UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 25, 2005
TRANSACT TECHNOLOGIES INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 0-21121 06-1456680
(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification no.)
7 Laser Lane, Wallingford, CT 06492
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 269-1198
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
-----------------------------------------------------
2005 Bonus Plan
On March 25, 2005, the Compensation Committee and Board of Directors (the
"Board") of TransAct Technologies Incorporated ("TransAct") approved a plan for
the payment of contingent cash bonuses to our executive officers and staff, and
other employees (the "2005 Bonus Plan"). The Bonus Plan is effective beginning
on January 1, 2005 and is intended to remain effective for calendar year 2005,
at the discretion of the Board based on business conditions and Company
performance. The bonus amounts are dependent on the Company's net income
performance, as well as individualized criteria such as achievement of specified
individual goals that are based on TransAct's overall company goals.
Specifically for calendar year 2005, the Committee and Board have established
payout targets for the 2005 Bonus Plan related to TransAct's achievement of
specific pre-determined earnings per share ("EPS") goals. Each eligible employee
in the 2005 Bonus Plan is assigned a percentage of the employee's base salary as
his or her target bonus, as approved by the Committee. The bonus starts accruing
once TransAct achieves a cumulative EPS goal, and would be 100% of the target
bonus if EPS were to reach a level established by the Committee. To the extent
there are any unplanned significant costs or charges, the Compensation Committee
would determine what adjustments, if any, are appropriate in determining EPS for
purposes of determining the bonus payment. The Board and Compensation Committee
reserve the right to modify goals, targets, amounts and criteria at any time.
Bonus payments (if any) shall be payable annually to eligible employees in cash,
less applicable withholdings, and are normally made in March following the
calendar-year performance period during which the bonuses were earned. Bonuses
payable under the 2005 Bonus Plan with respect to the CEO, executive staff, and
other employees will be determined by the Compensation Committee comprised of
the independent members of the Board.
Our bonus program is designed to reward the achievement of our short-term and
long-term strategic goals, to recognize and reward individual contributions to
our Company's performance, and to attract and retain employee talent that
contributes to our long-term success.
Non-Employee Director Compensation
On March 25, 2005, the Compensation Committee also approved a revised
compensation structure for those directors who are not also employees or
officers of the Company. Beginning in April 2005, cash compensation for
non-employee directors will include the following:
o A quarterly retainer of $2,500 for service on the Board Directors;
o $1,000 for each Board meeting attended;
o $500 for each telephonic Board meeting attended;
o $500 ($750 for the Chair) for each committee meeting attended; and
o $250 ($500 for the Chair) for each telephonic committee meeting
attended.
In addition, subject to shareholder approval, the Compensation Committee
approved changes to equity compensation for non-employee directors. Under the
new approach, annual grants to each director of 11,250 non-qualified stock
options will be replaced by annual grants to each director of 5,000 shares of
restricted stock. The restricted stock will vest at the rate of 20% per year
beginning on the first anniversary of the date of grant. Additional information
about the new approach for non-employee director equity compensation will be
provided in TransAct's 2005 Proxy Statement.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRANSACT TECHNOLOGIES INCORPORATED
By: /s/ Steven A. DeMartino
---------------------------
Steven A. DeMartino
Executive Vice President and
Chief Financial Officer
Date: March 29, 2005
3