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 [ ]
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[ ] 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:
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5)Total fee paid:
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[ ] 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
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April 20, 2007
Dear Shareholders:
You are invited to attend PAR Technology Corporation's 2007 Annual Meeting of
Shareholders to be held on Wednesday, May 23, 2007 at 4:00 PM. Once again, we
are proud to hold the meeting at one of our PAR Springer-Miller customer
locations, 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.
We encourage you to sign up for electronic delivery of future proxy materials in
order to conserve natural resources and help us reduce printing costs and
postage fees. For more information, please see "Electronic Delivery of Proxy
Materials" in the Proxy Statement.
Sincerely,
/s/John W. Sammon
[GRAPHIC OMITTED]
PAR Technology Corporation
8383 Seneca Turnpike; New Hartford, NY 13413-4991
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, MAY 23, 2007
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 Wednesday, May 23, 2007, at 4:00 PM, local time, for the
following purposes:
1. To elect two Directors of the Company for a term of office to expire
at the 2010 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 3, 2007 as the record date for the Meeting.
This means that owners of the Company's Common Stock at the close of business on
April 3, 2007 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 3, 2007, 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
options 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 20, 2007
TABLE OF CONTENTS
General Information............................................................
Proposal 1: Election of Directors..............................................
Biographies of Nominees and Directors Continuing in Office.....................
Corporate Governance...........................................................
Director Compensation..........................................................
Section 16(a) Beneficial Ownership Reporting Compliance .......................
Security Ownership of Certain Beneficial Owners and Management ................
Report of the Audit Committee..................................................
Compensation Discussion and Analysis...........................................
Compensation Committee Report..................................................
Executive Compensation.........................................................
Other Matters..................................................................
No Incorporation By Reference..................................................
Available Information..........................................................
Shareholder Proposals for 2008 Annual Meeting..................................
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Every shareholder's vote is important. Please complete, sign, date and return
your proxy form, or submit your vote and proxy by telephone or by Internet.
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
Printed on Recycled Paper
Using Soy Ink
[GRAPHIC OMITTED]
PAR Technology Corporation
8383 Seneca Turnpike; New Hartford, NY 13413-4991
April 20, 2007
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
4:00 PM, local time, on Wednesday May 23, 2007 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 20, 2007.
Purpose of Meeting
At the Meeting the Shareholders will be asked to consider and vote on the
following matters:
1. To elect two Directors of the Company for a term of office to expire
at the 2010 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 3, 2007, 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 14,360,880 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 7,180,441
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 3:00
AM on May 23, 2007.
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 Delivery of Proxy Materials
We would like to encourage shareholders to elect to receive future proxy
materials electronically in order to conserve natural resources and help us
reduce printing costs and postage fees. With electronic delivery, you will be
notified via e-mail as soon as the proxy materials are available on the
Internet, and you can submit your votes online. To sign up for electronic
delivery:
1. when voting via telephone or the Internet:
o when prompted, follow directions to indicate your enrollment to receive or
access shareholder communications electronically in future years
2. when voting via paper ballot
o direct holders may mark the box on the proxy card to indicate your
enrollment to receive or access shareholder communications electronically
in future years
OR
3. via email
o send an email with "On-Line Proxy Materials" in the subject line to:
investor_relations@partech.com
Once you enroll for electronic delivery, you will receive proxy materials
electronically as long as your account remains active or until you cancel your
enrollment.
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
shareholders 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,
2006, 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 2004, there were two Class III Directors
elected to hold office until the 2007 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 2010. The nominees of the Board of Directors for the
Class III Director positions, Dr. John W. Sammon and Mr. Charles A. Constantino,
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 decided 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 names of the nominees and each of the Directors continuing in office, their
ages as of April 20, 2007, the year each first became a Director and the
expiration of their current term in office are set forth in the following table.
------------------------------ ------ ------------------ -----------------------------------
Nominees for Director Age Director Since Term Expires
------------------------------ ------ ------------------ -----------------------------------
Dr. John W. Sammon 68 1968 2010 Annual Meeting of Shareholders
------------------------------ ------ ------------------ -----------------------------------
Charles A. Constantino 67 1970 2010 Annual Meeting of Shareholders
------------------------------ ------ ------------------ -----------------------------------
------------------------------ ------ ------------------ -----------------------------------
Continuing Directors Age Director Since Term Expires
------------------------------ ------ ------------------ -----------------------------------
Kevin R. Jost 52 2004 2008 Annual Meeting of Shareholders
------------------------------ ------ ------------------ -----------------------------------
James A. Simms 47 2001 2008 Annual Meeting of Shareholders
------------------------------ ------ ------------------ -----------------------------------
Sangwoo Ahn 68 1986 2009 Annual Meeting of Shareholders
------------------------------ ------ ------------------ -----------------------------------
Dr. Paul D. Nielsen 56 2006 2009 Annual Meeting of Shareholders
------------------------------ ------ ------------------ -----------------------------------
The Board of Directors unanimously recommends a vote FOR the proposal to elect
Dr. Sammon and Mr. Constantino. 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.
BIOGRAPHIES OF NOMINEES AND DIRECTORS CONTINUING IN OFFICE
Sangwoo Ahn. Mr. Ahn has held the position of Chairman of the Board of Quaker
Fabric Corporation since 1993 and is also a member of the Board of Directors of
Xanser Corp. 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 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 has been the President and Chief Executive Officer of
Hand Held Products, Inc., a manufacturer of data collection and management
solutions for in-premises, mobile and transaction processing applications since
its inception as a separate entity in 1999. 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 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 is a Managing Director of Needham & Company, LLC, a
privately held, full-service investment bank and asset management firm. For the
prior two years, he had been a senior professional with the investment banking
firm of Janney Montgomery Scott LLC, a wholly owned subsidiary of The Penn
Mutual Life Insurance Company. From 1997 through 2004, he was 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.
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 2006, the Board
held eight (8) meetings and Committees of the Board held a total of sixteen (16)
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 except for
Director Jost. Throughout 2006, Director Jost, who had scheduling conflicts with
some Board meeting dates, met several times with the Chairman and members of the
Company's management to discuss the Company's business and business strategy. 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 2006 are set forth in the following
table.
---------------------- ------------ -------- ----------------- ----------------- ----------------
Nominating
and Corporate
Name Executive Audit Compensation Governance Stock Option
---------------------- ------------ -------- ----------------- ----------------- ----------------
Mr. Ahn (F1) X Chair X
Mr. Constantino X X
Mr. Haney (F1) (F2) X X X
Mr. Jost (F1) Chair
Dr. Nielsen (F1) X X X
Dr. Sammon Chair Chair
Mr. Simms (F1) X X Chair
---------------------- ------------ -------- ----------------- ----------------- ----------------
2006 Meetings 3 6 3 1 3
---------------------- ------------ -------- ----------------- ----------------- ----------------
----------
(F1) Independent Directors
(F2) Member of the Board through May 11, 2006
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 2006 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 11 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 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, that is reviewed regularly by the respective committees which may
recommend appropriate changes for approval by the Board. 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 20 of this Proxy Statement.
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 Web site 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.
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 five times during 2006.
Communication with the Board. Interested parties may send written communication
to the Board of Directors as a group, 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, 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 20 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.
Transactions with Related Persons. For the period beginning January 1, 2006 and
ending March 31, 2007, 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, the President and CEO of the Company's
subsidiary, PAR Springer-Miller Systems, Inc., 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, 2006
until the expiration of the lease term in September 2009 is
$1,350,000.
o Karen E. Sammon, a member of Dr. Sammon's immediate family, was an
employee of ParTech, Inc., a subsidiary of the Company, during 2006,
holding the position of Vice President Software Development. In
November, 2006, Ms. Sammon was appointed President of Par-Siva
Corporation, a subsidiary of the Company which acquired substantially
all the assets of SIVA Corporation. Ms. Sammon's compensation for 2006
was $157,900 and she was granted stock options representing 100,000
shares of the Company's common stock at the fair market price on the
date of the grant in connection with her elevation to the position of
subsidiary president. The compensation paid to Ms. Sammon and options
granted were 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 2006 where he served as the Vice President and General
Manager of the Logistics Management Division. Mr. Sammon's
compensation for 2006 was $125,989 which was commensurate with that of
his peers.
o Samuel A. Constantino, a member of Mr. Constantino's immediate family,
was an employee of ParTech, Inc., a subsidiary of the Company, during
2006, holding the position of Director of Global Business Partner
Development. Mr. Constantino's compensation for 2006 was $136,598
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 member 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 COMPENSATION
Directors who are employees of the Company are not separately compensated for
serving on the Board. In 2006, non-employee Directors received annual retainers
of $25,000 for membership on the Board and 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. On March 8, 2007, the Board of Directors approved and
adopted an amendment to the compensation plan for non-employee directors
changing the amount and timing of annual stock option awards made to the
non-employee directors by providing that Non-Qualified Stock Option grants
representing 2,800 shares of the Company's common stock would be 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 shall 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. The amendment also provided for an
additional cash payment of $5,000 per year to the chairman of the Audit
Committee. In addition, from time to time, at the Board's discretion,
non-employee Directors may be granted additional Non-Qualified Stock Options
under the then existing stock option plan(s).
--------------------- ---------- --------- --------- --------------- --------------- ------------ ---------
Change in
Pension Value
Fees Earned and All Other
or Paid in Non-Equity Nonqualified Compensation
Cash Stock Option Incentive Plan Deferred ($)
Name ($) Awards Awards Compensation Compensation Total
($) ($) ($) Earnings ($)
--------------------- ---------- --------- --------- --------------- --------------- ------------ ---------
(a) (b) (c) (d) (e) (f) (g) (h)
--------------------- ---------- ---------- --------- --------------- --------------- ----------- ----------
Sangwoo Ahn 28,400 0 0 0 0 0 28,400
--------------------- ---------- --------- ---------- --------------- --------------- ----------- ----------
Kevin R. Jost 27,800 0 0 0 0 0 27,800
--------------------- ---------- --------- ---------- --------------- --------------- ----------- ----------
Dr. Paul D. Nielsen 26,400 0 0 0 0 0 26,400
--------------------- ---------- --------- ---------- --------------- --------------- ----------- ----------
James A. Simms 28,400 0 0 0 0 0 28,400
--------------------- ---------- --------- ---------- --------------- --------------- ----------- ----------
J. Whitney Haney 13,100 0 0 0 0 0 13,100
--------------------- ---------- --------- ---------- --------------- --------------- ----------- ----------
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 2006
except that Mr. Albert Lane, Jr., an Executive Officer, was late in filing one
Form 4 in connection with five sales of stock and Mr. Gregory Cortese, an
Executive Officer, was late in filing one Form 4 in connection with a cashless
exercise of stock options. Due solely to an administrative error, the filing of
a Form 4 was late in connection with a sale of stock by Mr. Charles Constantino,
a Director and Executive Officer of the Company.
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, 2007, by each Director, by each of
the Named Executive Officers and by all Directors and Executive Officers as a
group.
--------------------------------------------- ----------------------------- --------------------
Amount and Nature of
Name of Beneficial Owner or Group (F1) Beneficial Ownership (F2) Percent of Class (F3)
--------------------------------------------- ----------------------------- --------------------
Dr. John W. Sammon 5,708,550 (F4) 39.80%
--------------------------------------------- ----------------------------- --------------------
Charles A. Constantino 275,650 1.92%
--------------------------------------------- ----------------------------- --------------------
Gregory T. Cortese 313,810 (F5) 2.14%
--------------------------------------------- ----------------------------- --------------------
Sangwoo Ahn 88,500 (F6) *
--------------------------------------------- ----------------------------- --------------------
Ronald J. Casciano 129,600 (F7) *
--------------------------------------------- ----------------------------- --------------------
Albert Lane, Jr. 43,727 (F8) *
--------------------------------------------- ----------------------------- --------------------
James A. Simms 13,500 (F9) *
--------------------------------------------- ----------------------------- --------------------
Kevin R. Jost 3,534 (F10) *
--------------------------------------------- ----------------------------- --------------------
Dr. Paul D. Nielsen 500 *
--------------------------------------------- ----------------------------- --------------------
All Directors and Executive Officers 6,577,371 44.30%
as a Group (9 persons)
--------------------------------------------- ----------------------------- --------------------
* Represents less than 1%
(F1) 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.
(F2) Except as otherwise noted, each individual has sole voting and investment
power with respect to all shares.
(F3) Percent of Class is calculated utilizing 14,341,381 which is the number of
the Company's outstanding shares as of February 28, 2007 and the number of
options held by the named beneficial owners, if any, which become
exercisable within 60 days thereafter.
(F4) Includes 150 shares held jointly with Dr. Sammon's wife, Deanna D. Sammon.
Does not include 286,500 shares beneficially owned by Mrs. Sammon in which
Dr. Sammon disclaims beneficial ownership.
(F5) Includes 313,750 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,
2007.
(F6) Includes 28,500 shares which Mr. Ahn has or will have the right to acquire
pursuant to the Company's 1995 Stock Option Plan as of April 29, 2007.
(F7) Includes 129,600 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,
2007.
(F8) Includes 17,733 shares which Mr. Lane has or will have the right to acquire
pursuant to the Company's 1995 Stock Option Plan as of April 29, 2007. Does
not include 1,500 shares beneficially owned by Mr. Lane's wife, Linda Lane,
in which Mr. Lane disclaims beneficial ownership.
(F9) Includes 13,500 shares which Mr. Simms has or will have the right to
acquire pursuant to the Company's 1995 Stock Option Plan as of April 29,
2007.
(F10)Includes 3,524 shares which Mr. Jost has or will have the right to acquire
pursuant to the Company's 1995 Stock Option Plan as of April 29, 2007.
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
20 of this Proxy Statement.
For the fiscal year ending December 31, 2006, the Audit Committee consisted of
four members, Directors Ahn, Haney, Nielsen and Simms until May 11, 2006 when
Mr. Haney's term as a director of the Company expired. Following May 11, 2006,
the Audit Committee consisted of three members, Directors Ahn, Nielsen and
Simms.
Operating under its Board approved charter, 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 has the primary responsibility for
both the preparation of the Company's consolidated financial statements in
accordance with U.S. generally accepted accounting principles ("U.S. GAAP"); and
for the financial reporting process, including the system of internal control
and procedures designed to ensure compliance with applicable laws, regulations
and accounting standards. The responsibility for auditing the Company's
consolidated financial statements rests with the Company's independent
registered public accounting firm, KPMG LLP ("KPMG"). In addition to meeting its
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, KPMG is also responsible for opining on management's
assessment of the effectiveness of the Company's internal control over financial
reporting, and expressing its own opinion on the effectiveness of those internal
controls.
In carrying out its oversight responsibilities, the Audit Committee has met and
held discussions with management, Internal Audit and KPMG (including private
sessions with Internal Audit, KPMG, and the Chief Financial Officer). Management
represented to the Audit Committee that the Company's consolidated financial
statements as of and for the fiscal year ended December 31, 2006 were prepared
in accordance with U.S. GAAP. The Audit Committee reviewed and discussed with
management and KPMG the audited consolidated financial statements in the Annual
Report for the year ended December 31, 2006 (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 Company's internal control over financial reporting. In
addition, the Audit Committee has reviewed and discussed with KPMG such other
matters as are required to be discussed with the Audit Committee by Statement on
Auditing Standards No. 61 (Communication with Audit Committee), as amended. In
addition, the Audit Committee has received from KPMG the written disclosures
required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and held discussions with KPMG with respect
to KPMG's independence from the Company's management and the Company itself.
The Audit Committee fully considered and 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 (described in the next section). 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 8,
2007, and the Board has approved, the inclusion of the audited consolidated
financial statements in the Annual Report on Form 10-K for the year ended
December 31, 2006 for filing with the Securities and Exchange Commission.
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.
Members of 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, 2006 and December 31, 2005.
------------------------- --------------- ---------------
Type of Fees 2006 2005
------------------------- --------------- ---------------
Audit Fees $ 729,000 $ 731,000
------------------------- --------------- ---------------
Audit-Related Fees 0 0
------------------------- --------------- ---------------
Tax Fees $ 143,000 $ 125,000
------------------------- --------------- ---------------
All Other Fees 0 0
------------------------- --------------- ---------------
Total: $ 872,000 $ 856,000
------------------------- --------------- ---------------
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.
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 2006 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 2005, the Company purchased the Watson Wyatt Survey
of Top Management Compensation in the United States. 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 2006, 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 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 2006, the annual Incentive Compensation targets for the
Named Executive Officers ranged from 44% to 72% 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 will be based on performance
level achievement of greater than 75% of their goals of profit before tax,
revenue and accounts receivable collection cycle, and where applicable,
inventory turns, to earn an award for each element. Cash payments will be 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. For 2007, the Company has adjusted
its incentive compensation plan to increase the threshold target necessary to
receive an award under the plan. 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 $127,900; $42,400 and
$62,600 respectively for 2006 performance. Mr. Cortese is measured on the
performance of the Hospitality business segment and received $43,800 in
incentive compensation for the 2006 performance of that segment. Mr. Lane
received incentive compensation of $153,800 in connection with the 2006
performance of the Government business segment.
Equity Compensation. In furtherance of the objective of providing long-term
financial incentives that relate to improvement in long-term shareholder value,
the Company may award stock options and restricted stock awards to its key
employees (including Named Executive Officers other than Dr. Sammon and Mr.
Constantino) under the Company's 2005 Equity Incentive Plan. 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"). 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 Options, the type of Options to be granted,
the terms of the grant and the number of shares to be subject thereto. 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. Awards of restricted stock grants 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 grants, 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 2006, no Restricted Stock
Grants were made to the Named Executive Officers.
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
17.
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. As with all participants in
the Retirement Plan, the Company matches Named Executive Officer deferrals at
the rate of 10%.
Deferred Compensation. The Company sponsors a nonqualified 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 2006.
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 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 13 to 16, be included in this Proxy Statement.
Members of the Compensation Committee
Kevin Jost Dr. Paul D. Nielsen James A. Simms
(Chairman)
EXECUTIVE COMPENSATION
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 2006. For a complete understanding of the table, please read the
narrative disclosures that follow the table.
------------------------------ ------- -------- -------- ------- -------- ------------ ------------- ------------ -------
Non-Equity Nonqualified
Incentive Deferred
Stock Option Plan Compensation All Other
Name and Principal Position Year Salary Bonus Awards Awards Compensation Earnings Compensation Total
($)(F1) ($) ($) ($) ($)(F2) ($)(F3) ($)(F4) ($)
------------------------------ ------ -------- -------- ------- -------- ----------- ------------ ------------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
------------------------------ ------ -------- -------- ------- -------- ----------- ------------ ------------ -------
Dr. John W. Sammon
Chairman of the Board,
President & Chief Executive 2006 355,591 0 0 0 127,900 0 25,076(F5) 508,567
Officer
------------------------------ ------ -------- -------- ------- -------- ---------- ---------- ----------- --------
Ronald J. Casciano
Vice President, C.F.O. &
Treasurer 2006 192,529 0 0 0 42,400 5,065 8,493 248,487
------------------------------ ------ -------- -------- ------- -------- ---------- ---------- ----------- --------
Charles A. Constantino
Executive Vice President
and Director 2006 224,037 0 0 0 62,600 3,864 29,193(F6) 319,694
------------------------------ ------ -------- -------- ------- -------- ---------- ---------- ----------- --------
Gregory T. Cortese
CEO & President,
ParTech, Inc. 2006 249,958 0 0 0 43,800 598 9,881 304,237
------------------------------ ------ -------- -------- ------- -------- ---------- ---------- -------- --------
Albert Lane, Jr.
President,
Rome Research Corporation and 2006 245,642 6,978 0 0 153,800 49,296 25,288(F7) 481,004
PAR Government System
Corporation
------------------------------ ------ -------- -------- ------- -------- ---------- ---------- ---------- --------
(F1) 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 Nonqualified Deferred
Compensation Table on page 20.
(F2) Represents amounts paid under the Company's Executive Compensation Plan
during 2007 in respect of service performed in 2006. 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.
(F3) Amounts consist of above-market or preferential earnings during fiscal 2006
on compensation that was deferred in or prior to fiscal 2006 under the PAR
Technology Corporation Deferred Compensation Plan. These amounts are also
reported in the Nonqualified Deferred Compensation Table below under the
column entitled "Aggregate Earnings in Last Fiscal Year."
(F4) In addition to any perquisites identified for the individual Named
Executive Officers, All Other Compensation 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.
(F5) Includes payments made on Dr. Sammon's behalf for club memberships of
$10,641.
(F6) Includes automobile allowance of $6,300 and payments made on Mr.
Constantino's behalf for club memberships of $8,603.
(F7) Includes $10,290 of imputed income on Company payment of additional term
life insurance premiums as determined under the Internal Revenue Code in
connection with an additional life insurance policy not generally available
to all employees and automobile lease of $918.
Grants of Plan-Based Awards
There were no grants of plan based awards made to Named Executive Officers
during 2006.
Outstanding Equity Awards at Fiscal Year-End
The following table shows all outstanding equity awards held by the Named
Executive Officers at fiscal year-end, December 31, 2006.
--------------- --------------------------------------------------------------------- -------------------------------------------
Options Awards Stock Awards
--------------- --------------------------------------------------------------------- -------------------------------------------
Equity
Equity Incentive
Incentive Awards:
Market Plan Market or
Number Value Awards: Payout
Equity of of Number of Value of
Incentive Share Shares Unearned Unearned
Plan Awards: or or Shares, Shares
Number of Units Units Units, or Units or
Number of Number of Securities of of Other Other
Securities Securities Underlying Stock Stock Rights Rights
Underlying Underlying Unexercised that that that Have that Have
Unexercised Unexercised Unearned Option Option Have Have Not Not Vested
Options (#) Options (#) Options Exercise Expiration Not Not Vested (#) ($)
Name Exercisable Unexercisable (#) Price Date Vested Vested
($) (#) ($)
--------------- -------------- --------------- -------------- ---------- ------------ --------- --------- ----------- -----------
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
--------------- -------------- --------------- -------------- ---------- ------------ --------- --------- ----------- -----------
Dr. John W. 0 0 0 0 0 0 0 0 0
Sammon
--------------- -------------- --------------- -------------- ---------- ------------ --------- --------- ----------- -----------
Ronald J. 22,500(F1) 0 2.56 5/30/10 0 0 0 0
Casciano 67,500(F2) 1.75 10/1/11
3,600(F3) 1.25 1/9/11
23,250(F4) 36,750(F4) 6.01 10/13/14
--------------- -------------- --------------- -------------- ---------- ------------ --------- --------- ----------- -----------
Charles A. 0 0 0 0 0 0 0 0 0
Constantino
--------------- -------------- --------------- -------------- ---------- ------------ --------- --------- ----------- -----------
Gregory T. 112,500(F5) 0 0 3.17 12/31/09 0 0 0 0
Cortese 214,750(F6) 2.04 8/11/10
--------------- -------------- --------------- -------------- ---------- ------------ --------- --------- ----------- -----------
Albert Lane, 17,733(F7) 0 0 5.23 1/2/14 0 0 0 0
Jr.
--------------- -------------- --------------- -------------- ---------- ------------ --------- --------- ----------- -----------
----------
(F1) 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.
(F2) 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.
(F3) These options were granted on January 9, 2001. The options vested on
January 1, 2002.
(F4) 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.
(F5) These options were granted on December 31, 1999. The options vested on June
30, 2000.
(F6) 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.
(F7) These options were granted on January 2, 2004. The options vested on
December 31, 2006.
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 2006, which ended on December 31, 2006.
--------------------------- ------------------------------------------------- ----------------------------------
Option Awards Stock Awards
-------------------------- ------------------------------------------------- -----------------------------------
Number of Shares
Acquired on Exercise Value Realized on Number of Shares Value Realized on
Name (#) Exercise Acquired on Vesting Vesting
($) (F1) (#) ($)
--------------------------- ---------------------- ------------------- ---------------------- ------------------
(a) (b) (c) (d) (e)
--------------------------- ---------------------- ------------------- ---------------------- ------------------
Dr. John W. Sammon 0 0 0 0
--------------------------- ---------------------- ------------------- ---------------------- ------------------
Ronald J. Casciano 0 0 0 0
--------------------------- ---------------------- ------------------- ---------------------- ------------------
Charles A. Constantino 0 0 0 0
--------------------------- ---------------------- -------------------- ---------------------- ------------------
Gregory T. Cortese 8,000 125,846 0 0
--------------------------- ---------------------- -------------------- ---------------------- ------------------
Albert Lane, Jr. 12,267 189,546 0 0
--------------------------- ---------------------- -------------------- ---------------------- ------------------
(F1) 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).
Nonqualified Deferred Compensation
The contributions, earnings and account balances for the Named Executive
Officers participating in the PAR Technology Deferred Compensation Plan are set
forth in the following table. Contributions to the plan are held in a
rabbi-trust established by the Company and 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 if a Named Executive
Officer dies, a death benefit equal to $10,000 shall be paid in addition to the
account balance as of the time of the Named Executive Officer's death to the
Named Executive Officer's beneficiary.
------------------------- -------------------- ------------------ ------------------- ------------------- -------------------
Executive Registrant Aggregate Aggregate Aggregate Balance
Contributions in Contributions in Earnings in Last Withdrawals / at Last FYE
Name Last FY Last FY FY Distributions ($)
($) ($) ($)(F1) ($)
------------------------- -------------------- ------------------ ------------------- ------------------- -------------------
(a) (b) (c) (d) (e) (f)
------------------------- -------------------- ------------------ ------------------- ------------------- -------------------
Dr. John W. Sammon 0 0 0 0 0
------------------------- -------------------- ------------------ ------------------- ------------------- -------------------
Ronald J. Casciano 10,000 0 5,750 0 26,074
------------------------- -------------------- ------------------ ------------------- ------------------- -------------------
Charles A. Constantino 72,912 0 11,470 0 172,424
------------------------- -------------------- ------------------ ------------------- ------------------- -------------------
Gregory T. Cortese 4,808 0 1,152 0 13,075
------------------------- -------------------- ------------------ ------------------- ------------------- -------------------
Albert Lane, Jr. 297,530 0 82,740 0 748,732
------------------------- -------------------- ------------------ ------------------- ------------------- -------------------
(F1) The above-market or preferential earnings portion of these amounts are
reported in the Summary Compensation Table under the column entitled
"Nonqualified Deferred Compensation Earnings."
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, 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, 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. Shareholders 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 2008 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 2008 Annual Meeting,
any shareholder proposals must be received at the Company's general offices no
later than the close of business on December 21, 2007. If a matter of business
is received by March 7, 2008, 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 7, 2008, 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
/s/Gregory T. Cortese
---------------------
Secretary
April 20, 2007
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). 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.
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