Company: TCMD
Filing Date: 2025-03-28
Form Type: DEF 14A
Source: 0001558370-25-003924
Chunk: 70

Company: TACTILE SYSTEMS TECHNOLOGY INC
Filing Date: 2025-03-28
Form: DEF 14A
Chunk 70
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. SAR awards result in income recognition by a participant at the time such an award is exercised in an amount equal to the amount paid in cash or the then-current fair market value of the shares received by the participant, as applicable. In each of the foregoing cases, the Company will

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| 70 | Tactile Systems Technology, Inc. |

generally have a corresponding deduction at the time the participant recognizes ordinary income, subject to Code Section 162(m) with respect to covered employees. Excess Parachute Payments. Code Section 280G limits the Company’s tax deduction for payments received by certain individuals in connection with a change in control to the extent that the payments exceed an amount approximately three times their average annual compensation, and Section 4999 of the Code imposes a 20% excise tax on those payments. To the extent that payments upon a change in control are classified as “excess parachute payments” the Company’s tax deduction would be disallowed under Code Section 280G. Excess parachute payments arise from payments made to disqualified individuals that are in the nature of compensation and are contingent on changes in ownership or control of the employer or certain affiliates, and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans including stock options and other equity-based compensation. In addition to the deduction limitation applicable to the employer, a disqualified individual receiving an excess parachute payment is subject to a 20% excise tax on the amount thereof. We do not provide tax gross-ups for taxes due in connection with a change in control. Section 409A of the Code. The foregoing discussion of tax consequences of awards under the 2025 Plan assumes that the award discussed is either not considered a “deferred compensation arrangement” subject to Section 409A of the Code, or has been structured to comply with its requirements. If an award is considered a deferred compensation arrangement subject to Section 409A but fails to comply, in operation or form, with the requirements of Section 409A, the affected participant would generally be required to include in income when the award vests the amount deemed “deferred,” would be required to pay an additional 20% income tax on such amount, and would be required to pay interest on the tax that would have been paid but for the deferral. Section 162(m) and Limits on theCompany’s Deductions. Section 162(m) of the Code denies deductions