Exhibit 10.1

AWARD NOTICE OF
RESTRICTED STOCK UNITS AND
PERFORMANCE RESTRICTED STOCK UNITS
GRANTED PURSUANT TO THE
TRANSCAT, INC. 2003 INCENTIVE PLAN

Grantee:

Number of Restricted Stock Units
(“RSUs”) Awarded:

Number of Performance Restricted
Stock Units (“PRSUs”) Awarded:

Date of Grant:

1.

Grant of Restricted Stock Unit Award. This Award Notice serves to notify you
that the Board of Directors of Transcat, Inc., an Ohio corporation (the
“Company”), has granted to you, under the Company’s 2003 Incentive Plan, as
amended and restated (the “Plan”), a restricted stock unit and performance
restricted stock unit award (the “Award”), on the terms and conditions set forth
in this Award Notice and the Plan, of the number of RSUs and PRSUs (together,
the “Units”) set forth above. Each Unit entitles you to receive from the Company
one share of the Company’s Common Stock, $0.50 par value per share (the “Common
Stock”), which will vest (become non-forfeitable) as set forth in Sections 2 and
3 and will be payable in the form of shares of Common Stock as set forth in
Section 4, all in accordance with the terms of this Award Notice, the Plan, and
any rules and procedures adopted by the Committee. The Plan is incorporated
herein by reference and made a part of this Award Notice. Capitalized terms not
defined herein have the respective meanings set forth in the Plan.

          

2.

Vesting.
 

a.

RSU Vesting. Subject to Section 3 below, the RSUs subject to the Award will vest
on [_________], which is the last day of the Company’s [____] fiscal year (the
“Vesting Date”), provided that you are employed with the Company through the
Vesting Date.
 

b.     

PRSU Vesting. The PRSUs subject to the Award will vest on the Vesting Date based
on the successful completion of all of the following:
 

            i.

Subject to Section 3 below, you are employed with the Company through the
Vesting Date;
 

                      ii.       

The percentage of the PRSUs that will vest, if any, is determined based on the
Company’s performance against the performance measure set forth below over the
three-year period ending on the Vesting Date, as validated by the Company’s
external auditors. The applicable performance measure for the Award and the
percentage of PRSUs that vest for the specified levels of performance are as
follows:

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Cumulative fully diluted EPS for the three-year period ending Percentage of
PRSUs on the Vesting Date       that vest $[____] 150% $[____] 125% $[____] 100%
$[____] 75% $[____] 50%

No PRSUs will vest for Company performance below 50%, and therefore all PRSUs
subject to the Award will be forfeited. Performance above 50% and up to 150%
will be determined using straight line interpolation and the vesting percentages
set forth above for the earnings per share (“EPS”) results immediately preceding
and immediately following the actual EPS results shown above.

3.

Effects of Certain Events.

          

 

a.

General. Subject to Sections 3(b) through 3(e) of this Award Notice, in the
event that your employment with the Company is terminated prior to the Vesting
Date, all Units that are not vested as of the date of such termination are
automatically forfeited.
 

           b.     

Effect of Death, Disability or Retirement on RSUs. In the event of your death or
termination of employment due to Disability or Retirement prior to the Vesting
Date, then the Award shall continue and the vested RSUs, if any, shall be
distributed on a pro-rata basis on the date that other active participants
receive such distributions under their Award Notice for this program. The
pro-rata portion shall be determined by multiplying the number of vested RSUs by
a fraction, the numerator of which is the number of completed months during the
three-year period ending on the Vesting Date which you were employed by the
Company, and the denominator of which is the number of months in the period
beginning on the Date of Grant and ending on the Vesting Date. For purposes of
this Award Notice, “Disability” has the meaning given to such term under the
Plan and “Retirement” means your termination of employment on or after the date
that you have attained age 55 and have completed five or more years of service
with the Company.
 

           c.      

Effect of Death or Disability on PRSUs. In the event of your death or
termination of employment due to Disability prior to the Vesting Date, then the
Award shall continue and the vested PRSUs, if any, from such performance, shall
be distributed on a pro-rata basis on the date that other active participants
receive such distributions under their Award Notice for this program, based on
actual performance, based on the following:
 

i.

If you terminate employment in the first 15 months of the performance period you
will forfeit all PRSUs.
 

        ii.      

If you terminate employment within the 16th through the 27th month of the
performance period you will receive a pro-rated number of PRSUs subject to the
Award that become vested under Section 2(b) above.
 

iii.

If you terminate employment after 27 months of the performance period have
elapsed you will receive the full number of PRSUs that become vested under
Section 2(b) above.

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             The pro-rata portion shall be determined by multiplying the number
of vested PRSUs based on actual performance by a fraction, the numerator of
which is the number of completed months during the three-year period ending on
the Vesting Date which you were employed by the Company, and the denominator of
which is 36.         d.      

Effect of Retirement on PRSUs. If you terminate employment prior to the Vesting
Date due to Retirement, then the Award shall continue and the vested PRSUs, if
any, shall be distributed on a pro-rata basis on the date that other active
participants receive such distributions under their Award Notice for this
program, based on actual performance, based on the following:
 

i.

If you terminate employment in the first 15 months of the performance period you
will forfeit all PRSUs.
 

                   ii.      

If you terminate employment within the 16th through the 27th month of the
performance period you will receive a pro-rated number of PRSUs subject to the
Award that become vested under Section 2(b) above.
 

iii.

If you terminate employment after 27 months of the performance period have
elapsed you will receive the full number of PRSUs that become vested under
Section 2(b) above.

                   The pro-rata portion shall be determined by multiplying the
number of vested PRSUs based on actual performance by a fraction, the numerator
of which is the number of completed months during the three-year period ending
on the Vesting Date which you were employed by the Company, and the denominator
of which is 36.         e.

Change in Control. Upon a Change in Control of the Company, the provisions of
Section 10.3 of the Plan shall automatically and immediately become operative
with respect to the Award.

                

4.

Issuance of Shares of Common Stock. Unless the Units are forfeited prior to the
Vesting Date as provided in Sections 2 and 3 above, the Units will be payable in
the form of Common Stock as soon as administratively practicable following the
release of the Company’s operating results for the [____] fiscal year, but in no
event later than December 31, [____] (the “Payment Date”). Each vested Unit will
be payable in the form of one share of Common Stock on the Payment Date. Shares
of Common Stock will be registered on the books of the Company in your name as
of the Payment Date and delivered to you as soon as practical thereafter, in
certificated or uncertificated form, as you shall direct. You understand that
the Company will, and you hereby authorize the Company to, issue such
instructions to its transfer agent as the Company may deem necessary or proper
to comply with the intent and the purposes of this Award Notice. Notwithstanding
the foregoing provisions of this Section 4, if you make a valid election to
defer receipt of the shares of Common Stock pursuant to the terms of a
nonqualified deferred compensation plan maintained by the Company, payment of
vested Units shall be made in accordance with that election and the terms of
such nonqualified deferred compensation plan.

          

5.

Nontransferability. The Units awarded pursuant to this Award Notice may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
(“Transfer”), other than by will or by the laws of descent and distribution,
except as provided in the Plan. If any prohibited Transfer, whether voluntary or
involuntary, of the Units is attempted to be made, or if any attachment,
execution, garnishment, or lien shall be attempted to be issued against or
placed upon the Units, your right to such Units shall be immediately forfeited
to the Company, and this Award Notice shall be null and void.

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6.

No Shareholder Rights. The Units do not entitle the Grantee to any rights of a
shareholder of Common Stock, including dividends or voting rights.

          

7.

Restrictions on Issuance of Shares. If at any time the Company determines that
listing, registration or qualification of the shares of Common Stock subject to
this Award upon any securities exchange or under any state or federal law, or
the approval of any governmental agency, is necessary or advisable as a
condition to the Award or issuance of certificate(s) for Common Stock hereunder,
then, subject to the limitations imposed under Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), such Award or issuance may not be
made in whole or in part unless and until such listing, registration,
qualification or approval shall have been effected or obtained free of any
conditions not acceptable to the Company.
 

8.

Plan Controls. The Award is subject to all of the provisions of the Plan, and is
further subject to all the interpretations, amendments, rules and regulations
that may from time to time be promulgated and adopted by the Committee pursuant
to the Plan. In the event of any conflict among the provisions of the Plan and
this Award Notice, the provisions of the Plan will be controlling and
determinative.
 

9.

Taxes. You are responsible for any and all federal, state and local taxes (other
than stock transfer or issuance taxes) arising as a result of the vesting of the
Units or the delivery of the shares of Common Stock to you pursuant to this
Award or any subsequent sale of the shares of Common Stock by you.
 

10.

Section 409A. This Award Notice and the Units granted hereunder are intended to
comply with the requirements of Section 409A of the Code and shall be construed
and interpreted in a manner consistent with such intent.

ACKNOWLEDGEMENT

The undersigned Grantee acknowledges receipt of, and understands and agrees to,
this Award Notice and the Plan. The Grantee further acknowledges that as of the
date of grant, this Award Notice and the Plan set forth the entire understanding
between the Grantee and the Company regarding the grant of the Units under the
Award and supersede all prior oral and written agreements on that subject.

Date:       

Transcat, Inc.
 
By:                                 Grantee:    

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