SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
PAR Technology Corporation
______________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1)Title of each class of securities to which transaction applies:
_____________________.
2)Aggregate number of securities to which transaction applies:
____________________.
3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
_______________________________________________________.
4)Proposed maximum aggregate value of transaction:
__________________________.
5)Total fee paid:
______________________________________________________.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1)Amount Previously Paid: _________.
2)Form, Schedule or Registration Statement No.: _________.
3)Filing Party: _________.
4)Date Filed: __________.
Dr. John W. Sammon, Jr. PAR Technology Corporation
Chairman, President & Chief Executive Officer 8383 Seneca Turnpike
New Hartford, NY 13413
[GRAPHIC OMITTED]
April 30, 2003
Dear Shareholders:
It is my pleasure to invite you to PAR Technology Corporation's 2003 Annual
Meeting of Shareholders. We will hold the meeting on Thursday, May 22, 2003 at
10:00 a.m. at the Wyndham Boston Hotel, 89 Broad Street, Boston, Massachusetts
02110. 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; or vote 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 THURSDAY, MAY 22, 2003
Dear PAR Technology Shareholder:
The Annual Meeting of Shareholders of PAR Technology Corporation, a Delaware
corporation (the "Company") is scheduled to be held at the Wyndham Boston Hotel,
89 Broad Street, Boston, Massachusetts 02110 (see map on reverse of this page)
on, Thursday, May 22, 2003, 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
2. To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
Only holders of record of the Company's common stock at the close of business on
April 4, 2003 will be entitled to notice of and to vote at the Meeting.
Every shareholder's vote is important. Whether or not you plan to attend the
Meeting, we request you complete, sign, date and return the enclosed proxy card
promptly in the enclosed postage prepaid envelope so your shares will be
represented. Any person giving a proxy has the power to revoke it at any time
before it is exercised and shareholders of record who are present at the Meeting
may withdraw their proxies and vote in person.
If you are unable to attend the meeting, you will be able to access the meeting
on the Internet. The Company will broadcast the meeting as a webcast through
PAR's website at www.partech.com and through CCBN's website at
www.companyboardroom.com. The webcast will remain available for replay one week
following the meeting. Visit PAR's website at www.partech.com and click on the
Investor Relations section for details.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Gregory T. Cortese
Secretary
New Hartford, New York
April 30, 2003
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES
Directions to the Wyndham Boston
89 Broad Street
Boston, Massachusetts 02110
Phone: 617-556-0006 Fax: 617-556-0053
From Logan International Airport
Follow the signs to Boston via the Sumner Tunnel (toll $2.00) At end of Tunnel
follow signs onto I-93 South Take High Street / Congress Street exit #23 Bear
right on exit #23 off-ramp following the sign that says "High Street" onto
Oliver Street Proceed 3 blocks to Milk Street Turn right onto Milk Street and
follow 2 blocks to Broad Street Turn right onto Broad Street The Wyndham Boston
will be on your right
From Points North via I-93 South
Follow I-93 South into Boston Take High Street/Congress St. exit #23 Bear right
on exit #23 off-ramp onto Oliver Street Proceed 3 blocks to Milk Street Turn
right onto Milk Street and follow 2 blocks to Broad Street Turn Right onto Broad
Street The Wyndham Boston will be on your right
From Points South via I-93 North
Follow I-93 North and take the Government Center exit #23 Bear left off the exit
and turn left onto North Street Follow North Street to the end and turn left
onto Congress Street At the fourth set of traffic lights turn left onto Milk
Street Follow Milk Street four blocks and turn right onto Broad Street The
Wyndham Boston will be on your right
From Points West via I-90 East (Massachusetts Turnpike)
Follow I-90 (Mass Pike) East to exit #24B and merge onto I-93 North Follow I-93
North and take the Government Center exit #23 Bear left off the exit and turn
left onto North Street Follow North Street to the end and turn left onto
Congress Street At the fourth set of traffic lights turn left onto Milk Street
Follow Milk Street four blocks and turn right onto Broad Street The Wyndham
Boston will be on your right
[GRAPHIC OMITTED]
PAR Technology Corporation
8383 Seneca Turnpike, New Hartford, NY 13413-4991
April 30, 2003
PROXY STATEMENT
Annual Meeting of Shareholders
Thursday, May 22, 2003
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 "Meeting") to be held at 10:00 AM, local time, on
May 22, 2003, at the Wyndham Boston Hotel, 89 Broad Street, Boston,
Massachusetts 02110, and at any postponement or adjournment thereof.
Please complete, sign, date and return the enclosed proxy. When proxies in the
form enclosed are returned properly executed, the shares represented thereby
will be voted in accordance with the directions of the shareholder. When no
direction has been given by the shareholder, the proxy will be voted FOR the
election of the Directors named below for 2003. 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, by giving written notice
of revocation to the Secretary of the Company at the address set forth above, or
by attending the Meeting and voting in person.
The cost of preparing and mailing this Notice and Proxy Statement and the
enclosed proxy will be borne by the Company. In addition to the use of the
mails, some of the officers, Directors and regular employees of the Company,
without additional remuneration, may solicit proxies in person, by telephone or
other electronic means and may solicit brokers and other persons holding shares
beneficially owned by others to procure from the beneficial owners consents to
the execution of proxies. The Company will reimburse such brokers and other
persons their reasonable fees and expenses for sending solicitation material to
principals and obtaining their instructions.
The Company's Annual Report to its shareholders for the year ended December 31,
2002, including audited financial statements, accompanies this Proxy Statement.
That report is not incorporated in this Proxy Statement by reference. The
approximate date on which this Proxy Statement and the accompanying form of
proxy are first being sent or given to security holders is April 30, 2003.
Record Date, Outstanding Common Stock, Voting Rights
Only shareholders of record at the close of business on April 4, 2003, will be
entitled to notice of and to vote at the Meeting or any postponements or
adjournments thereof. As of that date, there were 8,400,750 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 4,200,376
votes, represented in person or by proxy, shall constitute a quorum to conduct
business.
Each share of Common Stock entitles the holder thereof to one vote on all
matters to come before the Meeting including the election of the Directors.
Shareholders may vote in person or by proxy. Execution of a proxy will not in
any way affect a shareholder's right to attend the Meeting and vote in person.
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 either or both
of 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 him from being elected.
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: Election of Directors
Under the Company's Certificate of Incorporation, the members of the Board are
divided into three classes with approximately one-third of the Directors
standing for election at each Annual Meeting of Shareholders. The Directors are
elected for a three-year term of office, and will hold office until their
respective successors have been duly elected and qualified or until their
earlier resignation or removal. The class of Directors which was elected to hold
office until the 2003 Annual Meeting of Shareholders consists of two Directors.
Therefore, at this meeting, two Directors will be elected for a three-year term
expiring at the Annual Meeting held in 2006. 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 named below. The nominees for Director named below are currently
members of the Board.
The Board of Directors has no reason to believe that the nominees will be unable
or unwilling to serve if elected. In the event that either 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, their ages as of April 30,
2003, the year each first became a Director, their principal occupations during
at least the past five years, other directorships held by each as of the date
hereof and certain other biographical information are as set forth below by
class, in order of the next class to stand for election.
NomineeS for Election to the Board of Directors
Term Expiring at the 2006 Annual Meeting of Shareholders
--------------------------------------------------------
MR. SANGWOO AHN Partner
Morgan Lewis Githens & Ahn, LP
Investment Bankers
Mr. Ahn, age 64, is one of the founders of the investment banking firm Morgan
Lewis Githens & Ahn, LP. He has held the above position since 1982. Mr. Ahn is
Chairman of the Board of Directors of Quaker Fabric Corporation. He 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 68, 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.
Members of the Board of Directors Continuing in Office
Term Expiring at the 2004 Annual Meeting of Shareholders
--------------------------------------------------------
DR. JOHN W. SAMMON, JR. Chairman of the Board,
CEO and President
Dr. Sammon, age 64, is the founder of the Company and has been the CEO,
President 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
Mr. Constantino, age 63, has been a Director of the Company since 1970 and has
been Executive Vice President since 1974. Mr. Constantino is also a member of
the Board of Directors of Veramark Technologies, Inc. and holds various
positions with other subsidiaries of the Company.
Term Expiring at the 2005 Annual Meeting of Shareholders
--------------------------------------------------------
MR. JAMES A. SIMMS Managing Director
Adams, Harkness & Hill, Inc.
Investment Bankers
Mr. Simms, age 43, 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.
EXECUTIVE OFFICERS OF THE COMPANY
In addition to the employee Directors named above, the Executive Officers of the
Company and their respective ages, positions and principal occupations for the
last five years are as follows:
Principal Occupations
Name Age Position for the Last 5 Years
---- --- -------- --------------------
Ronald J. Casciano 49 Vice President, C.F.O. CPA; promoted to Vice
and Treasurer President, C.F.O., and
Treasurer in June, 1995
Gregory T. Cortese 53 President ParTech, Inc. Appointed President,
General Counsel and ParTech, Inc. in June
Secretary of PAR 2000. Previously, held
Technology Corporation the position of
Vice President, Law and
Strategic Development
since 1998.
Albert Lane, Jr. 61 President, PAR Government Appointed President of
Systems Corporation and PAR Government Systems
Rome Research Corporation Corporation in 1997.
Research Corporation in
1988.
Board of Directors and Committees
The business of the Company is under the general direction of the Board as
provided by the By-Laws of the Company and the laws of the State of Delaware,
the state of incorporation. The Board met six times during the fiscal year
ending December 31, 2002. All members of the Board attended more than 75% of the
total number of meetings of the Board and Board committees on which they served.
The Board has four standing committees: Executive, Audit, Compensation and Stock
Option.
The Executive Committee. The Executive Committee is composed of three Directors:
Dr. Sammon (Chairman), Mr. Constantino and Mr. Ahn. The Executive Committee met
one time in 2002. The Executive Committee meets when required on short notice
during intervals between meetings of the Board and has authority to exercise all
of the powers of the Board in the management and direction of the business and
affairs of the Corporation in all cases in which specific directions shall not
have been given by the Board and subject to the limitations of the General
Corporation Law of the State of Delaware or the Company's Certificate of
Incorporation or By-Laws.
The Audit Committee. The Audit Committee consists of three Directors: Mr. Ahn
(Chairman), Mr. Haney and Mr. Simms. The Audit Committee met six times in 2002.
The functions of the Audit Committee are included in the Report of the Audit
Committee set forth below. The members of the Audit Committee are "independent"
as this term is defined by the New York Stock Exchange in its listing standards.
The Compensation Committee. The Compensation Committee is composed of three
Directors: Mr. Ahn (Chairman), Dr. Sammon and Mr. Constantino. The Compensation
Committee met one time in 2002. The Committee, which meets as required, reviews
and establishes the compensation of the executive officers and other principal
officers of the Company and its subsidiaries. The salaries and other
compensation of any executive officers who are members of the Compensation
Committee are subject to approval by the Board. The Committee also reviews and
recommends to the Board compensation for outside Directors for service on the
Board and committees of the Board, makes recommendations to the Stock Option
Committee for stock option awards and recommends to the Board changes in the
Company's incentive plans. The Report of the Compensation Committee set forth
below describes the responsibilities of this committee, and discloses the basis
for the compensation of the Chief Executive Officer, including the factors and
criteria upon which that compensation was based; compensation policies
applicable to the Company's executive officers; and the specific relationship of
corporate performance to executive compensation for 2002.
Stock Option Committee. The Stock Option Committee is composed of two Directors:
Dr. Sammon (Chairman) and Mr. Constantino, both of whom are "disinterested
persons" in compliance with the Company's 1995 Stock Option Plan. The Stock
Option Committee met two times in 2002. The Committee, which meets as required,
reviews recommendations of the Compensation Committee for stock option awards
and otherwise serves as the administrative body for the Stock Option Plan.
Director Compensation
Directors who are employees of the Company are not separately compensated for
serving on the Board. In 2002, non-employee Directors received annual retainers
of $13,000 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.
In addition, for serving on the Board, each non-employee Director receives, 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.
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).
In 2002, Director Haney received $15,000 in connection with a special project
for the Board in connection with the assessment of operations and, subsequently,
the winding up of the Company's subsidiary, Ausable Solutions, Inc.
CERTAIN TRANSACTIONS
AND RELATIONSHIPS
During 1999, the Company's subsidiary, Rome Research Corporation, granted loans
to Mr. Charles A. Constantino, a Director and an Executive Officer of the
Company, with annual interest at the prime rate adjusted quarterly. The purpose
of these loans was to assist Mr. Constantino in the purchase of a home. During
the Company's 1996 secondary offering, Mr. Constantino desired to sell a
significant portion of his shares 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
Mr. Constantino loans at a reasonable rate of interest so that Mr. Conastantino
could go forward with his personal purchase. The home serves as collateral for
this loan. During 2002, prior to the enactment of The Sarbanes-Oxley Act of
2002, Rome Research Corporation granted an additional loan in the amount of
$250,000 at an interest rate of 4.75% to serve as a bridge loan in connection
with a real estate transaction. Mr. Constantino repaid in full this bridge loan
together with all accrued interest in November 2002. The largest aggregate
amount outstanding (principal and interest) under all of these loans to Mr.
Constantino throughout 2002 was $779,000. The principal and interest of these
loans are due on demand from the Company. As of March 31, 2003, the total
principal and interest outstanding on such loans was $516,000.
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 2002 was $224,800. As of March 31, 2003, the total
principal and interest outstanding on this loan was $227,100 with all amounts in
excess of the original principal being accrued interest.
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 and President, 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.
On December 3, 2002 the Company and Director J. Whitney Haney were parties to a
stock purchase agreements for the private placement of Common Stock to E*Capital
Corporation, Edward W. Wedbush, Gary S. Siperstein and Mynde S. Siperstein JT
TEN, S. Harry Siperstein, TTEE of the S. Harry Siperstein Trust, dated 12/13/85,
as amended, and Charles Tanner, in Contributory IRA. In this transaction, the
Company sold 383,019 shares of the Common Stock from its Treasury holdings and
Director J. Whitney Haney sold 125,000 shares of the Common Stock from his
personal holdings. The selling price per share of the shares sold in this
private placement was $5.30, with an aggregate price of $2,692,700. The details
of the transaction are contained in the exhibits to the Form S-3 filed with the
Securities Exchange Commission dated December 24, 2002.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee consists 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 applicable laws, rules and regulations and New York Stock
Exchange listing standards. The responsibility of selecting the independent
auditors for the Company's independent auditors lies with the Audit Committee.
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 Audit Committee operates under a
written charter adopted by the Board of Directors, which is required to be
provided to shareholders every three years, unless amended earlier. The
Company's management has the primary responsibility for the financial statements
and the reporting process including the Company's system of internal controls.
PricewaterhouseCoopers LLP was the independent accounting firm for the Company
for fiscal year 2002. The independent auditors were responsible for auditing the
Company's financial statements and expressing an opinion as to whether those
financial statements fairly present the financial position, results of
operations and cash flows of the Company in conformity with generally accepted
accounting principles. 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
financial statements.
The Audit Committee has reviewed and discussed with the independent auditors
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 PricewaterhouseCoopers LLP the written disclosures
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and discussed the auditors' independence from
management and the Company, including the matters in the written disclosures.
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 (shown below). In addition, the
Audit Committee discussed with the Company's management the procedures for
selection of consultants and the related competitive bidding practices and
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
referred to above, the Committee believes that PricewaterhouseCoopers LLP's
provision of non-audit services is compatible with and did not impair the
independence of PricewaterhouseCoopers LLP.
The Audit Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee met with the internal and independent auditors to discuss the results
of their examinations, their 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.. PWC will be present at
the Meeting to answer questions.
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, 2002 for filing with the Securities
and Exchange Commission.
Management has advised the Audit Committee that during the year ended December
31, 2002, the Company paid fees to PricewaterhouseCoopers LLP for services in
the following categories:
Audit Fees: $ 157,500
Financial Information Systems Design and Implementation Fees: $ 0
All Other Fees: $ 55,600
The Company's Audit Committee has determined that the provision of the services
provided by PricewaterhouseCoopers LLP, as set forth herein, are compatible with
maintaining PricewaterhouseCoopers LLP's independence.
Audit Committee
Sangwoo Ahn, Chairman
J. Whitney Haney
James A. Simms
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 2002
except that: Mr. Albert Lane, Jr., an Executive Officer, failed to file reports
to reflect purchases of an aggregate of 28,000 shares of common stock between
September 2000 and December 2000 and sales of an aggregate of 32,000 shares of
common stock between April 2002 and December 2002 and gifts of an aggregate of
4,000 shares of common stock in October 2002. These transactions have
subsequently been reported. Mr. James Simms, a Director, was late in filing a
report to reflect a grant of 9,000 options to purchase the Company's Common
Stock.
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, 2003, 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.
Percent
Amount and Nature of of Class
Name of Beneficial Owner or Group(F1) Beneficial Ownership (2) (13)
--------------------------------- ------------------------ --------
Dr. John W. Sammon, Jr............................ 3,883,300 (3) 46.34%
Charles A. Constantino............................ 389,728 4.65%
Gregory T. Cortese ............................... 265,790 (4) 3.07%
J. Whitney Haney.................................. 39,755 (5) 0.47%
Sangwoo Ahn....................................... 67,500 (6) *
Ronald J. Casciano................................ 57,300 (7) *
Albert Lane, Jr. ................................. 65,673 (8) *
James A. Simms.................................... 3,000 (9) *
All Directors and Executive Officers
as a Group (8 persons)............................ 4,772,046 54.42%
Other Principal Beneficial Owners
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 599,550 (10) 7.56%
E*Capital Corporation
1000 Wilshire Blvd.
Los Angeles, CA 90017-2457 536,719 (11) 6.4%
Edward W. Wedbush
P.O. Box 30014
Los Angeles, CA 90030-0014 536,719 (11) 6.4%
Eliot Rose Asset Management, LLC
10 Weybosset Street, Suite 401
Providence, RI 02903 418,100 (12) 5.3%
-----------------------------
* 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 265,250 shares which Mr. Cortese has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 2003.
(5) Includes 10,000 shares which Mr. Haney has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 2003.
(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, 2003.
(7) Includes 54,900 shares which Mr. Casciano has or will have the right to
acquire pursuant to the Company's stock option plans as of May 30, 2003.
(8) Includes 32,273 shares which Mr. Lane has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 2003.
(9) Includes 3,000 shares which Mr.Simms has or will have the right to acquire
pursuant to the Company's stock option plans as of May 30, 2003.
(10) Information related to this shareholder was obtained from Schedule 13G
filed with the Commission on February 3, 2003 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. Dimensional disclaims beneficial ownership of
all the shares owned by the Funds. 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. (11) Information related to this shareholder was obtained from
Schedule 13G filed with the Commission on February 13, 2003 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 327,449
shares of the Company's common stock; shared voting power of 506,219
shares; and shared dispositive power of 536,719 shares. Mr. Wedbush reports
sole voting and dispositive power of 164,770 shares of the Company's common
stock; shared voting power of 506,219 shares; and shared dispositive power
of 536,719 shares.
(12) Information related to this shareholder was obtained from Schedule 13G
filed with the Commission on February 13, 2003 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 418,100 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 person for whom Eliot Rose acts as investment advisor 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 8,380,500 which is the number of
the Company's outstanding shares as of March 31, 2003 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............ 2002 $296,291 $ 0 (F4) 0 $ 2,220
Chairman of the Board ............ 2001 $ 76,837 (F5) $ 16,200 (F5) 0 $ 0
and Chief Executive Officer ...... 2000 $287,651 $ 0 0 $ 2,741
Charles A. Constantino ........... 2002 $242,416 $ 43,600 0 $ 3,320
Executive Vice President ......... 2001 $238,703 $ 66,806 0 $ 0
and Director ..................... 2000 $235,351 $ 0 0 $ 2,741
Gregory T. Cortese ............... 2002 $226,549 $ 20,200 0 $ 3,320
CEO & President, ParTech, Inc. ... 2001 $225,000 $ 40,500 0 $ 0
2000 $216,476 $ 0 0 $ 2,741
Albert Lane, Jr .................. 2002 $210,219 $ 147,100 0 $ 3,320
President, Rome Research ......... 2001 $203,635 $ 143,200 100,000 $ 0
Corporation and PAR Government ... 2000 $173,480 $ 78,262 0 $ 2,741
Systems Corporation
Ronald J. Casciano ............... 2002 $152,327 $ 22,900 0 $ 2,964
Vice President, C.F.O. & Treasurer 2001 $150,000 $ 22,500 65,400 $ 0
2000 $144,736 $ 0 15,000 $ 2,563
__________________
(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.
Options/SAR's Granted in Last Fiscal Year
-----------------------------------------
There were no stock options or stock appreciation rights ("SAR's") granted to
Executive Officers during 2002.
Aggregated Option Exercises in 2002 and Year-End Option Values
--------------------------------------------------------------
The table which follows sets forth information concerning exercises of stock
options during 2002 by each of the Executive Officers and the value of his
unexercised options as of December 31, 2002 based on a fair market value of
$6.90 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 12/31/02 Options at 12/31/02 (F2)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
Dr. John W. Sammon, Jr. ----- ----- ----- ----- ----- -----
Charles A. Constantino ----- ----- ----- ----- ----- -----
Gregory T. Cortese ----- ----- 242,750 101,250 $ 857,241 $ 388,547
J. Whitney Haney ----- ----- 10,000 0 $ 14,625 $ 0
Sangwoo Ahn ----- ----- 22,500 0 $ 19,625 $ 0
Ronald J. Casciano ----- ----- 44,400 36,000 $ 194,141 $ 146,587
Albert Lane, Jr. ----- ----- 23,818 68,182 $ 85,323 $ 291,477
James A. Simms ----- ----- 0 9,000 $ 0 $ 38,925
__________________
(F1) The value realized equals the aggregate amount of the excess of the fair
market value on the date of exercise (the average of the high and low
prices of the Company's common stock as reported in the Wall Street Journal
for the exercise date) over the relevant exercise price(s).
(F2) The value is calculated based on the aggregate amount of the excess of
$6.90 (the fair market value of the Company's common stock on 12/31/02)
over the relevant exercise price(s).
Compensation Committee Report
The Compensation Committee of the Board of Directors (the "Compensation
Committee") performs annual reviews of the performance and contribution of the
Company's executive officers against annual and long term commitments and
objectives to determine the nature and extent of executive compensation actions.
Decisions of the 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
2002 was consistent with the fundamental principles of the executive
compensation program, namely, that:
o Executive compensation must be tied to the Company's general performance
and achievement of financial and strategic goals;
o Executive compensation opportunities should be competitive with those
provided by other leading high technology companies of comparable size; and
o 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 for the fiscal year 2002. 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 based on its review of the third party salary data
in conjunction with the individual performance of that executive, the
performance of the organization over which the executive 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. The performance factors, minimum performance levels
and weighting of the factors upon which these bonuses are based are established
on an annual basis and are predicated on current business objectives. For 2002,
the factors for all business units included profit before tax, revenue and
collection cycle. Determination of the bonuses for employees 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)
under the Company's 1995 Stock Option Plan ("Option Plan"). Stock options
("Options") granted under the Option Plan may be either Incentive Stock Options
as defined by the Internal Revenue Code ("Incentive Stock Options") or Options
which are not Incentive Stock Options ("Nonqualified Stock Options"). Upon
review of recommendations from the Compensation Committee, the Stock Option
Committee determines the key employees of the Company and its subsidiaries who
shall be granted Options, the type of Options to be granted, the terms of the
grant and the number of shares to be subject thereto. Option grants become
exercisable no less than six months after the grant and typically expire ten
years after the date of the grant. Option grants are discretionary and are
reflective of the value of the recipient's position as well as the current
performance and continuing contribution of that individual to the Company.
CEO Compensation for Fiscal 2002
The Compensation Committee's recommendation to the Board for the 2002
compensation of the Chief Executive Officer was based on the policies and
practices described above. Dr. Sammon's 2002 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 2002 was $296,291, slightly below the
midpoint of the compensation peer group contained in the third party survey.
This base salary reflected an increase of 1.6% of the salary established for Dr.
Sammon for 2001.
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 $62,200. Dr. Sammon,
however, elected to decline this bonus.
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 is not therefore
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 and President of the Company and
Mr. Charles A. Constantino, Executive Vice President of the Company serve as
members of the Compensation Committee and the Stock Option Committee.
PERFORMANCE GRAPH
The following performance graph compares the cumulative total shareholder return
on the Company's Common Stock with the Standard & Poor's 500 Index and the
common stock of 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 $100 was
invested in each of the Company's Common Stock, the S&P 500 Stock Index, and the
peer group on December 31, 1997. The year-end values of each investment are
based on share price appreciation and the reinvestment of dividends.
Cumulative Total Return ($)
12/97 12/98 12/99 12/00 12/01 12/02
----- ----- ----- ----- ----- -----
PAR Technology Corporation 100 66 52 21 29 76
S&P 500 100 129 156 141 125 97
Peer Group 100 82 201 84 73 67
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.
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 2004 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 2004 Annual Meeting,
any shareholder proposals must be received at the Company's general offices no
later than the close of business on December 23, 2003. If a matter of business
is received by March 8, 2004, 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, 2004, the
Company may use its discretionary voting authority when the matter is raised at
the Annual Meeting, without inclusion of the matter in its Proxy Statement.
Proposals should be addressed to Gregory T. Cortese, Secretary, PAR Technology
Corporation, PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York
13413-4991. The Company recommends all such submissions be by Certified Mail -
Return Receipt Requested.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Gregory T. Cortese
Secretary
April 30, 2003
REVOCABLE PROXY
PAR TECHNOLOGY CORPORATION
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 22, 2003
This proxy is solicited on behalf of the Board of Directors
The underdersigned shareholder of PAR TECHNOLOGY CORPORATION hereby appoints
JOHN W. SAMMON, JR., CHARLES A. CONSTANTINO and SANGWOO AHN or any one of them,
jointly or severally, proxies with full power of substitution, to vote all
shares of Common Stock of the Company which the undersigned is entitled to vote
at the 2003 Annual Meeting of Shareholders to be held on May 22, 2003 at 10:00
AM, Local Time, at the Wyndham Boston Hotel, 89 Broad Street, Boston,
Massachusetts, and at any adjournment thereof, for the election of a Director
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. The undersigned hereby
instructs said proxies to vote as follows:
1. Nominees: Sangwoo Ahn and J. Whitney Haney
[ ] For All The Nominees
[ ] Withhold Authority For All
[ ] For All Except
Instruction: To withhold authority to vote for any individual nominee, mark "FOR
ALL EXCEPT" and write the name of the nominee on the line below.
______________________________________________
The Board of Directors recommends a vote FOR Item 1.
I plan to attend the Annual Meeting [ ]
UNLESS OTHERWISE INSTRUCTED ABOVE, THE SHARES REPRESENTED HEREBY WILL BE VOTED
IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS SET FORTH
ABOVE.
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.
Please be sure to sign and date this Proxy in the spaces below.
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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.
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PAR TECHNOLOGY CORPORATION
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