SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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: _______________________.
[x] 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 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: ____________________________________.
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Notice and Proxy Statement
Annual Meeting of Shareholders
[GRAPHIC - Company Logo] PAR Technology Corporation
8383 Seneca Turnpike, New Hartford, NY 13413-4991
Notice of Annual Meeting of
Shareholders to be Held on
Tuesday, May 23, 1995
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The Annual Meeting of Shareholders of PAR Technology Corporation (the "Company")
is scheduled to be held at the main office of the Company at 8383 Seneca
Turnpike, New Hartford, New York on May 23, 1995, at 4:00 PM, local prevailing
time, for the purpose of considering and acting upon the following:
1. To elect two Directors of the Company for a term of office to expire
at the third succeeding Annual Meeting of Shareholders;
2. To approve the PAR Technology Corporation 1995 Stock Option Plan;
3. To ratify the selection of Price Waterhouse LLP as the independent
accountants for the Company for the year 1995; and
4. Such other business as may properly come before the Meeting.
Only holders of record of the Company's common stock at the close of business on
April 14, 1995 will be entitled to vote at the Meeting.
Whether or not you plan to attend the Meeting, we suggest you complete the
enclosed proxy card, and sign, date and return it promptly so your shares will
be represented. Any person giving a proxy has the power to revoke it at any time
before it is exercised and Shareholders of record who are present at the Meeting
may withdraw their proxies and vote in person.
By Order of the Board of Directors
Gregory T. Cortese
Secretary
New Hartford, New York
April 26, 1995
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
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[GRAPHIC - Company Logo] PAR Technology Corporation
8383 Seneca Turnpike, New Hartford, NY 13413-4991
April 26,1995
PROXY STATEMENT
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The enclosed proxy is solicited by the Board of Directors of PAR Technology
Corporation (the "Company") for use at the Annual Meeting of Shareholders to be
held at 4:00 PM, local prevailing time, on May 23, 1995, and at any adjournment
thereof.
Please complete, sign, date and return the enclosed proxy. When proxies in the
form enclosed are returned properly executed, the shares represented thereby
will be voted in accordance with the directions of the Shareholder. When no
direction has been given by the Shareholder, the proxy will be voted FOR the
election of the Directors named below, FOR approval of the Company's 1995 Stock
Option Plan and FOR the ratification of Price Waterhouse LLP as independent
accountants for 1995. The proxy solicited hereby may be revoked at any time
prior to its exercise by executing and returning a proxy bearing a later date,
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.
The cost of preparing and mailing this Notice and Proxy Statement and the
enclosed proxy will be borne by the Company. In addition to the use of the
mails, some of the officers, Directors and regular employees of the Company may
solicit proxies in person, by telephone or telegraph and may solicit brokers and
other persons holding shares beneficially owned by others to procure from the
beneficial owners consents to the execution of proxies. The Company will
reimburse such brokers and other persons their reasonable fees and expenses for
sending solicitation material to principals and obtaining their instructions.
The Company's Annual Report to its Shareholders for the year ended December 31,
1994, including audited financial statements, accompanies this Proxy Statement.
The approximate date on which this Proxy Statement and the accompanying form of
proxy are first being sent or given to security holders is April 26, 1995.
RECORD DATE, OUTSTANDING COMMON STOCK, VOTING RIGHTS
Only Shareholders of record at the close of business on April 14, 1995, will be
entitled to vote at the Annual Meeting or any adjournments thereof. As of that
date, there were 7,685,917 shares of the Company's common stock outstanding and
entitled to vote. The holders of shares representing 3,842,960 votes,
represented in person or by proxy, shall constitute a quorum to conduct
business.
Each share of common stock entitles the holder thereof to one vote on all
matters to come before the Meeting including the election of Directors.
A Shareholder may, with respect to the election of the two Directors (i) vote
for the nominees named herein, or (ii) withhold authority to vote for either or
both of such nominees. The election of directors requires a plurality of the
votes cast. Accordingly, withholding authority to vote for a Director nominee
will not prevent him or her from being elected.
A Shareholder may, with respect to the approval of the Company's 1995 Stock
Option Plan and the ratification of the selection of Price Waterhouse LLP as
independent accountants: (i) vote "FOR", (ii) vote "AGAINST" or (iii) "ABSTAIN"
from voting. A majority of the votes cast by the holders of shares of capital
stock present or represtented by proxy and entitled to vote thereon (a quorum
being present) is required to approve the Company's 1995 Stock Option Plan and
ratify the selection of independent accountants. A vote to abstain from voting
on these proposals has the legal effect of a vote against the matter.
A proxy may indicate that all or a portion of the shares represented by such
proxy are not being voted with respect to a particular matter. This could occur,
for example, when a broker or bank is not permitted to vote stock held in street
name on certain matters in the absence of instructions from the beneficial owner
of the stock. These "non-voted shares" will be considered shares not present and
entitled to vote on such matters, although such shares may be considered present
and entitled to vote for other purposes and will count for purposes of
determining the presence of a quorum. Non-voted shares will not affect the
determination of the outcome of the vote on either proposal to be decided at the
meeting.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides that there shall be three
classes of Directors of as nearly equal size as possible, with the initial term
of office of the first class having expired at the 1993 Annual Meeting of
Shareholders, the initial term of office of the second class having expired at
the 1994 Annual Meeting of Shareholders and the initial term of office of the
third class to expire at the 1995 Annual Meeting of Shareholders. The successors
of the class of Directors whose term expires at each of the aforesaid annual
Shareholder meetings shall be elected for a term of office to expire at the
third succeeding Annual Meeting of Shareholders after their election, with the
Directors to hold office until their respective successor shall have been duly
elected and qualified. The class of Directors which was elected to hold office
until the 1995 Annual Meeting of Shareholders consists of two Directors.
Therefore, at this meeting, two Directors will be elected for a three year term
expiring at the 1998 Annual Meeting. Unless a contrary direction is indicated,
shares represented by valid proxies in the accompanying form will be voted FOR
the election of the nominees named below. The nominees for Directors named below
are currently members of the Board.
The Board of Directors has no reason to believe that the nominees will be unable
or unwilling to serve if elected. In the event that either or both nominees
named below 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 the substitute nominee(s) 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 each of the Directors and the nominees, their ages as of April 26,
1995, the year each first became a Director, their principal occupations during
at least the past five years, other Directorships held by each as of the date
hereof and certain other biographical information are as set forth below by
class, in order of the next class to stand for election.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
For a Term Expiring at the 1998 Annual Meeting of Shareholders
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DR. JOHN W. SAMMON, JR. Chairman of the Board and President
Dr. Sammon, age 56, is the founder of the Company and has been the President 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 one or more
subsidiaries of the Company.
MR. CHARLES A. CONSTANTINO Executive Vice President
Mr. Constantino, age 55, has been a Director of the Company since 1968 and has
been Executive Vice President since 1974. He also holds various positions with
one or more subsidiaries of the Company. Mr. Constantino is also a member of the
Board of Trustees for St. John Fisher College.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
Term Expiring at the 1996 Annual Meeting of Shareholders
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DR. JAMES C. CASTLE Chairman and CEO
US Computer Services Corporation
Dr. Castle, age 58, was appointed a Director of the Company as of December 1,
1989. He has been Chairman and CEO of US Computer Services Corporation since
August 1992. From August 1991 until assuming his current position with US
Computer Services Corporation, Dr. Castle was President, Office of the Chief
Executive of Teradata Corporation. Prior to that he was Chairman from May 9,
1989 and President, Chief Executive Officer and Director from October 1987 of
Infotron Systems Corporation. From December 1984 until October 1987, Dr. Castle
was President of TBG Information Systems Inc., a provider of information and
automation products and services, and a member of the Board of Management of its
parent company, TBG, N.V. He currently also serves as a Director of Digital
Sound Corporation, Leasing Solutions, Inc., and ADC Telecommunications, Inc.
Term Expiring at the 1997 Annual Meeting of Shareholders
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MR. SANGWOO AHN Partner
Morgan Lewis Githens and Ahn
Investment Bankers
Mr. Ahn, age 56, is one of the founders of the investment banking firm of Morgan
Lewis Githens and Ahn. He has held the above position since 1982. Prior to his
present position he served from 1976 as the Managing Director of the investment
banking firm of Warburg, Paribas, Becker, Inc. Mr. Ahn is also a Director of
Quaker Fabric Corp., Broadcasting Partners, Inc., Haynes International, Inc.,
Kaneb Services Inc., Kaneb Pipe Line Partners, L.P., ITI Technologies, Inc. and
Stuart Entertainment, Inc. Mr. Ahn has been a Director of the Company since
March 1986.
MR. J. WHITNEY HANEY President
PAR Microsystems Corporation
Mr. Haney, age 60, joined PAR Microsystems Corporation as a full time employee
on February 1, 1988. Mr. Haney had been a Director of PAR Microsystems since
September 1, 1987. On April 1, 1988, Mr. Haney assumed the position of President
of PAR Microsystems and was appointed a Director of the Company. Prior to
joining the Company, Mr. Haney was Vice President of Engineering - Scientific
Business Unit at Xerox Corporation.
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 Delaware, the state of
incorporation. The Board met seven times during the fiscal year ended December
31, 1994. All members of the Board attended more than 75% of the total number of
meetings of the Board and Board committees on which they served. The Board has
three standing committees: Executive, Audit and Compensation.
The Executive Committee, is composed of three Directors, Dr. Sammon (Chairman),
Charles A. Constantino and Sangwoo Ahn, and met three times in 1994. The
Executive Committee meets when required on short notice during intervals between
meetings of the Board and has 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 Audit Committee consists of two Directors, Mr. Ahn (Chairman) and Dr.
Castle, and met twice in 1994. The Audit Committee recommends the appointment of
the independent auditors, consults with the independent auditors on the plan of
audit, reviews the activities and reports of the independent auditors and
reports the results of such to the Board, and reviews and makes recommendations
concerning internal accounting controls.
The Compensation Committee is composed of three Directors, Mr. Ahn (Chairman),
Dr. Sammon and Mr. Constantino. The Compensation Committee met twice in 1994.
The Committee, which meets as required, reviews and establishes the compensation
of the executive officers and other principal officers of the Company and its
subsidiaries. The salaries and other compensation of any executive officers who
are members of the Compensation Committee are subject to approval by the Board.
The committee also reviews and recommends to the Board compensation for outside
Directors for service on the Board and committees of the Board, administers the
key employee incentive compensation program, makes recommendations to the Stock
Option Committee for stock option awards and recommends to the Board changes in
the Company's incentive plans. The Report of the Compensation Committee set
forth below describes the responsibilities of this committee, and discloses the
basis for the compensation of the Chief Executive Officer, including the factors
and criteria upon which that compensation was based; compensation policies
applicable to the Company's executive officers; and the specific relationship of
corporate performance to executive compensation for 1994.
Compensation of Directors
Directors who are employees of the Company are not separately compensated for
serving on the Board. All other Directors receive annual retainers of $10,000
for membership on the Board and an attendance fee of $1,000 per day for
attendance at Board meetings and any Committee meetings held on the same day and
$500 per day, prorated accordingly, for Committee meetings held on days other
than Board meeting days. All Directors are also reimbursed for all reasonable
expenses incurred in attending meetings. In addition, for serving on the Board,
each non-employee Director receives an initial Nonqualified Stock Option to
purchase 5,000 shares of the Company's common stock at an exercise price equal
to 80% of the fair market value of the stock on the date of grant vesting 20%
per year over five years. Upon expiration of such 5 year period, such
non-employee Directors may be granted additional Nonqualified Stock Options
under the then existing stock option plan. On November 30, 1994 Directors Ahn
and Castle were each granted 12,500 Nonqualified Stock Options (at an exercise
price of $6.50 per share) under the Company's 1984 Stock Option Plan. The fair
market value of the Company's common stock on November 30, 1994 was $6.50. These
Options vest 20% per year over 5 years.
Section 16
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
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 Securities Exchange Commission, the New York Stock Exchange
and the Company. To the Company's knowledge, based solely on its review of the
copies of such reports received by the Company and written representations from
certain reporting persons that they were not required to file Form 5's, the
Company believes that during 1994 all filing requirements were met except for
the following: due to administrative error, there was a failure to file on a
timely basis Form 5, Annual Statement of Changes in Beneficial Ownership, on
behalf of Director Ahn and Director Castle relative to the receipt on November
30, 1994 of Nonqualified Stock Options from the Company. Upon discovery of the
omissions, such Form 5's were immediately filed.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the ownership of
the Company's common stock as of March 31, 1995, by each Director, by each of
the Executive Officers named in the Summary Compensation Table below, by all
Directors and Executive Officers as a group, and by Other Beneficial Owners.
<TABLE>
<CAPTION>
Amount and Nature of
Name of Beneficial Owner or Group Beneficial Ownership (1) Percent of Class
- --------------------------------- ------------------------ ----------------
<S> <C> <C>
Dr. John W. Sammon, Jr. ................... 4,100,200 (2) (3) 53.35%
Charles A. Constantino..................... 591,110 (4) 7.69%
J. Whitney Haney........................... 252,200 (5) 3.18%
Sangwoo Ahn................................ 51,000 (6) *
Albert Lane, Jr. .......................... 22,400 (7) *
Dr. John R. Retelle, Jr. .................. 10,050 (8) *
Dr. James C. Castle ....................... 10,000 (9) *
All Directors and Executive Officers
as a Group (8 persons)..................... 5,058,965 63.05%
Other Principal Beneficial Owners
Deanna D. Sammon .......................... 943,875 (10) (11) 12.28%
</TABLE>
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*Represents less than 1%
(1) Except as otherwise noted, each individual has sole voting and investment
power with respect to all shares.
(2) Does not include 785,700 shares beneficially owned, or the 158,175 shares
held as custodian by Dr. Sammon's wife, Deanna D. Sammon. Dr. Sammon
disclaims beneficial ownership of such shares.
(3) Includes 77,700 held by Dr. Sammon as trustee for the benefit of his
daughter under a trust agreement dated July 5, 1983.
(4) Does not include 13,800 shares owned by Mr. Constantino's wife, Elaine
Constantino. Mr. Constantino disclaims beneficial ownership of such
shares.
(5) Includes 249,700 shares which Mr. Haney has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 1995.
(6) Includes 30,000 shares which Mr. Ahn has the right to acquire pursuant to
the Company's stock option plans as of May 30, 1995.
(7) Represents shares Mr. Lane has or will have the right to acquire pursuant
to the Company's stock option plans as of May 30, 1995.
(8) Represents shares Dr. Retelle has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 1995.
(9) Includes 5,000 shares which Dr. Castle has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 1995.
(10) Includes 158,175 shares held by Mrs. Sammon as custodian for her children.
(11) Does not include 4,100,200 shares beneficially owned by Mrs. Sammon's
husband, Dr. John Sammon, Jr. Mrs. Sammon disclaims beneficial ownership
of such shares.
The address for Dr. John W. Sammon, Jr., Deanna D. Sammon and Charles A.
Constantino is c/o PAR Technology Corporation, PAR Technology Park, 8383 Seneca
Turnpike, New Hartford, NY 13413-4991.
By virtue of his ownership interest, Dr. Sammon may be considered in control of
the Company. The holders of common stock do not have cumulative voting rights in
the election of Directors. Consequently, Dr. Sammon has sufficient votes to
elect all Directors of the Company.
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for each of
1994, 1993 and 1992 awarded to, earned by, or paid to the Chief Executive
Officer and the four most highly compensated Executive Officers of the Company
other than the Chief Executive Officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
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Annual Compensation Awards Payouts
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Other Securities
Annual Restricted Underlying All Other
Compen- Stock Options/ LTIP Compen-
Name and Bonus sation Award(s) SAR's (#) Payouts sation
Principal Position Year Salary (1) ($) ($) (2) ($) ($) (3)
- ------------------ ---- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dr. John W. Sammon, Jr. 1994 $ 192,856 $ 110,030 -0- -0- -0- -0- $ 7,172
Chairman of the Board, 1993 $ 185,302 $ 57,309 -0- -0- -0- -0- $ 8,969
President and Director 1992 $ 183,083 -0- -0- -0- -0- -0- $ 7,789
Charles A. Constantino 1994 $ 166,815 $ 81,803 -0- -0- -0- -0- $ 7,172
Executive Vice 1993 $ 152,968 $ 39,978 -0- -0- -0- -0- $ 8,033
President and Director 1992 $ 151,184 $ 15,628 -0- -0- -0- -0- $ 8,109
J. Whitney Haney 1994 $ 169,189 $ 89,583 -0- -0- -0- -0- $ 7,172
President, 1993 $ 162,103 $ 35,235 -0- -0- -0- -0- $ 8,768
PAR Microsystems 1992 $ 160,319 $ 8,070 $ 32,722 -0- 358,500 -0- $ 63,992
Corporation
Albert Lane, Jr. 1994 $ 132,600 $ 81,102 -0- -0- -0- -0- $ 7,172
President, Rome 1993 $ 118,000 $ 53,597 -0- -0- 21,300 -0- $ 7,206
Research Corporation 1992 $ 111,302 $ 16,361 -0- -0- 13,700 -0- $ 5,748
Dr. John P. Retelle, Jr. 1994 $ 115,000 $ 34,898 -0- -0- 5,000 -0- $ 856
President, 1993 $ 53,865 $ 18,495 -0- -0- 25,000 -0- -0-
PAR Government Systems 1992 NA NA NA NA NA NA NA
Corporation
</TABLE>
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(1) Cash bonus awards earned in the respective fiscal year.
(2) Represents stock options granted under the Company's 1984 Stock option Plan.
(3) For 1994 and 1993, the All Other Compensation column consists only of
Company contributions to the employees Profit Sharing component of the
Company's Retirement Plan.
In December 1991, PAR Microsystems Corporation granted Mr. Haney a loan for
$60,000 with interest at the prime rate, adjusted monthly, which is due on
January 2, 1997. In January 1992, PAR Microsystems Corporation granted Mr. Haney
an additional loan which totaled $540,000 with interest at the prime rate,
adjusted monthly, with is also due on January 2, 1997. The principal amount of
such notes, $600,000, is secured by a Deed to Secure Debt on real estate owned
by Mr. Haney and his wife. As of March 31, 1995 the total principal and interest
outstanding on such loans was $741,840.
In 1994, Rome Research Corporation granted Mr. Constantino loans aggregating
$350,000 with interest at the prime rate. In 1994, $50,000 was repaid to Rome
Research Corporation on these loans. In 1995, Rome Research Corporation granted
Mr. Constantino additional loans totaling $50,000 with interest at the prime
rate. These loans and the interest thereon are due on December 31,1995 and are
secured by a Collateral Security Mortgage on real estate owned by Mr.
Constantino and his wife. As of March 31, 1995 the total principal and interest
outstanding on such loans was $376,811.
The policies and practices of the Corporation pursuant to which the compensation
set forth in the Summary Compensation Table was paid or awarded is described
under "Compensation Committee Report" set forth elsewhere in this proxy
statement.
Options/SAR's Granted in Last Fiscal Year
The following table shows all grants of stock options to the Executive Officers
named in the Summary Compensation Table during 1994. There were no stock
appreciation rights ("SAR's") granted in 1994.
<TABLE>
<CAPTION>
Potential Realizable Value
Number of % of Total at Assumed Annual Rates of
Securities Options Stock Price Appreciation
Underlying Granted to Exercise for Option Term
Options/ Employees or Base ---------------------------
SAR's in Fiscal Price Expiration
Name Granted Year ($/Share) Date (1) 5% ( 2) 10% (2)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dr. John P. Retelle, Jr. 5,000 (3) 6.9% $6.63 06-30-04 $ 20,832 $ 52,793
All Common Shareholders (4) NA NA NA NA $31,833,357 $80,672,530
</TABLE>
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(1) Options expire on the tenth anniversary of the date of its grant. If the
holder of an Option ceases, other than by reason of death or retirement,
to be employed by the Company or any subsidiary, such Option shall
terminate on the earlier of the specified expiration date or three months
from the termination date. In the case of death or retirement, such Option
shall terminate on the earlier of the specified expiration date or the
first anniversary of such death or retirement.
(2) The dollar amounts in these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission ("SEC") and
are not intended to forecast future appreciation of the Company's stock.
As an alternative to the assumed potential realizable values stated in 5%
and 10% columns, SEC rules would permit stating the present value of such
Options at the date of grant. Methods of computing present value suggested
by different authorities can produce significantly different results.
Moreover, since stock Options granted by the Company are not transferable,
there is no objective criteria by which any comparison of present value
can be verified. Consequently, the Company's management does not believe
there is a reliable method of computing the present value of such stock
options.
(3) These stock options were granted on June 30, 1994. The fair market value
of the Company's common stock on June 30, 1994 was $6.63. These Options
vest as follows: 20% on December 31, 1994 and 5% each quarter thereafter.
(4) All common Shareholders are shown for comparison purposes only. The
Potential Realizable Value to all Shareholders is based on 7,643,063
shares outstanding on June 30, 1994, the closing stock price of $6.63 on
that date, a ten year term, and the stock price of the Company's stock
increasing at the assumed annual rates shown in the table, all of which
conform to the regular stock option awards made to executives on that
date. There can be no assurance that the Company's stock will perform at
the assumed annual rates shown in the table. The Company will neither make
nor endorse any predictions as to future stock performance.
Aggregated Option Exercises in 1994 and Year-End Option Values
The table which follows sets forth information concerning exercises of stock
options during 1994 by each of the Executive Officers named in the Summary
Compensation Table and the value of his unexercised Options as of December 31,
1994 based on a fair market value of $6.69 per share of the Company's common
stock on such date:
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-Money
Options at 12/31/94 Options at 12/31/94 (2)
Acquired Value 1)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dr. John W. Sammon, Jr. ----- ----- ----- ----- ----- -----
Charles A. Constantino ----- ----- ----- ----- ----- -----
J. Whitney Haney ----- ----- 230,900 117,600 $ 851,444 $ 433,650
Dr. John P. Retelle 1,600 (3) $ 6,608 7,300 21,100 $ 7,763 $ 24,667
Albert Lane, Jr. 5,000 (3) $ 28,190 24,500 16,500 $ 60,723 $ 46,999
</TABLE>
- ------------------
(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).
(2) The value is calculated based on the aggregate amount of the excess of $6.69
(the fair market value of the Company's common stock on 12/31/94) over the
relevant exercise price(s).
(3) Shares were acquired and sold the same day.
COMPENSATION COMMITTEE REPORT
Pursuant to its responsibilities, the Compensation Committee of the Board of
Directors (the "Committee") performs annual reviews of the performance and
contribution of the Company's executive officers against annual and long term
commitments and objectives to determine the nature and extent of executive
compensation actions. Decisions of the Committee relative to the compensation of
employee committee members (Dr. Sammon and Mr. Constantino) are subject to
review and approval by a majority of the disinterested members of the Board.
General Compensation Policy
PAR's executive compensation program is designed to attract, motivate, reward
and retain the management talent essential to achieving PAR's business
objectives and maintaining its position of leadership in the industry.
Compensation for PAR's executive officers in 1994 is consistent with the three
fundamental principles of the executive compensation program:
o Executive compensation must be tied to the Company's general
performance and achievement of financial and strategic goals;
o Executive compensation opportunities should be competitive with those
provided by other leading high technology companies of comparable size;
and
o Provide incentives that align the long-term financial interests of the
Company's executives with those of its Shareholders.
Elements of Executive Compensation
To meet its policy objectives for executive compensation, the Company's
executive compensation program consists of Base Salary, Incentive Compensation
and Stock Options.
Base Salary. The Committee reviewed and set the annual base salary of the
executive officers for fiscal 1994. In setting annual base salaries, the
Committee considered the salaries of relative executives in similar positions in
the industry from its most recent contracted survey, the level and scope of
responsibility, experience and performance of the executive, financial
performance of the Company and overall general economic factors. The Committee
believes that the companies with whom the Company competes for compensation
purposes are not necessarily the same companies with which shareholder
cumulative returns are compared. The peer groups used in the Performance Graph
below include the Standard & Poor's 500 Stock Index and those computer hardware
companies deemed most comparable to the Company's businesses for measuring stock
performance. An objective of the Committee is to administer the salary for each
executive management position within a range with a midpoint near the average
midpoint for comparable positions at companies of similar size, line of business
and geographic area. In implementing its compensation policies, the Committee
also considers the individual experience and performance of the executive, the
performance of the organization over which the executive has responsibility, the
performance of the Company and general economic conditions. The Committee gives
such weight to each factor as it deems appropriate.
Incentive Compensation. PAR's executive officers participate with other key
employees in the Key Employee Incentive Compensation Program. Adopted in 1985,
this program provides compensation calculated on annual business unit
performance and overall corporate performance compared to predetermined
financial goals. Under this program, key employees are eligible to receive an
annual incentive cash bonus based on the performance of the Company and the
appropriate business unit as measured against pre-established financial
objectives which include measurements of earnings per share, revenue, and cash
flow. Performance attainment of no less than 75% and up to 200% of the targeted
objective will entitle the participant to receive a proportionally calculated
incentive bonus. For 1994, the maximum possible incentive bonuses for
achievement of 100% performance was dependent upon the participant's
organizational level and ranged from 25% to 35% of the participant's base
salary.
Stock Options. In furtherance of the objective of providing long-term financial
incentives that relate to improvement in long-term Shareholder value, the
Company awards stock options to its key employees (including executive officers)
under its stock option plans ("Option Plans"). Stock options ("Options") granted
under the Option Plans may be either Incentive Stock Options as defined by the
Internal Revenue Code ("Incentive Stock Options") or Options which are not
Incentive Stock Options ("Nonqualified Stock Options"). The Option Plans are
administered by the Stock Option Committee of the Board of Directors. Upon
review of recommendations from the Compensation Committee, the Stock Option
Committee from time to time 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 become exercisable no less than six months after the grant and typically
expire ten years after the date of the grant. Option grants are discretionary
and are reflective of the value of the recipients' position as well as the
current performance and continuing contribution of that individual to the
Company.
CEO Compensation for Fiscal 1994
The Committee based the 1994 compensation of the Chief Executive Officer on the
policies and practices described above. In 1994, Dr. Sammon received salary
compensation of $192,856, an increase of 4% over his 1993 salary and earned an
Incentive Compensation bonus payment of $110,030. The Incentive Compensation
award was based on the Company's performance to pre-established objectives for
profit before tax, revenue, inventory turns and accounts receivable collection
cycle with each objective carrying a pre-established weight. Dr. Sammon, the
Company's founder, became a shareholder before the Company became publicly-owned
and has not, to date, been granted options under the Company's Stock Option
Plans in view of his already existing substantial interest in maximizing the
value of the Company's common stock.
Compensation Committee
Sangwoo Ahn, Chairman
Dr. John W. Sammon, Jr.
Charles A. Constantino
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that might incorporate by reference this proxy statement, in whole or in
part, the above Compensation Committee Report and the Performance Graph set
forth below shall not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933 (the "1933 Act") or the Securities Exchange Act
of 1934 (the "1934 Act"), except to the extent the Company specifically
incorporates them by reference into a filing under the 1933 Act or the 1934 Act
nor shall such Compensation Committee Report or Performance Graph be deemed to
be "soliciting material" or to be "filed" with the Securities and Exchange
Commission or subject to Regulation 14A or 14C under the 1934 Act or to the
liabilities of Section 18 of the 1934 Act, except to the extent that the Company
specifically incorporates them by reference into a filing under the 1933 Act or
the 1934 Act. As of the date of this proxy statement, the Company has made no
such incorporation by reference or request.
Compensation Committee Interlocks and Insider Participation
Dr. John W. Sammon, Jr., Chairman of the Board and President of the Company and
Mr. Charles A. Constantino, Executive Vice President of the Company serve as
members of the Compensation Committee.
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph shows the changes over the past five year period
(1990 through 1994) in the value of $100 invested in: (1) the Company's common
stock, (2) the Standard & Poor's 500 Index, and (3) the common stock of the
Computer Hardware Listed Industry Group (companies with SIC codes of 3571 and
3575) whose returns are weighted according to their respective market
capitalizations. The closing price of the Company's stock on December 31, 1989
was $5.13 and an investment of $100 would have acquired 19.5 shares of the
Company. On December 31, 1994 the Company's stock price closed at $6.63 making
the value of the originally acquired 19.5 shares $129.
The following companies are included in Computer Hardware Listed Industry Group:
Amdahl Corporation, Atari Corporation, Ceridian Corporation, Commodore
International Limited, Compaq Computer Corporation, Convex Computer Corporation,
Cray Research Inc., Datapoint Corporation, Intelligent Systems Corporation, NBI
Corporation, PAR Technology Corporation, Silicon Graphics Inc., Stratus Computer
Inc., Sulcus Computer Corporation, Tandem Computers Incorporated, and Tandy
Corporation.
The year-end values of each investment are based on share price appreciation and
the reinvestment of dividends.
[GRAPHIC - Performance Chart - points plotted as numbers below]
<TABLE>
<CAPTION>
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
-------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
PTC 100 51 51 120 146 129
PEER GROUP 100 87 79 87 118 159
S&P 500 100 97 126 136 150 152
</TABLE>
<PAGE>
APPROVAL OF THE PAR TECHNOLOGY CORPORATION 1995 STOCK OPTION PLAN
The Company's 1995 Stock Option Plan (the "Plan") was adopted by the Board of
Directors on April 6, 1995 and is currently effective subject to Shareholder
approval within twelve months. A copy of the Plan is attached hereto as Appendix
A, and the following summary description is qualified in its entirety by
reference to the Plan.
The purposes of the 1995 Plan are to encourage the sense of proprietorship on
the part of those key employees who are largely responsible for the continued
growth of the Company, to furnish those key employees with further incentive to
develop and promote the business and financial success of the Company and to
attract and induce key employees to continue in the service of the Company by
providing them with the opportunity to accumulate stock in the Company.
Summary of the 1995 Stock Plan
Up to 500,000 shares of the Company's common stock may be issued under the
Option Plan. If an Option granted under the Option Plan expires or terminates or
is canceled without having been exercised in full, the unpurchased shares
subject thereto shall again be available for the granting of Options under the
Option Plan. Shares issued under the Option plan may be either authorized but
previously unissued shares or shares that have been reacquired and held by the
Company as treasury shares. Authority to grant Options under the Option Plan
expires on April 5, 2005, and Options thereunder may be granted at any time on
or prior to such date.
Options granted under the Option Plan may be either incentive stock Options
under Section 422 of the Internal Revenue Code of 1986, as amended ("Incentive
Stock Options") and/or Options which are not Incentive Stock Options
("Nonqualified Stock Options" and, together with Incentive stock Options,
"Options"). The Option Plan shall be administered by a Committee of the Board of
Directors. The Committee shall be comprised of at least two members of the Board
each of whom is a "disinterested person" within the meaning of Rule 16b-3 as
promulgated under the Securities Exchange Act of 1934, as amended. The Committee
will determine from time to time the key employees of the Company and its
subsidiaries who shall be granted Options and the number of shares to be subject
thereto. The Committee shall, at the time of grant, determine whether an Option
is an Incentive Stock Option or Nonqualified Stock Option and, subject to the
limitations of the Option Plan, the other terms and conditions of each Option.
Each Option will be exercisable to the extent, at the exercise prices, at the
times and upon the satisfaction of such conditions as may be provided in the
stock option agreement evidencing such Option, but in no event shall an Option
become exercisable prior to six months from the date of grant or remain
exercisable for more than ten years from the date of the grant. To the extent
required by the Internal Revenue Code of 1986, as amended (the "Code"), the
aggregate fair market value (determined at the time of the grant) of the shares
of common stock with respect to which Incentive Stock Options are exercisable
for the first time by an employee during any calendar year shall not exceed
$100,000 and Options granted having a fair market value in excess of such amount
shall be deemed to be Nonqualified Stock Options. The Option price per share
will be determined by the Committee at the time of grant, but in the case of an
Incentive Stock Option may not be less than the fair market value of a share of
the Company's common stock on the date the Option is granted. The Optionee may
pay the Option price in cash, or, in the discretion of the Committee, in shares
of common stock of the Company or any other property acceptable to the Committee
or the Board, in each case having an aggregate fair market value on the date of
payment equal to the Option price.
The Option plan will permit holders of Options, in the discretion of the
Committee, to exercise their Options in immediately successive transactions
using shares obtained from one exercise to pay the Option price on the next
exercise until the Options are exhausted. In this way, Option holders will be
able to exercise their Options without a significant cash payment, making it
easier for them to exercise their Options in full. At the conclusion of such
transactions, the additional shares held by an Option holder are equal in value
to the excess of the fair market value of the shares subject to the Option over
the total exercise price for such shares. Payment of the Option price in shares
does not result in any increase in the compensation that an Option otherwise
provides, because the shares surrendered by an Option holder must have a market
value equal to the Option price.
Subject to the total number of shares available for grants under the Option
Plan, there is no minimum or maximum limit on the number of shares for which
Options may be granted to any one employee at any time.
All key employees of the Company and its subsidiaries, including officers and
directors who are employees, may be granted Incentive Stock Options under the
Option Plan. However, an Incentive Stock Option may not be granted to an
employee who, at the time the Option is granted, owns stock representing more
than ten percent of the total combined voting power of all classes of stock of
the Company, unless the Option price is at least 110 percent of the fair market
value (at the time the Option is granted) of the stock subject to Option, and
the Option by its terms is not exercisable more than five years from the date of
grant. Nonqualified Stock Options may be granted to all key employees, officers
and directors of the Company and its subsidiaries.
All rights to purchase shares under Options granted under the Option Plan will
cease to accrue upon the death or termination of employment of the Optionee to
whom an Option is granted. In the case of the termination of such Optionee's
employment with the Company or any subsidiary for any reason other than death,
any accrued rights not then exercised (but not installments that have not yet
vested) shall be exercisable until, and all such employee's Options shall
terminate upon, the earlier of three months from the date of termination of
employment or the Option's specified expiration date. In the case of termination
by reason of disability within the meaning of Section 22(e)(3) of the Code,
Options shall terminate the earlier of one year from the date of termination or
the Option's specified expiration date. In the case of termination by reason of
retirement within the meaning of Section 22(e)(3) of the Code, Nonqualified
Stock Options granted under the Option Plan shall terminate the earlier of one
year from the date of termination or the Option's specified expiration date. In
case of the death of such Optionee, any accrued rights not then exercised (but
not installments which have not yet vested) shall become exercisable by the
estate, personal representative or beneficiary who acquires such Optionee's
Option by will or by the laws of descent and distribution, at any time prior to
the earlier of the Option's specified expiration date or the first anniversary
of the Optionee's death. On the earlier of such dates, the Option shall
terminate. No Option granted under the Option Plan shall be assignable or
transferable except by will or by the laws of descent and distribution to the
extent described above. During the life of the employee, each of his or her
Options may be exercised only by the employee.
The Committee may, with the consent of the Optionee, grant a replacement Option
which may be exercisable at a lower Option price. Such Option price may not be
less than the fair market value of the stock subject to the replacement Option
at the time of substitution in the case of replacement Incentive Stock Options.
The Option plan provides that, in the event of any stock dividend, stock split
or share combination of the Company's common stock, any recapitalization,
reorganization or similar transactions, the Committee shall make appropriate
adjustments in the number of shares subject to each outstanding Option and the
Option price with respect thereto and the aggregate number of shares that may be
issued under the Option Plan. In the event of Shareholder approval of any
merger, consolidation or reorganization as a result of which the Company will
not survive as a publicly-owned corporation, then, absent the assumption of the
Options by the successor entity or the parent of such entity, all Options will
terminate and the holder of each Option shall be entitled to receive an amount
in cash equal to the excess of the fair market value of the shares exercisable
on the date immediately preceding the date of Shareholder approval and the total
exercise price for such shares.
The Committee may grant any holder of an Option the right to elect, in lieu of
purchasing shares of common stock as to which the Option is then exercisable, to
surrender the Option to any or all of such shares and to receive in exchange a
payment from the Company having a value equal to the difference between the
total exercise price of such shares under such Option and the total fair market
value of such shares on the date of such election. Payment, in the sole
discretion of the Committee, may be made entirely in cash, shares of common
stock or a combination of cash and shares of common stock. Upon election by the
Optionee to receive such payment such Option shall be correspondingly reduced by
the number of shares of common stock as to which such election shall have been
made.
The Board of Directors or the Shareholders of the Company may terminate the
Option Plan or amend it in any respect at any time, except that (a) no action of
the Board or the Shareholders may alter or impair an employee's rights under any
outstanding Option without his or her consent, and (b) without the approval of
the Company's Shareholders, the total number of shares that may be issued under
the Option Plan may not be increased (except pursuant to the adjustments
referred to above), the eligibility provisions may not be modified, and the
benefits accruing to participants under the Option Plan may not be materially
increased.
Federal Tax Consequences
The following is a summary of the Federal income tax treatment of the Incentive
Stock Options, Nonqualified Stock Options and Stock Appreciation Rights that may
be granted under the Plan based upon the current provisions of the Code and
regulations promulgated thereunder.
Nonqualified Stock Options. A Nonqualified Stock Option generally will not
result in any taxable income to the Option holder at the time it is granted. In
general, the holder of a Nonqualified Stock Option will realize ordinary income,
at the time of exercise of the Option, in an amount measured by the excess of
the fair market value of the Optioned shares (at the time of the exercise) over
the Option price. The Company will be entitled to a tax deduction at that time
in the amount of the ordinary income which the Option holder recognizes. The
Option holder's basis in such shares will be the fair market value on the date
exercised, and the long-term or short-term capital gain or loss, depending on
the holding period of the shares, will be recognized in the year of the sale.
Withholding of federal taxes at applicable rates will be required in connection
with ordinary income realized by an Option holder upon exercise of Nonqualified
Stock Options under the Plan. Grantees may pay withholding taxes by means of
contributing shares of the Company's common stock previously acquired or by
deducting shares of common stock from the amount to be received upon the
exercise of an Option in accordance with the procedures adopted by the
Committee.
Incentive Stock Options. Incentive Stock Options under the Plan are intended to
meet the requirements of Section 422 of the Code. An Incentive Stock Option will
not result in any taxable income to the Option holder when it is granted or
exercised. However, the excess of the fair market value of the shares of common
stock acquired on the date of exercise over the exercise price will be an item
of adjustment for alternative minimum tax purposes. To obtain the special tax
treatment applicable to an Incentive Stock Option, the Option must be exercised
within three months after the Option holder ceases to be an employee (one year
if the Option holder is disabled) unless the Option holder has died. If the
Optioned stock is held more than 2 years from the grant of the Option and more
than 1 year after the transfer of the stock to the Option holder upon exercise
of the Option, any gain realized over the price paid for the stock will
ordinarily be treated as a long-term capital gain (presently a maximum of 28%)
and any loss will ordinarily be treated as a long-term capital loss, in the year
of the sale.
If common stock is acquired upon the exercise of an Incentive Stock Option is
not held for the required holding periods, a "disqualifying disposition"
results, at which time the participant is deemed to have received an amount of
ordinary income equal to the lesser of (a) the excess of the fair market value
of the common stock on the date of exercise over the exercise price, or (b) the
excess of the amount realized on the disposition of the shares over the exercise
price. If the amount realized on the "disqualifying disposition" of the common
stock exceeds the fair market value on the date of exercise, the gain in excess
of the ordinary income portion will be treated as capital gain. Any loss on the
disposition of common stock acquired through the exercise of an Incentive Stock
Option is a capital loss.
No income tax deduction will be allowed to the Company with respect to shares of
common stock purchased by an Option holder through the exercise of an Incentive
Stock Option, provided there is no "disqualifying disposition" as described
above. In the event of a "disqualifying disposition", the Company is entitled to
a tax deduction equal to the amount of ordinary income recognized by the Option
holder.
Stock Appreciation Rights. The grant of a Stock Appreciation Right will not
result in tax consequences to the Company or to the Option holder. An Option
holder who exercises a Stock Appreciation Right will realize compensation
taxable as ordinary income in an amount equal to the cash or the fair market
value of the shares received on the date of exercise, and the Company will be
entitled to a deduction in the same amount. If an employee allows a Stock
Appreciation Right to expire, otherwise than as a result of exercising the
related Option, the Internal Revenue Service may contend that the employee will
have taxable income in the year of expiration equal to the amount of cash or the
fair market value of stock which he or she would have received if he or she had
exercised his or her Stock Appreciation Right immediately before it expired. In
addition, under Treasury Regulations governing Incentive Stock Option's, a Stock
Appreciation Right with respect to an Incentive Stock Option must be granted at
the same time the Incentive Stock Option is granted in order to ensure that the
Incentive Stock Option remains qualified as such.
The Board of Directors recommends a vote FOR the approval of the 1995 Stock
Option Plan. Proxies solicited by the Board of Directors will be so voted unless
Shareholders specify otherwise in their proxies.
<PAGE>
PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT ACCOUNTANTS
On the recommendation of the Audit Committee, the Board of Directors has
selected Price Waterhouse LLP as the independent accountants to examine the
financial statements of the Company and its subsidiaries for the year 1994.
Price Waterhouse LLP has been employed to perform this function for the Company
since fiscal 1980.
One or more representatives of Price Waterhouse LLP will be present at the
Annual Meeting, will have an opportunity to make a statement if they so desire
and will be available to respond to appropriate questions.
Although this appointment is not required to be submitted to a vote of the
Shareholders, the Board believes it is appropriate as a matter of policy to
request that the Shareholders ratify the appointment. If the Shareholders do not
ratify the appointment, the Audit Committee will investigate the reasons for
Shareholder rejection and the Board will reconsider the appointment.
The Board of Directors recommends a vote FOR the proposal to ratify the
selection of Price Waterhouse LLP. Proxies solicited by the Board of Directors
will be so voted unless Shareholders specify otherwise in their proxies.
OTHER MATTERS
Other than the foregoing, the Board of Directors knows of no matters which will
be presented at the Annual Meeting for action by Shareholders. However, if any
other matters properly come before the Meeting, or any adjournment thereof, the
persons acting by authorization of the proxies will vote thereon in accordance
with their best judgment.
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Proposals of Shareholders intended to be presented at the 1996 Annual Meeting
must be received by the Company on or before December 26, 1995 to be considered
for inclusion in the 1996 Proxy Statement and proxy relating to that meeting.
The Company recommends that all proposals be submitted by Certified Mail -
Return Receipt Requested.
By Order of the Board of Directors
Gregory T. Cortese
Secretary
April 26, 1995
<PAGE>
APPENDIX A
PAR TECHNOLOGY CORPORATION
1995 STOCK OPTION PLAN
ARTICLE I
PURPOSE
The 1995 Stock Option Plan (the "Plan") of PAR Technology Corporation
(the "Company") is intended (a) to encourage the sense of proprietorship on the
part of those key employees who are or will be largely responsible for the
continued growth of the Company and its subsidiaries (as such term is defined in
section 424(f) of the Internal Revenue Code of 1986, as amended (the "Code"), a
"Subsidiary"); (b) to furnish such key employees with further incentive to
develop and promote the business and financial success of the Company and its
Subsidiaries, and (c) to attract and induce such key employees to continue in
the service of the Company and its Subsidiaries, by providing a means whereby
such key employees of the Company and its Subsidiaries may be given an
opportunity to purchase the Company's common stock, par value $.02 per share
("Common Stock") pursuant to options ("Options") granted under the Plan which
are intended to be either "Incentive Stock Options" ("Incentive Stock Options")
under section 422 of the Code or options which are not Incentive Stock Options
("Nonqualified Stock Options").
ARTICLE II
ADMINISTRATION
2.1 Administrative Body. The Plan shall be administered by a Committee
(the "Committee") of the Board of Directors of the Company (the "Board"). The
Committee shall be comprised of at least two members of the Board each of whom
is a "disinterested person" within the meaning of Rule 16b-3 as promulgated
under the Securities Exchange Act of 1934, as amended (the "Act").
2.2 Authority. The Committee shall have authority, subject to the terms
of the Plan: to determine the employees to whom Options may be granted, the type
of option to be granted, the number of shares of Common Stock to be covered by
each Option, the purchase price per share of Common Stock covered by each
Option, the time or times at which Options may be granted and exercised, and the
terms and provisions of the instruments by which Options shall be evidenced;
with the consent of employees to whom Options have been granted, to grant in
substitution for outstanding Options replacement Options, which may be at a
lower purchase price (but, in the case of Incentive Stock Options at a purchase
price not less than fair market value of the Common Stock subject to the
replacement Option at the time of substitution), and to cancel replaced Options;
to interpret the Plan; to establish guidelines for administering the Plan; and
to make all determinations necessary or advisable, in its sole discretion, for
the administration of the Plan. At all meetings of the Committee the presence of
a majority of the members shall constitute a quorum for the transaction of
business and the vote of a majority of the members present shall be the act of
the Committee. Members of the Committee may participate in a meeting of the
Committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in such a meeting shall constitute presence in person at such
meeting.
Any action required or permitted to be taken at any meeting of the
Committee may be taken without a meeting, without prior notice and without a
vote, if all of its members consent in writing to the action, and such writing
is filed with the records of proceedings of the Committee.
ARTICLE III
ELIGIBILITY
Key employees and all officers and directors of the Company or any of
its Subsidiaries shall be eligible to participate in the Plan provided however
that Incentive Stock Options shall not be granted to officers and directors who
are not employees. The granting of any Option to any person under the Plan shall
neither entitle such person to, nor disqualify such person from, participating
in any other grant of Options or in any other incentive plan of the Company.
ARTICLE IV
STOCK
Subject to adjustment as provided in Article VII, the total number of
shares of Common Stock which may be issued under the Plan upon the exercise of
Options and stock appreciation rights provided pursuant to the Plan shall not
exceed 500,000 shares. Shares of Common Stock covered by Options that expire,
terminate (other than by reason of the exercise of stock appreciation rights as
provided in section 6.9), or are canceled without having been exercised shall
become available for future grants under the Plan. Upon the exercise of Options,
the Company may either issue unissued shares of Common Stock or transfer shares
of Common Stock held in its treasury.
ARTICLE V
GRANTING OF OPTIONS
Options may be granted under the Plan at any time on or prior to April
5, 2005. The date of grant of an Option under the Plan will be the date on which
the Option is awarded by the Committee, unless a later date is specified by the
Committee at the time of the award.
ARTICLE VI
TERMS AND CONDITIONS OF OPTIONS
Options shall be evidenced by stock option agreements in such form or
forms as the Committee may from time to time approve. Such stock option
agreements shall conform to the following terms and conditions:
6.1 Option Price. The option price per share shall be determined by the
Committee provided that in the case of an Incentive Stock Option, the option
price per share shall not be less than the fair market value (determined in good
faith by the Committee, subject to compliance with the principles, if any,
enunciated by the Internal Revenue Service with respect to the determination of
the fair market value of stock subject to grants of Incentive Stock Options) of
a share of Common Stock on the date of grant, and provided further that in the
case of an Incentive Stock Option granted to an employee who owns more than ten
percent of the total combined voting power of all classes of stock of the
Company or of any parent or Subsidiary, such price per share shall not be less
than 110% of the fair market value of the Common Stock on the date of grant.
Notwithstanding the foregoing sentence, in no event shall the option price be
less than the par value of a share of Common Stock.
6.2 Term of Options. Each Option shall expire on the tenth anniversary
of the date of its grant, or on such earlier date as may be specified in the
stock option agreement evidencing such option; provided, however that in the
case of an Incentive Stock Option granted to an employee who owns more than 10%
of the total combined voting power of all classes of stock of the Company or of
any parent or subsidiary corporation, the term may be no more than five years
from the date of grant.
6.3 Exercisability. Subject to Article VIII, each Option shall become
exercisable in one or more installments on the date or dates (no earlier than
six months after the date of its grant) and upon satisfaction of such conditions
as may be specified in the stock option agreement evidencing such Option.
Notwithstanding the foregoing, to the extent required by the Code, the aggregate
fair market value (determined as of the date of grant) of the shares of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by an employee during any calendar year (under all plans of the
Company or any Subsidiary) shall not exceed $100,000 and Options granted having
a fair market value in excess of such amount shall be deemed to be Nonqualified
Stock Options. Once an Option becomes exercisable with respect to a portion of
the shares subject thereto, it shall remain exercisable with respect thereto
until expiration or termination of such Option. An Option may be exercised from
time to time, in whole or in part, up to the total number of shares with respect
to which it is then exercisable. Notwithstanding any other provision hereof, no
Incentive Stock Option granted hereunder will be exercisable following the tenth
anniversary of the date of grant.
6.4 Payments. Upon exercise, the option price shall be paid in cash or,
in the discretion of the Committee, in shares of Common Stock, or any other
property acceptable to the Committee, or any combination of cash, shares of
Common Stock and such property, in each case having an aggregate fair market
value on the date of payment equal to such option price.
6.5 Termination of Employment. If the holder of an Option ceases, other
than by reason of death, to be employed by the Company or any Subsidiary, such
Option may be exercised to the extent of the number of shares of Common Stock
with respect to which such holder could have exercised such Option on the date
employment terminates, provided, however that such Option shall terminate on the
earlier of (a) such Option's specified expiration date and (b) the date three
months from the date of termination of such employment, provided that in the
case of termination of employment by reason of normal or early retirement or
disability (within the meaning of section 22(e)(3) of the Code), the applicable
portion of a Nonqualified Stock Option granted hereunder shall remain
exercisable until the first anniversary of termination of employment or, if
earlier, the date of expiration of such Option, and provided further that in the
case of termination of employment by reason of disability (within the meaning of
section 22(e)(3) of the Code), the applicable portion of an Incentive Stock
Option shall remain exercisable until the first anniversary of termination of
employment or, if earlier, the date of expiration of such Option (or in any such
case such earlier date as may be specified in the stock option agreement
evidencing such Option). The Plan shall not be construed as creating any
contract of employment or otherwise conferring upon any employee any legal right
to continuation of employment, nor as limiting or qualifying the right of the
Company or any Subsidiary to discharge any of its employees without regard to
the effect that such discharge might have upon such employee's rights under the
Plan.
6.6 Death. If the holder of an Option dies, such Option may be
exercised, to the extent of the number of shares of Common Stock with respect to
which such holder could have exercised such Option on the date of death, by such
holder's estate, personal representative or beneficiary who acquires such Option
by will or by the laws of descent and distribution at any time prior to the
earlier of such Option's specified expiration date and the first anniversary of
such holder's death. On the earlier of such dates, the Option shall terminate.
6.7 Assignability. No Option may be assigned, transferred or
hypothecated by the employee who is the holder thereof, except by will or by the
laws of descent and distribution, and during the lifetime of any such holder of
an Option, such Option may be exercised only by such holder. At the request of
the holder of an Option, shares of Common Stock purchased upon the exercise of
such Option, or received on exercise of stock appreciation rights may be issued
in or transferred into the name of such holder and another person, jointly with
the right of survivorship.
6.8 Withholding. The Company's obligation to deliver shares of Common
Stock or make any payment upon the exercise of any option or stock appreciation
right shall be subject to applicable federal, state and local tax withholding
requirements.
6.9 Stock Appreciation Right. In the sole discretion of the Committee,
any employee who is the holder of an Option may be granted the right to elect
(subject to any limitations expressly made applicable to rights contained in
this section 6.9 and contained in the stock option agreement evidencing such
Option), at any time in lieu of purchasing shares of Common Stock as to which
such Option is then exercisable, to surrender such Option with respect to any or
all of such shares, and to receive a payment from the Company having a value
equal to the amount by which (a) the fair market value of a share of Common
Stock on the date of such election, multiplied by the number of shares of Common
Stock as to which the holder shall have made such election, exceeds (b) the
total purchase price for such number of shares of Common Stock under such
Option. An option holder who makes such an election shall receive payment in the
sole discretion of the Committee, entirely in cash, entirely in shares of Common
Stock or in a combination of cash and shares of Common Stock in such proportion
as the Committee may determine. Any shares of Common Stock delivered pursuant to
the immediately preceding sentence shall be valued at their fair market value on
the date of such election. An election to exercise the rights provided by this
section 6.9 shall be made by written notice addressed to the Committee. Upon
election by the holder of an Option to receive a payment under this section 6.9,
such Option shall thereafter remain exercisable, according to its terms, only
with respect to the number of shares of Common Stock as to which it would
otherwise be exercisable less the number of shares of Common Stock as to which
such election shall have been made.
6.10 Other Terms. Stock option agreements evidencing options may
contain such other provisions, not inconsistent with the Plan, as the Committee
deems advisable.
6.11 Incentive Stock Options. Notwithstanding anything in the Plan to
the contrary, no term of this Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under section 422
of the Code, or, without the consent of any employee affected thereby, to
disqualify, or cause the modification of, any Incentive Stock Option under
section 422 or 424 of the Code, respectively.
ARTICLE VII
CAPITAL ADJUSTMENTS
Except as otherwise provided in any stock option agreement, in the
event of any change in the number of outstanding shares of Common Stock by
reason of any stock dividend, stock split, combination or exchange of shares,
recapitalization, reclassification, merger, consolidation, spin-off,
reorganization or other similar transaction, the Committee shall make
appropriate adjustments in the number and option price of shares of Common Stock
covered by each Option outstanding on the date of such transaction (by means of
a grant of a substitute Option or an additional Option or otherwise), and in the
total number of shares of Common Stock that may be issued under the Plan.
ARTICLE VIII
CHANGE OF CONTROL
Upon the approval by the requisite vote of the Shareholders of the
Company of any merger, consolidation or reorganization, as a result of which the
Company will not survive as a publicly-owned corporation, then, subject to the
next sentence, all Options shall terminate and the holder of each Option shall
be entitled to receive, in respect thereof, an amount in cash equal to the
product (i) the difference between (x) the fair market value of a share of
Common Stock on the date immediately preceding the date of such Shareholder
approval and (y) the exercise price of such Option, multiplied by (ii) the
number of shares in respect of which such Option is then exercisable.
Notwithstanding the foregoing sentence, if the Options are assumed by the
successor entity formed by such consolidation or into which the Company is
merged, or the parent of the entity into which the Company is merged or which
merges into the Company, the Options shall not terminate as provided in this
Article VIII, but each Option shall become an option pertaining to the
securities or other property to which the holder of the number of shares of
Common Stock to which such Option pertains would have been entitled to receive
in connection with such merger, consolidation or reorganization.
ARTICLE IX
MISCELLANEOUS
9.1 Adoption. The Plan shall become effective as of the date of its
adoption by the Board, subject to approval within twelve months thereafter by
the holders of a majority of the shares of Common Stock of the Company present
or represented and entitled to vote at a meeting of Shareholders or by the
written consent of the holders of a majority of the shares of Common Stock of
the Company entitled to vote. Prior to such Shareholder approval, Options may be
granted under the Plan, but any such Option by its terms shall not be
exercisable prior to such approval. If the Plan is not approved by the
Shareholders of the Company within such twelve-month period, the Plan shall
terminate, and all Options theretofore granted under the Plan shall terminate
and become null and void.
9.2 Amendment or Termination. The Board may terminate or amend the Plan
in any respect at any time, except that without Shareholder approval (i) the
total number of shares that may be issued under the Plan may not be increased
(other than by adjustment pursuant to Article VII), (ii) the provisions of
Article III regarding eligibility may not be modified and (iii) the benefits
accruing to participants under the Plan may not be materially increased. No
action of the Board, Committee or the stockholders of the Company may, without
the consent of the holder of an Option, alter or impair such holder's rights
under any Option previously granted.
9.3 Number and Gender. Where from the context it appears appropriate,
each term used in this Plan in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine,
feminine or neuter gender shall include the masculine, feminine and neuter.
9.4 Captions. Captions of the Plan are inserted for convenience of
reference only, and the Plan is not to be construed by interpretation thereof.
9.5 Applicable Law. This Plan shall be interpreted, construed and
administered in accordance with the laws of the State of Delaware.
<PAGE>
PROXY
PAR TECHNOLOGY CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
May 23, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of PAR TECHNOLOGY CORPORATION hereby appoints JOHN
W. SAMMON, JR., CHARLES A. CONSTANTINO and J. WHITNEY HANEY 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 1995 Annual Meeting of Shareholders to be held May 23, 1995 at 4:00 PM,
Local Time, and at any adjournment thereof, for the election of Directors and
upon the proposals 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. The undersigned hereby instructs said
proxies to vote as follows:
The Board of Directors recommends a vote FOR Items 1, 2 and 3.
1. ELECTION OF DIRECTORS
Nominees: Dr. John W. Sammon, Jr.
Charles A. Constantino
[ ] FOR ALL [ ] WITHHOLD FOR ALL [ ] FOR ALL EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "FOR
ALL EXCEPT" and write the name of the nominee on the line below.
________________________________________________________________________________
2. PROPOSAL TO APPROVE THE PAR TECHNOLOGY CORPORATION 1995 STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY SELECTION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT
ACCOUNTANTS FOR THE COMPANY.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
UNLESS OTHERWISE INSTRUCTED ABOVE, THE SHARES REPRESENTED HEREBY WILL BE VOTED
IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS SET FORTH
ABOVE.
I plan to attend the Annual Meeting [ ]
<PAGE>
Please be sure to sign and date this Proxy in the spaces provided.
________________________________________________________________________________
Date
________________________________________________________________________________
Stockholder sign above Co-holder (if any) sign above
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.
Detach above card, sign, date and mail in postage paid envelope provided.
PAR TECHNOLOGY CORPORATION
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
