UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (As Permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
TRANSACT TECHNOLOGIES INCORPORATED
(Name of Registrant as Specified In Its Charter)
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Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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TRANSACT TECHNOLOGIES INCORPORATED
7 LASER LANE
WALLINGFORD, CONNECTICUT 06492
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2006
Notice is hereby given that the 2006 Annual Meeting of Stockholders (the
"Annual Meeting") of TransAct Technologies Incorporated (the "Company" or
"TransAct"), a Delaware corporation, will be held on May 18, 2006 at 10:00 a.m.
Eastern Daylight Savings Time, at the Four Points by Sheraton Hotel, 275
Research Parkway, Meriden, CT 06450 for the following purposes, all of which are
more completely set forth in the accompanying Proxy Statement:
(1) To elect one director to serve until the 2009 Annual Meeting of
Stockholders or until the director's successor has been duly elected
and qualified;
(2) To ratify the selection of PricewaterhouseCoopers LLP as the Company's
independent registered public accounting firm for 2006; and
(3) To transact such other business as may legally come before the Annual
Meeting.
Stockholders of record at the close of business on March 28, 2006 are
entitled to notice of and to vote at the Annual Meeting. The transfer books will
not be closed for the Annual Meeting.
By Order of the Board of Directors,
STEVEN A. DEMARTINO
Secretary
Wallingford, Connecticut
April 20, 2006
YOUR VOTE IS IMPORTANT.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, THE COMPANY REQUESTS THAT
YOU FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY. A RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR THAT
PURPOSE. IF YOU DO ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE
IN PERSON. PROMPT RESPONSE IS HELPFUL, AND YOUR COOPERATION IS APPRECIATED.
TRANSACT TECHNOLOGIES INCORPORATED
7 LASER LANE
WALLINGFORD, CONNECTICUT 06492
PROXY STATEMENT FOR ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON MAY 18, 2006
This Proxy Statement is being furnished to the stockholders of TransAct
Technologies Incorporated (the "Company") in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Annual Meeting
of Stockholders of the Company to be held on May 18, 2006, and any adjournments
or postponements thereof (the "Annual Meeting"). This Proxy Statement, the
foregoing Notice of Annual Meeting, the enclosed form of proxy and the Company's
2005 Annual Report to Stockholders are first being mailed or given to
stockholders on or about April 20, 2006.
SOLICITATION AND REVOCATION OF PROXY
Any stockholder who executes and returns the enclosed proxy has the power
to revoke the same anytime prior to its being voted. The shares represented by
the proxy will be voted unless the proxy is mutilated or otherwise received in
such form or at such time as to render it not votable. The proxy is in ballot
form so that a specification may be made to grant or withhold authority to vote
for the election of directors and to indicate separate approval or disapproval
as to the other matters presented to stockholders. All of the proposals will be
presented by the Board of Directors. The shares represented by the proxy will be
voted for the election of the director named thereon, unless authority to do so
is withheld. With respect to the other proposals presented to stockholders by
the Board of Directors, the shares represented by the proxy will be voted in
accordance with the specification made. Where a choice is not so specified, the
shares represented by the proxy will be voted for the proposal. In addition, the
proxy confers discretionary authority to vote on any matter properly presented
at the Annual Meeting which is not known to the Company as of the date of this
Proxy Statement.
VOTING SECURITIES
Stockholders of record on March 28, 2006 are entitled to vote at the Annual
Meeting. Each holder of Common Stock is entitled to cast one vote for each share
of Common Stock held on March 28, 2006. There were 9,688,068 shares of Common
Stock issued and outstanding and entitled to vote at the close of business on
March 28, 2006. Shares representing a majority of the votes entitled to be cast
at the Annual Meeting, present in person or represented by proxy, will
constitute a quorum to transact business.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information known to the Company regarding
the beneficial ownership of the Company's common stock as of March 28, 2006 by:
(i) each person known by the Company to own beneficially more than 5% of the
Company's common stock; (ii) each director or nominee for director of the
Company; (iii) each current executive officer of the Company named in the
Summary Compensation Table; and (iv) all current directors and executive
officers of the Company as a group. Except as otherwise indicated, each of the
persons named in the table has sole voting power and sole dispositive power with
respect to the shares set forth opposite such person's name and the address of
the holder is 7 Laser Lane, Wallingford, CT 06492.
SHARES
BENEFICIALLY PERCENT OF
NAME OF BENEFICIAL OWNER OWNED CLASS
------------------------ ------------ ----------
COMMON STOCK
Graham Y. Tanaka(1)......................................... 362,597 3.49%
Bart C. Shuldman(2)......................................... 311,549 3.00%
Charles A. Dill(3).......................................... 190,185 1.83%
Michael S. Kumpf(4)......................................... 96,824 *
Thomas R. Schwarz(5)........................................ 90,725 *
Steven A. DeMartino(6)...................................... 81,000 *
James B. Stetson(7)......................................... 48,650 *
Andrew J. Hoffman(8)........................................ 21,299 *
All current directors and executive officers as a group (6
persons)(9)............................................... 1,283,328 12.34%
Janus Capital Management LLC(10)............................ 856,785 8.24%
151 Detroit Street
Denver, CO 80206
Bares Capital Management, Inc. (11)......................... 724,223 6.96%
510 South Congress Ave., Suite 306
Austin, TX 78704
---------------
* Less than 1% of the outstanding Common Stock.
(1) Includes 63,750 shares subject to options exercisable within 60 days of
March 28, 2006 granted under the Company's Non-Employee Directors' Stock
Plan and 7,065 shares deemed beneficially owned by Mr. Tanaka for the
benefit of his children. Also includes 5,000 unvested shares of restricted
stock of the Company.
(2) Includes 49,636 owned jointly with Mr. Shuldman's spouse, 1,500 shares
owned by his spouse in an individual retirement account, 4,800 shares owned
by his minor children and 3,750 shares owned by his mother. Also includes
38,500 unvested shares of restricted stock of the Company and 213,363
shares subject to options exercisable within 60 days of March 28, 2006
granted under the Company's 1996 Stock Plan.
(3) Includes 63,750 shares subject to options exercisable within 60 days of
March 28, 2006 granted under the Non-Employee Directors' Stock Plan. Also
includes 5,000 unvested shares of restricted stock of the Company and 2,000
shares owned by his spouse.
(4) Includes 16,500 unvested shares of restricted stock of the Company and
48,724 shares subject to options exercisable within 60 days of March 28,
2006 granted under the 1996 Stock Plan.
(5) Includes 63,750 shares subject to options exercisable within 60 days of
March 28, 2006 granted under the Non-Employee Directors' Stock Plan. Also
includes 5,000 unvested shares of restricted stock of the Company, 1,500
shares deemed to be beneficially owned by Mr. Schwarz in his capacity as
trustee of a trust for the benefit of his granddaughter, 1,500 shares
beneficially owned by his daughter, as to which shares he disclaims
beneficial ownership, and 3,975 shares owned by his spouse.
(6) Includes 18,900 unvested shares of restricted stock of the Company and
41,000 shares subject to options exercisable within 60 days of March 28,
2006 granted under the 1996 Stock Plan.
(7) Includes 12,500 unvested shares of restricted stock of the Company and
28,150 shares subject to options exercisable within 60 days of March 28,
2006 granted under the 1996 Stock Plan.
(8) Includes 14,000 unvested shares of restricted stock of the Company and
3,799 shares subject to options exercisable within 60 days of March 28,
2006 granted under the 1996 Stock Plan.
(9) Includes 144,400 unvested shares of restricted stock of the Company and
556,286 shares subject to options exercisable within 60 days of March 28,
2006 granted under the 1996 Stock Plan and the Non-Employee Directors'
Stock Plan.
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(10) Based on information provided in a Schedule 13G filed with the Securities
and Exchange Commission (the "SEC") on February 14, 2006 by Janus Capital
Management LLC ("Janus Capital") and Janus Venture Fund, Janus Capital is
an investment adviser and indirect majority owner of two other investment
advisers, Enhanced Investment Technologies LLC and Bay Isle Financial LLC,
and such entities have sole voting power and sole dispositive power over
856,785 shares of the Company's Common Stock, including 799,760 shares of
Common Stock with respect to which Janus Venture Fund, a registered
investment company to which Janus Capital provides investment advice, has
sole voting power and sole dispositive power.
(11) Based on information provided in a Schedule 13G filed with the SEC on
February 13, 2006 by Bares Capital Management, Inc. ("Bares Capital") and
Brian T. Bares, Bares Capital is an investment adviser and Mr. Bares is the
President of Bares Capital and beneficially owns a controlling percentage
of its outstanding voting securities, and such parties have sole voting
power and sole dispositive power over 724,223 shares of the Company's
Common Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
persons who beneficially own more than 10% of the Company's common stock to file
with the SEC and the Nasdaq Stock Market reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company
and to furnish the Company with copies of all such reports they file. To the
Company's knowledge, based solely on review of the copies of such reports
furnished to the Company, or written representations that no other reports were
required to be filed by those persons, the Company believes that, during the
fiscal year ended December 31, 2005, all such reports were timely filed.
CORPORATE GOVERNANCE
The Company strives to maintain corporate governance practices that benefit
the long-term interests of the Company's stockholders by clearly outlining the
Company's duties and responsibilities, providing a framework for active and
fruitful discussions among the members of the Company's Board of Directors and
between the Board and management, and avoiding conflicts of interest and other
legal and ethical problems. Accordingly, the Company's corporate governance
practices are designed not only to satisfy regulatory requirements, but also to
provide for effective management of the Company.
Information on the Company's corporate governance practices is available to
the public under "Corporate Governance" on the Company's website at
www.transact-tech.com. The information on the website includes the Company's
Corporate Governance Principles, the charters of the Board's Committees, and the
Company's Standards of Business Conduct, which includes a code of ethics
applicable to the officers responsible for financial reporting, including the
Chief Executive Officer, Chief Financial Officer and Controller.
The remainder of this section of the Proxy Statement summarizes the key
features of the Company's corporate governance practices:
BOARD SIZE
The Corporate Governance Principles provide that the Board should generally
have between four and ten members. In establishing the appropriate number of
directors, the Board and the Compensation and Corporate Governance Committee
consider (i) resignations and retirements from the current Board, (ii) the
availability of appropriate, qualified candidates, and (iii) the goal of
assuring that the Board is small enough to facilitate active discussions and
decision-making while, at the same time, is large enough to provide an
appropriate mix of continuity, experience, skills and diversity so that the
Board and its Committees can effectively perform their responsibilities.
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CRITERIA FOR MEMBERSHIP ON THE BOARD
The Board and its Nominating Committee consider a number of different
factors in selecting nominees for director. Some of these factors, such as
integrity, are applied uniformly to all prospective candidates. Others, such as
specific industry experience, may be adopted on a case by case basis by the
Board and the Nominating Committee based on the Company's business needs at the
time a nomination is under consideration. The Nominating Committee and the Board
of Directors apply the same criteria to each candidate for a particular position
on the Board, regardless of whether the candidate is proposed by a stockholder
or some other source. Specific criteria considered by the Nominating Committee
and the Board include:
Independence. The Board of Directors, in its Corporate Governance
Principles and Committee charters, has established a policy that a substantial
majority of the directors be "independent" members of the Board. The Nominating
Committee and the Board consider the independence of each prospective director
before election and further consider the independence of all continuing
directors on at least an annual basis. The Board has determined that all the
directors, except for Mr. Shuldman, who is the Company's Chief Executive
Officer, are independent in accordance with the Company's criteria. The Board
applies the following criteria in determining independence, which criteria are
derived from Nasdaq's listing standards as well as certain additional
requirements that are imposed on certain Committee members under the rules and
regulations of the Securities and Exchange Commission and the Internal Revenue
Service:
- Independent Judgment. The director must not have any relationship with
the Company that, in the opinion of the Board, would interfere with the
exercise of independent judgment in carrying out the responsibilities of
a director. In making this determination, the Board considers all
relevant facts and circumstances, including commercial, charitable and
familial relationships that might have an impact on the director's
judgment.
- Employment. The director must not have been an employee of the Company
at any time during the past three years. In addition, a member of the
director's immediate family (including the director's spouse, parents,
children, siblings, mother-in-law, father-in-law, brother-in-law,
sister-in-law, son-in-law, daughter-in-law and anyone who resides in the
director's home) must not have been an executive officer of the Company
during the past three years.
- Other Payments. Neither the director nor a member of his or her
immediate family member may have received payments of more than $60,000
per year from the Company during the current or any of the past three
years, except for director fees, payments arising solely from investments
in the Company's securities, benefits under certain Company plans and
non-discretionary compensation, certain permitted loans and compensation
paid to a family member who is not an executive officer of the Company.
- Auditor Affiliation. Neither the director nor a member of his or her
immediate family may be a current partner of the Company's independent
auditors or have been a partner or employee of the Company's independent
auditors who worked on the Company's audit at any time during the past
three years.
- Interlocking Directorships. Neither the director nor any member of his
or her immediate family may be employed as an executive officer by
another entity where, at any time during the past three years, any of the
Company's executive officers served on the compensation committee.
- Transactions. Neither the director nor any member of his or her
immediate family may be a partner in, or a controlling stockholder or
executive officer of, any organization that, during the current or any
one of the past three years, received payments from the Company, or made
payments to the Company, for property or services that exceed the greater
of $200,000 or 5% of the recipient's annual consolidated gross revenues
for such year (excluding payments arising solely from investments in the
Company's securities or paid under a non-discretionary charitable
matching program).
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- Additional Standards for Audit Committee Members. Any director who
serves on the Board's Audit Committee may not, directly or indirectly,
have received any consulting, advisory or other compensatory fee from the
Company (other than certain retirement benefits and deferred
compensation) or be an affiliate of the Company (except as a director,
but including by way of stock ownership). In addition, no such director
may have participated in the preparation of the financial statements of
the Company or any current subsidiary of the Company at any time during
the past three years.
Overall Board Composition. The Board of Directors believes it is important
to consider the professional skills and background, experience in relevant
industries, age and diversity of its directors in light of the Company's current
and future business needs.
Personal Qualities. Each director must possess certain personal qualities,
including integrity, judgment and business acumen. In addition, each director
must be no older than 75 years of age at the time of nomination or renomination.
Commitments. Each director must have the time and ability to make a
constructive contribution to the Board. While the Board does not believe it is
appropriate to establish a single standard regarding the number of other boards
on which a director may sit, this is a factor that may be considered in
reviewing a candidate's suitability.
Additional Criteria for Incumbent Directors. During their terms, all
incumbent directors on the Company's Board are expected to have regular
attendance at Board and Committee meetings; to stay informed about the Company
and its business; to participate in discussions of the Board and its Committees;
to take an interest in the Company's business and provide advice and counsel to
the Company's Chief Executive Officer; and to comply with the Company's
Corporate Governance Principles and other applicable policies.
Regulatory Requirements. The Board must have directors who meet the
criteria established from time to time by The Nasdaq Stock Market, the
Securities and Exchange Commission, the Internal Revenue Service and other
applicable regulatory entities for service on the Board and its Committees.
DIRECTOR NOMINATION PROCESS
Under its charter, the Nominating Committee is responsible for identifying,
reviewing and recommending individuals to the Board for nomination or election
as directors. This typically involves the following steps:
- Specific Criteria. The Nominating Committee and the Board review the
overall composition of the Board in light of the Company's current and
expected business needs and, as a result of such assessments, may
establish specific qualifications that the Committee will seek in Board
candidates.
- Identifying New Candidates. The Committee may seek to identify new
candidates for the Board (i) who possess the desired qualifications, and
(ii) who satisfy the other requirements for Board service. In identifying
new director candidates, the Committee may seek advice and names of
candidates from Committee members, other members of the Board, members of
management, and other public and private sources. The Committee may also,
but need not, retain a search firm in order to assist it in these
efforts.
- Reviewing New Candidates. The Committee reviews the potential new
director candidates identified through this process. This involves
reviewing the candidates' qualifications and conducting an appropriate
background investigation. The Committee may also select certain
candidates to be interviewed by one or more Committee members.
- Reviewing Incumbent Candidates. On an annual basis, the Committee also
reviews incumbent candidates for renomination to the Board. This review
involves an analysis of the criteria described above that apply to
incumbent directors.
- Recommending Candidates. The Nominating Committee recommends a slate of
candidates for the Board of Directors to submit for approval to the
stockholders at the Annual Meeting. This slate of
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candidates may include both incumbent and new nominees. In addition,
apart from this annual process, the Committee may, in accordance with the
Corporate Governance Principles, recommend that the Board elect new
members of the Board who will serve until the next annual stockholders
meeting. At the time of making any recommendation to the Board, the
Committee reports on the criteria that were applied in making the
recommendation and its findings concerning each candidate's
qualifications.
- Stockholder Nominations Submitted to the Committee. Stockholders may
also submit names of director candidates, including their own, to the
Nominating Committee for its consideration. The process for stockholders
to use in submitting suggestions to the Nominating Committee is set forth
below at "Procedures for Submitting Director Nominations and
Recommendations."
BOARD MEETINGS AND EXECUTIVE SESSIONS
The Board of Directors not only holds regular quarterly meetings, but also
holds at least one special-purpose meeting each year to review the Company's
strategy, to approve its annual business plan and annual budget, and to act on
matters relating to the Company's Annual Meeting and filings with the Securities
and Exchange Commission.
Non-employee directors meet by themselves in executive sessions, without
management or employee directors present, at every regularly scheduled Board
meeting. In addition, the non-employee directors and independent directors may
convene additional executive sessions at any time.
These executive sessions are led by the Chair of the committee that is
responsible for the subject matter at issue (e.g., the Audit Committee Chair
would lead a discussion of audit-related matters). When it is not clear which
committee has specific responsibility for the subject matter, the Chair of the
Compensation and Corporate Governance Committee presides.
COMMITTEES OF THE BOARD
The Board has four standing committees: the Audit Committee, the
Compensation and Corporate Governance Committee, the Nominating Committee and
the Executive Committee.
Each Committee is composed entirely of independent directors and operates
under a written charter. The Chair of each Committee is selected by the Board.
Each Committee, except the Executive Committee, holds regular executive sessions
at which only Committee members are present. Each Committee is authorized to
retain its own outside counsel and other advisors as it desires.
Charters for the Audit Committee, the Compensation and Corporate Governance
Committee, and the Nominating Committee are available on the Company's website,
www.transact-tech.com, but a brief summary of the committees' responsibilities
follows:
Audit Committee. The Audit Committee is responsible for assisting the
Board in fulfilling its responsibilities to oversee the quality and integrity of
the Company's financial statements and accounting practices, the Company's
compliance with legal and regulatory requirements, the independent auditor's
qualifications and independence, and the performance of the Company's
independent auditor and internal audit function.
Nominating Committee. The Nominating Committee is responsible for
assisting the Board in carrying out its responsibilities relating to the
composition of the Board, including identifying, reviewing and recommending
candidates to the Board for nomination or election as directors.
Compensation and Corporate Governance Committee. The Compensation and
Corporate Governance Committee is responsible for assisting the Board in
carrying out its responsibilities relating to executive compensation, the
Company's corporate governance practices, CEO performance review and succession
planning, director compensation, Board and Committee performance evaluation and
stockholder communication matters.
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Executive Committee. The Executive Committee meets between scheduled
meetings of the Board of Directors and has the power and authority of the Board,
except as limited by the Company's By-Laws.
BOARD AND COMMITTEE PERFORMANCE EVALUATIONS
The Board of Directors conducts periodic evaluations of its composition,
responsibilities, structure, processes and effectiveness. Each Committee of the
Board conducts a similar evaluation with respect to such Committee. These
evaluations are conducted under the auspices of the Compensation and Corporate
Governance Committee.
STANDARDS OF BUSINESS CONDUCT
In order to help assure the highest levels of business ethics at the
Company, the Board of Directors has adopted the Company's Standards of Business
Conduct, which apply to the Company's directors, officers and employees. The
Standards of Business Conduct provide an overview of the Company's policies
pertaining to employee conduct in the workplace, regulatory compliance and
investigations; the Company's relationships with its customers, vendors,
competitors and the public; insider trading; conflicts of interest; lobbying;
political activities and contributions; accuracy of books, records and financial
statements; confidentiality; and the protection of all who come forward to
report suspected violations of the Standards. In addition, with respect to the
Company's officers who are responsible for financial reporting, including the
Chief Executive Officer, Chief Financial Officer and Controller, the Standards
of Business Code are designed to act as a code of ethics that are designed to
promote honest and ethical conduct and mandate that these officers avoid
conflicts of interest and disclose any relationship that could give rise to a
conflict, protect the confidentiality of non-public information about the
Company, work to achieve responsible use of the Company's assets and resources,
comply with all applicable governmental rules and regulations and promptly
report any possible violation of the Standards. In addition, the Standards
require that these individuals promote full, fair, understandable and accurate
disclosure in the Company's publicly filed reports and other public
communications and sets forth standards for accounting practices and records.
Individuals to whom the Standards of Business Conduct apply are held accountable
for their adherence to it. Failure to observe the terms of the Standards of
Business Conduct can result in disciplinary action (including termination of
employment).
1. ELECTION OF DIRECTORS
The Board of Directors currently consists of four directors and is divided
into three classes. Each class of directors are elected by the holders of the
Company's Common Stock to serve staggered three-year terms.
At the Annual Meeting, one person is to be elected to hold office as a
director until the 2009 Annual Meeting of Stockholders or until a successor is
duly elected and qualified. In the absence of instructions to the contrary, the
persons named in the accompanying proxy will vote such proxy "FOR" the election
of the nominee named below. Should the nominee become unavailable, which is not
anticipated, votes pursuant to the proxy will be cast for a substitute candidate
as may be designated by the Board of Directors, or in the absence of such
designation, in such other manner as the Board may in their discretion
determine. Alternatively, in such a situation, the Board of Directors may take
action to fix the number of directors for the ensuing year at the number of
nominees and incumbent directors who are then able to serve.
DIRECTOR INDEPENDENCE AND QUALIFICATIONS
The Board of Directors has determined that all of the directors or
nominees, except for Mr. Shuldman, are "independent" within the criteria
established under the Company's Corporate Governance Principles. See "Corporate
Governance -- Criteria for Membership on the Board." In addition, the Board has
determined that each member of the Audit Committee is financially literate and
each director or nominee possesses the high level of skill, experience,
reputation and commitment that is mandated by the Board.
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INFORMATION CONCERNING NOMINEE FOR RE-ELECTION AS DIRECTOR WHOSE TERM WILL
EXPIRE AT THE 2009 ANNUAL MEETING
Charles A. Dill, 66, has been a director of the Company since its formation
in June 1996. From 2004 to the present, Mr. Dill has served as a General Partner
of Two Rivers Associates, a private equity investment firm. Mr. Dill was a
General Partner of Gateway Associates, a venture capital firm, from 1996 to
2004. Mr. Dill currently serves as a director of Zoltek Companies, Inc. and
Stifel Financial Corp., as well as several other privately held companies.
VOTE REQUIRED
The election of Charles A. Dill as director of the Company requires
affirmative votes of the holders of a plurality of the votes of the Company's
Common Stock present in person or represented by proxy and entitled to vote.
Abstentions by holders of such shares and broker non-votes will have no effect
on the election of directors, but will be included in determining the presence
of a quorum at the Annual Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION OF
CHARLES A. DILL AS DIRECTOR OF THE COMPANY.
INFORMATION CONCERNING DIRECTOR WHOSE TERM WILL EXPIRE AT THE 2007 ANNUAL
MEETING
Graham Y. Tanaka, 58, has been a director of the Company since its
formation in June 1996. Mr. Tanaka has been President of Tanaka Capital
Management, Inc., an investment management firm, since 1986. He is a director of
Tanaka Funds, Inc. and Tanaka Capital Management, Inc.
INFORMATION CONCERNING DIRECTORS WHOSE TERMS WILL EXPIRE AT THE 2008 ANNUAL
MEETING
Thomas R. Schwarz, 69, has been a director of the Company since its
formation in June 1996 and was Chairman of the Board from June 1996 to February
2001. Mr. Schwarz was Chairman and Chief Executive Officer of Grossman's Inc., a
retailer of building materials, from 1990 until his retirement in 1994. From
1980 to 1990, he was President, Chief Operating Officer and a director of
Dunkin' Donuts Incorporated, a food service company. Mr. Schwarz is a director
of Tanaka Growth Fund and a privately held company.
Bart C. Shuldman, 49, has been Chief Executive Officer, President and a
director of the Company since its formation in June 1996 and Chairman of the
Board since February 2001. Previously, Mr. Shuldman was Vice President of Sales
and Marketing of Magnetec Corporation, a former subsidiary of Tridex, from April
1993 to August 1993, and served as President of Magnetec, and later the combined
operations of Magnetec and Ithaca Peripherals Incorporated, another former
Tridex subsidiary, from August 1993 to June 1996.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the year ended December 31, 2005, the Board of Directors held twelve
meetings. Each director attended all of the meetings of the Board of Directors
and of the Committees of the Board of Directors on which such director served.
The standing committees of the Board of Directors are the Audit Committee,
the Compensation and Corporate Governance Committee, the Nominating Committee
and the Executive Committee.
The Audit Committee is comprised of Messrs. Charles A. Dill, Thomas R.
Schwarz and Graham Y. Tanaka, with Mr. Dill serving as Chair. As discussed above
under "Corporate Governance -- Criteria for Membership on the Board", the Board
has determined that each member of the Audit Committee is an independent
director and meets the financial literacy requirements of The Nasdaq Stock
Market to serve on the Committee. In addition, the Board has determined that Mr.
Dill is an "audit committee financial expert" as defined under the rules of the
Securities and Exchange Commission. The Audit Committee operates under a written
charter, which was revised in March 2004 and is posted on the Company's website.
The Audit Committee met four times during 2005.
8
The Compensation and Corporate Governance Committee is comprised of Messrs.
Charles A. Dill, Thomas R. Schwarz and Graham Y. Tanaka, with Mr. Schwarz
serving as Chair. The Compensation and Corporate Governance Committee operates
under a written charter, which was adopted in March 2004 and is posted on the
Company's website. See "Corporate Governance -- Recent Developments." The
Compensation and Corporate Governance Committee met five times during 2005.
The Nominating Committee is comprised of Messrs. Charles A. Dill, Thomas R.
Schwarz and Graham Y. Tanaka, with Mr. Tanaka serving as Chair. The Nominating
Committee operates under a written charter, which was adopted in March 2004 and
is posted on the Company's website. See "Corporate Governance -- Recent
Developments." The Nominating Committee met two times during 2005.
The Executive Committee is comprised of Messrs. Charles A. Dill, Thomas R.
Schwarz and Graham Y. Tanaka. The Executive Committee did not meet during 2005.
AUDIT COMMITTEE REPORT
Under its charter, the Audit Committee is responsible for assisting the
Board in fulfilling its responsibilities to oversee the internal control over
financial reporting and quality and integrity of the Company's financial
statements and accounting practices, the Company's compliance with legal and
regulatory requirements, the independent auditor's qualifications and
independence, and the performance of the Company's independent auditor and
internal audit function.
Management is responsible for preparing complete and accurate consolidated
financial statements in accordance with generally accepted accounting
principals. The independent public accountants are responsible for performing
independent audits of the Company's consolidated financial statements and for
issuing reports about those financial statements. The Audit Committee meets with
the independent public accountants, the Chief Executive Officer and the senior
management of the Company to review the scope and the results of the annual
audit, the amount of audit fees, the Company's system of internal accounting
controls over financial reporting, the financial statements contained in the
Company's Annual Report to Stockholders and other related matters. Separate
meetings are held with the independent public accountants and management.
Substantial attention at Audit Committee meetings throughout 2005 was devoted to
progress updates and presentations by management and the independent public
accountants relative to the Company's Sarbanes-Oxley Section 404 Internal
Control Certification Program. Management's Report on Internal Control, together
with the independent public accountants' accompanying report, has been reviewed
by the Committee and is contained in the Company's 2005 Annual Report on Form
10-K.
In connection with its duties, the Audit Committee has taken the following
actions:
- It has reviewed and discussed the audited financial statements, as well
as the assessment of internal controls over financial reporting, with
management.
- It has discussed with the independent registered public accounting firm,
which is responsible for expressing an opinion on the financial
statements in accordance with generally accepted accounting principles,
the matters required to be discussed by Statement on Auditing Standards
No. 61, "Communication with Audit Committees," as amended.
- It has received from the independent registered public accounting firm
the written disclosures describing any relationships between the
independent registered public accounting firm and the Company and the
letter confirming their independence required by Independence Standards
Board Standard No. 1, "Independence Discussions with Audit Committees,"
and has discussed with the independent auditors matters relating to their
independence.
9
- Based on its review and discussions described above, the Audit Committee
recommended to the Board of Directors that the audited financial
statements of the Company for the year ended December 31, 2005 be
included in the Company's Annual Report on Form 10-K for filing with the
SEC.
AUDIT COMMITTEE
Charles A. Dill, Chairman
Thomas R. Schwarz
Graham Y. Tanaka
During the year ended December 31, 2005, each outside director of the
Company received as compensation for services rendered: (i) a retainer of $2,500
for each fiscal quarter served as director, (ii) $1,000 for each Board of
Directors meeting attended, (iii) $500 for each Board of Directors committee
meeting attended, (iv) $500 for each telephonic Board of Directors meeting, and
(v) $250 for each telephonic committee meeting. Chairs of committees received
$750 for each committee meeting attended and $500 for each telephonic meeting.
Directors are reimbursed for expenses incurred in attending meetings.
Each non-employee director receives an annual grant of 5,000 shares of
restricted stock, pursuant to the terms of the Company's 2005 Equity Incentive
Plan. The restricted stock will vest at the rate of 20% per year beginning on
the first anniversary of the date of grant.
10
EXECUTIVE COMPENSATION
The following tables set forth information concerning the compensation
earned by the Company's Chief Executive Officer and each of the other four most
highly compensated executive officers (the "Named Executive Officers") in 2005:
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-----------------------
AWARDS
----------------------- ALL
ANNUAL COMPENSATION RESTRICTED SECURITIES OTHER
------------------- STOCK UNDERLYING COMPEN-
FISCAL SALARY(1) BONUS AWARDS(3) OPTIONS SATION(4)
NAME AND PRINCIPAL POSITIONS YEAR ($) ($) ($) (#) ($)
---------------------------- ------ --------- ------- ---------- ---------- ---------
Bart C. Shuldman.................... 2005 403,000 160,000 199,200 -- 29,114
Chairman, President and 2004 390,000 52,650 612,500 -- 29,305
Chief Executive Officer 2003 390,000 73,125 -- -- 56,413
Steven A. DeMartino(5).............. 2005 186,000 75,000 149,400 -- 18,406
Executive Vice President, 2004 166,759 24,239 220,240 -- 18,521
Chief Financial Officer, 2003 145,600 16,380 -- -- 29,764
Treasurer and Secretary
Michael S. Kumpf.................... 2005 168,810 40,000 149,400 -- 19,962
Executive Vice President, 2004 162,565 20,686 122,500 -- 20,132
Engineering 2003 158,600 20,816 -- -- 17,045
James B. Stetson(6)................. 2005 179,067 64,400(2) 99,600 -- 14,430
Senior Vice President and 2004 179,067 27,569(2) 122,500 -- 21,587
Business Manager, TransAct 2003 174,720 58,633 -- -- 22,094
Services Group
Andrew J. Hoffman(7)................ 2005 135,000 35,000 99,600 -- 10,944
Senior Vice President, 2004 121,930 13,175 122,500 -- 5,288
Operations 2003 117,850 13,258 -- -- 4,418
---------------
(1) None of the Named Executive Officers received perquisites or other personal
benefits in an amount which exceeded 10% of their salary plus bonus during
any fiscal year.
(2) All of the bonuses paid to Mr. Stetson represents commissions on sales by
the Company.
(3) All restricted stock awards were granted under the Company's 1996 Stock
Plan. The value of the restricted stock awards is based on the closing
market price of the Company's common stock on the date of grant. At the end
of fiscal year 2005, the number of shares of common stock which remain
subject to restricted awards and the value of such shares, based on the
closing price of the Company's common stock of $7.90 on such date, were as
follows: Mr. Shuldman: 50,000 shares and $395,000; Mr. DeMartino: 23,400
shares and $184,860; Mr. Kumpf; 21,000 shares and $165,900; Mr. Stetson:
16,000 shares and $126,400; and Mr. Hoffman: 16,000 shares and $126,400. The
grants of shares of restricted stock in 2005 (i) to Mr. Shuldman, Mr.
DeMartino, Mr. Kumpf, Mr. Stetson and Mr. Hoffman vest in five equal
installments beginning on the first anniversary of the date of grant.
Currently, no dividends may be paid on shares of the Company's common stock.
(4) For all the Named Executive Officers, these amounts consist of automobile
allowances, Company contributions under the Company's 401(k) Plan, and other
benefits such as life and disability insurance. Also, for 2003, includes a
one-time payment of accrued vacation as of December 31, 2002.
(5) Mr. DeMartino was appointed Senior Vice President, Finance and Information
Technology in October 2001, and replaced Richard L. Cote as Executive Vice
President, Chief Financial Officer, Treasurer and Secretary in June 2004.
(6) Mr. Stetson was appointed Executive Vice President, Sales and Marketing in
November 2001 and Senior Vice President and Business Manager, TransAct
Services Group in October 2004.
(7) Mr. Hoffman was appointed Senior Vice President, Operations in November
2004.
11
AGGREGATED OPTION EXERCISES IN 2005 AND FISCAL YEAR-END
OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE FISCAL YEAR-END FISCAL YEAR-END
EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($) (#) ($)
---- ----------- -------- ------------------------- -------------------------
Bart C. Shuldman............. 10,500 142,930 289,550/- 1,121,102/-
Steven A. DeMartino.......... -- -- 42,000/- 174,125/-
Michael S. Kumpf............. -- -- 48,724/- 154,160/-
James B. Stetson............. 4,100 25,256 28,150/- 115,595/-
Andrew J. Hoffman............ -- -- 3,799/- 16,107/-
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Under the terms of an Employment Agreement dated July 31, 1996 between Bart
C. Shuldman and the Company, Mr. Shuldman serves as President and Chief
Executive Officer at the pleasure of the Board of Directors. If Mr. Shuldman's
employment is terminated other than for Cause (as such term is defined in the
employment agreement), Mr. Shuldman shall be entitled to continue to receive:
(i) his annual base salary and all other benefits for two years from the date of
termination and (ii) a pro rata portion of his annual target bonus amount for
the year of termination. If Mr. Shuldman's employment is terminated other than
for Cause, or if Mr. Shuldman resigns for specified reasons, within one year of
a change-in-control of the Company, Mr. Shuldman shall be entitled to continue
to receive his annual base salary, annual target bonus and all benefits for a
period of three years from the date of termination. In addition, the Company
shall cause the immediate vesting of all restricted stock and stock options
granted to Mr. Shuldman under the 1996 Stock Plan.
Under the terms of a Severance Agreement with Steven A. DeMartino dated
June 1, 2004, if the employment of Mr. DeMartino is terminated other than for
Cause (as such term is defined in the severance agreement), Mr. DeMartino shall
be entitled to continue to receive, for one year following the date of
termination, his annual base salary, a pro rata portion of his annual target
bonus for the year of termination and all benefits which would otherwise have
been payable to him. If the employment of Mr. DeMartino is terminated other than
for Cause, or if he resigns for specified reasons, within one year of a
change-in-control of the Company, Mr. DeMartino shall be entitled to continue to
receive his annual base salary, annual target bonus and all benefits for a
period of two years from the date of termination. In addition, the Company shall
cause the immediate vesting of all restricted stock and stock options granted to
Mr. DeMartino under the 1996 Stock Plan.
Under the terms of Severance Agreements between the Company and James B.
Stetson, Michael S. Kumpf and Andrew J. Hoffman dated January 24, 2001,
September 4, 1996 and November 18, 2005, respectively, if the employment of Mr.
Stetson or Mr. Kumpf is terminated other than for Cause (as such term is defined
in the respective severance agreement), each executive shall be entitled to
continue to receive, for six months following the date of termination, the
annual base salary, a pro rata portion of the annual target bonus for the year
of termination and all benefits which would otherwise have been payable to each
of them. If the employment of Mr. Stetson or Mr. Kumpf is terminated other than
for cause, or if they resign for specified reasons, within one year of a
change-in-control of the Company, each shall be entitled to continue to receive
his annual base salary, annual target bonus and all benefits for a period of one
year from the date of termination. In addition, the Company shall cause the
immediate vesting of all restricted stock and stock options granted under the
1996 Stock Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, which is comprised of independent directors of
the Company, is responsible for administering the Company's executive
compensation policies. In connection with such
12
responsibilities, the Compensation Committee establishes the general
compensation policies for the Company, approves the hiring and termination of
all executive officers and any staff reporting directly to the Chief Executive
Officer of the Company and approves the compensation plans and specific
compensation levels for all executive officers and any staff reporting directly
to the Chief Executive Officer of the Company. The Compensation Committee also
approves the issuance of all awards to employees of the Company and its
subsidiaries under the Company's 2005 Equity Incentive Plan.
Compensation Policies and Goals
The primary goals of the Company's compensation policies are to attract,
retain, motivate and reward management of the Company, while at the same time,
aligning their interests closely with those of the Company and its stockholders.
The Company seeks to attract and retain management by offering a competitive
total compensation package. To align the interests of management more closely
with those of the Company as a whole and reward individual initiative and
effort, the Company seeks to promote performance-based compensation where
contribution to the Company as a whole is rewarded. Through the use of
performance-based plans that reward attainment of Company goals, the Company
seeks to foster an attitude of teamwork. The Company also believes that the use
of equity ownership is an important tool to ensure that the efforts of
management are consistent with the objectives of its stockholders and seeks to
promote increased ownership of the Company by management through the use of
stock awards.
The Compensation Committee has tried to achieve the above goals utilizing
publicly available information regarding competitive compensation. The
Compensation Committee may utilize an independent consultant to ensure that
compensation for the Company's management is competitive, meets the above-stated
objectives and is consistent for all members of management of the Company.
Compensation Components
At present, the compensation of the executive officers of the Company
consists of a combination of salary, cash bonuses, stock options, restricted
stock and participation in the Company's 401(k) Plan, as well as the provision
of medical and other personal benefits typically offered to corporate
executives. Some of the executive officers of the Company are parties to
agreements which provide for severance payments under certain circumstances.
These agreements for the Named Executive Officers are described above under
"Employment Contracts, Termination of Employment and Change-In-Control
Arrangements."
Salaries: The Compensation Committee targets the Chief Executive Officer's
salary at the mean of that for the Company's peer group and seeks to provide a
total compensation package competitive with those of others in the industry.
Cash Bonuses: The Company generally maintains an incentive compensation
plan for all salaried employees of the Company, including key executives, which
provides for the payment of cash bonuses. Under the plan, the Board of Directors
fixes an incentive target, as well as individual goals and objectives, for each
employee at the beginning of the year and bonuses are paid shortly after the end
of the year.
Stock Awards: Under the Company's 2005 Equity Incentive Plan, stock options
and restricted stock are granted by the Compensation Committee. Prior to 2006,
all salaried employees were granted an initial award of stock options or
restricted stock on their date of hiring for a fixed number of shares depending
on their level, which vests over three to five years. Beginning in 2006,
executives and certain key employees may be granted stock awards as determined
by the Compensation Committee
Other Benefit Plans: Executive officers of the Company may participate in
the Company's nondiscriminatory 401(k) Plan.
13
Chief Executive Officer Compensation
The Compensation Committee also makes decisions regarding the compensation
of the Chief Executive Officer using the philosophy and criteria set forth
above. Each year, the Company approves the adjustment of salary ranges for the
Chief Executive Officer based on studying the compensation paid to CEOs at peer
group companies. Mr. Shuldman's annual base salary for 2005 was $405,600.
Mr. Shuldman's annual incentive award, shown in the fourth column of the
Summary Compensation Table, was based upon a policy of the degree of achievement
of the corporate and individual goals and objectives. The 20,000 shares of
restricted stock granted to Mr. Shuldman during 2005 reflect this policy.
COMPENSATION COMMITTEE
Thomas R. Schwarz, Chairman
Charles A. Dill
Graham Y. Tanaka
14
CORPORATE PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock from December 31, 2000 through December 31, 2005, with the CRSP
Total Return Index for the Nasdaq Stock Market (U.S.) and the Nasdaq Computer
Manufacturer Stocks Index. The graph assumes that $100 was invested on December
31, 2000 in each of the Company's common stock, the CRSP Total Return Index for
the Nasdaq Stock Market (U.S.) and the Nasdaq Computer Manufacturer Stocks
Index, and that all dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
TRANSACT TECHNOLOGIES INCORPORATED COMMON STOCK,
THE CRSP TOTAL RETURN INDEX FOR THE NASDAQ STOCK MARKET (U.S.),
AND THE NASDAQ COMPUTER MANUFACTURER STOCKS INDEX
(PERFORMANCE GRAPH)
--------------------------------------------------------------------------
12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
--------------------------------------------------------------------------
TransAct
Technologies
Incorporated
Common Stock $100.00 $104.76 $90.29 $463.81 $610.29 $225.71
--------------------------------------------------------------------------
CRSP Total Return
Index for the
Nasdaq Stock
Market (U.S.) $100.00 $ 79.32 $54.84 $ 81.99 $ 89.23 $ 91.12
--------------------------------------------------------------------------
Nasdaq Computer
Manufacturer
Stocks Index $100.00 $ 68.89 $45.65 $ 63.50 $ 83.03 $ 84.97
--------------------------------------------------------------------------
15
2. RATIFICATION OF SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2006
The Audit Committee has selected PricewaterhouseCoopers LLP as independent
registered public accounting firm to audit the financial statements of the
Company for the 2006 fiscal year. This selection is being presented to the
stockholders for ratification at the Annual Meeting. PricewaterhouseCoopers LLP
has audited the Company's financial statements since the Company's formation.
A representative of PricewaterhouseCoopers LLP is expected to be present at
the Annual Meeting, will have the opportunity to make a statement, and is
expected to be available to respond to appropriate questions.
POLICY REGARDING PRE-APPROVAL OF SERVICES PROVIDED
BY THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has established a policy requiring its pre-approval of
all audit services and permissible non-audit services provided by the
independent registered public accounting firm, along with the associated fees
for those services. The Policy provides for the annual pre-approval of specific
types of services pursuant to policies and procedures adopted by the Audit
Committee, and gives detailed guidance to management as to the specific services
that are eligible for such annual pre-approval. The Policy requires the specific
pre-approval of all other permitted services. For both types of pre-approval,
the Audit Committee considers whether the provision of a non-audit service is
consistent with the Securities and Exchange Commission's rules on auditor
independence, including whether provision of the service (i) would create a
mutual or conflicting interest between the independent registered public
accounting firm and the Company, (ii) would place the independent registered
public accounting firm in the position of auditing its own work, (iii) would
result in the independent registered public accounting firm acting in the role
of management or as an employee of the Company, or (iv) would place the
independent registered public accounting firm in a position of acting as an
advocate for the Company. In addition, the Audit Committee considers whether the
independent registered public accounting firm is best positioned and qualified
to provide the most effective and efficient service, based on factors such as
the independent registered public accounting firm's familiarity with the
Company's business, personnel, systems or risk profile and whether provision of
the service by the independent registered public accounting firm would enhance
the Company's ability to manage or control risk or improve audit quality or
would otherwise be beneficial to the Company.
The Audit Committee may delegate to one of its members the authority to
address certain requests for pre-approval of services between meetings of the
Committee, and such Committee member is required to report his or her
pre-approval decisions to the Committee at its next regular meeting. The Policy
is designed to ensure that there is no delegation by the Audit Committee of
authority or responsibility for pre-approval decisions to management of the
Company. The Audit Committee monitors compliance by management with the
pre-approval policy by requiring management, pursuant to the Policy, to report
to the Audit and Finance Committee on a regular basis regarding the pre-approved
services rendered by the independent registered public accounting firm.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S SERVICES AND FEES
The Audit Committee is responsible for the appointment, compensation,
retention and oversight of the work of the independent registered public
accounting firm. Accordingly, the Audit Committee has appointed
PricewaterhouseCoopers LLP to perform audit and other services for the Company.
In addition, the Committee has procedures in place for the pre-approval by the
Committee of all services provided by PricewaterhouseCoopers LLP. These
pre-approval procedures, as amended, are described above under "Policy Regarding
Pre-Approval of Services Provided by the Independent Registered Public
Accounting Firm."
16
The aggregate fees billed by PricewaterhouseCoopers LLP to the Company for
the years ended December 31, 2005 and 2004 are as follows:
2005 2004
-------- --------
Audit Fees(1)............................................... $468,234 $605,700
Audit-Related Fees(2)....................................... 35,000 69,315
Tax Fees(3)................................................. 56,210 41,400
All Other Fees(4)........................................... 1,515 1,500
-------- --------
Total Fees for Services Provided............................ $560,959 $717,915
======== ========
---------------
(1) Audit Fees consist of fees related to: (i) the annual audit of the Company's
financial statements, (ii) the audit of management's assessment of the
effectiveness of internal control over financial reporting (as required by
Section 404 of the Sarbanes-Oxley Act of 2002), (iii) reviews of the
Company's quarterly financial statements, (iv) statutory audits for the
Company's UK subsidiary, and (v) the review of registration statements,
periodic reports and other reports filed with the SEC.
(2) Audit-Related Fees consist of fees incurred for consultations regarding
accounting and financial reporting standards, Sarbanes -- Oxley readiness
assistance, and due diligence work.
(3) Tax Fees include fees incurred for the preparation of domestic and foreign
tax returns and tax planning and advice.
(4) All Other Fees include software license fees for the use of a web-based
accounting research tool.
The Audit Committee has considered whether the provision of the above
services other than Audit Fees is compatible with maintaining the auditors'
independence and has determined that, in its opinion, they are compatible.
VOTE REQUIRED
The ratification of the selection of PricewaterhouseCoopers LLP as
independent registered public accounting firm for 2006 requires the affirmative
vote of a majority of the votes of the Common Stock present in person or
represented by proxy and entitled to vote. In the absence of instructions to the
contrary, the persons named in the accompanying proxy will vote such proxy "FOR"
the ratification of PricewaterhouseCoopers LLP. Abstentions by holders of such
shares with respect to voting on this matter will have the effect of a negative
vote; broker non-votes with respect to voting on this matter will have no effect
on the outcome of the vote. In the event stockholders do not ratify the
appointment, the Audit Committee will reconsider the appointment.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" RATIFICATION
OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR 2006.
STOCKHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
Stockholder proposals submitted for inclusion in next year's proxy
materials must be received by the Secretary of the Company on or before January
2, 2007. Proposals should be addressed to TransAct Technologies Incorporated, 7
Laser Lane, Wallingford, Connecticut 06492, Attention: Secretary. Stockholders
who wish to make a proposal at the 2007 Annual Meeting without regard to whether
it will be included in the Company's proxy materials should notify the Company
no later than February 28, 2007. If a Stockholder who wishes to present a
proposal fails to notify the Company by the due date, the proxies that the
Company solicits for the meeting will accord them discretionary authority to
vote on the Stockholder's proposal if it is properly brought before the meeting.
17
PROCEDURES FOR SUBMITTING DIRECTOR NOMINATIONS AND RECOMMENDATIONS
Stockholders may nominate candidates for election to the Board of Directors
if the proper nomination procedures specified in the Company's By-Laws are
followed. All nominations by stockholders must be delivered to or mailed and
received at the principal executive offices of the Company not less than 30 nor
more than 60 days prior to the meeting at which election of directors will take
place; however, if less than 40 days' notice or prior public disclosure of the
date of the meeting is given or made to stockholders, nominations will be timely
if received not later than 10 days after notice was given or public disclosure
was made. A stockholder's notice must set forth in writing (i) for each person
proposed to be nominated, all information relating to each such person that is
required to be disclosed in solicitations of proxies for election of directors
pursuant to Regulation 14A under the Exchange Act, including such person's
written consent to be named in the proxy and to serving as a director, and (ii)
for the stockholder giving notice, the (x) name and address of such stockholder
as they appear on the Company's books, and (y) the class and number of shares of
the Company beneficially owned by such stockholder. The Nominating Committee
will also consider any stockholder recommendation of a candidate for nomination
by the Board if the stockholder submits his or her recommendation in accordance
with the foregoing procedures.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS POLICY
Any stockholder wishing to communicate directly with members of the Board
of Directors should do so in writing. All correspondence addressed to the Board
as a whole, to its independent directors, to any of its Committees or Committee
Chairs, or to individual Board members should be mailed to the following
address:
Board of Directors/Independent Directors/Committee/Director
c/o Secretary
TransAct Technologies Incorporated
7 Laser Lane
Wallingford, Connecticut 06492
- You are welcome to communicate anonymously or confidentially.
- All correspondence addressed to an individual director or Committee
Chair, and marked "Confidential", will be collected in the office of the
Secretary and forwarded unopened to the individual director.
- Other correspondence will be opened by the Secretary, reviewed, copied
and directed as follows:
- Concerns regarding the Company's accounting, internal accounting
controls or auditing matters will be referred to the members of the
Audit Committee.
- Nominations or recommendations of candidates for election to the Board
of Directors will be referred to members of the Nominating Committee.
- Other correspondence will be copied by the Secretary and forwarded to
all of the members of the Board of Directors (or its independent
directors, if so addressed) unless the stockholder directs otherwise.
- A Stockholder may request written acknowledgement of the receipt of his
or her correspondence, which will be provided by the Secretary or, in the
case of correspondence marked "Confidential", by the individual director
or Committee Chair to whom it is addressed.
18
ANNUAL REPORT
A COPY OF THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT ON
FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, WILL BE
FURNISHED WITHOUT CHARGE TO ANY STOCKHOLDER UPON WRITTEN REQUEST. REQUESTS
SHOULD BE ADDRESSED TO: TRANSACT TECHNOLOGIES INCORPORATED, STOCKHOLDER
RELATIONS DEPARTMENT, 7 LASER LANE, WALLINGFORD, CONNECTICUT 06492.
GENERAL
The accompanying proxy will be voted as specified thereon. Unless otherwise
specified, proxies will be voted for the director nominated by the Board of
Directors, and for ratification of the selection of PricewaterhouseCoopers LLP
as independent registered public accounting firm for 2006. As of the date of
this Proxy Statement, the Board of Directors is not aware of any matter which is
to be presented for action at the Annual Meeting other than the matters set
forth herein. Should any other matter requiring a vote of the stockholders arise
at the Annual Meeting, the proxies confer upon the persons named in the
accompanying proxy the authority to vote in respect of any such other matter in
accordance with the recommendation of the Board of Directors.
A stockholder who has given a proxy may revoke it at any time prior to its
exercise at the Annual Meeting by: (i) giving written notice of revocation to
the Secretary of the Company, (ii) properly submitting to the Company a duly
executed proxy bearing a later date, or (iii) voting in person at the Annual
Meeting. All written notices of revocation and other communications with respect
to revocation of proxies should be addressed to the Company, as follows:
TransAct Technologies Incorporated, 7 Laser Lane, Wallingford, Connecticut
06492, Attention: Secretary. A proxy appointment will not be revoked by death or
supervening incapacity of the stockholder executing the proxy unless, before the
shares are voted, notice of such death or incapacity is filed with the Company's
Secretary or other person responsible for tabulating votes on behalf of the
Company.
The cost of preparing, assembling and mailing this proxy material will be
borne by the Company. The Company may solicit proxies otherwise than by use of
the mail, in that certain officers and regular employees of the Company, without
additional compensation, may use the telephone or otherwise to obtain proxies.
The Company will also request persons, firms and corporations holding shares in
their names, or owned by others, to send this proxy material to and obtain
proxies from, such beneficial owners and will reimburse such holders for their
reasonable expenses in doing so.
STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. PROMPT RESPONSE IS
HELPFUL, AND YOUR COOPERATION IS APPRECIATED.
April 20, 2006
19
TRANSACT TECHNOLOGIES INCORPORATED
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, MAY 18, 2006
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TRANSACT TECHNOLOGIES INCORPORATED
The undersigned stockholder of TransAct Technologies Incorporated (the
"Company") does hereby nominate, constitute and appoint Bart C. Shuldman and
Steven A. DeMartino, or either of them, with full power to act alone, my true
and lawful attorney with full power of substitution, for me and in my name,
place and stead to vote all of the shares of Common Stock of the Company
standing in my name on its books on March 28, 2006, at the Annual Meeting of its
stockholders to be held at the Four Points by Sheraton Hotel, 275 Research
Parkway, Meriden, CT 06450 on May 18, 2006 at 10:00 a.m., or at any adjournment
thereof, with all powers the undersigned would possess if personally present as
follows:
(TO BE SIGNED ON REVERSE SIDE)
PLEASE SIGN, DATE AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
TRANSACT TECHNOLOGIES INCORPORATED
MAY 18, 2006
[X] Please mark your
votes as in this
example.
FOR ABSTAIN
1. ELECTION OF [ ] [ ] Nominee: Charles A. Dill
DIRECTOR
FOR ABSTAIN AGAINST
2. RATIFICATION OF INDEPENDENT [ ] [ ] [ ]
REGISTERED PUBLIC
ACCOUNTING FIRM
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEE AS
DIRECTOR AND FOR PROPOSAL 2. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE NOMINEE FOR DIRECTOR AND FOR PROPOSAL 2. THE PROXY IS
AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.
SIGNATURE _________________________ DATE _________________________, 2006
SIGNATURE _________________________ DATE _________________________, 2006
(SIGNATURE IF HELD JOINTLY)
NOTE: Please sign exactly as name appears on this proxy. When shares
are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title
as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If
signer is a partnership, please sign in partnership name by
authorized person.