Exhibit 10.1

 

TACTILE SYSTEMS TECHNOLOGY, INC.

MANAGEMENT INCENTIVE PLAN

 

Adopted March 8, 2017

 

In order to provide an additional incentive to eligible employees to contribute
to the success of Tactile Systems Technology, Inc. (the “Company”), the Company
has adopted this Management Incentive Plan (the “Plan”) under which annual cash
bonus awards (the “Awards”) may be provided to eligible employees. As set forth
in this Plan, the grant of Awards is within the discretion of the Compensation
and Organization Committee (the “Committee”) of the Company’s Board of Directors
(the “Board”), and the payment of these Awards is subject to several
contingencies, including the attainment of performance goals approved by the
Committee that are based on one or more performance measures described below.

 

1.                                      Eligibility.  Any employee of the
Company or any of its subsidiaries is eligible to participate in the Plan. The
Committee will designate those employees who are to be participants in the Plan
for each calendar year performance period. Designation by the Committee as a
participant for a specific performance period does not confer on an employee the
right to participate in the Plan during any other performance periods.

 

2.                                      Grant of Performance Awards.  The
Committee will designate which employees may participate in the Plan and be
granted Awards for each performance period. Awards may be granted to
participants in such amounts and on such terms as may be determined by the
Committee, consistent with the terms of the Plan. At the time an Award is made,
the Committee will specify the terms and conditions that will govern the Award,
which will include that the Award will be earned upon, and to the extent that,
one or more performance goals based on one or more of the performance measures
specified in Section 3 have been attained over the course of the applicable
performance period. Different terms and conditions may be established by the
Committee for different Awards and for different participants. The terms of
individual Awards will be set forth in such written or electronic notices as the
Committee may prescribe.

 

3.                                      Performance Measures.  The performance
measures upon which performance goals applicable to Awards under the Plan may be
based shall be one or a combination of two or more of the following: (i) net
income; (ii) earnings before one or more of interest, taxes, depreciation,
amortization and stock-based compensation expense; (iii) revenue; (iv) gross
profit; (v) operating income; (vi) profitability as measured by return ratios
(including, but not limited to, return on assets, return on equity, return on
invested capital and return on revenue); (vii) cash flow (including, but not
limited to, operating cash flow, free cash flow and cash flow return on
capital); (viii) market share; (ix) margins (including, but not limited to, one
or more of gross, operating and net earnings margins); (x) stock price;
(xi) total stockholder return; (xii) orders; (xiii) cost and expense management;
(xiv) economic value added or similar value added measurements; and
(xv) implementation or completion of critical projects. Any performance goal
based on one or more of the foregoing performance measures may be expressed in
absolute amounts, on a per share basis (basic or diluted), relative to one or
more other performance measures, as a growth rate or change from preceding
periods, or as a comparison to the performance of specified companies, indices
or other external measures, and may relate to one or any combination of Company,
subsidiary, business unit or individual performance.

 

4.                                      Adjustments to Performance Measures or
Goals.  In connection with establishing or applying the performance goals
applicable to any performance period, the Committee may adjust the performance
goals or the performance measures on which they are based to equitably reflect,
in the Committee’s judgment, the impact of (i) events during the performance
period that are unusual in nature or infrequently occurring (such as
acquisitions, divestitures, restructuring activities or asset write-downs),
(ii) changes in applicable tax laws or accounting principles, or (iii) equity
restructurings, reorganizations or other changes in corporate capitalization.

 

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5.                                      Determination of Award Amounts Payable. 
Following the completion of each performance period, the Committee will
determine the degree to which the applicable performance goals were attained and
the corresponding Award amounts that would be payable to participants based on
such attainment. The Committee is authorized, in its sole and absolute
discretion and based on such factors as it deems relevant, to increase or
decrease (including to zero) the amount of an Award that would otherwise be
payable to any participant based on attainment of applicable performance goals.

 

6.                                      Payment of Awards. The amount of any
Award determined by the Committee to be payable to a participant will be paid to
the participant in a lump sum cash payment (less applicable withholding taxes)
no later than March 15 of the calendar year immediately following the applicable
performance period. As a condition to receiving any payment of an Award under
this Plan, a participant must continue to be employed by the Company or one of
its subsidiaries on the date of payment. If a participant’s employment with the
Company and its subsidiaries terminates for any reason (whether voluntary,
involuntary, as a result of death or disability, or with or without cause) at
any time prior to the date of payment, no payment under the Plan will be made.

 

7.                                      Administration.  The Committee shall
have power to make Awards and to determine when and to whom Awards will be
granted, and the form, amount and other terms and conditions of each Award,
subject to the provisions of this Plan. The Committee shall have the authority
to interpret this Plan and any Award made under this Plan, to establish, amend,
waive and rescind any rules relating to the administration of this Plan, and to
make all other determinations necessary or advisable for the administration of
this Plan. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in this Plan or in any Award in the manner and to
the extent it shall deem desirable. The determinations of the Committee in the
administration of this Plan shall be final, binding and conclusive. The
Committee may delegate all or any portion of its authority under the Plan to any
one or more of its members or, as to Awards to participants or eligible
employees who are not executive officers of the Company, to one or more
executive officers of the Company.

 

8.                                      Miscellaneous.

 

(a)                                 Effective Date and Term.  The Plan shall
become effective as of the date first written above, and shall remain in effect
until it has been terminated pursuant to Section 8(d).

 

(b)                                 No Right to Employment.  Nothing in the Plan
or any Award notice constitutes or implies (i) any obligation or undertaking to
employ or retain a participant for any period of time or in any position, or
(ii) any limitation on the right of the Company to terminate a participant’s
employment at any time with or without notice or cause.

 

(c)                                  Tax and Other Withholding.  Any payments
under the Plan will be subject to withholding of all taxes and other amounts
required by law to be withheld or paid to others. The Company may, in its
discretion and to the full extent permitted by law, apply a payment otherwise
payable to a participant under the Plan to pay any amounts, debts or claims owed
to the Company by such participant, until all such amounts, debts and claims are
paid in full.

 

(d)                                 Amendment, Modification and Termination of
the Plan.  The Board or Committee may at any time terminate, suspend or modify
the Plan and the terms and provisions of any Award to any participant which has
not yet been paid. No Award may be granted during any suspension of the Plan or
after its termination.

 

(e)                                  Unfunded Plan.  The Plan shall be unfunded,
and the Company shall not be required to segregate any assets that may at any
time be represented by Awards under the Plan. No participant shall, by virtue of
this Plan, have any interest in any specific assets of the Company.

 

(f)                                   Other Benefit Programs.  Payments received
by a participant under an Award made pursuant to the Plan shall not be deemed a
part of the participant’s regular recurring compensation

 

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for purposes of the termination, indemnity or severance pay law of any state and
shall not be included in, nor have any effect on, the determination of benefits
under any other employee benefit plan, contract or similar arrangement provided
by the Company unless expressly so provided by such other plan, contract or
arrangement, or unless the Committee expressly determines otherwise.

 

(g)                                  Governing Law.  The Plan and all
determinations made and actions taken pursuant to the Plan shall be governed by
the laws of the State of Minnesota without regard to its conflicts-of-law
principles, and shall be construed accordingly.

 

(h)                                 Non-Transferability.  No Award may be sold,
assigned, transferred, exchanged or encumbered, voluntarily or involuntarily.

 

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