Exhibit 10.1

 

TACTILE SYSTEMS TECHNOLOGY, INC.

2016 EQUITY INCENTIVE PLAN

 

Performance Stock Unit Agreement

 

Tactile Systems Technology, Inc. (the “Company”), pursuant to its 2016 Equity
Incentive Plan (the “Plan”), hereby grants an award of Performance Stock Units
to you, the Participant named below.  The terms and conditions of this Award are
set forth in this Performance Stock Unit Agreement (the “Agreement”), consisting
of this cover page, the Terms and Conditions on the following pages and the
attached Exhibit A, and in the Plan document, a copy of which has been provided
to you.  Any capitalized term that is used but not defined in this Agreement
shall have the meaning assigned to it in the Plan as it currently exists or as
it is amended in the future.

 

Name of Participant:

 

 

 

 

 

Target Number of Performance Stock Units:

 

 

 

 

 

Maximum Number of Performance Stock Units:

 

 

 

 

 

Grant Date:

 

 

 

 

 

Performance Period:

 

 

 

 

 

Vesting Schedule:

 

The number of Units determined in accordance with Exhibit A to have been earned
during the Performance Period will vest on the dates specified in
Section 4(a) of the Award Terms and Conditions.

 

 

 

Performance Goals:

 

See Exhibit A

 

By signing below or otherwise evidencing your acceptance of this Agreement in a
manner approved by the Company, you agree to all of the terms and conditions
contained in this Agreement and in the Plan document and acknowledge that you
have received and reviewed these documents.

 

PARTICIPANT:

 

TACTILE SYSTEMS TECHNOLOGY, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

Tactile Systems Technology, Inc.

2016 Equity Incentive Plan

Performance Stock Unit Agreement

Terms and Conditions

 

1.             Award of Performance Stock Units.  The Company hereby confirms
the grant to you, as of the Grant Date and subject to the terms and conditions
of this Agreement and the Plan, of an award of Performance Stock Units (the
“Units”) in an amount initially equal to the Target Number of Performance Stock
Units specified on the cover page of this Agreement.  The number of Units that
may actually be earned and become eligible to vest pursuant to this Award can be
between    % and    % of the Target Number of Units, but may not exceed the
Maximum Number of Performance Stock Units specified on the cover page of this
Agreement.  Each Unit that is earned as a result of the performance goals
specified in Exhibit A to this Agreement having been satisfied and which
thereafter vests represents the right to receive one Share of the Company’s
common stock.  Prior to their settlement or forfeiture in accordance with the
terms of this Agreement, the Units granted to you will be credited to a
performance stock unit account in your name maintained by the Company.  This
account will be unfunded and maintained for book-keeping purposes only, with the
Units simply representing an unfunded and unsecured contingent obligation of the
Company.

 

2.             Restrictions Applicable to Units.  Neither this Award nor the
Units subject to this Award may be sold, assigned, transferred, exchanged or
encumbered other than by will or the law of descent and distribution.  Any
attempted transfer in violation of this Section 2 shall be void and without
effect.  The Units and your right to receive Shares in settlement of any Units
under this Agreement shall be subject to forfeiture except to extent the Units
have been earned and thereafter vest as provided in Sections 4 and 5.

 

3.             No Shareholder Rights.  The Units subject to this Award do not
entitle you to any rights of a holder of the Company’s common stock.  You will
not have any of the rights of a shareholder of the Company in connection with
any Units granted or earned pursuant to this Agreement unless and until Shares
are issued to you in settlement of earned and vested Units as provided in
Section 5.

 

4.             Vesting and Forfeiture of Units.  The Units shall vest at the
earliest of the following times and to the degree specified.

 

(a)       Scheduled Vesting.  Subject to Sections 4(b)-(d), the number of Units
that have been earned during the Performance Period, as determined by the
Committee in accordance with Exhibit A (the “Earned Units”), will vest on the
Initial Vesting Date and the Final Vesting Date in the amounts described in this
section, so long as your Service has been continuous from the Grant Date to each
applicable vesting date.  For these purposes, the “Initial Vesting Date” means
the date the Committee certifies (i) the degree to which the performance goals
for the Performance Period have been satisfied, and (ii) the number of Units
that have been earned during the Performance Period as determined in accordance
Exhibit A, which certification shall occur no later than March 15 of the
calendar year immediately following the calendar year during which the
Performance Period ended. The “Final Vesting Date” means
[                                                  ]. The following table
summarizes the percentage of the Earned Units that will vest on the applicable
vesting dates:

 

 

 

Vesting Date

 

% of the Earned Units that Vest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)           Disability.  If your Service terminates by reason of your
Disability prior to the Initial Vesting Date, then you will be entitled to have
vest on the Initial Vesting Date a pro rata portion of the Earned Units

 

2

--------------------------------------------------------------------------------

 

(had your Service been continuous until the Initial Vesting Date).  The pro rata
portion shall be determined by multiplying the Earned Units by a fraction whose
numerator is the number of days during the Performance Period prior to your
employment termination date and whose denominator is the number of days in the
Performance Period.  If your Service terminates by reason of your Disability
after the Initial Vesting Date but prior to the Final Vesting Date, then you
will be entitled to have vest on the date your Service terminates all unvested
Earned Units.

 

(c)           Death.  If your Service terminates by reason of your death prior
to the Initial Vesting Date, then you will be entitled to have vest on the date
your Service terminates a pro rata portion of the Target Number of Units
specified on the cover page of this Agreement. The pro rata portion shall be
determined by multiplying the Target Number of Units by a fraction whose
numerator is the number of days during the Performance Period prior to your
employment termination date and whose denominator is the number of days in the
Performance Period. If your Service terminates by reason of your death after the
Initial Vesting Date but prior to the Final Vesting Date, then you will be
entitled to have vest on the date your Service terminates all unvested Earned
Units.

 

(d)           Change in Control.  If and to the extent this Award is continued,
assumed or replaced in connection with a Change in Control, and if within one
year after the Change in Control you experience an involuntary termination of
Service for reasons other than Cause, or you terminate your Service for Good
Reason (as defined below), then as of such termination date a number of Units
equal to following shall vest: (i) the Target Number of Units or, if the
Performance Period has ended, the Earned Units, minus (ii) the number of Units
that vested prior to such termination date.

 

If this Award is not continued, assumed or replaced in connection with a Change
in Control and vesting of the Units is being accelerated in accordance with
Sections 12(b) and 12(c) of the Plan, then in such case the number of Units that
may be accelerated shall be the Target Number of Units (or if the Performance
Period has ended, the Earned Units) minus the number of Units that vested prior
to the date of the Change in Control.

 

“Good Reason” shall, if you have an employment agreement with the Company or are
subject to a Company severance policy, have the meaning set forth in your
employment agreement or such severance policy.  In all other cases, “Good
Reason” means the existence of one or more of the following conditions without
your written consent, so long as you provided written notice to the Company of
the existence of the condition not later than 90 days after the initial
existence of the condition, the condition has not been remedied by the Company
within 30 days after its receipt of such notice and your Service terminates no
later than 130 days after the condition’s initial occurrence: (i) any material,
adverse change in your duties, responsibilities, or authority; (ii) a material
reduction in your base salary or bonus opportunity that is not part of a general
reduction applicable to employees in the same classification or grade as you; or
(iii) a geographical relocation of your principal office location by more than
50 miles.

 

(e)           Forfeiture of Unvested Units.  To the extent any of Sections
4(a) through (d) is applicable to this Award, any Units that do not vest on the
applicable vesting date as provided therein shall immediately be forfeited.  If
your employment terminates prior to the Final Vesting Date under circumstances
other than as set forth in Sections 4(b) through (d), all unvested Units shall
immediately be forfeited.

 

5.             Settlement of Units.  Subject to Section 7 below, as soon as
practicable after any date on which Units vest (but no later than the 15th day
of the third calendar month following the applicable vesting date), the Company
shall cause to be issued and delivered to you (or to your personal
representative or your designated beneficiary or estate in the event of your
death, as applicable) one Share in payment and settlement of each vested Unit. 
Delivery of the Shares shall be effected by the issuance of a stock

 

3

--------------------------------------------------------------------------------

 

certificate to you, by an appropriate entry in the stock register maintained by
the Company’s transfer agent with a notice of issuance provided to you, or by
the electronic delivery of the Shares to a brokerage account you designate, and
shall be subject to the tax withholding provisions of Section 6 and compliance
with all applicable legal requirements as provided in Section 17(c) of the Plan,
and shall be in complete satisfaction and settlement of such vested Units.  If
the Units that vest include a fractional Unit, the Company shall round the
number of vested Units to the nearest whole Unit prior to issuance of Shares as
provided herein.

 

6.             Tax Consequences and Withholding.  No Shares will be delivered to
you in settlement of vested Units unless you have made arrangements acceptable
to the Company for payment of any federal, state, local or foreign withholding
taxes that may be due as a result of the delivery of the Shares.  You hereby
authorize the Company (or any Affiliate) to withhold from payroll or other
amounts payable to you any sums required to satisfy such withholding tax
obligations, and otherwise agree to satisfy such obligations in accordance with
the provisions of Section 14 of the Plan.  You may elect to satisfy such
withholding tax obligations by having the Company withhold a number of Shares
that would otherwise be issued to you in settlement of the Units and that have a
fair market value equal to the amount of such withholding tax obligations by
notifying the Company of such election prior to the applicable vesting date.

 

7.             Compensation Recovery Policy.  To the extent that this Award and
any compensation associated therewith is considered “incentive-based
compensation” within the meaning and subject to the requirements of Section 10D
of the Exchange Act, this Award and any compensation associated therewith shall
be subject to potential forfeiture or recovery by the Company in accordance with
any compensation recovery policy adopted by the Board or the Committee in
response to the requirements of Section 10D of the Exchange Act and any
implementing rules and regulations thereunder adopted by the Securities and
Exchange Commission or any national securities exchange on which the Company’s
Shares are then listed.  This Agreement may be unilaterally amended by the
Committee to comply with any such compensation recovery policy.

 

8.             Additional Provisions.

 

(a)           Governing Plan Document.  This Agreement and the Award are subject
to all the provisions of the Plan, and to all interpretations, rules and
regulations which may, from time to time, be adopted and promulgated by the
Committee pursuant to the Plan.  If there is any conflict between the provisions
of this Agreement and the Plan, the provisions of the Plan will govern.

 

(b)           Choice of Law.  This Agreement shall be interpreted and enforced
under the laws of the State of Delaware (without regard to its conflicts or
choice of law principles).

 

(c)           Binding Effect.  This Agreement will be binding in all respects on
your heirs, representatives, successors and assigns, and on the successors and
assigns of the Company.

 

(d)           Section 409A of the Code.  The award of Units as provided in this
Agreement and any issuance of Shares or payment pursuant to this Agreement are
intended to be exempt from Section 409A of the Code under the short-term
deferral exception specified in Treas. Reg. § 1.409A-l(b)(4).

 

(e)           Electronic Delivery and Acceptance.  The Company may deliver any
documents related to this Restricted Stock Unit Award by electronic means and
request your acceptance of this Agreement by electronic means.  You hereby
consent to receive all applicable documentation by electronic delivery and to
participate in the Plan through an on-line (and/or voice activated) system
established and maintained by the Company or the Company’s third-party stock
plan administrator.

 

4

--------------------------------------------------------------------------------

 

By signing the cover page of this Agreement or otherwise accepting this
Agreement in a manner approved by the Company, you agree to all the terms and
conditions described above and in the Plan document.

 

5

--------------------------------------------------------------------------------