Transactions with Related Persons
The Board of Directors has adopted a new written “Related Party Transactions Policy & Procedure” (“Policy”), which provides that the Company will only enter into, ratify, or continue a related party transaction, when the Board, acting through the Nominating & Corporate Governance Committee, determines that the transaction is in the best interests of PAR and its stockholders. Pursuant to the Policy, the Nominating and Corporate Governance Committee shall review and either approve or disapprove all transactions or relationships in which PAR or any of its subsidiaries is a party and the amount of the transaction exceeds or is expected to exceed $120,000, and in which a director (director nominee), executive officer, a person who beneficially owns more than 5% of PAR’s common stock or any immediate family member or affiliated entity of any of the foregoing persons (a “related party”), has a direct or indirect interest.
Except as set forth below, there were no transactions, or currently proposed transactions, in which the Company was or is to be a participant and the amount involved exceeds the lesser of $120,000 or 1% of the Company’s total assets at December 31, 2017 or December 31, 2016, and in which any related person had or will have a direct or indirect material interest as defined in Item 404 of Regulation S-K of the Exchange Act, except for the following:
• Karen E. Sammon, the Company’s Chief of Staff and a member of the immediate family of Dr. John W. Sammon, a Director and a beneficial owner of more than 10% of our common stock, was paid compensation in 2017 and 2016 as reported above under the heading “Executive Compensation”.
• John W. Sammon, III, a member of the immediate family of Dr. John W. Sammon and Karen E. Sammon, became an employee of ParTech, Inc. on October 13, 2014, serving as General Manager & Senior Vice President, SureCheck. Mr. Sammon’s total compensation for 2017, was $245,050, comprised of a base salary of $205,000 and 4,500 shares of restricted stock, which vest ratably over three (3) years, 50% (2,250) are time vesting and 50% (2,250) are performance vesting, and have an aggregate grant date fair value of $40,050. Mr. Sammon’s total compensation for 2016 was $185,000, which was comprised of his base salary. In 2017 and 2016, Mr. Sammon participated in our retirement plan, insurance and other customary benefits offered to our executives.
• Karen E. Sammon, the Company’s Chief of Staff, and her brother, John W. Sammon, III, General Manager & Senior Vice President of ParTech, Inc., are principals in Sammon and Sammon, LLC, doing business as Paragon Racquet Club. Paragon Racquet Club leases a building from us, located in New Hartford, New York, on a month-to-month basis at the base rate of $9,775 per month (or an aggregate annual amount of $117,300 for 2017 and 2016) and provides complimentary memberships to PAR’s local employees, which were valued at $27,170 in 2017 and $28,170 in 2016. Both Ms. Sammon and Mr. Sammon are members of the immediate family of Dr. Sammon. The Board reviewed this arrangement and, after consulting with the principals of Sammon and Sammon, determined the arrangement will not continue and will terminate on or about April 30, 2018.
• The Company’s former Director, Paul D. Eurek (who resigned November 29, 2017) served as President of Xpanxion LLC until his retirement on June 30, 2017. In October 2016, ParTech, Inc. entered into a statement of work (“SOW”) with Xpanxion for software development services. The SOW provided for the issuance of monthly invoices reflecting Xpanxion team members’ roles (e.g., program manager, architect, developer) and their respective hourly rates multiplied by hours spent by team members providing services in a month, plus reimbursement of expenses. Accordingly, monthly fees varied, depending on services provided and by what team member. In 2017 and 2016 we incurred approximately $1.0 million and $0.2 million of fees, respectively, to Xpanxion under the SOW. In 2017 and 2016, we made payments of $1.2 million and zero, respectively, to Xpanxion under the SOW. Mr. Eurek received no additional payment or other incremental remuneration from Xpanxion as a result of the software development services provided to ParTech, Inc.