SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.)
Filed by Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
PAR Technology Corporation
______________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1)Title of each class of securities to which transaction applies:
_____________________.
2)Aggregate number of securities to which transaction applies:
____________________.
3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
_______________________________________________________.
4)Proposed maximum aggregate value of transaction:
__________________________.
5)Total fee paid:
______________________________________________________.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1)Amount Previously Paid: _________.
2)Form, Schedule or Registration Statement No.: _________.
3)Filing Party: _________.
4)Date Filed: __________.
Dr. John W. Sammon, Jr. PAR Technology Corporation
Chairman, President & Chief Executive Officer 8383 Seneca Turnpike
New Hartford, NY 13413
[GRAPHIC OMITTED]
April 29, 2004
Dear Shareholders:
It is my pleasure to invite you to PAR Technology Corporation's 2004 Annual
Meeting of Shareholders. We will hold the meeting on Tuesday, May 25, 2004 at
10:00 AM at The Warwick Hotel Denver; 1776 Grant Street; Denver, Colorado 80203.
During the Annual Meeting, we will discuss each item of business described in
the Notice of Annual Meeting and Proxy Statement and give a report on the
Company's business operations. There will also be time for questions.
This booklet includes the Notice of Annual Meeting and Proxy Statement. The
Proxy Statement provides information about PAR in addition to describing the
business we will conduct at the meeting.
We hope you will be able to attend the Annual Meeting. Whether or not you expect
to attend, please vote your shares by signing, dating and returning the proxy
card in the prepaid envelope; taking advantage of telephone or internet voting;
or voting in person at the meeting.
Sincerely,
/s/John W. Sammon, Jr.
[GRAPHIC OMITTED]
PAR Technology Corporation
8383 Seneca Turnpike, New Hartford, NY 13413-4991
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 25, 2004
Dear PAR Technology Shareholder:
The Annual Meeting of Shareholders (the "Meeting") of PAR Technology
Corporation, a Delaware corporation (the "Company") is scheduled to be held at
The Warwick Hotel Denver; 1776 Grant Street; Denver, Colorado 80203. (see map on
reverse of this page) on, Tuesday, May 25, 2004, at 10:00 AM, local time, for
the following purposes:
1. To elect two Directors of the Company for a term of office to expire
at the third succeeding Annual Meeting of Shareholders and one
Director of the Company for a term of office to expire at the next
succeeding Annual Meeting of Shareholders;
2. To ratify of the selection of the independent auditors for the 2004
fiscal year; and
3. To transact such other business as may properly come before the
Meeting or any adjournments or postponements of the Meeting.
The Board of Directors set April 5, 2004 as the record date for the Meeting.
This means that owners of the Company's common stock at the close of business on
April 5, 2004 are entitled to receive this notice and to vote at the Meeting or
any adjournments or postponements of the Meeting. We will make available a list
of shareholders as of the close of business on April 5, 2004, for inspection by
any shareholder, for any purpose relating to the Meeting, during normal business
hours at our principal executive offices, 8383 Seneca Turnpike, New Hartford,
New York 13413, for ten days prior to the Meeting. This list will also be
available to shareholders at the Meeting.
Every shareholder's vote is important. Whether or not you plan to attend the
Meeting, we request you complete, sign, date and return the enclosed proxy card
promptly in the enclosed postage prepaid envelope. Most shareholders also have
the options of voting their shares on the Internet or by telephone. If such
methods are available to you, voting instructions are printed on your proxy card
or included with your proxy materials.
The proxy solicited hereby may be revoked at any time prior to its exercise by
executing and returning to the address set forth above a proxy bearing a later
date or later dated vote by telephone or on the Internet, by giving written
notice of revocation to the Secretary of the Company at the address set forth
above, or by attending the Meeting and voting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Gregory T. Cortese
Secretary
New Hartford, New York
April 29, 2004
Directions to the Warwick Denver
1776 Grant Street
Denver, CO 80203
Telephone: (303) 861-2000
Fax: (303) 832-0320
www.warwickdenver.com
DIRECTIONS FROM DENVER INTERNATIONAL AIRPORT (DIA) TO WARWICK HOTEL
-------------------------------------------------------------------
Pena Boulevard to I-70 West. I-70 West to Colorado Boulevard South. Take
Colorado Boulevard South to 17th Avenue West. Take 17th Ave West - at York St it
will become 18th One Way. Stay in the left-hand lane, right past Logan Street
will be the entrance into our parking lot (0). If the ground lot is full there
is an entrance to underground parking in the lot. The Hotel is bordered by
Logan, Grant, 17th and 18th. MAP NOT TO SCALE.
DIRECTIONS FROM MOUNTAINS TO THE WARWICK HOTEL-DENVER
-----------------------------------------------------
I-70 East to 6th Avenue East. Take 6th Avenue to Logan Street. Take Logan Street
North past 17th Street and half way down the block will be the entrance into our
parking lot. The Hotel is bordered by Logan, Grant, 17th and 18th. MAP NOT TO
SCALE.
[GRAPHIC OMITTED]
PAR Technology Corporation
8383 Seneca Turnpike, New Hartford, NY 13413-4991
April 29, 2004
PROXY STATEMENT
Annual Meeting of Shareholders
Tuesday, May 25, 2004
The enclosed proxy is solicited by the Board of Directors of PAR Technology
Corporation, a Delaware corporation (the "Company") for use at the Annual
Meeting of Shareholders (the "Annual Meeting" or "Meeting") to be held at 10:00
AM, local time, on Tuesday, May 25, 2004, at The Warwick Hotel Denver; 1776
Grant Street; Denver, Colorado 80203, and at any postponement or adjournment of
the Meeting.
Shareholders of record can vote by telephone, on the Internet, by mail or by
attending the Meeting and voting by ballot. If you are a beneficial shareholder,
please refer to your proxy card or the information forwarded by your bank,
broker or other holder of record to identify which options are available to you.
If you vote by telephone or on the Internet you do not need to return your proxy
card. Telephone and Internet voting facilities for shareholders of record will
be available 24 hours a day, and will close at 3:00 AM on May 25, 2004. All
shares that have been properly voted and not revoked will be voted at the Annual
Meeting. When proxies in the form enclosed are returned properly executed, the
shares represented by the proxies will be voted in accordance with the
directions of the shareholder. If you sign and return your proxy card but do not
specify your voting instructions, the shares represented by that proxy will be
voted as recommended by the Board of Directors. The proxy solicited hereby may
be revoked at any time prior to its exercise by executing and returning to the
address set forth above a proxy bearing a later date or later dated vote by
telephone or on the Internet, by giving written notice of revocation to the
Secretary of the Company at the address set forth above, or by attending the
Meeting, withdrawing the proxy and voting in person.
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 officers, Directors and regular employees of the Company, without
additional remuneration, may solicit proxies in person, by telephone or other
electronic means. The Company may also request banks and brokers to solicit
their customers who have shares of the Company registered in the names of a
nominee and, if so, will reimburse such banks and brokers for their reasonable
out-of-pocket costs.
The Company's Annual Report to its shareholders for the year ended December 31,
2003, including audited consolidated financial statements, accompanies this
Proxy Statement. Except as otherwise expressly provided herein, 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 29, 2004.
Record Date, Outstanding Common Stock, Voting Rights
Only shareholders of record at the close of business on April 5, 2004, will be
entitled to notice of and to vote at the Meeting or any postponements or
adjournments of the Meeting. As of that date, there were 8,621,550 shares of the
Company's Common Stock, par value $0.02 per share (the "Common Stock")
outstanding and entitled to vote. The holders of shares representing 4,310,776
votes, represented in person or by proxy, shall constitute a quorum to conduct
business.
Each share of Common Stock entitles the shareholder to one vote on all matters
to come before the Meeting including the election of the Directors. Shareholders
may vote in person or by proxy. The method by which you vote will not in any way
affect a shareholder's right to attend the Meeting and vote in person. If your
shares are held in the name of a bank, broker or other holder of record, you
must obtain a proxy, executed in your favor, from the holder of record to be
able to vote at the Meeting.
A shareholder may, with respect to the election of the Directors: (i) vote "FOR"
the nominees named herein, or (ii) "withhold authority" to vote for any or all
such nominees. The election of the Directors requires a plurality of the votes
cast. Accordingly, withholding authority to vote for a Director nominee will not
prevent the nominee from being elected.
A shareholder may, with respect to the ratification of the selection of KPMG LLP
("KPMG") as independent auditors: (i) vote "FOR"; (ii) vote "AGAINST"; or (iii)
"ABSTAIN" from voting. A "FOR" vote of a majority of votes cast by the holders
of capital stock present and represented by proxy and entitled to vote thereon
(a quorum being present) is required to ratify the selection of independent
auditors. A vote to ABSTAIN from voting on this matter 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 of
Directors 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 or until
their earlier resignation or removal. In 2001, there were two Class III
Directors elected to hold office until the 2004 Annual Meeting of Shareholders.
Therefore, at this Meeting, two Directors will be elected for a three-year term
expiring at the Annual Meeting held in 2007. The nominees of the Board of
Directors for the Class III Director positions, Dr. John W. Sammon, Jr. and Mr.
Charles A. Constantino, are currently members of the Company's Board of
Directors (the "Board").
In addition, the Company's By-Laws provides for a Board of not less than three
nor more than fifteen Directors and authorizes the Board to determine the
authorized number of Directors within that range. The number of Directors
currently authorized by the Board is six. The Board has nominated one individual
for election to a Class I Director position. The Director elected for this
position will remain in office for a one year term expiring at the Annual
Meeting held in 2005 at which time he will be considered by the Nominating and
Corporate Governance Committee to stand for re-election as part of the Class I
class of Directors. The nominee for the Class I Director position, Mr. Kevin R.
Jost, has been determined by the Board to be "independent" as this term is
defined by the New York Stock Exchange in its listing standards and pursuant to
the Company's Corporate Governance Guidelines. Mr. Jost is not currently a
member of the Board.
The Board of Directors has no reason to believe that any of the nominees will be
unable or unwilling to serve if elected. In the event that any of the nominees
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 nominees and each of the Directors continuing in office, their
ages as of April 29, 2004, 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. There is no family relationship among any of the nominees, Directors,
or any of the Company's Executive Officers. The Company's Executive Officers
serve at the discretion of the Board.
NomineeS for Election to the Board of Directors
Class III: Term Expiring at the 2007 Annual Meeting of Shareholders
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DR. JOHN W. SAMMON, JR. Chairman of the Board, President
and Chief Executive Officer
PAR Technology Corporation
Dr. Sammon, age 65, is the founder of the Company and has been the President,
Chief Executive Officer and a Director since its incorporation in 1968. He was
elected Chairman of the Board in 1983. Dr. Sammon is also a former President of
the Company's subsidiary, ParTech, Inc. serving in that capacity from 1978 to
1987 and again from December 1997 through June 2000 and also currently holds
various positions with other subsidiaries of the Company.
MR. CHARLES A. CONSTANTINO Executive Vice President
PAR Technology Corporation
Mr. Constantino, age 64, has been a Director of the Company since 1970, has been
Executive Vice President since 1974 and holds various positions with
subsidiaries of the Company. Mr. Constantino is also a member of the Board of
Directors of Veramark Technologies, Inc.
Class I: Term Expiring at the 2005 Annual Meeting of Shareholders
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MR. KEVIN R. JOST President and
Chief Executive Officer
Hand Held Products, Inc.
Mr. Jost, age 49, has been the President and Chief Executive Officer of Hand
Held Products, Inc. ("HHP") since 1999. HHP is the result of Welch Allyn
spinning out their Data Collection Business in June 1999 into a separate entity
and the subsequent combination with HHP. From 1982-1999 Mr. Jost was Vice
President and General Manager of the Welch Allyn Data Collection Division.
The Board of Directors recommends a vote FOR the proposal to elect Dr. Sammon,
Mr. Constantino and Mr. Jost. Unless a contrary direction is indicated, shares
represented by valid proxies and not so marked as to withhold authority to vote
for the nominees will be voted FOR the election of the nominees.
Members of the Board of Directors Continuing in Office
Class I: Term Expiring at the 2005 Annual Meeting of Shareholders
-----------------------------------------------------------------
MR. JAMES A. SIMMS Managing Director
Adams, Harkness & Hill, Inc.
Investment Bankers
Mr. Simms, age 44, has been a Managing Director of the investment bank Adams,
Harkness & Hill, Inc. since 1997. Mr. Simms has been a Director of the Company
since October 2001.
Class II: Term Expiring at the 2006 Annual Meeting of Shareholders
------------------------------------------------------------------
MR. SANGWOO AHN Chairman of the Board
Quaker Fabric Corporation
Mr. Ahn, age 65, has held the above position since 1993. He is Chairman of the
Board of Quaker Fabric Corporation and is also a member of the Board of
Directors of Kaneb Services, LLC., Kaneb Pipeline Partners, LP and Xanser Corp.
Mr. Ahn has been a Director of the Company since March 1986.
MR. J. WHITNEY HANEY Director
Mr. Haney, age 69, is a former President of the Company's subsidiary, ParTech,
Inc., serving in that capacity 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.
Board of Directors and Committees
The business of the Company is under the general direction of the Board of
Directors as provided by the By-Laws of the Company and the laws of the State of
Delaware, the state of incorporation. In 2003, the Board held four meetings and
Committees of the Board held a total of thirteen meetings. Overall attendance at
Board meetings was 100%. Each member of the Board attended more than 88% of the
aggregate of all meetings of the Board and the committees on which they served.
It is the Company's policy to encourage Directors to attend the Annual Meeting
but such attendance is not required. Last year, one member of the Board attended
the Annual Meeting.
Shareholders may send written communication to the Board by mail addressed to
the attention of the Board of Directors or to an individual Director c/o Gregory
T. Cortese, Secretary, PAR Technology Corporation; PAR Technology Park; 8383
Seneca Turnpike, New Hartford, NY 13413. Upon receipt the communication will be
relayed to the Chairman, if it is addressed to the Board as a whole, or to an
individual Director if the communication is addressed to an individual Director.
The Board has five standing committees: (i) Executive Committee, (ii) Audit
Committee, (iii) Compensation Committee, (iv) Stock Option Committee and (v)
Nominating and Corporate Governance Committee which was formally created in
January 2004. The members of each committee and the number of meetings held by
each committee in 2003 are set forth in the following table.
Nominating
and Corporate
Name Executive Audit Compensation Stock Option Governance
---- --------- ----- ------------ ------------ ----------
Mr. Ahn * X Chair Chair X
Mr. Constantino X X X
Mr. Haney * X X X
Dr. Sammon Chair X Chair
Mr. Simms * X Chair
2003 Meetings 3 6 3 1 0
* Independent Directors
In its annual review of Director independence, the Board has determined the
following Directors to be independent: Sangwoo Ahn, J. Whitney Haney and James
A. Simms. For a Director to be considered "independent", the Board must
affirmatively determine that the Director has no material relationship with the
Company, either directly or as a partner, shareholder or officer of an
organization that has a relationship with the Company. The Board observes all
criteria for independence established by the New York Stock Exchange and other
governing laws and regulations.
Executive Committee.
The Executive Committee, comprised of three Directors, has the delegated
authority to exercise all of the powers of the Board in the management and
direction of the business and affairs of the Corporation in all cases in which
specific directions shall not have been given by the Board and subject to the
limitations of the following: the General Corporation Law of the State of
Delaware; the Company's Certificate of Incorporation; the Company's By-Laws. The
Executive Committee meets when required on short notice during intervals between
meetings of the Board.
Audit Committee.
The functions of the Audit Committee are included in the Audit Committee
Charter, as adopted by the Board and attached as Appendix A to this Proxy
Statement. The Board of Directors has determined the members of the Audit
Committee are "independent" as this term is defined by the New York Stock
Exchange in its listing standards and that no member of the Audit Committee has
a material relationship with the Company that would render that member not to be
"independent". The Board has further determined that Director Ahn, the Chairman
of the Audit Committee, can still serve effectively on the Company's Audit
Committee even though he simultaneously serves on the audit committees of more
than three public companies. There were six meetings of the Audit Committee
during 2003 including meetings held separately with management, and separate
Executive Sessions with non-management Directors, the internal auditor and the
independent auditor respectively. The Report of the Audit Committee begins on
page 8.
Compensation Committee.
The Compensation 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 2003. The Compensation Committee Report begins on
page 15.
Stock Option Committee.
Both members of the Stock Option Committee are "disinterested persons" in
compliance with the Company's 1995 Stock Option Plan. The Stock Option
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.
Nominating and Corporate Governance Committee.
Previously, the responsibilities of the Nominating and Corporate Governance
Committee have been undertaken by the full Board. In January 2004, the Board
formally created this committee and appointed the members identified in the
above table. The Board has determined that each of the members of this committee
has met the independence standards adopted by the Board which incorporate the
independence requirements under the New York Stock Exchange listing standards.
This committee's responsibilities include the identification and recommendation
of Director nominees for the Board; the development and annual review of the
Company's governance principles; and development, review and monitoring of the
Company's Code of Business Conduct and Ethics. The Charter of the Nominating and
Corporate Governance Committee is attached as Appendix B to this Proxy Statement
and is also available on the Company's website at www.partech.com under the
"About PAR" link on the website's home page.
The Nominating and Corporate Governance Committee considers all shareholder
recommendations for candidates for the Board, which should be sent to:
Nominating and Corporate Governance Committee; c/o Gregory T. Cortese,
Secretary, PAR Technology Corporation, PAR Technology Park; 8383 Seneca
Turnpike, New Hartford, NY 13413. The committee's minimum qualifications and
specific qualities and skills required for Directors are set forth in Company's
Corporate Governance Guidelines and Nominating and Corporate Governance
Committee Charter. In addition to considering candidates suggested by
shareholders, the committee considers potential candidates recommended by
current Directors, company officers, employees and others. The committee may
sometimes use the services of a third party executive search firm to assist it
in identifying and evaluating possible nominees for Director. The committee
screens all potential candidates in the same manner regardless of the source of
the recommendation. In identifying and considering candidates for nomination to
the Board of Directors, this committee considers, in addition to the
requirements set out in the Company's Corporate Governance Guidelines and
Nominating and Corporate Governance Committee Charter, quality of experience,
the needs of the Company and the range of talent and experience represented on
the Board. When considering a candidate, the committee will determine whether
requesting additional information or an interview is appropriate.
Mr. Jost is the only nominee for Director proposed to be elected for the first
time at the Annual Meeting. Mr. Jost's name was first recommended by the Chief
Executive Officer.
Director Compensation
Directors who are employees of the Company are not separately compensated for
serving on the Board. In 2003, non-employee Directors received annual retainers
of $25,000 for membership on the Board and an attendance fee of $1,000 per day
for attendance at Board meetings ($200 if attendance is via telephone) 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.
Prior to 2004, each non-employee Director received, at the time of initial
election or re-election, a Nonqualified Stock Option to purchase 9,000 shares of
the Company's Common Stock at the fair market value of the stock on the date of
grant, vesting 3,000 shares per year over three years. The Board has revised the
stock component of non-employee Director compensation which will be phased in
commencing in 2004. Under the new program, any non-employee Director elected or
re-elected to the Board of Directors on or after the date of the 2004 Annual
Meeting of Shareholders will annually receive a number of Nonqualified Stock
Options based on a formula. The formula aims to provide that number of stock
options for the Company's Common Stock, which on the date of the grant, have a
fair market value ("FMV"), comparable to the FMV of stock options and/or stock
granted to non-employee directors of comparable companies as reported in the
most recent survey by The Conference Board, Inc. and any other nationally
recognized research firm(s) determined by the Board to be appropriate1. Such
stock options shall vest on the first anniversary date of the grant provided
that, as of the anniversary date the Director's position had not been vacated by
reason of resignation or removal for cause. In addition, from time to time, at
the Board's discretion, non-employee Directors may be granted additional
Nonqualified Stock Options under the then existing stock option plan(s).
1 The formula is expressed: A/B = C where A = FMV of grants by comparable
companies to their non-employee directors; B = per share FMV of PAR Common Stock
on the date of the grant; and C = the number of shares of PAR Common Stock
represented by Nonqualified Stock Options to be granted. By way of example, if
the FMV of comparable companies is determined to be $20,000 and, on the day of
the grant, the FMV of PAR Common Stock is $10 per share, the Director would be
granted Nonqualified Stock Options representing 2,000 shares of PAR Common
Stock.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
During the Company's 1996 secondary offering, Mr. Constantino a Director and an
Executive Officer of the Company, desired to sell a significant portion of his
stock in the Company to generate liquid assets to be used for a personal
purchase of property. The Company, however, believed that the sale of the
quantity of shares Mr. Constantino desired to sell would have an adverse impact
on the market price of the Company's stock, and therefore requested that Mr.
Constantino not participate in the sale of shares during the secondary offering
at the level he had proposed. Instead, the Company offered to extend Mr.
Constantino loans which would allow him to go forward with his personal
purchase. Consequently, during 1999, the Company's subsidiary, Rome Research
Corporation, granted loans to Mr. Charles A. Constantino for the purpose of
purchasing a home, with annual interest at the prime rate adjusted quarterly.
Mr. Constantino's home serves as collateral for these loans. Subsequent to July
30, 2002 the Company has not made any material changes to these loans. The
largest aggregate amount outstanding (principal and interest) under these loans
to Mr. Constantino throughout 2003 was $520,674. The principal and interest of
these loans are due on demand from the Company. As of March 31, 2004, the total
principal and interest outstanding on such loans was $510,182. In April, 2004,
Mr. Constantino made payment of $260,182 reducing the total principal and
interest outstanding on such loans to $250,000.
Prior to the enactment of The Sarbanes-Oxley Act of 2002, Rome Research
Corporation granted Mr. Albert Lane, Jr., an Executive Officer of the Company, a
loan in the amount of $220,000 at prime rate (adjusted quarterly) in order to
assist him in the construction of a home. Mr. Lane's home serves as collateral
for this loan which is repayable in installments with final payment due in
February 2006. The largest aggregate amount outstanding (principal and interest)
under this loan throughout 2003 was $227,093. As of March 31, 2004, the total
principal and interest outstanding on this loan was $100,062. In April 2004 Mr.
Lane paid all outstanding principal and interest on this note.
John W. Sammon, III and Karen E. Sammon, members of the immediate family of Dr.
John W. Sammon, Jr., the Company's Chairman of the Board, President and Chief
Executive Officer, are principals in Sammon and Sammon, LLC, doing business as
Paragon Racquet Club. Paragon Racquet Club currently leases a portion of the
Company's facilities at New Hartford, New York at a monthly base rate of $9,775.
The Company provides membership to this facility to all employees.
REPORT OF THE AUDIT COMMITTEE
The information contained in the following report is subject to the disclaimer
regarding "soliciting material" and "filed" information immediately following
the Report of the Compensation Committee contained in this proxy statement.
Composition. The Audit Committee of the Board is composed of three independent
members of the Board whose independence has been determined by the Board of
Directors based upon the independence standards adopted by the Board which
incorporate the independence requirements under the Securities and Exchange
Commission's requirements for members of audit committees and New York Stock
Exchange listing rules. The Board has also determined that no member of the
Audit Committee has a relationship with the Company that would render such
member not "independent". In addition, the Board of Directors has determined
that Sangwoo Ahn is an "audit committee financial expert" as defined by rules
set forth by the Securities and Exchange Commission ("SEC").
Responsibilities. The Audit Committee operates under a written charter adopted
by the Board of Directors. The charter, included as Attachment A to this proxy
statement, is reviewed annually for changes as appropriate. The attached Audit
Committee Charter reflects amendments recently adopted by the Board. The Audit
Committee reports and acts on behalf of the Board of Directors by providing
oversight of the financial management, independent auditors and financial
reporting process of the Company. The Company's management has the primary
responsibility for the preparation of the Company's consolidated financial
statements in accordance with generally accepted accounting principles ("U.S.
GAAP") and the reporting process including the Company's system of internal
controls. In fulfilling its oversight responsibilities, the Audit Committee
reviewed and discussed with management the audited consolidated financial
statements in the Annual Report, including a discussion of the quality, not just
the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the consolidated
financial statements.
It is the responsibility of the independent accountant to audit the Company's
consolidated financial statements and express an opinion as to whether those
consolidated financial statements fairly present the financial position, results
of operations and cash flows of the Company in conformity with U.S. GAAP.
Review with Management and Independent Auditors. The Audit Committee has
reviewed and discussed with the Company's independent auditors, KPMG, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee by Statement on Auditing Standards No. 61
(Communication with Audit Committee), as amended. In addition, the Audit
Committee has received from KPMG the written disclosures required by the
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees) and held discussions with the auditors with respect to the auditors'
independence from the Company's management and the Company itself. The Audit
Committee fully considered the non-audit services provided by the independent
auditors and the fees and costs billed and expected to be billed by the
independent auditors for those services (described in the next section). In
addition, the Audit Committee considered whether those non-audit services
provided by the independent auditors are compatible with maintaining auditor
independence. In reliance on the reviews and discussions with the Company's
management and the independent auditors, the Committee believes that non-audit
services provided to the Company by PricewaterhouseCoopers LLP
("PricewaterhouseCoopers LLP" or "PwC") and KPMG are compatible with and did not
impair the independence of PwC or KPMG.
The Audit Committee met and discussed with the Company's internal and
independent auditors the overall scope and plans for their respective audits.
The Audit Committee met with Internal Audit to discuss the results of its
examinations, its evaluations of the Company's internal controls, and the
overall quality of the Company's financial reporting. These meetings were held
with and without the presence of management. Access to the Audit Committee by
internal and independent auditors is unrestricted.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved, the
inclusion of the audited consolidated financial statements in the Annual Report
on Form 10-K for the year ended December 31, 2003 for filing with the SEC. The
Audit Committee has appointed KPMG as the Company's independent auditors for
fiscal 2004. One or more representatives of KPMG are expected to attend the
Annual Shareholder Meeting, where they will have the opportunity to make a
statement if they desire to do so, and are also expected to be available to
answer appropriate questions.
Audit Committee
Sangwoo Ahn, Chairman
J. Whitney Haney
James A. Simms
Change in Independent Auditors.
On July 23, 2003, the Audit Committee of the Board of Directors authorized
management of the Company to seek proposals from accounting firms interested in
replacing PricewaterhouseCoopers as our independent accountants. Subsequently,
letters were sent to three accounting firms inquiring as to their interest in
submitting proposals to act as our independent accountants. On August 21, 2003,
PricewaterhouseCoopers resigned. The Audit Committee engaged KPMG as our
independent public accountants as of October 9, 2003. The Audit Committee
considers KPMG to be the Company's principal accountant for the 2003 fiscal
year. Disclosures related to this change in independent auditors appear under
Item 9 in the Company's 2003 Annual Report which item is incorporated herein by
this reference. A copy of the Company's 2003 Annual Report accompanies this
Proxy Statement.
Fees Paid to Independent Auditors.
The following table presents fees paid by the Company for professional services
by PricewaterhouseCoopers and KPMG during the year ended December 31, 2003 and
to PricewaterhouseCoopers during the year ended December 31, 2002.
2003 2003 2002
Type of Fees KPMG PwC PwC
------------------------- --------------- --------------- ---------------
Audit Fees $ 192,090 $ 471,700 $ 157,500
------------------------- --------------- --------------- ---------------
Audit-Related Fees 0 0 2,100
------------------------- --------------- --------------- ---------------
Tax Fees 0 56,800 53,539
------------------------- --------------- --------------- ---------------
All Other Fees 0 0 0
------------------------- --------------- --------------- ---------------
Total: $ 192,090 $ 528,500 $ 213,139
------------------------- --------------- --------------- ---------------
The categories of fees in the preceding table, in accordance with the SEC's
rules and definitions, are defined as follows:
Audit Fees are fees for professional services rendered for the audit of the
Company's consolidated financial statements and review of the interim
consolidated financial statements included in quarterly reports and
services that are normally provided by the auditor in connection with
statutory and regulatory filings or engagements.
Audit-Related Fees are fees principally for audits of consolidated
financial statements of employee benefit plans and due diligence services.
Tax Fees are fees for professional services for federal, state and
international tax compliance, tax advice and tax planning.
All Other Fees are for any services not included in the first three
categories.
The Audit Committee has concluded that the provision of the non-audit services
listed above is compatible with maintaining the independence of the Company's
auditors. Consistent with SEC policies regarding auditor independence, the Audit
Committee has established a policy to pre-approve all auditing services and
permitted non-audit services, including the fees and terms thereof, performed by
the independent auditor.
CODE OF BUSINESS CONDUCT AND ETHICS
All of the Company's employees, including the Chief Executive Officer and the
Chief Financial Officer ("Officers") are required to abide by the Company's Code
of Business Conduct and Ethics to ensure the Company's business is conducted in
a consistently legal and ethical manner. The full text of the Company's Code of
Business Conduct and Ethics is available on the Company's website,
www.partech.com under the "About PAR" link on the website's home page. The Code
is designed to deter wrongdoing and to promote: (a) honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships; (b) full, fair, accurate timely
and understandable disclosure in reports and documents that the Company files
with or submits to the SEC and other public communications; (c) compliance with
applicable governmental laws, rules and regulations; (d) the prompt internal
reporting of violations of the Code to the appropriate person(s) identified in
the Code; and (e) accountability for adherence to the Code. The Company intends
to disclose future amendments to, or waivers from, certain provisions of the
Code that applies to the Officers and Directors and relates to the above
elements by posting such information on our website within five calendar days
following the date of such amendment or waiver.
SECTION 16(a) BENEFICIAL OWNERSHIP Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Executive Officers and Directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Such persons are required by regulations of the
Securities and Exchange Commission to furnish the Company with copies of all
such filings. Based solely on its review of the copies of such reports received
by the Company and written representations from reporting persons, the Company
believes that all ownership filing requirements were timely met during 2003.
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, 2004, by each Director, by each of
the named Executive Officers 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 certain holders of 5% or more of the Company's Common
Stock based on several Schedule 13G filings with the Securities and Exchange
Commission.
Amount and Nature of Percent
Name of Beneficial Owner or Group(1) Beneficial Ownership (2) of Class (13)
------------------------------------ ------------------------ -------------
Dr. John W. Sammon, Jr .................... 3,805,600 (3) 44.18%
Charles A. Constantino .................... 357,228 4.15%
Gregory T. Cortese ........................ 287,990 (4) 3.24%
J. Whitney Haney .......................... 30,055 (5) 0.35%
Sangwoo Ahn ............................... 67,500 (6) *
Ronald J. Casciano ........................ 72,300 (7) *
Albert Lane, Jr ........................... 51,645 (8) *
James A. Simms ............................ 6,000 (9) *
All Directors and Executive Officers
as a Group (8 persons) .................... 5,307,418 51.89%
Other Principal Beneficial Owners
---------------------------------
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 524,150 (10) 6.08%
E*Capital Corporation
1000 Wilshire Blvd.
Los Angeles, CA 90017-2457 343,049 (11) 3.98%
Edward W. Wedbush
P.O. Box 30014
Los Angeles, CA 90030-0014 164,770 (11) 1.91%
Eliot Rose Asset Management, LLC
10 Weybosset Street, Suite 401
Providence, RI 02903 703,950 (12) 8.17%
_____________________________
* Represents less than 1%
(1) Except as otherwise noted, the address for each beneficial owner listed
above is c/o PAR Technology Corporation, 8383 Seneca Turnpike, New
Hartford, NY 13413-4991.
(2) Except as otherwise noted, each individual has sole voting and investment
power with respect to all shares.
(3) Does not include 254,570 shares beneficially owned by Dr. Sammon's wife,
Deanna D. Sammon. Dr. Sammon disclaims beneficial ownership of such shares.
(4) Includes 287,450 shares which Mr. Cortese has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 2004.
(5) Includes 1,300 shares which Mr. Haney has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 2004.
(6) Includes 22,500 shares which Mr. Ahn has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 2004.
(7) Includes 69,900 shares which Mr. Casciano has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 2004.
(8) Includes 14,545 shares which Mr. Lane has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 2004.
(9) Includes 6,000 shares which Mr.Simms has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 2004.
(10) Information related to this shareholder was obtained from Schedule 13G
filed with the Commission on February 6, 2004 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, commingled group trusts and separate
accounts ("Funds") to which Dimensional furnishes investment advice or
serves as investment manager. Based on the Schedule 13G, Dimensional, in
its role as investment advisor and investment manager, possesses voting
and/or investment power as to all of the Company's shares owned by the
Funds. Dimensional disclaims beneficial ownership of all the shares owned
by the Funds.
(11) Information related to this shareholder was obtained from Schedule 13G
filed with the Commission on February 5, 2004 by E*Capital Corporation
("E*Capital") and Edward W. Wedbush ("Mr. Wedbush"). E*Capital and Mr.
Wedbush have reported their holdings as a group. E*Capital is the parent
company of Wedbush Morgan Securities, Inc. Mr. Wedbush is the chairman of
E*Capital and owns a majority of its outstanding shares, and, accordingly,
may be deemed the beneficial owner of shares owned by E*Capital. Mr.
Wedbush has expressly disclaimed beneficial ownership of the Company's
shares held by E*Capital on the Schedule 13G. Based on the Schedule 13G,
E*Capital has sole voting and dispositive power of 343,049 shares of the
Company's common stock and shared voting power of 519,819 shares; and
shared dispositive power of 550,319 shares. Mr. Wedbush reports sole voting
and dispositive power of 164,770 shares of the Company's common stock;
shared voting power of 519,819 shares; and shared dispositive power of
550,319 shares. Edward Wedbush, John Matise and Eric Wedbush are officers
and/or directors of E*Capital and may be deemed to have voting or
dispositive control over shares held by E*Capital or certain affiliates of
E*Capital.
(12) Information related to this shareholder was obtained from Schedule 13G
filed with the Commission on January 28, 2004 by Eliot Rose Asset
Management, LLC ("Eliot Rose""), a registered investment advisor, and Gary
S. Siperstein ("Mr. Siperstein") a principal of Eliot Rose. Both Eliot Rose
and Mr. Siperstein report holding sole dispositive power of 703,950 shares
of the Company's common stock. As reported in the Schedule 13G, Eliot Rose
is deemed to have beneficial ownership of the shares pursuant to separate
arrangements whereby it acts as investment advisor to certain persons (the
"Clients"). Each Client has the right to receive or the power to direct the
receipt of dividends from or the proceeds from the sale of the common stock
purchased or held pursuant to such arrangements. Gary S. Siperstein is
deemed to be the beneficial owner of the shares pursuant to his ownership
interest in Eliot Rose Asset Management, LLC.
(13) Percent of Class is calculated utilizing 8,614,550 which is the number of
the Company's outstanding shares as of March 31, 2004 and the number of
options held by the named beneficial owners, if any, which become
exercisable within 60 days thereafter.
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for each of
the last three fiscal years awarded to, earned by, or paid to the Chief
Executive Officer and the four other most highly compensated Executive Officers
of the Company other than the Chief Executive Officer.
Summary Compensation Table
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)
------------------ ---------------------------------------------------------
Dr. John W. Sammon, Jr ........... 2003 $300,500 $104,400 0 $ 7,691
Chairman of the Board ............ 2002 $296,291 $ 0 (F4) 0 $ 2,220
and Chief Executive Officer ...... 2001 $ 76,837(5) $ 16,200 (F5) 0 $ 0
Charles A. Constantino ........... 2003 $236,408 $ 73,200 0 $ 7,691
Executive Vice President ......... 2002 $242,416 $ 43,600 0 $ 3,320
and Director ..................... 2001 $238,703 $ 66,806 0 $ 0
Gregory T. Cortese ............... 2003 $231,750 $ 56,400 0 $ 7,720
CEO & President, ParTech, Inc. ... 2002 $226,549 $ 20,200 0 $ 3,320
2001 $225,000 $ 40,500 0 $ 0
Albert Lane, Jr .................. 2003 $224,014 $157,900 0 $ 7,691
President, Rome Research ......... 2002 $210,219 $147,100 0 $ 3,320
Corporation and PAR Government ... 2001 $203,635 $143,200 100,000 $ 0
Systems Corporation
Ronald J. Casciano ............... 2003 $161,952 $ 40,200 0 $ 7,024
Vice President, C.F.O. & Treasurer 2002 $152,327 $ 22,900 0 $ 2,964
2001 $150,000 $ 22,500 65,400 $ 0
________
(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 and the Company's matching
contribution to the 401(k) savings plan.
(F4) The 2002 bonus for Dr. Sammon pursuant to a pre-established bonus plan
would have been $62,200. Dr. Sammon elected not to accept payment of this
bonus.
(F5) The 2001 base salary for Dr. Sammon was established at $291,748, however,
Dr. Sammon did not accept payment beyond $76,837. This limitation was, in
part, in response to the Company's 2001 salary reduction program. Dr.
Sammon's salary reduction was significantly greater than the 10% reduction
mandated by the program. The portion of salary reduction that exceeded the
amount mandated by the program was self-imposed by Dr. Sammon.
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.
Aggregated Option Exercises in 2003 and Year-End Option Values
--------------------------------------------------------------
The table which follows sets forth information concerning exercises of stock
options during 2003 by each of the Executive Officers named in the Summary
Compensation Table and the value of his unexercised options as of December 31,
2003 based on a fair market value of $7.955 per share of the Company's Common
Stock on such date:
Value of Unexercised
Number of Unexercised in-the-Money
Acquired Value (F1) Options at 12/31/03 Options at 12/31/03 (F2)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
Dr. John W. Sammon, Jr -- -- -- -- -- --
Charles A. Constantino -- -- -- -- -- --
Gregory T. Cortese .... 4,900 $ 31,166 282,850 56,250 $1,303,712 $ 275,203
Ronald J. Casciano .... -- -- 59,400 21,000 $ 317,276 $ 108,274
Albert Lane, Jr ....... 32,000 $ 112,900 19,091 40,909 $ 101,755 $ 218,045
__________
(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
$7.955 (the fair market value of the Company's common stock on 12/31/03)
over the relevant exercise price(s).
Employment Contracts and Termination of Employment and Change-in-Control
---------- --------- --- ----------- -- ---------- --- -----------------
Arrangements
------------
The Company has an employment agreement with Mr. Cortese that provides for his
employment as Chief Executive Officer and President of the Company's subsidiary,
ParTech, Inc. through June 30, 2007. Mr. Cortese's agreement provides that he
will receive a minimum base salary of $225,000 and will be eligible to receive
an incentive bonus in accordance with the guidelines of the Company's incentive
compensation plan.
Under the terms of the agreement, if Mr. Cortese's employment is terminated by
the Company after the expiration of the agreement or without cause he is
entitled to receive (a) severance payment equal to one year of his base salary
as of the time of termination and (b) continued coverage in the Company's health
benefit plans during the severance period.
Compensation Committee Report
The Compensation Committee of the Board of Directors 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 Compensation
Committee relative to the compensation of employee Compensation 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
The Company seeks to attract, motivate, retain and reward the management talent
essential to achieving its business objectives and maintaining its leadership
position in the industry. Compensation for the Company's Executive Officers in
2003 was consistent with the fundamental principles of the executive
compensation program, namely, that:
- 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.
The primary responsibility of the Company's Executive Officers and its Chief
Executive Officer is to enhance shareholder value by balancing the requirements
of long term growth objectives with the achievement of short term performance
goals. Individual compensation awards are established based upon the
contribution the executive has made to achieve the Company's short term
strategic performance objectives as well as the anticipated contribution of that
executive toward long term objectives.
Elements of Executive Compensation
To meet its policy objectives for executive compensation, the Company's
executive compensation program consists of Base Salary, Bonuses and Stock
Options.
Base Salary. The Compensation Committee reviewed and established the annual base
salary of the Executive Officers, including the Chief Executive Officer, for the
fiscal year 2003. In setting annual base salaries, the Compensation Committee
considered the salaries of relative executives in similar positions in the
industry, the level and scope of responsibility, experience and performance of
the executive, the financial performance of the Company; and other overall
general economic factors. The Compensation 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 the purpose of measuring stock performance. In contrast, the
salary information utilized by the Company and the Compensation Committee
includes national third party survey information for salaries in the high
technology group within the durable goods industry sector as reported in a
nationally recognized report on executive compensation. An objective of the
Compensation 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.
The Compensation Committee set base salaries for each Executive Officer based on
its review of the third party salary data in conjunction with the individual
performance of that Executive Officer, the performance of the organization over
which the Executive Officer has responsibility, the performance of the Company
and general economic conditions (with each factor being weighted as the
Compensation Committee deemed appropriate).
Bonuses. All Executive Officers, including the Chief Executive Officer, are also
given pre-established performance goals established for the respective business
units under their control. In general, the performance goals of the Executive
Officers (other than the Chief Executive Officer) are approved by the Chief
Executive Officer. These goals generally relate to achieving financial
objectives and/or functional goals within the officer's area of responsibility.
The performance factors, minimum performance levels and weighting of the factors
upon which bonuses are based are established on an annual basis and are
predicated on current business objectives. For 2003, the factors for all
business units included profit before tax, revenue and collection cycle. Bonuses
for Executive Officers overseeing the Company's restaurant business segment,
ParTech, Inc., included the additional element of inventory turns.
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
other than Dr. Sammon and Mr. Constantino) 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.
Chief Executive Officer Compensation for Fiscal 2003
The Compensation Committee's recommendation to the Board for the 2003
compensation of the Chief Executive Officer was based on the policies and
practices described above. Dr. Sammon's 2003 base salary was established after
review of his performance and the comparative information from the third party
salary survey. Dr. Sammon's base salary in 2003 was $300,500, which remains
slightly below the midpoint of the compensation peer group contained in the
third party survey. This base salary reflected an increase of 1.4% of Dr.
Sammon's base salary for 2002.
In establishing Dr. Sammon's total compensation package, the Compensation
Committee also considered the performance goals of the Company as a whole that
it had pre-established for Dr. Sammon in connection with an incentive bonus
including the Company's overall financial and operational performance. The
Compensation Committee noted that in the specific areas of profit before tax,
revenue, inventory turns and collection cycle, the Company had met the
pre-established performance levels to the extent that would entitle the Chief
Executive Officer to payment of a bonus in the amount of $104,400.
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 and is considered a "disinterested person" and therefore 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
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended (the "1933 Act")
or the Securities Exchange Act of 1934 (the 1934 Act") that might incorporate by
reference this Proxy Statement, in whole or in part, the Report of the Audit
Committee found earlier in this Proxy Statement, 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 1933 Act or 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, President and CEO 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 a self constructed peer group made up of companies on an
industry basis, which companies returns are weighted according to their
respective market capitalizations at the beginning of each year for which the
return is calculated. The graph is constructed on the assumption that $100 was
invested in each of the Company's Common Stock, the S&P 500 Stock Index, and the
peer group on December 31, 1998. The year-end values of each investment are
based on share price appreciation and the reinvestment of dividends.
Cumulative Total Return ($)
12/98 12/99 12/00 12/01 12/02 12/03
----- ----- ----- ----- ----- -----
PAR Technology Corporation 100 79 31 43 115 133
S&P 500 .................. 100 121 110 97 76 97
Peer Group ............... 100 246 103 89 81 120
[GRAPHIC OMITTED]
The following companies are included in the Company's self constructed Peer
Group: Aspeon, Inc. (formerly known as Javelin Systems, Inc.), Micros Systems,
Inc., PAR Technology Corporation, and Radiant Systems, Inc.
Proposal 2: Ratification of the Selection of Independent Auditors.
On the recommendation of the Audit Committee, the Board of Directors has
selected KPMG as the independent auditors to audit the consolidated financial
statements of the Company and its subsidiaries for the 2004 fiscal year. KPMG
has been employed to perform this function since October 9, 2003.
Although this appointment is not required to be submitted to a vote of the
shareholders, the Board generally requests the shareholders ratify the
appointment. If the shareholders do not ratify the appointment, the Audit
Committee will investigate the reasons for their rejection and the Board will
reconsider the appointment.
The Board of Directors recommends a vote FOR the proposal to ratify the
selection of KPMG. 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 that will
be presented at the Annual Meeting for action by shareholders. However, if any
other matters properly come before the Meeting, or any postponement or
adjournment thereof, the persons acting by authorization of the proxies will
vote thereon in accordance with their judgment.
SHAREHOLDER PROPOSALS FOR 2005 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 2005 Annual Meeting,
any shareholder proposals must be received at the Company's general offices no
later than the close of business on December 30, 2004. If a matter of business
is received by March 15, 2005, the Company may include it in the Proxy Statement
and form of proxy and, if it does, it may use its discretionary authority to
vote on the matter. For matters that are not received by March 8, 2005, the
Company may use its discretionary voting authority when the matter is raised at
the Annual Meeting, without inclusion of the matter in its Proxy Statement.
Proposals should be addressed to Gregory T. Cortese, Secretary, PAR Technology
Corporation, PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York
13413-4991. The Company recommends all such submissions be sent by Certified
Mail - Return Receipt Requested.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Gregory T. Cortese
Secretary
April 29, 2004
Appendix A
PAR TECHNOLOGY CORPORATION
AUDIT COMMITTEE CHARTER
Purpose
The Audit Committee (the "Committee") is established by and amongst the Board of
Directors (the "Board") of PAR Technology Corporation (the "Company") to oversee
the Company's accounting, financial and other reporting processes and audits of
its consolidated financial statements. The Committee's primary purpose is to
help the Board fulfill its responsibility to oversee management's conduct and
representations of the Company's reporting processes, its system(s) of internal
control, the audit process, and its processes for monitoring compliance with
laws and regulations and the Company's code of ethics and conduct. This includes
reviewing financial reports and other information the Company provides to
governmental and regulatory authorities, investors or the general public,
reviewing the Company's disclosure controls and procedures and its internal
accounting and financial control systems and procedures and assessing the
annual, independent audit of the Company's consolidated financial statements.
The Committee shall review the adequacy of this Charter on at least an annual
basis (see Other Responsibilities below).
Authority
In discharging its oversight role, the Committee has authority to conduct or
authorize investigations into any matter brought to its attention. Within this
scope of responsibility, the Committee has full access to all books, records,
facilities and personnel of the Company and is empowered to:
- Authorize Company funding to enable the Committee to retain independent
outside counsel, accountants, auditors or other advisors as it determines
necessary to carry out its duties;
- Seek any information it requires to fulfill its responsibilities from
employees - all of whom are directed to cooperate with the Committee's
requests - or external parties;
- Meet with Company officers, independent auditor or outside counsel, as
necessary to fulfill its responsibilities.
The Board and the Committee are in place to represent the Company's
shareholders; therefore, the independent auditor is ultimately accountable to
the Board and the Committee.
Membership
The Board or its nominating committee will appoint Committee members and the
Committee chair. The Committee should consist of at least three members of the
Board, and the Committee's composition will meet the requirements of the Audit
Committee Policy of the New York Stock Exchange, Section 10A(m)(3) of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations of the Securities and Exchange Commission (the "Commission"). At
least one member of the Committee shall, in the assessment of the Board, qualify
and be identified as an audit committee financial expert as defined by the
Commission. All members of the Committee shall be financially literate at the
time of their appointment to the Committee or within a reasonable time
thereafter.
Meetings
The Committee will meet at least four times a year, with authority to convene
additional meetings, as circumstances require. All Committee members are
expected to attend each meeting, in person or via tele- or video-conference. The
Committee will invite members of management, auditors or others to attend
meetings and provide pertinent information, as necessary. It will hold executive
session meetings with the independent auditor, management and internal auditors.
Meeting agendas will be prepared and provided to members in advance, along with
appropriate briefing materials. Minutes will be prepared.
Key Responsibilities
The Committee's job is one of oversight and it recognizes that the Company's
management is responsible for preparing the Company's consolidated financial
statements and that the Company's independent auditor is responsible for
auditing those consolidated financial statements. In fulfilling its oversight
responsibilities, the Committee is not providing any expert or special assurance
as to the Company's consolidated financial statements or any professional
certification as to the Company's independent auditor's work.
Within this framework, the Committee will carry out the activities that follow.
These are set forth as a guide with the understanding that the Committee may
deviate from this guide as appropriate given the circumstances. Each area below
includes specific action items to be performed; in addition, three areas -
Consolidated Financial Statements and Disclosures, Internal Controls and
Oversight of the Independent Auditor - begin with higher-level activity or
responsibility statements which, in turn, encompass the more specific actions
detailed in each case.
Consolidated Financial Statement and Disclosure Matters
-------------------------------------------------------
1. Review with management and the independent auditor financial results to be
included in quarterly reports to the SEC (e.g. Form 10-Q), including
disclosures in the MD&A and including the results of the independent
auditor's review of such financials.
- Understand how management develops interim financial information, and
the nature and extent of independent auditor involvement.
- Consider whether interim financial reports are complete, consistent
with information known to Committee members, and reflect appropriate
accounting principles.
2. Review with the independent auditor and management audited consolidated
financial statements to be included in SEC Form 10-K (or in the Annual
Report to Shareholders if distributed prior to filing Form 10-K), including
disclosures in the MD&A, and recommend to the Board whether the audited
statements should be included in Form 10-K.
- Consider whether the annual consolidated financial statements are
complete, consistent with information known to Committee members, and
reflect appropriate accounting principles.
- Review, and consider the accuracy and completeness of, other sections
of the Annual Report and related regulatory filings.
3. Review all matters required to be discussed, or to be communicated to the
Committee, by Statement of Auditing Standards ("SAS") No.61 relating to the
conduct of the audit.
Specificactions:
- On a timely basis, review and discuss with the independent auditor:
- Critical accounting policies and practices used.
- Alternative treatments of financial information within GAAP, discussed
with management, the ramifications of using such alternative
disclosures and treatments, and the auditor preferred treatment.
- Other material communications with management, such as a management
letter or a schedule of differences and potential adjustments.
- Discuss with the independent auditor, and with management, significant
accounting and reporting issues and judgments and their respective impact
on the consolidated financial statements, including the effect of recent
professional and regulatory pronouncements, complex or unusual transactions
and highly judgmental areas, material off-balance sheet transactions or
structures and other similar relationships and any significant changes in
the Company's selection or application of accounting principles.
- Discuss generally with management "pro-forma" or "adjusted" non-GAAP
information, as well as financial information and earnings guidance
provided, in any report or public disclosure. Ensure management can
reconcile such information to GAAP.
- Review the results of the audit. As cited above, discuss with the
independent auditor any difficulties encountered during the audit,
including restrictions on the scope of activities or access to requested
information, and any significant disagreements with management.
Internal Controls
-----------------
1. Discuss with management and the independent auditor the quality and
adequacy of the Company's internal controls and any special steps adopted
in light of material control deficiencies, if any.
Specificactions:
- Review disclosures made to the Committee by the Company's CEO and CFO,
during their certification process for filings on Forms 10-Q and 10-K,
about any significant deficiencies in the design or operation of internal
controls or material weakness therein and any fraud involving management or
other employees who have a significant role in the Company's internal
controls.
- Understand the scope of internal and independent auditors' reviews of
disclosure controls and procedures and internal controls over financial
reporting, and obtain reports on significant findings and recommendations,
together with management's responses.
- Consider the effectiveness of the Company's financial and accounting,
financial reporting and disclosure controls.
- Recommend or establish, and monitor, procedures designed to improve the
quality and reliability of disclosure controls and controls over the
reporting of the Company's financial condition and results of operations.
Oversight of Internal Audit Function
------------------------------------
Specificactions:
- Review with management, the internal audit Director and the independent
auditor the charter, plans, activities, staffing and organizational
structure of the internal audit function.
- Ensure there are no restrictions or limitations placed on the performance
of internal audit.
- Review the effectiveness of the internal audit function, including
compliance with established internal auditing practice standards.
- Review significant internal audit department findings and management
responses.
- Review the appointment and replacement of the senior internal auditing
executive.
- On a regular basis, meet separately with the internal auditor to discuss
any matters that the Committee or internal audit believes should be
discussed privately.
Oversight of the Company's Relationship with the Independent Auditor
--------------------------------------------------------------------
The independent auditor is ultimately accountable to the Board and the
Committee. Therefore, the Committee, subject to any action that may be taken by
the full Board, has the ultimate authority and is responsible to select (or
nominate for shareholder approval), evaluate, determine funding for and, where
appropriate, replace the independent auditor.
Specificactions:
- Review the independent auditor's proposed audit scope and approach,
including staffing of the audit and coordination of audit effort with
internal audit.
- Pre-approve all auditing services and permitted non-audit services,
including the fees and terms thereof, subject to the de minimus exception
for non-audit services described in Section 10A(i)(1)(B) of the Exchange
Act that are approved by the Committee prior to the completion of the
audit.
- Discuss disclosure to investors, in periodic reports as required, of
any permitted and approved non-audit services.
- Discuss management's ability to ensure the auditor does not perform,
contemporaneously with the audit, any non-audit service specifically
prohibited by law, rule or regulation.
- Review and confirm the independence of the independent auditor.
- At least annually obtain and review a report from the auditor
delineating all relationships between the Company and the auditor,
including non-audit services, consistent with Independence Standards
Board Standard Number 1.
- Discuss with the auditor any such disclosed relationships and their
impact on the auditor's independence, taking into account the opinions
of management and the internal auditors.
- Determine in particular whether providing permitted non-audit services
is compatible with the audit firm maintaining its independence.
- Present the Committee's conclusions to the full Board, and recommend
that it takes appropriate action to satisfy itself of the auditor's
independence.
- Review and evaluate the lead partner of the independent auditor team, and
the performance of the independent auditors. Exercise final approval on the
appointment or discharge of the auditors.
- Ensure the rotation of the lead audit partner, and the concurring
(review) partner, as required by law.
- Consider whether it is appropriate to adopt a policy of rotating the
independent audit firm on a regular basis.
- Recommend to the Board policies for the Company's hiring of employees
or former employees of the independent auditor who participated in any
capacity in the audit of the Company.
- At least annually obtain and review a report from the auditor that
describes: the audit firm's internal quality-control procedures; any
material issues raised by the firm's most recent internal quality
control review, or peer review, or by any governmental or professional
inquiry or investigation in the most recent five years relating to the
firm's audits; and any steps taken to deal with any such issues.
- Evaluate the qualifications and performance of the independent
auditor, including whether the auditor's quality controls are
adequate. Take in to account the opinions of management and the
internal auditors. Present to the full Board the Committee's
conclusions with respect to the audit firm's quality controls and the
auditors' qualifications and performance.
- On a regular basis, meet separately with the independent auditor to discuss
any matters that the Committee or the independent auditor believes should
be discussed privately.
Compliance Oversight Responsibilities
-------------------------------------
Specificactions:
- Review the effectiveness of the system for monitoring compliance with laws
and regulations, and the results of management investigations and follow-up
(including disciplinary action) of any instances of noncompliance.
- Discuss with management and the independent auditor any correspondence with
regulators or governmental agencies and any published report that raise
material issues regarding the Company's consolidated financial statements
or accounting policies.
- Review the process for communicating the Code of Ethics to Company
personnel:
- Discuss and verify the Company's ability to monitor compliance with
the Company's Code of Ethics and Standards of Conduct policy.
- Discuss disclosure in the Company's Form 10-K relating to the Code of
Ethics for the CEO and senior financial officers, and disclosure in
Form 8-K regarding revisions to and waivers granted under the Code of
Ethics.
- Obtain regular updates from management and Company legal counsel regarding
compliance matters that may have a material impact on the Company's
consolidated financial statements or on its compliance policies.
- Obtain from the independent auditor assurance that Section 10A (b) of the
Exchange Act has not been implicated.
- Review reports and disclosures of insider and affiliated party
transactions, and approve all related party transactions, i.e. transactions
disclosable under Item 404 of Regulation S-K. (Note: Approving Directors
must be independent and disinterested).
- Establish procedures for the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting controls
or auditing matters, and for the confidential, anonymous submission by
employees of concerns regarding questionable accounting or auditing
matters.
Reporting Responsibilities
--------------------------
Specificactions:
- Regularly report to the Board about Committee activities, issues and
related recommendations.
- Provide an open avenue of communication between internal audit, the
independent auditor and the Board.
- Report annually to the shareholders, describing the Committee's
composition, its responsibilities and how these were discharged, and any
other information required by rule or regulation.
- Review any other reports the Company issues that relate to areas of
Committee responsibility.
Other Responsibilities
----------------------
Specificactions:
- Review and assess the adequacy of this charter annually, requesting Board
approval for proposed changes.
- Perform other activities related to areas covered by this charter as
requested by the Board.
- Institute and oversee special investigations as needed.
- Confirm annually that all responsibilities outlined in this charter have
been carried out.
- Evaluate the Committee's and individual members' performance on a regular
basis.
Appendix B
PAR TECHNOLOGY CORPORATION
Nominating and Corporate Governance Committee Charter
A. PURPOSE
The primary function of the Nominating and Corporate Governance Committee
(the "Committee") is to assist the Board of Directors (the "Board") of PAR
Technology Corporation (the "Company") in fulfilling its responsibilities by:
(i) identifying individuals qualified to become members of the Board, and
recommending that the Board select the Director nominees for election at the
next annual meeting of shareholders, (ii) developing and recommending to the
Board a set of corporate governance principles (the "Corporate Governance
Guidelines") applicable to the Company, (iii) adopting a corporate code of
ethics and conduct (a "Code of Business Conduct") and (iv) monitoring compliance
with and periodically reviewing the Corporate Governance Guidelines and Code of
Business Conduct.
B. GOALS AND RESPONSIBILITIES
To fulfill its responsibilities and duties the Committee shall:
Board Composition and Nominations
---------------------------------
1. Evaluate the current composition and organization of the Board and its
committees in light of requirements established by the Securities and
Exchange Commission, the New York Stock Exchange (NYSE), any exchange upon
which securities of the Company are traded, and any governmental or
regulatory body exercising authority over the Company (each a "Regulatory
Body") or any other applicable statute, rule or regulation which the
Committee deems relevant and make recommendations regarding the foregoing
to the Board for approval.
2. Review the composition and size of the Board in order to ensure that the
Board is comprised of members reflecting the proper expertise, skills,
attributes and personal and professional backgrounds for service as a
Director of the Company, as determined by the Committee.
3. Board members may recommend candidates for Board membership, for this
Committee's consideration. From these, and from other viable candidates,
this Committee shall recommend that the Board select nominees for election
as Directors of the Company. Nominees must meet the Director qualification
standards specified in the Corporate Governance Guidelines document. Also,
when identifying and evaluating potential Directors, the Committee and
Board should consider the criteria in the attached Appendix and any other
criteria or standards they determine are necessary or appropriate.
However, if the Company is legally obligated by contract or otherwise to
provide third parties with the ability to nominate Directors (for example,
the rights of preferred stockholders, rights under shareholder agreements
or other agreements), the selection and nomination of such Directors shall
not be subject to the criteria above, and independent Director approval of
such nominees (see D.1 below) will not be required.
4. Recommend the appointment of Board members to committees of the Board.
5. Evaluate the performance of current Board members proposed for reelection,
and approve those members standing for reelection that the Committee
determines is appropriate, subject to the exception set forth in paragraph
3 above for Directors that the Company is legally obligated to approve.
6. Review and recommend to the Board an appropriate course of action upon the
resignation, retirement, disability or death of current Board members or
any planned expansion of the Board and review the qualifications for
service on the Board of any potential additional or replacement members of
the Board.
Establishment and Review of Corporate Governance Policies
---------------------------------------------------------
7. Develop and adopt Corporate Governance Guidelines which shall at a minimum
address Director qualification standards; Director responsibilities;
Director access to management and, as necessary and appropriate,
independent advisors; Director compensation; Director orientation and
continuing education; management succession; and an annual performance
evaluation of the Board.
8. Develop and adopt a Code of Business Conduct for Company employees,
Directors and officers designed to promote honest and ethical conduct which
shall at a minimum address conflicts of interest; corporate opportunities;
confidentiality; fair dealing; the protection and proper use of Company
assets; compliance with laws, rules and regulations, including insider
trading laws; and shall encourage the reporting of any illegal or unethical
behavior and expressly prohibit retaliation of any kind for reports or
complaints alleging conduct that violates the policy.
9. The Corporate Governance Guidelines and the Code of Business Conduct will
comply with any requirements established by any Regulatory Body or any
other applicable statute, rule or regulation which the Committee deems
relevant. Once formulated, the Committee shall recommend to the full Board
the adoption of such Corporate Governance Guidelines and Code of Business
Conduct.
10. Review and assess the adequacy of the Corporate Governance Guidelines and
the Code of Business Conduct periodically, but at least annually. The
Committee shall recommend to the Board for approval any modifications to
the Corporate Governance Guidelines or Code of Business Conduct.
11. Collaborate with the Company's officers to develop a means by which
employees can allege non-compliance with or violations of the Code of
Business Conduct, by Directors, officers or other employees, and can report
this to the Committee in a confidential manner.
12. Review and assess the adequacy of this Charter periodically as conditions
dictate, but at least annually. Recommend to the Board, for its approval,
any modifications to this Charter if and when appropriate.
13. Periodically, review and assess the adequacy of the Company's Certificate
of Incorporation and By-Laws and the charters of any committee of the Board
(the "Governing Documents"), in order to ensure compliance with the
Corporate Governance Guidelines, and recommend to the Board any necessary
modifications to the Governing Documents.
14. To the extent required by any Regulatory Body or otherwise deemed advisable
by the Committee, develop, implement, review and monitor an orientation and
education program for members of the Board.
Oversight of the Evaluation of the Board and Management
-------------------------------------------------------
15. Evaluate and determine an appropriate response to credible evidence
indicating non-compliance with or violations of the Code of Business
Conduct, Corporate Governance Guidelines or the Governing Documents by
Directors, officers or employees, after consulting with legal counsel,
including reporting any violation of law to any appropriate Regulatory
Body.
16. Determine criteria for evaluating changes in, or any requests from
Directors or officers for waivers of, the Code of Business Conduct, review
and rule on any such requests and establish a process for prompt disclosure
to the shareholders, upon the grant of any such waiver, as may be required
by any Regulatory Body.
17. Review and recommend to the Board an appropriate course of action upon the
resignation, retirement, disability or death of any Executive Officer and
review the qualifications for service of any potential new Executive
Officers.
18. At the request of the Board, or in the Committee's own discretion, conduct
a performance evaluation of the Board to determine whether it and its
committees are functioning effectively.
Review of Shareholder Proposals
-------------------------------
19. Review all shareholder proposals submitted to the Company (including any
proposal relating to the nomination of a member of the Board) and the
timeliness of the submission thereof and recommend to the Board appropriate
action on each such proposal.
C. ANNUAL PERFORMANCE EVALUATION OF THE COMMITTEE
The Committee shall conduct a self-evaluation at least annually to determine
whether it is functioning effectively, and provide the result to the Board for
discussion.
D. COMMITTEE COMPOSITION AND PROCEDURES
Independence Requirements
-------------------------
1. Each Committee member shall meet any applicable independence requirements
promulgated by any Regulatory Body. In particular, NYSE-listed companies must
have a Committee composed entirely of independent Directors to enable
independent approval of Director nominees, as required, either by an independent
nominating committee or by a majority of the independent Directors.
Number of Members
-----------------
2. The Committee shall be comprised of a minimum of three members of the Board,
provided, however, that if fewer than three independent Directors sit on the
Board, the Committee shall be comprised of such lesser number as the Board from
time to time may designate.
Committee Member Appointment and Removal
----------------------------------------
3. Members of the Committee shall be elected by the Board and shall serve until
their successors shall be duly elected and qualified or until their earlier
resignation or removal. Unless a Chair is elected by the Board, the members of
the Committee may designate a Chair by majority vote of the full Committee
membership.
Committee Structure and Operations
----------------------------------
4. The Committee may delegate its authority to subcommittees as it deems
appropriate.
Meetings of the Committee; Quorum
5. The Committee shall meet as necessary, but at least annually, to enable it to
fulfill its goals and responsibilities as set forth herein. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business, and the action of a majority of those present, after determining a
quorum, shall be the act of the Committee.
Committee Reporting to the Board
--------------------------------
6. The Committee shall report its findings to the Board and shall keep written
minutes of its meetings which shall be recorded and filed with the books and
records of the Company.
Appendix 1 to Nominating and Corporate Governance Committee Charter
-------------------------------------------------------------------
Following is a non-exhaustive list of criteria to consider when identifying and
evaluating potential nominees for the Board of Directors of PAR Technology
Corporation:
1. Seek a balance of Directors with business leadership positions and those
who bring special expertise.
2. Consider skills compatible with the Company's business objectives which
presently include government contracting, transportation, technology,
finance and marketing, etc. and background, all in the context of an
assessment of the perceived needs of the Board at that point in time.
3. Ensure that existing and future commitments would not materially interfere
with the Board member's obligations to the Company.
4. Choose Directors with a view to bringing to the Board a variety of
experience and background, Directors who will form a core of business
executives with financial expertise, Directors who have substantial
experience outside the business community--in the public, academic, or
scientific communities, Directors who will represent the balanced, best
interests of the shareholders as a whole rather than the special interest
groups or constituencies. Each Director should be chosen without regard to
race, color, sex, religion, national origin, age, disability or any other
category protected by federal, state or local law. Each should be an
individual of the highest character and integrity and have an inquiring
mind and vision and the ability to work well with others. Each should
possess substantial and significant experience which would be of a
particular importance to the Company. Each should have sufficient time
available to devote to the affairs of the Company.
5. Directors should be diverse enough to represent differing points of view,
show evidence of leadership in their particular fields, have broad
experience and the ability to exercise sound business judgment.
6. Directors must be of proven integrity with a record of substantial
achievement; demonstrated ability and sound judgment that usually will be
based on broad experience, must be willing to devote the required amount of
time to the Company's affairs, including attendance at board meetings, must
possess a judicious and somewhat critical temperament that will enable
objective appraisal of management's plans and programs, and must be
committed to building sound, long-term Company growth.
REVOCABLE PROXY
PAR TECHNOLOGY CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
May 25, 2004
10:00 AM
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of PAR TECHNOLOGY CORPORATION hereby appoints
JOHN W. SAMMON, JR., CHARLES A. CONSTANTINO and 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 2004 Annual Meeting of Shareholders to be held on Tuesday, May 25, 2004
at 10:00 AM, Local Time, at The Warwick Hotel Denver; 1776 Grant Street, Denver,
Colorado, and at any adjournment thereof, for the election of Directors and upon
the proposal 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.
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS INSTRUCTION CARD PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE OR PROVIDE YOUR INSTRUCTIONS TO VOTE VIA THE
INTERNET OR BY TELEPHONE.
(Continued, and to be marked, dated and signed, on the other side)
FOLD AND DETACH HERE
PAR TECHNOLOGY CORPORATION - ANNUAL MEETING, MAY 25, 2004:
YOUR VOTE IS IMPORTANT!
Proxy Materials are available on-line at:
http://www.partech.com/ir-front.cfm
You can vote in one of three ways:
1. Call toll free 1-866-213-1445 on a Touch-Tone Phone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
or
2. Via the Internet at https://www.proxyvotenow.com/ptc and follow the
instructions.
or
3. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE SEE REVERSE SIDE FOR VOTING INSTRUCTIONS
REVOCABLE PROXY
PAR TECHNOLOGY CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
May 25, 2004
Please mark as
indicated in this
example [ X ]
1. ELECTION OF DIRECTORS
[ ] For
[ ] Withhold All
[ ] For All Except
Nominees for a 3 year term:
(01) Dr. John W. Sammon, Jr.
(02) Charles A. Constantino
Nominee for a 1 year term:
(03) Kevin R. Jost
INSTRUCTION: To withhold authority to vote for any nominee(s), mark "For All
Except" and write that nominee(s') name(s) or number(s) in the space provided
below.
___________________________________________________________________
2. To ratify the selection of KPMG LLP as independent auditors for 2004.
[ ] For
[ ] Against
[ ] Abstain
The Board of Directors recommends a vote "FOR" proposals 1 and 2 listed above.
Mark here if you plan to attend the meeting [ ]
Mark here for address change and note change [ ]
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
UNLESS OTHERWISE INSTRUCTED ABOVE, THE SHARES REPRESENTED HEREBY WILL BE VOTED
IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS SET FORTH
ABOVE.
ELECTRONIC DELIVERY OF PROXY MATERIALS: If you wish to receive future annual
reports and proxy materials via the internet, please send an email with "On-Line
Proxy Materials" in the subject line to: investor_relations@partech.com.
If signing as attorney, executor, administrator, trustee or guardian, please
give full title as such and if signing for a corporation, please give your
title. When shares are in the name of more than one person, each should sign the
proxy.
Please be sure to date and sign this instruction card in the box below.
--------------------------------------------------------------------------------
Sign above Date
x x x IF YOU WISH TO PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR INTERNET,
PLEASE READ THE INSTRUCTIONS BELOW x x x
FOLD AND DETACH HERE IF YOU ARE VOTING BY MAIL
--------------------------------------------------------------------------------
PROXY VOTING INSTRUCTIONS
Shareholders of record have three ways to vote:
1. By Mail; or
2. By Telephone (using a Touch-Tone Phone); or
3. By Internet.
A telephone or Internet vote authorizes the named proxies to vote your shares in
the same manner as if you marked, signed, dated and returned this proxy. Please
note telephone and Internet votes must be cast prior to 3 a.m., May 25, 2004. It
is not necessary to return this proxy if you vote by telephone or Internet.
Vote by Telephone
Call Toll-Free on a Touch-Tone Phone anytime prior to 3 a.m., May 25, 2004.
1-866-213-1445
Vote by Internet anytime prior to 3 a.m., May 25, 2004 go to
https://www.proxyvotenow.com/ptc
Please note that the last vote received, whether by telephone, Internet or by
mail, will be the vote counted.
ON-LINE PROXY MATERIALS : http://www.partech.com/ir-front.cfm
Your vote is important!