Proposal 5 — Ratification of the Appointment of BDO USA, LLP
as our Independent Auditors
The Audit Committee considered and pre-approved any non-audit services provided byhas appointed BDO during 2015 andUSA, LLP as the fees and costs billed and expectedCompany’s independent auditors for 2019. BDO USA, LLP has served as our independent auditor since 2012.
Although your vote to be billed for those services. The prior membersratify the appointment of BDO USA, LLP is not binding on the Company, the Audit Committee considered and pre-approved any non-audit services provided by BDO during 2014 andwill consider your vote in determining the fees and costs billed and expected to be billedappointment of our independent auditors for those services.next year. The Audit Committee also considered whetherreserves the non-audit services provided byright, in its sole discretion, to change an appointment at any time during the year if it determines that such a change would be in our best interests.
Ratification of the appointment of BDO were compatible with maintaining auditor independence. In relianceUSA, LLP as our independent auditors for 2019 requires the affirmative vote of a majority of votes cast and entitled to vote on this Proposal.
The Board of Directors recommends a vote “For” ratification of the reviews and discussions withappointment of BDO USA, LLP as 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 2015 and 2014 is provided below in this Proxy Statement under the heading, “Principal Accounting Fees and Services”.independent auditors for 2019.
This report is provided by the following independent directors, who comprise the Audit Committee.
Cynthia A. Russo
(Chair)
| Paul D. Eurek | Dr. Donald H. Foley | Todd E. Tyler |
Principal Accounting Fees and Services
The following table presents fees billed to the Company for professional services rendered by BDO USA, LLP during the years ended December 31, 20152018 and December 31, 2014.2017 by BDO USA, LLP.
| | | | Fiscal Year Ended | |
| Type of Fees | | | 2018 | | | 2017 | |
Audit Fees(1) | | | | $ | 716,965 | | | | | $ | 699,151 | | |
| Audit-Related Fees | | | | | | | | | | | | | |
| Tax Fees | | | | | | | | | | | | | |
| All Other Fees | | | | | | | | | | | | | |
| Total: | | | | $ | 716,965 | | | | | $ | 699,151 | | |
| | | | BDO USA, LLP | |
| | Type of Fees | | 2015 | | | 2014 | |
| | Audit Fees | | $ | 581,000 | | | $ | 419,000 | |
| | Audit-Related Fees | | | 0 | | | | 0 | |
| | Tax Fees | | | 0 | | | | 0 | |
| | All Other Fees | | | 0 | | | | 29,000 | |
| | Total: | | $ | 581,000 | | | $ | 448,000 | |
(1)
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 consolidatedannual 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 related to the performance of the audit or review of the financial statements and not reported within the 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 and principally include services for risk management and corporate governance.
Consistent with SEC policies regarding auditor independence, theThe 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 Company’s independent registered public accounting firm.auditors. As such, all auditing services and permitted non-audit services, including the fees and terms thereof,there of, 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 aswere pre-approved by the Company’s independent principal accountant for the current year. Audit Committee.
One or more representatives of BDO USA, LLP are expected to be in attendance atattend the meeting,Annual Meeting, where they will have the opportunity to make a statement, if they so desire, and 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, 2016, by each Director, each of the Named Executive Officers, 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 | 4,622,081 (4) | 29.55% |
| | Karen E. Sammon | 665,669 (5) | 4.26% |
| | Ronald J. Casciano | 221,866 (6) | 1.42% |
| | Dr. Donald H. Foley | 26,079 | * |
| | Paul D. Eurek | 15,713 (7) | * |
| | Todd E. Tyler | 15,713 (7) | * |
| | Cynthia A. Russo | 8,538 (7) | * |
| | Matthew R. Cicchinelli | 6,892 (8) | * |
| | All Directors and Executive Officers as a Group (10 persons) (9) | 5,605,457 | 35.83% |
| | Other Principal Beneficial Owners | | |
| | Deanna D. Sammon | 2,092,596 (10) ** | 13.38% |
| | J.W. Sammon Corp. 408 Lomond Place, Utica, NY 13502 and Sammon Family Limited Partnership 408 Lomond Place, Utica, NY 13502 | 2,062,096 (11)** | 13.18% |
| | Eliot Rose Asset Management, LLC and Gary S. Siperstein 1000 Chapel View Blvd., Suite 240 Cranston, RI 02920 | 1,606,915 (12) | 10.27% |
| | Edward W. Wedbush P.O. Box 30014 Los Angeles, CA 90030-0014 | 868,114 (13) | 5.55% |
| ** | 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, PAR Technology Park, 8383 Seneca Turnpike, New Hartford, NY 13413-4991. |
(2) | Except as otherwise noted, each individual has sole voting and investment power with respect to all shares. |
(3) | “Percent of Class” is calculated utilizing 15,644,089 shares of Common Stock, which is the number of the Company’s shares of Common Stock outstanding as of February 29, 2016, and the number of options held by the named beneficial owners, if any, that become exercisable within 60 days thereafter. |
(4) | Includes 100 shares held jointly with Dr. Sammon’s wife, Deanna D. Sammon, and 2,062,096 shares held by the Sammon Family Limited Partnership, for which Dr. Sammon possesses shared voting and dispositive power. The figure does not include 30,400 shares beneficially owned by Mrs. Sammon in which beneficial ownership is disclaimed by Dr. Sammon. |
(5) | Includes 54,000 shares Ms. Sammon has or will have the right to purchase as of April 29, 2016 pursuant to stock options issued under the Company’s equity incentive plans, 2,334 unvested performance based restricted stock awards and 700 unvested time based restricted stock awards. |
(6) | Includes 95,000 shares Mr. Casciano has or will have the right to purchase as of April 29, 2016 pursuant to stock options issued under the Company’s equity incentive plans, 1,200 unvested time based restricted stock awards, 48,600 shares held jointly with his spouse, Anna Casciano and 43,000 shares pledged as security. |
(7) | Includes 8,538 unvested time based restricted stock award. |
(8) | Includes 1,333 shares which Mr. Cicchinelli has or will have the right to acquire as of April 29, 2016 pursuant to the Company's stock option plans 1,067 unvested performance based restricted stock awards, and 334 unvested time based restricted stock awards. |
(9) | This table includes security ownership for those persons serving in the capacity of Director and/or Executive Officer on April 8, 2016, the date this Proxy Statement is first expected to be made available to shareholders. |
(10) | Information related to this shareholder was obtained from Schedule 13G filed with the SEC on April 6, 2016, by John W. Sammon, Deanna D. Sammon, J.W. Sammon Corp. and Sammon Family Limited Partnership (“the Partnership”). Amount includes 30,400 shares for which Mrs. Sammon holds sole voting and dispositive power, 2,062,096 shares held by the Partnership for which Mrs. Sammon possesses shared voting and dispositive power and 100 shares held jointly with her husband, Dr. John W. Sammon. Excludes 2,559,885 owned by Mrs. Sammon’s spouse, Dr. John W. Sammon, as to which she disclaims beneficial ownership. It is noted that 2,062,196 of these shares are included in the beneficial ownership holdings indicated in the table for Dr. John W. Sammon. |
(11) | Information related to this shareholder was obtained from Schedule 13G filed with the SEC on April 6, 2016, by John W. Sammon, Deanna D. Sammon, J.W. Sammon Corp (“JWSC”), and Sammon Family Limited Partnership (the “Partnership”). A total of 2,062,096 shares are held by the Partnership. JWSC is general partner of the Partnership. Dr. Sammon and his spouse, Deanna D. Sammon are the sole owners of JWSC. The Partnership and JWSC, as general partner of the Partnership, each possess sole voting and dispositive power over the shares. Dr. and Mrs. Sammon are the sole owners of JWSC and, as such, hold shared voting and dispositive power over the shares. As a result, the Partnership, JWSC, John W. Sammon and Deanna D. Sammon are each deemed to be beneficial owners of the 2,062,096 shares held by the Partnership. It is noted that these shares are included in the beneficial ownership holdings indicated in the table for Dr. John W. Sammon. |
(12) | Information related to this shareholder was obtained from Schedule 13G filed with the SEC on March 4, 2016 by Eliot Rose Asset Management, LLC and Gary S. Siperstein. Eliot Rose Asset Management, LLC (“ERAM”) and Gary S. Siperstein each report sole voting and dispositive power of 1,606,915 shares and no shared voting or shared dispositive power. The reporting parties indicate that ERAM is deemed to be the beneficial owner of 1,606,915 shares pursuant to separate arrangements whereby it acts as investment adviser to certain persons. Each person for whom ERAM acts as investment adviser has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the common stock purchased or held pursuant to such arrangements. Gary S. Siperstein is deemed to be the beneficial owner of 1,606,915 shares pursuant to his ownership interest in ERAM. |
(13) | Information related to this shareholder was obtained from Schedule 13G/A filed with the SEC on February 17, 2015 by Edward W. Wedbush, Wedbush, Inc., and Wedbush Securities, Inc. Edward W. Wedbush reports he possesses sole voting and dispositive power of 286,416 shares, shared voting power of 756,372 shares and shared dispositive power of 868,114 shares. Mr. Wedbush reports he is Chairman of the Board and possesses approximately 50% ownership of the issued and outstanding shares of Wedbush, Inc. Wedbush, Inc. reports sole voting and dispositive power of 365,471 shares and shared voting and dispositive power of 469,956 shares. Wedbush Inc. is the sole shareholder of Wedbush Securities, Inc. Mr. Wedbush is President of Wedbush Securities, Inc. which reports sole voting and dispositive power of 47,703 shares, shared voting power of 469,956 shares and shared dispositive power of 581,698. The reporting parties indicate in their filing that the inter-relationship of the parties should not be construed as an admission of beneficial ownership by Mr. Wedbush of the securities held or controlled by Wedbush, Inc. or Wedbush Securities Inc. |
152020 Annual Meeting
Stockholder ProposalsSECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and Directors, and persons who own more than 10% of a registered class of the Company's equity securities, to file reports of ownership and changesWe will include in ownership with the SEC and the NYSE. Such persons are required by SEC regulations 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 2015 all reportsour proxy materials for the Company’s executive officers and Directors that were required to be filed under Section 16(a) were filed on a timely basis except for the following: a Form 3 in connection the initial holdings of
Mr. Cicchinelli was filed late due solely to administrative error in connection with the engagement of a new filing service by the Company.
Directors who are employees of the Company are not separately compensated for serving on the Board. All directors are reimbursed for reasonable expenses incurred in attending meetings. For 2015, compensation for non-management directors consisted of a fixed annual cash retainer paid to Directors (with no additional attendance fee for attendance at Board and committee meetings), and for independent directors, an award of restricted stock with full vesting occurring on May 22, 2015, provided, as of the vesting date, the independent director’s position had not been vacated by reason of resignation or removal for cause. Under terms of the grants, transfer of such stock is prohibited while the recipient serves as a director except to the extent necessary to provide reimbursement for taxes incurred as a result of the vesting of such grants. The grants also stipulate that the Board may, in its discretion, waive any forfeiture triggered by the vacating of the independent Director and allow the grants to vest as scheduled.
The following table shows compensation information for the Company’s non-management Directors for fiscal 2015.
Director Compensation for Fiscal 2015
Name of Director | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(1) | | | All Other Compen- sation ($) | | | Total ($) | |
Paul D. Eurek (2) | | $ | 40,000 | | | $ | 39,830 | | | | -- | | | $ | 79,830 | |
Cynthia A. Russo (3) | | $ | 22,500 | | | $ | 39,830 | | | | -- | | | $ | 62,330 | |
Dr. John W. Sammon (4) | | $ | 65,000 | | | | -- | | | | -- | | | $ | 65,000 | |
Todd E. Tyler (5) | | $ | 40,000 | | | $ | 39,830 | | | $ | 10,000 | (6) | | $ | 89,830 | |
| Former Director | | | | | | | | | | | | | | | | |
John S. Barsanti (7) | | $ | 18,420 | | | | -- | | | | -- | | | $ | 18,420 | |
(1) | 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 footnote 8 of the Company’s 2015 Consolidated Financial Statement included in the Company’s Annual Report on 10-K filed with the SEC on March 30, 2016. There can be no assurance that the grant date fair value amounts will be realized. Directors Eurek, Russo and Tyler each received a grant for 8,538 restricted shares of the Company’s Common Stock on June 23, 2015, in exchange for payment of $.02 per share. The grant date fair value of the aforementioned grants to each of the independent Directors was $4.685 per share. |
(2) | At December 31, 2015, Mr. Eurek had an aggregate of 15,173 restricted stock awards and no option awards outstanding. |
(3) | Joined the Board on May 28, 2015. At December 31, 2015, Ms. Russo had an aggregate of 8,538 restricted stock awards and no option awards outstanding. |
(4) | At December 31, 2015, Dr. Sammon had no restricted stock awards and no option awards outstanding. |
(5) | At December 31, 2015, Mr. Tyler had an aggregate of 15,173 restricted stock awards and no option awards outstanding. |
(6) | Awarded by the Board in conjunction with the additional effort provided during the divestiture of hotel and spa technology business unit. |
(7) | Term expired on May 28, 2015. The dollar amount includes the following prorated amounts: annual retainer of $40,000 and $5,000 for serving as Presiding Director and Chair of the Audit Committee. At December 31, 2015, Mr. Barsanti had an aggregate of 7,175 restricted stock awards and no option awards outstanding. |
The Company qualifies as a “smaller reporting company” as defined by Item 10(f) of Regulation S-K. As such, the “Named Executive Officers” for the Company are limited to the Company’s principal executive officer and the two most highly compensated other executive officers who were serving as executive officers at the end of the Company’s last completed fiscal year. The following narrative describes the Company’s compensation objectives, policies and elements of compensation for its executive officers, including its Named Executive Officers for 2015: Ronald J. Casciano, Chief Executive Officer and President; Karen E. Sammon, President, ParTech, Inc.; and Matthew R. Cicchinelli., President of PAR Government Systems Corporation and Rome Research Corporation, wholly owned subsidiaries of the Company (“PAR Government”). Specific discussion regarding the method used to determine compensation for these Named Executive Officers for the 2015 fiscal year is also provided which includes the material factors necessary for an understanding of the information provided in the Summary Compensation Table which follows.
Philosophy
The Company’s compensation philosophy regarding executive compensation is to structure programs that motivate executive officers to grow the Company’s revenues and profits, creating long-term value for shareholders. To achieve this, compensation programs have been designed and implemented to (i) reward executive officers for operating performance and leadership, (ii) align their interests with shareholders, and
(iii) encourage executive officers to remain with the Company.
Objectives
The Company’s compensation program has three primary objectives:
| · | Values-Based: our compensation program will reward performance and behaviors that reinforce the values of leadership, integrity, accountability, teamwork, innovation, and quality; |
| · | Performance-Based: the compensation program will motivate participants to achieve the Company’s overall performance goals as approved by the Board of Directors. It will also incorporate the performance objectives of each of our employees, including executive officers; |
| · | Aligned with Shareholders: our programs will ensure alignment with management and shareholder interests. |
Compensation Policy
Consistent with our philosophy, the Compensation Committee designs compensation programs for the Company’s executive officers in accordance with 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. |
In the view of the Compensation Committee, compensation paid to the executive officers in 2015, including the Named Executive Officers, was consistent with the above policies. The primary responsibility of the Company’s Chief Executive Officer and its other executive officers is the enhancement of shareholder value through balancing the requirements of long-term growth with the achievement of short term performance. The contribution an executive officer has made to achieve the Company’s short term strategic performance objectives as well as that executive officer’s anticipated contribution toward long term objectives provide the basis upon which the executive officer’s individual compensation awards are established.
Setting Compensation
In determining and assessing the appropriateness of the compensation for all executive officers, the Compensation Committee did not engage an independent compensation consultant but, instead, procured benchmark data from a third party survey. This third party compensation survey was utilized by the Compensation Committee to evaluate the compensation levels of chief executive officers at companies of similar size and geographic location within the high technology sector.
Elements of Executive Compensation
To meet its compensation policy objectives, the Company compensates executive officers through a combination of Base Salary, incentive compensation (short-term), Equity Compensation, Deferred Compensation, and various benefits, including medical and 401(k) plans generally made available to all employees of the Company.
The determination of the Company’s executive officers’ compensation is solely within the purview of the Compensation Committee. In deciding compensation programs for the Chief Executive Officer, the Compensation Committee considered the third party information, market trends and best practices. The Compensation Committee also solicited and considered the self-assessment of each executive as to his or her performance against pre-established goals and objectives, as well as the executive’s involvement in the day to day operations of the relevant business unit. For 2015, the Chief Executive Officer did not have any role in establishing his compensation other than his election to not receive a payout under the 2015 annual incentive compensation program discussed further below.
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 executive officers, the Compensation Committee considered the salaries of executives in similar positions, the level and scope of responsibility, experience and performance of the individual executive officers, the financial performance of the Company and other overall general economic factors.
The Compensation Committee utilized the benchmark data mentioned previously when reviewing annual base salaries. An objective of the Compensation Committee was to approve the salary for each executive officer when compared with similar positions identified in the surveys, taking into account variables such as industry, company size, geographic location, and comparison of duties. Consideration was also given to the individual performance of that executive officer, the performance of the organization over which the executive officer has responsibility, the performance of the Company and general economic conditions (with each factor being weighted as the Compensation Committee deemed appropriate).
Incentive Compensation. The purpose of the Company’s annual incentive compensation program for its executive officers is to provide financial incentive for meeting and exceeding pre-established financial performance goals for the respective businesses under their control. In general, the financial performance goals of the executive officers are approved by the Board.
The Compensation Committee made a change to the traditional program for 2015 for the Company’s corporate and Restaurant/Retail executives. The Compensation Committee retained the 2014 program in 2015 for executives within the Government segment. In 2015, incentive compensation payments to the Corporate executives were based 70% on the achievement of earnings before tax depreciation and amortization (EBITDA) goals by the Restaurant/Retail businesses within the Hospitality business segment and 30% on the achievement of Profit Before Tax goals by the Government business segment. As such, the Named Executive Officers within Corporate could earn from 0% to 25% of base salary depending on the executive’s level and on actual financial performance compared to the goals established. For Restaurant/Retail executives, the incentive metric was EBITDA and for PAR Government executives, the metric was Profit Before Tax.
For 2015, the incentive program for each of the Named Executive Officers was set as follows:
Annual Incentive Compensation Plan for Corporate – The incentive payment to Mr. Casciano was based 70% on the achievement of EBITDA goals by the Restaurant/Retail businesses within the Hospitality business segment and 30% on the achievement of Profit Before Tax goals by the Government business segment. On target performance in 2015 would have resulted in an incentive payment to Mr. Casciano of $43,750, equal to 12.5% of his base salary.
Annual Incentive Compensation Plan for Restaurant/Retail executives. – The goal for Ms. Sammon’s plan was based on EBITDA performance. A senior executive in this plan could earn between 5% up to a maximum of 20% of their base salary. On target performance in 2015 would result in an incentive payment to Ms. Sammon of $24,750, equal to 9% of her base salary.
Annual Incentive Compensation Plan for PAR Government executives. – The incentive payment to
Mr. Cicchinelli was based on a goal of Profit Before Tax. On target performance in 2015 would result in an incentive payment to Mr. Cicchinelli equal to 10% of base salary. Mr. Cicchinelli could earn from 0% to 150% of the individual target established for the business depending on actual financial performance compared to the actual goals of the operating plan.
To the extent earned under this formula, cash payments were made following the completion of the Company’s yearly audit. Based on the metrics described above, Mr. Casciano’s 2015 incentive compensation payment was calculated to be $53,594, representing 123% of target; and Ms. Sammon’s 2015 incentive compensation was calculated to be $27,500, representing 111% of target. In light of the discovery of an unauthorized use of Company funds by the Company’s former CFO during 2015 and certain material weaknesses in the Company's internal controls (as disclosed in the Company's Annual Report on Form 10-K filed with the SEC on March 30, 2016), Mr. Casciano and Ms. Sammon declined receipt of their respective incentive compensation indicating their belief that, given their positions of chief executive in 2015 and 2016 respectively, such payment did not align with shareholder values. Mr. Cicchinelli, as an executive officer for the Company’s Government business segment, was measured on the performance of that segment and received incentive compensation of $22,090, representing 137.5% of target, for 2015 performance. In his previous position as VP, ISR Solutions, Mr. Cicchinelli also received commission payment in 2015 in the amount of $26,000 in connection with Government contracts. He also received a special incentive of $15,000 for additional efforts during the transition of the previous President, PAR Government.
Equity Compensation. Stock options granted under the 2005 Equity Incentive Plan or 2015 Equity Incentive Plan may be either Incentive Stock Options as defined by the Internal Revenue Code (“ISO’s”) or options which are not ISO’s (“Non-Qualified Stock Options”). Options generally become exercisable no less than one year after their grant and expire 10 years after the date of the grant. Option grants are discretionary and the amount of the grant reflects of the value of the recipient’s position, as well as the current performance and continuing contribution of that individual to the Company.
The Compensation Committee has recommended and the Board has approved Long Term Incentive (“LTI”) program equity awards to be made to Ms. Sammon in connection with her promotion to President and Chief Executive Officer, and to Mr. Cicchinelli in connection with his promotion to President, PAR Government. These grants are anticipated to be made once the Company emerges from its current fiscal quarter-end trading quiet period. The planned grant to Ms. Sammon will consist of 50,000 non-qualified stock options and 30,000 restricted performance shares. Mr. Cicchinelli will be granted 20,000 restricted performance shares. For these performance shares, the financial performance objectives shall be a series of annual Profit Before Tax targets, with 33% of performance shares vesting annually upon achievement of these targets for 2016, 2017 and 2018.
The terms and conditions of grants under the LTI program contain customary restrictions on transfer of shares, as well as non-solicitation and non-recruitment restrictions for one year following termination of employment. The terms of grants also provide for the “claw back” (i.e. reversal of an award) of vested awards and any profits from exercise of options issued under the awards in the event vesting or profits are later determined by the Board to have resulted from materially inaccurate financial information. In the event of a change in control of company ownership or ownership of a business unit in which the executive is employed, and the executive is terminated without cause (“double-trigger”) the unvested shares granted under the LTI program would vest.
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, the primary purpose of which is to minimize distractions from the executives’ attention to important Company objectives.
PAR Technology Corporation Retirement Plan. The Named Executive Officers are eligible to participate in the PAR Technology Corporation Retirement Plan (the “Retirement Plan”). The Retirement Plan has a deferred profit-sharing component that covers substantially all the employees of the Company including the Named Executive Officers. Contributions to the profit-sharing component of the Retirement Plan are made at the discretion of the Board. There were no contributions to the Company’s profit-sharing program made during 2015. 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 401(k) portion of the Retirement Plan, including the Named Executive Officers. The match on such deferrals is 10% up to the 2015 and 2016 annual IRS limit of $18,000, excluding any deferrals in connection with the catch-up provision.
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 and/or cash bonus to the plan in excess of tax code limitations that apply to the Company's Retirement Plan. The Board also has the sole discretion to make Company contributions to the plan on behalf of employee participants, although it did not make any such employer contributions in 2015.
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 and 2015 Equity Incentive Plans 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 Executive Officer (“CEO”) reports on his evaluations of executive officers, including the other Named Executive Officers. The CEO makes compensation recommendations to the Compensation Committee for the other Named Executive Officers with respect to base salary and annual and long-term incentives.
Mr. Casciano oversaw the actual formulation of plans incorporating the suggestions of the Compensation Committee and provided information to the Compensation Committee on how employees were evaluated and the overall results of the evaluations.
Employment and Severance Agreements
On January 1, 2016, the Board appointed Karen E. Sammon to the position of President and Chief Executive Officer. In connection with her promotion, Ms. Sammon entered into an employment agreement with the Company under which her employment is “at will” and provided for the following elements that will impact her 2016 compensation: (a) an annual base salary of $300,000; (b) participation in the Company’s incentive compensation plan at the rate of 75% of her annual base salary in connection with performance against financial metrics established by the Board; (c) subject to approval and terms established by the Board on the grant date, grants under the PAR Technology Corporation 2015 Equity Incentive Plan of (i) 50,000 non-qualified stock options vesting equally over three years on the anniversary of the date of grant and (ii) 30,000 shares of restricted stock with long term performance based vesting in equal installments over three years with achievement of financial metrics as established by the Board; and (d) continued participation in the Company’s retirement plan, as well as provision of insurance benefits and other customary benefits offered to the Company’s senior executives. Any termination of Ms. Sammon’s employment without cause prior to January 1, 2018, would result in a severance payment of an amount equal to one year of her then current annual base salary in exchange for a duly executed standard release.
On December 12, 2015, Matthew R. Cicchinelli was appointed to the position of President, PAR Government Systems Corporation and Rome Research Corporation. In connection with his promotion, Mr. Cicchinelli entered into an employment agreement with the Company under which his employment is “at will” and provided for the following elements that impacted his 2015 and 2016 compensation: (a) an annual base salary of $240,000; (b) participation in the Company’s 2016 Incentive Compensation Plan at a rate of 50% of his annual base salary for on plan performance against financial targets associated with the Company’s Annual Operating Plan and specific business objectives as established by the Board; (c) subject to approval and terms established by the Board on the grant date, a grant under the PAR Technology Corporation 2015 Equity Incentive Plan of 20,000 shares of restricted stock with long term performance based vesting in equal installments over three years with achievement of financial metrics as established by the Board; and (d) continued participation in the Company’s retirement plan, as well as provision of insurance benefits and other customary benefits offered to the Company’s senior executives. Mr. Cicchinelli’s employment is not governed by any severance agreement.
On September 1, 2015, Mr. Steven P. Lynch was separated from his position as President, PAR Government Systems Corporation and Rome Research Corporation by mutual agreement with the Company. Under this agreement, Mr. Lynch received (i) a pro rata portion of 2015 incentive compensation amounting to $130,625;
(ii) a payment of one year’s base salary of $285,000 in exchange for an executed and unrevoked Release Agreement. Mr. Lynch also received three months of executive level outplacement with a value of $4,200.
Summary Compensation TableThe following table provides information concerning the compensation of the Company’s Chief Executive Officers and the two other most highly compensated executive officers (the “Named Executive Officers”) for fiscal 2015 and 2014. For a complete understanding of the table, please read the narrative disclosures above, as well as the footnotes that follow the table.
Name and Principal Position | Year | Salary ($)(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) |
Ronald J. Casciano (7) Chief Executive Officer, | 2015 | 350,000 | -- | -- | -- | -- | -- | 11,814 | 361,814 |
President and Treasurer, PAR Technology Corporation (retired) | 2014 | 350,000 | -- | 58,334 | -- | -- | 7,084 | 11,043 | 426,461 |
| | | | | | | | | | |
Karen E. Sammon (8) Former President, ParTech, Inc. | 2015 | 275,000 | -- | -- | -- | -- | -- | 1,290 | 276,290 |
(Current President & CEO, PAR Technology Corporation) | 2014 | 275,000 | -- | 75,091 | -- | -- | -- | 1,242 | 351,333 |
| | | | | | | | | | |
Matthew R. Cicchinelli (9) President, PAR Government | 2015 | 161,846 | -- | -- | -- | 22,090 | --- | 48,197(10) | 217,133 |
Systems Corporation and Rome Research Corporation | 2014 | 146,807 | -- | 20,756 | 3,202 | 22,079 | -- | 28,417(10) | 236,261 |
| | | | | | | | | |
Stephen P. Lynch (11) Former President, PAR | 2015 | 227,452 | -- | -- | 76,224 | 130,625 | -- | 316,715 (12) | 751,016 |
Government Systems Corporation and Rome Research Corporation | 2014 | 285,000 | | -- | -- | 212,078 | -- | 14,418(13) | 560,277 |
| | | | | | | | | | |
Robert P. Jerabeck(14) Former Executive Vice | 2015 | 95,769 | -- | -- | -- | -- | -- | 1,081 | 96,850 |
President and Chief Operating Officer, PAR Technology Corporation | 2014 | 300,000 | -- | 43,751 | -- | -- | -- | 3,222 | 346,973 |
(1) | Amounts reported in column (c) reflect base salaries earned by 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. |
(2) | During fiscal year 2015, there were no stock awards granted. During fiscal year 2014, the Company granted 9,100 stock awards to Ms. Sammon and granted 15,600, 4,300 and 11,700 stock awards to Messrs. Casciano, Cicchinelli and Jerabeck, respectively. Included in the total are 7,000 performance based awards and 2,100 time vested awards to Ms. Sammon and 12,000, 3,200 and 9,000 performance based awards and 3,600, 1,000 and 2,700 time vested awards to Messrs. Casciano, Cicchinelli and Jerabeck, respectively. Additionally, during 2014, Ms. Sammon was granted 18,815 phantom stock awards, of which 6,272 were time vested and 12,543 were performance based awards. The dollar amounts reflect the aggregate grant fair value based upon the probable outcome of such conditions identified in the performance based awards, calculated in accordance with FASB ASC Topic 718. Assumptions made in these valuations are discussed in Note 7 to the Company’s 2015 Consolidated Financial Statement included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2015. The aggregate grant date fair value assuming the highest level of performance conditions will be achieved, are $122,000 for Ms. Sammon and $78,500, $22,000 and $58,900 for Messrs. Casciano, Cicchinelli and Jerabeck, respectively. All unvested grants to Mr. Jerabeck were forfeited at the time of his separation from the Company on April 15, 2015. |
(3) | During fiscal year 2015, the Company granted 54,550 options to Mr. Lynch and did not grant any stock options to Ms. Sammon, or Messrs. Casciano, Cicchinelli or Jerabeck. There was no vesting of any of the granted options to Mr. Lynch prior to his separation from the Company on September 1, 2015 and all unvested options were forfeited. During fiscal year 2014, the Company granted, 2,000 stock options to Mr. Cicchinelli and did not grant any stock options to Messrs. Casciano, Jerabeck or Lynch. 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 8 to the Company’s 2015 and Note 7 to the Company’s 2014 Consolidated Financial Statement included in the Company’s Annual Reports on Form 10-K filed with the SEC on March 30, 2016 and March 31, 2015 respectively. There can be no assurance that the grant date fair value amounts will be realized. |
(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 discussion of Executive Compensation under the section entitled “Incentive Compensation” on page 19. 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. |
(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); personal vehicle use; and imputed income on Company payment of term life insurance premiums as determined under the Internal Revenue Code. |
(7) | Mr. Casciano retired from his management positions with the Company effective January 1, 2016. |
(8) | Ms. Sammon was promoted to the position of President and Chief Executive Officer of the Company effective January 1, 2016. Prior to her promotion, Ms. Sammon served as President, ParTech, Inc. |
(9) | Mr. Cicchinelli was promoted to the position of President, PAR Government Systems Corporation and Rome Research Corporation effective December 12, 2015. Prior to his promotion, Mr. Cicchinelli served as Vice President, Intelligence, Surveillance and Reconnaissance Innovations. |
(10) | Also includes commission payments of $26,000 and $32,000 in 2015 and 2014, respectively. Also includes a $15,000 bonus related to the transition of the previous President of PAR Government. |
(11) | Mr. Lynch separated from the Company on September 1, 2015. |
(12) | In addition to the perquisites described in footnote (6) above, includes a separation payment of $285,000 and $12,000 housing benefit. |
(13) | In addition to the perquisites described in footnote (6) above, includes $9,000 housing benefit. |
(14) | Mr. Jerabeck separated from the Company on April 15, 2015. |
Outstanding Equity Awards at Fiscal Year-End
The following tables show all outstanding equity awards held by the Named Executive Officers at December 31, 2015.
| | Option Awards |
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date |
| (a) | (b) | (c) | (d) | (e) | (f) |
Ronald J. Casciano | 7,500(1) 10,000(2) 75,000(3) | 2,500(1) 5,000(2) 75,000(3) | 0 0 0 | $4.78 $5.32 $5.32 | 04/23/22 12/11/23 12/11/23 |
Karen E. Sammon | 4,000(4) 50,000(5) | 2,000(4) 50,000(5) | 0 0 0 | $5.32 $5.32 | 12/11/23 12/11/23 |
Matthew R. Cicchinelli | 666(6) | 1,334(6) | 0 | $4.80 | 1/9/24 |
(1) | These options were granted on April 23, 2012. Of these options, 2,500 vested on April 23, 2013, 2,500 vested on April 23, 2014 and 2,500 vested on April 23, 2015. The 2,500 unvested options vest as follows: 2,500 shares on April 23, 2016. |
(2) | These options were granted on December 11, 2013. Of these options, 5,000 vested on December 31, 2014 and 5,000 vested on December 31, 2015. The 5,000 unvested options vest as follows: 5,000 shares on December 31, 2016. |
(3) | These options were granted on December 11, 2013. Of these options, 37,500 vested on December 31, 2014. The 112,500 unvested options vest as follows: 37,500 shares on December 31, 2015, 37,500 shares on December 31, 2016 and the remaining 37,500 shares on December 31, 2017. |
(4) | These options were granted on December 11, 2013. Of these options, 2,000 vested on December 31, 2014 and 2,000 vested on December 31, 2015. The 2,000 unvested options vest as follows: 2,000 shares on December 31, 2016. |
(5) | These options were granted on December 11, 2013. Of these options, 25,000 vested on December 31, 2014. The 50,000 unvested options vest as follows: 25,000 shares on December 31, 2015, 25,000 shares on December 31, 2016 and the remaining 25,000 shares on December 31, 2017. |
(6) | These options were granted on January 9, 2014. The options will vest 33% annually over a three year period on the anniversary of the date of the grant. The 1,334 unvested options vest as follows: 666 shares on January 9, 2016 and the remaining 667 shares on January 9, 2017. |
| Stock Awards |
Name | Grant Date | Number of
Share or Units
of Stock that
Have Not
Vested (#)
| Market Value
of Shares or
Units of Stock
that Have Not
Vested ($)
| 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) | | (g) | (h) | (i) | (j) |
Ronald J.
Casciano *
| 2/14/2014
2/14/2014
| 0
0
| 0
0
| 2,400(1)
4,000(2)
| 16,152(1)
26,920(2)
|
Karen E.
Sammon
| 1/9/2014
1/9/2014
| 0
0
| 0
0
| 2,334(3)
1,400(4)
| 15,708(3)
9,422(4)
|
Matthew R.
Cicchinelli
| 1/9/2014
1/9/2014
| 0
0
| 0
0
| 1,814(3)
667(4)
| 12,208(3)
4,489(4)
|
Robert P.
Jerabeck *
| -- | -- | -- | --
| -- |
Stephen P.
Lynch *
| -- | -- | -- | -- | -- |
| * | Based on the separation from the Company on September 1, 2015 and April 15, 2015 for Messrs. Lynch and Jerabeck, respectively, there are no stock awards that remain unvested at December 31, 2015. |
| (1) | The Company granted 3,600 time vesting based restricted stock awards to Mr. Casciano. The time vesting based restricted stock awards vest in three separate tranches in equal share amounts on January 1, 2015, January 1, 2016 and January 1, 2017. The dollar amounts reflected above represent the market value based on the Company’s closing stock price at December 31, 2015. The aggregate grant date fair value as computed in accordance with FASB ASC Topic 718, assuming the highest level of performance conditions will be achieved is $18,054 for Mr. Casciano. Assumptions made in these valuations are discussed in Note 8 to the Company’s 2015 Consolidated Financial Statement included in the Company’s Annual Report on 10-K filed with the SEC on March 31, 2016. |
| (2) | The Company granted 12,000 performance based awards to Mr. Casciano. The performance based awards vest in three separate tranches in equal share amounts on March 15, 2015, March 15, 2016 and March 15, 2017. The first and second tranche was cancelled based on non-achievement of performance conditions. The dollar amounts reflected above represent the market value based on the Company’s closing stock price at December 31, 2015. The aggregate grant date fair value as computed in accordance with FASB ASC Topic 718, assuming the highest level of performance conditions will be achieved on the remaining shares, is $20,140 for Mr. Casciano. Assumptions made in these valuations are discussed in Note 8 to the Company’s 2014 Consolidated Financial Statement included in the Company’s Annual Report on 10-K filed with the SEC on March 31, 2016. |
| (3) | The Company granted 7,000 and 3,200 performance based awards to Ms. Sammon and Mr. Cicchinelli respectively. The performance based awards vest in three separate tranches in equal share amounts on March 15, 2015, March 15, 2016 and March 15, 2017. The first and second tranche was cancelled based on non-achievement of performance conditions. The dollar amounts reflected above represent the market value based on the Company’s closing stock price at December 31, 2015. The aggregate grant date fair value as computed in accordance with FASB ASC Topic 718, assuming the highest level of performance conditions will be achieved on the remaining shares, is $12,498 and $11,427 for Ms. Sammon and Mr. Cicchinelli, respectively. Assumptions made in these valuations are discussed in Note 8 to the Company’s 2015 Consolidated Financial Statement included in the Company’s Annual Report on 10-K filed with the SEC on March 31, 2016. |
| (4) | The Company granted 2,100 and 1,000 time vesting based restricted stock awards to Ms. Sammon and Mr. Cicchinelli, respectively. The time vesting based restricted stock awards vest in three separate tranches in equal share amounts on January 1, 2015, January 1, 2016 and January 1, 2017. The dollar amounts reflected above represent the market value based on the Company’s closing stock price at December 31, 2015. The aggregate grant date fair value as computed in accordance with FASB ASC Topic 718, assuming the grant conditions will be achieved is $7,469 and $3,557 for Ms. Sammon and Mr. Cicchinelli, respectively. Assumptions made in these valuations are discussed in Note 8 to the Company’s 2015 Consolidated Financial Statement included in the Company’s Annual Report on 10-K filed with the SEC on March 31, 2016. |
Equity Compensation Plan Information
The following table shows the number, as of December 31, 2015, of equity securities 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) |
| | (a) | (b) | (c) |
| Equity compensation plans approved by security holders | 932,509 | $5.14 | 1,000,000(*) |
| Equity compensation plans not approved by security holders | 0 | 0 | 0 |
| Total | 932,509 | $5.14 | 1,000,000 |
(*) | This total reflects those shares available for issuance under the Company’s 2015 Equity Incentive Plan. The ability to issue grants under the Company’s previous equity plan, the 2005 Equity Incentive Plan, expired by its terms on December 28, 2015, however, awards previously granted under this plan remain valid and may extend beyond that date. |
Transactions with Related Persons
For the Company’s last fiscal year beginning January 1, 2015 and ending December 31, 2015, and for the Company’s 2014 fiscal year, beginning January 1, 2014 and ending December 31, 2014, there were no transactions, or currently proposed transactions, in which the Company was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest, except for the following:
| · | Prior to her promotion to President and Chief Executive Officer for the Company effective January 1, 2016, Karen E. Sammon, a member of the immediate family of Dr. John W. Sammon, Director and Chairman Emeritus of the Company’s Board of Directors and a beneficial owner of more than five percent of the Company’s outstanding Common Stock, served as President of ParTech, Inc., a wholly owned subsidiary of the Company. ParTech, Inc. is the principal business unit in the Company’s Hospitality business segment. Ms. Sammon’s total compensation for 2015 was $276,290 and was principally comprised of her salary of $275,000, as well as provision of insurance benefits and other customary benefits offered to the Company’s senior executives. Ms. Sammon’s total compensation for 2014 was $351,333 and was principally comprised of her salary of $275,000, approximately $36,184 in equity or equity based awards with performance based vesting, and approximately $38,907 in time based equity or equity based awards, as well as provision of insurance benefits and other customary benefits offered to the Company’s senior executive. Ms. Sammon’s annual base salary for 2016 is currently set at $300,000. |
| · | John W. Sammon, III, a member of the immediate family of Dr. Sammon and Karen E. Sammon, became an employee of ParTech, Inc., a subsidiary of the Company, on October 13, 2014 serving as General Manager & Senior Vice President, Intelligent Checklist Software Division. Mr. Sammon’s total compensation for 2015 was $187,618 which was comprised of his salary, participation in the Company’s retirement plan, as well as provision of insurance benefits and other customary benefits offered to the Company’s senior executives. Mr. Sammon’s total compensation for 2014 was $32,232 which was comprised of his salary, participation in the Company’s retirement plan, as well as provision of insurance benefits offered to the Company’s senior executives. Mr. Sammon’s annual base salary for 2016 is currently set at $185,000. |
| · | Karen E. Sammon, the Company’s President and Chief Executive Officer, and her brother, John W. Sammon, III, an employee of ParTech, Inc. are principals in Sammon and Sammon, LLC, doing business as Paragon Racquet Club. Paragon Racquet Club leases a portion of the Company’s facilities at New Hartford, New York on a month to month basis at the base rate of $9,775 (or an aggregate annual amount of $117,300 for 2015 and 2014). In addition, Paragon Racquet Club provided memberships to the Company's local employees valued at $24,200 and $23,800 for 2015 and 2014, respectively. Both Ms. Sammon and Mr. Sammon are members of the immediate family of Dr. Sammon. |
Policies and Procedures With Respect to Related Party Transactions
The Company’s written policy on related party transactions requires Controllers of all subsidiaries to review on a quarterly basis all transactions and potential transactions for related party involvement. All identified transactions, if any, are reported to the Company’s principal accounting officer and the Company’s legal counsel. Approval or ratification by the Nominating and Corporate Governance Committee is required for any transaction or series of transactions exceeding $120,000 in which the Company is a participant and any related person has a material interest. Related persons would include the Company’s Directors and executive officers and their immediate family members as well as any person known to be the beneficial owner of more than 5% of the Company’s Common Stock.
Under the Company’s Corporate Governance Guidelines and Code of Business Conduct & Ethics, all Directors and executive officers and employees of the Company have a duty to report, which includes reports to the Company’s Compliance Officer and to the Nominating and Corporate Governance Committee or Audit Committee, potential conflicts of interests, including transactions with related persons. All related party transactions, other than compensation arrangements, expense allowances and other similar items in the ordinary course of business are disclosed in the Company’s financial statements. Compensation paid by the Company for service to an employee, even if the aggregate amount involved exceeds $120,000, are not reviewed by the Nominating and Corporate Governance or Audit Committees unless the Compliance Officer, principal accounting officer or legal counsel believe such compensation to be inconsistent with peers of the related party within the Company or the Company’s compensation practices in general.
Proposal 2: | Non-binding advisory vote regarding the compensation of the Company’s Named Executive Officers |
As a smaller reporting company, the Company provides disclosures regarding compensation of Named Executive Officers pursuant to Item 402 (m) through (q) of Regulation S-K promulgated under the Securities Exchange Act of 1934 (“Regulation S-K”). While the Company’s smaller reporting company status exempts it from Item 402(b) of Regulation S-K, which imposes compensation discussion and analysis of a company’s executive compensation practices, the Company has elected to provide information regarding its objectives and practices regarding executive compensation in order to give its shareholders transparency into its compensation philosophy and practices. The compensation paid to the Company’s Named Executive Officers is disclosed in the narrative discussion and compensation tables on pages 17 through 26 of this Proxy Statement. As discussed in the disclosures, the Company believes its compensation policies and decisions are focused on pay-for-performance principles and are strongly aligned with the long term interests of building shareholder value.
The Company’s shareholders, through their non-binding advisory vote at the 20132020 Annual Meeting of Shareholders, indicated a desire for an annual non-binding advisory vote regardingStockholders any stockholder proposals that comply with Rule 14a-8 under the compensation of the Company’s Named Executive Officers. The Board believes an annual vote will enhance shareholder communication by providing a clear, simple means for the Company to obtain information on investor sentiment about its executive compensation philosophy. Therefore, in accordance with Section 14A of the Security Exchange Act of 1934, as amended, and the regulations promulgated there under, shareholders are being asked to provide a non-binding advisory vote on the following resolution:
RESOLVED,Act. Rule 14a-8 requires that the compensation paidwe receive such proposals not less than 120 days prior to the Company’s Named Executive Officers, as disclosed in this Proxy Statement, including the compensation tables and narrative discussion, be and hereby is APPROVED.
The shareholder vote on Proposal 2 is advisory in nature and, therefore, is not binding on the Company, the Board of Directors or the Compensation Committee. While the opinions of the Company’s shareholders are valued, the result of the vote will not be deemed to create or imply any change to the fiduciary duties for the Company, the Board or the Compensation Committee. To the extent there is any significant vote against the compensation of the Company’s Named Executive Officers as disclosed in this Proxy Statement, the Company, the Board, and the Compensation Committee will consider shareholder concerns and an evaluation will be made as to whether any actions are necessary to address those concerns.
The Board of Directors recommends a vote FOR the proposal to approve the compensation of the Company’s Named Executive Officers, as disclosed in this Proxy Statement, including the compensation tables and narrative discussion. Unless a contrary direction is indicated, shares represented by valid proxies that are not marked with a vote in connection with Proposal 2, will be voted FOR the proposal.
Other than as described in the materialsone-year anniversary of this Proxy Statement, or by December 25, 2019. If the Board knows of no matters that will be presented at the meeting for action by shareholders. However, if any other matters properly come before the meeting, or any postponement or adjournment thereof, the persons acting by authorizationproposal is in compliance with all of the proxiesrequirements set forth in Rule 14a-8 under the Exchange Act, we will vote thereoninclude the stockholder proposal in accordance with their judgment.
NO INCORPORATION BY REFERENCE
Inour proxy statement and place it on the Company’s filings withform of proxy issued for the SEC, information is sometimes “incorporated by reference.” This means that we are referring shareholders to information that has previously been filed with the SEC and the information2020 Annual Meeting. Stockholder proposals submitted for inclusion in our proxy materials should be considered as part of the particular filing. As provided under SEC regulations, the “Report of the Audit Committee” and the executive compensation discussion contained in this Proxy Statement specifically are not incorporated by reference into any other filings with the SEC. In addition, this Proxy Statement includes several website addresses. These website addresses are intended to provide inactive, textual references only. The information on these websites is not part of this Proxy Statement. If you have received this document in paper form, the Company’s Annual Report to its shareholders for the year ended December 31, 2015, including audited consolidated financial statements, accompanies this Proxy Statement. Exceptmailed to the extent expressly provided herein, the Company’s Annual Report is not incorporated in this Proxy Statement by reference.
The Company’s Annual Report on Form 10-K can be located with the Proxy Materials on the Company’s website https://www.partech.com/about-us/investors/annual-reports/. In addition, the Annual Report on Form 10-K can be accessed under the SEC Filings link on our websitehttps://www.partech.com/about-us/investors/sec-filings/ together with the Company’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended. These reports are available for access as soon as is reasonably practicable after the Company electronically files such reports with, or furnishes those reports to, the SEC. The Company'sfollowing address: Corporate Governance Guidelines, Board of Directors committee charters (including the charters of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee) and code of ethics entitled “Code of Business Conduct and Ethics” also are available at this same location on our website. Shareholders can receive free printed copies of any or all of these documents by directing a written or oral request to:Secretary, PAR Technology Corporation, Attention: Investor Relations, PAR Technology Park, 8383 Seneca Turnpike, New Hartford, NY 13413-4991, 315-738-0600; https://www.partech.com/about-us/investors/.New York 13413-4991.
Stockholder Nominations of Directors
SHAREHOLDER PROPOSALS FOR 2017 ANNUAL MEETING
ShareholdersAs described in our bylaws, stockholders may submit proposals on matters appropriatebring nominations for shareholder action atdirectors before the Company’s2020 Annual Meetings consistentMeeting only with the regulations adopted by the SECtimely and the By-Laws ofproper notice to the Company. To be considered for inclusion in next year’s Proxy Statement and formtimely, our Corporate Secretary must receive notice of proxy relating tostockholder nominations not more than 90 days nor less than 60 days before the 20172020 Annual Meeting any shareholder proposalsof Stockholders. However, in the event that the Company provides less than 70 days’ notice or prior public disclosure of the date of the 2019 Annual Meeting, stockholders’ notice must be received at the Company’s general offices nonot later than the close of business on Decemberthe tenth (10th) day following the date on which the Company gives such notice or makes prior public disclosure. Based on an assumed annual meeting date of June 9, 2016. If a matter2020, the deadline for stockholders to provide timely notice of director nominations and/or other items of business is received by February 22, 2017, the Company may include itwill be no earlier than March 11, 2020, and no later than April 10, 2020. Stockholders must mail written notice that complies with all requirements set forth in the Proxy Statement and form of proxy and, if it does, it may use its discretionary authority to vote on the matter. For matters that are not received by February 22, 2017, the Company may use its discretionary voting authority when the matter is raised at the Annual Meeting of Shareholders, without inclusion of the matter in its Proxy Statement. Proposals should be addressedour bylaws to the attention of:following address: Corporate Secretary, PAR Technology Corporation,
PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York 13413-4991. The Company recommendsWe recommend all such submissions be sent by Certified Mail -— Return Receipt Requested.
Other Annual Meeting Business
Pursuant to our bylaws, stockholders may bring items of business before the Annual Meeting outside of the process pursuant to Rule 14a-8 only with timely and proper notice to the Company. To be timely, our Corporate Secretary must receive notice not more than 90 days nor less than 60 days before the 2020 Annual Meeting of Stockholders. However, in the event that the Company provides less than 70 days’ notice or prior public disclosure of the date of the Annual Meeting, stockholders’ notice must be received not later than the close of business on the tenth (10th) day following the date on which the Company gives such notice or makes prior public disclosure. Based on an assumed annual meeting date of June 9, 2020, the deadline for stockholders to provide timely notice of other items of business will be no earlier than March 11, 2020, and no later than April 10, 2020. Stockholders must mail written notice that complies with all requirements set forth in our bylaws to the following address: Corporate Secretary, PAR Technology Corporation, PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York 13413-4991. We recommend all submissions be sent by Certified Mail — Return Receipt Requested.
By Order of the Board of Directors,
Cathy A. King
Corporate Secretary
| By Order of the Board of Directors, | |
| | |
| Viola A. Murdock | |
| Corporate Secretary | |
April 8, 2016 | | |
April 23, 2019
A copy of our Annual Report on Form 10-K for the year ended December 31, 2018, including financial statements thereto but not including exhibits, as filed with the SEC on March 18, 2019, is available without charge upon written request to: PAR Technology Corporation, Attn: Investor Relations, 8383 Seneca Turnpike, New Hartford, New York 13413.
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