| At the Meeting the Shareholders will be asked to consider and vote on the following matters:
1. | To elect one (1) Director for a term of office to expire at the 2015 Annual Meeting of Shareholders; |
2. | To ratify the action of the Board of Directors amending the PAR Technology Corporation 2005 Equity Incentive Plan (“the Plan”) to reserve an additional 1,250,000 shares of the Company’s common stock for issuance under the Plan; | April 11, 2014
Dear Shareholders:
You are invited to attend PAR Technology Corporation’s 2014 Annual Meeting of Shareholders (the “Meeting”) to be held on Thursday, May 22, 2014, at 10:00 AM, local time. We are proud to once again hold the Meeting at one of our customer locations, Langham Place, Fifth Avenue, 400 Fifth Avenue, New York, New York 10018. During the Meeting, we will present a report on our operations, followed by discussion of and voting on the matters set forth in the accompanying Notice of 2014 Annual Meeting of Shareholders and Proxy Statement and discussion of other business matters properly brought before the Meeting. There will also be time for questions.
This Proxy Statement provides information about PAR that is of interest to all shareholders and presents information regarding the business to be conducted at the Annual Meeting of Shareholders.
I sincerely hope you will attend our Annual Meeting of Shareholders on May 22, 2014. Under New York Stock Exchange Rules, your broker is not permitted to vote on your behalf in an uncontested election of directors or corporate governance matters supported by management unless you provide specific instructions. As a result, taking an active role in the voting of your shares has become more important than ever before. Whether or not you plan to attend, you can ensure your shares are represented at the Meeting by promptly voting and submitting your proxy over the Internet, by telephone, or by completing, signing, dating and returning your proxy form in the prepaid envelope provided with the form.
Sincerely, 3. | To transact/s/ Ronald J. CascianoChief Executive Officer and President
Important Notice of Internet Availability of Proxy Materials for the Shareholder Meeting to be held at 10:00 AM local time on May 22, 2014:
The Proxy Statement, Proxy Card and the 2013 Annual Report on Form 10-K are available at: www.partech.com/investors/proxy
You can access Internet voting at: https://www.rtcoproxy.com/par
You can access toll free Telephone voting at: 1-855-620-8049 |
Printed Using Soy Ink PAR Technology is concerned about our environment and preserving our world’s natural resources. If you are accessing this document on line, please consider the environment before you print. If you are reviewing a hard copy of this document, when you are finished, please be considerate of the environment and recycle.
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This summary is intended to provide a quick source for information contained elsewhere in this Proxy Statement. This summary does not contain all the information a shareholder should consider and you are encouraged to read the entire Proxy Statement carefully before voting your shares.
Annual Meeting Information: ·Date and Time: | Thursday, May 22, 2014 at 10:00 AM, local time | | | ·Place: | Langham Place, Fifth Avenue 400 Fifth Avenue New York, NY 10018 | | | ·Record Date: | April 2, 2014 |
Meeting Agenda: · | Ratification of reservation of an additional 500,000 shares for issuance under the 2005 Equity Incentive Plan |
· | Adoption of amendments to the Company’s Certificate of Incorporation and By-Laws to declassify the Board of Directors |
· | Non-binding advisory vote regarding the compensation of the Company’s Named Executive Officers |
· | Transact such other business as may properly come before the Meeting or any adjournments or postponements of the Meeting. |
Each of the proposals are 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 April 19, 2012 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 15,210,084 shares of the Company's Common Stock, par value $0.02 per share (the “Common Stock”) outstanding and entitled to vote. Treasury shares are not voted. The holders of shares representing 7,605,043 votes, represented in person or by proxy, shall constitute a quorum to conduct business.
As a result of recent amendments to New York Stock Exchange Rules, broker discretionary voting (voting without specific instruction from the shareholder) has been eliminated in connection with uncontested election of directors and corporate governance matters supported by management. As a result, every shareholder is encouraged to participate in voting.
The Company has also 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 take advantage of telephone or internet voting, 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 Midnight on June 6, 2012.
|
Matters to be voted upon:
A shareholder’s right to attend the Meeting and vote in person will not 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 are returned properly executed, the shares represented by the proxies will be voted in accordance with the directions of the shareholder. In those instances where proxy cards are signed and returned, but fail to specify the shareholder’s voting instructions, the shares represented by that proxy will be voted as recommended by the Board of Directors. The proxy solicited hereby may be revoked at any time prior to its exercise by: (i) executing and returning to the address set forth above a proxy bearing a later date; (ii) voting on a later date via telephone or internet; (iii) giving written notice of revocation to the Secretary of the Company at the address set forth above; or (iv) attending the Meeting, withdrawing the proxy and voting in person.
Voting
A shareholder may, with respect to the electionMatter
| Board’s Recommended Vote | Page Reference for more detail | ·Ratification of the Director: (i) vote “FOR” the nominee named herein, or (ii) “WITHHOLD AUTHORITY” to votereservation of an additional 500,000 shares for such nominee. The election of the Director requires a plurality of the votes cast. Accordingly, withholding authority to vote for the Director nominee will not prevent the nominee from being elected.
A Shareholder may, with respect to the ratification of the amendment ofissuance under the PAR Technology Corporation 2005 Equity Incentive Plan
| FOR | 28 | ·Adoption of amendments to reserve an additional 1,250,000 shares of the Company’s common stock for issuance under the Plan: (i) vote “FOR”, (ii) vote “AGAINST” or (iii) “ABSTAIN” from voting. A majority of the votes cast by the holders of shares of capital stock present or represented by proxy and entitled to vote thereon (a quorum being present) is required to ratify the amendment of the 2005 Equity Incentive Plan. A vote to abstain from voting on this proposal has the legal effect of a vote against the matter.
Electronic Access to Proxy Materials and Annual Report
This Proxy Statement and the Company’s Annual Report to its shareholders for the year ended December 31, 2011, including audited consolidated financial statements are available on the Company’s Web site at www.partech.com/investors/proxy.
Proxy Solicitation Costs
In addition to the use of the mail service, directors, officers, employees and certain stockholders of the Company, none of whom will receive additional compensation for doing so, may solicit proxies on behalf of the Company personally, by telephone or by other electronic means. 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.
Proposal 1: Election of Director
As required by the Company’s Certificate of Incorporation the members ofand By-Laws to declassify the Board of Directors (the “Board”) are divided into three (3) classes with approximately one-third
| FOR | 28 | ·Non-binding advisory vote regarding the compensation of the Board standingCompany’s Named Executive Officers | FOR | 29 |
NOTICE OF 2014 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON THURSDAY, MAY 22, 2014
Dear PAR Technology Shareholder:
The 2014 Annual Meeting of Shareholders (the “Meeting”) of PAR Technology Corporation, a Delaware corporation (the “Company”), will be held at one of our customer locations, Langham Place, Fifth Avenue, 400 Fifth Avenue, New York, New York 10018 on Thursday, May 22, 2014, at 10:00 AM, local time, for the following purposes: | 1. | To ratify the of reservation of an additional 500,000 shares for election at each Annual Meeting. The Directors are elected for a three-year termissuance under the PAR Technology Corporation 2005 Equity Incentive Plan; |
| 2. | To adopt amendments to the Company’s Certificate of office,Incorporation and hold office until their respective successors have been duly elected and qualified or until their resignation or removal, if earlier. In 2009, there were two (2) Class II Directors electedBy-Laws to hold office until the 2012 Annual Meeting of Shareholders. In July, 2011, Director Charles A. Constantino, a Class III director, retired fromdeclassify the Board of DirectorsDirectors; |
| 3. | To obtain a non-binding advisory vote regarding the compensation of the Company’s Named Executive Officers; and in March, 2012, Director Dr. Paul D. Nielsen indicated |
| 4. | To transact such other business as may properly come before the Meeting or any adjournments or postponements of the Meeting. |
The Board of Directors set April 2, 2014 as the record date for the Meeting. This means that owners of the Company's Common Stock at the close of business on April 2, 2014 are entitled to receive this notice and to vote at the Meeting or any adjournments or postponements thereof. A list of shareholders as of the close of business on April 2, 2014 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, beginning 10 days prior to the Meeting. This list will also be available to shareholders at the Meeting.
Every shareholder’s vote is important. Whether or not you plan to attend in person, we request you vote as soon as possible. Most shareholders have the option of voting their shares by telephone or via 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 proxy card in the accompanying 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 date via telephone or Internet; (iii) giving written notice of revocation to the Secretary of the Company at the address set forth above; or (iv) voting at the Meeting. | BY ORDER OF THE BOARD OF DIRECTORS | | | | /s/ Viola A. Murdock | | Acting Secretary | April 11, 2014 | |
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PAR Technology Corporation 8383 Seneca Turnpike, New Hartford, NY 13413-4991 April 11, 2014
FOR ANNUAL MEETING OF SHAREHOLDERS
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 “Meeting”) to be held at 10:00 AM, local time, on Thursday, May 22, 2014, at Langham Place, Fifth Avenue, 400 Fifth Avenue, New York, New York 10018 and at any postponement or adjournment thereof. The approximate date on which this Proxy Statement, the form of proxy and Annual Report for the fiscal year ending December 31, 2013 are first being sent or given to shareholders is April 11, 2014.
Purpose of Meeting At the Meeting, the shareholders will be asked to consider and vote on the following matters: | 1. | To ratify the reservation of an additional 500,000 shares for issuance under the PAR Technology Corporation 2005 Equity Incentive Plan; |
| 2. | To adopt amendments to the Board his intent notCompany’s Certificate of Incorporation and By-Laws to stand for re-election and to retire from the Board at the expiration of his term on June 7, 2012. Pursuant to their powers under the Company’s By-Laws, in March, 2012 the Board decreased the number of directors on the Board from seven to five. Therefore, at this Meeting, one (1) Director will be elected for a three-year term expiring at the Annual Meeting held in 2015. The nominee ofdeclassify the Board of Directors forDirectors; |
| 3. | To obtain a non-binding advisory vote regarding the Class II Director position, Sangwoo Ahn, is currently a membercompensation of the Board, has been nominated for election byCompany’s Named Executive Officers; and |
| 4. | To transact such other business as may properly come before the Board upon recommendationMeeting or any adjournments or postponements of the Nominating and Corporate Governance Committee and has consented to stand for election. A brief biography for Mr. Ahn is provided at the bottom of this page.
The Board has no reason to believe that Mr. Ahn will be unable or unwilling to serve if elected. In the event Mr. Ahn shall become unwilling or unable 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.
The Board of Directors unanimously recommends a vote FOR the proposal to elect Mr. Ahn. Unless a contrary direction is indicated, shares represented by valid proxies that are not marked so as to withhold authority to vote for the nominee, will be voted FOR the election of the nominee.
Meeting.
|
Each of the proposals 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 April 2, 2014 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 15,754,266 shares of the Company's Common Stock, par value $0.02 per share (the “Common Stock”), outstanding and entitled to vote. Treasury shares are not voted. 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. The holders of shares representing a majority, or 7,877,134 votes, represented in person or by proxy, shall constitute a quorum to conduct business. Broker discretionary voting (voting without specific instruction from the shareholder) has been eliminated in connection with uncontested election of directors and corporate governance matters supported by management. As a result, broker discretionary voting will not be allowed with respect to any of the above proposals. Every shareholder is encouraged to participate in voting.
The Company has also 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.
Shareholders may vote in person or by proxy. Shareholders of record can vote by telephone, via the Internet or at the Meeting. If you are a beneficial shareholder, please refer to your proxy card or the information forwarded to you by your bank, broker or other holder of record to identify which options are available to you. If you take advantage of telephone or Internet voting, you do not need to return your proxy card. Telephone and Internet voting facilities for shareholders of record will be available 24 hours a day, and will close at 3:00 AM on May 22, 2014.
A shareholder’s right to attend the Meeting and vote in person will not in any way be 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 Meeting. When proxies are returned properly executed, the shares represented by the proxies will be voted in accordance with the directions of the shareholder. In those instances where proxy cards are signed and returned, but fail to specify the shareholder’s voting instructions, the shares represented by that proxy will be voted as recommended by the Board of Directors. The proxy solicited hereby may be revoked at any time prior to its exercise by: (i) executing and returning to the address set forth above a proxy bearing a later date; (ii) voting on a later date via telephone or Internet; (iii) giving written notice of revocation to the Secretary of the Company at the address set forth above; or (iv) voting at the Meeting.
Voting
With respect to the ratification of the amendment of the PAR Technology Corporation 2005 Equity Incentive Plan to reserve an additional 500,000 shares of the Company’s Common Stock for issuance under the Plan, a Shareholder may: (i) vote “FOR”, (ii) vote “AGAINST” or (iii) “ABSTAIN” from voting. A majority of the votes cast by the holders of shares of capital stock present or represented by proxy and entitled to vote thereon (a quorum being present) is required to ratify the amendment of the 2005 Equity Incentive Plan. For this proposal, abstentions and broker “non-votes” are included in the number of shares present or represented for purposes of determining whether a quorum exists, but are not considered as shares voting or as votes cast with respect to such matter. As a result, abstentions and broker “non-votes” will not have any effect on such proposals.
A Shareholder may, in connection with the proposals to adopt amendments to the Company’s Certificate of Incorporation and By-Laws to declassify the Board of Directors, (i) vote “FOR”; (ii) vote “AGAINST”; or (iii) “ABSTAIN” from voting. An affirmative vote of two thirds (66.667%) of the shareholders entitled to vote generally for the election of directors is required for approval. Therefore, abstentions and broker “non-votes” have the practical effect of being votes against the matter.
With respect to the non-binding advisory vote regarding the compensation of the Company’s Named Executive Officers, a shareholder may: (i) vote “FOR”; (ii) vote “AGAINST”; or (iii) “ABSTAIN” from voting. For this proposal, the vote is advisory and not binding on us or the Board in any way. Therefore, there is no vote required for approval. However, the Board and the Compensation Committee will take into account the outcome of the vote when making future decisions regarding our executive compensation programs.
With respect to any other matter that properly comes before the Meeting, the affirmative vote of the holders of a majority of the shares of Common Stock represented in person or by proxy and entitled to vote on the proposal will be required for approval.
Electronic Access to Proxy Materials and Annual Report This Proxy Statement, form of proxy and the Company’s Annual Report to its shareholders for the year ended December 31, 2013, including audited consolidated financial statements are available on the Company’s web site at www.partech.com/investors/proxy.
Proxy Solicitation and Costs In addition to the use of the Internet and mail service, directors, officers, employees and certain stockholders of the Company may solicit proxies on behalf of the Company personally, by telephone or by facsimile or electronic transmission. No additional compensation will be paid to such individuals. The Company will bear the cost of the solicitation of proxies, including the preparation, assembly, printing and mailing of the Notice of Internet Availability, this Proxy Statement and any additional information furnished to shareholders. The Company will also bear the cost of 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 Internet and telephone voting procedures are designed to verify a shareholder’s identity, allow the shareholder to give voting instructions and confirm that such instructions have been recorded properly.
As currently required by the Company’s Certificate of Incorporation, the members of the Board of Directors (the “Board”) are divided into three classes with approximately one-third of the Board standing for election at each Annual Meeting. The Directors are elected for the term specified, and hold office until their respective successors have been duly elected and qualified or until their resignation or removal, if earlier. At this Meeting, no Directors will be elected. On March 11, 2014, Directors Jost and Simms, both of whom are Class I Directors, indicated they did not wish to stand for re-election and would step down from their positions effective at the Meeting. In addition, Chairman Ahn indicated he would retire from the Board effective at the Meeting. The Company is currently undergoing an extensive search for candidates to replace these directors. Following the Meeting, the full Board expects to assume the responsibilities of all four standing committees of the Board until such time as the open seats on the Board have been duly filled. For those committees where independence is required of all members, any non-independent directors sitting on such committees shall resign from such committees as soon as reasonably practicable after the appointment of independent directors. DIRECTORS AND CORPORATE GOVERNANCE
DIRECTORS
The name ofSet forth in the nominee and eachfollowing table are the names of the Directors continuing in office, their ages as of April 26, 201211, 2014 (the approximate date on which this Proxy Statement and the accompanying formForm of proxyProxy are first being sent or givenmade available to shareholders), the year each first became a Director and the expiration of their current term in office are set forth inprovided the following table whichproposal to de-classify the Board is approved (Proposal 2 described below). This is followed by a brief biography.
Continuing Directors | Age | Director Since | Term Will Expire | Ronald J. Casciano | 60 | 2013 | 2015 Annual Meeting of Shareholders | Dr. John W. Sammon | 75 | 1968 | 2015* Annual Meeting of Shareholders |
Nominee for Director | Age | Director Since | Term Expires | Sangwoo Ahn | 73 | 1986 | 2015 Annual Meeting of Shareholders | Continuing Directors | Age | Director Since | Term Expires | Paul B. Domorski | 55 | 2011 | 2013 Annual Meeting of Shareholders | Dr. John W. Sammon | 73 | 1968 | 2013 Annual Meeting of Shareholders | Kevin R. Jost | 57 | 2004 | 2014 Annual Meeting of Shareholders | James A. Simms | 52 | 2001 | 2014 Annual Meeting of Shareholders |
Nominee for Director
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. 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. | * | In the event the proposal to de-classify the Board fails to pass, Dr. Sammon’s term will expire at the 2016 Annual Meeting of Shareholders |
Continuing Directors:
Paul B. Domorski.Ronald J. Casciano. Mr. DomorskiCasciano was elected Chairman,appointed Director and named Chief Executive Officer and President of PAR Technology Corporation in April, 2011. Prior to his executive role at PAR,March 2013 and has been Treasurer of the Company since 1995. Mr. Domorski servedCasciano was elected by the shareholders as President, Chief Executive Officer and director of EMS Technologies, Inc., which was recently acquired by Honeywell and is a manufacturer of communication equipment and systems. During Mr. Domorski’s tenure, EMS Technologies was named one of Forbes 200 “Best Small Companies”. Prior to joining EMS, Mr. Domorski was vice president of Avaya Corporation’s $1.6 billion services operations business responsible for service and support operations worldwide. Previously, he served as president and chief executive officer during the restructuring of RSL Communications Ltd., an international provider of communications services. Mr. Domorski spent nearly 10 years internationally as president of Syncordia, British Telecom’s rapidly growing global outsourcing and network integration business, and head of Unisys EMEA services business. He began his career at Unisys Corporation and its predecessor companies, Burroughs and Memorex, holding progressively more responsible executive and financial roles there. In addition to his leadership experience, Mr. Domorski brings diversity to the Board with his substantial international management experience, board experience with publicly held EMS Technologies and experience and skills in organizational development and effecting business turn arounds. In addition, Mr. Domorski strengthens the board with his adherence to high ethical standards and professional integrity. Mr. Domorski is a member of Class IIIII of the Company’s Board at the 2013 Annual Meeting of Shareholders. Prior to his promotion, Mr. Casciano, a Certified Public Accountant, had been Vice President, Chief Financial Officer and Treasurer of the Company since June 1995. In 2012, he was promoted to Senior Vice President. Mr. Casciano held the office of Chief Accounting Officer of the Company from 2009 to May 2012. Mr. Casciano joined the Company in 1983 and has been a Director since April, 2011.
Kevin R. Jost. served in several leadership roles with broad based management responsibilities, including accounting, finance, investor relations, information technology, human resources, and facilities. Mr. Jost isCasciano formerly served as a member of the Board of Directors and Chairman of Furmanite Corporation,the Audit Committee of Veramark Technologies, Inc., a position he has held from 2011 until the sale of that company in 2013. Mr. Casciano brings 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 IBoard an in-depth understanding of the Company’s Boardfinances and has beenoperations, financial and analytical skills as a Directorcertified public accountant, and a broad set of the Company since 2004.multi-functional management and organizational skills.
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. From March 2007 until joining Vicor in April 2008,
Mr. Simms 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.
Dr. John W. Sammon. Dr. Sammon is the founder of the Company, and served as the Company’s Chief Executive Officer, President and Chairman of the Board until he was succeeded by Mr. Domorski in April 2011.2011 and currently serves on the boards of various subsidiaries of the Company. The extensive experience gained as leader of the Company since its inception as well as from the various senior executive capacities he has held with the Company’s subsidiaries, gives Dr. Sammon an in depthin-depth understanding of the Company’s business and its customers. Dr. Sammon also brings to the boardBoard his extensive leadership experience, strategic planning and broad organizational development expertise. In April, 2011, Dr. Sammon was named Chairman Emeritus of the Board. Dr. Sammon is a member of Class III of the Company’s Board and has been a Director of the Company since 1968.
Dr. Sammon is the father of Karen E. Sammon, President of ParTech, Inc., a wholly owned subsidiary of the Company.
CORPORATE GOVERNANCE
As provided by the By-Laws of the Company and the laws of the State of Delaware, the Company’s state of incorporation, the business of the Company is under the general direction of the Board. AsUntil the departure of the mailing of this statementDirectors Ahn, Jost and Simms from the Board iseffective at the Meeting, the Board will be comprised of six members: fivefour non-management directors and one management director. In March, 2012 the Board exercised its authority pursuant to the Company’s By-Laws to reduce the number of the Board to five effective as of the date of the 2012 Annual Shareholder Meeting. Director Independence. The Board of Directors has affirmatively determined that fourthree of the non-management directors (Directors Ahn, Jost Nielsen and Simms) 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. 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/wp-content/uploads/2012/01/PAR_Corp_Gov_Guidelines.pdf. These standards identify, among other things, material business, charitable and other relationships that could interfere with a director’sDirector’s ability to exercise independent judgment. During 2011,2013, there were no transactions, relationships or arrangements withbetween the Company and Directors Ahn, Jost Nielsen or Simms or any entityof their respective immediate family members or entities with which they are affiliated. There are no family relationships between any of these directors,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 2011,2013, the Board held twenty-two (22)11 meetings and the standing Committees of the Board held a total of seventeen (17)19 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 membertwo members of the Board attended the Annual Meeting.Meeting of Shareholders.
Board Leadership Structure. Mr. Domorski succeeded Dr. Sammon asOn March 25, 2013, the Board, pursuant to its authority under the Company’s Chief Executive Officer (“CEO”) andBy-Laws, amended the By-Laws to separate the Chairman of the Board from the office of Chief Executive Officer and elected Director Ahn to serve as non-executive Chairman of Aprilthe Board. The Board has determined that the separation of the Chairman of the Board and Chief Executive Officer roles is appropriate for the Company at this time because it enables the Chief Executive Officer to focus more closely on the day to day operations of the Company, which is particularly valuable when a new executive management team has been appointed. The task of providing leadership of the Board will be the focus of the Chairman. Particularly, the Board believes the election of a non-executive Chairman enables the leader of the Company’s Board to better represent shareholder interests and provide independent evaluation of and oversight over management. The Board also believes that such a separation is consistent with best practices of corporate governance of a publicly traded company. Prior to March 25, 2011. In addition,2013, the leadership structure was such that the role of Chairman of the Board and Chief Executive Officer was held by Paul B. Domorski. To provide balance to the leadership of the Board, the independent Directors have designated Director Sangwoo Ahn, Chairman of the Audit Committee, as the independent lead or Presiding Director with broad authority and responsibility. The PresidingIn this role, Director Sangwoo Ahn, presidesduring 2013, scheduled and presided at regularly scheduled10 executive sessions of the independent directors of the Company. Director Ahn chairsDirectors without any management Directors or employees present, and has the authority to call and schedule executive sessions and communicatescommunicated with the ChairmanChief Executive Officer to provide feedback and recommendations of the independent Directors. The independent directors met in executive session without any management directors or employees present twelve (12) times during 2011. Director Ahn is also Chairman of the Audit Committee of the Board and a member of the Executive Committee, Compensation Committee and Nominating and Corporate Governance Committee. The independent Directors believe 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 has 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 Board of Directors.Board. Throughout the year,2013, the Board dedicatesdedicated a portion of its meetings to review and discuss specific risk topics in detail. In addition, at least twice each year the Board holds a comprehensive review with the management of each business segment during which the respective leaders of the Company’s business units present to and discuss with the Board, the strategic and operational risks facing the management team, with Board follow upfollow-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 management, its Internal Audit function, and its independent public accounting firm and management regarding these matters and the effectiveness of such controls and processes. The Audit Committee regularly reports on such matters to the full Board.
Committees. The Board has four (4) standing committees: Executive, Audit, Compensation,Executive; Audit; Compensation; and Nominating and Corporate Governance. Pursuant to the Company’s By-Laws, the Board may designate members of the Board to constitute such other committees as the Board may determine to be appropriate. Commencing in May, 2011, the Board reconstituted the Executive Committee and designated all of the Company’s independent Directors to constitute the Audit, Compensation, and Nominating and Corporate Governance committees. The members of each of the four standing committees and the number of meetings held by each committee in 20112013 are set forth in the following table. Following the Annual Meeting, the full Board will assume responsibilities of all four standing committees until such time as the open seats on the Board have been duly filled. For those committees where independence is required of all members, any non-independent directors sitting on such committees shall resign from such committees as soon as reasonably practicable after the appointment of independent directors.
Name | Executive | Audit | Compensation | Nominating and Corporate Governance | Mr. Ahn | Chair | Chair | X | X | Mr. Jost | X | X | Chair | X | Dr. Sammon | X | | | | Mr. Simms | | X | X | Chair | 2013 Meetings | 0 | 6 | 6 | 7 |
Executive Committee. The Executive Committee has the delegated authority, 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, to exercise all powers of the Board in the management and direction of the business and affairs of the Corporation in all cases in which specific direction has not been provided by the Board. The Executive Committee meets when required on short notice during intervals between meetings of the Board.
Name | Executive (Prior to May 3, 2011) | Executive (As of May 3, 2011) | Audit | Compensation | Nominating and Corporate Governance | Mr. Ahn | X | Chair | Chair | X | X | Mr. Constantino | X | | | | | Mr. Jost | | X | X | Chair | X | Dr. Nielsen | | | X | X | X | Dr. Sammon | Chair | X | | | | Mr. Simms | | | X | X | Chair | 2011 Meetings | 1 | 0 | 7 | 8 | 1 |
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Audit Committee. Pursuant toThe Audit Committee, in accordance with its charter, the Audit CommitteeCharter, assists the Board in oversight of management’s conduct and representations of the Company’s accounting and financial reporting processes, systems of internal control, the audit process of the Company’s financial statements, and the Company’s processes for monitoring compliance with laws and regulations and the Company’s code of ethics and conduct. As required by the New York Stock Exchange (“NYSE”) and the committee charter,Charter, 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. Since May, 2011,During 2013, the Audit Committee consisted of four members.three independent members of the Board: Chairman Ahn, and Directors Jost and Simms. The standards adopted by the Board incorporate the independence requirements of the NYSE Corporate Governance Standards and the independence requirements set forth by the Securities and Exchange Commission (“SEC”).SEC. The Board has determined that each of the members of the Audit Committee are “independent” as this term is defined by the NYSE in its listing standards, andthe members of the Audit Committee 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 theThe 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, thethereafter. The Board has determined that SangwooChairman Ahn isand Directors Jost, and Simms are each an “audit committee financial expert”, as defined by the SEC. The number of meetings of the Audit Committee indicated in the table above includes meetings held separately with management, the Company’s internal auditorsInternal Audit function, and the independent registered public accounting firm, andas well as separate Executive Sessionsexecutive sessions with only independent Directors present. The Report of the Audit Committee begins on page 98 of this Proxy Statement.
Compensation Committee. In accordance with its charterThe Compensation Committee Charter was amended and restated in 2013 to conform to the newly effective independence rules of the NYSE Governance Rules. The Committee’s Charter and the requirements of the NYSE, require the Compensation Committee isto be comprised of a minimum of three independent directors. Since May, 2011, the Compensation Committee has consisted of four members. The Board has determined that each of the members of this committee has met the independence standards adopted by the Board which incorporate the new independence requirements under theof 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 determines and approves the compensation level (including any long termlong-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 its committees.
The Compensation Committee engaged the Burke Group as its compensation consultant for the 2013 fiscal year to provide market trend information in connection with both director and executive compensation. The Burke Group was tasked with assisting the Committee in understanding trends and best practices for director and executive compensation in public companies and assessing market practices in connection with executive salaries and long- and short-term incentives. In addition, the consultant developed recommendations for executive compensation reflecting the Company’s strategic plans and compensation philosophy, while being consistent with market practices. It was in this framework, that the Burke Group provided the Committee assistance in developing grant terms under the Company’s 2005 Equity Incentive Plan incorporating long-term performance goals aligning the interests of executives with those of the Company’s shareholders. While the Burke Group provided benchmark data and a general framework for comparisons, the ultimate decisions regarding executive compensation remained with the Compensation Committee. Except for providing services to the Compensation Committee, the Burke Group has not provided any other services to the Company, any member of the Company’s management, or any member of the Compensation Committee.
Nominating and Corporate Governance Committee. Pursuant to its charter and NYSE listing standards, a minimum of three independent directors must constitute the Nominating and Corporate Governance Committee is composed of a minimum of three independent directors. As was the case with the Audit and Compensation Committees, discussed above, since May, 2011, the Nominating and Corporate Governance Committee has been comprised of the four independent directors of the Board.Committee. The Nominating and Corporate Governance Committee assists the Board in meeting its responsibilities in connection with the identificationto: identify and recommendation ofrecommend qualified nominees for election to the Board; developingdevelop and recommendingrecommend to the Board a set of corporate governance principles, which compriseas set forth in the Company’s Corporate Governance Guidelines; adoptingadopt a corporate code of ethics and conduct, embodiedas set forth in the Company’s Code of Business Conduct and Ethics; and monitoringmonitor the compliance with, and periodically reviewingreview and makingmake recommendations to the Board regarding the Company’s governing principles and Code of Business Conduct and Ethics.governance. The Board has determined that each of the members of this committeethe Nominating and Corporate Governance Committee has met the independence standards adopted by the Board which incorporate the independence requirements under theof NYSE listing standards.
Special Committee. At During 2013 the March 16, 2011, meetingCommittee undertook a review of the Board, Dr. Sammon, at that time ChairmanCompany’s code of ethics and conduct. Upon completion, the Boardnew code was recommended to and Chief Executive Officer, informed the Board of his intention to make a formal proposal to acquire at least approximately 80% of the equity of PAR Logistics Management Systems Corporation (“LMS”), a wholly-owned subsidiary of the Company. Acknowledging the considerable conflict of interest involved and the “fair dealing and fair price” requirements of Delaware General Corporation Law associated with insider transactions, as well as prior assessment and discussionapproved by the Board offor the possibility of divesting LMS, the Board, by unanimous vote, established a Special Committee, consisting solely of independent Directors Ahn, Jost, Nielsenimplementation and Simms. Mr. Simms was elected Chairman of the Special Committee. Also by unanimous vote, the Board authorized (a) the Special Committee to consider, accept, reject and/or negotiate the terms of a transaction involving LMS deemed (i) appropriate and consistent with the strategy of the Company, (ii) reflecting both fair dealing and fair price, and (iii) in the best interest of the Company and its stockholders, (b) the Special Committee to take such further steps or actions the Special Committee determined advisable and in the best interest of the Company and its stockholders, including the retention of counsel and financial advisors, and (c) the Company to indemnify the Directors servingis posted on the Special Committee to the maximum extent allowed by applicable Delaware law on a current basis and to pay for any losses, costs or expenses such Director might incur as a direct result of any lawful actions taken or decisions made by the Special Committee. The Board unanimously voted to compensate the Directors serving on the Special Committee, reflecting the time commitment, effort and risk associated with their undertakings, on the following basis: $30,000 for Mr. Simms, in his capacity as Chairman of the Special Committee, and $15,000 for each of Directors Ahn, Jost and Nielsen.Company’s website.
The Special Committee established and maintained a system of regular, frequent communications among themselves, counsel to the Special Committee, financial advisors to the Special Committee, and the Board (outside of formal meetings of the Board) to discuss and report on the undertakings of the Special Committee. Such communications, either in-person meetings or conference calls, occurred from March 2011 through December 2011.
Committee Charters. Each of the Audit, Compensation, and Nominating and Corporate Governance Committees operate under a written charter approved by the Board. The charter isThese charters are reviewed regularly by the respective committees, which may recommend appropriate changes for approval by the Board. A copy ofDuring 2013, the AuditCompensation Committee recommended and the Board approved an Amended and Restated Compensation Committee Charter is attached as Appendix Awhich conforms to this Proxy Statement.the new NYSE governance rules. 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 internetInternet 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 2330 of this Proxy Statement.
Presiding Director and Executive Sessions. The independent directors have chosenDirectors chose Director Ahn to preside at regularly scheduled executive sessions of the independent directors of the Company.Directors during 2013. Among his duties and responsibilities as Presiding Director,in this capacity, Director Ahn chairschaired and hashad the authority to call and schedule executive sessionsExecutive Sessions and communicatescommunicated with the ChairmanChief Executive Officer and the Board to provide feedback and recommendations of the independent Directors. The independent directorsDirectors met in executive session with only independent directorsDirectors being present a total of twelve (12)10 times during 2011. 2013.
Communication with the Board. Interested parties may send written communication to the Board of Directors as a group, the independent directorsDirectors as a group, the Presiding Director, of executive sessions of independent directors, or to any individual directorDirector by sending the communication c/o Gregory T. Cortese, Secretary;Corporate Secretary, PAR Technology Corporation;Corporation, PAR Technology Park;Park, 8383 Seneca Turnpike, New Hartford, NY 13413. UponUntil the Meeting, upon receipt, the communication will be relayed to the Chairman,Director Ahn, if it is addressed to the Board as a whole; to Director Ahn, if it is addressedwhole, to the Presiding Director, of executive sessions of the independent directors or to the independent directorsDirectors as a group, or, to the individual Director, if the communication is addressed to an individual Director, to the individual Director. Following the Meeting, communications will be relayed to the full Board or, if the communication is addressed to an individual Director, to the individual Director. All communications regarding financial accounting, internal controls, audits and auditsrelated matters 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 are used to assist in identifying and evaluating possible nominees for director.nominees. Shareholder recommendations for possible candidates for the Board should be sent to: Nominating and Corporate Governance Committee;Committee, c/o Gregory T. Cortese, Secretary;Corporate Secretary, PAR Technology Corporation;Corporation, PAR Technology Park;Park, 8383 Seneca Turnpike;Turnpike, New Hartford, NY 13413. Regardless of the source of the recommendation, the Nominating and Corporate Governance Committee screens all potential candidates in the same manner. In identifying and considering candidates, for nomination to the Board, the Committee considers the requirements set out in the charter of the Nominating and Corporate Governance Committee Charter.Committee. The criteria includesinclude specific traits,characteristics, abilities and experience that are considered in light ofrelevant to 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 expertise; |
· | 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 charter of the Nominating and Corporate Governance Committee, Charter, the Committeecommittee 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 Committeecommittee will determine whether requesting additional information or an interview is appropriate. The minimum qualifications and specific qualities and skills required for directorsa candidate are set forth in the Company’s Corporate Governance Guidelines and Nominating and Corporate Governance Committee Charter. The Company’s Corporate Governance Guidelines andthe charter of the Nominating and Corporate Governance Committee, Charterwhich are posted on the Company’s website and a printed copy of both documents may be obtainedwebsite. Printed copies are available, without charge, byupon written request.request to the Company. The website and address to send such requests may be found under the heading “Available Information” on page 2330 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,Company’s principal executive officer, the Chief Financial Officerprincipal financial officer, the principal accounting officer, controller 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 2330 of this Proxy Statement under the heading “Available Information.”Information”. The full text of the Company’s Code is also available on the Company’s website at http://www.partech.com/wp-content/uploads/2012/01/Code_of_Business_Conduct_and_Ethics.pdf. 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 2230 of this Proxy Statement.
ReportingOperating under a written charter approved and adopted by the Board and acting on behalf of and reporting to the Board, of Directors and acting on its behalf, the Audit Committee actsprovides oversight of the financial management, independent auditors and financial reporting process of the Company. The Audit Committee’s charter is reviewed annually for changes as appropriate and is available on behalfthe Company’s website or, upon request, in hardcopy (See “Available Information” on page 30 of this Proxy Statement). Three independent members of the Board to provide oversightcomprised the Audit Committee during 2013. The independence of the members of the Committee was determined by the Board based upon its independence standards which incorporate the New York Stock Exchange governance rules and the SEC’s independence requirements for members of audit committees. In addition, the Board determined that each member of the Committee, Sangwoo Ahn, Kevin Jost and James Simms, are “audit committee financial experts” as defined by rules set forth by the SEC. During 2013, the Audit Committee met six times.
The Company’s financial management independent registered public accounting firm, KPMG LLP (“KPMG”) and financial reporting process. The responsibilityis responsible for establishing and maintaining adequate internal financial controls, preparing the Company’s consolidated financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), and the financial reporting process rests with the Company’s management. As the Company’s independent registered public accounting firm, KPMG is responsibleprocess. The responsibility for auditing the Company’s consolidated financial statements and 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.GAAP rests with the Company’s independent registered public accounting firm.
The Audit Committee is responsible for selecting the independent registered public accounting firm for the Company. During 2013, BDO USA, LLP (“BDO”) served as the Company’s independent registered public accounting firm and has been selected by the Audit Committee to serve in that capacity again in 2014. BDO provided to the Audit Committee the written disclosures and letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent communications with the Audit Committee concerning independence, and the Audit Committee has discussed with BDO the matters in those written disclosures, as well as BDO’s independence from the Company and its management. The Audit Committee has reviewed, met and discussed with BDO such other matters as are required to be discussed with the Committee by Auditing Standards No. 16, Communications with Audit Committees.
The Company’s internal audit function (“Internal Audit”) and BDO have unrestricted access to the Audit Committee. Throughout the year, the Audit Committee met and discussed the overall scope and plans for their respective audits, the results of their examinations, and their assessment of the overall quality of the Company’s financial reporting with BDO and Internal Audit. In addition, the Audit Committee met and discussed with Internal Audit their evaluation of the Company’s internal controls. These meetings were held both with and without Company management present.
In the context of the above, the Audit Committee has reviewed, met and discussed with management, KPMGBDO, and the Company’s internal audit function (“Internal Audit”)Audit: (a) the audited consolidated financial statements in the Annual Report for the year ended December 31, 20112013 (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 (b) management’s assessment of the effectiveness of the Company’s internal control over financial reporting.reporting in compliance with Section 404 of the Sarbanes Oxley Act of 2002. Management represented to the Audit Committee that the Company’s consolidated financial statements as of and for the fiscal year ended December 31, 20112013 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 FinancialAccounting Officer, Internal Audit and KPMG.
Internal Audit and KPMG have unrestricted access to the Audit Committee. Throughout the year the Audit Committee met and discussed with the Company’s internal auditors and KPMG the overall scope and plans for their respective audits, the results of their examinations, 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. The Audit Committee met seven times during 2011 with all members of the committee being present at all meetings held.
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 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).
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 the Firm for those services. The Audit Committee also considered whether the 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 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 2011 and 2010 is provided below in this Proxy Statement under the heading, “Principal Accounting Fees and Services”. BDO. In reliance on the reviews and discussions with both management and KPMGBDO referred to above, the Audit Committee recommended to the Board on March 26, 2012, 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, 20112013 for filing with the SecuritiesSEC.
The Audit Committee considered and Exchange Commission.pre-approved any non-audit services provided by BDO during 2013 and 2012 and the fees and costs billed and expected to be billed for those services. The Audit Committee also considered whether the non-audit services provided by BDO were compatible with maintaining auditor independence. In reliance on the reviews and discussions with the Company’s management, and BDO, the Committee is satisfied that non-audit services provided to the Company by BDO are compatible with and did not impair the independence of BDO. A breakdown of the fees and costs billed to the Company by BDO during 2013 and 2012 is provided below in this Proxy Statement under the heading, “Principal Accounting Fees and Services”.
This report is provided by the following independent directors, who comprise the Audit Committee.
Sangwoo Ahn (Chairman) | Dr. Paul D. Nielsen | Kevin R. Jost | James A. Simms |
Principal Accounting Fees and Services
The following table presents fees paid bybilled to the Company for professional services rendered by KPMGBDO USA, LLP during the years ended December 31, 20112013 and December 31, 2010.2012.
| | BDO USA, LLP | | Type of Fees | | 2013 | | | 2012 | | Audit Fees | | $ | 366,000 | | | $ | 335,000 | | Audit-Related Fees | | | 0 | | | | 0 | | Tax Fees | | | 4,000 | | | | 0 | | All Other Fees | | | 0 | | | | 0 | | Total: | | $ | 370,000 | | | $ | 335,000 | |
Type of Fees | | 2011 | | | 2010 | | Audit Fees | | $ | 546,000 | | | $ | 437,000 | | Audit-Related Fees | | $ | 150,000 | | | | 0 | | Tax Fees | | $ | 8,000 | | | $ | 12,000 | | All Other Fees | | | 0 | | | | 0 | | Total: | | $ | 704,000 | | | $ | 449,000 | |
In accordance with the SEC’s rules and definitions, the categories of fees in the above table 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 in connection withrelated to the performance of the audit or review of the Company’s logistics management business pursuant tofinancial statements and not reported within the Asset Purchase and Sale Agreement with ORBCOMM Inc. dated December 23, 2011.audit fees above. 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. 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. As such, all auditing services and permitted non-audit services, including the fees and terms thereof, performed by the independent registered public accounting firm were pre-approved. 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. The Audit Committee has selected BDO USA, LLP to serve as the Company’s independent principal accountant for the current year. One or more representatives of KPMGBDO 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 29, 201228, 2014, by each Director, by each of the Named Executive Officers, and by all Directors and Executive Officers as a group and certain other principal beneficial holders. Under SEC regulation, “beneficial ownership” is defined as sole or shared voting or dispositive power over the Company’s Common Stock.
Name of Beneficial Owner or Group (1) | | Amount and Nature of Beneficial Ownership (2) | | | Percent of Class (3) | | Dr. John W. Sammon | | | 4,742,833 | (4) | | | | 30.11% | | Ronald J. Casciano | | | 251,200 | (5) | | | | 1.59% | | Sangwoo Ahn | | | 128,100 | (6) | | | | * | | James A. Simms | | | 68,100 | (7) | | | | * | | Stephen P. Lynch | | | 63,100 | (8) | | | | * | | Robert P. Jerabeck | | | 55,200 | (9) | | | | * | | Kevin R. Jost | | | 39,134 | (10) | | | | * | | Paul B. Domorski | | | 24,000 | (11) | | | | * | | All Directors and Executive Officers as a Group (11 persons) | | | 5,933,690 | | | | | 37.31% | | Other Principal Beneficial Owners | | | | | | | | | | Deanna D. Sammon | | | 2,092,596 | (12)** | | | | 13.28% | | J.W. Sammon Corp. 408 Lomond Place, Utica, NY 13502 and Sammon Family Limited Partnership 408 Lomond Place, Utica, NY 13502 | | | 2,062,096 | (13)** | | | | 13.09% | | Edward W. Wedbush P.O. Box 30014 Los Angeles, CA 90030-0014 | | | 873,819 | (14) | | | | 5.55% | | Dimensional Fund Advisors LP Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746 | | | 771,536 | (15) | | | | 4.90% | |
Name of Beneficial Owner or Group (1) | | Amount and Nature of Beneficial Ownership (2) | | | Percent of Class (3) | | Paul B. Domorski | | | 86,500 | (4) | | | * | | Dr. John W. Sammon | | | 5,121,196 | (5) | | | 33.82 | % | Ronald J. Casciano | | | 150,600 | (6) | | | * | | Sangwoo Ahn | | | 103,100 | (7) | | | * | | Kevin R. Jost | | | 49,134 | (8) | | | * | | James A. Simms | | | 43,100 | (9) | | | * | | Dr. Paul D. Nielsen | | | 32,600 | (10) | | | * | | Stephen P. Lynch | | | 25,500 | (11) | | | * | | All Directors and Executive Officers as a Group (9 persons) | | | 5,634,730 | | | | 37.21 | % | Other Principal Beneficial Owners Dimensional Fund Advisors LP Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746 | | | 759,927 | (12) | | | 5.01 | % | WEDBUSH, Inc. 1000 Wilshire Blvd., Los Angeles, CA 90017 Edward W. Wedbush P.O. Box 30014, Los Angeles, CA 90030 and Wedbush Securities, Inc. P.O. Box 20014, Los Angeles, CA 90030 | | | 851,221 | (13) | | | 5.62 | % |
* Represents less than 1% | ** | These shares are reported in the manner required by Item 403 of Regulation S-K. For clarity, it is noted that 2,062,096 of these shares are included in the total beneficial ownership holdings of Dr. John W. Sammon as set forth in the table. |
(1) | Except as otherwise noted, the address for each beneficial owner listed above is c/o PAR Technology Corporation;Corporation, PAR Technology Park;Park, 8383 Seneca Turnpike;Turnpike, New Hartford, NY 13413-4991. |
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Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and Directors, and persons who own more than 10% of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE. Such persons are required by SEC 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 20112013 all reports for the Company’s executive officers and Directors that were required to be filed under Section 16(a) were filed on a timely basis.basis except that a Form 4 in connection with a gifting transaction by Ms. Karen E. Sammon was filed late.