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
- --------------------------------------------------------------------------------
(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):
[ ] $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: ____________________________________.
<PAGE>
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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, June 4, 1996
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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 June 4, 1996, at 4:00 PM, local prevailing
time, for the following purposes:
1. To elect one Director of the Company for a term of office to expire at the
third succeeding Annual Meeting of Shareholders;
2. To consider and act upon a proposal to amend the Company's Amended
Certificate of Incorporation to increase the authorized number of shares of
Common Stock of the Company from 12,000,000 shares to 19,000,000 shares;
and to increase the authorized number of shares of Preferred Stock from
500,000 shares to 1,000,000 shares;
3. To ratify the selection of Price Waterhouse LLP as the independent
accountants for the Company for the year 1996; 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
May 7, 1996 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
May 13, 1996
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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<PAGE>
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[GRAPHIC -- COMPANY LOGO]
PAR Technology Corporation
8383 Seneca Turnpike, New Hartford, NY 13413-4991
May 13, 1996
PROXY STATEMENT
================================================================================
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 June 4, 1996, 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 Director named below, FOR the approval of the amendment to the
Company's Certificate of Incorporation and FOR the ratification of Price
Waterhouse LLP as independent accountants for 1996. 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,
1995, including audited financial statements, accompanies this Proxy Statement.
That report is not incorporated in this Proxy Statement by reference. The
approximate date on which this Proxy Statement and the accompanying form of
proxy are first being sent or given to security holders is May 13, 1996.
RECORD DATE, OUTSTANDING COMMON STOCK, VOTING RIGHTS
Only Shareholders of record at the close of business on May 7, 1996, will be
entitled to vote at the Annual Meeting or any adjournments thereof. As of that
date, there were 7,752,178 shares of the Company's Common Stock outstanding and
entitled to vote. The holders of shares representing 3,876,090 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 the Director.
<PAGE>
A Shareholder may, with respect to the election of the Director (i) vote for the
nominee named herein, or (ii) withhold authority to vote for such nominee. The
election of directors requires a plurality of the votes cast. Accordingly,
withholding authority to vote for the Director nominee will not prevent him from
being elected.
A Shareholder may, with respect to the approval of the amendment to the
Company's Certificate of Incorporation and the ratification of the selection of
Price Waterhouse LLP as independent accountants: (i) vote "FOR", (ii) vote
"AGAINST" or (iii) "ABSTAIN" from voting. An affirmative vote of the holders of
a majority of outstanding shares of Common Stock shall be required to approve
the amendment to the Certificate of Incorporation described in Proposal 2
herein. A majority of the votes cast by the holders of shares of capital stock
present or represented by proxy and entitled to vote thereon (a quorum being
present) is required to 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 any proposal to be decided at the
meeting.
ELECTION OF DIRECTOR
Under the Company's Certificate of Incorporation, the members of the Board are
divided into three classes with approximately one-third of the Directors
standing for election at each Annual Meeting of Shareholders. 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. The class of
Directors which was elected to hold office until the 1996 Annual Meeting of
Shareholders consists of one Director. Therefore, at this meeting, one Director
will be elected for a three-year term expiring at the 1999 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 nominee named below.
The nominee for Director named below is currently a member of the Board.
The Board of Directors has no reason to believe that the nominee will be unable
or unwilling to serve if elected. In the event that the nominee 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 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 nominee, their ages as of May 13,
1996, 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.
<PAGE>
NOMINEE FOR ELECTION TO THE BOARD OF DIRECTORS
For a Term Expiring at the 1999 Annual Meeting of Shareholders
DR. JAMES C. CASTLE Chairman and CEO
U.S. Computer Services Corporation
Dr. Castle, age 59, was appointed a Director of the Company as of December 1,
1989. He has been Chairman and CEO of U.S. Computer Services Corporation since
August 1992. From August 1991 until assuming his current position with U.S.
Computer Services Corporation, Dr. Castle was President, Office of the Chief
Executive of Teradata Corporation. He currently also serves as a Director of
Leasing Solutions, Inc. and ADC Telecommunications, Inc.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
Term Expiring at the 1997 Annual Meeting of Shareholders
MR. SANGWOO AHN Partner
Morgan Lewis Githens and Ahn
Investment Bankers
Mr. Ahn, age 57, is one of the founders of the investment banking firm of Morgan
Lewis Githens and Ahn. He has held the above position since 1984. Mr. Ahn is
also a Director of Quaker Fabric Corporation, 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 61, 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.
Term Expiring at the 1998 Annual Meeting of Shareholders
DR. JOHN W. SAMMON, JR. Chairman of the Board and President
Dr. Sammon, age 57, 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 56, has been a Director of the Company since 1970 and has
been Executive Vice President since 1974. He also holds various positions with
one or more subsidiaries of the Company.
<PAGE>
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 six times during the fiscal year ended December 31,
1995. 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
four standing committees: Executive, Audit, Compensation and Stock Option.
The Executive Committee, is composed of three Directors, Dr. Sammon (Chairman),
Mr. Constantino and Mr. Ahn. The Executive Committee did not meet in 1995. 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 1995. 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 1995.
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 1995.
The Stock Option Committee is composed of two Directors, Dr. Sammon (Chairman)
and Mr. Constantino, both of whom are "disinterested persons" within the meaning
of Rule 16b-3 as promulgated under the Security Exchange Act of 1934, as amended
and in compliance with the Company's 1995 Stock Option Plan. The Stock Option
Committee met one time in 1995. The Committee, which meets as required, reviews
recommendations of the Compensation Committee for stock option awards and
otherwise serves as the administrative body for the Stock Option Plan.
<PAGE>
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 five-year period, such
non-employee Directors may be granted additional Nonqualified Stock Options
under the then existing stock option plan.
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 1995 all filing requirements were met except for
the following: due to an error by administrative personnel, there was a failure
to file on a timely basis a Form 4, Statement of Changes in Beneficial
Ownership, on behalf of Mr. Constantino, relative to the sale of stock by his
wife on March 16, 1995. Upon discovery of the omission, the Form 4 was
immediately filed.
Other Relationships
In 1995, $50,000 was paid to Morgan Lewis Githens and Ahn, Inc. of which Mr. Ahn
is a partner, for investment banking consulting services.
<PAGE>
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, 1996, 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) 52.92%
Charles A. Constantino................................. 537,961 (4) 6.94%
J. Whitney Haney....................................... 269,800 (5) 3.37%
Sangwoo Ahn............................................ 53,500 (6) *
Albert Lane, Jr. ...................................... 16,845 (7) *
Dr. James C. Castle ................................... 12,500 (9) *
Dr. John P. Retelle, Jr. .............................. 9,050 (8) *
All Directors and Executive Officers
as a Group (8 persons)................................. 5,023,256 61.99%
Other Principal Beneficial Owners
Deanna D. Sammon ...................................... 935,685 (10) (11) 12.08%
</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 777,510 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 8,800 shares owned by Mr. Constantino's wife, Elaine
Constantino. Mr. Constantino disclaims beneficial ownership of such
shares.
(5) Includes 267,300 shares which Mr. Haney has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 1996.
(6) Includes 32,500 shares which Mr. Ahn has the right to acquire pursuant to
the Company's stock option plans as of May 30, 1996.
(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, 1996.
(8) Includes 7,500 shares which Dr. Castle has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 1996.
(9) Represents shares Dr. Retelle has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 1996.
<PAGE>
(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.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for each of
1995, 1994 and 1993 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.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
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. 1995 $200,904 $ 76,206 -0- -0- -0- -0- $ 7,130
Chairman of the Board, 1994 $192,856 $ 110,030 -0- -0- -0- -0- $ 7,172
President and Director 1993 $185,302 $ 57,309 -0- -0- -0- -0- $ 8,969
Charles A. Constantino 1995 $173,772 $ 56,498 -0- -0- -0- -0- $ 7,130
Executive Vice President 1994 $166,815 $ 81,803 -0- -0- -0- -0- $ 7,172
and Director 1993 $152,968 $ 39,978 -0- -0- -0- -0- $ 8,033
J. Whitney Haney 1995 $175,956 $ 56,396 $ 9,026 -0- -0- -0- $ 7,130
President, PAR Microsystems 1994 $169,189 $ 89,583 -0- -0- -0- -0- $ 7,172
Corporation 1993 $162,103 $ 35,235 -0- -0- -0- -0- $ 8,768
Albert Lane, Jr. 1995 $140,270 $ 71,317 -0- -0- -0- -0- $ 7,130
President, Rome Research 1994 $132,600 $ 81,102 -0- -0- -0- -0- $ 7,172
Corporation 1993 $118,000 $ 53,597 -0- -0- 21,300 -0- $ 7,206
Dr. John P. Retelle, Jr. 1995 $124,668 $ 39,105 -0- -0- 5,000 -0- $ 7,130
President, PAR Government 1994 $115,000 $ 34,898 -0- -0- 5,000 -0- $ 856
Systems Corporation 1993 $ 53,865 $ 18,495 -0- -0- 25,000 -0- -0-
</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 or 1995 Stock Option Plan.
(3) 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, 1996 the total principal and interest
outstanding on such loans was $809,392.88.
<PAGE>
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 outstanding loans totaling $350,000 together with interest were
repaid in full in 1995.
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
There were no stock options or stock appreciation rights ("SAR's") granted to
Executive Officers named in the Summary Compensation Table during 1995.
Aggregated Option Exercises in 1995 and Year-End Option Values
The table which follows sets forth information concerning exercises of stock
options during 1995 by each of the Executive Officers named in the Summary
Compensation Table and the value of his unexercised Options as of December 31,
1995 based on a fair market value of $9.06 per share of the Company's common
stock on such date:
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-Money
Options at 12/31/95 Options at 12/31/95 (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 10,000 (3) $ 53,750 267,900 70,600 $ 1,624,144 $428,012
Dr. John P. Retelle 2,500 (3) $ 15,345 12,050 13,850 $ 39,735 $ 48,394
Albert Lane, Jr. 12,700 (3) $ 82,690 19,780 8,520 $ 89,856 $ 43,133
</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
$9.06 (the fair market value of the Company's common stock on 12/31/95)
over the relevant exercise price(s).
(3) Shares were acquired and sold the same day.
<PAGE>
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 1995 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 1995. 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.
<PAGE>
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 profit before tax, revenue, accounts
receivable collection cycle and inventory turns. 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 1995,
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 1995 Stock Option Plan ("Option Plan"). Stock options ("Options")
granted under the Option 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 ("Nonqualified Stock Options"). The Option Plan is
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 1995
The Committee based the 1995 compensation of the Chief Executive Officer on the
policies and practices described above. In 1995, Dr. Sammon received salary
compensation of $200,904, an increase of 4% over his 1994 salary and earned an
Incentive Compensation bonus payment of $76,206. 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 Plan
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
<PAGE>
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 and the Stock Option Committee.
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph shows the changes over the past five year period
(1991 through 1995) 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, 1990
was $2.63 and an investment of $100 would have acquired 38 shares of the
Company. On December 31, 1995 the Company's stock price closed at $9.00 making
the value of the originally acquired 38 shares $343.
The following companies are included in Computer Hardware Listed Industry Group:
Amdahl Corporation, Atari Corporation, Ceridian Corporation, Compaq Computer
Corporation, Cray Research Inc., Datapoint Corporation, Intelligent Systems
Corporation, PAR Technology Corporation, Silicon Graphics Inc., Stratus Computer
Inc., Sulcus Computer Corporation, Tandem Computers Incorporated, and Tandy
Corporation. Commodore International Limited, Convex Computer Corporation and
NBI Corporation, were formerly included in the Computer Hardware Listed Industry
Group. PAR has been advised that stock for these companies is no longer publicly
traded and therefore they are excluded from PAR's peer group.
The year-end values of each investment are based on share price appreciation and
the reinvestment of dividends.
[GRAPHIC OMITTED]
* $100 invested on 12/31/90 in stock or index including reinvestment of
dividends. Fiscal year ending December 31.
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PTC 100 100 233 286 252 343
PEER GROUP 100 88 97 132 177 184
S&P 500 100 130 140 155 157 215
</TABLE>
<PAGE>
Proposal 2.
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF
COMMON AND PREFERRED STOCK OF THE COMPANY
The Company's Board of Directors has adopted a resolution recommending that the
Shareholders adopt an amendment to Article FOURTH of the Company's Amended
Certificate of Incorporation, (the "Certificate of Incorporation") in order to
increase the authorized number of shares of the Company's Common Stock from
12,000,000 to 19,000,000 and to increase the authorized number of shares of the
Company's Preferred Stock from 500,000 to 1,000,000 (the "Amendment"). If the
Amendment is approved, Section 1 of Article FOURTH of the Certificate of
Incorporation, which sets forth the Company's present authorized capital stock,
will be deleted and the following will be substituted therefor:
"The Corporation shall have authority to issue twenty million
(20,000,000) shares of stock consisting of nineteen million
(19,000,000) shares of Common Stock of the par value of $0.02 per share
and one million (1,000,000) shares of Preferred Stock of the par value
of $0.02 per share."
The proposed increase in the number of authorized shares of Common and Preferred
Stock will ensure that sufficient shares will be available, if needed, for
issuance in connection with acquisitions, equity financing, employee benefit
plans, stock splits, public offerings and other corporate purposes deemed to be
in the best interest of the Company and its Shareholders. The Board of Directors
believes that the availability of the additional shares for such purposes
without delay or the necessity for a special shareholders' meeting would be
beneficial to the Company in that it will give the Company greater flexibility
in responding quickly to advantageous business opportunities. The Company from
time to time considers whether additional equity capital should be raised by the
Company by public or private sale. If required by law or regulation, the Company
will seek Shareholder approval prior to any issuance of shares.
Approval of the Amendment and the subsequent issuance of the additional
authorized shares could have the effect of diluting existing Shareholder
earnings per share, book value per share and voting power. The holders of any of
these additional authorized shares of Common Stock issued in the future would
have the same rights and privileges as the holders of the shares of Common Stock
currently authorized and outstanding. Those rights do not include preemptive
rights with respect to the future issuance of any additional shares. As with the
currently authorized shares of Preferred Stock, these additional authorized
shares of Preferred Stock would have the rights and privileges as determined by
the Board of Directors pursuant to Section 2 of Article FOURTH of the
Certificate of Incorporation. It is not possible to state the precise effect of
increasing the number of authorized shares of Preferred Stock upon the rights of
holders of Common Stock until the Board of Directors determines the respective
preferences, limitations and relative rights of the holders of any future series
of Preferred Stock. However, such effects may include a dilution of the voting
power of the Common Stock to the extent that such Preferred Stock has voting
rights.
<PAGE>
Approval of the Amendment and the subsequent issuance of the additional
authorized shares may also have the effect of deterring or rendering more
difficult attempts by third parties to obtain control of the Company if such
attempts are not approved by the Board of Directors in that the shares may be
used to make a counter-offer for the shares of the bidder or by selling shares
to dilute the voting power of the bidder. Issuances of Preferred Stock can be
implemented, and have been implemented by some companies in recent years, with
voting or conversion privileges intended to make acquisition of a company more
difficult or costly. Such an issuance could be used to discourage or limit
Shareholder participation in certain types of transactions that might be
proposed (such as a tender offer), whether or not such transactions were favored
by the majority of the Shareholders.
Existing provisions contained in the Company's Certificate of Incorporation and
By-Laws already afford the Company some protection against acquisition attempts
which are not supported by the Board of Directors.
The Certificate of Incorporation provides for the issuance of serial Preferred
Stock and authorizes the Board of Directors, without prior Shareholder approval,
to fix the number of shares constituting each series and to fix the dividend,
redemption, conversion, voting rights and other rights, preferences and
restrictions relating thereto. In addition, the Certificate of Incorporation
provides for a Board of Directors divided into three classes of directors
serving staggered three-year terms; provides that Shareholder action can only be
taken at an annual or special meeting and requires Shareholder action by written
consent in lieu of a meeting to be at the consent of all Shareholders entitled
to vote on such action; and provides that certain of its provisions cannot be
altered, amended or repealed and no provisions inconsistent with such provisions
can be adopted without the affirmative vote of holders of at least two-thirds of
the shares generally entitled to vote for the election of directors.
The Company's By-Laws provide that the number of directors on the Company's
Board may be fixed by the Board of Directors; that in order for a person to be
eligible for election as a director of the Company, such person must be
nominated by or at the direction of the Board of Directors or by a Shareholder
entitled to vote for the election of directors in accordance with certain
specified procedures. Shareholder nominations must be made pursuant to timely
written notice to the Secretary of the Company. The Shareholder's notice must
provide certain specified information about the proposed nominee and the
nominating Shareholder. In addition, Shareholder meetings may conduct only that
business which has been brought before the meeting by or at the direction of the
Board of Directors or by a Shareholder who has given timely prior written
notice. To be considered timely for purposes of nomination of a director or the
presenting of business at the meeting, in most cases, the Shareholder's notice
must be received at the principal executive offices of the Company not less than
60 nor more than 90 days prior to the date of the Shareholders' meeting. These
By-Law provisions may discourage or deter a third party from soliciting proxies
to elect its own slate of directors or otherwise attempting to gain control of
the Company.
Both the Company's Certificate of Incorporation and By-Laws contain provisions
which require a resolution adopted by the majority of the entire Board of
Directors to call a special meeting of Shareholders; that all matters to be
acted upon at a special meeting of Shareholders be specified in the notice for
such meeting; that any action taken by Shareholders to adopt, amend or repeal
the Company's By-Laws will require a two-thirds vote of the Shareholders
entitled to vote generally for the election of directors and that any such
proposed action is required to be described or referred to in the notice for the
Shareholder meeting at which such vote is to occur.
<PAGE>
All of the provisions described above may tend to discourage acquisition
attempts. The Board of Directors is not aware of any current efforts to
accumulate the Company's shares or to obtain control of the Company by means of
a merger, tender offer, solicitation in opposition to management or otherwise.
The Board of Directors recommends a vote FOR this Proposal. Proxies solicited by
the Board of Directors will be so voted unless Shareholders specify otherwise in
their proxies.
Proposal 3.
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 1996.
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.
<PAGE>
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of Shareholders intended to be presented at the 1997 Annual Meeting
must be received by the Company on or before January 13, 1997 to be considered
for inclusion in the 1997 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
May 13, 1996
<PAGE>
REVOCABLE PROXY
PAR TECHNOLOGY CORPORATION
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF SHAREHOLDERS -- JUNE 4, 1996
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 1996 Annual Meeting of Shareholders to be held on June 4, 1996 at 4:00
PM, Local Time, and at any adjournment thereof, for the election of a Director
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 DIRECTOR -
Nominee: James C. Castle
[ ] FOR [ ] WITHHOLD
2. PROPOSAL TO AMEND THE COMPANY'S AMENDED CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK FROM 12,000,000
SHARES TO 19,000,000 SHARES AND TO INCREASE THE AUTHORIZED NUMBER OF SHARES
OF PREFERRED STOCK FROM 500,000 SHARES TO 1,000,000 SHARES.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE SELECTION OF PRICE WATERHOUSE AS THE INDEPENDENT
ACCOUNTANTS FOR THE COMPANY FOR THE YEAR 1996.
I plan to attend the Annual Meeting [ ]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
UNLESS OTHERWISE INSTRUCTED ABOVE, THE SHARES REPRESENTED HEREBY WILL BE VOTED
IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS SET FORTH
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
