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):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1)Title of each class of securities to which transaction applies:
_____________________.
2)Aggregate number of securities to which transaction applies:
____________________.
3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
_______________________________________________________.
4)Proposed maximum aggregate value of transaction:
__________________________.
5)Total fee paid:
______________________________________________________.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1)Amount Previously Paid: _________.
2)Form, Schedule or Registration Statement No.: _________.
3)Filing Party: _________.
4)Date Filed: __________.
<PAGE>
[GRAPHIC - Company Logo]
PAR Technology Corporation
8383 Seneca Turnpike, New Hartford, NY 13413-4991
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, MAY 20, 1999
Dear PAR Technology Shareholder:
The Annual Meeting of Shareholders of PAR Technology Corporation (the "Company")
is scheduled to be held at the main office of the Company located at 8383 Seneca
Turnpike, New Hartford, New York on, Thursday, May 20, 1999, at 4:00 PM, local
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 ratify the action of the Board of Directors amending the PAR Technology
Corporation 1995 Stock Option Plan to reserve an additional 500,000 shares
of the Company's common stock for issuance under the Plan.
3. To ratify the selection of PricewaterhouseCoopers LLP as the independent
accountants for the Company for the year 1999; 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 8, 1999 will be entitled to vote at the Meeting.
Every Shareholder's vote is important. Whether or not you plan to attend the
Meeting, we request you complete, sign, date and return the enclosed proxy card
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 20, 1999
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>
[GRAPHIC - Company Logo]
PAR Technology Corporation
8383 Seneca Turnpike
New Hartford, NY 13413-4991
April 20, 1999
PROXY STATEMENT
Annual Meeting of Shareholders
Thursday, May 20, 1999
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 time, on May 20, 1999, 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 ratification of the action by the
Board of Directors amending the Company's 1995 Stock Option Plan to reserve an
additional 500,000 shares of the Company's common stock for issuance under the
Plan and FOR the ratification of PricewaterhouseCoopers LLP as independent
accountants for 1999. 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 other electronic means 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,
1998, 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 April 20, 1999.
RECORD DATE, OUTSTANDING COMMON STOCK, VOTING RIGHTS
Only Shareholders of record at the close of business on April 8, 1999, will be
entitled to vote at the Annual Meeting or any adjournments thereof. As of that
date, there were 8,420,465 shares of the Company's common stock outstanding and
entitled to vote. The holders of shares representing 4,210,234 votes,
represented in person or by proxy, shall constitute a quorum to conduct
business.
<PAGE>
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.
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 the Director 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 ratification of the amendment of the
Company's 1995 Stock Option Plan to reserve an additional 500,000 shares of the
Company's common stock for issuance under the Plan: (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 represented by proxy and entitled
to vote thereon (a quorum being present) is required to ratify the amendment of
the 1995 Stock Option Plan. A vote to abstain from voting on this proposal has
the legal effect of a vote against the matter.
A Shareholder may, with respect to the ratification of the selection of
PricewaterhouseCoopers 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 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 this proposal 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.
Proposal 1: Election of Directors
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 1999 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 Annual Meeting held in
2002. 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 a substitute nominee selected by the Board,
unless the Board should determine to reduce the number of Directors pursuant to
the By-Laws of the Company.
The names of the nominee and each of the Directors, their ages as of April 20,
1999, 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
Term Expiring at the 2002 Annual Meeting of Shareholders
--------------------------------------------------------
DR. JAMES C. CASTLE Chairman and CEO
USCS International, Inc.
Dr. Castle, age 62, was appointed a Director of the Company in December 1989. He
has been Chairman and CEO of USCS International since August 1992. From August
1991 until assuming his current position with USCS International, Dr. Castle was
President and CEO of Teradata Corporation. He currently also serves as a
Director of Leasing Solutions, Inc., ADC Telecommunications, Inc., PMI Group,
Inc. and DST Systems, Inc.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
Term Expiring at the 2000 Annual Meeting of Shareholders
--------------------------------------------------------
MR. SANGWOO AHN Partner
Morgan Lewis Githens & Ahn, LP
Investment Bankers
Mr. Ahn, age 60, is one of the founders of the investment banking firm Morgan
Lewis Githens & Ahn, LP. He has held the above position since 1982. Mr. Ahn is
Chairman of the Board of Directors of Gradall Industries, Inc. and Quaker Fabric
Corporation. He is also a member of the Board of Directors of ITI Technologies,
Inc., Kaneb Services, Inc., Kaneb Pipeline Partners, L.P. and Stuart
Entertainment, Inc. Mr. Ahn has been a Director of the Company since March 1986.
MR. J. WHITNEY HANEY Director
Mr. Haney, age 64, was the previous President of ParTech, Inc. from 1988 to
1997. Mr. Haney retired as an employee of ParTech, Inc. in January, 1998. Mr.
Haney has been a Director of the Company since April 1988.
Term Expiring at the 2001 Annual Meeting of Shareholders
--------------------------------------------------------
DR. JOHN W. SAMMON, JR. Chairman of the Board and President
Dr. Sammon, age 60, 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 was appointed President of ParTech, Inc. in December 1997
and also currently holds various positions with other subsidiaries of the
Company.
MR. CHARLES A. CONSTANTINO Executive Vice President
Mr. Constantino, age 59, 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 five times during the fiscal year ending December
31, 1998. 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. The Executive Committee is composed of three Directors:
Dr. Sammon (Chairman), Mr. Constantino and Mr. Ahn. The Executive Committee did
not meet in 1998. 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. The Audit Committee consists of two Directors: Mr. Ahn
(Chairman) and Dr. Castle. The Audit Committee met twice in 1998. 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. The Compensation Committee is comprised of three
Directors: Mr. Ahn (Chairman), Dr. Sammon and Mr. Constantino. The Compensation
Committee met one time in 1998. 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, 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 1998.
Stock Option Committee. 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 1998. 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.
DIRECTOR COMPENSATION
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 12,500 shares of the Company's common stock at the fair market value of
the stock on the date of grant, vesting 20% per year over five years. From time
to time, at the Board's discretion, such non-employee Directors may be granted
additional Nonqualified Stock Options under the then existing stock option
plan(s).
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1998 all filing requirements were met except for
the following: due to an administrative error, there was a failure to file on a
timely basis a Form 4, Statement of Changes in Beneficial Ownership, on behalf
of Mr. Lane relative to the purchase of stock by Mr. Lane on September 4, 1998.
Upon discovery of the omission, the appropriate disclosure form was filed.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of
the Company's common stock as of March 31, 1999, by each Director, by each of
the Executive Officers named in the Summary Compensation Table below and by all
Directors and Executive Officers as a group. The table also sets forth
information regarding the ownership of the Company's common stock by Wellington
Management Company, LLP and Dimensional Fund Advisors, Inc. based on Schedule
13G's filed by these entities (February 10, 1999 and February 11, 1999
respectively) with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
Amount and Nature of
Name of Beneficial Owner or Group Beneficial Ownership (F1) Percent of Class (F11)
- --------------------------------- ------------------------- ----------------------
<S> <C> <C>
Dr. John W. Sammon, Jr. ............................ 3,883,300 (F2) 46.12%
Charles A. Constantino.............................. 389,728 (F3) 4.63%
J. Whitney Haney.................................... 161,255 (F4) 1.88%
Sangwoo Ahn......................................... 55,000 (F5) *
Albert Lane, Jr. ................................... 27,400 (F6) *
Ronald J. Casciano ................................. 25,800 (F7) *
Dr. James C. Castle ................................ 10,000 (F8) *
All Directors and Executive Officers
as a Group (7 persons).............................. 4,552,483 52.72%
Other Principal Beneficial Owners
- ---------------------------------
Wellington Management Company, LLP 647,000 (F9) 7.40%
Dimensional Fund Advisors, Inc. 613,400 (F10) 7.02%
_____________________________
* Represents less than 1%
<FN>
(F1) Except as otherwise noted, each individual has sole voting and investment
power with respect to all shares.
(F2) Does not include 254,570 shares beneficially owned by Dr. Sammon's wife,
Deanna D. Sammon. Dr. Sammon disclaims beneficial ownership of such shares.
(F3) Does not include 3,800 shares owned by Mr. Constantino's wife, Elaine
Constantino. Mr. Constantino disclaims beneficial ownership of such shares.
<PAGE>
(F4) Includes 157,775 shares which Mr. Haney has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 1999.
(F5) Includes 10,000 shares which Mr. Ahn has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 1999.
(F6) Includes 16,000 shares which Mr. Lane has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 1999.
(F7) Includes 25,400 shares which Mr. Casciano has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 1999.
(F8) 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, 1999.
(F9) Information obtained from Schedule 13G filed with the Securities and
Exchange Commission (the "Commission") on February 10, 1999 by Wellington
Management Company, LLP ("WMC"), a registered investment advisor.
Represents shares acquired by Wellington Trust Company, N.A., a
wholly-owned subsidiary of WMC, which are held of record by clients of WMC.
WMC has shared voting power as to 500,000 shares and shared dispositive
power as to all of the shares.
(F10)Information obtained from Schedule 13G filed with the Commission on
February 11, 1999 by Dimensional Fund Advisors, Inc. ("Dimensional"), a
registered investment advisor. Dimensional is deemed to have beneficial
ownership of the shares all of which are owned by registered investment
companies and investment vehicles ("Portfolios") to which Dimensional
furnishes investment advice or serves as investment manager. Dimensional
disclaims beneficial ownership of all the shares. Based on the Schedule
13G, Dimensional, in its role as investment advisor and investment manager,
possesses sole voting and dispositive power as to all of the shares.
(F11)Percent of Class is calculated utilizing 8,420,465 which is the number of
the Company's outstanding shares as of March 31, 1999.
</FN>
</TABLE>
The address for Dr. John W. Sammon, Jr. is c/o PAR Technology Corporation; PAR
Technology Park; 8383 Seneca Turnpike; New Hartford, NY 13413-4991. The address
for Wellington Management Company, LLP is 75 State Street, Boston, MA 02109. The
address for Dimensional Fund Advisors, Inc. is 1299 Ocean Avenue, 11th Floor,
Santa Monica, CA 90401.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for each of
1998, 1997 and 1996 awarded to, earned by, or paid to the Chief Executive
Officer and the most highly compensated Executive Officers of the Company other
than the Chief Executive Officer.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compen-
sation
--------------------------------------------------
Annual Compensation Awards
--------------------------------------------------
Securities
Underlying All Other
Options/ Compen-
Name and Bonus SAR's (#) sation
Principal Position Year Salary (F1) (F2) (F3)
- ------------------ --------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dr. John W. Sammon, Jr ........... 1998 $219,492 $ 30,100 0 $ 8,113
Chairman of the Board, ........... 1997 $214,154 0 0 $ 13,039
President, Director and .......... 1996 $207,916 0 0 $ 1,910
President, ParTech, Inc. .........
Charles A. Constantino ........... 1998 $189,850 $ 28,100 0 $ 8,113
Executive Vice President ......... 1997 $185,233 $ 45,000 0 $ 13,039
and Director ..................... 1996 $179,838 0 0 $ 1,910
Albert Lane, Jr .................. 1998 $159,750 $ 76,700 20,000 $ 8,113
President, Rome Research ......... 1997 $152,250 $133,985 0 $ 13,039
Corporation and PAR Government ... 1996 $153,439 0 0 $ 1,910
Systems Corporation
Ronald J. Casciano ............... 1998 $129,300 $ 16,500 0 $ 6,699
Vice President, C.F.O. & Treasurer 1997 $115,360 $ 20,000 0 $ 10,465
1996 $105,560 0 0 $ 1,661
- ----------
<FN>
(F1) Cash bonus awards earned in the respective fiscal year.
(F2) Represents stock options granted under the Company's 1995 Stock Option
Plan.
(F3) All Other Compensation column consists only of Company contributions to the
Company's Employee Retirement Plan and Trust.
</FN>
</TABLE>
The following persons have been indebted to the Company or one of its
subsidiaries at some time since January 1, 1998:
Albert Lane, Jr., one of the Company's named Executive Officers, was granted a
loan by Rome Research Corporation in 1997 with annual interest established at
the prime rate. The loan was due in February 1998 and was secured by a Deed of
Trust on real estate owned by Mr. Lane. During 1998, the largest aggregate
amount outstanding (principal and interest) on this loan was $109,640. This
loan, together with interest was repaid in full in February 1998.
<PAGE>
Mr. Charles A. Constantino, an Executive Officer of the Company, was granted
loans from the Company's subsidiary, Rome Research Corporation, with annual
interest rates of 6.5%. The largest aggregate amount outstanding (principal and
interest) under such loans in the period since January 1, 1998 was $406,050. The
principal and interest of such loans are due on demand from the Company. As of
March 31, 1999, the total principal and interest outstanding on such loans was
$406,050.
The policies and practices of the Corporation pursuant to which the compensation
set forth in the Summary Compensation Table was paid or awarded is described
under "Compensation Committee Report" set forth elsewhere in this Proxy
Statement.
Options/SAR's Granted in Last Fiscal Year
-----------------------------------------
The following table shows all grants of stock options to the Executive Officers
named in the Summary Compensation Table during 1998. There were no stock
appreciation rights ("SAR's") granted in 1998.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Number of % of Total Rates of Stock Price
Securities Options Appreciation for Option Term
Underlying Granted to Exercise ----------------------------
Options/ Employees or Base
SAR's in Fiscal Price Expiration
Name Granted Year ($/Share) Date (F1) 5% (F2) 10% (F2)
---- ------- ---- --------- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Albert Lane, Jr. 20,000 (F3) 14% $6.7188 03-19-08 $ 84,507 $ 214,158
- ----------
<FN>
(F1) Options expire on the tenth anniversary of the date of the 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.
(F2) 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.
(F3) These stock options were granted on March 19, 1998. The fair market value
of the Company's common stock on March 19, 1998 was $6.7188. These Options
vest as follows: 20% on each of the first through the fifth anniversaries
of the date of grant, becoming fully vested on March 19, 2003.
</FN>
</TABLE>
<PAGE>
Aggregated Option Exercises in 1998 and Year-End Option Values
--------------------------------------------------------------
The table which follows sets forth information concerning exercises of stock
options during 1998 by each of the Executive Officers named in the Summary
Compensation Table and the value of his unexercised Options as of December 31,
1998 based on a fair market value of $6.0625 per share of the Company's common
stock on such date:
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-Money
Acquired Value (F1) Options at 12/31/98 Options at 12/31/98 (F2)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- --------- ----------- ------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Dr. John W. Sammon, Jr. ----- ----- ----- ----- ----- -----
Charles A. Constantino ----- ----- ----- ----- ----- -----
Albert Lane, Jr. ----- ----- 12,000 20,000 $ 24,750 $0
Ronald J. Casciano ----- ----- 25,400 10,000 $ 62,488 $0
<FN>
(F1) The value realized equals the aggregate amount of the excess of the fair
market value on the date of exercise (the average of the high and low
prices of the Company's common stock as reported in the Wall Street Journal
for the exercise date) over the relevant exercise price(s).
(F2) The value is calculated based on the aggregate amount of the excess of
$6.0625 (the fair market value of the Company's common stock on 12/31/98)
over the relevant exercise price(s).
</FN>
</TABLE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee"), pursuant
to its responsibilities, 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 seeks to attract, motivate, reward and retain the management talent
essential to achieving its business objectives and maintaining its leadership
position in the industry. Compensation for PAR's executive officers in 1998 was
consistent with the following principles which are the foundation of PAR's
executive compensation program:
* Executive compensation must be tied to the Company's general performance
and achievement of financial and strategic goals;
* Executive compensation opportunities should be competitive with those
provided by other leading high technology companies of comparable size; and
* Executive compensation should provide incentives that align the long-term
financial interests of the Company's executives with those of its
Shareholders.
<PAGE>
Elements of Executive Compensation
To meet its policy objectives for executive compensation, the Company's
executive compensation program consists of Base Salary and Stock Options.
Base Salary. The Committee reviewed and established the annual base salary of
the executive officers for the fiscal year 1998. In establishing 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
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, geographic area
and lines of business. 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.
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 the Company's 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"). Upon
review of recommendations from the Compensation Committee, the Stock Option
Committee determines the key employees of the Company and its subsidiaries who
shall be granted Options, the type of Options to be granted, the terms of the
grant and the number of shares to be subject thereto. Option grants 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 recipient's position as well as the current
performance and continuing contribution of that individual to the Company.
CEO Compensation for Fiscal 1998
The Committee based the 1998 compensation of the Chief Executive Officer on the
policies and practices described above. In 1998, Dr. Sammon received salary
compensation of $219,492, an increase of 2.5% over his 1997 salary. 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 Option Plan
or any of the Company's previous stock option plans in view of his already
existing substantial interest in maximizing the value of the Company's common
stock. In addition, Dr. Sammon is currently Chairman of the Stock Option
Committee as a "disinterested person" and is not eligible to receive stock
option grants under the current Option Plan.
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.
PERFORMANCE GRAPH
The following performance graph compares the cumulative total shareholder return
on the Company's common stock with the Standard & Poor's 500 Index and the
common stock of two peer groups, Computer Hardware Listed Industry Group (Peer
Group 1) and a self constructed peer group (Peer Group 2), whose returns are
weighted according to their respective market capitalizations. The graph is
constructed on the assumption that $100 was invested in each of the Company's
common stock, the S&P 500 Stock Index, and both peer groups on December 31,
1993. 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>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PTC 100 88 120 185 121 80
PEER GROUP 1 100 136 151 196 318 457
PEER GROUP 2 100 129 169 139 156 126
S&P 500 100 101 139 171 229 294
</TABLE>
The following companies are included in Peer Group 1 for purposes of the
performance graph: JTS Corporation, Ceridian Corporation, Compaq Computer
Corporation, Datapoint Corporation, Intelligent Systems Corporation, PAR
Technology Corporation, Silicon Graphics Inc., Stratus Computer Inc., Sulcus
Computer Corporation, and Tandy Corporation.
<PAGE>
The Company is changing its basis of comparison from the Computer Hardware
Listed Industry Group to a self constructed peer group (Peer Group 2) which it
believes provides a more accurate portrayal of the Company's results as compared
to companies in a similar line of business. The following companies are included
in Peer Group 2: Javelin Systems, Inc., Micros Systems, Inc., PAR Technology
Corporation, Radiant Systems, Inc., Tridex Corporation.
Proposal 2: Ratification of Amendment of 1995 Stock Option Plan
On February 27, 1999, the Board of Directors voted unanimously to amend the
Company's 1995 Stock Option Plan (the "Plan") to increase the number of shares
reserved under the terms of the Plan from 500,000 to 1,000,000. This decision
was made subject to Shareholder approval.
As of March 31, 1999, a total of 391,700 shares have been awarded pursuant to
the Plan. The Board believes that the Plan has been and will continue to be an
excellent means by which to attract and retain key employees. Accordingly, the
Board believes the number of shares reserved for issuance should be increased to
1,000,000 and recommends approval thereof by the Shareholders. There are no
current plans for the issuance of any of the additional shares. The following
resolution will be proposed at the Meeting for Shareholder consideration:
RESOLVED, that the amendment of the PAR Technology Corporation 1995 Stock
Option Plan (the "Plan") to increase the total number of shares reserved
for issuance under the Plan from 500,000 to 1,000,000 which was approved by
the Company's Board of Directors on February 27, 1999, be and the same
hereby is, approved, ratified and confirmed.
The Board of Directors recommends a vote FOR the proposal to ratify the
amendment of the Company's 1995 Stock Option Plan to reserve additional shares
for issuance under the Plan.
Proposal 3: Ratification of the Selection of Independent Accountants
On the recommendation of the Audit Committee, the Board of Directors has
selected PricewaterhouseCoopers LLP as the independent accountants to examine
the financial statements of the Company and its subsidiaries for the year 1999.
PricewaterhouseCoopers LLP (formerly Price Waterhouse LLP) has been employed to
perform this function for the Company since fiscal 1980.
One or more representatives of PricewaterhouseCoopers 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 PricewaterhouseCoopers LLP as the Company's independent accountants
for the 1999 fiscal year.
<PAGE>
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 judgment.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Shareholders may submit proposals on matters appropriate for Shareholder action
at the Company's annual meetings consistent with the regulations adopted by the
SEC and the By-Laws of the Company. To be considered for inclusion in next
year's Proxy Statement and form of proxy relating to the 2000 Annual Meeting,
such proposals must be received at the Company's general offices no later than
the close of business December 21, 1999. If a matter of business is received by
March 3, 2000, the Company may include it in the Proxy Statement and form of
proxy and, if it does, may use its discretionary authority to vote on the
matter. For matters that are not received by March 3, 2000, the Company may use
its discretionary voting authority when the matter is raised at the Annual
Meeting, without inclusion of the matter in its Proxy Statement. Proposals
should be addressed to Gregory T. Cortese, Secretary, PAR Technology
Corporation, PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York
13413-4991. The Company recommends all such submissions be by Certified Mail -
Return Receipt Requested.
BY ORDER OF THE BOARD OF DIRECTORS
Gregory T. Cortese
Secretary
April 20, 1999
REVOCABLE PROXY
PAR TECHNOLOGY CORPORATION
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 20, 1999
This proxy is solicited on behalf of the Board of Directors
The underdersigned shareholder of PAR TECHNOLOGY CORPORATION hereby appoints
JOHN W. SAMMON, JR., CHARLES A. CONSTANTINO and SANGWOO AHN or any one of them,
jointly or severally, proxies with full power of substitution, to vote all
shares of Common Stock of the Company which the undersigned is entitled to vote
at the 1999 Annual Meeting of Shareholders to be held on May 20, 1999 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:
1. ELECTION OF DIRECTOR - Nominees: Dr. James C. Castle
[ ] For The Nominee
[ ] Withhold Authority To Vote for The Nominee
- --------------------------------------------------------------------------------
2. PROPOSAL TO RATIFY AMENDMENT OF 1995 STOCK OPTION PLAN TO RESERVE
ADDITIONAL SHARES OF COMMON STOCK FOR ISSUANCE UNDER THE PLAN.
[ ] For
[ ] Against
[ ] Abstain
- --------------------------------------------------------------------------------
3. PROPOSAL TO RATIFY SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE
INDEPENDENT ACCOUNTANTS FOR THE COMPANY FOR THE YEAR 1999.
[ ] For
[ ] Against
[ ] Abstain
The Board of Directors recommends a vote FOR Items 1, 2 and 3.
I plan to attend the Annual Meeting [ ]
UNLESS OTHERWISE INSTRUCTED ABOVE, THE SHARES REPRESENTED HEREBY WILL BE VOTED
IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS SET FORTH
ABOVE.
Please be sure to sign and date this Proxy in the spaces provided.
- --------------------------------------------------------------------------------
Stockholder sign above Date
- --------------------------------------------------------------------------------
Co-holder (if any) sign above Date
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
- --------------------------------------------------------------------------------
