UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
| Filed by the Registrant x |
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| x | Definitive Proxy Statement |
| ¨ | Definitive Additional Materials |
| ¨ | Soliciting Material Pursuant to §240.14a-12 |
| Table Trac, Inc. |
| (Name of Registrant as Specified In Its Charter) |
| (Name of Person(s) Filing Proxy Statement if other than the Registrant) |
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| (2) | Aggregate number of securities to which transaction applies: | |
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TABLE TRAC, INC.
6101 Baker Road, Suite 206
Minnetonka, Minnesota 55345
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 23, 2019
TO THE STOCKHOLDERS OF TABLE TRAC, INC.:
Please take notice that the Annual Meeting of Stockholders (the “Annual Meeting”) of Table Trac, Inc. (the “Company”) will be held, pursuant to due call by the Board of Directors, on Wednesday, October 23, 2019, at 10:30a.m., at HILTON GARDEN INN 6330 Point Chase Eden Prairie, Minnesota 55344 (Crosstown Hwy 62 & Shady Oak Rd.), or at any adjournment or adjournments thereof, for the purpose of considering and taking appropriate action with respect to the following:
| 1. | The election of three directors to the Company’s Board of Directors; |
| 2. | An advisory vote to approve the compensation of our executive officers as disclosed in this Proxy Statement (“say-on-pay”); |
| 3. | An advisory vote on the frequency of future advisory votes on executive compensation (“say-on-frequency”); |
| 4. | The ratification of the appointment of Boulay P.L.L.P. as our independent registered public accounting firm for fiscal 2019; and |
| 5. | The transaction of any other business as may properly come before the Annual Meeting or any adjournments thereof. |
Pursuant to due action of the Board of Directors, stockholders of record on September 9, 2019 will be entitled to vote at the Annual Meeting or any adjournments thereof.
| By Order of the Board of Directors: | |
| ROBERT R. SIQVELAND | |
| Secretary |
September 23, 2019
TABLE TRAC, INC.
6101 Baker Road, Suite 206
Minnetonka, Minnesota 55345
PROXY STATEMENT
20162019 ANNUAL MEETING OF STOCKHOLDERS
to be held on October 19, 201623, 2019
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Table Trac, Inc. (the “Company”)(periodically referred to herein as the “Company,” “we,” “our,” “us” and similar terms) for use at the 20162019 Annual Meeting of Stockholders (the “Annual Meeting”) to be held atthe Sheraton Minneapolis West Hotelon Wednesday, October 23, 2019, at 12201 Ridgedale Drive, Minnetonka, MN, 55305(next to the Ridgedale Mall off 394)10:30 a.m., at9:00 AMlocal time, HILTON GARDEN INN 6330 Point Chase Eden Prairie, Minnesota 55344 (Crosstown Hwy 62 & Shady Oak Rd.), and any adjournment or postponement thereof, for the purpose of considering and taking appropriate action with respect to the following:
| 1. |
| 2. |
| 3. |
| 4. | The ratification of the appointment of Boulay P.L.L.P. as our independent registered public accounting firm for fiscal |
This Proxy Statement and the enclosed proxy card are first being mailed or given to stockholders on or about September 7, 2016.23, 2019.
Proxies and Voting Procedures
Only holdersHolders of record of our common stock at the close of business on September 2, 20169, 2019 (the “record date”), will be entitled to attend and vote at the Annual Meeting or any adjournments thereof. There were 4,504,4654,528,668 shares of our common stock outstanding on the record date. Each share of common stock entitles the holder thereof to one vote upon each matter submitted to be presenteda vote of stockholders at the Annual Meeting. A quorum, consisting of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting, must be present in person or represented by proxy before legal action may be taken at the Annual Meeting.
Each proxy returned to the Company will be voted in accordance with the instructions indicated thereon; provided, however, that ifthereon. If no direction is given by a stockholder who returns a properly executed proxy, then the shares will be voted as recommended by the Company’s Board of Directors. If a stockholder abstains from voting on any matter, then the abstention will be counted for purposes of determining whether a quorum is present at the Annual Meeting for the transaction of business as well as shares entitled to vote on that matter. Under Section 320 of the Nevada General Corporation Law (Chapter 78 of the Nevada Revised Statutes), the affirmative vote of the holders of a majority of the total votes cast, in person or represented by proxy at the Annual Meeting and entitled to vote, is required for ratification and approval of each proposal contained in this Proxy Statement, other than the election of directors.directors (Proposal One) and the say-on- frequency advisory vote (Proposal Three). For the election of directors, director-nominees are approved upon their receipt of a plurality of votes cast at the meeting. For the say-on-frequency advisory vote, the frequency (three years, two years or one year) that receives the highest number of votes cast by stockholders will be the frequency that has been selected by stockholders.
Accordingly, an abstention on any matter (other than the election of directors)directors or the say-on- frequency advisory vote) will have the same effect as a vote against that matter. In the case of the election of directors (who are elected by a plurality of votes cast), and the “say-on-frequency advisory vote, an abstention is the equivalent of simply not casting a vote.
A “broker non-vote” occurs when a nominee holding shares for a beneficial owner votes on one proposal, but does not vote on another proposal because the nominee does not have discretionary voting power and has not received instructions from the beneficial owner. Broker non-votes on a matter are counted as present for purposes of establishing a quorum for the Annual Meeting, but are not considered entitled“entitled to votevote” on that particular matter. Consequently, broker non-votes generally do not have the same effect as a negative vote on the matter.matter being voted on.
Each stockholder who signs and returns a proxy card in the form enclosed with this Proxy Statement may revoke the proxy at any time prior to its use by giving notice of such revocation to our Secretary in writing, in open meeting, or by executing and delivering a new proxy card to our Secretary. Unless so revoked, the shares represented by each proxy card will be voted at the Annual Meeting and at any adjournments thereof. A stockholder’s mere presence at the Annual Meeting does not revoke any proxy that the stockholder has previously delivered.
Please note that if you are a beneficial owner of shares registered in the name of your broker, bank, custodian, nominee or other agent (commonly referred to as holding your shares in “street name”), you will have received a voting instruction form with these proxy materials from that organization rather than from the Company. In such a case, you should complete and mail the voting instruction form as instructed by your broker, bank, custodian, nominee or other agent to ensure that your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by your broker, bank, custodian, nominee or other agent. If you hold your shares in street name and you wish to vote in person at the Annual Meeting, then you must obtain a legal proxy from your broker, bank, custodian, nominee or other agent. To do so, follow the instructions you received with these proxy materials, or contact your broker, bank, custodian, nominee or other agent to request a legal proxy form. You may also request a legal proxy at www.proxyvote.com.
NOTICE TO BENEFICIAL OWNERS OF SHARES HELD IN BROKER ACCOUNTS:
www.proxyvote.com.New York Stock Exchange Rule 452 prohibits NYSE member organizations from giving a proxy to vote with respect to an election of directors (Proposal One) or with respect to executive compensation matters (Proposal Two) without receiving voting instructions from a beneficial owner. Because NYSE Rule 452 applies to all brokers that are members of the NYSE, this prohibition applies to the Annual Meeting even though our common stock is not listed on the New York Stock Exchange. Therefore, brokers will not be entitled to vote shares at the Annual Meeting with respect to Proposal One, Two or Three without instructions by the beneficial owner of the shares.AS A RESULT, BENEFICIAL OWNERS OF SHARES HELD IN BROKER ACCOUNTS ARE ADVISED THAT, IF THEY DO NOT TIMELY PROVIDE INSTRUCTIONS TO THEIR BROKER, THEIR SHARES WILL NOT BE VOTED IN CONNECTION WITH THESE PROPOSALS.
STOCKHOLDER PROPOSAL FOR ELECTION OF DIRECTORS
(Proposal One)
The Company’s directors are elected upon a plurality of votes cast. If elected or re-elected,re- elected, each nominee has consented to serve as a director of the Company, to hold office until the next annual meeting of stockholders or until his successor is elected and shall have qualified. If any director-nominee should withdraw or otherwise become unavailable for reasons not presently known, the proxies that would have otherwise been voted for that director nominee may be voted for a substitute director nominee selected by the Company’s Board of Directors.
Set forth below is information regarding the individuals nominated for election to the Board of Directors, which includes information furnished by them as to their principal occupations for the last five years, certain other directorships held by them, and their ages as of the date of this Proxy Statement:
Chad Hoehne 54 -(age 57) – Director since 1999
Mr. Hoehne is the Founder, President and founderCEO of the Company. He has a B.S. degreeTable Trac, Inc. After graduating from Minnesota State University Mankato earning his BS in Business Administration Finance and computer minor from Minnesota State University.Finance, Mr. Hoehne foundedspent 10 years working in management for a Minneapolis-based electronics manufacturing and software company prior to founding Table Trac Inc. in 1994 after working nine years for a successful Minneapolis electronics manufacturer1995. Mr. Hoehne took his experience in electronic manufacturing and software company.design and applied those in the area of gaming systems, developing and patenting the first of its kind table games management system (Table Trac) in 1996, and leading the company’s business plan to encompass the entire Casino Management Systems business in all jurisdictions. Table Trac Inc has grown to be licensed in Nevada and 4 other states commercially, 12 countries and dozens of First Nations serving over 150 casinos.
William Martinez (age 57) – Director since 2018
Mr. HoehneMartinez has been on our board sinceprivate contractor for the Company’s founding.Department of Justice for the past two years, serving as an expert in homicide investigations and Use of Force. From 2012 to 2016, Mr. Martinez was the Assistant Chief of Police-Chief of Detectives/Major Crimes, for the city of St. Paul. Prior to that, he was the Senior Commander of St. Paul’s Homicide and Robbery Unit. Bill has also been committed to numerous Community Building Initiatives over the years. In addition to his extensive experience in multiple facets of law enforcement, Bill is a skilled leader with strong communication and teaching skills and will be highly effective in developing Table Trac’s organizational and ongoing development vision.
Brian Hinchley 50 -Thomas J. Mertens (age 54) – Director since 20152018
Mr. HinchleyMertens is the CEO and CFOa graduate of the Company. He hasSt. John's University with a B.A. degree in Business Administration/Accounting fromaccounting. He became a Certified Public Accountant in 1990 and a Master Graduate of Rapport Leadership International in 2002. For the University of St. Thomas in St. Paul, Minnesota. Prior to joining Table Trac, Mr. Hinchley waspast seven years, Tom has been the Chief Financial Officer for the Archdiocese of St. Paul and Minneapolis where he developed, implemented and provided oversight of processes, procedures and best practices. Tom was the CFO and Controller for Macquarie Air-Serv Holding Inc. for eight years where he provided expertise and leadership in growing the company's revenues from September 1998$60M to May 2011$130M mainly through acquisitions. Tom began his career as an auditor for KPMG Peat Marwick in Minneapolis. Tom is a proven leader and will bring that skill and decades of two privately owned international software companies, Intercim, LLC and WorkWise, Inc. Mr. Hinchley also served in accounting roles for Griffin Companies (a commercial real estate company) from May 1992experience to August 1998.Table Trac's Board of Directors.
Mr. Hinchley has been the Company’s CFO since June 2011, and was named the CEO April 2016.
Steven A. Browne 60 - Independent Director since 2010
Mr. Steve Browne has been involved in the gaming industry since the late 1970s and has been involved with companies as Del Webb’s Sahara Tahoe, the Eldorado, and Club Cal-Neva in northern Nevada. He worked in many positions at all levels, primarily in the area of table games management and operations. In 1988, Mr. Browne and two partners purchased Cactus Jacks Casino in Carson City, Nevada. He spent the next ten years as Treasurer and General Manager of that property. During that period, Steve was instrumental in developing a unique, customer-driven marketing and service program that took an underperforming casino down the road to seven years of double-digit growth. In 1997, he stepped down as General Manager and sold his interest in the casino. Since that time, Mr. Browne has developed a successful consulting practice specializing in the areas of customer service, player development, and casino operations. He works extensively with casino clients across North America and overseas. Mr. Browne is the author of two books,Gambling And Service: The Complete Book On Casinos, Customer Service, And Selling An Entertainment Experience That Enriches People’s Lives, andThe Math of Player Development. He is also the author of several complete Service and Sales Training Programs for gaming employees and managers. Mr. Browne has been instrumental in leading the charge to developing customer service and customer-focused marketing as a competitive edge in today’s fiercely contested gaming markets.
Mr. Browne has been a director at Table Trac since December 2010.
Louis Fornetti 66 - Independent Director since 2011
Mr. Fornetti has many years of experience in finance and corporate governance. Mr. Fornetti has served on the Board of Directors recommends that stockholders vote FOR each of Saxon Mortgage Corporation (NYSE) (2005-2006), American Medical Security (NYSE) (2003-2004), Stockwalk Corporation (NASD) (2001), and American Express Financial Advisors (1988-1995). Mr. Fornetti has also served on the Board of Directors of Othnet, Inc. (a private software development corporation) and IPool Corporation (a private consumer advocacy corporation). From 2004 to present, Mr. Fornetti has been a business advisor and consultant. His prior work experience includes service as the Executive Vice President and Chief Financial Officer of RBC Dain Rauscher (1995-1997), Senior Vice President and Chief Financial Officer of American Express Financial Advisors (1992-1995), corporate controller of American Express Financial Advisors (1985-1992), Vice President and Corporate Controller of St. Paul Travelers (f/k/a The St. Paul Companies, Inc.) (1979-1985), and audit manager at KPMG (Peat Marwick) (1972-1979). Mr. Fornetti received his B.A. from Northern Michigan and a CPA certificate from the State of Minnesota in 1974.above-named director-nominees.
Mr. Fornetti has been a director at Table Trac since June 2011.EXECUTIVE OFFICERS OF OUR COMPANY
| Name and Title | Age | Principal Occupation and Business Experience | ||
Chad Hoehne, | [57] | See ‘‘Election of Directors (Proposal One)” — above. | ||
Robert Siqveland, | [75] | Mr. Siqveland is employed by Table Trac, Inc. as Chief Operating Officer. Mr. Siqveland has served as Corporate Secretary since 1999. Prior to joining Table Trac, Mr. Siqveland was an investment advisor with Summit Investment and venture capitalist with Property Growth Company for 25 years, providing “seed capital” and management to over 30 companies. | ||
Randy Gilbert, | [54] | Mr. Gilbert was appointed as the Company’s Chief Financial Officer on January 8, 2018. Previously and since September 2015, Mr. Gilbert served as a Principal with Assurance Consulting 3 (AC3) a division of Boeckermann, Grafstrom and Mayer, which provides Sarbanes Oxley and Internal audit services. Prior to that and since 2006, he was a manager with AC3. Additionally, Mr. Gilbert served as the Chief Financial Officer for EVO Transportation & Energy Services, Inc. (formerly called Minn Shares Inc.) from May 2016 to December 2017. Mr. Gilbert has a Bachelor of Accounting B.ACC degree from the University of Minnesota - Duluth and began his Accounting career with KPMG. |
EXECUTIVE COMPENSATION
Gary Loebig 67 - Independent Director since 2011
Gary Loebig has nearly 30 years of experience in Class II and Class III gaming. Mr. Loebig is the Principal and a Founder of GLL Consulting, a consulting services company specializing in sales, marketing and product development and regulatory matters for Class II, Class III, Lottery, Charitable and Commercial Gaming market segments. Mr. Loebig currently is a Managing Director of a Limited Liability Corporation involved in game development; as well as Chief Compliance Office for an Internet gaming company. From 1998-2008, Mr. Loebig served in various positions with Multimedia Games (NASDAQ), including Executive Vice Present-Sales and Interim Chief Executive Officer, on a variety of issues including Class II business strategies and new business development. Mr. Loebig has also held executive management positions at Stuart Entertainment, Inc. (NASDAQ), where he served as the corporation’s Senior Vice President-Market and Product Development; and at Directory Service Company (a private printing, publishing and advertising corporation) where he served as Vice President-Sales and Marketing. Mr. Loebig has a BBA and MBA degree from the University of Iowa.
Mr. Loebig has been a director at Table Trac since June 2011.
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarizes the total compensation paid or earned during the fiscal years ended December 31, 20142017 and 2015.2018.
| Name, Principal Position | Salary and Bonus | Stock Awards | Total | |||||||||||
| Chad Hoehne, | 2018 | $ | 337,222 | $ | 0 | $ | 337,222 | |||||||
| President, CTO and CEO(1) | 2017 | 327,298 | 0 | 327,298 | ||||||||||
| Robert Siqveland, COO, | 2018 | 134,478 | 0 | 134,478 | ||||||||||
| Secretary | 2017 | 137,926 | 0 | 137,926 | ||||||||||
| Randy Gilbert, CFO(2) | 2018 | 191,500 | 117,500 | (4) | 257,500 | |||||||||
| Brian Hinchley, CEO /CFO(3) | 2017 | 285,500 | 0 | 177,000 | ||||||||||
| Name, Principal Position | Salary | Stock Awards | Stock Option Awards (1) | Total | ||||||||||||||||
| Chad Hoehne, | 2015 | $ | 234,021 | $ | 0 | $ | 0 | $ | 234,021 | |||||||||||
| President | 2014 | 246,374 | 0 | 0 | 246,374 | |||||||||||||||
| Glenn Goulet, | 2015 | 0 | 0 | 0 | 0 | |||||||||||||||
| Former CEO (2) | 2014 | 227,329 | 0 | 0 | 227,329 | |||||||||||||||
| Brian Hinchley, | 2015 | 157,664 | 11,974 | 0 | 169,638 | |||||||||||||||
| CEO / CFO | 2014 | 139,992 | 0 | 0 | 139,992 |
(1) The amounts in this column represent the aggregate grant date fair value with respect to stock options granted in the years indicated, including the incremental grant date fair value of stock options repriced during the years indicated, if any. The fair value was calculated in accordance with stock-based accounting rules (ASC 718).
(2) Mr. Goulet resigned from his role as Chief Executive Officer and a director in December 2014.
| (1) | (1) Chad Hoehne was appointed as the Company’s Chief Executive Officer on November 20, 2017. From November 20, 2017 until January 8, 2018, he also served as the interim Chief Financial Officer. |
| (2) | Mr. Gilbert was appointed as the Company’s Chief Financial Officer on January 8, 2018. |
| (3) | Brian Hinchley resigned as CEO/CFO effective November 16, 2017. |
| (4) | The amounts represent the aggregate grant date fair value with respect to stock options granted in the years indicated. The fair value was calculated in accordance with stock-based accounting rules (ASC 718). For a discussion of the assumptions used in calculating the grant date fair value, see footnote 5 to our financial statement contained in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 28, 2019. |
We do not currently have any employment or change-in-control agreements with any named executives or any other current members of our executive management.
As of the date of this Annual Report, Table Trac Inc. doesProxy Statement, we do not offer itsour executive employees any pension, annuity, profitprofit- sharing or similar benefit plans other than insurance.insurance and the company 401K. Executive compensation is subject to change from time to time concurrent with our requirements and policies as established by the Board of Directors and its Compensation Committee.
Outstanding Equity Awards at Fiscal Year End
The Company had no outstanding equity awards asAs of December 31, 2015 for any2018, our named executives. Executives could earn awards under an Executive Incentive Plan ifexecutives had the Company achieves certain financial milestones.following outstanding options to purchase common stock:
| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Price ($) | Option Expiration Date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) | ||||||||||||||||||
| Chad Hoehne | — | — | N/A | N/A | — | — | ||||||||||||||||||
| Robert Siqveland | — | — | N/A | N/A | — | — | ||||||||||||||||||
| Randy Gilbert | — | — | N/A | N/A | 50,000 | (1) | $ | 140,500 | ||||||||||||||||
| Brian Hinchley | — | — | N/A | N/A | — | — | ||||||||||||||||||
| (1) | As of December 31, 2018, Randy Gilbert, the Company’s Chief Financial Officer, held 50,000 shares of restricted stock with a market value of $140,500. The transaction and forfeiture restrictions with respect to 20,000 such shares lapsed on January 8, 2019, and such restrictions on the remaining 30,000 shares are schedule to lapse in equal annual installments of 10,000 each on January 8, 2020, 2021 and 2022. |
Director Compensation Table
The table below summarizes the total cash and non-cash compensation paid or earned during the fiscal year ended December 31, 20152018 by each individual who served or is currently serving, as a Company director on the Company’s Board of directors during the fiscal year ended December 31, 2015.2018.
| Name | Fees earned or paid in cash | Stock Awards | Option Awards | Total | ||||||||||||
| Chad Hoehne | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| William Martinez | 5,000 | 4500 | (2) | 0 | 5,000 | |||||||||||
| Thomas Mertens | 5,500 | 4500 | (2) | 0 | 5,500 | |||||||||||
| Steven Browne(1) | 20,700 | 0 | 0 | 20,700 | ||||||||||||
| Louis Fornetti(1) | 25,200 | 0 | 0 | 25,200 | ||||||||||||
| Gary Loebig(1) | 19,575 | 0 | 0 | 19,575 | ||||||||||||
| Name | Compensation | Stock Awards | Stock Option Awards | Total | ||||||||||||||||
| Chad Hoehne | 2015 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||
| Brian Hinchley | 2015 | 0 | 0 | 0 | 0 | |||||||||||||||
| Steven Browne | 2015 | 14,100 | 8,850 | 0 | 22,950 | |||||||||||||||
| Louis Fornetti | 2015 | 35,100 | 0 | 0 | 35,100 | |||||||||||||||
| Gary Loebig | 2015 | 27,600 | 0 | 0 | 27,600 | |||||||||||||||
| (1) | Messrs. Browne, Fornetti and Loebig did not stand for reelection at the Company’s 2018 annual stockholders meeting held October 29, 2018. |
| (2) | The amounts in this column represent the aggregate grant date fair value with respect to stock options granted in the years indicated, including the incremental grant date fair value of stock options repriced during the years indicated, if any. The fair value was calculated in accordance with stock-based accounting rules (ASC 718). Stock awards granted to Messrs. Martinez and Mertens are each comprised of 2,000 shares of restricted stock, with transfer and forfeiture restrictions scheduled to lapse in their entirety on October 29, 2019 (the one-year anniversary of the date of grant). |
CORPORATE GOVERNANCE MATTERS
Board of Directors and Independence
The Board of Directors does havehas a standing Compensation Committee and Audit Committee.Committee, each of which composed of Messrs. Mertens, Martinez and Hoehne (with Mr. Mertens serving as chairperson). The CompensationCompany also has a Compliance Committee, which is composed of Messrs. Browne, FornettiMartinez, Randy Sayre (our external compliance consultant) and LoebigChad Hoehne (with Mr. LoebigMartinez serving as chairperson). Mr. Siqveland is the Compliance Officer for the Company. Each of the foregoing committees has a written charter, a copy of each of which is available at our website atwww.tabletrac.com. The composition of our Audit Committee is composedand Compensation Committee complies with the listing requirements of Messrs. Browne, Fornetti and Loebig (with Mr. Fornetti serving as chairperson). The NASDAQ Marketplace Rules. The Compliance Committee complies with the rules of the Nevada Gaming Control Board.
The Board of Directors has determined that Messrs. Browne, FornettiMartinez and LoebigMertens are each “independent,” as such term is defined in Section 5605(a)(2) of the Nasdaq ListingMarketplace Rules, and meetsmeet the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act. The preceding disclosure respecting director independence is required under applicable SEC rules. However,Act of 1934, as a corporation whose shares are listed for trading on the OTCQB, the Company is not required to have any independent directors at all on itsamended.
Board Leadership Structure and Risk Oversight
Our Board of Directors or any independent directors serving on any particular committeesis led by a Chairman of the Board, Chad Hoehne, and all of Directors.our directors (including our independent directors) participate in board leadership. Because a majority of our directors are independent and all of the members of our board participate in leadership, we believe the leadership structure of our Board of Director allows it to maintain oversight of our management and to carry out its roles and responsibilities of behalf of the stockholders.
Management and our Board of Directors discuss risks primarily in our board meetings. These discussions generally identify risks that are prioritized and assigned to the appropriate board committee or the full Board for oversight. Our entire Board of Directors periodically discusses our management or risks. Additional review or reporting on Company risks is conducted as needed or as requested by management, the Board of Directors, a board committee, or any single director.
Board and Committee Meetings
The Board of Directors held four formal meetings during fiscal 2018. During fiscal 2018, the Audit Committee held four formal meetings, and the Compensation Committee held two formal meetings while the Compliance Committee met four times. The Board of Directors attended 100% of the board meetings and meetings of committees to which they belong. Although we have no formal policy regarding directors’ attendance at our annual stockholder meetings, we encourage our directors to attend those meetings.
Audit Committee Financial Expert and Related Matters
The Board of Directors has determined that at least one member of the Audit Committee, Mr. Lou Fornetti,Tom Mertens, is an “audit committee financial expert” as that term is defined in Regulation S-K promulgated under the Securities Exchange Act.Act of 1934, as amended. Mr. Fornetti’s relevant experience is detailed above. Mr. FornettiMertens qualifies as an “independent director,” as such term is defined in Section 5605(a)(2) of the NASDAQ Listing Rules, and meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act.Act of 1934. The Board of Directors has determined each member of the Audit Committee is able to read and understand fundamental financial statements and that at least one member of the Audit Committee has past experience in finance or accounting matters.
Audit Committee Report
The Audit Committee is responsible primarily for providing oversight and monitoring the preparation and review of our financial statements, which are provided to stockholders and the general public in the disclosures we file with the SEC. In addition, the Audit Committee is responsible for appointing, and reviewing the services of our independent registered public accounting firm.
The Audit Committee does not prepare our financial statements, or determine whether our financial statements are complete and accurate. Rather, our management is responsible for preparing our financial statements. Our independent registered public accountants are responsible for auditing our financial statements to ensure their completeness and accuracy.
The Audit Committee also oversees our accounting policies and the internal controls over financial reporting, which our management is responsible for establishing and maintaining and our independent registered accountants are responsible for reviewing to determine effectiveness.
In fulfilling its oversight over our independent registered public accounting firm, the Audit Committee carefully reviews the engagement of the independent registered public accounting firm, which includes, among other things, the scope of the audit; fees; the assigned partner(s) and other personnel and their industry experience; auditor independence; peer and Public Company Accounting Oversight Board (PCAOB) reviews; significant legal proceedings; previous experience with the firm’s performance; and any non-audit services performed by our independent registered public accounting firm. The Audit Committee meets independently with management, independently with Boulay, and also in executive session with only the Committee members present.
The Audit Committee has reviewed and discussed the audit and the audited financial statements for the year ended December 31, 2018 with management and Boulay, including a discussion related to the accounting principles used that are unique to this industry. The Audit Committee has discussed with Boulay the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1 AU section 308, as adopted by the PCAOB. The Audit Committee has received and reviewed the written disclosures and the letter from Boulay required by the applicable requirements of the PCAOB regarding Boulay’s communications with the Audit Committee concerning independence, and has discussed with Boulay its independence.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the financial statements referred to above be included in our Annual Report on Form 10-K for the year ended December 31, 2018.
| AUDIT COMMITTEE: | |
| Thomas Mertens (Chair) | |
| William Martinez | |
| Chad Hoehne |
Compensation Committee
Our Compensation Committee is charged with oversight responsibility for the adequacy and effectiveness of our executive compensation and benefit plans, and is primarily responsible for all matters relating to compensation of our executive officers and the directors, the adoption of all employee compensation and employee benefit plans and the administration of such plans including granting stock incentives or other benefits, and the review and approval of disclosures regarding executive compensation included in this Proxy Statement. Our Compensation Committee has the authority to obtain advice and assistance from external legal, accounting or other advisors, and has the authority to retain, terminate and approve the fees payable to any external compensation consultant to assist in the evaluation of director, and senior executive compensation. Nevertheless, any services to be rendered by our independent accounting firm must be pre-approved by the Audit Committee under our policy regarding the pre-approval of such services.
Nomination of Directors
The Company does not have a standing nominating committee (or other committee performing similar functions). Currently,Based on the fullsize of our Board of Directors, participateswe believe it is appropriate for all of our directors to be involved in the identification and consideration of all director-nominees.director nominees. The full Board of DirectorsCompany does not employ any charter or other form of official written policy or guidelines for the purposes of considering director-nominees. Nevertheless, when considering director-nominees, the Board of DirectorsCompany recruits and considers candidates without regard to race, color, religion, sex, ancestry, national origin or disability. Generally, the Board of DirectorsCompany will consider each candidate’s business and industry experience, his or her ability to act on behalf of stockholders, overall Boardboard diversity, potential concerns regarding independence or conflicts of interest and other factors relevant in evaluating director-nominees. Typically, the candidatecandidates will meet with at least a majorityall members of the directors serving on the Board of Directors. The Board of Directorsmanagement team. Management will also consider a candidate’s personal attributes, including without limitation personal integrity, loyalty to the Company and concern for its success and welfare, willingness to apply sound and independent business judgment, awareness of a director’s vital role in the Company’s good corporate citizenship and image, time available for meetings and consultation on Company matters, and willingness to assume broad fiduciary responsibility.
Our stockholders may recommend to the Board of Directors candidates to be considered for election at the Company’s annual stockholders meeting. In order to make such a recommendation, a stockholder generally must submit the recommendation in writing to the Board of Directors, in care of the Company’s Secretary, at the Company’s headquarters address at least 120 days prior to the mailing date of the previous year’s annual meeting proxy statement.
Code of Ethics
The Company has adopted a Code of Ethics that governs the conduct of our officers, directors and employees in order to promote honesty, integrity, loyalty and the accuracy of our financial statements.
Related-Party Transaction Policy
In all cases, the Company abides by applicable state corporate law when approving all transactions, including transactions involving officers, directors or affiliates. More particularly, the Company’s policy is to have any related-party transactions (i.e., transactions involving a director, an officer or an affiliate of the Company) be approved solely by a majority of the disinterested and independent directors serving on the Board of Directors.
Stockholder Communications with Directors
Our Board of Directors has established a means for stockholders and others to communicate with the board.Board of Directors. If a stockholder has a concern regarding our financial statements, accounting practices or internal controls, governance practices, business ethics or corporate conduct, the concern should be submitted in writing to Mr. Brian Hinchley,Chad Hoehne, CEO, in care of our Secretary at the address listed above. If a stockholder is unsure as to which category the concern relates, the stockholder may communicate it to theany independent director in care of our Secretary at the address listed above. All such stockholder communications will be forwarded to the applicable director(s).
Security OwnershipCompliance Committee
Although Table Trac has always had a Compliance Officer, with our Nevada licensure, this element has become geometrically more important and demanding. We not only have a Compliance Committee, but we have a Nevada consultant on the committee who was a previous member ofCertain Beneficial Owners the Nevada Gaming Control Board (NGCB). The three-person Committee consists of an outside Board member, Chad Hoehne, CEO, and Managementour external consultant. In addition, the company’s Compliance Officer (Bob Siqveland), with 40 years’ experience in this capacity, provides a report to the committee every quarter at committee meetings. The Compliance Officer then sends required quarterly and annual reports to various department heads in the Nevada oversight structure to include the NGCB.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of our common stock as of September 2, 2016,9, 2019, by (i) each person known by the Company to be the beneficial owner of more than five percent of our outstanding common stock, (ii) each current director, (iii) each executive officer of the Company and other persons identified as a named executive in the Summary Compensation Table, and (iv) all current executive officers and directors, as well as previous directors, as a group. Percentage ownership is based on 4,528,668 shares of our common stock outstanding on the record date.
Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power with respect to the shares set forth opposite his, her or itsname. Unless otherwise indicated, the address of each of the following persons is 6101 Baker Road, Suite 206, Minnetonka, Minnesota 55345.
| Common Shares | Percentage of | |||||||
| Beneficially | Common | |||||||
| Name and Address | Owned(1) | Shares(1) | ||||||
| Chad Hoehne(2) | 1,306,100 | 28.96 | % | |||||
| Robert Siqveland(3) | 206,500 | 4.58 | % | |||||
| Brian Hinchley(4) | 35,000 | * | ||||||
| Steve A. Browne, Director(5) | 84,000 | 1.86 | % | |||||
| Louis Fornetti, Director(6) | 21,000 | * | ||||||
| Gary Loebig, Director(7) | 15,000 | * | ||||||
| All directors and officers as a group(8) | 1,667,600 | 36.97 | % | |||||
| Zeff Capital, LP(10) | ||||||||
| 1601 Broadway, 12th floor | ||||||||
| New York, NY 10019 | 300,283 | 6.66 | % | |||||
| Name and Address | Common Shares Beneficially Owned(1) | Percentage of Common Shares(1) | ||||||
| Chad Hoehne(2) | 1,171,600 | 25.87 | % | |||||
| Randy Gilbert(3) | 25,225 | * | ||||||
| Robert Siqveland(4) | 206,500 | 4.56 | % | |||||
| William Martinez(5) | 2,000 | * | ||||||
| Thomas Mertens(6) | 2,000 | * | ||||||
| All directors and officers as a group(7) | 1,407,325 | 31.08 | % | |||||
| Brian Hinchley(8) | 35,000 | * | ||||||
| Zeff Capital, LP(9) | 446,863 | 9.87 | % | |||||
| 1601 Broadway, 12th floor | ||||||||
| New York, NY 10019 | ||||||||
* denotes less than one percent.
| * | denotes less than one percent. |
| (1) | Beneficial ownership is determined in accordance with the rules of the SEC, and includes general voting power and/or investment power with respect to securities. Under the applicable SEC rules, each person’s beneficial ownership is calculated by dividing the total number of shares with respect to which they possess beneficial ownership by the total number of outstanding shares of the Company. In any case where an individual has beneficial ownership over securities that are not outstanding, but that are issuable upon the exercise of options or warrants or similar rights within the next 60 days, that same number of shares is added to the denominator in the calculation described above. Because the calculation of each person’s beneficial ownership set forth in the “Percentage of Common Shares” column of the table may include shares that are not presently outstanding, the sum total of the percentages set forth in such column may exceed 100%. |
| (2) | Mr. Hoehne is the President and a director of the Company. |
| (3) | Mr. |
| (4) | Mr. |
| (5) | Mr. |
| (6) | Mr. |
| (7) | Consists of five persons: Messrs. Hoehne, Gilbert, Siqveland, Martinez and Mertens. |
| (8) | Mr. |
| (9) | Share figures reflected in the table are based on a December, 2018 Schedule |
CERTAIN RELATIONSHIPS AND TRANSACTIONS
None.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s officers, directors and persons considered to be beneficial owners of more than ten percent of a registered class of the Company’s equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission and NASDAQ. Officers, directors and greater-than-ten-percent shareholdersgreater- than-ten-percent stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the Company by its officers and directors, or the Company’s actual knowledge of transactions involving such officers and directors, the Company believes that all such filings were filed on a timely basis for fiscal year 2015, other than the Form 4 filed by Brian Hinchley, filed on August 27, 2015 to report one transaction (the due date for which was August 24, 2015), and the Form 4 filed by Steven Browne, filed on August 31, 2015 to report one transaction (the due date for which was August 24, 2015).2018.
TOADVISORY VOTE ON A NON-BINDING ADVISORY RESOLUTION TO APPROVECOMPENSATION OF THE COMPANY��S EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY.COMPENSATION
(Proposal Two)
TheUnder the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was signed into law on July 21, 2010. The Dodd-Frank Act requires that, our stockholders be providedare entitled to vote to approve, on an opportunity to cast a separate advisory vote onbasis, the compensation paid toof our named executive officers as disclosed in this Proxy Statement. Statement in accordance with the rules of the SEC. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement.
AtThe compensation of our named executive officers is disclosed in the Company’s 2013 Annual Meeting of Shareholders (the “2013 Annual Meeting”),section entitled “Executive Compensation” above and in the shareholders approved frequency of say-on-pay vote of once every three years. The most recent say-on-pay vote was conducted at the 2013 Annual Meeting.compensation tables and related narrative disclosures.
The Company has designed its executive compensation program to attract, motivate, reward and retain the senior management talent required to achieve our corporate objectives and to increase long-term stockholder value.
This proposal, commonly known as a “say-on-pay” proposal, gives you as a stockholder the opportunity to vote on the compensation of our executive officers through the following resolution:
“RESOLVED, that the stockholders of Table Trac, Inc., approve the compensation of its executive officers as described in the Proxy Statement for its 20162019 Annual Meeting.”
Under the Dodd-Frank Act, your vote on this matter is advisory and will therefore not be binding upon the Board of Directors. However, the Compensation Committee of the Board of Directors will take the outcome of the vote into account when determining further executive compensation arrangements.
THE BOARD RECOMMENDS THAT SHAREHOLDERSSTOCKHOLDERS VOTE FOR APPROVAL OF THE EXECUTIVE COMPENSATION DISCLOSED IN THIS PROXY STATEMENT.
ADVISORY VOTE ON FREQUENCY OF FUTURE “SAY-ON-PAY” ADVISORY VOTES
(Proposal Three)
The Dodd-Frank Act also enables our stockholders to indicate (on an advisory basis) how frequently we should seek an advisory vote on the compensation of our named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules, such as Proposal Two. In particular, we are asking whether this “say-on-pay” vote should occur every three years, every two years, or every one year.
While the Board of Directors intends to carefully consider the stockholder vote resulting from the proposal, the final vote will not be binding on us and is advisory in nature.
At the Company’s 2013 Annual Meeting of Stockholders, the stockholders approved frequency of say-on-pay vote of once every three years, and we have been conducted “say-on- pay” advisory votes in accordance with such schedule. The Board of Directors believes that a three-year vote cycle will balance the interest of stockholders in providing regular input on executive compensation and the interests of the Board of Directors and stockholders in allowing sufficient time to evaluate the long-term effectiveness of the Company’s executive compensation philosophy, policies and practices.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE TO HOLD AN ADVISORY VOTE ON THE OVERALL COMPENSATION OF THE COMPANY’S EXECUTIVE OFFICERS EVERY THREE YEARS.
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal Three)Four)
Our Board of Directors is committed to the quality, integrity and transparency of the Company’s financial reports. Independent auditors play an important part in our system of financial control. Our Board of Directors and its Audit Committee has appointed Boulay P.L.L.P. (“Boulay”) as our independent registered public accounting firm for the fiscal year ending December 31, 2016.2019. A representative of Boulay is expected to attend the Annual Meeting and will be available to make statements and respond to questions from stockholders.
If the stockholders do not ratify the appointment of Boulay, the Board of Directors and Audit Committee may reconsider its selection, but is not required to do so. Notwithstanding the proposed ratification of the appointment of Boulay by the stockholders, the Board of Directors and Audit Committee may, in their discretion, direct the appointment of a new independent registered public accounting firm at any time during the year without notice to, or the consent of, the stockholders, if the Board of Directors or Audit Committee determines that such a change would be in the best interests of the Company.
Fees Billed to Company by Independent Registered Public Accounting Firm
The following table details the fees billed to the Company by Boulay in 2015.2018 and 2017:
| 2015 | ||||
| Audit fees, including quarterly review of Form 10-Q | $ | 41,500 | ||
| Tax fees | 6,000 | |||
| Audit-related fees | 8,560 | |||
| $ | 56,060 | |||
(1) Represents amounts related to the audit of the Company’s consolidated annual financial statements and the review of the Company’s interim consolidated financial statements included in the Company’s Annual Report on Form 10-K for the indicated period.
(2) Tax fees consist of fees for tax compliance, tax advice and tax planning.
(3) Audit-related fees represent amounts reasonably related to the performance of the audit or review of the Company’s consolidated financial statements but are not reported under the Audit Fees category. This category may include fees related to the performance of audits and attestation services not required by statute or regulations, and accounting consultations about the application of generally accepted accounting principles to proposed transactions.
| 2018 | 2017 | |||||||
| Audit fees, including quarterly review of Form 10-Q(1) | $ | 105,590 | $ | 92,500 | ||||
| Tax fees(2) | 11,078 | 8,750 | ||||||
| Audit-related fees(3) | 17,010 | 19,318 | ||||||
| All other fees | 0 | 0 | ||||||
| $ | 133,678 | $ | 120,568 | |||||
| (1) | Audit Fees consist of fees for professional services rendered for the audit of our consolidated annual financial statements included in our annual report, and review of the interim consolidated financial statements included in quarterly reports, and services that are normally provided in connection with statutory and regulatory filings or engagements. Includes amounts reflected on invoices received in 2019 for certain 2018 year-end audit services. |
| (2) | Tax Fees consist of fees for professional services rendered for tax compliance, tax advice and tax planning. |
| (3) | Audit-Related Fees consist of fees for professional services rendered that reasonably related to the performance of the audit or review of our consolidated financial statements but not reported under the “Audit Fees” category. This category may include fees related to the performance of audits and attestation services not required by statute or regulations, and accounting consultations about the application of generally accepted accounting principles to proposed transactions. |
The Board of Directors has reviewed the services provided by Boulay during the fiscal year ended December 31, 20152018, and the amounts billed for such services. After consideration, the Board of Directors has determined that the receipt of these fees by Boulay is compatible with the provision of independent audit services. The Audit Committee has discussed these services and fees with Baker Tilly and CompanyBoulay management to determine that they are appropriate under the rules and regulations concerning auditor independence promulgated by the SEC to implement the Sarbanes-Oxley Act of 2002, as well as under guidelines of the American Institute of Certified Public Accountants.
Pre-Approval Policy
The Audit Committee is responsible for appointing, setting compensation for and overseeing the work of our independent registered public accounting firm. The Audit Committee has established a policy for pre-approving the services provided by our independent registered public accounting firm in accordance with the auditor-independence rules of the SEC. This policy requires the review and pre-approval by the Audit Committee (or the full Board of Directors) of all audit and permissible non-audit services provided by our independent registered public accounting firm and an annual review of the financial plan for audit fees. During fiscal 2018, 100% of the audit-related and tax services provided by our independent registered public accounting firm were pre-approved by our Audit Committee in conformity with its pre-approval policy.
To ensure that auditor independence is maintained, the Audit Committee annually pre-approvespre- approves the audit services to be provided by our independent registered public accounting firm and the related estimated fees for such services, as well as the nature and extent of specific types of audit related, tax and other non-audit services to be provided by our independent registered public accounting firm.
THE BOARD OF DIRECTORS RECOMMENDS A VOTEThe Board of Directors recommends a vote FOR THE RATIFICATION OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.the ratification of the Company’s independent registered public accounting firm.
STOCKHOLDER PROPOSALS AND
DISCRETIONARY PROXY VOTING AUTHORITY
Any stockholder desiring to submit a proposal for action by the stockholders at the next annual stockholders’ meeting, which will be the 20172020 annual meeting, must submit that proposal in writing to the Secretary of the Company at the Company’s corporate headquarters no later than February 18, 2017November 11, 2019 to have the proposal included in the Company’s proxy statement for that meeting.meeting (unless the date of the Company’s 2020 annual meeting of stockholders varies more than 30 days from October 23, 2019, in which case a stockholder proposal is due a reasonable amount of time prior to when the Company begins to print and mail its proxy statement for that meeting). Due to the complexity of the respective rights of the stockholders and the Company in this area, any stockholder desiring to propose such an action is advised to consult with his or her legal counsel with respect to such rights. The Company suggests that any such proposal be submitted by certified mail, return-receipt requested.
Rule 14a-4 promulgated under the Securities Exchange Act of 1934 governs the Company’s use of its discretionary proxy voting authority with respect to a stockholder proposal that the stockholder has not sought to include in the Company’s proxy statement. Rule 14a-4 provides that if a proponent of a proposal fails to notify the Company at least 45 days prior to the month and day of mailing of the prior year’s proxy statement, then management proxies will be allowed to use their discretionary voting authority when the proposal is raised at the meeting, without any discussion of the matter.
SOLICITATION
The Company will bear the cost of preparing, assembling and mailing the proxy, Proxy Statement, Annual Report and other material whichthat may be sent to the stockholders in connection with this solicitation. Brokerage houses and other custodians, nominees and fiduciaries may be requested to forward soliciting material to the beneficial owners of stock, in which case they may be reimbursed by the Company for their expenses in doing so. Proxies are being solicited primarily by mail. Nevertheless, officers and employees of the Company may solicit proxies personally, by telephone, by special letter, or via the Internet.
The Board of Directors does not intend to present to the meeting any other matter not referred to above and does not presently know of any matters that may be presented to the meeting by others. If, however, other matters come before the meeting, it is the intent of the persons named in the enclosed proxy to vote the proxy in accordance with their best judgment.
By Order of the Board of Directors:
Robert R. Siqveland
Secretary
| By Order of the Board of Directors: | |
| ROBERT R. SIQVELAND | |
| Secretary |
