Plain English Meaning
A transponder that can be addressed by ATC radar individually, like being called by name instead of everyone replying at once. It also sends extra information about the aircraft, not just an altitude and code.
Full Definition
A transponder that supports Mode S (Select), a surveillance and communication protocol allowing air traffic control radar to interrogate one specific aircraft individually using its unique 24-bit address, rather than triggering replies from every transponder in range. Mode S transponders also exchange data such as altitude, aircraft identification, and information used by traffic and collision-avoidance systems.