Use of estimates
The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, stock based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment, identifiable intangible assets and goodwill, valuation allowances for receivables, inventories and deferred income tax assets, and measurement of contingent consideration at fair value. Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements Not Yet Adopted
In February 2016, the FASB issued new guidance related to leases. This standard requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. The new standard is effective for the Company for the fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is evaluating the impact the adoption of this standard will have on its consolidated financial statements.
In November 2015, the FASB issued new guidance related to the balance sheet classification of deferred taxes. This standard requires an entity to classify all deferred tax assets, along with any valuation allowance, as noncurrent on the balance sheet. As a result, each jurisdiction will have one net noncurrent deferred tax asset or liability. The new standard is effective for the Company for fiscal years beginning after December 15, 2016. The adoption of this standard, which may be applied either prospectively or retrospectively, is not expected to have a material impact on the Company’s consolidated financial statements.
In July 2015, the FASB issued new guidance related to the measurement of inventory. This standard changes the inventory valuation method from the lower of cost or market to the lower of cost or net realizable value for inventory valued under the first-in, first-out or average cost methods. The new standard is effective for the Company beginning in its first quarter of fiscal 2017, and requires prospective adoption with early adoption permitted. The Company is evaluating the impact the adoption of this standard will have on its consolidated financial statements.
In April 2015, the FASB issued new guidance related to the presentation of debt issuance costs, which amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of a deferred charge asset. The new standard is effective for the Company beginning in its first quarter of fiscal 2016, with early adoption permitted. The Company is evaluating the impact the adoption of this standard and it is not expected to have a material impact on our consolidated financial statements.
In April 2015, the FASB issued new guidance related to accounting for the fees paid in a cloud computing arrangement, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If considered a software license, the arrangement should be accounted for as an acquisition of a software license. If not considered a software license, the arrangement should be accounted for as a service contract. The new standard is effective for the Company beginning in its first quarter of fiscal 2016, with early adoption permitted. The Company is evaluating the impact the adoption of this standard and it is not expected to have a material impact on our consolidated financial statements
In September 2014, the FASB issued amended guidance on the accounting for certain share-based employee compensation awards. The amended guidance requires that share-based employee compensation awards with terms of a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. The Company is required to adopt this guidance for its annual and interim periods beginning March 1, 2016. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
In August 2014, the FASB issued new guidance related to disclosures around going concern, including management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related disclosures when conditions or events raise substantial doubt about an entity's ability to continue as a going concern. The new standard is effective for the Company beginning in its first quarter of fiscal 2017, with early adoption permitted. The impact of adopting this guidance on January 1, 2017 is not expected to have a material impact on our consolidated financial statements.
In May 2014, the FASB amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In July 2015, the FASB affirmed its proposal of a one-year deferral of the effective date of the new revenue standard. As a result, the new guidance will be effective for the Company beginning in its first quarter of fiscal 2018. The amendments may be applied retrospectively to each prior period presented or with the cumulative effect recognized as of the date of initial application. PAR is currently evaluating the impact of these amendments and the transition alternatives on PAR's financial statements.
Recently Adopted Accounting Pronouncements
In April 2014, the FASB issued guidance that raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and other disposals that do not meet the definition of a discontinued operations. The new guidance defines a discontinued operation as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. The new guidance is effective on January 1, 2015, with early adoption permitted. The adoption of this amendment on January 1, 2015 did not have a significant impact on the Company's financial position or results of operations.
Note 2 — Acquisition
On September 18, 2014, PAR Technology Corporation (the "Company") and its wholly-owned subsidiary, ParTech, Inc. ("ParTech"), entered into and closed a definitive agreement with Brink Software Inc. ("Brink") and all the shareholders of Brink pursuant to which ParTech has purchased the equity interest of Brink in a two-step closing. This acquisition was to expand the Company’s cloud based POS software offerings. The guaranteed portion of the purchase price for Brink’s shares will total $10 million in cash, which is payable over a period of three years with $5.0 million paid at closing, $3.0 million paid on the first year anniversary of close, and $2.0 million payable on the second year anniversary of close. In addition to the guaranteed payments, there is a contingent consideration of up to $7.0 million payable to the former owners of Brink based on the achievement of certain conditions as defined in the definitive agreement.
The payment of $5.0 million on September 18, 2014, was for the purchase of 51% of Brink’s outstanding shares. The remaining 49% was purchased and transferred on September 18, 2015, the first anniversary of the initial closing date, for a purchase price of $5.0 million, $3.0 million of which was paid on the second closing and the $2.0 million balance will be payable on September 18, 2016. The estimated fair value of the remaining portion of the note payable due on September 18, 2016 is approximately $1.9 million and is included within current debt in PAR’s consolidated balance sheets. Per the stock purchase agreement, Brink shareholders assigned their voting rights of the remaining 49% of Brink shares to PAR. As a result, PAR controlled 100% of the Brink shares prior to the transfer on September 18, 2015 and fully consolidated the financial results of Brink in accordance with ASC Topic 805. The agreement also provided up to $1.0 million of the purchase price to be delivered into escrow if one or more claims arise within the first twelve months of the transaction. Such escrow served as a source of payment for any indemnification obligations that may arise. No such claims arose within the first twelve months of the transaction.
The contingent purchase price maximum of $7.0 million can be earned through fiscal year 2018, based upon the achievement of certain conditions as defined in the definitive agreement. These conditions have separate targets as defined in the definitive agreement, which began on December 31, 2015. The targets for fiscal year 2015 were not met, however, the total earning potential has a cumulative effect ending fiscal year 2018. The estimated fair value of this contingent consideration is approximately $5.1 million and is included within non-current liabilities in PAR’s consolidated balance sheets (see note 13).
In determining the purchase price allocation, the Company considered, among other factors, market participants’ intentions to use the acquired assets and the historical and estimated future demand for the acquired Brink POS cloud based point of sale application.
As of September 18, 2014, the Company recorded an aggregate purchase price of $14.9 million, including a cash payment of $5.0 million, net of cash acquired of $184,000, plus additional estimated cash payments of $9.9 million, which represents the fair value of the remaining consideration.
The total purchase price was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed by the Company based on their fair values as of the closing date of the acquisition. The excess of the purchase price over those fair values was recorded to goodwill. The following table summarizes our allocation of purchase price (in thousands) at the measurement date, September 18, 2014:
Accounts receivable
|
|
$
|
83
|
|
Inventories
|
|
|
116
|
|
Intangible assets
|
|
|
7,190
|
|
Goodwill
|
|
|
10,315
|
|
Other assets
|
|
|
90
|
|
Total assets acquired
|
|
$
|
17,794
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
124
|
|
Other current liabilites
|
|
|
365
|
|
Deferred Tax Liabilities
|
|
|
2,445
|
|
Total liabilities assumed
|
|
$
|
2,934
|
|
|
|
|
|
|
Purchase price
|
|
$
|
14,860
|
|
The identifiable intangible assets acquired and their estimated useful lives (based on third party valuations) are as follows (in thousands):
|
|
Fair Value
|
|
|
Trade name
|
|
$
|
400
|
|
Indefinite
|
Developed technology
|
|
|
6,600
|
|
7 Years
|
Customer relationships
|
|
|
160
|
|
7 Years
|
Non-competition agreements
|
|
|
30
|
|
1 Year
|
|
|
$
|
7,190
|
|
|
The intangible assets are being amortized on a straight line basis, which is consistent with the pattern that the economic benefits of the intangible assets are expected to be utilized based on the estimated cash flows generated from such assets. The Company recognized approximately $987,000 and $279,000 of amortization expense related to the amortizable intangible assets at December 31, 2015 and 2014, respectively, based on the aforementioned estimates.
On an unaudited proforma basis, assuming the completed acquisition had occurred as of the beginning of the periods presented, the consolidated results from continuing operations of the Company would have been as follows (in thousands, except per share amounts):
|
|
(Unaudited)
Year ended
December 31, 2014
|
|
Revenues
|
|
$
|
219,328
|
|
Net loss
|
|
$
|
(559
|
)
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
Basic
|
|
$
|
(0.04
|
)
|
Diluted
|
|
$
|
(0.04
|
)
|
The unaudited proforma financial information presented above gives effect to purchase accounting adjustments which have resulted or are expected to result from the acquisition. This proforma information is not necessarily indicative of the results that would actually have been obtained had the companies combined for the periods presents.
The Company has recognized transaction, integration, and other acquisition related costs of approximately $163,000 through December 31, 2014, which have been recorded within sales, general, and administration expense within the Company’s consolidated statements of operations. Additionally, the results of the Brink acquisition acquired in 2014 contributed $832,000 to PAR’s revenue and reduced PAR’s net income from continuing operations by $145,000 in 2014. T
he results of operations of the Brink acquisition is reported in the Company’s consolidated results of operations of the Company from the date of acquisition.
Note 3 — Divestiture and Discontinued Operations
On November 4, 2015, ParTech, Inc. (“PTI”), a wholly owned subsidiary of PAR Technology Corporation, PAR Springer-Miller Systems, Inc. (“PSMS”), Springer-Miller International, LLC (“SMI”), and Springer-Miller Canada, ULC (“SMC”) (PTI, PSMS, SMI and SMC are collectively referred to herein as the “Group”), entered into an asset purchase agreement (the “APA”) with Gary Jonas Computing Ltd., SMS Software Holdings LLC, and Jonas Computing (UK) Ltd. (the “Purchasers”), each of which is an affiliate of the Jonas Software Group of Constellation Software Inc. of Toronto, Ontario, for the sale of substantially all of the assets of PSMS. Total consideration to be received from the sale is $16.6 million in cash (the “Base Purchase Price”), with $12.1 million received at the time of closing, and $4.5 million receivable eighteen months after the closing date, a portion of which amount will be available to pay certain indemnification obligations of the group.
The estimated fair value of the remaining portion of the note receivable, less any estimated working capital adjustments, due on May 4, 2017 is approximately $3.3 million and is included within noncurrent assets in PAR’s consolidated balance sheets.
In addition to the base purchase price, contingent consideration of up to $1,500,000 is receivable by PAR based on achievement of certain agreed-upon revenue and earnings targets for calendar years 2016 through 2018, as set forth in the APA. As of December 31, 2015, the Company has not recorded any amount associated with this contingent consideration as it does not believe achievement of the related targets is probable.
Summarized financial information for the Company’s discontinued operations is as follows (in thousands):
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash
|
|
$
|
-
|
|
|
$
|
300
|
|
Accounts receivable - net
|
|
|
-
|
|
|
|
1,771
|
|
Other current assets
|
|
|
-
|
|
|
|
574
|
|
Property, plant and equipment - net
|
|
|
-
|
|
|
|
986
|
|
Goodwill
|
|
|
-
|
|
|
|
6,116
|
|
Intangible assets - net
|
|
|
-
|
|
|
|
12,372
|
|
Assets of discontinued operation
|
|
$
|
-
|
|
|
$
|
22,119
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
$
|
-
|
|
|
$
|
417
|
|
Accrued salaries and benefits
|
|
|
441
|
|
|
|
703
|
|
Accrued expenses
|
|
|
-
|
|
|
|
87
|
|
Customer Deposits
|
|
|
-
|
|
|
|
1,103
|
|
Deferred service revenue
|
|
|
-
|
|
|
|
2,307
|
|
Liabilities of discontinued operation
|
|
$
|
441
|
|
|
$
|
4,617
|
|
Summarized financial information for the Company’s discontinued operations is as follows (in thousands):
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
14,545
|
|
|
$
|
15,746
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations before income taxes
|
|
$
|
(5,702
|
)
|
|
$
|
(5,816
|
)
|
Loss on disposition
|
|
|
(2,408
|
)
|
|
|
-
|
|
Benefit from income taxes
|
|
|
3,198
|
|
|
|
2,094
|
|
Loss from discontinued operations, net of taxes
|
|
$
|
(4,912
|
)
|
|
$
|
(3,722
|
)
|
Note 4 — Accounts Receivable, net
The Company’s net accounts receivable consist of, excluding discontinued operations:
|
|
December 31,
(in thousands)
|
|
|
|
2015
|
|
|
2014
|
|
Government segment:
|
|
|
|
|
|
|
Billed
|
|
$
|
9,400
|
|
|
$
|
9,340
|
|
Advanced billings
|
|
|
(1,266
|
)
|
|
|
(450
|
)
|
|
|
|
8,134
|
|
|
|
8,890
|
|
Hospitality segment:
|
|
|
|
|
|
|
|
|
Accounts receivable - net
|
|
|
21,396
|
|
|
|
20,784
|
|
|
|
$
|
29,530
|
|
|
$
|
29,674
|
|
At December 31, 2015,2014 and 2013, the Company had recorded allowances for doubtful accounts of $875, 000, $484,000 and $422,000, respectively, against hospitality segment accounts receivable. Write-offs of accounts receivable during fiscal years 2015 and 2014 were $382,000 and $278,000, respectively. The provision for doubtful accounts recorded in the consolidated statements of operations was $772,000 and $340,000 in 2015 and 2014, respectively.
Note 5 — Inventories, net
Inventories are used in the manufacture and service of hospitality products. The components of inventory, net consist of the following, excluding discontinued operations:
|
|
December 31,
(in thousands)
|
|
|
|
2015
|
|
|
2014
|
|
Finished Goods
|
|
$
|
8,775
|
|
|
$
|
13,615
|
|
Work in process
|
|
|
402
|
|
|
|
457
|
|
Component parts
|
|
|
5,068
|
|
|
|
3,748
|
|
Service parts
|
|
|
7,254
|
|
|
|
8,108
|
|
|
|
$
|
21,499
|
|
|
$
|
25,928
|
|
December 31, 2015 and December 31, 2014, the Company had recorded inventory reserves of $8.6 million and $7.9 million, respectively, against Hospitality inventories, which relates primarily to service parts.
Note 6 — Property, Plant and Equipment
The components of property, plant and equipment, excluding discontinued operations, are:
|
|
December 31,
(in thousands)
|
|
|
|
2015
|
|
|
2014
|
|
Land
|
|
$
|
253
|
|
|
$
|
253
|
|
Building and improvements
|
|
|
5,645
|
|
|
|
5,645
|
|
Rental property
|
|
|
5,330
|
|
|
|
5,308
|
|
Furniture and equipment
|
|
|
11,804
|
|
|
|
10,160
|
|
|
|
|
23,032
|
|
|
|
21,366
|
|
Less accumulated depreciation
|
|
|
(17,316
|
)
|
|
|
(16,218
|
)
|
|
|
$
|
5,716
|
|
|
$
|
5,148
|
|
The estimated useful lives of buildings and improvements and rental property are twenty to twenty-five years. The estimated useful lives of furniture and equipment range from three to eight years. Depreciation expense from continuing operations was $1,137,000 and $1,052,000 for 2015 and 2014, respectively.
The Company leases a portion of its headquarters facility to various tenants. Net rent received from these leases totaled $264,000 and $359,000 for 2015 and 2014, respectively. Future minimum rent payments due to the Company under these lease arrangements are approximately $306,000, $246,000 and $57,000 in 2016, 2017 and 2018, respectively.
The Company leases office space under various operating leases. Rental expense from continuing operations on operating leases was approximately $1.4 million and $1.3 million for 2015 and 2014, respectively. Future minimum lease payments under all non-cancelable operating leases are (in thousands):
2016
|
|
|
1,466
|
|
2017
|
|
|
1,149
|
|
2018
|
|
|
924
|
|
2019
|
|
|
860
|
|
2020
|
|
|
336
|
|
Thereafter
|
|
|
738
|
|
|
|
$
|
5,473
|
|
Note 7 — Debt
Through June 4, 2014, the Company maintained a credit facility with J.P. Morgan Chase, N.A. and NBT Bank, N.A. (on behalf of itself and as successor by merger to Alliance Bank, N.A.) consisting of $20.0 million in working capital lines of credit (with the option to increase to $30.0 million), which expired in June 2014. This agreement allowed the Company, at its option, to borrow funds at the LIBOR rate plus the applicable interest rate spread or at the bank's prime lending rate. This credit facility was secured by certain assets of the Company.
On June 5, 2014, the Company executed an amendment to its then existing credit facility to provide for the renewal of the facility through June 2017, with terms generally consistent to those of its prior facility. This facility provided the Company with capital of up to $20.0 million (with the option to increase to $30.0 million) in the form of a revolving line of credit. This agreement allowed the Company, at its option, to borrow funds at the LIBOR rate plus the applicable interest rate spread or at the bank's prime lending rate.
On September 9, 2014, the Company terminated its existing credit facilities with J.P. Morgan Chase, N.A. and NBT Bank, N.A. (on behalf of itself and as successor by merger to Alliance Bank, N.A.) consisting of $20.0 million in working capital lines of credit, and the Company and its domestic subsidiaries entered into a new three-year credit facility with J.P. Morgan Chase, N.A (the Credit Facility). The terms of the Credit Facility provide for up to $25 million of a line of credit, with borrowing availability based on a percentage of value of various assets of the Company and its subsidiaries. The new agreement bears interest at the applicable bank rate (3.25% at December 31, 2015) or, at the Company's option, at the LIBOR rate plus the applicable interest rate spread (range of 1.5% – 2.0%). At December 31, 2015, the Company did not have any outstanding balance on this line of credit. The weighted average interest rate paid by the Company was approximately 3.50% during fiscal year 2015. The new agreement contains traditional asset based loan covenants and includes covenants regarding earnings before interest, tax, depreciation & amortization (“EBITDA”) and a fixed charge coverage ratio, and provides for acceleration upon the occurrence of customary events of defaults.
On March 19, 2015, the Company amended the Credit Facility to reduce the EBITDA requirement and extend the fixed charge coverage ratio. The amendment provides the Company flexibility to continue investing in the Company’s future product offerings while maintaining certain covenant thresholds as defined in the amendment. On March 16, 2016, the Company received a notice of defaults under its current Credit Facility due to unauthorized investments made during 2015 by the company’s former Chief Financial Officer, which were not permitted investments as defined in the lending agreement. See Note 1, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements for further discussion on these unauthorized investments. These unauthorized investments involved cash transfers totaling $776,000, which amounts have been written off by the Company as of December 31, 2015 (the “Unauthorized Transactions”). On March 24, 2016 the lender provided waivers of the defaults, subject to certain terms and conditions contained in the waiver, including entry by the Company into a fourth amendment to the Company’s Credit Agreement.
On March 24, 2016, based on the waiver received, the Company executed the fourth amendment to its existing Credit Agreement. Under the terms and conditions of this amendment, the Company has undertaken to engage, and has engaged, an independent consultant to review its internal controls relating to financial reporting and authorization procedures for financial transactions (including, without limitation, investments) initiated by the Company’s officers (the “Internal Control Review”). The company has agreed to deliver to the lender a report prepared by Company’s consultant that sets forth, in reasonable detail, the results of the Internal Control Review, together with a summary of any recommended changes to the Company’s internal control procedures (the “ICR Report”). To the extent the ICR Report sets forth recommended changes to Borrowers’ internal control procedures (“IC Recommendations”), The Company has agreed to promptly take steps to implement the IC Recommendations in all material respects. The Company has agreed to provide periodic updates to the lender relating to the Internal Control Review, implementation of IC Recommendations and any ongoing investigations related to the Unauthorized Transactions
In addition to the credit facility described above, the Company has a mortgage loan, collateralized by certain real estate, with a balance of $746,000 and $919,000 at December 31, 2015 and 2014, respectively. This mortgage matures on November 1, 2019. The Company's fixed interest rate was 4.05% through October 1, 2014. Beginning on October 1, 2014, the fixed rate was converted to a new rate equal to the then-current five year fixed advanced rate charged by the New York Federal Home Loan bank, plus 225 basis points. Effective November 1, 2014, the Company entered into an agreement that fixed the interest rate at 4.00% through the maturity date of the loan. The annual mortgage payment including interest through November 1, 2019 totals $206,000.
In connection with the acquisition of Brink Software on September 18, 2014, the Company recorded indebtedness to the former owners of Brink under the stock purchase agreement. At December 31, 2015 and 2014, the principal balance of the note payable was $2.0 million and $5.0 million and it had a carrying value of $1.9 million and $4.8 million, respectively. The carrying value was based on the note’s estimated fair value at the time of acquisition. The note does not bear interest and repayment terms are $3.0 million, which was paid on the first anniversary of close, September 18, 2015, and $2.0 million payable on the second anniversary of close, September 18, 2016.
The Company’s future principal payments under the stock purchase agreement and its mortgage are as follows (in thousands):
2016
|
|
$
|
2,103
|
|
2017
|
|
|
188
|
|
2018
|
|
|
195
|
|
2019
|
|
|
183
|
|
|
|
$
|
2,669
|
|
Note 8 — Stock Based Compensation
The Company recognizes all stock-based compensation to employees and directors, including grants of employee stock options and restricted stock awards, in the financial statements as compensation cost over the vesting period based on their fair value on the date of grant. Total stock-based compensation expense included in selling, general and administrative expense in 2015 and 2014 was $487,000 and $1,185,000, respectively. The amount recorded for the twelve months ended December 31, 2015 and 2014 was recorded net of benefits of $197,000 and $114,000, as the result of forfeitures of unvested stock awards prior to the completion of the requisite service period. The amount of total stock based compensation includes $182,000 and $608,000 in 2015 and 2014, respectively, relating to restricted stock awards. No compensation expense has been capitalized during 2015 and 2014.
The Company has reserved 1,000,000 shares under its 2015 Equity Incentive Plan (“EIP”). Stock options under this Plan may be incentive stock options or nonqualified stock options. The Plan also provides for restricted stock awards, including performance based awards. Stock options are nontransferable other than upon death. Option grants generally vest over a one to five year period after the grant and typically expire ten years after the date of the grant. The EIP provides for the grant of several different forms of stock-based compensation, including stock options to purchase shares of PAR common stock. The Compensation Committee of the Board of Directors (Compensation Committee) has discretion to determine the material terms and conditions of option awards under the EIP, provided that (i) the exercise price must be no less than the fair market value of PAR common stock (defined as the closing price) on the date of grant, (ii) the term must be no longer than ten years, and (iii) in no event shall the normal vesting schedule provide for vesting in less than one year. Other terms and conditions of an award of stock options will be determined by the Compensation Committee as set forth in the agreement relating to that award. The Compensation Committee has authority to administer the EIP.
Information with respect to stock options included within this plan is as follows:
|
|
No. of Shares
(in thousands)
|
|
|
Weighted
Average
Exercise Price
|
|
|
Aggregate Intrinsic
Value (in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2014
|
|
|
1,240
|
|
|
$
|
5.28
|
|
|
$
|
1,264
|
|
Options granted
|
|
|
118
|
|
|
|
4.90
|
|
|
|
|
|
Options exercised
|
|
|
(94
|
)
|
|
|
5.04
|
|
|
|
|
|
Forfeited and cancelled
|
|
|
(211
|
)
|
|
|
5.09
|
|
|
|
|
|
Expired
|
|
|
(120
|
)
|
|
|
6.50
|
|
|
|
|
|
Outstanding at December 31, 2015
|
|
|
933
|
|
|
$
|
5.14
|
|
|
$
|
1,579
|
|
Vested and expected to vest at December 31, 2015
|
|
|
905
|
|
|
$
|
5.14
|
|
|
$
|
1,532
|
|
Total shares exercisable as of December 31, 2015
|
|
|
302
|
|
|
$
|
5.14
|
|
|
$
|
512
|
|
Shares remaining available for grant
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
The weighted average grant date fair value of options granted during the years 2015 and 2014 was $1.44 and $1.68, respectively. The total intrinsic value of options exercised during the year ended December 31, 2015 was $119,000. There were no options exercised during the year ended December 31, 2014. New shares of the Company’s common stock are issued as a result of stock option exercises in 2015. The fair value of options at the date of the grant was estimated using the Black-Scholes model with the following assumptions for the respective period ending December 31:
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Expected option life
|
|
5.1 years
|
|
|
5.9 years
|
|
Weighted average risk-free interest rate
|
|
|
1.6
|
%
|
|
|
1.7
|
%
|
Weighted average expected volatility
|
|
|
30
|
%
|
|
|
31
|
%
|
Expected dividend yield
|
|
|
0
|
%
|
|
|
0
|
%
|
For the years ended December 31, 2015 and 2014, the expected option life was based on the Company’s historical experience with similar type options. Expected volatility is based on historical volatility levels of the Company’s common stock over the preceding period of time consistent with the expected life. The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life. Stock options outstanding at December 31, 2015 are summarized as follows:
Range of
Exercise Prices
|
|
|
Number
Outstanding
(in thousands)
|
|
Weighted
Average
Remaining Life
|
|
Weighted
Average
Exercise
Price
|
|
|
|
|
|
|
|
|
|
|
$
|
4.31 - $6.47
|
|
|
|
933
|
|
8.10 years
|
|
$
|
5.14
|
|
At December 31, 2015 the aggregate unrecognized compensation cost of unvested equity awards, as determined using a Black-Scholes option valuation model, was $758,000 (net of estimated forfeitures) which is expected to be recognized as compensation expense in fiscal years 2016 through 2018. The Company has not paid cash dividends on its common stock, and the Company presently intends to continue to retain earnings for reinvestment in growth opportunities. Accordingly, it is anticipated no cash dividends will be paid in the foreseeable future.
Current year activity with respect to the Company’s non-vested restricted stock awards is as follows:
Non-vested restricted stock awards (in thousands)
|
|
Shares
|
|
|
Weighted
Average grant-
date fair value
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2015
|
|
|
273
|
|
|
$
|
4.68
|
|
Granted
|
|
|
34
|
|
|
|
4.67
|
|
Vested
|
|
|
(110
|
)
|
|
|
4.71
|
|
Forfeited and cancelled
|
|
|
(112
|
)
|
|
|
3.95
|
|
Balance at December 31, 2015
|
|
|
85
|
|
|
$
|
5.13
|
|
The EIP also provides for the issuance of restricted stock, as well as restricted stock units. These types of awards can have either service based or performance based vesting with performance goals being established by the Compensation Committee. Grants of restricted stock with service based vesting are subject to vesting periods ranging from zero to 60 months. Grants of restricted stock with performance based vesting are subject to a vesting period of 12 to 36 months and performance conditions as defined by the Compensation Committee. The Company assesses the likelihood of achievement throughout the performance period and recognizes compensation expense associated with its performance awards based on this assessment. Other terms and conditions applicable to any award of restricted stock will be determined by the Compensation Committee and set forth in the agreement relating to that award.
During 2015 and 2014, the Company issued 34,000 and 170,000 restricted stock awards, respectively, at a per share price of $0.02. Included within the equity grants of 2014 were approximately 109,000 performance based restricted stock awards which vest upon the achievement of business unit and consolidated financial goals relative to fiscal years 2014 through 2016. These equity awards are forfeited if the performance conditions are not achieved for each fiscal year. For the periods ended December 31, 2015 and 2014, the Company recognized compensation expense related to the performance awards based on its estimate of the probability of achievement in accordance with ASC Topic 718.
The fair value of restricted stock awards is based on the average price of the Company’s common stock on the date of grant. The weighted average grant date fair value of restricted stock awards granted during the years 2015 and 2014 was $4.67 and $5.24, respectively. In accordance with the terms of the restricted stock award agreements, the Company released 110,000 and 112,000 shares during 2015 and 2014, respectively. During 2015, there were 112,000 shares of restricted stock cancelled, of which 102,000 were performance based restricted shares. During 2014, there were 62,000 shares of restricted stock cancelled, of which 52,000 were performance based restricted shares.
Note 9— Income Taxes
The provision for income taxes from continuing operations consists of:
|
|
Year ended December 31,
(in thousands)
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Current income tax:
|
|
|
|
|
|
|
Federal
|
|
$
|
221
|
|
|
$
|
115
|
|
State
|
|
|
141
|
|
|
|
212
|
|
Foreign
|
|
|
267
|
|
|
|
757
|
|
|
|
|
629
|
|
|
|
1,084
|
|
Deferred income tax:
|
|
|
|
|
|
|
|
|
Federal
|
|
|
816
|
|
|
|
2,238
|
|
State
|
|
|
55
|
|
|
|
372
|
|
|
|
|
871
|
|
|
|
2,610
|
|
Provision for income taxes
|
|
$
|
1,500
|
|
|
$
|
3,694
|
|
The deferred tax benefit related to discontinued operations was $3.2 million in fiscal year 2015 and $2.1 million recorded in fiscal year 2014.
Deferred tax liabilities (assets) are comprised of the following at:
|
|
December 31,
(in thousands)
|
|
|
|
2015
|
|
|
2014
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
Software development costs
|
|
$
|
1,841
|
|
|
$
|
4,984
|
|
Acquired intangible assets
|
|
|
2,088
|
|
|
|
2,350
|
|
Gross deferred tax liabilities
|
|
|
3,929
|
|
|
|
7,334
|
|
|
|
|
|
|
|
|
|
|
Allowances for bad debts and inventory
|
|
|
(4,804
|
)
|
|
|
(4,524
|
)
|
Capitalized inventory costs
|
|
|
(75
|
)
|
|
|
(114
|
)
|
Intangible assets
|
|
|
(1,747
|
)
|
|
|
(2,100
|
)
|
Employee benefit accruals
|
|
|
(2,050
|
)
|
|
|
(1,715
|
)
|
Federal net operating loss carryforward
|
|
|
(6,215
|
)
|
|
|
(9,249
|
)
|
State net operating loss carryforward
|
|
|
(1,111
|
)
|
|
|
(1,104
|
)
|
Tax credit carryforwards
|
|
|
(8,760
|
)
|
|
|
(7,809
|
)
|
Foreign currency
|
|
|
(33
|
)
|
|
|
(33
|
)
|
Other
|
|
|
(334
|
)
|
|
|
(502
|
)
|
Gross deferred tax assets
|
|
|
(25,129
|
)
|
|
|
(27,150
|
)
|
|
|
|
|
|
|
|
|
|
Less valuation allowance
|
|
|
3,421
|
|
|
|
3,947
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets
|
|
$
|
(17,779
|
)
|
|
$
|
(15,869
|
)
|
The Company has Federal tax credit carryforwards of $8.7 million that expire in various tax years from 2016 to 2035. The Company has a Federal operating loss carryforward of $19.9 million that expires in various tax years through 2035. Of the operating loss carryforward, $1.6 million will result in a benefit within additional paid in capital when realized. The Company also has state tax credit carryforwards of $210,000 and state net operating loss carryforwards of $8.0 million that expire in various tax years through 2034. In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result of this analysis and based on the current year’s taxable income, and utilization of certain carryforwards management determined that it should reduce it valuation allowance in the current year. A valuation allowance is still required to the extent it is more likely than not that the future benefit associated with the foreign tax credit carryforwards and certain state tax loss carryforwards will not be realized. As a result, the Company recorded a tax benefit associated with a reduction of the deferred tax asset valuation allowance of $0.5 million for 2015. The Company recorded tax expense in 2015 associated with an increase in the valuation allowance in 2014 in the amount of $1.6 million for 2014.
The Company records the benefits relating to uncertain tax positions only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities. Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. At December 31, 2015, the Company’s reserve for uncertain tax positions is not material and the Company believes it has adequately provided for its tax-related liabilities. The Company is no longer subject to United States federal income tax examinations for years before 2012. The provision for (benefit from) income taxes differed from the provision computed by applying the Federal statutory rate to income (loss) from continuing operations before taxes due to the following:
|
|
2015
|
|
|
2014
|
|
Federal statutory tax rate
|
|
|
34.0
|
%
|
|
|
34.0
|
%
|
State taxes
|
|
|
5.8
|
|
|
|
11.5
|
|
Non deductible expenses
|
|
|
1.0
|
|
|
|
4.6
|
|
Tax credits
|
|
|
(4.8
|
)
|
|
|
(11.7
|
)
|
Repatriation of foreign earnings
|
|
|
0.0
|
|
|
|
59.8
|
|
Foreign income tax rate differential
|
|
|
(1.3
|
)
|
|
|
(43.2
|
)
|
Valuation allowance
|
|
|
(9.5
|
)
|
|
|
41.7
|
|
Tax return and audit adjustments
|
|
|
3.8
|
|
|
|
0.0
|
|
Other
|
|
|
(1.8
|
)
|
|
|
1.4
|
|
|
|
|
27.2
|
%
|
|
|
98.1
|
%
|
Note 10 — Employee Benefit Plans
The Company has a deferred profit-sharing retirement plan that covers substantially all employees. The Company’s annual contribution to the plan is discretionary. The Company’s did not make a contribution in 2015 or 2014. The plan also contains a 401(k) provision that allows employees to contribute a percentage of their salary up to the statutory limitation. These contributions are matched at the rate of 10% by the Company. The Company’s matching contributions under the 401(k) component were $359,000 and $318,000 in 2015 and 2014, respectively.
The Company also maintains an incentive-compensation plan. Participants in the plan are key employees as determined by the Board of Directors and executive management. Compensation under the plan is based on the achievement of predetermined financial performance goals of the Company and its subsidiaries. Awards under the plan are payable in cash. Awards under the plan totaled $776,000 and $656,000, in 2015 and 2014, respectively.
The Company also sponsors a deferred compensation plan for a select group of highly compensated employees. Participants may make elective deferrals of their salary to the plan in excess of tax code limitations that apply to the Company’s qualified plan. The Company invests the participants’ deferred amounts to fund these obligations. The Company also has the sole discretion to make employer contributions to the plan on behalf of the participants, though it did not make any employer contributions in 2015 or 2014.
Note 11 — Contingencies
The Company is subject to legal proceedings, which arise in the ordinary course of business. Additionally, U.S. Government contract costs are subject to periodic audit and adjustment. In the opinion of management, the ultimate liability, if any, with respect to these actions will not materially affect the financial position, results of operations, or cash flows of the Company.
Note 12 — Segment and Related Information
The Company is organized in three reporting units: restaurant/retail, hotel/spa, and government. The Company has identified government as a separate reportable segment and has aggregated its two restaurant/retail/hotel/spa reporting units into one reportable segment, hospitality, as the reporting units share many similar economical characteristics. Management views the government and hospitality segments separately in operating its business, as the products and services are different for each segment. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The hotel/spa reporting has been sold as of November 4, 2015 and is included within discontinued operations (see note 3).
The Company has two reportable business segments, hospitality and government. The hospitality segment offers integrated solutions to the hospitality industry consisting of restaurants
,
grocery stores
and specialty retail outlets. These offerings include industry leading hardware and software applications utilized at the point-of-sale, back of store and corporate office and includes the acquisition of Brink Software. This segment also offers customer support including field service, installation, and twenty-four hour telephone support and depot repair. The government segment performs complex technical studies, analysis, and experiments, develops innovative solutions, and provides on-site engineering in support of advanced defense, security, and aerospace systems. This segment also provides expert on-site services for operating and maintaining U.S. Government-owned communication assets.
Information noted as “Other” primarily relates to the Company’s corporate, home office operations.
Information as to the Company’s segments is set forth below. Amounts below exclude discontinued operations.
|
|
Year ended December 31,
(in thousands)
|
|
|
|
2015
|
|
|
2014
|
|
Revenues:
|
|
|
|
|
|
|
Hospitality
|
|
$
|
141,151
|
|
|
$
|
130,174
|
|
Government
|
|
|
87,852
|
|
|
|
87,689
|
|
Total
|
|
$
|
229,003
|
|
|
$
|
217,863
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) :
|
|
|
|
|
|
|
|
|
Hospitality
|
|
$
|
1,721
|
|
|
$
|
323
|
|
Government
|
|
|
5,365
|
|
|
|
4,883
|
|
Other
|
|
|
(457
|
)
|
|
|
(1,790
|
)
|
|
|
|
6,629
|
|
|
|
3,416
|
|
Other income, net
|
|
|
(800
|
)
|
|
|
485
|
|
Interest expense
|
|
|
(308
|
)
|
|
|
(136
|
)
|
Income from continuing operations before provision for income taxes
|
|
$
|
5,521
|
|
|
$
|
3,765
|
|
|
|
|
|
|
|
|
|
|
Identifiable assets:
|
|
|
|
|
|
|
|
|
Hospitality
|
|
$
|
72,948
|
|
|
$
|
81,269
|
|
Government
|
|
|
10,052
|
|
|
|
11,221
|
|
Other
|
|
|
32,312
|
|
|
|
22,688
|
|
Total
|
|
$
|
115,312
|
|
|
$
|
115,178
|
|
|
|
|
|
|
|
|
|
|
Goodwill:
|
|
|
|
|
|
|
|
|
Hospitality
|
|
$
|
10,315
|
|
|
$
|
10,315
|
|
Government
|
|
|
736
|
|
|
|
736
|
|
Total
|
|
$
|
11,051
|
|
|
$
|
11,051
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion:
|
|
|
|
|
|
|
|
|
Hospitality
|
|
$
|
2,673
|
|
|
$
|
1,678
|
|
Government
|
|
|
48
|
|
|
|
50
|
|
Other
|
|
|
349
|
|
|
|
279
|
|
Total
|
|
$
|
3,070
|
|
|
$
|
2,007
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures including software costs:
|
|
|
|
|
|
|
|
|
Hospitality
|
|
$
|
3,645
|
|
|
$
|
2,181
|
|
Government
|
|
|
-
|
|
|
|
36
|
|
Other
|
|
|
208
|
|
|
|
969
|
|
Total
|
|
$
|
3,853
|
|
|
$
|
3,186
|
|
The following table presents revenues by country based on the location of the use of the product or services.
Amounts below exclude discontinued operations.
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
United States
|
|
$
|
197,303
|
|
|
$
|
189,845
|
|
Other Countries
|
|
|
31,700
|
|
|
|
28,018
|
|
Total
|
|
$
|
229,003
|
|
|
$
|
217,863
|
|
The following table presents assets by country based on the location of the asset.
Amounts below exclude discontinued operations.
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
United States
|
|
$
|
100,021
|
|
|
$
|
93,825
|
|
Other Countries
|
|
|
15,291
|
|
|
|
21,353
|
|
Total
|
|
$
|
115,312
|
|
|
$
|
115,178
|
|
Customers comprising 10% or more of the Company's total revenues, excluding discontinued operations, are summarized as follows:
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
Hospitality segment
:
|
|
|
|
|
|
|
McDonald’s Corporation
|
|
|
19
|
%
|
|
|
16
|
%
|
Yum! Brands, Inc.
|
|
|
10
|
%
|
|
|
12
|
%
|
Government segment
:
|
|
|
|
|
|
|
|
|
U.S. Department of Defense
|
|
|
38
|
%
|
|
|
40
|
%
|
All Others
|
|
|
33
|
%
|
|
|
32
|
%
|
|
|
|
100
|
%
|
|
|
100
|
%
|
No other customer within All Others represented more than 10% of the Company’s total revenue for the years ended December 31, 2015 and 2014.
Note 13 — Fair Value of Financial Instruments
The Company’s financial instruments have been recorded at fair value using available market information and valuation techniques. The fair value hierarchy is based upon three levels of input, which are:
Level 1 − quoted prices in active markets for identical assets or liabilities (observable)
Level 2 − inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable market data for essentially the full term of the asset or liability (observable)
Level 3 − unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable)
The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables, debt instruments and deferred compensation assets and liabilities. For cash and cash equivalents, trade receivables and trade payables, the carrying amounts of these financial instruments as of December 31, 2015 and 2014 were considered representative of their fair values. The estimated fair value of the Company’s long-term debt and line of credit at December 31, 2015 and 2014 was based on variable and fixed interest rates at December 31, 2015 and 2014, respectively, for new issues with similar remaining maturities and approximates the respective carrying values at December 31, 2015 and 2014.
The deferred compensation assets and liabilities primarily relate to the Company’s deferred compensation plan, which allows for pre-tax salary deferrals for certain key employees (see note 10). Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by the participants. The deferred compensation liabilities are classified within Level 2, as defined under U.S. GAAP, because their inputs are derived principally from observable market data by correlation to the hypothetical investments. The Company holds insurance investments to partially offset the Company’s liabilities under the deferred compensation plan, which are recorded at fair value each period using the cash surrender value of the insurance investments.
The Company has obligations, to be paid in cash, to the former owners of Brink Software, based on the achievement of certain conditions as defined in the definitive agreement (see note 2). The fair value of this contingent consideration payable was estimated using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820, fair value measurements and disclosures. The significant inputs in the Level 3 measurement not supported by market activity included the Company’s probability assessments of expected future cash flows related to the Company’s acquisition of Brink during the contingent consideration period, appropriately discounted considering the uncertainties associated with the obligation, and calculated in accordance with the terms of the definitive agreement. The liabilities for the contingent consideration were established at the time of the acquisition and are evaluated on a quarterly basis based on additional information as it becomes available. Any change in the fair value adjustment is recorded in the earnings of that period.
Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations.
Significant increases or decreases in the inputs noted above in isolation would result in a significantly lower or higher fair value measurement.
The following table presents a summary of changes in fair value of the Company’s Level 3 assets and liabilities that are measured at fair value on a recurring basis (in thousands):
|
|
Level 3 Inputs
|
|
|
|
Liabilities
|
|
Balance at December 31, 2014
|
|
$
|
5,040
|
|
New level 3 liability
|
|
|
-
|
|
Change in fair value of contingent consideration liability
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90
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Transfers into or out of Level 3
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-
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Balance at December 31, 2015
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$
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5,130
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Note 14 — Related Party Transactions
The Company leases its corporate wellness facility to related parties at a current rate of $9,775 per month. The Company receives a complimentary membership to this facility which is provided to all employees. During 2015 and 2014 the Company received rental income amounting to $117,300 for the lease of the facility in each year.
Note 15 — Subsequent Events
On March 24, 2016, the Company amended its credit facility with J.P. Morgan Chase, N.A. See Note 7 for further details.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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PAR TECHNOLOGY CORPORATION
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March 30, 2016
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/s/ Karen E. Sammon
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Karen E. Sammon
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Chief Executive Officer & President
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signatures
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Title
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Date
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/s/ Karen E. Sammon
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Karen E. Sammon
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Chief Executive Officer &
President
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March 30, 2016
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/s/ Cynthia A. Russo
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Cynthia A. Russo
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Director
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March 30, 2016
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/s/ Paul D. Eurek
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Paul D. Eurek
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Director
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March 30, 2016
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/s/ Todd E. Tyler
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Todd E. Tyler
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Director
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March 30, 2016
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/s/ John W. Sammon
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John W. Sammon
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Director
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March 30, 2016
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/s/ Ronald J. Casciano
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Ronald J. Casciano
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Director
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March 30, 2016
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/s/ Donald H. Foley
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Donald H. Foley
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Director
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March 30, 2016
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/s/ Matthew J. Trinkaus
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Matthew J. Trinkaus
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Controller and
Chief Accounting Officer
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March 30, 2016
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List of Exhibits
Exhibit No.
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Description of Instrument
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3.(i)
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Certificate of Incorporation, as amended May 22, 2014.
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Filed as Exhibit 3(i) to Form 8-K filed May 29, 2014 of PAR Technology Corporation and incorporated herein by reference.
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3.(ii)
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By-laws, as amended May 22, 2014.
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Filed as Exhibit 3.(ii) to Form 8-K filed May 29, 2014 of PAR Technology Corporation incorporated herein by
reference.
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4
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Specimen Certificate representing the Common Stock.
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Filed as Exhibit 4 to Registration Statement on Form S-2 (Registration No. 333-04077) of PAR Technology
Corporation incorporated herein by reference.
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10.1
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Letter of Agreement with Sanmina– SCI Corporation.
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Filed as Exhibit 10.1 to Form S-3/A (Registration No. 333-102197) of PAR Technology Corporation incorporated herein by reference.
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10.2
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2005 Equity Incentive Plan of PAR Technology Corporation.
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Filed as Exhibit 4.2 to Form S-8 (Registration No. 333-137647) of PAR Technology Corporation and incorporated herein by reference.
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10.3
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2005 Equity Incentive Plan, as amended.
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Filed as Exhibit 4.1 to Registration Statement on Form S-8 (Registration No. 333-187246) of PAR Technology Corporation incorporated herein by reference.
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10.4
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Form of Restricted Stock Award Agreement Pursuant
to the 2005 Equity Incentive Plan.
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Filed as Exhibit 10.1 to Form 10-Q as for the quarter ended June 30, 2013 and incorporated by reference.
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10.5
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Pledge and Security Agreement with JP Morgan Chase.
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Filed as Exhibit 10.2 to Form 8-K dated June 16, 2008 of PAR Technology Corporation and incorporated herein by reference.
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10.6
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June 2011 – Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A; NBT Bank, N.A.; Alliance Bank, N.A.
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Filed as an Exhibit 10.1 to Form 8-K dated June 6, 2011 of PAR Technology Corporation and incorporated herein by reference.
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List of Exhibits (Continued)
Exhibit No.
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Description of Instrument
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10.7
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June 2011 - Amendment No. 1 to Pledge and Security Agreement with JPMorgan Chase Bank, N.A.
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Filed as an Exhibit 10.2 to Form 8-K dated June 6, 2011 of PAR Technology Corporation and incorporated herein by reference.
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10.8***
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December 2011 - Asset Purchase and Sale Agreement by and between PAR Technology Corporation, PAR Government Systems Corporation, PAR Logistics Management Systems Corporation and ORBCOMM Inc. and PLMS Acquisition, LLC.
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Filed as an Exhibit 10.13 to Form 10-K dated April 4, 2012 of PAR Technology Corporation and incorporated herein by reference.
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10.9
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February 2013 - Amendment No. 2 to Pledge and Security Agreement with JPMorgan Chase Bank, N.A.
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Filed as an Exhibit 10.14 to Form 10-K dated March 13, 2013 of PAR Technology Corporation and incorporated herein by reference.
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10.10
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Employment Offer Letter dated March 21, 2013 between Registrant and Ronald J. Casciano.
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Filed as an Exhibit 10.1*+ to Form 10-Q for the quarter ended March 31, 2013 and incorporated herein by reference.
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10.11
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Employment Offer Letter dated March 21, 2013 between Registrant and Robert P. Jerabeck.
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Filed as an Exhibit 10.2*+ to Form 10-Q for the quarter ended March 31, 2013 and incorporated herein by reference.
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10.12
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Employment Offer Letter dated March 21, 2013 between Registrant and Karen E. Sammon.
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Filed as an Exhibit 10.3*+ to Form 10-Q for the quarter ended March 31, 2013 and incorporated herein by reference.
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10.13
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Form of Notice of Equity Award and Agreement Pursuant to the 2005 Equity Incentive Plan.
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Filed as an Exhibit 10.17 to Form 10-K dated March 14, 2014 of Par Technology Corporation and incorporated herein by reference.
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10.14
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June 2014 – Amendment No. 3 to Pledge and Security Agreement with JPMorgan Chase Bank, N.A.
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Filed as an Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2014 and incorporated herein by reference.
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10.15 ***
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Credit Agreement with JPMorgan Chase Bank, N.A. dated as of September 9, 2014.
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Filed as an Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.
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10.16
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Pledge and Security Agreement with JPMorgan Chase Bank, N.A. dated as of September 9, 2014.
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Filed as an Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.
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List of Exhibits (Continued)
Exhibit No.
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Description of Instrument
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10.17 ***
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Stock Purchase Agreement by and among Brink Software, Inc., the Shareholders, ParTech, Inc., and PAR Technology Corporation dated as of September 18, 2014.
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Filed as an Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.
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10.18
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Form of Outside Director Notice of Restricted Stock Award and Agreement Pursuant to the 2005 Equity Incentive Plan.
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Filed as an Exhibit 10.21 to Form 10-K dated March 31, 2015 of Par Technology Corporation and incorporated herein by reference.
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10.19
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Form of Notice of Award and Agreement Pursuant to the 2005 Equity Incentive Plan.
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Filed as an Exhibit 10.23 to Form 10-K dated March 31, 2015 of Par Technology Corporation and incorporated herein by reference.
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10.20 ***
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Second Amendment to Credit Agreement and Other Loan Documents with JPMorgan Chase Bank, N.A. dated as of March 19, 2015
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Filed as an Exhibit 10.24 to Form 10-K dated March 31, 2015 of Par Technology Corporation and incorporated herein by reference
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10.21
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Separation Agreement between PAR Technology Corporation and Stephen P. Lynch dated August 31, 2015.
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Filed as an Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference.
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10.22
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2015 Equity Incentive Plan of PAR Technology Corporation.
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Filed as Exhibit 4.2 to Form S-8 (Registration No. 333-208063) of PAR Technology Corporation and incorporated herein by reference.
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10.23
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Form of Notice of Award Pursuant to the 2015 Equity Incentive Plan
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Filed as Exhibit 4.3 to Form S-8 (Registration No. 333-208063) of PAR Technology Corporation and incorporated herein by reference.
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10.24
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Form of Outside Director Notice of Restricted Stock Award and Agreement Pursuant to the 2015 Equity Incentive Plan
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Filed as Exhibit 4.4 to Form S-8 (Registration No. 333-208063) of PAR Technology Corporation and incorporated herein by reference.
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Employment Offer Letter dated July 13, 2015 between Registrant and Michael Bartusek
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November 2015 – Asset Purchase Agreement by and among Gary Jonas Computing Ltd., SMS Software Holdings LLC, Jonas Computing (UK) Ltd., PAR Springer-Miller Systems, Inc., Springer-Miller International, LLC, Springer-Miller Canada, ULC, ParTech, Inc., and Constellation Software Inc.
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Employment Offer Letter dated November 16, 2015 between Registrant and Karen Sammon
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List of Exhibits (Continued)
Exhibit No.
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Description of Instrument
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Employment Offer Letter dated December 10, 2015 between Registrant and Matthew Cicchinelli
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Fourth Amendment to Credit Agreement with JPMorgan Chase Bank, N.A. dated as of March 24, 2016
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Subsidiaries of the registrant.
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Consent of Independent Registered Public Accounting Firm.
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Certification of Chief Executive Officer & President Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification of Controller and Chief Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification of Chief Executive Officer & President Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Certification of Controller and Chief Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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***
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Portions of this Exhibit were omitted pursuant to a request for confidential treatment. The omitted portions have been separately filed with the Securities and Exchange Commission.
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