands):

YEARS ENDED
-------------------------------------------
DECEMBER 31,    DECEMBER 31,     JANUARY 1,
1996            1997            1999
------------    ------------     ----------

Provision (benefit) for income taxes at
federal statutory rate                          $ 2,165         $(6,251)        $(1,473)
State income taxes, net of federal benefit            259             (12)             14
Other permanent differences                           (31)
Change in valuation allowance                                       3,566           1,555
Other                                                  33             (64)            (41)
-------         -------         -------

Provision (benefit) for income taxes              $ 2,426         $(2,761)        $    55
=======         =======         =======

Deferred taxes consist of the following (in thousands):

DECEMBER 31,     JANUARY 1,
1997            1999
------------     ----------

Net operating loss carryforwards                                  $ 1,877         $ 3,880
State tax provision                                                  (270)           (146)
Accrued compensation                                                  131             229
Accrued insurance                                                     427             793
Allowance for doubtful accounts and other receivable                1,158             312
Depreciation                                                         (180)            (52)
Other                                                                 423             105
-------         -------

Deferred tax assets                                                 3,566           5,121
Valuation allowance                                                (3,566)         (5,121)
-------         -------

Net deferred taxes                                                $    --         $    --
=======         =======

At January 1, 1999, the Company has net operating loss carry forwards of
$10,688,000 available to reduce future federal taxable income and
$3,815,000 available to reduce future California State taxable income. The
Company has Federal and California net operating loss carry forwards which
begin expiring in the year 2012 and 2002, respectively. The Company has
established a full valuation allowance for the deferred tax assets due to
its continuing losses.

F-16

304

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

7.    EMPLOYEE BENEFITS

Pension Plans - Certain of the Company's employees are covered by
union-sponsored, collectively bargained, multi-employer pension plans.
Pension expense related to these plans was approximately $172,000,
$178,000 and $202,000 for the years ended December 31, 1996, December 31,
1997 and January 1, 1999, respectively. The administrators have advised
the Company that there were no withdrawal liabilities as of December 1990,
the most recent date for which an analysis was made. The Company has no
current intention of withdrawing from any of these plans.

Retirement Plan - The Company has a 401(k)-retirement plan covering all
employees not participating in the pension plans. Eligible employees, as
defined by the 401(k) plan, may elect to contribute up to 15% of their
total compensation; not to exceed the amount allowed by the Internal
Revenue Service code guidelines. The Company makes matching contributions
to the 401(k) plan each year equal to 50% of the employee contributions,
not to exceed 4% of the total compensation, and can also make
discretionary matching contributions. Employee contributions are fully
vested at all times, and the Company's matching contributions vest over
five years. The Company's matching contributions were approximately
$468,000, $506,000 and $471,000 for the years ended December 31, 1996,
December 31, 1997 and January 1, 1999, respectively.

8.    COMMITMENTS AND CONTINGENCIES

The Company leases its facilities under operating leases and leases
certain computer and office equipment under two- to five-year operating
lease agreements. Total rent expense relating to these leases was
approximately $2,756,000, $6,369,000 and $5,646,000 for the years ended
December 31, 1996, December 31, 1997 and January 1, 1999, respectively,
with sublease income of $101,000 in fiscal year 1998.

The following table sets forth future minimum lease payments under
noncancelable operating leases as of January 1, 1999 (in thousands):

Fiscal Year:
Rent    Sublease    Total
------   --------   ------

1999                                 $4,038    $ (261)   $3,777
2000                                  1,882               1,882
2001                                  1,238               1,238
2002                                    903                 903
2003                                    147                 147
------    ------    ------
Total future minimum lease payments  $8,208    $ (261)   $7,947
======    ======    ======

F-17

305

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

9.    RELATED-PARTY TRANSACTIONS

The Company receives legal services from a law firm previously affiliated
with its principal stockholder and paid approximately $516,000, $189,000
and $114,000 for such legal services during the years ended December 31,
1996, December 31, 1997 and January 1, 1999, respectively.

The Company has an investment in an affiliate, which provides
telemarketing and related services (Note 4). The Company paid
approximately $524,000 and $898,000 during the years ended December 31,
1997 and January 1, 1999, respectively. Approximately $50,000 was payable
to the affiliate at January 1, 1999.

10.   STOCK TRANSACTIONS AND WARRANTS

In March 1996, the Company completed an initial stock offering and sold
1,788,000 shares of its common stock, at a net price of $13.02 per share.
An additional 349,800 shares of common stock were sold also at a net
$13.02 per share, pursuant to an underwriters over-allotment provision.
The net proceeds of the approximately $26.5 million raised by the Company
were used, in part, to repay existing bank debt.

During the three fiscal years 1996, 1997 and 1998, the Company issued the
following shares of common stock, 57,798 shares, 8,107 shares, and 30,328
shares, respectively as a result of options that were exercised (Note 11).
The income tax effect of any difference between the market price of the
Company's common stock at the grant date and the market price at the
exercise date is credited to additional paid-in capital, as required.

On February 17, 1997, the Company adopted an Employee Stock Purchase Plan
("ESP Plan"). The ESP Plan allows employees of the Company to purchase
common stock at a discount, without having to pay any commissions on the
purchases. The discount is the greater of 15% of the fair market value
("FMV") at the end of the reportable period or the difference between the
FMV at the beginning and end of the reportable period. The maximum amount
that any employee can contribute to the ESP Plan per quarter is $6,250,
and the total number of shares reserved by the Company for purchase under
the ESP Plan is 200,000. During 1998, the Company issued 12,290 shares of
common stock, at a weighted average price of $3.69 per share.

In May 1998, the Company issued 42,670 shares of common stock to two
employees as compensation for services and recorded $179,000 of
compensation expense.

F-18

306

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

During February 1996, 100,000 warrants issued in conjunction with a 1992
line of credit for the purchase of 152,405 shares of common stock at $1.82
per share, were exercised through a cashless exercise, based on the
estimated fair market value of the Company's common stock, at the date of
exercise of $14.00, reduced the number of shares issued to 87,000. During
October 1996, the remaining warrants to purchase 52,405 shares of common
stock at $1.82 per share were exercised through a cashless exercise, based
on the estimated fair value of the Company's common stock at the date of
exercise of $12.75, reduced the number of shares issued to 44,924.

11.   STOCK OPTIONS

The Company has three stock option plans: the 1990 Stock Option Plan (1990
Plan), the 1995 Stock Option Plan (1995 Plan), and the 1995 Director's
Plan (Director's Plan).

The 1990 Plan is a nonqualified option plan providing for the issuance of
up to 810,811 shares of common stock to officers, directors and key
employees. The options have a term of 10 years and one week and are either
fully vested or will vest ratably no later than five years from the grant
date. During 1995, the Company elected to no longer grant options under
this plan.

The 1995 Plan provides for the granting of either incentive or
nonqualified stock options to specified employees, consultants and
directors of the Company for the purchase of up to 1,300,000 shares of the
Company's common stock. The options have a term of ten years, except in
the case of incentive stock options granted to greater than ten-percent
stockholders of the Company, for which the term is five years. The
exercise price of nonqualified stock options must be equal to at least 85%
of the fair market value of the Company's common stock at the date of
grant; the exercise price of incentive stock options must be equal to at
least the fair market value of the Company's common stock at the date of
grant. At January 1, 1999, options to purchase 281,746 shares were
available for grant under this plan.

The Director's Plan is a stock option plan for nonemployee directors and
provides for the purchase of up to 100,000 shares of the Company's common
stock. An option to purchase 1,500 shares of the Company's common stock
shall be granted automatically each year to each director, following the
Company's annual stockholders' meeting. The exercise price of options
issued under this plan shall be not less than the fair market value of the
Company's common stock on the date of grant. Each option under this plan
shall vest and become exercisable in full on the first anniversary of its
grant date, provided the optionee is reelected as a director of the
Company. The maximum term of options granted under the plan is ten years
and one day, subject to earlier termination following an optionee's
cessation of service with the Company. At January 1, 1999, options to
purchase 89,500 shares were available for grant under this plan.

F-19

307
PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

The Company has adopted the disclosure-only provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. No compensation cost has been
recognized for the stock option plans. The impact of stock options granted
prior to 1995 has been excluded from the pro forma calculation;
accordingly, the 1996, 1997 and 1998 pro forma adjustments may not be
indicative of future period pro forma adjustments, when the calculation
will apply to all applicable future stock options. Had compensation cost
for the Company's option plans been determined based on the fair value at
the grant date for awards in 1996, 1997 and 1998 consistent with the
provisions of SFAS No. 123, the Company's net income (loss) and net income
(loss) per share would have been reduced to the pro forma amounts
indicated below:

Years Ended
------------------------------------------------
DECEMBER 31,      DECEMBER 31,         JANUARY 1,
1996              1997               1999
------------      ------------        ----------

Net income (loss), as reported (in thousands)           $    3,759        $  (15,099)        $   (4,266)
Net income (loss), pro forma (in thousands)             $    3,564        $  (15,808)        $   (5,420)

Basic net income (loss) per share, as reported          $     0.70        $    (2.72)        $    (0.78)
Basic net income (loss) per share, pro forma            $     0.66        $    (2.85)        $    (1.00)

Diluted net income (loss) per share, as reported        $     0.63        $    (2.72)        $    (0.78)
Diluted net income (loss) per share, pro forma          $     0.60        $    (2.85)        $    (1.00)

The fair value of each option grant is estimated based on the date of
grant using the Black-Scholes option-pricing model, using the return on a
ten year treasury bill, with the following weighted-average assumptions
used for grants in 1998: dividend yield of 0%; expected volatility of
104.6%; risk-free interest rate of 4.7%; and expected lives of six years.
The following weighted-average assumptions were used for grants in 1997:
dividend yield of 0%; expected weighted-average volatility of 79.5%;
risk-free interest rate of 6.2%; and expected lives of six years. The
following assumptions were used for grants in 1996: dividend yield of 0%;
expected volatility of 101.7%; risk-free interest rate of 6.3%; and
expected lives of six years.

F-20

308

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

The following table summarizes activity under the Company's 1990 Plan,
1995 Plan and Directors' Plan:

YEARS ENDED                                            
-------------------------------------------------------------------------------------------------- 
DECEMBER 31,                       DECEMBER 31,                      JANUARY 1,           
1996                               1997                              1999              
----------------------------       ----------------------------       ---------------------------- 
WEIGHTED-                          WEIGHTED-                          WEIGHTED-  
AVERAGE                            AVERAGE                           AVERAGE    
EXERCISE                           EXERCISE                          EXERCISE   
SHARES            PRICE            SHARES            PRICE            SHARES            PRICE    
----------        ----------       ----------        ----------       ----------        ---------- 

Options                                                                                                                       
outstanding,                                                                                                                
beginning of year           791,356         $   6.76           883,202         $   8.12         1,526,851         $   6.10  
Options granted               234,540         $  13.57           938,325         $   5.55           350,500         $   5.49  
Options exercised             (57,798)        $   5.85            (8,107)        $   7.77           (30,328)        $   2.91  
Options canceled                                                                                                              
or expired                 (84,896)        $   9.25          (286,569)        $  10.45          (408,738)        $   6.51  
----------                         ----------                         ----------                   

Options                                                                                                                       
outstanding,                                                                                                                
end of year                 883,202         $   8.12         1,526,851         $   6.10         1,438,285         $   5.91  
==========                         ==========                         ==========                   
Option price                                                                                                                  
range at                                                                                                                    
end of year              $     2.78 to                      $     2.78 to                      $     2.78 to                
$    14.00                         $    14.00                         $    14.00                   

Option price                                                                                                                  
range for                $     2.78 to                      $     7.40 to                      $     2.78 to                
exercised shares         $     9.81                         $     8.51                         $     5.32                   

Weighted-average                                                                                                              
fair value of                                                                                                               
options granted                                                                                                             
during the year          $    11.18                         $     4.01                         $     5.49                   

F-21

309

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

The following table summarizes information about fixed-price stock options
outstanding at January 1, 1999:

OPTIONS OUTSTANDING                            OPTIONS EXERCISABLE
-------------------------------------------------        ------------------------------
WEIGHTED-
NUMBER             AVERAGE           WEIGHTED-           NUMBER            WEIGHTED-
RANGE OF            OUTSTANDING AT       REMAINING           AVERAGE         EXERCISABLE AT        AVERAGE
EXERCISE              JANUARY 1,        CONTRACTUAL          EXERCISE          JANUARY 1,          EXERCISE
PRICES                 1999               LIFE               PRICE              1999               PRICE
---------------         --------------      -----------         ---------        --------------       ---------

$2.78             129,729               3.17          $    2.78            129,729          $    2.78
$3.69-$6.25           1,005,119               8.91          $    5.51            208,537          $    5.55
$7.40-$9.81             263,302               5.09          $    7.75            261,275          $    7.74
$14.00              40,135               7.51          $   14.00             35,135          $   14.00
---------                                                ---------
$2.78 to $14.00           1,438,285               7.65          $    5.91            634,676          $    6.35
=========                                                =========        

Outstanding warrants are summarized below:

SHARES               EXERCISE
SUBJECT TO            PRICE PER
WARRANTS               SHARE
-----------          -------------

Balance, January 1, 1996             248,800           $1.82 - $8.51
Exercised                         (152,405)                  $1.82
--------

Balance, December 31, 1996            96,395           $2.78 - $8.51
--------

Balance, December 31, 1997            96,395           $2.78 - $8.51
--------

Balance, January 1, 1999              96,395           $2.78 - $8.51
========

The above warrants expire at various dates from 2002 through 2004.

F-22

310
PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

12.   EARNINGS PER SHARE

YEARS ENDED
------------------------------------------------
DECEMBER 31,      DECEMBER 31,        JANUARY 1,
1996              1997               1999
------------      ------------        ----------
(in thousands, except per share data)

Basic:
Weighted-average common shares outstanding             5,370             5,551              5,439

Net income (loss)                                     $  3,759          $(15,099)          $ (4,266)
========          ========           ========

Basic earnings per share                              $   0.70          $  (2.72)          $  (0.78)
========          ========           ========

Diluted:
Weighted-average common shares - basic                 5,370             5,551              5,439
Potential common shares                                  620
--------          --------           --------

Weighted-average common shares - diluted               5,990             5,551              5,439
========          ========           ========

Net income (loss)                                     $  3,759          $(15,099)          $ (4,266)
========          ========           ========

Diluted earnings per share                            $   0.63          $  (2.72)          $  (0.78)
========          ========           ========

F-23

311
PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS
IN THE PERIOD ENDED JANUARY 1, 1999

13.   SEGMENTS

Utilizing the management approach, the Company has broken down its
business based upon the nature of services provided, i.e., dedicated,
shared service and project. The Company does not allocate operating
expenses to these segments, nor does it allocate specific assets to these
segments. Therefore, segment information reported in the following
includes only net revenues (in thousands):

BUSINESS SEGMENTS
--------------------------------------------------------------
DEDICATED      SHARED SERVICE       PROJECTS           TOTAL
--------       --------------       --------          --------

Fiscal year 1998
Net revenues            $ 38,766          $ 40,216          $ 42,806          $121,788
========          ========          ========          ========

Fiscal year 1997
Net revenues            $ 44,423          $ 44,932          $ 38,853          $128,208
========          ========          ========          ========

Fiscal year 1996
Net revenues            $ 21,894          $ 68,446          $ 29,600          $119,940
========          ========          ========          ========

During the years ended January 1, 1999, December 31, 1997 and December 31,
1996, sales to two major customers (three major customers for year ended
January 1, 1999) totaled $47.3 million, 38.0 million and $26.4 million,
respectively.

14.   SUBSEQUENT EVENT

On February 28, 1999, the Company signed a definitive agreement with the
SPAR Group to merge in a stock transaction involving the issuance of
approximately 12.3 million of PIA stock to the shareholders of the SPAR
Group. The transaction is subject to shareholder and regulatory approval.
After the merger, SPAR Group shareholders will own approximately 69% of
PIA Common Stock. The Companies expect to complete the transaction by May
1999.

F-24

312

EXHIBIT 11.1

PIA MERCHANDISING SERVICES, INC. AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

ADDITIONS       WRITE OFFS
BALANCE AT      CHARGED TO          AND         BALANCE AT
BEGINNING      COSTS AND        ALLOWANCE         END
OF YEAR       EXPENSES(1)       CHARGES        OF YEAR
----------     ------------     -----------     ---------

DESCRIPTION

Year ended December 31, 1996 -
Allowance for doubtful accounts and other        $    424        $  105           $   54         $    583

Year ended December 31, 1997 -
Allowance for doubtful accounts and other        $    583        $  918           $  (50)        $  1,451

Year ended January 1, 1999 -
Allowance for doubtful accounts and other        $  1,451        $ (270)          $ (360)        $    821

(1)  Includes amounts charged to revenues for rebates, price adjustments and other.

F-25

313

EXHIBIT INDEX

EXHIBIT                                                                     
NUMBER             DESCRIPTION                                              
- ------             -----------                                              

3.1     *   Certificate of Incorporation of PIA                           

3.2     *   By-laws of PIA                                                

4.1     *   Registration Rights Agreement entered into as of              
January 21, 1992 by and between RVM Holding Corporation.      
RVM/PIA, a California Limited Partnership, The Riordan        
Foundation and Creditanstalt-Bankvering.                      

10.1     *   1990 Stock Option Plan                                        

10.2         Amended and Restated 1995 Stock Option Plan (incorporated by  
reference of Exhibit 10.2 to the Company's Form 10Q for the   
2nd Quarter ended July 3, 1998).                              

10.3     *   1995 Stock Option Plan for Non-employee Directors             

10.4         Employment Agreement dated as of June 25, 1997 between        
PIA and Terry R. Peets (incorporated by reference to          
Exhibit 10.5 to the Company's Form 10-Q for the 2nd           
Quarter ended June 30, 1997)                                  

10.5         Severance Agreement dated as of February 20, 1998             
between PIA and Cathy L. Wood (incorporated by reference      
to Exhibit 10.5 to the Company's Form 10-Q for the 1st        
Quarter ended April 30, 1998)                                 

10.6         Severance Agreement dated as of August 10, 1998 between       
PIA and Clinton E. Owens (incorporated by reference to        
Exhibit 10.6 to the Company's Form 10-Q for the 3rd           
Quarter ended October 2, 1998)                                

10.7         Amendment No. 1 to Employment Agreement dated as of           
October 1, 1998 between PIA and Terry R. Peets                
(filed herein)                                                

10.8         Amended and Restated Severance Compensation Agreement         
dated as of October 1, 1998 between PIA and Cathy L. Wood     
(filed herein)                                                

10.9         Loan and Security Agreement dated December 7, 1998 among      
Mellon Bank, N.A., PIA Merchandising Co., Inc., Pacific       
Indoor Display Co. and PIA. (filed herein)                    

10.10        Agreement and Plan of Merger dated as of February 28,         
1999 among PIA, S.G. Acquisition, Inc., PIA                   
Merchandising Co., Inc., SPAR Acquisition, In., SPAR          
Marketing, Inc., SPAR Marketing Force, Inc., SPAR, Inc.,      
SPAR/Burgoyne Retail Services, Inc., SPAR Incentive           
Marketing, Inc., SPAR MCI Performance Group, Inc. and         
SPAR Trademarks, Inc. (filed herein)                          

10.11        Voting Agreement dated as of February 28, 1999 among          
PIA, Clinton E. Owens, RVM/PIA, California limited            
partnership, Robert G. Brown and William H. Bartels           
(filed herein)                                                

21.1     *   Subsidiaries of the Company                                   

23.1         Consent of Deloitte & Touche LLP                              

27.1         Financial Data Schedule                                       

- -------------
* Filed as an Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-80429) on December 14, 1995.