SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
Filed by Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
PAR Technology Corporation
------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
---------------------.
2) Aggregate number of securities to which transaction applies:
--------------------.
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):
-------------------------------------------------------.
4) Proposed maximum aggregate value of transaction:
--------------------------.
5) Total fee paid:
------------------------------------------------------.
[ ] 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: __________.
Dr. John W. Sammon PAR Technology Corporation
Chairman, President & Chief Executive Officer 8383 Seneca Turnpike
New Hartford, NY 13413
[GRAPHIC OMITTED]
April 21, 2009
Dear Shareholders:
You are invited to attend PAR Technology Corporation's 2009 Annual Meeting of
Shareholders to be held on Tuesday, May 26, 2009, at 1:30 PM. We are proud to
hold the meeting at the New York Palace Hotel; 455 Madison Avenue, New York, New
York 10022. The Annual Meeting will begin with a report on our operations,
followed by discussion and voting on the matters set forth in the accompanying
Notice of Annual Meeting and Proxy Statement and discussion on other business
matters properly brought before the meeting. There will also be time for
questions.
This booklet includes the Notice of Annual Meeting and Proxy Statement. The
Proxy Statement provides information about PAR in addition to describing the
business we will conduct at the meeting.
We hope you will be able to attend the Annual Meeting. Whether or not you plan
to attend, you can ensure that your shares are represented at the meeting by
promptly voting and submitting your proxy by Internet or by telephone, or by
completing, signing, dating and returning your proxy form in the enclosed
prepaid envelope.
Sincerely,
John W. Sammon
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to be held on May 26, 2009:
The Proxy Statement and Annual Report to Shareholders are available at
http://www.partech.com/en/about/investor/par-annual-reports.html.
[GRAPHIC OMITTED]
PAR Technology Corporation
8383 Seneca Turnpike; New Hartford, NY 13413-4991
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 26, 2009
Dear PAR Technology Shareholder:
The Annual Meeting of Shareholders (the "Meeting") of PAR Technology
Corporation, a Delaware corporation (the "Company") is scheduled to be held at
the New York Palace Hotel; 455 Madison Avenue; New York, New York 10022 (see map
on back cover) on Tuesday, May 26, 2009, at 1:30 PM, local time, for the
following purposes:
1. To elect two (2) Directors of the Company for a term of office to
expire at the 2012 Annual Meeting of Shareholders;
2. To transact such other business as may properly come before the
Meeting or any adjournments or postponements of the Meeting.
The Board of Directors set April 1, 2009 as the record date for the Meeting.
This means that owners of the Company's Common Stock at the close of business on
April 1, 2009 are entitled to receive this notice and to vote at the Meeting or
any adjournments or postponements of the Meeting. We will make available a list
of shareholders as of the close of business on April 1, 2009, for inspection by
any shareholder, for any purpose relating to the Meeting, during normal business
hours at our principal executive offices, 8383 Seneca Turnpike; New Hartford,
New York 13413, for ten (10) days prior to the Meeting. This list will also be
available to shareholders at the Meeting.
Every shareholder's vote is important. Whether or not you plan to attend the
Meeting, we request you vote as soon as possible. Most shareholders have the
option of voting their shares on the Internet or by telephone. If such methods
are available to you, voting instructions are printed on your proxy card or
otherwise included with your proxy materials. You may also vote by completing
and returning the enclosed proxy card in the enclosed postage prepaid envelope.
If you vote by the Internet or telephone, there is no need to return your proxy
card.
The proxy solicited hereby may be revoked at any time prior to its exercise by
executing and returning to the address set forth above a proxy bearing a later
date or later dated vote by telephone or on the Internet, by giving written
notice of revocation to the Secretary of the Company at the address set forth
above, or by attending the Meeting and voting in person.
BY ORDER OF THE BOARD OF DIRECTORS
Gregory T. Cortese
Secretary
New Hartford, New York
April 21, 2009
TABLE OF CONTENTS
General Information............................................................
Proposal 1: Election of Directors..............................................
Directors, Executive Officers and Corporate Governance.........................
Report of the Audit Committee..................................................
Security Ownership of Certain Beneficial Owners and Management ................
Section 16(a) Beneficial Ownership Reporting Compliance .......................
Director Compensation..........................................................
Executive Compensation.........................................................
Compensation Discussion and Analysis...........................................
Compensation Committee Interlocks and Insider Participation....................
Compensation Committee Report..................................................
Summary Compensation Table.....................................................
Grants of Plan-Based Awards....................................................
Outstanding Equity Awards at Fiscal Year-End...................................
Option Exercises and Stock Vested..............................................
Non-Qualified Deferred Compensation............................................
Transactions with Related Persons..............................................
Policies and Procedures with Respect to Related Party Transactions.............
Director Independence..........................................................
Other Matters..................................................................
No Incorporation by Reference..................................................
Available Information..........................................................
Shareholder Proposals for 2010 Annual Meeting..................................
Printed on Recycled Paper
Using Soy Ink
[GRAPHIC OMITTED][GRAPHIC OMITTED]
PAR Technology is concerned about our environment and preserving our world's
natural resources. When you are finished with the use of this document, please
be considerate of the environment and recycle.
[GRAPHIC OMITTED]
PAR Technology Corporation
8383 Seneca Turnpike; New Hartford, NY 13413-4991
April 21, 2009
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors of PAR Technology
Corporation (the "Board"), a Delaware corporation (the "Company") for use at the
Annual Meeting of Shareholders (the "Annual Meeting" or "Meeting") to be held at
1:30 PM, local time, on Tuesday, May 26, 2009, at the New York Palace Hotel; 455
Madison Avenue, New York, New York 10022, and at any postponement or adjournment
of the Meeting. The approximate date on which this Proxy Statement and the
accompanying form of proxy are first being sent or given to shareholders is
April 21, 2009.
Purpose of Meeting
At the Meeting the Shareholders will be asked to consider and vote on the
following matters:
1. To elect two (2) Directors of the Company for a term of office to
expire at the 2012 Annual Meeting of Shareholders;
2. To transact such other business as may properly come before the
Meeting or any adjournments or postponements of the Meeting.
The proposal for the election of Directors is described in more detail in this
Proxy Statement.
Record Date, Voting Rights, Methods of Voting
Only shareholders of record at the close of business on April 1, 2009 will be
entitled to notice of and to vote at the Meeting or any postponements or
adjournments of the Meeting. As of that date, there were 14,537,363 shares of
the Company's Common Stock, par value $0.02 per share (the "Common Stock")
outstanding and entitled to vote. The holders of shares representing 7,268,682
votes, represented in person or by proxy, shall constitute a quorum to conduct
business.
Each share of Common Stock entitles the shareholder to one vote on all matters
to come before the Meeting including the election of the Directors. Shareholders
may vote in person or by proxy. Shareholders of record can vote by telephone, on
the Internet, by mail or by attending the Meeting and voting by ballot. If you
are a beneficial shareholder, please refer to your proxy card or the information
forwarded by your bank, broker or other holder of record to identify which
options are available to you. If you vote by telephone or on the Internet you do
not need to return your proxy card. Telephone and Internet voting facilities for
shareholders of record will be available 24 hours a day, and will close at
Midnight on May 25, 2009.
The method by which a shareholder votes will not in any way affect their right
to attend the Meeting and vote in person. If shares are held in the name of a
bank, broker or other holder of record, the shareholder must obtain a proxy,
executed in their favor, from the holder of record to be able to vote at the
Meeting. All shares that have been properly voted and not revoked will be voted
at the Annual Meeting. When proxies in the form enclosed are returned properly
executed, the shares represented by the proxies will be voted in accordance with
the directions of the shareholder. If you sign and return your proxy card, but
do not specify your voting instructions, the shares represented by that proxy
will be voted as recommended by the Board of Directors. The proxy solicited
hereby may be revoked at any time prior to its exercise by executing and
returning to the address set forth above a proxy bearing a later date or later
dated vote by telephone or on the Internet, by giving written notice of
revocation to the Secretary of the Company at the address set forth above, or by
attending the Meeting, withdrawing the proxy and voting in person.
Voting
A shareholder may, with respect to the election of the Directors: (i) vote "FOR"
the nominees named herein, or (ii) "WITHHOLD AUTHORITY" to vote for any or all
such nominees. The election of the Directors requires a plurality of the votes
cast. Accordingly, withholding authority to vote for a Director nominee will not
prevent the nominee from being elected.
Electronic Access to Proxy Materials and Annual Report
This Proxy Statement and the Company's 2008 Annual Report are available on the
Company's Web site at
http://www.partech.com/en/about/investor/par-annual-reports.html. Instead of
receiving paper copies of next year's Proxy Statement and Annual Report by mail,
shareholders can elect to receive future proxy materials electronically via the
Internet. By electing to access your proxy materials via the Internet, you will
not only help preserve environmental resources, but you will also gain faster
access to your proxy materials, save the Company the cost of producing and
mailing documents to you, and reduce the amount of paper you receive in the
mail.
Shareholders of record may enroll in the electronic proxy and Annual Report
access service for future Annual Meetings of Shareholders either by emailing
their request to investor_relations@partech.com with the words "On-Line Proxy
Materials" in the subject line or when voting their shares for this year's
annual meeting. If you vote via telephone or the Internet, simply follow the
prompts for that selection. When voting using a paper ballot, simply mark the
box on the proxy card and provide your email address where indicated. Street
name shareholders who wish to enroll for electronic access should review the
information provided in the proxy materials mailed to them by their bank or
broker.
Proxy Solicitation Costs
The Company will bear the cost of the solicitation of proxies, including the
charges and expenses of brokerage firms and others forwarding the solicitation
material to beneficial owners of shares of the Company's Common Stock. In
addition to the use of the mail, directors, officers, employees and certain
stockholders of the Company, none of whom will receive additional compensation
for doing so, may solicit proxies on behalf of the Company personally, by
telephone or by facsimile transmission.
The Company's Annual Report to its shareholders for the year ended December 31,
2008, including audited consolidated financial statements, accompanies this
Proxy Statement. Except to the extent expressly provided herein, the Company's
Annual Report is not incorporated in this Proxy Statement by reference.
Proposal 1: Election of Directors
Under the Company's Certificate of Incorporation, the members of the Board of
Directors are divided into three classes with approximately one-third of the
Directors standing for election at each Annual Meeting. The Directors are
elected for a three-year term of office, and will hold office until their
respective successors have been duly elected and qualified or until their
earlier resignation or removal. In 2006, there were two Class II Directors
elected to hold office until the 2009 Annual Meeting of Shareholders. Therefore,
at this Meeting, two Directors will be elected for a three-year term expiring at
the Annual Meeting held in 2012. The nominees of the Board of Directors for the
Class II Director positions, Mr. Sangwoo Ahn and Dr. Paul D. Nielsen, are
currently members of the Company's Board of Directors (the "Board") and have
been nominated for election by the Board upon recommendation of the Nominating
and Corporate Governance Committee and each has consented to stand for
re-election.
The Board has no reason to believe that any of the nominees will be unable or
unwilling to serve if elected. In the event that any of the nominees shall
become unable or unwilling to accept nomination or election as a Director, it is
intended that such shares will be voted, by the persons named in the enclosed
proxy, for the election of a substitute nominee selected by the Board, unless
the Board should determine to reduce the number of Directors pursuant to the
By-Laws of the Company.
The Board of Directors unanimously recommends a vote FOR the proposal to elect
Mr. Ahn and Dr. Nielsen. Unless a contrary direction is indicated, shares
represented by valid proxies which are not marked so as to withhold authority to
vote for the nominees will be voted FOR the election of the nominees.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS
The names of the nominees and each of the Directors continuing in office, their
ages as of April 21, 2009, the year each first became a Director and the
expiration of their current term in office are set forth in the following table
which is followed by a brief biography.
--------------------------------------------------------------------------------
Nominees for Director Age Director Since Term Expires
--------------------------------------------------------------------------------
Sangwoo Ahn 70 1986 2012 Annual Meeting of
Shareholders
--------------------------------------------------------------------------------
Dr. Paul D. Nielsen 58 2006 2012 Annual Meeting of
Shareholders
--------------------------------------------------------------------------------
Continuing Directors Age Director Since Term Expires
--------------------------------------------------------------------------------
Dr. John W. Sammon 70 1968 2010 Annual Meeting of
Shareholders
--------------------------------------------------------------------------------
Charles A. Constantino 69 1970 2010 Annual Meeting of
Shareholders
--------------------------------------------------------------------------------
Kevin R. Jost 54 2004 2011 Annual Meeting of
Shareholders
--------------------------------------------------------------------------------
James A. Simms 49 2001 2011 Annual Meeting of
Shareholders
--------------------------------------------------------------------------------
Sangwoo Ahn. Mr. Ahn is a member of the Board of Directors of Furmanite
Corporation. Mr. Ahn is a member of Class II of the Company's Board and has been
a Director of the Company since March 1986.
Charles A. Constantino. Mr. Constantino has held the position of Executive Vice
President since 1974 and in 2009 was also appointed Vice Chairman, Office of the
Chairman. Mr. Constantino holds various positions with subsidiaries of the
Company. Mr. Constantino is also a member of the Board of Directors of Veramark
Technologies, Inc. Mr. Constantino is a member of Class III of the Company's
Board and has been a Director of the Company since 1970.
Kevin R. Jost. Mr. Jost retired on December 31, 2008 as President of Honeywell
Imaging and Mobility (formerly Hand Held Products, Inc.), a manufacturer of data
collection and management solutions for in-premises, mobile and transaction
processing applications. Mr. Jost had been the President and Chief Executive
Officer of Hand Held Products since its inception as a separate entity in 1999
until its acquisition in 2007 by Honeywell International, Inc. From 1982 through
1999, Mr. Jost was Vice President and General Manager of Welch Allyn Data
Collection, a division of Welch Allyn, Inc. In 1999, Welch Allyn Data Collection
division became a separate entity and acquired Hand Held Products, Inc. and
continued business under the acquired company's name. Mr. Jost is a member of
Class I of the Company's Board and has been a Director of the Company since May
2004.
Dr. Paul D. Nielsen. Dr. Nielsen has been Director and CEO of the Software
Engineering Institute ("SEI") at Carnegie Mellon University since 2004. Prior to
joining SEI, Dr. Nielsen served as a major general in the U.S. Air Force, where
he was the commander of the Air Force Research Laboratory and Technology
Executive Officer for the Air Force. Dr. Nielsen is a member of Class II of the
Company's Board and has been a Director of the Company since January 1, 2006.
Dr. John W. Sammon. Dr. Sammon is the founder of the Company and has been the
President, Chief Executive Officer and a Director since its incorporation in
1968. He was elected Chairman of the Board in 1983. Dr. Sammon is also a former
President of the Company's subsidiary, ParTech, Inc., serving in that capacity
from 1978 to 1987 and again from December 1997 through June 2000 and also
currently holds various positions with other subsidiaries of the Company. Dr.
Sammon is a member of Class III of the Company's Board.
James A. Simms. Mr. Simms has been the Chief Financial Officer and a member of
the board of directors of Vicor Corporation since April 2008. Publicly traded
Vicor designs, develops, manufactures and markets modular power components and
complete power systems primarily for the communications, information technology,
industrial control and military electronics markets. Prior to joining Vicor, and
since March 2007, Mr. Simms had served as a Managing Director of Needham &
Company, LLC, an investment banking firm and registered broker-dealer. From
November 2004 to March 2007, he served in a senior executive role with Janney
Montgomery Scott LLC, a wholly owned subsidiary of The Penn Mutual Life
Insurance Company. For the prior seven years, he was a senior executive with the
investment banking firm of Adams, Harkness & Hill, Inc. Mr. Simms is a member of
Class I of the Company's Board and has been a Director of the Company since
October 2001.
EXECUTIVE OFFICERS
The executive officers of the Company during 2008, their respective ages as of
April 21, 2009, positions held during 2008 and occupations for the last five
years are as follows:
------------------------------------------------------------------------------------------------------------------------------
Name Age Position Occupation for Last 5 Years
------------------------------------------------------------------------------------------------------------------------------
Dr. John W. Sammon 70 Chairman, President and Dr. Sammon is the founder of the Company and has been the
Chief Executive Officer, President, Chief Executive Officer and a Director since
PAR Technology Corporation its incorporation in 1968, and Chairman since 1983.
------------------------------------------------------------------------------------------------------------------------------
Ronald J. Casciano 55 Vice President, Mr. Casciano, CPA, was promoted to Vice President, Chief
Chief Financial Officer Financial Officer, Treasurer of PAR Technology
and Treasurer, PAR Technology Corporation in June, 1995.
Corporation
------------------------------------------------------------------------------------------------------------------------------
Charles A. Constantino 69 Executive Vice President and Mr. Constantino has been a Director of the Company since
Director, PAR Technology 1970 and Executive Vice President since 1974.
Corporation
------------------------------------------------------------------------------------------------------------------------------
Gregory T. Cortese 59 Chief Executive Officer & Mr. Cortese was named President, ParTech, Inc. in June
President, ParTech, Inc.; 2000 and President of Pixel Point, ULC in September 2005
President, PixelPoint, ULC; in addition to General Counsel and Secretary of PAR
General Counsel and Secretary, Technology Corporation.
PAR Technology Corporation
------------------------------------------------------------------------------------------------------------------------------
Stephen P. Lynch 53 President, PAR Government Mr. Lynch was appointed to President, PAR Government Systems
Systems Corporation and Rome Corporation and Rome Research Corporation in January 2008.
Research Corporation Previous to his appointment to the position of President Mr. Lynch
served as Executive Vice President of PAR Government Systems
Corporation since July 2006.
------------------------------------------------------------------------------------------------------------------------------
CORPORATE GOVERNANCE
Board of Directors and Committees. The business of the Company is under the
general direction of the Board as provided by the By-Laws of the Company and the
laws of the State of Delaware, the state of incorporation. In 2008, the Board
held eight (8) meetings and Committees of the Board held a total of eighteen
(18) meetings. Each member of the Board attended at least 75% of the aggregate
of all meetings of the Board and the committees on which they served. It is the
Company's policy to encourage Directors to attend the Annual Meeting but such
attendance is not required. Last year, one member of the Board attended the
Annual Meeting.
The Board has standing Executive, Audit, Compensation, Nominating and Corporate
Governance and Stock Option committees. The members of each committee and the
number of meetings held by each committee in 2008 are set forth in the following
table.
--------------------------------------------------------------------------------
Nominating
and Corporate
Name Executive Audit Compensation Governance Stock Option
--------------------------------------------------------------------------------
Mr. Ahn (*) X Chair X
Mr. Constantino X X
Mr. Jost (*) Chair
Dr. Nielsen (*) X X X
Dr. Sammon Chair Chair
Mr. Simms (*) X X Chair
--------------------------------------------------------------------------------
2008 Meetings 3 6 3 3 3
--------------------------------------------------------------------------------
(*) Independent Director
Executive Committee. The Executive Committee has the delegated authority to
exercise all of the powers of the Board in the management and direction of the
business and affairs of the Corporation in all cases in which specific
directions shall not have been given by the Board and subject to the limitations
of the General Corporation Law of the State of Delaware; the Company's
Certificate of Incorporation; and the Company's By-Laws. The Executive Committee
meets when required on short notice during intervals between meetings of the
Board.
Audit Committee. In accordance with its charter, the Audit Committee consists of
at least three members, each of whom has been determined by the Board to meet
the independence standards adopted by the Board. The standards adopted by the
Board incorporate the independence requirements of the New York Stock Exchange
("NYSE") Corporate Governance Standards and the independence requirements set
forth by the Securities and Exchange Commission ("SEC"). The Board has
determined the members of the Audit Committee are "independent" as this term is
defined by the NYSE in its listing standards and meet SEC standards for
independence of audit committee members and that no member of the Audit
Committee has a material relationship with the Company that would render that
member not to be "independent". At least one member of the Committee shall, in
the assessment of the Board, qualify and be identified as an audit committee
financial expert as defined by the SEC. The Board has determined that Sangwoo
Ahn is an "audit committee financial expert." All members of the Committee are
financially literate at the time of their appointment to the Committee or within
a reasonable time thereafter. Pursuant to its charter, the Audit Committee
assists the Board in oversight of management's conduct and representations of
the Company's financial reporting processes, its systems of internal control,
the audit process, and its processes for monitoring compliance with laws and
regulations and the Company's code of ethics and conduct. There were six (6)
meetings of the Audit Committee during 2008 including meetings held separately
with management, and separate Executive Sessions with independent Directors, the
internal auditor and the independent registered public accounting firm
respectively. The Report of the Audit Committee begins on page 8 of this Proxy
Statement.
Compensation Committee. The Compensation Committee, which meets as required (but
no less than once per year), reviews and makes recommendations to those
identified in its charter regarding the compensation, benefits, stock grants,
stock options and incentive plans for all Executive Officers of the Company, and
in connection with the compensation for outside Directors for service on the
Board and committees of the Board.
Nominating and Corporate Governance Committee. The Nominating and Corporate
Governance Committee assists the Board in meeting its responsibilities in
connection with the identification and recommendation of qualified nominees for
election to the Board, developing, monitoring the compliance with, and making
recommendations to the Board regarding the Company's governing principles and
Code of Business Conduct and Ethics. The Board has determined that each of the
members of this committee has met the independence standards adopted by the
Board which incorporate the independence requirements under the NYSE listing
standards.
Stock Option Committee. The Stock Option Committee, which meets as required,
makes recommendations to the Compensation Committee for stock option awards and
otherwise serves as the administrative body for the Company's 1995 Stock Option
Plan and the 2005 Equity Incentive Plan. Both members of the Stock Option
Committee are "disinterested persons" in compliance with the Company's 1995
Stock Option Plan.
Committee Charters. Each of the Audit, Compensation, and Nominating and
Corporate Governance Committees operate under a written charter approved by the
Board, which is reviewed regularly by the respective committees which may
recommend appropriate changes for approval by the Board. A copy of the Audit
Committee Charter is attached as Appendix A to this Proxy Statement. Copies of
the charters for the Audit, Compensation, and Nominating and Corporate
Governance Committees are posted on the Company's website and a printed copy of
these documents may be obtained without charge by written request. Requests can
be made via the internet or by mail. The respective website and address for
making such requests for printed copies of these and other available documents
may be found under the heading "Available Information" on page 24 of this Proxy
Statement.
Presiding Director and Executive Sessions. The non-management directors have
chosen Director Ahn to preside at regularly scheduled executive sessions of the
non-management directors of the Company. Among his duties and responsibilities
as Presiding Director, Director Ahn chairs and has the authority to call and
schedule executive sessions and communicates with the Chairman to provide
feedback and recommendations of the independent Directors. The non-management
directors met in executive session without any management directors or employees
present four times during 2008.
Office of the Chairman. In January 2009 the Company established the Office of
the Chairman. The Office of the Chairman is responsible for the strategic
direction and the oversight of the operation of the Company and is comprised of
four officers: Dr. John W. Sammon, Charles A. Constantino, Ronald J. Casciano,
and Gregory T. Cortese.
Communication with the Board. Interested parties may send written communication
to the Board of Directors as a group, the Office of the Chairman, the
non-management directors as a group, the presiding director of executive
sessions of non-management directors, or to any individual director by sending
the communication c/o Gregory T. Cortese, Secretary; PAR Technology Corporation;
PAR Technology Park; 8383 Seneca Turnpike, New Hartford, NY 13413. Upon receipt,
the communication will be relayed to the Chairman, if it is addressed to the
Board as a whole or to the Office of the Chairman; to Director Ahn, if it is
addressed to the presiding director of executive sessions of the non-management
directors or to the non-management directors as a group, or to the individual
Director, if the communication is addressed to an individual Director. All
communications regarding accounting, internal controls and audits will be
referred to the Audit Committee. Interested parties may communicate anonymously
if they so desire.
Nomination Process. The Nominating and Corporate Governance Committee considers
all shareholder recommendations for candidates for the Board. Such shareholder
recommendations should be sent to: Nominating and Corporate Governance
Committee; c/o Gregory T. Cortese, Secretary; PAR Technology Corporation; PAR
Technology Park; 8383 Seneca Turnpike; New Hartford, NY 13413. The committee's
minimum qualifications and specific qualities and skills required for Directors
are set forth in the Company's Corporate Governance Guidelines and Nominating
and Corporate Governance Committee Charter. The Company's Corporate Governance
Guidelines and the committee's charter are posted on the Company's website and a
printed copy of both documents may be obtained without charge by written
request. The website and address to send such requests may be found under the
heading "Available Information" on page 24 of this Proxy Statement. In addition
to considering candidates suggested by shareholders, the committee considers
potential candidates recommended by current Directors, company officers,
employees and others. The committee may sometimes use the services of a third
party executive search firm to assist it in identifying and evaluating possible
nominees for Director. The committee screens all potential candidates in the
same manner regardless of the source of the recommendation. In identifying and
considering candidates for nomination to the Board, this committee considers, in
addition to the requirements set out in the Company's Corporate Governance
Guidelines and Nominating and Corporate Governance Committee Charter, quality of
experience, the needs of the Company and the range of talent and experience
represented on the Board. When considering a candidate, the committee will
determine whether requesting additional information or an interview is
appropriate.
Code of Business Conduct and Ethics. All of the Company's Directors and
employees, including the Chief Executive Officer, the Chief Financial Officer
and all other Executive Officers are required to abide by the Company's Code of
Business Conduct and Ethics (the "Code") to ensure the Company's business is
conducted in a consistently legal and ethical manner. A printed copy of the Code
may be obtained without charge by making a written request to the Company.
Information regarding where such requests should be directed can be found in
this Proxy Statement under the heading "Available Information." The full text of
the Company's Code is also available on the Company's website at
http://www.partech.com/ptc/ptc-ir-front2.cfm. The Code is designed to deter
wrongdoing and to promote: (a) honest and ethical conduct, including the ethical
handling of actual or apparent conflicts of interest between personal and
professional relationships; (b) full, fair, accurate, timely and understandable
disclosure in reports and documents that the Company files with or submits to
the SEC and other public communications; (c) compliance with applicable
governmental laws, rules and regulations; (d) the prompt internal reporting of
violations of the Code to the appropriate person(s) identified in the Code; and
(e) accountability for adherence to the Code. The Company intends to disclose
future amendments to, or waivers from, provisions of the Code that apply to the
Executive Officers and Directors and relate to the above elements by posting
such information on our website within five calendar days following the date of
such amendment or waiver.
REPORT OF THE AUDIT COMMITTEE
The information contained in the following report is subject to the disclaimer
regarding "filed" information and incorporation by reference contained on page
24 of this Proxy Statement.
The Audit Committee reports to and acts on behalf of the Board by providing
oversight of the Company's financial management, independent registered public
accounting firm and financial reporting process. The Company's management is
responsible for establishing and maintaining adequate internal financial
controls, for preparing the Company's consolidated financial statements in
accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and
for the financial reporting process. The responsibility for auditing the
Company's consolidated financial statements rests with the Company's independent
registered public accounting firm, KPMG LLP ("KPMG"). KPMG is responsible for
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. In addition, KPMG has the responsibility of providing
an opinion as to whether the Company's consolidated financial statements fairly
present, in all material respects, the consolidated financial position, results
of operations and cash flows of the Company in conformity with U.S. GAAP.
In this context, the Audit Committee has reviewed, met and discussed with
management, the Company's internal audit function ("Internal Audit") and KPMG
(including private sessions with Internal Audit, KPMG, and the Company's Chief
Financial Officer) the audited consolidated financial statements in the Annual
Report for the year ended December 31, 2008 (including a discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
consolidated financial statements); management's assessment of the effectiveness
of the Company's internal control over financial reporting; and KPMG's
evaluation of the effectiveness of the Company's internal control over financial
reporting. Management represented to the Audit Committee that the Company's
consolidated financial statements as of and for the fiscal year ended December
31, 2008 were prepared in accordance with U.S. GAAP.
In addition, the Audit Committee has reviewed, met and discussed with KPMG such
other matters as are required to be discussed with the Committee by applicable
Auditing Standards as periodically amended (including significant accounting
policies, alternative accounting treatments and estimates, judgments and
uncertainties). KPMG has provided to the Audit Committee the written disclosures
and the letter required by the applicable requirements of the Public Company
Accounting Oversight Board regarding the independent auditors and the Audit
Committee has discussed with KPMG the matters in those written disclosures and
KPMG's independence from the Company and its management. The Audit Committee
considered and pre-approved any non-audit services provided by KPMG and the fees
and costs billed and expected to be billed by such firm for those services (as
shown in the next section of this Proxy Statement). In addition, the Audit
Committee considered whether those non-audit services provided by KPMG are
compatible with maintaining auditor independence.
In reliance on the reviews and discussions with the Company's management and the
independent registered public accounting firm, the Committee is satisfied that
non-audit services provided to the Company by KPMG are compatible with and did
not impair the independence of KPMG.
Access to the Audit Committee by the Company's internal auditors and by KPMG is
unrestricted. The Audit Committee met and discussed with the Company's internal
auditors and KPMG the overall scope and plans for their respective audits. The
Audit Committee met with the Company's internal auditors and KPMG to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and their assessment of the overall quality of the Company's financial
reporting. These meetings were held both with and without Company management
present.
In reliance on the reviews and discussions with both management and KPMG
referred to above, the Audit Committee recommended to the Board on March 12,
2009, and the Board approved, the inclusion of the audited consolidated
financial statements in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2008 for filing with the Securities and Exchange
Commission.
This report is provided by the following independent directors, who comprise the
Audit Committee.
Sangwoo Ahn Dr. Paul D. Nielsen James A. Simms
(Chairman)
Fees Paid to Independent Registered Public Accountants
The following table presents fees paid by the Company for professional services
by KPMG during the years ended December 31, 2008 and December 31, 2007.
---------------------------------------------------------
Type of Fees 2008 2007
---------------------------------------------------------
Audit Fees $584,000 $ 586,000
---------------------------------------------------------
Audit-Related Fees 0 0
---------------------------------------------------------
Tax Fees $165,000 $ 134,000
---------------------------------------------------------
All Other Fees 0 0
---------------------------------------------------------
Total: $749,000 $ 720,000
---------------------------------------------------------
The categories of fees in the preceding table, in accordance with the SEC's
rules and definitions, are defined as follows:
Audit Fees are fees for professional services rendered for the audit of the
Company's consolidated financial statements and review of the interim
consolidated financial statements included in quarterly reports and
services that are normally provided by the auditor in connection with
statutory and regulatory filings or engagements.
Audit-Related Fees are fees principally for audits of consolidated
financial statements of employee benefit plans and due diligence services.
Tax Fees are fees for professional services for federal, state and
international tax compliance, tax advice and tax planning.
All Other Fees are for any services not included in the first three
categories.
The Audit Committee has concluded that the provision of the non-audit services
listed above is compatible with maintaining the independence of the Company's
independent registered public accounting firm. Consistent with SEC policies
regarding auditor independence, the Audit Committee has established a policy to
pre-approve all auditing services and permitted non-audit services, including
the fees and terms thereof, performed by the independent registered public
accounting firm.
One or more representatives of KPMG are expected to be in attendance at the
Annual Shareholder Meeting, where they will have the opportunity to make a
statement if they so desire, and will be available to answer appropriate
questions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of
the Company's Common Stock as of February 28, 2009 by each Director, by each of
the Named Executive Officers and by all Directors and Executive Officers as a
group.
--------------------------------------------------------------------------------
Amount and Nature of Percent of
Name of Beneficial Owner or Group (1) Beneficial Ownership (2) Class (3)
--------------------------------------------------------------------------------
Dr. John W. Sammon 5,493,450 (4) 37.79%
--------------------------------------------------------------------------------
Charles A. Constantino 256,950 1.77%
--------------------------------------------------------------------------------
Gregory T. Cortese 304,310 (5) 2.05%
--------------------------------------------------------------------------------
Ronald J. Casciano 153,600 (6) 1.05%
--------------------------------------------------------------------------------
Stephen P. Lynch 7,500 (7) *
--------------------------------------------------------------------------------
Sangwoo Ahn 91,300 (8) *
--------------------------------------------------------------------------------
James A. Simms 16,300 (9) *
--------------------------------------------------------------------------------
Kevin R. Jost 6,334 (10) *
--------------------------------------------------------------------------------
Dr. Paul D. Nielsen 3,800 (11) *
--------------------------------------------------------------------------------
All Directors and Executive Officers 6,333,544 42.08%
as a Group (9 persons)
--------------------------------------------------------------------------------
Other Principal Beneficial Owners
Prescott Group Capital Management, L.L.C.;
Prescott Group Aggressive Small Cap, L.P.;
Prescott Group Aggressive Small Cap II,
L.P. and Phil Frohlich 1,516,634 (12) 10.4%
--------------------------------------------------------------------------------
* Represents less than 1%
(1) Except as otherwise noted, the address for each beneficial owner listed
above is c/o PAR Technology Corporation; PAR Technology Park; 8383 Seneca
Turnpike; New Hartford, NY 13413-4991.
(2) Except as otherwise noted, each individual has sole voting and investment
power with respect to all shares.
(3) Percent of Class is calculated utilizing 14,536,963 which is the number of
the Company's outstanding shares as of February 28, 2009 and the number of
options held by the named beneficial owners, if any, which become
exercisable within 60 days thereafter.
(4) Includes 150 shares held jointly with Dr. Sammon's wife, Deanna D. Sammon.
Does not include 71,400 shares beneficially owned by Mrs. Sammon in which
Dr. Sammon disclaims beneficial ownership.
(5) Includes 304,250 shares which Mr. Cortese has or will have the right to
acquire pursuant to the Company's 1995 Stock Option Plan as of April 29,
2009.
(6) Includes 147,600 shares which Mr. Casciano has or will have the right to
acquire pursuant to the Company's 1995 Stock Option Plan as of April 29,
2009.
(7) Includes 7,000 shares which Mr. Lynch has or will have the right to acquire
pursuant to the Company's 1995 Stock Option Plan as of April 29, 2009.
(8) Includes 31,300 shares which Mr. Ahn has or will have the right to purchase
as of April 29, 2009 pursuant to the Company's stock option plans.
(9) Includes 16,300 shares which Mr. Simms has or will have the right to
purchase as of April 29, 2009 pursuant to the Company's stock option plans.
(10) Includes 6,334 shares which Mr. Jost has or will have the right to purchase
as of April 29, 2009 pursuant to the Company's stock option plans.
(11) Includes 2,800 shares which Dr. Nielsen has or will have the right to
purchase as of April 29, 2009 pursuant to the Company's stock option plans.
(12) Information related to these shareholders was obtained from Schedule 13G/A
filed with the SEC on December 5, 2008 by Prescott Group Capital
Management, L.L.C., an Oklahoma limited liability company ("Prescott
Capital"), Prescott Group Aggressive Small Cap, L.P., an Oklahoma limited
partnership ("Prescott Small Cap"), Prescott Group Aggressive Small Cap II,
L.P. an Oklahoma limited partnership ("Prescott Small Cap II" and together
with Prescott Small Cap, the "Small Cap Funds") and Mr. Phil Frolich, the
principal of Prescott Capital relating to shares of common stock of the
Company purchased by the Small Cap Funds through the account of Prescott
Group Aggressive Small Cap Master Fund, G.P. an Oklahoma general
partnership ("Prescott Master Fund"), of which the Small Cap Funds are
general partners. Prescott Capital serves as the general partner of the
Small Cap Funds and may direct the Small Cap Funds, the general partners of
Prescott Master Fund, to direct the vote and disposition of the 1,516,634
shares of Common Stock held by the Master Fund. As the principal of
Prescott Capital, Mr. Frohlich, a US citizen, may direct the vote and
disposition of the 1,516,634 shares of Common Stock held by Prescott Master
Fund. As reported in the Schedule 13G/A, Prescott Capital and Mr. Frohlich
are beneficial owners of the 1,516,634 shares of Common Stock. The
principal business office address for Prescott Capital is 1924 South Utica,
Suite 1120; Tulsa, Oklahoma 74104-6529.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Executive Officers and Directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC and the NYSE. Such persons are
required by regulations of the SEC to furnish the Company with copies of all
such filings. Based solely on its review of the copies of such reports received
by the Company and written representations from reporting persons, the Company
believes that all ownership filing requirements were timely met during 2008.
DIRECTOR COMPENSATION
Directors who are employees of the Company are not separately compensated for
serving on the Board. In 2008, non-employee directors received annual retainers
of $25,000 for membership on the Board, an additional annual retainer of $5,000
is paid to the chairman of the Audit Committee and all non-employee directors
receive an attendance fee of $1,000 per day for in person attendance at Board
meetings and any committee meetings held on the same day and $500 per day for
any committee meetings held on days other than Board meeting days. The
attendance fee is $200 if attendance is via telephone. All Directors are also
reimbursed for all reasonable expenses incurred in attending meetings.
Non-Qualified Stock Option grants representing 2,800 shares of the Company's
common stock are awarded to each non-employee director on the date of the
Company's annual meeting of shareholders at the fair market price on the date of
the grant. Such stock options vest on the first anniversary date of the grant
provided that, as of the anniversary date the director's position had not been
vacated by reason of resignation or removal for cause. In addition, from time to
time, at the Board's discretion, non-employee directors may be granted
additional Non-Qualified Stock Options under the then existing stock option
plan(s).
The following table shows compensation information for the Company's
non-employee directors for fiscal 2008.
Director Compensation for Fiscal 2008
------------------------------------------------------------------------------------------------------------------------------
Change in
Pension Value
Fees Earned and All Other
or Paid in Non-Equity Nonqualified Compensation
Cash Stock Option Incentive Plan Deferred ($)
Name ($) Awards Awards Compensation Compensation Total
($) ($)(FN1) ($) Earnings ($)
------------------------------------------------------------------------------------------------------------------------------
Sangwoo Ahn 36,000 0 11,738(FN2) 0 0 0 47,738
------------------------------------------------------------------------------------------------------------------------------
Kevin R. Jost 29,400 0 11,738(FN3) 0 0 0 41,138
------------------------------------------------------------------------------------------------------------------------------
Dr. Paul D. Nielsen 31,000 0 11,738(FN4) 0 0 0 42,738
------------------------------------------------------------------------------------------------------------------------------
James A. Simms 31,000 0 11,738(FN5) 0 0 0 42,738
------------------------------------------------------------------------------------------------------------------------------
(1) The dollar amounts reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended December 31, 2008,
in accordance with FAS 123R of stock options granted in 2008 pursuant to
the equity compensation element of the Company's compensation plan for
non-employee directors. Assumptions made in these valuations are discussed
in footnote 7 of the Company's 2008 Consolidated Financial Statement
included in the Company's Annual Report on 10-K filed with the SEC on March
16, 2009. There can be no assurance that the FAS 123R amounts will ever be
realized. Each non-employee Director received an option grant to purchase
2,800 shares of the Company's common stock on May 22, 2008 at an exercise
price of $8.175. The grant date fair value of the grants to each of the
non-employee directors was $12,102.
(2) At the end of fiscal year 2008, Mr. Ahn had options to purchase an
aggregate of 34,100 shares of the Company's common stock.
(3) At the end of fiscal year 2008, Mr. Jost had options to purchase an
aggregate of 9,134 shares of the Company's common stock.
(4) At the end of fiscal year 2008, Dr. Nielsen had options to purchase an
aggregate of 5,600 shares of the Company's common stock.
(5) At the end of fiscal year 2008, Mr. Simms had options to purchase an
aggregate of 19,100 shares of the Company's common stock.
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Overall Compensation Philosophy, Objectives and Policy
Philosophy. The Company's Named Executive Officer compensation philosophy is to
create long-term value for our shareholders. To achieve this philosophy, we have
designed and implemented our compensation programs for Named Executive Officers
to reward them for operating performance, leadership, to align their interests
with shareholders and to encourage them to remain with the Company.
Objectives. The Company's compensation objectives are to:
o Ensure the alignment of compensation with the performance objectives
of each of our employees, including Named Executive Officers;
o Reward performance and behaviors that reinforce the values of
leadership, integrity, accountability, teamwork, innovation and
quality; and
o Achieve the Company's overall performance goals.
Compensation Policy. The Compensation Committee designs compensation programs
for Named Executive Officers intended to further the Company's objectives of
attracting, motivating, retaining and rewarding talented executives necessary to
assist the Company in achieving its performance goals. In addition, to ensure
that the Company maintains its leadership position in the industries in which it
competes. Accordingly, the Committee has adopted the following overriding
policies:
o Compensation must be tied to the Company's general performance and
achievement of financial and strategic goals;
o Compensation opportunities should be competitive with those provided
by other companies of comparable size engaged in similar businesses;
and
o Compensation should provide incentives that align the long-term
financial interests of the Company's Executive Officers with those of
its shareholders.
Compensation that was paid to the Named Executive Officers in 2008 was
consistent with the above policies. The primary responsibility of the Company's
Chief Executive Officer and its other Named Executive Officers is the
enhancement of shareholder value through balancing the requirements of long term
growth with the achievement of short term performance. The contribution a Named
Executive Officer has made to achieve the Company's short term strategic
performance objectives as well as that Named Executive Officer's anticipated
contribution toward long term objectives provide the basis upon which the
officer's individual compensation awards are established.
Elements of Executive Compensation
To meet its policy objectives for Named Executive Officer compensation, the
Company compensated them through a combination of Base Salary, Bonuses, Stock
Options, Deferred Compensation and provided various benefits, including medical
and 401(k) plans generally made available to all employees of the Company.
Base Salary. In setting the annual base salary of the Chief Executive Officer
and in reviewing and approving the annual base salaries of the other Named
Executive Officers, the Compensation Committee considered the salaries of
executives in similar positions, the level and scope of responsibility,
experience and performance of the Named Executive Officer, the financial
performance of the Company and other overall general economic factors. The
Compensation Committee purchases compensation surveys from a national third
party provider of data for salaries in the high technology group within the
durable goods industry sector as reported in a nationally recognized report on
executive compensation. In 2007, the Company purchased the Compdata Survey of
Management Compensation in the United States. This data was updated utilizing
the 2008 Compdata Survey of Management Compensation Summary as well as the
Compensation Summary published by the Society of Human Resource Management
National Data. An objective of the Compensation Committee is to approve a salary
for each Named Executive Officer near the average midpoint for similar positions
identified in the survey taking into account variables, such as industry,
company size, geographic location, and comparison of duties. Consideration is
also given to the individual performance of that Named Executive Officer, the
performance of the organization over which the Named Executive Officer has
responsibility, the performance of the Company and general economic conditions
(with each factor being weighted as the Compensation Committee deems
appropriate).
Incentive Compensation. The purpose of the Company's incentive compensation
program for Named Executive Officers is to provide incentive based compensation
to Named Executive Officers for meeting and exceeding pre-established financial
performance goals for the respective business units under their control. In
general, the financial performance goals of the Named Executive Officers are
approved by the Board of Directors. For 2008, the financial performance measures
taken into consideration to determine an appropriate bonus for Named Executive
Officers of all business units other than the Government business segment,
included profit before tax, revenue, accounts receivable collection cycle and
inventory turns. The financial performance measures taken into consideration to
determine an appropriate bonus for the Named Executive Officer of the Government
business segment, PAR Government Systems Corporation and Rome Research
Corporation, included profit before tax, revenue and accounts receivable
collection cycle. In 2008, the annual Incentive Compensation targets for the
Named Executive Officers ranged from 42% to 65% of Base Salary. Named Executive
Officers may earn from 0% to 200% of the individual target established for their
business unit depending on actual financial performance compared to the actual
goals of the plan. The calculation of the award is based on performance level
achievement of greater than 90% of their goals for revenue targets and 80% of
their goals of profit before tax and accounts receivable collection cycle, and
where applicable, inventory turns, to earn an award for each element. Cash
payments are made following the completion of the Corporation audit. For any
fiscal year, total awards paid to a business unit may not exceed an amount equal
to 20% of Net Profit after Taxes for that business unit. Dr. Sammon, Mr.
Casciano and Mr. Constantino are measured on the performance of both the
Hospitality and Government business segments and received incentive compensation
totaling $104,900; $46,200 and $52,700 respectively for 2008 performance. Mr.
Cortese is measured on the performance of the Hospitality business segment and
received $8,600 in incentive compensation for the 2008 performance of that
segment. Mr. Lynch received incentive compensation of $165,800 in connection
with the 2008 performance of the Government business segment.
Equity Compensation. In keeping with its philosophy of providing long-term
financial incentives that relate to improvement in long-term shareholder value,
the Company may grant restricted stock awards and/or stock options to its key
employees (including Named Executive Officers other than Dr. Sammon and Mr.
Constantino) under the Company's 2005 Equity Incentive Plan. Upon review of
recommendations from the Stock Option Committee, the Compensation Committee
determines the key employees of the Company and its subsidiaries who shall be
granted equity compensation, the type of equity compensation to be granted, the
terms of the grant and the number of shares to be subject to such grants or
options. Grants of restricted stock awards are generally limited to the
Company's senior level employees and are used in special circumstances. There
are two types of vesting associated with restricted stock awards, Time Only and
Event/Performance. Time Only vesting generally occurs over a 3 to 5 year period.
Event/Performance vesting occurs where stock grants vest upon the achievement of
certain financial targets (e.g. increase in revenue, earnings per share or other
metrics) so long as the event is non-subjective. In 2008, no Restricted Stock
Awards were made to the Named Executive Officers. Stock options ("Options")
granted under the 2005 Equity Incentive Plan may be either Incentive Stock
Options as defined by the Internal Revenue Code ("Incentive Stock Options") or
Options which are not Incentive Stock Options ("Non-Qualified Stock Options").
Option grants generally become exercisable no less than six months after the
grant and expire ten (10) years after the date of the grant. Option grants are
discretionary and are reflective of the value of the recipient's position, as
well as the current performance and continuing contribution of that individual
to the Company.
Benefits and Perquisites. The Company provides partial payment for medical,
dental and vision insurance, 401(k) plan with profit sharing and disability and
life insurance benefits to its Named Executive Officers consistent with that
offered generally to its employees. In addition, Named Executive Officers are
provided a limited number of perquisites whose primary purpose is to minimize
distractions from the executives' attention to important Company objectives. The
Company provides an automobile or automobile allowance and payment of country
club dues, all of which are quantified in the Summary Compensation Table on page
18.
Retirement Plans
PAR Technology Corporation Retirement Plan. The Named Executive Officers are
eligible to participate in the PAR Technology Corporation Retirement Plan (the
"Retirement Plan"). The Plan has a deferred profit-sharing component that covers
substantially all the employees of the Company including the Named Executive
Officers. The Company's annual profit sharing contribution to the Retirement
Plan is at the discretion of the Board. The Retirement Plan also contains a
401(k) provision that allows employees to contribute a percentage of their
salary, pre-tax, up to certain tax code limitations. The Company matches the
deferrals of all participants in the Retirement Plan, including the Named
Executive Officers, at the rate of 10%.
Deferred Compensation. The Company sponsors a Non-Qualified Deferred
Compensation Plan for a select group of highly compensated employees that
includes the Named Executive Officers. The Deferred Compensation Plan was
adopted effective March 4, 2004. Participants may make voluntary deferrals of
their salary to the plan in excess of tax code limitations that apply to the
Company's Retirement Plan. The Company also has the sole discretion to make
employer contributions to the plan on behalf of the participants, though it did
not make any employer contributions in 2008.
Compliance with Internal Revenue Code Section 162(m). Section 162(m) of the
Internal Revenue Code of 1986, as amended, provides that compensation in excess
of $1,000,000 paid to the Named Executive Officers of a publicly held company
will not be deductible for federal income tax purposes unless such compensation
is paid pursuant to one of the enumerated exceptions set forth in Section
162(m). The Company's primary objective in designing and administering its
compensation policies is to support and encourage the achievement of the
Company's long-term strategic goals and to enhance stockholder value. In
general, stock options granted under the Company's 2005 Equity Incentive Plan
are intended to qualify under and comply with the "performance based
compensation" exemption provided under Section 162(m), thus excluding from the
Section 162(m) compensation limitation any income recognized by executives at
the time of exercise of such stock options. Because salary and bonuses paid to
Named Executive Officers have been below the $1,000,000 threshold, the Committee
has elected, at this time, to retain discretion over bonus payments, rather than
to ensure that payments of salary and bonus in excess of $1,000,000 are
deductible. The Committee intends to review periodically the potential impacts
of Section 162(m) in structuring and administering the Company's compensation
programs.
Role of Executive Officers
The Company's Chief Financial Officer takes direction from and brings
suggestions to the Compensation Committee on compensation matters for the Named
Executive Officers. He oversees the actual formulation of plans incorporating
the suggestions of the Compensation Committee. He provides information to the
Compensation Committee on how employees are evaluated and the overall results of
the evaluations. He assists the Chair of the Compensation Committee in preparing
the agenda for its meetings.
The Company's Chief Executive Officer reports on his evaluations of the senior
executives, including the other Named Executive Officers. He makes compensation
recommendations for the other Named Executive Officers with respect to base
salary and annual and long-term incentives which are the basis of discussion
with the Compensation Committee. The Chief Financial Officer meets with the
Compensation Committee to discuss and evaluate the financial implications of
compensation related decisions.
Severance Policy
The Company does not have a formal severance plan but as a matter of policy
provides severance for its employees in limited circumstances such as when an
employee's position is eliminated. All employees, including the Named Executive
Officers, are covered by the policy and payments are based on level of
responsibility, seniority and/or length of service. The Company has no other
termination arrangements with any of the Named Executive Officers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Decisions regarding executive compensation for all executive officers and
outside directors are made by the Compensation Committee of the Board of
Directors, which in 2008 was composed of Messrs. Jost, Nielsen and Simms. None
of the members of the Compensation Committee has ever been an officer or
employee of the Company or any of its subsidiaries and no executive officer of
the Company serves on the board of directors of any company at which the
Compensation Committee members is employed.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has reviewed and discussed
with management the section of this Proxy Statement entitled "Compensation
Discussion and Analysis." Based on this review and discussion, the Committee has
recommended to the Board that the section entitled "Compensation Discussion and
Analysis," as it appears on pages 14 through 17, be included in this Proxy
Statement.
Members of the Compensation Committee
Kevin R. Jost Dr. Paul D. Nielsen James A. Simms
(Chairman)
Summary Compensation Table
The following table provides information concerning the compensation of the
Company's Chief Executive Officer, Chief Financial Officer and the three other
most highly compensated executive officers (the "Named Executive Officers") for
fiscal 2008, 2007 and 2006. For a complete understanding of the table, please
read the narrative disclosures that follow the table.
----------------------------------------------------------------------------------------------------------------------------
Non-Equity Non-Qualified
Incentive Deferred
Stock Option Plan Compensation All Other
Name and Principal Position Year Salary Bonus Awards Awards Compensation Earnings Compensation Total
($)(FN1) ($) ($)(FN2) ($)(FN3) ($)(FN4) ($)(FN5) ($)(FN6) ($)
----------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
----------------------------------------------------------------------------------------------------------------------------
Dr. John W. Sammon
2008 355,591 -- -- -- 104,900 -- 21,585(FN7) 482,076
Chairman of the Board,
President & Chief Executive 2007 355,591 -- - -- 107,100 -- 23,356(FN7) 486,047
Officer
2006 355,591 -- -- -- 127,900 -- 25,076(FN7) 508,567
----------------------------------------------------------------------------------------------------------------------------
Ronald J. Casciano
2008 242,307 -- -- 7,719 46,200 -- 5,110 301,066
Vice President, C.F.O. & 2007 200,000 -- -- 15,373 39,000 -- 7,000 261,373
Treasurer
2006 192,529 -- -- 27,935 42,400 5,065 8,493 276,422
----------------------------------------------------------------------------------------------------------------------------
Charles A. Constantino
2008 228,714 -- -- -- 52,700 -- 28,632(FN8) 310,046
Executive Vice President 2007 205,386 -- -- -- 51,000 -- 30,823(FN8) 287,209
and Director
2006 224,037 -- -- -- 62,600 3,864 29,193(FN8) 319,694
----------------------------------------------------------------------------------------------------------------------------
Gregory T. Cortese
2008 217,584 -- -- -- 8,600 -- 6,868 233,052
CEO & President, 2007 249,958 -- -- -- 22,200 711 13,667(FN9) 285,536
ParTech, Inc.
2006 249,958 -- -- -- 43,800 598 9,881 304,237
----------------------------------------------------------------------------------------------------------------------------
Stephen P. Lynch
2008 233,996 -- 1,238 38,453 165,800 -- 4,033 443,520
President,
Rome Research Corporation and 2007 215,875 -- 2,255 -- -- -- 4,158 222,288
PAR Government Systems
Corporation 2006 105,833 -- -- -- -- -- 1,784 107,617
----------------------------------------------------------------------------------------------------------------------------
(1) Amounts reported in column (c) reflect base salaries paid to each of the
Named Executive Officers for the listed fiscal year. Amounts shown are not
reduced to reflect the Named Executive Officer's elections, if any, to
defer receipt of salary into the Deferred Compensation Plan which is
included in the Non-Qualified Deferred Compensation Table on page 22.
(2) The amounts reported in column (e) reflect the amounts recognized in fiscal
years 2008, 2007 and 2006, respectively, for financial statement reporting
purposes in accordance with FAS 123R for stock awards granted during and
prior to fiscal 2008, 2007 and 2006, respectively, except that estimates
for forfeitures related to service-based vesting conditions have been
disregarded. Assumptions made in these valuations are discussed in footnote
7 of the Company's 2008 Consolidated Financial Statement included in the
Company's Annual Report on 10-K filed with the SEC on March 16, 2009.
(3) The amounts reported in column (f) reflect the amounts recognized in fiscal
years 2008, 2007 and 2006, respectively, for financial statement reporting
purposes in accordance with FAS 123R for options granted during and prior
to fiscal 2008, 2007 and 2006, respectively, except that estimates for
forfeitures related to service-based vesting conditions have been
disregarded. None of the Named Executive Officers forfeited any stock
option awards in fiscal 2008, 2007 or 2006. Assumptions made in valuation
are discussed in footnote 7 of the Company's 2008 Consolidated Financial
Statement. The actual value of the option awards will depend on the
difference between the market value of the Company's Common Stock on the
date the stock option is exercised and the exercise price.
(4) Amounts reported in column (g) represent the amounts paid under the
Incentive Compensation element of the Company's Executive Compensation Plan
during the years indicated in respect of service performed during those
years. A description of the Incentive Compensation element is contained in
the section entitled "Incentive Compensation" on page 15. Amounts shown are
not reduced to reflect the Named Executive Officer's elections, if any, to
defer receipt of salary into the Deferred Compensation Plan.
(5) Amounts reported in column (h) consist of above-market or preferential
earnings during years indicated on compensation that was deferred in or
prior to such years under the PAR Technology Corporation Deferred
Compensation Plan. These amounts are also reported in the Non-Qualified
Deferred Compensation Table on page 22 under the column entitled "Aggregate
Earnings in Last Fiscal Year".
(6) In addition to any perquisites identified for the individual Named
Executive Officers, the amounts reported in column (i) consists of Company
contributions to the Company's qualified plan and matching contribution to
the 401(k); and imputed income on Company payment of term life insurance
premiums as determined under the Internal Revenue Code.
(7) Includes payments made on Dr. Sammon's behalf for club memberships of
$10,641 in 2006; $10,452 in 2007; $11,840 in 2008.
(8) Includes automobile allowance of $6,300 in 2006; $10,800 in 2007; and
$10,800 in 2008, and payments made on Mr. Constantino's behalf for club
memberships of $8,603 in 2006; $7,119 in 2007; and $8,087 in 2008.
(9) Includes automobile allowance of $2,629 and payments made on Mr. Cortese's
behalf for club memberships of $2,670 in 2007.
Grants of Plan-Based Awards
The following table sets forth the equity grants made to the Company's Named
Executive Officers during 2008 pursuant to the PAR Technology Corporation 2005
Equity Incentive Plan.
-----------------------------------------------------------------------------------------------------------------------------
All Other
Option
Awards: Exercise or
Number of Base Price Grant Date
Estimated Future Payouts Under Securities of Option Fair Value of
Non-Equity Incentive Plan Awards Underlying Awards Stock and
Name Grant Date (FN1) Options (#) ($/Share) Option Awards
----------------------------------------------------------------------------------------------------------------------------
Threshold Target
($) ($) Maximum ($)
----------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h)
----------------------------------------------------------------------------------------------------------------------------
Dr. John W. Sammon 0 231,200 462,400
----------------------------------------------------------------------------------------------------------------------------
Ronald J. Casciano 0 101,800 203,600
----------------------------------------------------------------------------------------------------------------------------
Charles A. Constantino 0 116,100 232,200
----------------------------------------------------------------------------------------------------------------------------
Gregory T. Cortese 0 132,500 265,000
----------------------------------------------------------------------------------------------------------------------------
Stephen P. Lynch 01/08/2008 (FN2) 0 124,100 248,200 20,000 6.25 69,181
----------------------------------------------------------------------------------------------------------------------------
(1) The amounts reported in Columns (c) through (e) reflect threshold, target
and maximum performance incentive compensation payment amounts for the 2008
performance year as set in 2008. Actual payments under the incentive
compensation program are reflected in column (g) of the Summary
Compensation Table on page 18 of this Proxy Statement. The program is
described under the "Incentive Compensation" heading of the Compensation
Discussion and Analysis section of this Proxy Statement found on page 15 of
this Proxy Statement.
(2) These Options vest as follows: 20% on January 8, 2008 and 5% each quarter
thereafter, becoming fully vested on July 8, 2012. Options expire on the
tenth anniversary of the date of the grant. If the holder of an Option
ceases to be employed by the Company or any subsidiary, other than by
reason of termination for cause, death, disability or retirement, such
Option shall terminate on the earlier of the specified expiration date or
three months from the termination date. If the holder of the Option is
terminated for cause, the Option shall terminate immediately. In the case
of death, disability or retirement, such Option shall terminate on the
earlier of the specified expiration date or twelve months after the
employment relationship ceases due to such death, disability or retirement.
Outstanding Equity Awards at Fiscal Year-End
The following table shows all outstanding equity awards held by the Named
Executive Officers at fiscal year-end, December 31, 2008.
-----------------------------------------------------------------------------------------------------------------------------------
Options Awards Stock Awards
-----------------------------------------------------------------------------------------------------------------------------------
Equity
Equity Incentive
Incentive Awards:
Market Plan Market or
Number Value Awards: Payout
Equity of Share of Number of Value of
Incentive or Units Shares Unearned Unearned
Plan Awards: of Stock or Shares, Shares
Number of that Units Units, or Units or
Number of Number of Securities Have Not of Other Other
Securities Securities Underlying Vested Stock Rights Rights
Underlying Underlying Unexercised (#) that that Have that Have
Unexercised Unexercised Unearned Option Option Have Not Not Vested
Options (#) Options (#) Options Exercise Expiration Not Vested (#) ($)
Name Exercisable Unexercisable (#) Price Date Vested
($) ($)
--------------- -------------- ---------------- -------------- ---------- ------------- ---------- --------- ----------- -----------
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
--------------- -------------- ---------------- -------------- ---------- ------------- ---------- --------- ----------- -----------
Dr. John W. 0 0 0 0 0 0 0 0 0
Sammon
--------------- -------------- ---------------- -------------- ---------- ------------- ---------- --------- ----------- -----------
19,500(FN1) 2.56 5/30/10
Ronald J. 67,500(FN2) 1.75 10/1/11
Casciano 600(FN3) 0 1.25 1/9/11 0 0 0 0
54,000(FN4) 6,000(FN4) 6.01 10/13/14
--------------- -------------- ---------------- -------------- ---------- ------------- ---------- --------- ----------- -----------
Charles A.
Constantino 0 0 0 0 0 0 0 0 0
--------------- -------------- ---------------- -------------- ---------- ------------- ---------- --------- ----------- -----------
Gregory T. 97,290(FN5) 0 0 3.17 12/31/09 0 0 0 0
Cortese 206,960(FN6) 2.04 8/11/10
--------------- -------------- ---------------- -------------- ---------- ------------- ---------- --------- ----------- -----------
Stephen P. 5,000(FN7) 15,000(FN7) 0 6.25 01/08/18 0 0 0 0
Lynch
--------------- -------------- ---------------- -------------- ---------- ------------- ---------- --------- ----------- -----------
(1) These options were granted on May 30, 2000. The options vested 20% on the
six-month anniversary of the grant date, with the remainder vesting in
equal quarterly installments over the next 48 months.
(2) These options were granted on October 1, 2001. The options vested 9,000 on
April 1, 2002; 9,000 on July 1, 2002; with the remaining vesting in equal
quarterly installments over the next 33 months.
(3) These options were granted on January 9, 2001. The options vested on
January 1, 2002.
(4) These options were granted on October 13, 2004. The options vested 6,750 on
April 13, 2005; 14,250 on January 13, 2006; 2,250 on April 13, 2006; 9,750
on January 13, 2007; 3,000 on April 13, 2007; 3,000 on July 13, 2007; 750
on October 13, 2007; 5,250 on January 13, 2008 with the remainder vesting
in equal quarterly installments over the next 15 months.
(5) These options were granted on December 31, 1999. The options vested on June
30, 2000.
(6) These options were granted on August 11, 2000. The options vested 20% on
the six-month anniversary of the grant date, with the remainder vesting in
equal quarterly installments over the next 48 months.
(7) These options were granted on January 8, 2008. The options vested 20% on
the six-month anniversary of the grant date; with the remainder vesting in
equal quarterly installments over the next 48 months.
Option Exercises and Stock Vested
The following table shows all stock options exercised and value realized upon
exercise, and all stock awards vested and value realized upon vesting, by the
Named Executive Officers during fiscal 2008, which ended on December 31, 2008.
-----------------------------------------------------------------------------------------------------------
Option Awards Stock Awards
-----------------------------------------------------------------------------------------------------------
Number of Shares Number of Shares
Acquired on Value Realized on Acquired on Vesting Value Realized on
Exercise Exercise (#) Vesting
Name (#) ($) (FN1) ($)
-----------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
-----------------------------------------------------------------------------------------------------------
Dr. John W. Sammon 0 0 0 0
-----------------------------------------------------------------------------------------------------------
Ronald J. Casciano 6,000 20,153 0 0
-----------------------------------------------------------------------------------------------------------
Charles A. Constantino 0 0 0 0
-----------------------------------------------------------------------------------------------------------
Gregory T. Cortese 0 0 0 0
-----------------------------------------------------------------------------------------------------------
Stephen P. Lynch 0 0 0 0
-----------------------------------------------------------------------------------------------------------
(1) The Value Realized equals the aggregate amount of the excess of the fair
market value on the date of exercise (the average of the high and low
prices of the Company's Common Stock as reported in the Wall Street Journal
for the exercise date) over the relevant exercise price(s).
Non-Qualified Deferred Compensation
The following table sets forth the contributions, earnings and account balances
for each of the Named Executive Officers who participate in the PAR Technology
Deferred Compensation Plan. Amounts contributed to the plan are held in a
Company established rabbi-trust and are invested in a group variable universal
life insurance contract insuring the lives of the Named Executive Officers. The
group variable universal life insurance contract is owned by the Company and
subject to the claims of its creditors. Contributions to the plan are allocated
to a separate account established in each Named Executive Officer's name. Each
separate account is credited with the Named Executive Officer's elective
deferrals and Company contributions, if any. The value of each Named Executive
Officer's account is credited or debited with deemed earnings, gains or losses
based on the cash surrender value of the group variable universal life insurance
contract. Distribution of a Named Executive Officer's account balance is
permitted upon that Named Executive Officer's termination of employment, death,
disability or financial hardship. Payment of a Named Executive Officer's account
balance will be made in a lump sum payment or in annual installments over a
period of two to 15 years, as selected by the Named Executive Officer. The plan
also provides that, in the event of death, a death benefit equal to $10,000
shall be paid in addition to the account balance as of the time of the Named
Executive Officer's death to the beneficiary of the Named Executive Officer.
Non-Qualified Deferred Compensation Table
---------------------------------------------------------------------------------------------------------------------------
Executive Registrant Aggregate Aggregate Aggregate Balance
Contributions in Contributions in Earnings in Last Withdrawals / at Last FYE
Name Last FY Last FY FY Distributions ($)
($) ($) ($)(FN1) ($)
---------------------------------------------------------------------------------------------------------------------------
Dr. John W. Sammon 0 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
Ronald J. Casciano 10,010 0 (15,215) 0 24,917
---------------------------------------------------------------------------------------------------------------------------
Charles A. Constantino 48,000 0 (44,468) 26,393 225,253
---------------------------------------------------------------------------------------------------------------------------
Gregory T. Cortese 5,000 0 (8,870) 0 15,876
---------------------------------------------------------------------------------------------------------------------------
Stephen P. Lynch 71,592 0 (22,913) 0 70,597
---------------------------------------------------------------------------------------------------------------------------
(1) The above-market or preferential earnings portion of these amounts are
reported in the Summary Compensation Table under the column entitled
"Non-Qualified Deferred Compensation Earnings."
Transactions with Related Persons
For the period beginning January 1, 2008 and ending March 31, 2009, there were
no transactions, or currently proposed transactions, in which the Company was or
is to be a participant and the amount involved exceeds $120,000, and in which
any related person had or will have a direct or indirect material interest,
except for the following:
o John W. Sammon, III and Karen E. Sammon, members of the immediate
family of Dr. John W. Sammon, the Company's Chairman of the Board,
President and Chief Executive Officer, are principals in Sammon and
Sammon, LLC, doing business as Paragon Racquet Club. Paragon Racquet
Club currently leases a portion of the Company's facilities at New
Hartford, New York on a month to month basis at the base rate of
$9,775. The Company provides membership to this facility to all local
employees.
o John Springer-Miller, who served as the President and CEO of the
Company's subsidiary, PAR Springer-Miller Systems, Inc. for a portion
of 2008, is the owner of the building in Stowe, Vermont, in which the
subsidiary maintains its principal offices. The subsidiary currently
leases the majority of the building from Mr. Springer-Miller at a
monthly base rate of $30,000. The aggregate amount of all monthly
payments due from January 1, 2008 until the expiration of the lease
term in September 2009 is $630,000.
o Karen E. Sammon, a member of Dr. Sammon's immediate family, was an
employee of ParTech, Inc., a subsidiary of the Company, during 2008,
holding the position of President, Software Solutions Division. Ms.
Sammon also holds the position of President of Par-Siva Corporation, a
subsidiary of the Company, a position she holds concurrent with her
position in ParTech, Inc. Ms. Sammon's compensation for 2008 was
$175,000 which was commensurate with that of her peers.
o John W. Sammon, III, a member of Dr. Sammon's immediate family, was an
employee of PAR Government Systems Corporation, a subsidiary of the
Company, during 2008 where he served as the Vice President and General
Manager of the Logistics Management Division. Mr. Sammon's
compensation for 2008 was $138,233 which was commensurate with that of
his peers.
Policies and Procedures With Respect to Related Party Transactions
The Company's written Policy on Related Party Transactions requires Controllers
of all subsidiaries to review on a quarterly basis all transactions and
potential transactions for related party involvement. All identified
transactions, if any, are reported to the Company's Chief Financial Officer and
the Corporation's legal counsel. Approval or ratification by the Nominating &
Corporate Governance Committee is for any transaction or series of transactions
exceeding $120,000 in which the Company is a participant and any related person
has a material interest. Related persons would include the Company's Directors
and executive officers and their immediate family members as well as any person
known to be the beneficial owner of more than 5% of PAR's common stock.
Under the Company's Corporate Governance Guidelines and Code of Business Conduct
& Ethics, all Directors and executive officers and employees of the Company have
a duty to report up the chain, which includes reports to the Company's
Compliance Officer and to the Nominating and Corporate Governance Committee or
Audit Committee, potential conflicts of interests, including transactions with
related persons. All related party transactions, other than compensation
arrangements, expense allowances and other similar items in the ordinary course
of business shall be disclosed in the Company's financial statements.
Compensation paid by the Company for service to an employee, even if the
aggregate amount involved exceeds $120,000 are not reviewed by the Nominating
and Corporate Governance or Audit Committees unless the Compliance Officer,
Chief Financial Officer or legal counsel believe such compensation to be
inconsistent with peers of the related party within the Company or the Company's
compensation practices in general.
Director Independence
The Board of Directors has affirmatively determined that the following
Directors, comprising all of the non-management directors, are "independent"
under the listing standards of the NYSE, the Company's Standards of Independence
and pursuant to the Company's Corporate Governance Guidelines: Mr. Ahn, Mr.
Jost, Dr. Nielsen and Mr. Simms. In order to assist the Board in making this
determination, the Board has adopted standards of independence as part of the
Company's Corporate Governance Guidelines which are available on the Company's
website at http://www.partech.com/pressrel/PAR_Corp_Gov_Guidelines.pdf. These
standards identify, among other things, material business, charitable and other
relationships that could interfere with a director's ability to exercise
independent judgment. There are no family relationships between any of the
non-employee directors, and any of the Company's executive officers ("Executive
Officers"). The Executive Officers serve at the discretion of the Board.
OTHER MATTERS
Other than as described in the materials of this Proxy Statement, the Board
knows of no matters that will be presented at the Annual Meeting for action by
shareholders. However, if any other matters properly come before the Meeting, or
any postponement or adjournment thereof, the persons acting by authorization of
the proxies will vote thereon in accordance with their judgment.
NO INCORPORATION BY REFERENCE
In the Company's filings with the SEC, information is sometimes "incorporated by
reference." This means that we are referring shareholders to information that
has previously been filed with the SEC and the information should be considered
as part of the particular filing. As provided under SEC regulations, the "Audit
Committee Report" and the "Compensation Discussion and Analysis" contained in
this Proxy Statement specifically are not incorporated by reference into any
other filings with the SEC. In addition, this Proxy Statement includes several
website addresses. These website addresses are intended to provide inactive,
textual references only. The information on these websites is not part of this
Proxy Statement.
AVAILABLE INFORMATION
The Company's Annual Report on Form 10-K can be located with the Proxy Materials
at http://www.partech.com/en/about/investor/par-annual-reports.html, as well as
with the Company's Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and amendments to reports filed or furnished pursuant to Sections 13(a) and
15(d) of the Securities Exchange Act of 1934, as amended, which are available
under the SEC Filings link on our website
http://www.partech.com/ptc/ptc-ir-front2.cfm as soon as reasonably practicable
after PAR electronically files such reports with, or furnishes those reports to,
the Securities and Exchange Commission. PAR's Corporate Governance Guidelines,
Board of Directors committee charters (including the charters of the Audit
Committee, Compensation Committee, and Nominating and Corporate Governance
Committee) and code of ethics entitled "Code of Business Conduct and Ethics"
also are available at that same location on our website. Stockholders can
receive free printed copies of these documents by directing a written or oral
request to: PAR Technology Corporation; Attention: Investor Relations; PAR
Technology Park; 8383 Seneca Turnpike; New Hartford, NY 13413-4991;
315-738-0600; http://www.partech.com/ptc/rfi-form.cfm.
SHAREHOLDER PROPOSALS FOR 2010 ANNUAL MEETING
Shareholders may submit proposals on matters appropriate for shareholder action
at the Company's annual meetings consistent with the regulations adopted by the
SEC and the By-Laws of the Company. To be considered for inclusion in next
year's Proxy Statement and form of proxy relating to the 2010 Annual Meeting,
any shareholder proposals must be received at the Company's general offices no
later than the close of business on December 17, 2009. If a matter of business
is received by March 3, 2010, the Company may include it in the Proxy Statement
and form of proxy and, if it does, it may use its discretionary authority to
vote on the matter. For matters that are not received by March 3, 2010, the
Company may use its discretionary voting authority when the matter is raised at
the Annual Meeting, without inclusion of the matter in its Proxy Statement.
Proposals should be addressed to Gregory T. Cortese, Secretary; PAR Technology
Corporation; PAR Technology Park; 8383 Seneca Turnpike; New Hartford, New York
13413-4991. The Company recommends all such submissions be sent by Certified
Mail - Return Receipt Requested.
BY ORDER OF THE BOARD OF DIRECTORS
Gregory T. Cortese
Secretary
April 21, 2009
Appendix A
PAR TECHNOLOGY CORPORATION
AUDIT COMMITTEE CHARTER
Membership
The Audit Committee (the "Committee") of PAR Technology Corporation (the
"Company") shall consist of at least three members of the Board of Directors
(the "Board"). Members shall be appointed upon the recommendation of the
Nominating and Corporate Governance Committee and may be removed by the Board in
its discretion. All members of the Committee will meet the independence and
other requirements of the Audit Committee Policy of the New York Stock Exchange,
Section 10A(m)(3) of the Securities Exchange Act of 1934 (the "Exchange Act")
and the rules and regulations of the Securities and Exchange Commission (the
"Commission"). At least one member of the Committee shall, in the assessment of
the Board, qualify and be identified as an audit committee financial expert as
defined by the Commission. All members of the Committee shall be financially
literate at the time of their appointment to the Committee or within a
reasonable time thereafter. Members of the Committee shall not simultaneously
serve on the audit committees of more than two other public companies unless the
Board determines that simultaneous service would not impair the ability of the
member to effectively serve on the Committee and the Board discloses this
determination in the Company's annual proxy statement.
Purpose
The Company's management is responsible for preparing the Company's financial
statements and the Company's independent auditor is responsible for auditing
those financial statements. The Audit Committee's purpose shall be to:
1. Prepare an audit committee report as required by the SEC to be
included in the Company's annual proxy statement.
2. Assist the Board in its oversight of:
a. the integrity of the Company's financial statements;
b. the Company's compliance with legal and regulatory requirements;
c. the Company's independent auditor's qualifications and
independence; and
d. the performance of the Company's internal audit function and
independent auditors
The financial management and the independent auditors of the Company have more
time, knowledge and more detailed information on the Company than do Committee
members. Therefore, in carrying out its responsibilities to assist the Board in
the above oversight functions, the Committee is not providing any expert or
special assurance as to the Company's financial statements or any certification
as to the work of the independent auditors.
Meetings
The Committee will meet at least four times a year, with authority to convene
additional meetings, as circumstances require. All Committee members are
expected to attend each meeting, in person or via teleconference or
video-conference. The Committee will invite members of management, auditors or
others to attend meetings and provide pertinent information, as necessary.
Meeting agendas will be prepared and provided to members in advance, along with
appropriate briefing materials. Minutes will be prepared.
In addition to meetings with Company officers and employees, the independent
auditor or outside counsel or other advisers as necessary to fulfill its
responsibilities, the Committee shall, on a regular basis, hold separate private
meetings with the following to discuss any matters either party believes should
be discussed privately:
o Company management;
o the Company's independent auditors; and
o the Company's internal auditor
Authority & Responsibilities
In carrying out its purpose, the Committee shall have the following authority
and responsibilities:
A. Oversight of Independent Auditor
1. The independent auditor is ultimately accountable to the Board and the
Committee. Therefore, the Committee, subject to any action that may be
taken by the full Board, has the ultimate authority and is directly
responsible for the appointment, compensation, evaluation, retention,
oversight of the work and when appropriate termination of any registered
public accounting firm engaged for the purpose of preparing or issuing an
audit report or performing other audit, review or attest services for the
Company. The oversight responsibility includes resolution of disagreements
between management and the independent auditor regarding financial
reporting. Each such registered public accounting firm shall report
directly to the Committee.
2. To assist the Board in its oversight of the independence, qualifications
and performance of the independent auditor the Committee shall:
a. assess the auditor's independence by at least annually obtaining and
reviewing a report from the independent auditor delineating all
relationships between the Company and the independent auditor,
including non-audit services, consistent with Independence Standards
Board Standard Number 1;
b. discuss with the independent auditor any such disclosed relationships
and their impact or potential impact on the auditor's independence and
objectivity, taking into account the opinions of management and the
internal auditors; and
c. set clear policies for the hiring of employees or former employees of
the Company's independent auditors who participated in any capacity in
the audit of the Company taking into account the pressures that may
exist for auditors seeking a job with the company they audit.
d. at least annually obtain and review a report from the independent
auditor that describes:
i. the audit firm's internal quality-control procedures;
ii. any material issues raised by the firm's most recent internal
quality control review, or peer review, or by any inquiry or
investigation by governmental or professional authorities within
the most recent five years relating to one or more independent
audits carried out by the firm; and
iii. any steps taken to deal with any such issues
e. (after reviewing the independent auditor's report and the independent
auditor's work throughout the year) review and evaluate the
qualifications, performance and independence of the independent
auditor and lead partner of the independent auditor team taking into
account the opinions of the Company's management and the internal
auditors;
f. discuss with management the timing and process for implementing the
rotation of the lead audit partner, and the concurring (review)
partner and any other active audit engagement team partner;
g. consider and discuss with management whether it is appropriate to
adopt a policy of rotating the independent audit firm on a regular
basis;
h. review and approve the independent auditor's proposed audit scope and
approach, including staffing of the audit and coordination of audit
effort with internal audit;
3. The Committee shall regularly report to the full Board about Committee
activities, issues and related recommendations and present the Committee's
conclusions with respect to the audit firm's quality controls,
independence, qualifications and performance and review any issues that
arise with respect to the performance and independence of the independent
auditors.
4. The Committee shall have the sole authority to approve all audit engagement
fees and terms and the Committee, or a member of the Committee, must
pre-approve any auditing services and permitted non-audit services,
including the fees and terms thereof provided by the Company's independent
auditor, subject to the de minimus exception for non-audit services
described in Section 10A(i)(1)(B) of the Exchange Act that are approved by
the Committee prior to the completion of the audit.
B. Oversight of Internal Audit Function
1. The Committee shall review and discuss with the independent auditor the
responsibilities, budget and staffing of the Company's internal audit
function.
2. The Committee shall review and discuss with management, the internal audit
director and the independent auditor:
a. the effectiveness of the internal audit function, including compliance
with established internal auditing practice standards
b. the audit risk assessment process and the proposed scope of the
Internal Audit department for the upcoming year and coordination of
that scope with the independent auditor; and
c. the results of the internal auditors' examination of significant
internal audit department findings and management responses.
3. The Committee shall assess and confirm there are no restrictions or
limitations placed on the performance of internal audit.
4. The Committee shall review the appointment and, when appropriate, the
replacement of the senior internal auditing executive.
5. The Committee shall regularly report to the Board about Committee
activities, issues and related recommendations with respect to the
performance of the internal audit function.
C. Oversight of Management's Conduct of Financial Reporting Process
1. Financial Reporting Practices. The responsibility for the Company's
financial statements and disclosures rest with the Company's management. In
providing oversight of the Company's financial reporting practices, the
Committee shall;
a. regularly review with the independent auditor any audit problems or
difficulties and management's response. The review shall include any
restrictions on the scope of the independent auditor's activities or
on the access the independent auditor had to requested information and
any significant disagreements with management; any accounting
adjustments noted or proposed by the auditor that were "passed" (as
immaterial or otherwise); any communications between the audit team
and the audit firm's national office regarding auditing or accounting
issues presented by the engagement; and any "management" or "internal
control" letter or schedule of differences issued, or proposed to be
issued, by the audit firm to the Company.
b. review and discuss with the independent auditor, and with management,
major issues regarding accounting principals and financial statement
presentations, including any significant changes in the Company's
selection or application of accounting principles;
c. review and discuss with management and the independent auditor any
major issues as to the quality and adequacy of the Company's internal
controls and any special steps adopted in light of material control
deficiencies, if any;
d. review and discuss any analyses prepared by the Company's management
and/or independent auditor setting forth significant financial
reporting issues and judgments made in connection with the preparation
of the financial statements, including any analyses of the effects of
alternative GAAP methods on the financial statements;
e. review the effect of recent accounting professional and regulatory
initiatives, complex or unusual transactions and highly judgmental
areas, material off-balance sheet transactions or structures and other
similar relationships on the financial statements of the Company;
2. Audited Financial Statements. With respect to the Company's annual audited
financial statements, the Committee shall:
a. meet with Company management and the independent auditor to review and
discuss the Company's annual audited financial statements to be
included in SEC Form 10-K (or in the Annual Report to Shareholders if
distributed prior to filing Form 10-K) and the Company's specific
disclosures under "Management's Discussion and Analysis of Financial
Condition and Results of Operations";
b. review and discuss with the independent auditor the matters required
to be discussed by the applicable Statement of Auditing Standards
("SAS"); and
c. based on these discussions, the Committee will advise the Board
whether it recommends the audited financial statements to be included
in the Annual Report on Form 10-K (or in the Annual Report to
Shareholders if distributed prior to filing Form 10-K).
3. Interim Financial Statements. With respect to the Company's interim
financial statements the Committee shall:
a. meet with Company management and the independent auditor to review and
discuss the Company's quarterly financial statements to the SEC (e.g.
Form 10-Q) including the results of the independent auditor's review
of such financials, prior to the filing thereof and the Company's
specific disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations";
b. review and discuss with the independent auditor and management the
matters required to be discussed by the applicable SAS.
4. Disclosure of Financial Information. The Committee shall review and discuss
in a general manner (e.g. the type of information to be disclosed and the
type of presentation to be made) the Company's earnings press releases
(paying particular attention to any use of "pro forma" or "adjusted"
non-GAAP information) as well as the financial information and earning
guidance provided to analysts and rating agencies. The Committee is not
required to discuss in advance each earnings release or each instance in
which the Company provides earnings guidance.
5. Risk Assessment. It is the responsibility of the Company's CEO and senior
management to assess and manage the Company's exposure to risk. The
Committee shall discuss with the Company's management the guidelines and
policies to govern the process by which the Company's management undertakes
to assess and manage the Company's exposure to risk. Discussion should also
include the Company's major financial risk exposures and the steps
management has taken to monitor and control such exposures.
6. The Committee shall regularly report to the Board about Committee
activities, issues and related recommendations with respect to the quality
or integrity of the Company's financial statements,
D. Assist the Board in Oversight of the Company's Compliance with Policies and
Procedures Addressing Legal and Ethical Concerns.
1. The Committee shall establish procedures for the receipt, retention and
treatment of complaints received by the Company regarding accounting,
internal accounting controls or auditing matters, and for the confidential,
anonymous submission by employees of the Company of concerns regarding
questionable accounting or auditing matters.
2. The Committee has authority to conduct or authorize investigations into any
matter brought to its attention. Within this scope of responsibility, the
Committee has full access to all books, records, facilities and personnel
of the Company and is empowered to:
a. engage independent counsel or other advisers as it determines
necessary to carry out its duties;
b. seek any information from any employees - all of whom are directed to
cooperate with the Committee's requests - or external parties;
c. meet with Company officers, independent auditor or outside counsel, as
necessary to fulfill its responsibilities;
3. The Committee shall regularly report to the Board about Committee
activities, issues and related recommendations with respect to the quality
or integrity of the Company's compliance with legal or regulatory
requirements.
E. General
1. The Committee shall have the power to authorize Company funding necessary
and appropriate to carry out its duties, in particular it shall have the
power to authorize funding for:
a. the compensation of any registered public accounting firm engaged for
the purpose of preparing or issuing an audit report or performing
other audit, review or attest services for the Company;
b. the compensation of any independent counsel or other advisers as it
determines necessary to carry out its duties; and
c. the payment of the Committee's ordinary administrative expenses that
are necessary and appropriate in carrying out its duties.
2. The Committees functions are the sole responsibility of the Committee and
may not be allocated to a different committee of the Board.
3. Review and assess the adequacy of this charter annually, requesting Board
approval for proposed changes.
4. Confirm annually that all responsibilities outlined in this charter have
been carried out.
5. Evaluate the Committee's and individual members' performance on an annual
basis.
6. Perform other activities related to areas covered by this charter as
requested by the Board.
7. Institute and oversee special investigations as needed.
Directions to The New York Palace Hotel
455 Madison Avenue; New York, NY 10022
212-888-7000
From Westchester:
Take the Saw Mill River Parkway South. Follow the signs to the Henry Hudson
Parkway South. Follow the Henry Hudson Parkway South to 50th Street (Manhattan).
Exit onto 50th Street and follow across town to Madison Avenue. The New York
Palace is located on 50th Street between Madison and Park Avenues.
From New Jersey Turnpike (Lincoln Tunnel):
Go North on the New Jersey Turnpike (Interstate 95 North) to Exit 16 E for the
Lincoln Tunnel (pay toll). Follow directions into the Lincoln Tunnel (pay toll).
Upon exiting the tunnel bear left for "Uptown" and proceed two blocks to 42nd
Street. Turn left onto 42nd Street. Turn right on 10th Avenue. Continue North to
50th Street; turn right onto 50th Street. Follow 50th Street across town
traveling East to Madison Avenue. The New York Palace is located on 50th Street
between Madison and Park Avenues.
From New England Via Triboro Bridge/95 South/Hutchinson River Parkway:
Follow signs to the Triboro Bridge. Follow all signs for Manhattan/FDR South
(pay toll). Take the FDR South. Exit onto 49th Street. Follow 49th Street to 6th
Avenue. Turn right on 6th Avenue. Turn right onto 50th Street. The New York
Palace is located on 50th Street between Madison and Park Avenues.
From Midtown Tunnel / Long Island Expressway:
Enter the Queens Midtown Tunnel (pay toll). Upon exiting the tunnel bear right
to 37th Street (Uptown sign). Follow 37th Street to 3rd Ave. Turn right onto 3rd
Avenue to 51st Street and turn left onto 51st Street. The New York Palace is
located on 51st Street between Park and Madison Avenues.
[GRAPHIC OMITTED][GRAPHIC OMITTED]
REVOCABLE PROXY
PAR TECHNOLOGY CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
May 26, 2009
1:30 PM
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of PAR TECHNOLOGY CORPORATION hereby appoints JOHN
W. SAMMON, CHARLES A. CONSTANTINO and SANGWOO AHN or any one of them, jointly or
severally, proxies with full power of substitution, to vote all shares of Common
Stock of the Company which the undersigned is entitled to vote at the 2009
Annual Meeting of Shareholders to be held on Tuesday, May 26, 2009 at 1:30 PM,
Local Time, at The New York Palace Hotel; 455 Madison Avenue, New York, NY
10022, and at any adjournment thereof, for the election of Directors set forth
and more particularly described in the accompanying Notice of Annual Meeting and
Proxy Statement and upon such other matters that may properly come before the
meeting.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to help conserve natural resources and reduce the costs
incurred by PAR TECHNOLOGY CORPORATION in mailing proxy materials, you can
consent to receiving all future proxy statements, proxy cards and annual reports
electronically over the Internet. To sign up for electronic delivery, please
follow the instructions above to vote using the Internet or telephone and, when
prompted, indicate that you agree to receive or access shareholder
communications electronically in future years. If you are voting by paper
ballot, please check the box where indicated and provide your email address.
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS INSTRUCTION CARD PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE OR PROVIDE YOUR INSTRUCTIONS TO VOTE VIA
THE INTERNET OR BY TELEPHONE.
(Continued, and to be marked, dated and signed, on the other side)
FOLD AND DETACH HERE
-------------------------------------------------------------------------------
PAR TECHNOLOGY CORPORATION - ANNUAL MEETING, MAY 26, 2009:
YOUR VOTE IS IMPORTANT!
Proxy Materials and the Company's Annual Report are available on-line at:
http://www.partech.com/en/about/investor/par-annual-reports.html
You can vote in one of three ways:
1. Call toll free 1-866-213-1445 on a Touch-Tone Phone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
or
2. Via the Internet at https://www.proxyvotenow.com/ptc and follow the
instructions.
or
3. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE SEE REVERSE SIDE FOR VOTING INSTRUCTIONS
[ X ] PLEASE MARK VOTES REVOCABLE PROXY Annual Meeting of Shareholders
AS IN THIS EXAMPLE
PAR TECHNOLOGY CORPORATION May 26, 2009
1. ELECTION OF DIRECTORS For Withhold All For All Except
[ ] [ ] [ ]
Nominees for a 3 year term:
(01) Mr. Sangwoo Ahn
(02) Dr. Paul D. Nielsen
INSTRUCTION: To withhold authority to vote for any nominee(s), mark "For All
Except" and write that nominee(s') name(s) or number(s) in the space provided
below.
The Board of Directors recommends a vote "FOR" proposal 1.
Mark here if you plan to attend the meeting [ ]
Mark here for address change and note change [ ]
----------------------------------------------
UNLESS OTHERWISE INSTRUCTED ABOVE, THE SHARES REPRESENTED HEREBY WILL BE VOTED
IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS SET FORTH
ABOVE.
ELECTRONIC DELIVERY OF PROXY MATERIALS: If you wish to [ ] receive future annual
reports and proxy materials via the internet, please indicate by checking the
box at right and providing your email address below
----------------------------------------------
If signing as attorney, executor, administrator, trustee or guardian, please
give full title as such and if signing for a corporation, please give your
title. When shares are in the name of more than one person, each should sign the
proxy.
Please be sure to date and sign this instruction card in the box below.
--------------------------------------------------------------------------------
Sign above Date
--------------------------------------------------------------------------------
IF YOU WISH TO PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR INTERNET,
PLEASE READ THE INSTRUCTIONS BELOW
--------------------------------------------------------------------------------
FOLD AND DETACH HERE IF YOU ARE VOTING BY MAIL
PROXY VOTING INSTRUCTIONS
Shareholders of record have three ways to vote:
1. By Mail; or
2. By Telephone (using a Touch-Tone Phone); or
3. By Internet.
A telephone or Internet vote authorizes the named proxies to vote your shares in
the same manner as if you marked, signed, dated and returned this proxy. Please
note telephone and Internet votes must be cast prior to Midnight, May 25, 2009.
It is not necessary to return this proxy if you vote by telephone or Internet.
-------------------------------------------------
Vote by Telephone
-------------------------------------------------
Call Toll-Free on a Touch-Tone Phone anytime prior to Midnight, May 25, 2009:
1-866-213-1445
-------------------------------------------------
Vote by Internet
-------------------------------------------------
anytime prior to
Midnight, May 25, 2009 go to:
https://www.proxyvotenow.com/ptc
Please note that the last vote received, whether by telephone, Internet or by
mail, will be the vote counted.
ON-LINE PROXY MATERIALS:
http://www.partech.com/en/about/investor/par-annual-reports.html
Your vote is important!
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------