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REVOCABLE PROXY
PAR TECHNOLOGY CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
May 26, 2010June 16, 2011
10:30 AM3:00 PM
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of PAR TECHNOLOGY CORPORATION hereby appoints PAUL B. DOMORSKI, JOHN W. SAMMON 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 20102011 Annual Meeting of Shareholders to be held on Wednesday, May 26, 2010Thursday, June 16, 2011 at 10:30 AM,3:00 PM, Local Time, at The Mandarin Oriental Hotel, Boston; 776 Boylston Street; Boston, MA 02199,New York Palace Motel; 455 Madison Avenue, New York, New York 10022, and at any adjournment thereof, for the election of Directors 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.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to help conserve natural resources and reduce the costs incurred by PAR TECHNOLOGY CORPORATION in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically over the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet or telephone and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. If you are voting by paper ballot, please check the box where indicated and provide your email address.
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 26, 2010:JUNE 16, 2011:
YOUR VOTE IS IMPORTANT!
Proxy Materials and the Company’s Annual Report are available on-line at:
http://www.partech.com/en/about/investor/par-annual-reports.html
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
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE | REVOCABLE PROXY PAR TECHNOLOGY CORPORATION | Annual Meeting of Shareholders |
| PAR TECHNOLOGY CORPORATION | May 26, 2010 |
1. | ELECTION OF DIRECTORS | For | Withhold All | For All Except |
| | [ ] | [ ] | [ ] |
Nominee for a 2 year term:
(01) Mr. Paul B. Domorski
Nominees for a 3 year term:
(01) Dr. John W. Sammon
(02) Mr. CharlesKevin R. Jost
(03) Mr. James A. ConstantinoSimms
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. | The Board of Directors recommends a vote "FOR" proposal 1. | |
| 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. | |
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| ELECTRONIC DELIVERY OF PROXY MATERIALS: If you wish to receive future annual reports and proxy materials via the internet, please indicate by checking the box at right and providing your email address 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. | |
Please be sure to date and sign this instruction card in the box below.
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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 Midnight, May 25, 2010.June 15, 2011. 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 Midnight, May 25, 2010:June 15, 2011:
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Midnight, May 25, 2010June 15, 2011 go to:
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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/en/about/investor/par-annual-reports.html
Your vote is important!
Due to recent amendments to New York Stock Exchange Rules, broker discretionary voting has been eliminated in connection with uncontested election of directors. As a result, every shareholder’s participation in voting is more important than ever before.
Dr. John W. SammonPaul B. Domorski | PAR Technology Corporation |
Chairman, President & Chief Executive Officer | 8383 Seneca Turnpike |
April 23, 2010May 18, 2011
Dear Shareholders:
You are invited to attend PAR Technology Corporation’s 20102011 Annual Meeting of Shareholders to be held on Wednesday, May 26, 2010,Thursday, June 16, 2011, at 10:30 AM. 3:00 PM. We are proud to hold the meeting at one of our PAR Springer-Miller customer locations, the Mandarin Oriental Hotel, Boston; 776 Boylston Street, Boston, Massachusetts 02199. New York Palace Hotel; 455 Madison Avenue, New York, New York 10022. During the Annual Meeting we will present a report on our operations, followed by discussion and voting on the matters set forth in the accompanying Notice of Annual Meeting and Proxy Statement and discussion on other business matters properly brought before the meeting. There will also be time for questions.
This booklet includes the Notice of Annual Meeting and Proxy Statement. In addition to describing the business we will conduct at the meeting, the Proxy Statement provides information about PAR that is of interest to all shareholders.
We hope you will be able to attend the Annual Meeting. Due to recent amendments to New York Stock Exchange Rules, broker discretionary voting has been eliminated in connection with uncontested election of directors. As a result your participation in voting is more important than ever before. Whether or not you plan to attend, you can ensure that your shares are represented at the meeting by promptly voting and submitting your proxy by Internet or by telephone, or by completing, signing, dating and returning your proxy form in the enclosed prepaid envelope.
Sincerely,
/s/John W. SammonPaul B. Domorski
John W. Sammon
Paul Domorski
![](https://capedge.com/proxy/DEF 14A/0000708821-11-000012/par_logo.jpg)
PAR Technology Corporation
8383 Seneca Turnpike; New Hartford, NY 13413-4991
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, MAY 26, 2010THURSDAY, JUNE 16, 2011
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 one of our customer locations, the Mandarin Oriental Hotel, Boston; 776 Boylston Street, Boston, Massachusetts 02199New York Palace Hotel; 455 Madison Avenue; New York, New York 10022 (see map on back cover) on Wednesday, May 26, 2010,Thursday, June 16, 2011, at 10:30 AM3:00 PM, local time, for the following purposes:
| 1. | To elect two (2)three (3) Directors of the Company, one (1) Director for a term of office to expire at the 2013 and two (2) Directors for a term of office to expire at the 2014 Annual Meeting of Shareholders; and |
| 2. | 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 March 26, 2010May 12, 2011 as the record date for the Annual Meeting. This means that owners of the Company's Common Stock at the close of business on March 26, 2010May 12, 2011 are entitled to receive this notice and to vote at the Annual Meeting or any adjournments or postponements of the Meeting. We will make available ameeting. A list of shareholders as of the close of business on March 26, 2010May 12, 2011 will be made available for inspection by any shareholder, for any purpose relating to the Meeting, during normal business hours at our principal executive offices, PAR Technology Park; 8383 Seneca Turnpike; New Hartford, New York 13413, forbeginning ten (10) days prior to the Meeting. This list will also be available to shareholders at the Meeting.meeting.
Due to recent amendments to New York Stock Exchange Rules, broker discretionary voting has been eliminated in connection with uncontested election of directors. As a result, every shareholder’s participation in voting is more important than ever before.
Every shareholder’s vote is important. Whether or not you plan to attend the Meeting, we request you vote as soon as possible. Most shareholders have the option of voting their shares by telephone or on the Internet. If such methods are available to you, voting instructions are printed on your proxy card or otherwise included with your proxy materials. You may also vote by the traditional means of completing and returning the enclosed proxy card in the enclosed postage prepaid envelope. If you vote by the telephone or Internet, there is no need to return your proxy card.
The proxy solicited hereby may be revoked at any time prior to its exercise by: i) executing and returning to the address set forth above a proxy bearing a later date; ii) voting on a later dated vote bydate via telephone or on the Internet; iii) by giving written notice of revocation to the Secretary of the Company at the address set forth above; or iv) by attending the Meeting and voting in person.
| BY ORDER OF THE BOARD OF DIRECTORS |
BY ORDER OF THE BOARD OF DIRECTORS
| /s/Gregory T. Cortese
Gregory T. Cortese
|
/s/Gregory T. Cortese
New Hartford, New York
April 23, 2010May 18, 2011
TABLE OF CONTENTS
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Compensation Discussion and Analysis | 15 |
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Printed on Recycled Paper
Using Soy Ink
PAR Technology is concerned about our environment and preserving our world’s natural resources. When you are finished with the use of this document, please be considerate of the environment and recycle.
PAR Technology Corporation
8383 Seneca Turnpike; New Hartford, NY 13413-4991
April 23, 2010May 18, 2011
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors of PAR Technology Corporation (the “Board”), a Delaware corporation (the “Company”) for use at the Annual Meeting of Shareholders (the “Annual Meeting” or “Meeting”) to be held at 10:30 AM,3:00 PM, local time, on Wednesday, May 26, 2010,Thursday, June 16, 2011, at the Mandarin Oriental Hotel, Boston; 776 Boylston Street, Boston, Massachusetts 02199,New York Palace Hotel; 455 Madison Avenue, New York, New York 10022, and at any postponement or adjournment of the Meeting. The approximate date on which this Proxy Statement and the accompanying form of proxy are first being sent or given to shareholders is April 23, 2010.May 18, 2011.
Purpose of Meeting
At the Meeting the Shareholders will be asked to consider and vote on the following matters:
| 1. | To elect two (2)three (3) Directors of the Company, one (1) Director for a term of office to expire at the 2013 and two (2) Directors for a term of office to expire at the 2014 Annual Meeting of Shareholders; and |
| 2. | To transact such other business as may properly come before the Meeting or any adjournments or postponements of the Meeting. |
The proposal for the election of Directors is described in more detail in this Proxy Statement.
Record Date, Voting Rights, Methods of Voting
Only shareholders of record at the close of business on March 26, 2010May 12, 2011 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 14,862,366 15,116,584 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 7,431,1847,558,293 votes, represented in person or by proxy, shall constitute a quorum to conduct business.
Due to recent amendments to New York Stock Exchange Rules, broker discretionary voting has been eliminated in connection with uncontested election of directors. As a result, every shareholder is encouraged to participate in voting.
In addition, the Company has been advised that many states are strictly enforcing escheatment laws and requiring shares held in “inactive” accounts to escheat to the state in which the shareholder was last known to reside. One way shareholders can ensure their account is active is to vote their shares.
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. 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 a.m.Midnight on May 26, 2010.June 15, 2011.
A shareholder’s right to attend the Meeting and vote in person will not be precluded or in any way affected by the method by which the shareholder has voted. The last vote of the shareholder is controlling. If shares are held in the name of a bank, broker or other holder of record, the shareholder must obtain a proxy, executed in their favor, from the holder of record to be able to vote at the Meeting. 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 byby: (i) executing and returning to the address set forth above a proxy bearing a later date; (ii) voting on a later date or later dated vote byvia telephone or on the Internet, byInternet; (iii) giving written notice of revocation to the Secretary of the Company at the address set forth above,above; or by(iv) attending the Meeting, withdrawing the proxy and voting in person.
Due to recent amendments to New York Stock Exchange Rules, broker discretionary voting has been eliminated in connection with uncontested election of directors. As a result, every shareholder is encouraged to participate in voting.
Voting
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.
Electronic Access to Proxy Materials and Annual Report
The Company’s 20092010 Annual Report and this Proxy Statement are available on the Company’s Web site at http://www.partech.com/en/about/investor/par-annual-reports.html. Accessing proxy materials via the Internet, will not only help preserve environmental resources, but will also allow for faster access to proxy materials, save the Company the cost of producing and mailing documents, and reduce the amount of paper received in the mail. Instead of receiving paper copies of next year’s Proxy Statement and Annual Report by mail, shareholders can electplease consider electing to receive future proxy materials electronically via the Internet.
Shareholders of record may enroll in the electronic proxy and Annual Report access service for future Annual Meetings of Shareholders either by emailing their request to investor_relations@partech.com with the words “On-Line Proxy Materials” in the subject line or when voting their shares forin connection with this year’s annual meetingAnnual Meeting. If you voteWhen voting via telephone or the Internet, simply follow the prompts for that selection. When voting using a paper ballot, simply mark the box on the proxy card and provide your email address where indicated. Street name shareholders who wish to enroll for electronic access should review the information provided in the proxy materials mailed to them by their bank or broker.
Proxy Solicitation Costs
In addition to soliciting shareholder proxies throughthe use of the mail service, the Company may be assisted by its directors, officers, employees and certain stockholders inof the solicitationCompany, none of proxies. Such solicitationwhom will receive additional compensation for doing so, may be conductedsolicit proxies on behalf of the Company personally, by telephone or by facsimile transmission. No additional compensation will be received by such individuals for this service. The Company will bear the cost of the solicitation of proxies, including the charges and expenses of brokerage firms and others forwarding the solicitation material to beneficial owners of shares of the Company’s Common Stock.
The Company's Annual Report to its shareholders for the year ended December 31, 2009,2010, including audited consolidated financial statements, accompanies this Proxy Statement. Except to the extent expressly provided herein, the Company’s Annual Report is not incorporated in this Proxy Statement by reference.
Proposal 1: Election of Directors
Pursuant to the Company’s Certificate of Incorporation, the members of the Board of Directors (the “Board”) are divided into three (3) classes with approximately one-third of the Board standing for election at each Annual Meeting. The Directors are elected for a three-year term of office, and hold office until their respective successors have been duly elected and qualified or until their resignation or removal, if earlier. In 2007,2008, there were two (2) Class IIII Directors elected to hold office until the 20102011 Annual Meeting of Shareholders. In April 2011, the Board of Directors, pursuant to their powers under the Company’s By-Laws increased the number of directors on the Board from six to seven; adding an additional director to Class III Directors. Therefore, at this Meeting, two (2) Directors will be elected for a three-year term expiring at the Annual Meeting held in 2014 and one (1) Director will be elected for a two-year term expiring at the Annual Meeting held in 2013. The nominees of the Board of Directors for the Class I Director positions, Kevin R. Jost and James A. Simms, and the nominee of the Board of Directors for the Class III Director positions, Dr. John W. Sammon and Charles A. Constantino,position, Paul B. Domorski, are currently members of the Board and have been nominated for election by the Board upon recommendation of the Nominating and Corporate Governance Committee and each has consented to stand for re-election.election.
The Board has no reason to believe that eitherany of the nominees will be unable or unwilling to serve if elected. In the event that eitherany of the nominees shall become unableunwilling or unwillingunable 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 Board of Directors unanimously recommends a vote FOR the proposal to elect Dr. SammonMr. Domorski, Mr. Jost and Mr. Constantino.Simms. Unless a contrary direction is indicated, shares represented by valid proxies whichthat are not marked so as to withhold authority to vote for the nominees, will be voted FOR the election of the nominees.
DIRECTORS AND CORPORATE GOVERNANCE
DIRECTORS
The names of the nominees and each of the Directors continuing in office, their ages as of April 23, 2010May18, 2011 (the approximate date on which this Proxy Statement and the accompanying form of proxy are first being sent or given to shareholders), the year each first became a Director and the expiration of their current term in office are set forth in the following table which is followed by a brief biography.
Nominees for Director | Age | Director Since | Term Expires |
Dr. John W. Sammon | 71 | 1968 | 2010 Annual Meeting of Shareholders |
Charles A. Constantino | 70 | 1970 | 2010 Annual Meeting of Shareholders |
| | | |
Continuing Directors | Age | Director Since | Term Expires |
Kevin R. Jost | 55 | 2004 | 2011 Annual Meeting of Shareholders |
James A. Simms | 50 | 2001 | 2011 Annual Meeting of Shareholders |
Sangwoo Ahn | 71 | 1986 | 2012 Annual Meeting of Shareholders |
Dr. Paul D. Nielsen | 59 | 2006 | 2012 Annual Meeting of Shareholders |
Sangwoo Ahn. Mr. Ahn is presently a member of the Board of Directors of Furmanite Corporation, a position he has held since 1989 (prior to May 2007, Furmanite Corporation was known as Xanser Corp). Within the last five years, Mr. Ahn has served as the Chairman of the Board of Quaker Fabric Corporation and as a member of the Board of Directors of Kaneb Services, LLC. In addition, Mr. Ahn was one of the founders of the investment banking firm of Morgan Lewis Githens and Ahn, Inc. (now Morgan Joseph & Co., Inc.). In addition to his board leadership experience, Mr. Ahn brings a sophisticated financial background and is a financial expert within the meaning of the rules of the SEC, and brings his knowledge of public accounting, corporate reporting and risk management. Mr. Ahn is a member of Class II of the Company’s Board and has been a Director of the Company since 1986.Nominees for Director | Age | Director Since | Term Expires |
Paul B. Domorski | 54 | 2011 | 2013 Annual Meeting of Shareholders |
Kevin R. Jost | 56 | 2004 | 2014 Annual Meeting of Shareholders |
James A. Simms | 51 | 2001 | 2014 Annual Meeting of Shareholders |
| | | |
Continuing Directors | Age | Director Since | Term Expires |
Sangwoo Ahn | 72 | 1986 | 2012 Annual Meeting of Shareholders |
Dr. Paul D. Nielsen | 60 | 2006 | 2012 Annual Meeting of Shareholders |
Charles A. Constantino | 71 | 1970 | 2013 Annual Meeting of Shareholders |
Dr. John W. Sammon | 72 | 1968 | 2013 Annual Meeting of Shareholders |
Nominees for Director
Charles A. Constantino. Paul B. Domorski.Mr. Constantino has held Paul B. Domorski joined the position of Executive Vice President since 1974 and was elected to the position of ViceCompany as Chairman of the Board, in 2009.President and Chief Executive Officer on April 25, 2011. From 2006 to November, 2009, Mr. Constantino holds various positions with subsidiariesDomorski was the President, Chief Executive Officer and director of EMS Technologies, Inc. a publicly traded manufacturer of communication equipment and systems. Prior to joining EMS Technologies, Mr. Domorski served as the Vice President, of the Company.$1.6 billion Service Operations business, for Avaya, Inc., from 2003 to 2006. Publicly traded Avaya provides communications systems, applications and services for businesses, government agencies and other organizations. Mr. Constantino isDomorski also served on the Executive Board of TechAmerica, the leading electronics trade association formed by the merger of the American Electronics Association, the Cyber Security Industry Alliance, the Information Technology Association of America, and the Government Electronics & Information Technology Association. Mr. Domorski’s qualifications to serve on our Board of Directors include his role as the Company’s President and Chief Executive Officer, his diverse management and board experience in publicly held companies as well as his adherence to high ethical standards and professional integrity. In addition, Mr. Domorski brings to the Board his experience and skills gained in his prior roles as a membersenior executive of publicly-traded companies, his significant experience with the provision of hardware and software solutions to commercial and government customers, and his financial, managerial and operational acumen. Mr. Domorski also increases the diversity of the Board of Directors of Veramark Technologies, Inc. Mr. Constantino has served the Company in various capacities for over 40 years. He has significant relationships within the markets in which the Company participates and brings diversifiedwith his substantial international business experience having served as President of Syncordia British Telecom’s outsourcing and expertisenetwork management business from 1997 to 2000 and as President and CEO during the restructuring of RSL Communications Ltd, an international provider of communications services. Mr. Domorski holds a Master’s degree in customer relations, leadership developmentOrganizational Dynamics from the University of Pennsylvania as well as Master's and strategic planning.Bachelor degrees from The American University. He is an alumnus of the Wharton Business School, having attended their advanced management program. Mr. ConstantinoDomorski is a member of Class III of the Company’s Board and has been a Director of the Company since 1970.April 2011.
Kevin R. Jost. Mr. Jost is a member of the Board of Directors of Furmanite Corporation, a position to which he was appointed in March 2010. Mr. Jost is the former President (retiring in 2008) of Honeywell Imaging and Mobility (formerly Hand Held Products, Inc.), a global supplier of data collection and management solutions for in-premises, mobile and transaction processing applications. Mr. Jost had been the President and Chief Executive Officer of Hand Held Products since its inception as a separate entity in 1999 until its acquisition in 2007 by Honeywell International, Inc. Mr. Jost brings his global technology business experience, his executive and organizational development experience, strategic planning and diversified business knowledge. Mr. Jost is a member of Class I of the Company’s Board and has been a Director of the Company since 2004.
Dr. Paul D. Nielsen. Dr. Nielsen has been Director and CEO of the Software Engineering Institute (“SEI”) at Carnegie Mellon University since 2004. Prior to joining SEI, Dr. Nielsen served as a major general in the U.S. Air Force, where he was the commander of the Air Force Research Laboratory and Technology Executive Officer for the Air Force. Dr. Nielsen brings his substantial experience in the military, scientific, technological and academic communities as well as leadership development and oversight experience. Dr. Nielsen is a member of Class II of the Company’s Board and has been a Director of the Company since 2006.
Dr. John W. Sammon. Dr. Sammon 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 currently holds various positions with other subsidiaries of the Company. Dr. Sammon brings an in depth understanding of the Company’s business and its customers, leadership experience, strategic planning and broad organizational development expertise. Dr. Sammon is a member of Class III of the Company’s Board.
James A. Simms. Mr. Simms has been the Chief Financial Officer and a member of the board of directors of Vicor Corporation since April 2008. Publicly traded Vicor designs, develops, manufactures and markets modular power components and complete power systems primarily for the communications, information technology, industrial control and military electronics markets. Prior to joining Vicor, and since March 2007, Mr. Simms had served as a Managing Director of Needham & Company, LLC, an investment banking firm and registered broker-dealer. From November 2004 to March 2007, he served in a senior executive role with Janney Montgomery Scott LLC, a wholly owned subsidiary of The Penn Mutual Life Insurance Company. Mr. Simms contributes his financial background as well as his experience in strategic planning and oversight. Mr. Simms is a member of Class I of the Company's Board and has been a Director of the Company since October 2001.
Continuing Directors:
CORPORATE GOVERNANCE
The businessSangwoo Ahn. Mr. Ahn is presently a member of the Board of Directors of Furmanite Corporation, a position he has held since 1989 (prior to May 2007, Furmanite Corporation was known as Xanser Corp). Within the last five years, Mr. Ahn has served as the Chairman of the Board of Quaker Fabric Corporation and as a member of the Board of Directors of Kaneb Services, LLC. In addition, Mr. Ahn was one of the founders of the investment banking firm of Morgan Lewis Githens and Ahn, Inc. In addition to his board leadership experience, Mr. Ahn brings a sophisticated financial background and is a financial expert within the meaning of the rules of the SEC, and brings his knowledge of public accounting, corporate reporting and risk management. Mr. Ahn is a member of Class II of the Company’s Board and is the Presiding Director of the non-management directors. Mr. Ahn has been a Director of the Company since March 1986.
Charles A. Constantino. Mr. Constantino is under the general directiona member of the Board of Directors of Veramark Technologies, Inc. Mr. Constantino has served the Company in various capacities for over 40 years. Mr. Constantino held the position of Executive Vice President of the Company from 1974 until his retirement in March 2011 and continues to serve on the boards of subsidiaries of the Company. He has significant relationships within the markets in which the Company participates and brings diversified business experience and expertise in customer relations, leadership development and strategic planning. Mr. Constantino is a member of Class III of the Company’s Board and has been a Director of the Company since 1970.
Dr. Paul D. Nielsen. Dr. Nielsen has been Director and CEO of the Software Engineering Institute (“SEI”) at Carnegie Mellon University since 2004. Prior to joining SEI, Dr. Nielsen served as a major general in the U.S. Air Force, where he was the commander of the Air Force Research Laboratory and Technology Executive Officer for the Air Force. Dr. Nielsen brings his substantial experience in the military, scientific, technological and academic communities as well as leadership development and oversight experience. Dr. Nielsen is a member of Class II of the Company’s Board and has been a Director of the Company since 2006.
Dr. John W. Sammon. Dr. Sammon 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 was appointed President of the Company’s subsidiary, ParTech, Inc. on January 16, 2011 following the death of Mr. Edwin Soladay. Dr. Sammon has previously served in that capacity from 1978 to 1987 and again from December 1997 through June 2000. Dr. Sammon also currently holds various positions with other subsidiaries of the Company. Dr. Sammon brings an in depth understanding of the Company’s business and its customers, leadership experience, strategic planning and broad organizational development expertise. Dr. Sammon is a member of Class III of the Company’s Board.
As provided by the By-Laws of the Company and the laws of the State of Delaware, the state of incorporation.incorporation, the business of the Company is under the general direction of the Board. As of the mailing of this statement the Board is comprised of seven members: six non-management directors and one management director.
Director Independence. The Board of Directors has affirmatively determined that the following Directors comprising all of the non-management directors, are “independent” under the listing standards of the New York Stock Exchange (“NYSE”), the Company’s Standards of Independence and pursuant to the Company’s Corporate Governance Guidelines: Mr. Ahn, Mr. Jost, Dr. Nielsen and Mr. Simms. In order to assist the Board in making this determination, the Board has adopted standards of independence as part of the Company’s Corporate Governance Guidelines which are available on the Company’s website at http://www.partech.com/pressrel/PAR_Corp_Gov_Guidelines.pdf. These standards identify, among other things, material business, charitable and other relationships that could interfere with a director’s ability to exercise independent judgment. During 2009,2010, there were no transactions, relationships or arrangements with the non-management directorsDirectors Ahn, Jost, Nielsen or Simms or any entity with which they are affiliated. There are no family relationships between any of the non-employeethese directors, and any of the Company’s executive officers (“Executive Officers”). The Executive Officers serve at the discretion of the Board.
Board Meetings and Attendance. In 2009,2010, the Board held eight (8)twelve (12) meetings and Committees of the Board held a total of twenty-one (21)fifteen (15) meetings. Each member of the Board attended at least 75% 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.
Board Leadership Structure. During 2010, Dr. Sammon iswas the currentCompany’s Chief Executive Officer (“CEO”) and Chairman of the Board. Mr. Domorski succeeded Dr. Sammon in this role as of April 25, 2011. In addition, the independent Directors have designated, anDirector Sangwoo Ahn, as the independent lead or Presiding Director with broad authority and responsibility. The Presiding Director, Sangwoo Ahn, presides at regularly scheduled executive sessions of the non-management directors of the Company. Director Ahn chairs and has the authority to call and schedule executive sessions and communicates with the Chairman to provide feedback and recommendations of the independent Directors. The non-management directors met in executive session without any management directors or employees present threefive times during 2009.2010. Director Ahn is also Chairman of the Audit Committee of the Board and a member of the Executive Committee and Nominating and Corporate Governance Committee. The independent Directors believe that the Company’s current model of combined CEO and Chairman in conjunction with the Presiding Director position is the appropriate leadership structure for the Company at this time as it allows one person to lead the Company and the Board, while also providing for effective oversight by an independent Presiding Director. The model of combined CEO and Chairman have served our shareholders well through numerous economic cycles as it provides for an effective means to focus the independent Directors’ attention on the issues of greatest importance to the Company and its shareholders. The strength of the Company’s independent Directors coupled with its corporate governance policies and practices minimizes the potential conflicts that may result from the Company’s current model of the combined CEO and Chairman.
Board Oversight of Risk Management. The Company views oversight of risk management as a responsibility of the full Board. Throughout the year, the Board dedicates a portion of its meetings to review and discuss specific risk topics in detail. In addition, twice each year the Board holds a comprehensive, review with the management of each business segment at which strategic and operational risks are presented by the leaders of each business unit and discussed with follow up as appropriate. The Audit Committee oversees the Company’s risk policies and processes relating to the financial statements and financial reporting processes, including internal controls over financial reporting. The Audit Committee meets regularly with the Company’s Internal Audit function, independent public accounting firm and management regarding these matters and the effectiveness of such controls and processes and regularly reports on such matters to the full Board.
Committees.
The Board has five (5) standing committees: Executive, Audit, Compensation, Nominating and Corporate Governance and Stock Option. The members of each committee and the number of meetings held by each committee in 20092010 are set forth in the following table.
Name | Executive | Audit | Compensation | Nominating and Corporate Governance | Stock Option | Executive | Audit | Compensation | Nominating and Corporate Governance | Stock Option |
Mr. Ahn (*) | X | Chair | | X | | X | Chair | | X | |
Mr. Constantino | X | | | X | X | | | | X |
Mr. Jost (*) | | | Chair | | | Chair | | |
Dr. Nielsen (*) | | X | X | | | X | X | X | |
Dr. Sammon | Chair | | | Chair | Chair | | | | Chair |
Mr. Simms (*) | | X | X | Chair | | | X | X | Chair | |
2009 Meetings | 2 | 5 | 3 | 8 | 3 | |
2010 Meetings | | 4 | 5 | 3 | 1 | 2 |
(*) Independent Director | (*) Independent Director | (*) Independent Director |
Executive Committee. The Executive Committee meets when required on short notice during intervals between meetings of the Board. Subject to the limitations of the General Corporation Law of the State of Delaware; the Company’s Certificate of Incorporation; and the Company’s By-Laws, the Executive Committee has the delegated authority to exercise all of the powers of the Board in the management and direction of the Company’sCorporation’s business and affairs in which specific directions have not been given by the Board.
Audit Committee. Pursuant to its charter, the Audit Committee assists the Board in oversight of management’s conduct and representations of the Company’s financial reporting processes, its systems 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. As required by its charter and the NYSE, the Audit Committee consists of a minimum of three members, each of whom has been determined by the Board to meet the independence standards adopted by the Board. The standards adopted by the Board incorporate the independence requirements of the New York Stock Exchange (“NYSE”) Corporate Governance Standards and the independence requirements set forth by the Securities and Exchange Commission (“SEC”). The Board has determined the members of the Audit Committee are “independent” as this term is defined by the NYSE in its listing standards and meet SEC standards for independence of audit committee members and that no member of the Audit Committee has a material relationship with the Company that would render that member not to be “independent”. While the Board has determined that Sangwoo Ahn is an “audit committee financial expert” as defined by the SEC, the Charter requires all members of the Committee to be financially literate at the time of their appointment to the Committee or within a reasonable time thereafter. There were five (5) meetings of the Audit Committee during 20092010 including meetings held separately with management, and separate Executive Sessions with independent Directors, the Company’s internal auditors and the independent registered public accounting firm respectively. The Report of the Audit Committee begins on page 89 of this Proxy Statement.
Compensation Committee. In accordance with its charter and the requirements of the NYSE, the Compensation Committee is comprised of a minimum of three directors. 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 NYSE listing standards. Meeting as needed, but no less than once per year, the Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the Company’s Chief Executive Officer, evaluates performance in light of those goals and objectives and, either as a committee or together with the other independent directors, as directed by the Board, determines and approves the compensation level (including any long term compensation components) and benefits based on this evaluation. In addition, the recommendations of the Chief Executive Officer regarding the compensation, benefits, stock grants, stock options and incentive plans for all Executive Officers of the Company are subject to the review and approval of the Compensation Committee. The Compensation Committee also reviews and makes recommendations to the Board regarding the level and form of compensation for non-employee Directors in connection with service on the Board and committees of the Board.
Nominating and Corporate Governance Committee. Pursuant to its charter and NYSE listing standards, the Nominating and Corporate Governance Committee is composed of a minimum of three independent directors. The Nominating and Corporate Governance Committee assists the Board in meeting its responsibilities in connection with the identification and recommendation of qualified nominees for election to the Board; developing and recommending to the Board a set of corporate governance principles which comprise the Corporate Governance Guidelines; adopting a corporate code of ethics and conduct embodied in the Company’s Code of Business Conduct and Ethics; and monitoring the compliance with, and periodically reviewing and making recommendations to the Board regarding the Company’s governing principles and Code of Business Conduct and Ethics. 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 NYSE listing standards.
Stock Option Committee. The Stock Option Committee meets as required and makes recommendations to the Compensation Committee for stock option awards and otherwise serves as the administrative body for the Company’s 1995 Stock Option Plan and the 2005 Equity Incentive Plan. Both members of the Stock Option Committee are “disinterested persons” in compliance with the Company’s 1995 Stock Option Plan.
Committee Charters. Each of the Audit, Compensation, and Nominating and Corporate Governance Committees operate under a written charter approved by the Board, whichBoard. The charter is reviewed regularly by the respective committees which may recommend appropriate changes for approval by the Board. Copies of the charters for the Audit, Compensation, and Nominating and Corporate Governance Committees are posted on the Company’s website and a printed copy of these documents may be obtained without charge by written request. Requests can be made via the internet or by mail. The respective website and address for making such requests for printed copies of these and other available documents may be found under the heading “Available Information” on page 2824 of this Proxy Statement.
Presiding Director and Executive Sessions. The non-management directors have chosen Director Ahn to preside at regularly scheduled executive sessions of the non-management directors of the Company. Among his duties and responsibilities as Presiding Director, Director Ahn chairs and has the authority to call and schedule executive sessions and communicates with the Chairman to provide feedback and recommendations of the independent Directors. The non-management directors met in executive session without any management directors or employees present threefive times during 2009.2010.
Communication with the Board. Interested parties may send written communication to the Board of Directors as a group, the non-management directors as a group, the presiding directorPresiding Director of executive sessions of non-management directors, or to any individual director by sending the communication 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; to Director Ahn, if it is addressed to the presiding directorPresiding Director of executive sessions of the non-management directors or to the non-management directors as a group, or to the individual Director, if the communication is addressed to an individual Director. All communications regarding accounting, internal controls and audits will be referred to the Audit Committee. Interested parties may communicate anonymously if they so desire.
Director Nomination Process. The Nominating and Corporate Governance Committee reviews possible candidates for the Board of Directors and recommends the nominees for Directors to the full Board for approval. The Nominating and Corporate Governance Committee considers potential candidates from many sources including shareholders, current Directors, company officers, employees, and others. On occasion the services of a third party executive search firm is used to assist in identifying and evaluating possible nominees for Director. Mr. Domorski was identified to the Committee by a third party executive search firm. Shareholder recommendations for possible candidates for the Board 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 Nominating and Corporate Governance 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, this committee considers the requirements set out in the Nominating and Corporate Governance Committee Charter. These criteria describe specific traits, abilities and experience that are considered in light of the Company’s businesses and structure when identifying and evaluating potential nominees for election to the Board, including:
· | the highest character and integrity with a record of substantial achievement; |
· | demonstrated ability to exercise sound judgment generally based on broad experience; |
· | active and former business leaders with accomplishments demonstrating special expertiseexpertise; |
· | skills compatible with the Company’s business objectives; and |
· | diversity reflecting a variety of personal and professional experience and background. |
In addition to the non-exhaustive criteria set forth in the Nominating and Corporate Governance Committee Charter, this committee also considers the requirements set forth in the Company’s Corporate Governance Guidelines, as well as the 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. The minimum qualifications and specific qualities and skills required for Directors are set forth in the Company’s Corporate Governance Guidelines and Nominating and Corporate Governance Committee Charter. The Company’s Corporate Governance Guidelines and the Nominating and Corporate Governance Committee Charter are posted on the Company’s website and a printed copy of both documents may be obtained without charge by written request. The website and address to send such requests may be found under the heading “Available Information” on page 2824 of this Proxy Statement.
Code of Business Conduct and Ethics. To ensure the Company’s business is conducted in a consistently legal and ethical manner, all of the Company’s Directors and employees, including the Chief Executive Officer, the Chief Financial Officer and all other Executive Officers are required to abide by the Company’s Code of Business Conduct and Ethics (the “Code”). 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. A printed copy of the Code may be obtained without charge by making a written request to the Company. Information regarding where such requests should be directed can be found on page 2824 of this Proxy Statement under the heading “Available Information.” The full text of the Company’s Code is also available on the Company’s website at http://www.partech.com/ptc/ptc-ir-front2.cfm. The Company intends to disclose future amendments to, or waivers from, provisions of the Code that apply to the Executive Officers and Directors and relate to the above elements by posting such information on its website within five (5) calendar days following the date of such amendment or waiver.
REPORT OF THE AUDIT COMMITTEE
The information contained in the following report is subject to the disclaimer regarding “filed” information and incorporation by reference contained on page 2724 of this Proxy Statement.
The Audit Committee reportsReporting to the Board and actsacting on behalf of the Board, by providingthe Audit Committee provides oversight of the Company’s financial management, oversight of the Company’s independent registered public accounting firm and oversight of the Company’s financial reporting process. The Company’s management is responsibleAudit Committee met five times during 2010 with all members of the committee being present at all meetings held. Responsibility for establishing and maintaining adequate internal financial controls, for preparing the Company’s consolidated financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and for the financial reporting process. The responsibility for auditingprocess itself rests with the Company’s consolidated financial statements rests with themanagement. The Company’s independent registered public accounting firm, KPMG LLP (“KPMG”). KPMG is responsible for expressing an opinion onauditing the effectiveness of the Company’s internal control overconsolidated financial reporting.statements. In addition, KPMG has the responsibility of providing an opinion as to whether the Company’s consolidated financial statements fairly present, in all material respects, the consolidated financial position, results of operations and cash flows of the Company in conformity with U.S. GAAP.
In this context, the Audit Committee has reviewed, met and discussed with management, KPMG and the Company’s internal audit function (“Internal Audit”) and KPMG (including private sessions with Internal Audit, KPMG, and the Company’s Chief Financial Officer) the audited consolidated financial statements in the Annual Report for the year ended December 31, 20092010 (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); and management’s assessment of the effectiveness of the Company’s internal control over financial reporting; and KPMG’s evaluation of the effectiveness of the Company’s internal control over financial reporting. Management represented to the Audit Committee that the Company’s consolidated financial statements as of and for the fiscal year ended December 31, 20092010 were prepared in accordance with U.S. GAAP. In addition the Audit Committee has held private sessions regarding these matters with the Company’s Chief Financial Officer, Internal Audit and KPMG.
In addition, the Audit Committee has reviewed, met and discussed with KPMG such other matters as are required to be discussed with the Committee by applicable Auditing Standards as periodically amended (including significant accounting policies, alternative accounting treatments and estimates, judgments and uncertainties). KPMG has provided to the Audit Committee the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors and the Audit Committee has discussed with KPMG the matters in those written disclosures and KPMG’s independence from the Company and its management.
The Audit Committee considered and pre-approved any non-audit services provided by KPMG and the fees and costs billed and expected to be billed by such firmthe Firm for those services (as shown in the next section of this Proxy Statement). In addition, theservices. The Audit Committee also considered whether thosethe non-audit services provided by KPMG are compatible with maintaining auditor independence.
In reliance on the reviews and discussions with the Company’s management and the independent registered public accounting firm,KPMG, the Committee is satisfied that non-audit services provided to the Company by KPMG are compatible with and did not impair the independence of KPMG. A breakdown of the fees and costs paid to KPMG during 2010 and 2009 is provided below in this Proxy Statement under the heading, “Fees Paid to Independent Registered Public Accountants.”
AccessInternal Audit and KPMG have unrestricted access to the Audit Committee byCommittee. Throughout the Company’s internal auditors and by KPMG is unrestricted. Theyear the Audit Committee met and discussed with the Company’s internal auditors and KPMG the overall scope and plans for their respective audits. The Audit Committee met with the Company’s internal auditors and KPMG to discussaudits, the results of their examinations, their evaluations of the Company’s internal controls, and their assessment of the overall quality of the Company’s financial reporting. In addition the Audit Committee met and discussed with Internal Audit, their evaluations of the Company’s internal controls. These meetings were held both with and without Company management present.
In reliance on the reviews and discussions with both management and KPMG referred to above, the Audit Committee recommended to the Board on March 11, 2010,9, 2011, and the Board approved, the inclusion of the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20092010 for filing with the Securities and Exchange Commission.
This report is provided by the following independent directors, who comprise the Audit Committee.
Sangwoo Ahn (Chairman) | Dr. Paul D. Nielsen | James A. Simms |
Fees Paid to Independent Registered Public Accountants
The following table presents fees paid by the Company for professional services by KPMG during the years ended December 31, 20092010 and December 31, 2008.2009.
Type of Fees | 2009 | 2008 | 2010 | 2009 |
Audit Fees | $410,000 | $ 584,000 | $437,000 | $ 443,000 |
Audit-Related Fees | 0 | 0 |
Tax Fees | $24,000 | $ 165,000 | $12,000 | $ 24,000 |
All Other Fees | 0 | 0 |
Total: | $434,000 | $ 749,000 | $449,000 | $ 467,000 |
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 independent registered public accounting firm. 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 registered public accounting firm.
One or more representatives of KPMG are expected to be in attendance at the Annual Shareholder Meeting, where they will have the opportunity to make a statement if they so desire, and will be available to answer appropriate questions.
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 February 28, 20102011 by each Director, by each of the Named Executive Officers and by all Directors and Executive Officers as a group.group and certain other principal beneficial holders.
Name of Beneficial Owner or Group (1) | Amount and Nature of Beneficial Ownership (2) | | Percent of Class (3) |
Dr. John W. Sammon | 5,493,450 | (4) | 37.06% |
Charles A. Constantino | 256,950 | (5) | 1.73% |
Gregory T. Cortese | 180,507 | (6) | 1.20% |
Ronald J. Casciano | 153,600 | (7) | 1.03% |
Sangwoo Ahn | 81,100 | (8) | * |
A. Edwin Soladay | 69,150 | (9) | * |
James A. Simms | 21,100 | (10) | * |
Stephen P. Lynch | 13,500 | (11) | * |
Kevin R. Jost | 11,134 | (12) | * |
Dr. Paul D. Nielsen | 8,600 | (13) | * |
All Directors and Executive Officers as a Group (10 persons) | 6,289,091 | | 41.14% |
Other Principal Beneficial Owners Dimensional Fund Advisors LP Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746 | 784,024 | (14) | 5.29% |
Gary S. Siperstein and Eliot Rose Asset Management, LLC 1000 Chapel View Blvd., Suite 240 Cranston, RI 02920 | 796,769 | (15) | 5.37% |
Prescott Group Capital Management, L.L.C.; Prescott Group Aggressive Small Cap, L.P.; Prescott Group Aggressive Small Cap II, L.P. and Phil Frohlich 1924 South Utica, Suite 1120 Tulsa, OK 74104-6529 | 1,516,634 | (16) | 10.23% |
Name of Beneficial Owner or Group (1)(2) | | Amount and Nature of Beneficial Ownership (3) | | | Percent of Class (4) | |
Dr. John W. Sammon | | | 5,443,702 | (5) | | | 35.46 | % |
Charles A. Constantino | | | 240,950 | (6) | | | 1.57 | % |
Sangwoo Ahn | | | 93,100 | (7) | | | * | |
A. Edwin Soladay | | | 89,910 | (8) | | | * | |
James A. Simms | | | 33,100 | (9) | | | * | |
Stephen P. Lynch | | | 19,500 | (10) | | | * | |
Kevin R. Jost | | | 29,134 | (11) | | | * | |
Dr. Paul D. Nielsen | | | 21,600 | (12) | | | * | |
All Directors and Executive Officers as a Group (11 persons) | | | 6,147,596 | | | | 40.04 | % |
Other Principal Beneficial Owners Dimensional Fund Advisors LP Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746 | | | 775,658 | (13) | | | 5.16 | % |
Gary S. Siperstein and Eliot Rose Asset Management, LLC 1000 Chapel View Blvd., Suite 240 Cranston, RI 02920 | | | 906,069 | (14) | | | 6.03 | % |
* Represents less than 1%
(1) | Except as otherwise noted, the address for each beneficial owner listed above is c/o PAR Technology Corporation; PAR Technology Park; 8383 Seneca Turnpike; New Hartford, NY 13413-4991. |
(2) | It is noted that as of February 28, 2011 the information possessed by the Company pursuant to Schedule 13G/A filed with the SEC by Prescott Group Capital Management, L.L.C., an Oklahoma limited liability company having an address of 1924 South Utica, Suite 1120; Tulsa, OK 74104-6529 (“Prescott Capital”), Prescott Group Aggressive Small Cap, L.P., an Oklahoma limited partnership (“Prescott Small Cap”), Prescott Group Aggressive Small Cap II, L.P. an Oklahoma limited partnership (“Prescott Small Cap II” and together with Prescott Small Cap, the “Small Cap Funds”) and Mr. Phil Frolich, the principal of Prescott Capital relating to shares of common stock of the Company purchased by the Small Cap Funds through the account of Prescott Group Aggressive Small Cap Master Fund, G.P. an Oklahoma general partnership (“Prescott Master Fund”), of which the Small Cap Funds are general partners, indicated holdings of 1,516,634 (10.08%) of the Company’s common stock. On April 8, 2011, however, a Schedule 13G/A was filed with the SEC by Prescott Capital, the Small Cap Funds and Mr. Phil Frolich reflecting an aggregate beneficial holding of 0 shares of the Company. As a result of this subsequent filing, the Company did not include the holdings of Prescott Capital and Mr. Frolich in the Security Ownership table. |
(3) | Except as otherwise noted, each individual has sole voting and investment power with respect to all shares. |
(3)(4) | Percent of Class is calculated utilizing 14,825,11615,353,368 which is the number of the Company’s outstanding shares as of February 28, 20102011 and the number of options held by the named beneficial owners, if any, which become exercisable within 60 days thereafter. |
(4)(5) | Includes 150 shares held jointly with Dr. Sammon’s wife, Deanna D. Sammon. Does not include 71,400 shares beneficially owned by Mrs. Sammon in which Dr. Sammon disclaims beneficial ownership. |
(5)(6) | Includes 70,00079,000 shares pledged as security. |
(6) | Includes 180,447 shares which Mr. Cortese has or will have the right to acquire pursuant to the Company's stock option plans as of April 29, 2010. |
(7) | Includes 147,600 shares which Mr. Casciano has or will have the right to acquire pursuant to the Company's stock option plans as of April 29, 2010.
|
(8) | Includes 19,100 shares which Mr. Ahn has or will have the right to purchase as of April 29, 20102011 pursuant to the Company’s stock option plans. |
(9)(8) | Includes 69,00089,000 shares which Mr. SoladaySoladay’s estate has or will have the right to acquire as of April 29, 2011 pursuant to the Company's stock option plan as of April 29, 2010.plan. |
(10)(9) | Includes 19,100 shares which Mr. Simms has or will have the right to purchase as of April 29, 20102011 pursuant to the Company’s stock option plans. |
(11)(10) | Includes 13,00019,000 shares which Mr. Lynch has or will have the right to acquire as of April 29, 2011 pursuant to the Company's stock option plans as of April 29, 2010.plans. |
(12)(11) | Includes 9,134 shares which Mr. Jost has or will have the right to purchase as of April 29, 20102011 pursuant to the Company’s stock option plans. |
(13)(12) | Includes 5,600 shares which Dr. Nielsen has or will have the right to purchase as of April 29, 20102011 pursuant to the Company’s stock option plans. |
(14)(13) | Information related to these shareholders was obtained from Schedule 13G/A filed with the SEC on February 10, 201011, 2011 by Dimensional Fund Advisors LP a Delaware limited partnership. Dimensional Fund Advisors LP is an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”.) In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-advisor and/or manager, neither Dimensional Fund Advisors LP nor its subsidiaries (collectively “Dimensional”) possess voting and/or investment power over the securities of the Company that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Company held by the Funds. However, all securities reported in the Schedule 13G are owned by the Funds. Dimensional disclaims beneficial ownership of such securities and states that the filing of the Schedule 13G shall not be construed as an admission that Dimensional Fund Advisors LP or any of its affiliates is a beneficial owner for any other purposes than Section 13(d) of the Security Exchange Act of 1934. |
(15)(14) | Information related to these shareholders was obtained from Schedule 13G/A filed with the SEC on February 5, 201014, 2011 by Eliot Rose Asset Management, LLC and Gary S. Siperstein. Eliot Rose Asset Management, LLC is deemed to be the beneficial owner of 796,769906,069 shares pursuant to separate arrangements whereby it acts as investment advisor to certain persons. Each person for whom Eliot Rose Asset Management, LLC acts as investment adviseradvisor 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. Mr. Siperstein is deemed to be the beneficial owner of 796,769906,069 shares pursuant to his ownership interest in Eliot Rose Asset Management, LLC. |
(16) | Information related to these shareholders was obtained from Schedule 13G/A filed with the SEC on December 5, 2008 by Prescott Group Capital Management, L.L.C., an Oklahoma limited liability company (“Prescott Capital”), Prescott Group Aggressive Small Cap, L.P., an Oklahoma limited partnership (“Prescott Small Cap”), Prescott Group Aggressive Small Cap II, L.P. an Oklahoma limited partnership (“Prescott Small Cap II” and together with Prescott Small Cap, the “Small Cap Funds”) and Mr. Phil Frolich, the principal of Prescott Capital relating to shares of common stock of the Company purchased by the Small Cap Funds through the account of Prescott Group Aggressive Small Cap Master Fund, G.P. an Oklahoma general partnership (“Prescott Master Fund”), of which the Small Cap Funds are general partners. Prescott Capital serves as the general partner of the Small Cap Funds and may direct the Small Cap Funds, the general partners of Prescott Master Fund, to direct the vote and disposition of the 1,516,634 shares of Common Stock held by the Master Fund. As the principal of Prescott Capital, Mr. Frohlich, a US citizen, may direct the vote and disposition of the 1,516,634 shares of Common Stock held by Prescott Master Fund. As reported in the Schedule 13G/A, Prescott Capital and Mr. Frohlich are beneficial owners of the 1,516,634 shares of Common Stock. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's Executive Officersexecutive 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 SEC and the NYSE. Such persons are required by regulations of the SEC 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 during 20092010 all reports for the Company’s Executive Officersexecutive officers and Directors that were required to be filed under Section 16(a) were filed on a timely basis, except that two transactions (one report)one Form 4 in connection with receipt of a Restricted Stock Grant by Mr. Cortese and one transaction by Mr. Constantino wereAhn was not filed on a timely basis. In both instances, Form 4 reports were promptly filed uponbasis due to a technical issue preventing the filing from being accepted at the SEC. Upon discovery of the error.error, the Form 4 report was promptly re-filed.
DIRECTOR COMPENSATION
Directors who are employees of the Company are not separately compensated for serving on the Board. In 2009,2010, the non-employee directors voted to adopt the recommendation of the Compensation Committee to increase compensation of non-employee directors. For 2010, non-employee directors received annual retainers of $25,000$50,000 for membership on the Board, an additional annual retainer of $5,000 iswas paid to the chairman of the Audit Committee and $1,000 to each member of the Audit Committee. All non-employee directors receivereceived an attendance fee of $1,500 per day for in person attendance at Board meetings and any committee meetings held on the same day and $500 per day for any committee meetings held on days other than Board meeting days. The attendance fee is $200 if attendance is via telephone. All Directors arewere also reimbursed for all reasonable expenses incurred in attending meetings. Restricted Stock Awards representing 2,000 shares of the Company's common stock are awardedwere granted to each non-employee director on the date of the Company's annual meeting2010 Annual Meeting of shareholders at the fair market price on the date of the grant.shareholders. Such stock awards vest on the first anniversary date of the grant provided that as of the anniversary date, the director’s position had not been vacated by reason of resignation or removal for cause. Additional awards of 10,000 shares were granted to each non-employee director in July 2010 with 1/3 vesting on the date of the grant and 1/3 vesting on each of the next two anniversaries of the grant date, provided, however, in the event the non-employee director ceases to be a member of the Board due to change of control of the Corporation, all remaining unvested shares under the grant will immediately vest as of the date of departure from the Board.
The following table shows compensation information for the Company’s non-employee directors for fiscal 2009.2010.
Director Compensation for Fiscal 20092010
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compen-sation ($) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total ($) |
Sangwoo Ahn | 43,000 | 12,900 | | $0 | (2) | 0 | 0 | 0 | 55,900 | 66,000 | 64,450 | $0 (2) | 0 | 0 | 130,450 |
Kevin R. Jost | 37,800 | 12,900 | | $0 | (3) | 0 | 0 | 0 | 50,700 | 61,000 | 64,450 | $0 (3) | 0 | 0 | 125,450 |
Dr. Paul D. Nielsen | 36,200 | 12,900 | | $0 | (4) | 0 | 0 | 0 | 49,100 | 61,800 | 64,450 | $0 (4) | 0 | 0 | 126,250 |
James A. Simms | 30,000 | 12,900 | | $0 | (5) | 0 | 0 | 0 | 42,900 | 62,000 | 64,450 | $0 (5) | 0 | 0 | 126,450 |
| The Executive Officersexecutive officers of the Company during 2009,2010, and, where indicated, all persons chosen to become executive officers during 2011, their respective ages as of April 23, 2010,May 18, 2011, positions held during 20092010 or to be held in 2011 (as indicated) and occupations for the last five years are as follows: |
Name | Age | Position | Occupation for Last 5 Years |
Dr. John W. Sammon | 71 | Chairman, President and Chief Executive Officer, PAR Technology Corporation | Dr. Sammon is the founder of the Company and has been the President, Chief Executive Officer and a Director since its incorporation in 1968, and Chairman since 1983. |
Ronald J. Casciano | 5657 | Vice President, Chief Financial Officer, Treasurer and Chief Accounting Officer, PAR Technology Corporation | Mr. Casciano, CPA, was promoted to Vice President, Chief Financial Officer, Treasurer of PAR Technology Corporation in June 1995. Mr. Casciano was named Chief Accounting Officer in 2009. |
Charles A. Constantino | 7071 | Vice Chairman, Director and Executive Vice President and Director, PAR Technology Corporation | Mr. Constantino has been a Director of the Company since 1970; Executive Vice President since 1974 and Vice Chairman since 2009. |
Gregory T. Cortese | 60 | 1974. Mr. Constantino retired from the position of Executive Vice President Strategic Initiatives, General Counseleffective March 11, 2011. |
Paul B. Domorski | 54 | Chairman, Chief Executive Officer and Secretary,President, PAR Technology Corporation;Corporation | Mr. Domorski was elected Chairman, Chief Executive Officer and President PixelPoint, ULCof the Company effective April 25, 2011. Mr. Domorski was president, chief executive officer and a director of EMS Technologies, a publicly traded manufacturer of communication equipment and systems. Prior to joining EMS, he was vice president of service operations at Avaya Corporation. He served as president and chief executive officer during the restructuring of RSL Communications Ltd., an international provider of communications services. Mr. Domorski was also president of Syncordia, British Telecom’s international outsourcing and Network business. He began his career at Unisys Corporation and its predecessor companies, Burroughs and Memorex, holding progressively more responsible executive and financial roles there. He served on the executive committee and as a board member of TechAmerica, which was formerly called The American Electronic Association. |
Larry Hall | 51 | President, PAR Springer-Miller Systems, Inc. | Mr. CorteseHall was appointed Executive Vicenamed President, Strategic InitiativesPAR Springer-Miller Systems, Inc. in January 2009. In addition to serving as General CounselAugust 2008. Previously Mr. Hall was a president and SecretaryCEO of PAR Technology Corporation, Mr. Cortese has served as President of Pixel Point, ULC since September 2005 and served as President, ParTech,Hotel Booking Solutions, Inc. from June 2000 through December 2008. |
Stephen P. Lynch | 54 | President, PAR Government Systems Corporation and Rome Research Corporation | Mr. Lynch was appointed tonamed President, PAR Government Systems Corporation and Rome Research Corporation in January 2008. Previous to his appointment to the position of President Mr. Lynch served as Executive Vice President of PAR Government Systems Corporation since July 2006. |
Dr. John W. Sammon | 72 | Formerly Chairman, President and Chief Executive Officer, PAR Technology Corporation | Dr. Sammon is the founder of the Company and has been the President, Chief Executive Officer and a Director since its incorporation in 1968, and Chairman since 1983. Dr. Sammon retired from the position of Chairman, President and Chief Executive Officer effective April 25, 2011. |
A. Edwin Soladay | 6565* | President, ParTech, Inc. | Mr. Soladay was named President, ParTech, Inc. in January, 2009. Previously, Mr. Soladay was the Chief Operating Officer of Fujitsu Transaction Solutions, a wholly owned subsidiary of Fujitsu Limited. *Mr. Soladay passed away on January 14, 2011. |
Timothy B. Votaw | 52 | Senior Vice President Sales & Marketing, ParTech, Inc. | Mr. Votaw was named Senior Vice President of Sales and Marketing of ParTech, Inc. in August, 2009. Prior to his appointment at ParTech, Inc., Mr. Votaw served as Senior Vice President of Sales for the Americas at Honeywell Scanning & Mobility (previously Hand Held Products, Inc.). |
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
| Overall Compensation Philosophy, Objectives and Policy | |
Philosophy. The Company’s Named Executive Officer compensation philosophy is to create long-term value for our shareholders. To achieve this philosophy, we have designed and implemented our compensation programs for Named Executive Officers to reward them for operating performance, leadership, align their interests with shareholders and encourage them to remain with the Company.
Objectives. The Company’s compensation objectives are to:
· | Ensure the alignment of compensation with the performance objectives of each of our employees, including Named Executive Officers; |
· | Reward performance and behaviors that reinforce the values of leadership, integrity, accountability, teamwork, innovation and quality; and |
· | Achieve the Company’s overall performance goals. |
· | Ensure alignment with management and shareholder interests. |
Compensation Policy. The Compensation Committee designs compensation programs for Named Executive Officers intended to further the Company’s objectives of attracting, motivating, retaining and rewarding talented executives necessary to assist the Company in achieving its performance goals. Accordingly, the Committee has adopted the following overriding policies:
· | Compensation must be tied to the Company's general performance and achievement of financial and strategic goals; |
· | Compensation opportunities should be competitive with those provided by other companies of comparable size engaged in similar businesses; and |
· | Compensation should provide incentives that align the long-term financial interests of the Company's Executive Officers with those of its shareholders. |
Elements of Executive Compensation
To meet its policy objectives for Named Executive Officer compensation, the Company compensated them through a combination of Base Salary, Incentive Compensation, Equity Compensation, Deferred Compensation and provided various benefits, including medical and 401(k) plans generally made available to all employees of the Company.
The determination of the Company’s Named Executive Officers’ compensation is solely within the purview of the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee” or “Committee”). In determining and assessing the appropriateness of the compensation for all named executives, the Compensation Committee solicits and considers the self assessment of each executive as to their performance against pre-established goals and objectives, the executive’s involvement in the day to day operations of the relevant business unit, as well as results of a third party compensation survey. The third party compensation survey utilized by the Committee evaluates the compensation levels of chief executive officers at companies of similar size and geographic location within the high technology, durable group industry, as defined by the third party compensation survey, companies which are determined to be peers of the Company.
As to the chief executive specifically, the Committee also performs its own evaluation of the chief executive’s performance in light of the goals and objectives the Committee had approved for the prior fiscal year. Other than the chief executive’s self assessment which is solicited and considered by the Compensation Committee in establishing compensation levels, the chief executive does not have any role in establishing his compensation.
Base Salary. In setting the annual base salary of the Chief Executive Officer and in reviewing and approving the annual base salaries of the other Named Executive Officers, the Compensation Committee considered the salaries of executives in similar positions, the level and scope of responsibility, experience and performance of the Named Executive Officer, the financial performance of the Company and other overall general economic factors.
The Compensation Committee typically purchases compensation surveysdata from a national third party provider of data for salaries in the high technology group within the durable goods industry sector as reported in a nationally recognized report on executive compensation. In 2008,2010, in conjunction with its purchase of a membership with the Company purchased the Compdata Survey of Management Compensation in the United States. This data was updated utilizing the 2009 Compdata Survey of Management Compensation Summary as well as the Compensation Summary published by the Society of Human Resource Management National Data. The compensation surveys, provided by theLeadership Council, a national third party provider and utilized as a compensation benchmark, did not identify specific peer companies, but rather identifiedresource on Human Resources related matters, the Company was provided with access to the online market database Payscale Market Rate. This database provided the Company with real time salary information for its peer groups, disaggregated by industry, volume of revenue, total employee headcount, and geographic region. In selecting the appropriate peer group, the Compensation Committee utilized the high technologycomputer hardware/software peer group companies within the durable goods industry sector, having consolidated revenues within the range of $100$200 million and $500$300 million, full time equivalent employees within the range of 1,0011,000 and 5,000,2,500, and located in the northeastern United States. The Committee concluded that the aforementioned peer group was the most similar with respect to industry, operations, size and location of the Company, and would be appropriate in deriving their compensation benchmarks.
An objective of the Compensation Committee is to approve the salary for each Named Executive Officer near the average midpoint for similar positions identified in the survey, taking into account variables such as industry, company size, geographic location, and comparison of duties. Consideration is also given to the individual performance of that Named Executive Officer, the performance of the organization over which the Named Executive Officer has responsibility, the performance of the Company and general economic conditions (with each factor being weighted as the Compensation Committee deems appropriate).
Incentive Compensation. The purpose of the Company’s incentive compensation program for its Named Executive Officers is to provide incentive based compensation to Named Executive Officers for meeting and exceeding pre-established financial performance goals for the respective businesses under their control. In general, the financial performance goals of the Named Executive Officers are approved by the Board of Directors.
The Company has four businesses with which it evaluates performance, Restaurants, Hotel / Spa, Government, and Logistics Management. For 2009,2010, the financial performance measures taken into consideration to determine an appropriate bonus for Named Executive Officers of the Restaurant and Logistics Management businesses included profit before tax, revenue, accounts receivable collection cycle (days sales outstanding) and inventory turns. The financial performance measures taken into consideration to determine an appropriate bonus for the Named Executive Officer of the Government and Hotel / Spaall businesses included profit before tax, revenue, and accounts receivable collection cycle (days sales outstanding).operating cash flow.
In 2009,2010, the annual Incentive Compensation targets for the Named Executive Officers ranged from 50% to 65% of Base Salary. Named Executive Officers may earn from 0% to 200% of the individual target established for their business depending on actual financial performance compared to the actual goals of the operating plan. The calculation of the award is based on performance level achievement of greater than 90% of their goals for revenue targets, and 80% of their goals of profit before tax and accounts receivable collection cycle, and where applicable, inventory turns.operating cash flow. Cash payments are made following the completion of the Company’sCorporation’s audit.
For any fiscal year, total awards paid to a business unit may not exceed an amount equal to 20% of net profit after taxes for that business (“Cap”). Mssrs.Dr. Sammon Casciano, Constantino and Cortese wereis measured on the weighted performance of the Company’sCorporation (includes all four business unitsbusinesses) as a whole and received incentive compensation totaling $71,900; $38,900, $38,900 and $38,900 respectively$227,700 for 20092010 performance. Mr. Soladay wasis measured on the performance of the Restaurant business and did not earn anreceived incentive compensation awardof $277,600 for the 20092010 performance of that business. Mr. Lynch received incentive compensation of $133,500$134,400 in connection with the 20092010 performance of the Government business.
The incentive compensation awards (assuming that each of the fourthree aforementioned performance objectives were achieved at 100%) that could have been paid to Dr. Sammon, as a percentage of base salary was 65%, while the percentage of base salary that could have been paid to Messrs. Casciano, Constantino,Mssrs. Soladay and Cortese wasLynch were 50%, respectively.
The incentive compensation awardsaward for Messrs.Dr. Sammon Casciano, Constantino, and Cortese werewas based on the performance objectives of the Company’sCorporation’s consolidated results. The results of each performance objective and the impact on the amount of incentive compensation awarded to the aforementioned Executive Officersexecutive officers during the most recent fiscal year covered were as follows:
Revenue (represented 35%33.3% of the total incentive award) – For fiscal year 2009,2010, the revenue objective was achieved or exceeded by two of the Company’s four businesses. ThisCorporation and therefore resulted in a partialthe full 33.3% factor applied to the incentive compensation award (based on the proportionate share of the achieved or exceeded goals in relation to the Company’s consolidated revenue goal).award.
Pretax Income (represented 35%33.3% of the total incentive award) – For fiscal year 2009,2010, the pretax income objective was partiallynot achieved by one business (although that businessthe Corporation, and therefore did not meet its goal completely, its actual results were greater than 80% of the goal, thereby earning a partial award) and was exceeded by another business. This resulted in a partial factor appliedcontribute to the incentive compensation award (based on the proportionate share of partially achieved and exceeded goals in relation to the Company’s consolidated pretax income goal).award.
Inventory TurnoverOperating Cash Flow (represented 15%33.3% of the total incentive award) – For fiscal year 2009,2010, the inventory turnover objective was not achieved by the two relevant businesses (this objective does not apply to two of the four businesses, as they do not carry any inventory) and therefore was not factored in the calculation of the incentive award.
Accounts Receivable (represented 15% of the total incentive award) - For fiscal year 2009, the accounts receivableoperating cash flow objective was exceeded by twothe Corporation, thereby resulting in a contribution factor of 200% of the Company’s businesses and was partially achieved by another of its businesses. This resulted in a partial33.3% factor applied to the incentive compensation award.
Given that the revenue objective was achieved at 100% and the operating cash flow objective was exceeded at 200%, Dr. Sammon’s incentive compensation award (based on the proportionate sharewas approximately 65% of partially achieved and exceeded goals in relation to the Company’s consolidated accounts receivable goal).his base salary.
The incentive compensation award (assuming that each of the fourthree aforementioned performance objectives waswere achieved at 100%) that could have been paid to Mr. Soladay as a percentage of his base salary was 50%.
The incentive compensation award for Mr. Soladay was based on the performance objectives of the Restaurant business. The result of each performance objective and the impact on the amount of incentive compensation awarded to Mr. Soladay during the most recent fiscal year covered werewas as follows:
Revenue (represented 33.3% of the total incentive award) – For fiscal year 2010, the revenue objective was exceeded by the Restaurant business, thereby resulting in a contribution factor of 200% of the 33.3% factor applied to the incentive compensation award.
Pretax Income (represented 33.3% of the total incentive award) – For fiscal year 2010, the pretax income objective was exceeded by the Restaurant business, thereby resulting in a contribution factor of 118% of the 33.3% factor applied to the incentive compensation award.
Operating Cash Flow (represented 33.3% of the total incentive award) – For fiscal year 2010, the operating cash flow objective was exceeded by the Restaurant business thereby resulting in a contribution factor of 195% of the 33.3% factor applied to the incentive compensation award.
Revenue (represented 35% ofGiven that the total incentive award) – For fiscal year 2009, the revenue objective was not achievedaforementioned objectives were exceeded by the Restaurant business, and therefore did not factorMr. Soladay’s incentive compensation award was approximately 85% of his base salary; which is in the calculationexcess of the incentive award.50% of base salary award that would have been provided had all objectives been achieved at 100%. Such award was in accordance with the pre-defined calculation for those metrics in excess of the performance objective, which was pre-approved by the Company’s Board of Directors.
Pretax Income (represented 35% of the total incentive award) – For fiscal year 2009, the pretax income objective was not achieved by the Restaurant business and therefore did not factor in the calculation of the incentive award.
Inventory Turnover (represented 15% of the total incentive award) – For fiscal year 2009, the inventory turnover objective was not achieved by the Restaurant business and therefore did not factor in the calculation of the incentive award.
Accounts Receivable (represented 15% of the total incentive award) - For fiscal year 2009, the accounts receivable objective was exceeded by the Restaurant business. However, due to the Cap provision in the plan, no incentive award was earned even with an achievement of this objective.
The incentive compensation award (assuming that each of the three aforementioned performance objectives applicable to the Government business waswere achieved at 100%) that could have been paid to Mr. Lynch as a percentage of his base salary was 50%.
The incentive compensation award for Mr. Lynch was based on the performance objectives of the Government business. The result of each performance objective and the impact on the amount of incentive compensation awarded to Mr. Lynch during the most recent fiscal year covered werewas as follows:
Revenue (represented 35%33.3% of the total incentive award) – For fiscal year 2009,2010, the revenue objective was exceedednot achieved by the Government business, and resulted in more than 100% consideration intherefore did not contribute to the determination of Mr. Lynch’s incentive compensation award.
Pretax Income (represented 35%33.3% of the total incentive award) – For fiscal year 2009,2010, the pretax income objective was exceeded by the Government business and resulted in more than 100% consideration123% of Mr. Lynch’sthe 33.3% factor applied to the incentive compensation award.
Inventory Turnover (represented 0% of the total incentive award) – The inventory turnover objective does not apply to the Government business as this business does not carry any inventory.
Accounts Receivable (represented 30%Operating Cash Flow(represented 33.3% of the total incentive award) - For fiscal year 2009,2010, the accounts receivableoperating cash flow objective was exceeded by the Government business and resulted in more than 100% consideration200% of Mr. Lynch’sthe 33.3% factor applied to the incentive compensation award.
Given that the aforementioned objectives were exceeded by the Government business, Mr. Lynch’s incentive compensation award was approximately 53%54% of his base salary; which is in excess of the 50% of base salary award that would have been provided had all objectives been achieved at 100%. Such award was in accordance with the pre-defined calculation for those metrics in excess of the performance objective, which was pre-approved by the Company’s Board of Directors.
Equity Compensation. In keeping with its philosophy of providing long-term financial incentives that relate to improvement in long-term shareholder value, the Company may grant restricted stock awards and/or stock options to its key employees (including Named Executive Officers other than Dr. Sammon and Mr. Constantino) under the Company’s 2005 Equity Incentive Plan. Upon review of recommendations from the Stock Option Committee, the Compensation Committee determines the key employees of the Company and its subsidiaries who shall be granted equity compensation, the type of equity compensation to be granted, the terms of the grant and the number of shares to be subject to such grants. Grants of restricted stock awards are generally limited to the Company’s senior level employees and are used in special circumstances.
There are two types of vesting associated with restricted stock awards: Time-Only and Event/Performance. Time-Only vesting generally occurs over a 3 to 5 year period. Event/Performance vesting occurs upon the achievement of certain financial targets (e.g. increase in revenue, earnings per share or other metrics) so long as the event is non-subjective. In 2009,2010, no Restricted Stock Awards were granted to the Named Executive Officers.
Stock options (“Options”) granted under the 2005 Equity Incentive 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 (“Non-Qualified Stock Options”). Option grants generally become exercisable no less than six months after the grant and expire ten (10) 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.
During fiscal year 2009, of In 2010, no Stock Options were granted to the Named Executive Officers, equity compensation was provided to Mssrs. Soladay and Lynch, in the form of stock options. The non-qualified stock options awarded to Mr. Soladay were awarded commensurate with his employment as President of the Company’s Restaurant business. These awards were approved by the Compensation Committee following recommendation of the Company’s Stock Option Committee based on Mr. Soladay’s new role and the total compensation package deemed appropriate for that role. This determination was made after consideration of the third party compensation survey.Officers.
The incentive stock options awarded to Mr. Lynch were provided as a long term incentive to retain Mr. Lynch and continue the profitable results achieved by the Government business, consistent with the Company’s philosophy of providing long-term financial incentives that translate to improvement in long-term shareholder value. These awards were approved by the Compensation Committee following recommendation of the Company’s Stock Option Committee based on the results of the Government business which Mr. Lynch oversees, as well as after consideration of the third party compensation survey.
Benefits and Perquisites. The Company provides partial payment for medical, dental and vision insurance, 401(k) plan with profit sharing and disability and life insurance benefits to its Named Executive Officers consistent with that offered generally to its employees. In addition, Named Executive Officers are provided a limited number of perquisites whose primary purpose is to minimize distractions from the executives’ attention to important Company objectives. The Company provides an automobile or automobile allowance and payment of country club dues, all of which are quantified in the Summary Compensation Table on page 21.
PAR Technology Corporation Retirement Plan. The Named Executive Officers are eligible to participate in the PAR Technology Corporation Retirement Plan (the “Retirement Plan”). The Plan has a deferred profit-sharing component that covers substantially all the employees of the Company including the Named Executive Officers. The Company’s annual profit sharing contribution to the Retirement Plan is at the discretion of the Board. The Retirement Plan also contains a 401(k) provision that allows employees to contribute a percentage of their salary, pre-tax, up to certain tax code limitations. The Company matches the deferrals of all participants in the Retirement Plan, including the Named Executive Officers, at the rate of 10%.
Deferred Compensation. The Company sponsors a Non-Qualified Deferred Compensation Plan for a select group of highly compensated employees that includes the Named Executive Officers. Participants may make voluntary deferrals of their salary to the plan in excess of tax code limitations that apply to the Company's Retirement Plan. The Company also has the sole discretion to make employer contributions to the plan on behalf of the participants, though it did not make any employer contributions in 2009.2010.
Compliance with Internal Revenue Code Section 162(m). Section 162(m) of the Internal Revenue Code of 1986, as amended, provides that compensation in excess of $1,000,000 paid to the Named Executive Officers of a publicly held company will not be deductible for federal income tax purposes unless such compensation is paid pursuant to one of the enumerated exceptions set forth in Section 162(m). The Company’s primary objective in designing and administering its compensation policies is to support and encourage the achievement of the Company’s long-term strategic goals and to enhance stockholder value. In general, stock options granted under the Company’s 2005 Equity Incentive Plan are intended to qualify under and comply with the “performance based compensation” exemption provided under Section 162(m), thus excluding from the Section 162(m) compensation limitation any income recognized by executives at the time of exercise of such stock options. Because salary and bonuses paid to Named Executive Officers have been below the $1,000,000 threshold, the Committee has elected, at this time, to retain discretion over bonus payments, rather than to ensure that payments of salary and bonus in excess of $1,000,000 are deductible. The Committee intends to review periodically the potential impacts of Section 162(m) in structuring and administering the Company’s compensation programs.
| Role of Executive Officers | |
The Company’s Chief Financial Officer takes direction from and brings suggestions to the Compensation Committee on compensation matters for the Named Executive Officers. He oversees the actual formulation of plans incorporating the suggestions of the Compensation Committee. He provides information to the Compensation Committee on how employees are evaluated and the overall results of the evaluations. He assists the Chair of the Compensation Committee in preparing the agenda for its meetings.
The Company’s Chief Executive Officer reports on his evaluations of the senior executives, including the other Named Executive Officers. He makes compensation recommendations for the other Named Executive Officers with respect to base salary and annual and long-term incentives which are the basis of discussion with the Compensation Committee. The Chief Financial Officer meets with the Compensation Committee to discuss and evaluate the financial implications of compensation related decisions.
Severance Policy
The Company does not have a formal severance plan but as a matter of policy provides severance for its employees in circumstances such as when an employee’s position is eliminated. All employees, including the Named Executive Officers, are covered by the policy and payments are based on level of responsibility, seniority and/or length of service. The Company has no other termination arrangements with any of the Named Executive Officers except as follows:
·o | A. Edwin Soladay.Paul B. Domorski. Under the employment arrangement with Mr. Soladay,Domorski, termination without cause prior to April 26, 2015 or termination by Mr. Domorski for good reason as defined in his agreement, would trigger immediate vesting of 50% of any unvested stock options scheduled to vest through January 1, 2011 andreceived as part of his options received upon hire. Immediate vesting of all unvested equity interests would be triggered by any change of control situation as defined in his agreement. Mr. Domorski would receive severance payments equal to any unearned portion Mr. Soladay’s annual base salary ($325,000) for the period from the termination date through December 31, 2011. Such payments would be subject to and conditioned upon execution of a mutually agreeable separation agreement which would include an agreement as to how the severance payments would be made, a mutual release of claims and Mr. Soladay’s compliance with confidentiality obligations.follows: |
·o | Gregory T. Cortese. UnderIn the employment arrangement with Mr. Cortese,event of termination without cause prior to August 31, 2010April 26, 2013, severance would trigger payment equal tobe the pro rata portionsum of a) the greater of one year of Mr. Cortese’sDomorski’s annual base salary (currently $250,000)$400,000) or the amount of his annual base salary for the period fromcommencing on the termination date through August 31, 2010. Termination on or after August 31, 2010 would trigger: a) 13 payments over a period of six months aggregating toApril 25, 2013 and b) an amount equal to one halfthe prior year’s annual cash bonus, if any, paid to him. |
o | In the event of termination by Mr. Domorski for good reason as defined in his agreement, termination without cause on or after April 26, 2013 or as a result of a change of control situation approved by the Board, severance would be the sum of Mr. Cortese’sDomorski’s annual base salary at(currently $400,000) and an amount equal to the time of termination; b) a monthly contribution of $849 toward Mr. Cortese’s COBRA payment for a period of six months; and c) upprior year’s annual cash bonus, if any, paid to $1,750 toward the procurement of a life insurance policy. All payments are subject to and conditioned upon a general release of all claims and compliance with confidentiality obligations.him. |
o | COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONIn the event of termination resulting from a change of control not approved by the Board, severance would be three times the sum of Mr. Domorski’s annual base salary (currently $400,000) and an amount equal to the prior year’s annual cash bonus, if any, paid to him. |
Decisions regarding executive compensation for all Executive OfficersSuch payments would be subject to and outside directors areconditioned upon execution of a mutually agreeable separation agreement which would include an agreement as to how the severance payments would be made, by the Compensation Committeea mutual release of the Board of Directors, which in 2009 was composed of Messrs. Jost, Nielsenclaims and Simms. None of the members of the Compensation Committee has ever been an officer or employee of the Company or any of its subsidiariesMr. Domorski’s compliance with non-compete, non-solicitation and no executive officer of the Company serves on the board of directors of any company at which the Compensation Committee members is employed.confidentiality obligations.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has reviewed and discussed with management the section of this Proxy Statement entitled “Compensation Discussion and Analysis.” Based on this review and discussion, the Committee has recommended to the Board that the section entitled “Compensation Discussion and Analysis,” as it appears on pages 15 through 20, be included in this Proxy Statement.
Members of the Compensation Committee
Kevin R. Jost
(Chairman)
| Dr. Paul D. Nielsen | James A. Simms |
Summary Compensation Table
The following table provides information concerning the compensation of the Company’s Chief Executive Officer Chief Financial Officer and the threetwo other most highly compensated Executive Officersexecutive officers (the “Named Executive Officers”) for fiscal 2009, 20082010 and 2007.2009. For a complete understanding of the table, please read the narrative disclosures that follow the table.
Name and Principal Position | Year | Salary ($) (1) | Bonus ($) | Stock Awards ($) (2) | Option Awards ($) (3) | Non-Equity Incentive Plan Compensation ($) (4) | Non-Qualified Deferred Compensation Earnings ($) (5) | All Other Compensation ($) (6) | | Total ($) |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | (j) |
Dr. John W. Sammon Chairman, President and Chief Executive Officer, PAR Technology Corporation | 2009 2008 2007 | 355,591 355,591 355,591 | -- -- -- | -- -- -- | -- -- -- | 71,900 104,900 107,100 | -- -- -- | 23,795 21,585 23,356 | (7) (7) (7) | 451,286 482,076 486,047 |
Ronald J. Casciano Vice President, Chief Financial Officer, Treasurer and Chief Accounting Officer, PAR Technology Corporation | 2009 2008 2007 | 250,000 242,307 200,000 | -- -- -- | -- -- -- | -- -- -- | 38,900 46,200 39,000 | 7,599 | 3,917 5,110 7,000 | | 300,416 293,617 246,000 |
Charles A. Constantino Vice Chairman, Director and Executive Vice President, PAR Technology Corporation | 2009 2008 2007 | 221,310 228,714 205,386 | -- -- -- | -- -- -- | -- -- -- | 38,900 52,700 51,000 | -- -- -- | 31,848 28,632 30,823 | (8)) (8) (8) | 292,058 310,046 287,209 |
Gregory T. Cortese Executive Vice President, Strategic Initiatives; General Counsel and Secretary, PAR Technology Corporation; President, PixelPoint, ULC | 2009 2008 2007 | 250,000 217,584 249,958 | -- -- -- | -- -- -- | -- -- -- | 38,900 8,600 22,200 | 4,937 -- 711 | 5,069 6,868 13,667 | (9) | 298,906 233,322 286,536 |
Stephen P. Lynch President, PAR Government Systems Corporation and Rome Research Corporation | 2009 2008 2007 | 250,000 233,996 215,875 | -- -- -- | -- -- 4,453 | 22,693 69,181 -- | 133,500 165,800 -- | 46,650 -- -- | 2,835 4,033 4,158 | | 455,678 473,010 224,486 |
A. Edwin Soladay President, ParTech, Inc. | 2009 | 325,000 | -- | -- | 294,938 | -- | 2,139 | 12,335 | (10) | 634,412 |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Non-Qualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
Dr. John W. Sammon Chairman, President and Chief Executive Officer, PAR Technology Corporation | 2010 | 355,591 | -- | -- | -- | 227,700 | -- | 26,753(7) | 610,044 |
2009 | 355,591 | -- | -- | -- | 71,900 | -- | 23,795(7) | 451,286 |
| | | | | | | | | |
Stephen P. Lynch President, PAR Government Systems Corporation and Rome Research Corporation | 2010 | 250,000 | -- | -- | -- | 134,400 | 51,970 | 8,981 | 445,351 |
2009 | 250,000 | -- | -- | 22,693 | 133,500 | 46,650 | 2,835 | 455,678 |
| | | | | | | | | |
A. Edwin Soladay President, ParTech, Inc | 2010 | 325,000 | -- | -- | -- | 277,600 | 4,329 | 20,310(8) | 627,239 |
2009 | 325,000 | -- | -- | 294,938 | -- | 2,139 | 12,335(8) | 634,412 |
(1) | Amounts reported in column (c) reflect base salaries paid to each of the Named Executive Officers for the listed fiscal year. Amounts shown are not reduced to reflect the Named Executive Officer’s elections, if any, to defer receipt of salary into the Company’s Deferred Compensation Plan which is included in the Non-Qualified Deferred Compensation Table on page 26.Plan. |
(2) | The dollar amount reported in column (e) reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Assumptions made in this valuation are discussed in footnote 6 of the Company’s 2009 Consolidated Financial Statement included in the Company’s Annual Report on 10-K filed with the SEC on March 16, 2010. There can be no assurance that the grant date fair value amounts will be realized. |
(3) | The dollar amounts reported in column (f) reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Assumptions made in these valuations are discussed in footnoteNote 6 ofto the Company’s 20092010 Consolidated Financial Statement included in the Company’s Annual Report on 10-K filed with the SEC on March 16, 2010.2011. There can be no assurance that the grant date fair value amounts will be realized. |
(3) | The dollar amounts reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Assumptions made in these valuations are discussed in Note 6 to the Company’s 2010 Consolidated Financial Statement included in the Company’s Annual Report on 10-K filed with the SEC on March 16, 2011. There can be no assurance that the grant date fair value. The actual value of the option awards will depend on the difference between the market value of the Company’s Common Stock on the date the stock option is exercised and the exercise price. |
(4) | Amounts reported in column (g) represent the amounts paid under the Incentive Compensation element of the Company’s Executive Compensation Plan during the years indicated in respect of service performed during those years. A description of the Incentive Compensation element is contained in the section entitled “Incentive Compensation” beginning on page 16.17. Amounts shown are not reduced to reflect the Named Executive Officer’s elections, if any, to defer receipt of salary into the Deferred Compensation Plan. |
(5) | Amounts reported in column (h) consist of above-market or preferential earnings during years indicated on compensation that was deferred in or prior to such years under the PAR Technology Corporation Deferred Compensation Plan. These amounts are also reported in the Non-Qualified Deferred Compensation Table on page 26 under the column entitled “Aggregate Earnings in Last Fiscal Year”. |
(6) | In addition to any perquisites identified for the individual Named Executive Officers, the amounts reported in column (i) consists of Company contributions to the Company’s qualified plan and matching contribution to the 401(k); and imputed income on Company payment of term life insurance premiums as determined under the Internal Revenue Code. |
(7) | Includes payments made on Dr. Sammon’s behalf for club memberships of $10,452 in 2007; $11,840 in 2008; and $10,737 in 2009.2009 and $10,728 in 2010. |
(8) | Includes automobile allowance of $10,800 in 2007; $10,800 in 2008; and $10,800$7,200 in 2009 and payments made on Mr. Constantino’s behalf for club memberships of $7,119 in 2007; $8,087 in 2008, and $7,990 in 2009. |
(9) | Includes automobile allowance of $2,629 and payments made on Mr. Cortese’s behalf for club memberships of $2,670 in 2007. |
(10) | Includes automobile allowance of $7,200 in 2009.2010. |
Grants of Plan-Based Awards
The following table sets forth the equity grants made to the Company’s Named Executive Officers during 2009 pursuant to the PAR Technology Corporation 2005 Equity Incentive Plan.
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | All Other Option Awards: Number of Securities Underlying Options (#) | | |
Threshold ($) | Target ($) | Maximum ($) | Exercise or Base Price of Option Awards ($/Share) | Grant Date Fair Value of Stock and Option Awards |
(a) | (b) | (c) | (d) | (e) | (f) | | (g) | (h) |
Dr. John W. Sammon | | 0 | 231,200 | 462,400 | | | | |
Ronald J. Casciano | | 0 | 125,000 | 250,000 | | | | |
Charles A. Constantino | | 0 | 125,000 | 250,000 | | | | |
Gregory T. Cortese | | 0 | 125,000 | 250,000 | | | | |
Stephen P. Lynch | 02/24/09 | 0 | 125,000 | 250,000 | 10,000 | (2) | $4.73 | $22,693 |
A. Edwin Soladay | 01/02/09 | 0 | 162,500 | 325,000 | 125,000 | (3) | $5.68 | $294,938 |
(1) | The amounts reported in Columns (c) through (e) reflect threshold, target and maximum performance incentive compensation payment amounts for the 2009 performance year as set in 2009. Actual payments under the incentive compensation program are reflected in column (g) of the Summary Compensation Table on page 21 of this Proxy Statement. The program is described under the “Incentive Compensation” heading of the Compensation Discussion and Analysis section of this Proxy Statement beginning on page 16 of this Proxy Statement. |
(2) | These options were granted on February 24, 2009. The options vest 20% annually over a five-year period and expire on the tenth anniversary of the date of the grant. If the holder of an Option ceases to be employed by the Company or any subsidiary, other than by reason of termination for cause, death, disability or retirement, such Option shall terminate on the earlier of the specified expiration date or three months from the termination date. If the holder of the Option is terminated for cause, the Option shall terminate immediately. In the case of death, disability or retirement, such Option shall terminate on the earlier of the specified expiration date or twelve months after the employment relationship ceases due to such death, disability or retirement. |
(3) | These options were granted on January 2, 2009. Of these options, 50,000 vested on January 2, 2009 and 19,000 vested on December 31, 2009. Of the remaining unvested options, 20,000 vest on December 31, 2010; 21,000 vest on December 30, 2011; 15,000 vest on December 31, 2012. These Options expire on the tenth anniversary of the date of the grant. If the holder of an Option ceases to be employed by the Company or any subsidiary, other than by reason of termination for cause, death, disability or retirement, such Option shall terminate on the earlier of the specified expiration date or three months from the termination date. If the holder of the Option is terminated for cause, the Option shall terminate immediately. In the case of death, disability or retirement, such Option shall terminate on the earlier of the specified expiration date or twelve months after the employment relationship ceases due to such death, disability or retirement. |
Outstanding Equity Awards at Fiscal Year-End
The following table shows all outstanding equity awards held by the Named Executive Officers at fiscal year-end, December 31, 2009.2010.
| Option Awards | Stock Awards |
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Share or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights that Have Not Vested (#) | Equity Incentive Awards: Market or Payout Value of Unearned Shares Units or Other Rights that Have Not Vested ($) |
(a) | (b) | | (c) | | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
Dr. John W. Sammon | 0 | | 0 | | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Ronald J. Casciano | 19,500 600 67,500 60,000 | (1) (2) (3) (4) | 0 | | 0 | $2.56 $1.25 $1.75 $6.01 | 5/30/10 1/9/11 10/1/11 10/13/14 | 0 | 0 | 0 | 0 |
Charles A. Constantino | 0 | | 0 | | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Gregory T. Cortese | 206,373 | (5) | 0 | | 0 | $2.04 | 8/11/10 | 0 | 0 | 0 | 0 |
Stephen P. Lynch | 9,000 0 | (6) (7) | 11,000 10,000 | (6) (7) | 0 | $6.25 $4.73 | 01/08/18 02/24/19 | 250 | 1,445 | 0 | 0 |
A. Edwin Soladay | 69,000 | (8) | 56,000 | (8) | 0 | $5.68 | 01/02/19 | 0 | 0 | 0 | 0 |
| Option Awards | Stock Awards |
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Share or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights that Have Not Vested (#) | Equity Incentive Awards: Market or Payout Value of Unearned Shares Units or Other Rights that Have Not Vested ($) |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
Dr. John W. Sammon | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Steven P. Lynch | 13,000(1) 2,000(2) | 7,000(1) 8,000(2) | 0 | $6.25 $4.73 | 01/08/18 02/24/19 | 125 | 714 | 0 | 0 |
A. Edwin Soladay | 89,000(3) | 36,000(3) | 0 | $5.68 | 01/02/19 | 0 | 0 | 0 | 0 |
(1) | These options were granted on May 30, 2000. The options vested 20% on the six-month anniversary of the grant date, with the remainder vesting in equal quarterly installments over the next 48 months. |
(2) | These options were granted on January 9, 2001. The options vested on January 1, 2002.
|
(3) | These options were granted on October 1, 2001. The options vested 9,000 on April 1, 2002; 9,000 on July 1, 2002; with the remaining vesting in equal quarterly installments over the next 33 months. |
(4) | These options were granted on October 13, 2004. The options vested 6,750 on April 13, 2005; 14,250 on January 13, 2006; 2,250 on April 13, 2006; 9,750 on January 13, 2007; 3,000 on April 13, 2007; 3,000 on July 13, 2007; 750 on October 13, 2007; 5,250 on January 13, 2008 with the remainder vesting in equal quarterly installments over the next 15 months. |
(5) | These options were granted on August 11, 2000. The options vested 20% on the six-month anniversary of the grant date, with the remainder vesting in equal quarterly installments over the next 48 months. |
(6) | These options were granted on January 8, 2008. The options vested 20% on the six-month anniversary of the grant date; with the remainder vesting in equal quarterly installments over the next 48 months. |
(7)(2) | These options were granted on February 24, 2009. The options vest 20% annually over a five-year period. |
(8)(3) | These options were granted on January 2, 2009. Of these options, 50,000 vested on January 2, 2009, and 19,000 vested on December 31, 2009. Of the remaining unvested options,2009 and 20,000 vestvested on December 31, 2010; 21,000 vest on December 30, 2011; 15,000 vest on December 31, 2012.2010. Pursuant to the terms of the grant, vesting of the options ceased upon the death of Mr. Soladay. |
Option Exercises and Stock Vested
The following table shows all stock options exercised and value realized upon exercise, and all stock awards vested and value realized upon vesting, by the Named Executive Officers during fiscal 2009, which ended on December 31, 2009.
| Option Awards | Stock Awards |
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) |
(a) | (b) | (c) | (d) | (e) |
Dr. John W. Sammon | 0 | 0 | 0 | 0 |
Ronald J. Casciano | 0 | 0 | 0 | 0 |
Charles A. Constantino | 0 | 0 | 0 | 0 |
Gregory T. Cortese | 97,877 | 317,742 | 0 | 0 |
Stephen P. Lynch | 0 | 0 | 125 | 725 |
A. Edwin Soladay | 0 | 0 | 0 | 0 |
(1) | The Value Realized on Exercise equals the aggregate amount of the excess of the fair market value on the date of exercise (the average of the high and low prices of the Company's Common Stock as reported in the Wall Street Journal for the exercise date) over the relevant exercise price(s). |
(2) | The Value Realized on Vesting equals the aggregate fair market value on the date of vesting (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). |
Equity Compensation Plan Information
The following table shows the number of equity securities that are authorized for issuance under the Company’s equity incentive plans, differentiated by those compensation plans that have been previously approved by shareholders and those compensation plans that have not been previously approved by shareholders.
Plan Category | Number of Securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-Average exercise price of outstanding options, warrants and rights | Number of Securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) | Number of Securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-Average exercise price of outstanding options, warrants and rights | Number of Securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) |
| (a) | (b) | (c) | (a) | (b) | (c) |
Equity compensation plans approved by security holders | 989,000 | $5.17 | 441,000 | 571,000 | $5.47 | 508,000 |
Equity compensation plans not approved by security holders | 0 | 0 | 0 | 0 | 0 | 0 |
Total | 989,000 | $5.17 | 441,000 | 571,000 | $5.47 | 508,000 |