Document:

TCMD EX 10-2

		

			 

		

		
			Exhibit 10.2
		

		
			 
		

		
			TACTILE SYSTEMS TECHNOLOGY, INC.
		

		
			EXECUTIVE EMPLOYEE SEVERANCE PLAN
		

		
			(Adopted Effective November 1, 2018)
		

		
			 
		

		
			I.INTRODUCTION
		

		
			Tactile Systems Technology, Inc. (the “Company”) has established the Tactile Systems Technology, Inc. Executive Employee Severance Plan (the “Plan”) to provide severance pay and other benefits to eligible executive-level employees of the Company whose employment terminates under certain covered circumstances.  The Company, in its complete and sole discretion, will determine who is an eligible employee under the Plan, the requirements to receive severance benefits under the Plan, and the amount of any severance benefits under the Plan.
		

		
			This Plan supersedes and replaces any policy, plan or practice that may have existed in the past regarding the payment of severance benefits to eligible employees.  
		

		
			This document is both the “Plan document” and the “Summary Plan Description” for the Plan.
		

		
			II.ELIGIBILITY
		

		
			All employees designated by the Company’s Board of Directors (“Board”) or a committee thereof as eligible to be a participant in the Plan are eligible to become participants in the Plan.  An eligible employee becomes a participant (“Participant”) as of the later of (i) the effective date of this Plan or (2) the date he or she is first classified by the Board or a committee thereof as an eligible employee.  In order for an eligible employee to become a Participant under this Plan the eligible employee must sign a Confidentiality, Assignment of Intellectual Property and Restrictive Covenants Agreement (or similarly titled agreement) in a form approved by the Board or a committee thereof, unless such requirement is waived in writing by the Board or a committee thereof.  You will cease to be a Participant in this Plan when you cease to be designated by the Board or a committee thereof as eligible to be a participant in the Plan.
		

		
			III.SEVERANCE EVENTS
		

		
			In general, if you are an eligible Participant in this Plan, and you comply with all provisions and requirements of the Plan, then you will receive severance benefits if your employment with the Company is terminated (either before a Change in Control or within 12 months following a Change in Control) (i) at the initiative of the Company other than for Cause or (ii) by you for Good Reason.  These concepts are described in detail below.
		

		
			“For Cause”.  You will not be eligible for benefits under this Plan if your employment is terminated by the Company “for Cause.”  “Cause” means: 
		

			
	
			
				 (i)
			

			
	
			
			an act or acts of dishonesty undertaken by you and intended to result in personal gain or enrichment of you or others at the expense of the Company;

			
	
			
				 (ii)
			

			
	
			
			unlawful conduct or gross misconduct by you that, in either event, is materially injurious to the Company; 

			
	
			
				 (iii)
			

			
	
			
			you being convicted of a felony; or

			
	
			
				 (iv)
			

			
	
			
			any material breach by you of any terms or conditions of any written agreement between you and the Company which breach has not been cured by you within 15 days after written notice thereof to you from the Company.

		
			For the purposes of clauses (ii) and (iv) above, no act or failure to act on your part shall be considered “Cause” if done by you pursuant to specific authorization evidenced by a resolution duly adopted by the 

		 

 

Board or pursuant to specific advice given by counsel for the Company, unless such specific authorization or advice results in whole or in part from material misrepresentations or omissions by you. 
		

		
			“Good Reason”.  If you initiate the termination of your employment with the Company, you will be eligible for Plan benefits only if you terminated with Good Reason, as defined below.  
		

		
			“Good Reason” means the occurrence of any of the following events without your consent:
		

		
			(i)the assignment of you to a position with responsibilities or duties of a materially lesser status or degree than your position as of the date this Plan was adopted;
		

		
			(ii)any material breach of any terms or conditions of any written agreement between the Company and you by the Company not caused by you; or
		

		
			(iii) the requirement by the Company that you relocate out of the Minneapolis/St. Paul Metropolitan area or metropolitan area designated by the Company at the later of your initial employment date or the date this Plan is adopted by the Company. 
		

		
			“Good Reason” shall not exist unless you have first provided written notice to the Company of the occurrence of one or more of the conditions under clauses (i) through (iii) above within 90 days of the condition’s initial occurrence, such condition is not fully remedied by the Company within 30 days after the Company’s receipt of written notice from you, and your termination of employment with the Company occurs no later than 130 days after the condition’s initial occurrence.  
		

		
			“Change in Control”.  For purposes of this Plan, a qualifying “Change in Control” means a “Change in Control” as defined in the Tactile Systems Technology, Inc. 2016 Equity Incentive Plan.
		

		
			“Disability”.  For purposes of this Plan, “Disability” means your inability to perform on a full-time basis the duties and responsibilities of your employment with the Company by reason of your illness or other physical or mental impairment or condition, if such inability continues for an uninterrupted period of 90 days or more during any 180-day period.  A period of inability is “uninterrupted” unless and until you return to full-time work for a continuous period of at least 30 days.  
		

		
			“Termination Date”.   For purposes of this Plan, “Termination Date”  means the date on which a “separation from service” has occurred for purposes of Section 409A of the Internal Revenue Code, as amended, and the regulations and guidance thereunder (the “Code”).  
		

		
			Timely Release Required.  Regardless of the reason for your termination, you will not be eligible for Plan benefits unless you sign an approved release form after your employment with the Company actually terminates, timely deliver such signed release form to the Company and do not rescind the release during any period during which rescission is permissible.  You may obtain a copy of the current release form at any time by contacting the Company’s Human Resources Department.  However, the Company will determine the contents of the release form, and may revise it from time to time as appropriate to deal with particular severance situations.  As such, the release form you will be required to sign to receive benefits under the Plan may differ from any release form you previously received.  
		

		
			The release will generally include provisions addressing a full release of all claims you may have against the Company and related individuals and entities (to the full extent permitted under applicable law) and provisions concerning your ongoing compliance with your non-disclosure of confidential information, assignment of intellectual property, non-competition and non-solicitation obligations to the Company, including those obligations that survive the termination of your employment with the Company.   Severance benefits will be paid only after any period for rescinding the release has expired.  If you violate any provisions of the release, the Company will no longer be required to pay you any remaining severance benefits due to you under the Plan.
		

		
			Ineligibility for Benefits.  Severance benefits will not be paid under this Plan in any of the following circumstances:
		

		
			

		 

		

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			You are offered another position with the Company (or the successor/ purchasing entity) and you refuse to accept that position, other than for Good Reason.

			
	
			
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			You voluntarily terminate your employment with the Company (or the successor/purchasing entity), other than for Good Reason.

			
	
			
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			Your termination of employment occurs more than 12 months after a Change in Control occurs. 

			
	
			
				 Ø
			

			
	
			
			Your termination of employment does not qualify as a “separation from service” under Section 409A of the Code.

			
	
			
				 Ø
			

			
	
			
			Your employment is terminated by the Company (or the successor/ purchasing entity) for Cause.

			
	
			
				 Ø
			

			
	
			
			Your employment terminates due to death, Disability, or failure to return to work for the Company following a leave of absence, layoff or any other period of authorized absence from the Company.

			
	
			
				 Ø
			

			
	
			
			You have not signed a Confidentiality, Assignment of Intellectual Property and Restrictive Covenants Agreement.

			
	
			
				 Ø
			

			
	
			
			You refuse to sign the release form prepared by the Company, or you rescind the release before it becomes final.

			
	
			
				 Ø
			

			
	
			
			You breach any provisions included in the release form prepared by the Company.

		
			IV.PLAN BENEFITS
		

		
			A Participant who experiences a qualifying severance event under Section III while a Participant will be eligible to receive severance benefits under the Plan, including severance pay and vesting of equity awards as set forth below.  
		

		
			Severance Pay (CEO)
		

		
			If you are a Participant, you are the Chief Executive Officer of the Company, and you experience a qualifying severance event and you otherwise qualify for benefits under the Plan, then you will be entitled to the severance pay and benefits described below.
		

		
			Qualifying Severance Event Before a Change in Control:
		

		
			The Company will pay you an amount equal to two times your annualized base salary as of your Termination Date, payable in substantially equal installments in accordance with the Company’s regular payroll schedule commencing with the first normal payroll date of the Company following the Termination Date and continuing for 24 months thereafter, provided that any installments that would have been paid during the 60 day period immediately following the Termination Date shall be held by the Company until the first payroll date occurring more than 60 days after the Termination Date.
		

		
			If you are eligible for and take all steps necessary to continue your group health insurance coverage with the Company following the Termination Date, the Company will pay for the portion of the premium costs for such coverage that the Company would pay if you had remained employed by the Company, at the same level of coverage that was in effect as of the Termination Date, for a period of 18 consecutive months after the Termination Date (or until you receive group health or dental coverage from another employer, if earlier).
		

		
			Qualifying Severance Event Within 12 Months After a Change in Control:
		

		
			The Company will pay you an amount equal to two times the sum of (i) your annualized base salary as of your Termination Date, plus (ii) your target incentive bonus as of your Termination Date, less applicable 

		 

		

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withholdings, payable in a lump sum on the Company’s first payroll date occurring more than 60 days after the Termination Date (but no later than 75 days after the Termination Date).
		

		
			If you are eligible for and take all steps necessary to continue your group health insurance coverage with the Company following the Termination Date, the Company will pay for the portion of the premium costs for such coverage that the Company would pay if you had remained employed by the Company, at the same level of coverage that was in effect as of the Termination Date, for a period of 18 consecutive months after the Termination Date (or until you receive group health or dental coverage from another employer, if earlier).
		

		
			Severance Pay (Non-CEO)
		

		
			If you are a Participant, you are employed in any position other than Chief Executive Officer of the Company, and you experience a qualifying severance event and you otherwise qualify for benefits under the Plan, then you will be entitled to the severance pay and benefits described below.
		

		
			Qualifying Severance Event Before a Change in Control:
		

		
			The Company will pay you an amount equal to one times your annualized base salary as of your Termination Date, payable in substantially equal installments in accordance with the Company’s regular payroll schedule commencing with the first normal payroll date of the Company following the Termination Date and continuing for 12 months thereafter, provided that any installments that would have been paid during the 60 day period immediately following the Termination Date shall be held by the Company until the first payroll date occurring more than 60 days after the Termination Date.
		

		
			If you are eligible for and take all steps necessary to continue your group health insurance coverage with the Company following the Termination Date, the Company will pay for the portion of the premium costs for such coverage that the Company would pay if you had remained employed by the Company, at the same level of coverage that was in effect as of the Termination Date, for a period of 12 consecutive months after the Termination Date (or until you receive group health or dental coverage from another employer, if earlier).  
		

		
			Qualifying Severance Event Within 12 Months After a Change in Control:
		

		
			The Company will pay you an amount equal to one times the sum of (i) your annualized base salary as of your Termination Date, plus (ii) your target incentive bonus as of your Termination Date, less applicable withholdings, payable in a lump sum on the Company’s first payroll date occurring more than 60 days after the Termination Date (but no later than 75 days after the Termination Date).
		

		
			If you are eligible for and take all steps necessary to continue your group health insurance coverage with the Company following the Termination Date, the Company will pay for the portion of the premium costs for such coverage that the Company would pay if you had remained employed by the Company, at the same level of coverage that was in effect as of the Termination Date, for a period of 12 consecutive months after the Termination Date (or until you receive group health or dental coverage from another employer, if earlier).
		

		
			Equity Vesting
		

		
			If you experience a qualifying severance event and you otherwise qualify for benefits under the Plan, and the Termination Date occurs before a Change in Control, then with respect to any equity-based award that has been granted to you under the Company’s 2016 Equity Incentive Plan or any predecessor or successor plan and is outstanding and not fully vested on such Termination Date (an “Equity Award”), a pro rata portion of the unvested portion of such Equity Award will vest as of the date your release becomes irrevocable.  The pro rata portion shall be determined by multiplying the number of shares or stock units subject to the Equity Award by a fraction whose numerator is the number of days during the applicable vesting or performance period prior to your Termination Date and whose denominator is the total number of days in the vesting or performance period, and subtracting from that product the number of shares or 

		 

		

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stock units as to which the Equity Award had vested prior to your Termination Date.  If such Equity Award is a stock option or stock appreciation rights award, it will remain exercisable to the extent so vested for one year after your Termination Date.  If the vesting of the Equity Award is subject to the satisfaction of performance goals over a performance period, the number of shares or stock units subject to the Equity Award for purposes of this paragraph will be deemed to be the number that would otherwise vest at the end of the applicable performance period if target level performance had been achieved.
		

		
			If you experience a qualifying severance event and you otherwise qualify for benefits under the Plan, and the Termination Date occurs within 12 months after a Change in Control, then the unvested portion of any Equity Award that is outstanding on such Termination Date will vest as of the date your release becomes irrevocable.  If such Equity Award is a stock option or stock appreciation rights award, it will remain exercisable to the extent so vested for one year after your Termination Date.  If the vesting of the Equity Award is subject to the satisfaction of performance goals over a performance period, the unvested portion of such Equity Award will be determined by subtracting from the number of shares or stock units that would otherwise vest at the end of the applicable performance period if target level performance had been achieved the number of shares or stock units as to which the Equity Award had vested prior to your Termination Date.     
		

		
			Section 409A
		

		
			This Plan is intended to provide for payments and benefits that are exempt from, or that comply with, the requirements of Section 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly.   Each payment or benefit made pursuant to this Plan shall be deemed to be a separate payment for purposes of Code Section 409A.  In addition, payments or benefits pursuant to this Plan shall be exempt from the requirements of Code Section 409A to the maximum extent possible as “short-term deferrals” pursuant to Treasury Regulation Section 1.409A-1(b)(4), as involuntary separation pay pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), and/or under any other exemption that may be applicable, and this Plan shall be construed accordingly.  To the extent that any amounts payable under this Plan are required to be delayed under Code Section 409A, such amounts are intended to be and should be considered for purposes of Code Section 409A as separate payments from the amounts that are not required to be delayed.  Notwithstanding anything herein to the contrary, if any Participant is considered a “specified employee” (as defined in Treasury Regulation Section 1.409A-1(i)) as of the Termination Date, then no payments of deferred compensation subject to Code Section 409A and payable due to such Participant’s separation from service shall be made under this Plan before the first business day that is six months after the Termination Date (or upon the Participant’s death, if earlier) (the “Specified Period”).  Any deferred compensation payments that would otherwise be required to be made to a Participant during the Specified Period will be accumulated by the Company and paid to the Participant on the first day after the end of the Specified Period.  The foregoing restriction on the payment of amounts to a Participant during the Specified Period will not apply to the payment of employment taxes.  
		

		
			Section 280G
		

		
			If any payment or benefit to be paid or provided to a Participant under this Plan, taken together with any payments or benefits otherwise paid or provided to such Participant by the Company or any corporation that is a member of an “affiliated group” (as defined in Section 1504 of the Code without regard to Section 1504(b) of the Code) of which the Company is a member (the “other arrangements”), would collectively constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), and if the net after-tax amount of such parachute payment to such Participant is less than what the net after-tax amount to such Participant would be if the aggregate payments and benefits otherwise constituting the parachute payment were limited to three times such Participant’s “base amount” (as defined in Section 280G(b)(3) of the Code) less $1.00, then the aggregate payments and benefits otherwise constituting the parachute payment shall be reduced to an amount that shall equal three times such Participant’s base 

		 

		

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amount, less $1.00.  Should such a reduction in payments and benefits be required, such Participant shall be entitled, subject to the following sentence, to designate those payments and benefits under this Plan or the other arrangements that will be reduced or eliminated so as to achieve the specified reduction in aggregate payments and benefits to such Participant and avoid characterization of such aggregate payments and benefits as a parachute payment.  The Company will provide such Participant with all information reasonably requested by such Participant to permit the Participant to make such designation.  To the extent that such Participant’s ability to make such a designation would cause any of the payments and benefits to become subject to any additional tax under Code Section 409A, or if such Participant fails to make such a designation within ten business days of receiving the requested information from the Company, then the Company shall achieve the necessary reduction in such payments and benefits by first reducing or eliminating the portion of the payments and benefits that are payable in cash and then by reducing or eliminating the non-cash portion of the payments and benefits, in each case in reverse order beginning with payments and benefits which are to be paid or provided the furthest in time from the date of the Company’s determination.  A net after-tax amount shall be determined by taking into account all applicable income, excise and employment taxes, whether imposed at the federal, state or local level, including the excise tax imposed under Section 4999 of the Code.   
		

		
			Reductions of Severance Benefits    
		

		
			Except as otherwise provided in this Plan, all severance benefits payable under this Plan will be reduced, as and when it is otherwise payable, by the amount of any severance or similar payment required to be paid to you by the Company under applicable federal, state, and local laws.  Cash severance payments are also subject to all applicable withholding due on any severance benefits, including state and federal income tax withholding and FICA and Medicare tax withholding.
		

		
			Coordination/Offsets for Employment Agreements
		

		
			If you are party to an individual written employment contract or agreement with the Company (or a subsidiary) that provides for the payment of any benefits upon termination of your employment, then your cash severance benefits under this Plan will be reduced as follows.  Any cash severance pay under this Plan will be reduced (offset), as and when it is otherwise payable, by the amount of any cash payment made or due to be made by the Company to you pursuant to an employment contract, agreement or other severance arrangement, to the extent such payment is called a severance payment or otherwise becomes payable due to a termination of your employment with the Company (but not including any cash severance payments that are specifically due to COBRA premiums or outplacement) .  If such an agreement, contract or arrangement provides for cash severance payments in excess of those provided under this Plan, no severance pay will be due under this Plan.  However, you may still be eligible for other benefits under the Plan, to the extent benefits are not duplicative of what you are receiving under the agreement, contract or arrangement.
		

		
			Termination of Severance Benefits
		

		
			All severance benefits payable under this Plan will be terminated if the Company determines that you have violated your ongoing obligations with respect to non-disclosure of confidential information, assignment of intellectual property, non-competition and non-solicitation, including those obligations under your Confidentiality, Assignment of Intellectual Property and Restrictive Covenants Agreement and any other agreement with the Company that survive the termination of your employment with the Company.  Specifically with respect to Equity Awards, and notwithstanding anything to the contrary in any agreement evidencing an Equity Award, if you violate any of your ongoing obligations described above, then (i) you will immediately forfeit all outstanding Equity Awards and any right to receive shares thereunder, and (ii) with respect to shares that have been issued pursuant to an Equity Award within two (2) years prior to such violation, you shall either (A) return such shares to the Company or (B) pay to the Company in cash an amount equal to the fair market value of the shares as of the date their receipt became taxable to you.
		

		
			

		 

		

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			V.AMENDMENT AND TERMINATION OF THE PLAN
		

		
			Except as provided below, the Company reserves the right in its discretion to amend or terminate this Plan, or to alter, reduce, or eliminate any severance benefit, practice or policy hereunder, in whole or in part, at any time and for any reason without the consent of or notice to any employee or any other person having any beneficial interest in this Plan.  Such action may be taken by the Board of the Company, the Compensation Committee of the Board, or by any other individual or committee to whom such authority has been delegated by the Board.
		

		
			However, during the 12-month period following a Change in Control, the Plan may not be amended, terminated or otherwise altered to reduce the amount (or negatively change the terms) of any severance benefit that becomes payable to a Participant who was a Participant in the Plan on the day prior to the Change in Control.  In addition, if a Change in Control occurs within the 6-month period following the effective date of an amendment to terminate the Plan or otherwise reduce the amount (or negatively alter the terms) of any severance benefit under the Plan, such amendment (or portion of such amendment) will become null and void upon the Change in Control.  Upon the Change in Control, the Plan will automatically revert to the terms in effect prior to the adoption of said amendment.
		

		
			Notwithstanding the above limitations, the Plan may be amended at any time (and such amendment will be given affect) if such amendment is required to bring the Plan into compliance with applicable law, including but not limited to Section 409A of the Internal Revenue Code of 1986, as amended (and the regulations or other applicable guidance thereunder).   
		

		
			VI.SUBMITTING CLAIMS FOR BENEFITS
		

		
			Normally, the Company will determine an employee’s eligibility and benefit amount on its own and without any action on the part of the terminating employee, other than returning the release form.  The severance payments will begin as soon as administratively feasible after the date the release becomes irrevocable. 
		

		
			Formal Claims for Benefits.  If you think you are entitled to benefits but have not been so notified by the Company, if you disagree with a decision made by the Company, or if you have any other complaint regarding the Plan that is not resolved to your satisfaction, you or your authorized representative may submit a written claim for benefits. The claim must be submitted to the Company’s Human Resources Department within six months after the date you terminated employment.  Claims received after that time will not be considered.
		

		
			The Company will ordinarily respond to the claim within 90 days of the date on which it is received.  However, if special circumstances require an extension of the period of time for processing a claim, the 90-day period can be extended for an additional 90 days by giving you written notice of the extension, the reason why the extension is necessary, and the date a decision is expected.
		

		
			The Company will give you a written notice of its decision if it denies your claim for benefits in whole or in part.  The notice will explain the specific reasons for the decision, including references to the relevant plan provision upon which the decision is based, with a description of any additional material or information necessary for you to perfect your claim, and the procedures for appealing the decision.  
		

		
			Appeals.  If you disagree with the initial claim determination, in whole or in part, you or your authorized representative can request that the decision be reviewed by filing a written request for review with the Company’s Human Resources Department within 60 days after receiving notice that the claim has been denied.  You or your representative may present written statements describing reasons why you believe the claim denial was in error, and should include copies of any documents you want us to consider in support of your appeal.  Your claim will be decided based on the information submitted, so you should make sure that your submission is complete.  Upon request to the Company, you may review all 

		 

		

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documents we considered or relied on in deciding your claim.  (You may also receive copies of these documents free of charge.)
		

		
			Any appeal will be reviewed and decided by person(s) other than the person(s) who made the determination on your original claim.  Generally, the decision will be reviewed within 60 days after the Company receives a request for review.  However, if special circumstances require a delay, the review may take up to 120 days.  (If a decision cannot be made within the 60-day period, you will be notified of this fact in writing.)  You will receive a written notice of the decision on the appeal, which will explain the reasons for the decision by making specific reference to the Plan provisions on which the decision is based.
		

		
			Limitations Period.    The claims procedure above is mandatory.  If an employee has completed the entire claims procedure and still disagrees with the outcome of the employee’s claim, the employee may commence a civil action under § 502(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  The employee must commence such civil action within one year of the date of the final denial, or the employee will waive all rights to relief under ERISA.
		

		
			VII.PLAN ADMINISTRATION
		

		
			The following information relates to the administration of the Plan and the determination of Plan benefits.  
		

		
			Type of Plan:  The Plan is a severance benefit plan.   
		

		
			Plan Administrator/Plan Sponsor:  The Company is the “Plan Sponsor” and “Plan Administrator” of this Plan.  Communications to the Company regarding the Plan should be addressed to:
		

		
			Tactile Systems Technology, Inc. 
1331 Tyler Street NE, Suite 200
Minneapolis, MN 55413
Attention: Chief Financial Officer
Telephone:  (612) 355-5100
		

		
			As Plan Administrator, the Company has complete discretionary authority to interpret the provisions of the Plan and to determine which employees are eligible to participate and eligible for Plan benefits, the requirements to receive severance benefits, and the amount of those benefits.  The Company also has authority to correct any errors that may occur in the administration of the Plan, including recovering any overpayment of benefits from the person who received it.
		

		
			Employer Identification Number:  41-1801204
		

		
			Plan Year:  The calendar year.  The first Plan Year is a short Plan Year, starting on the date the Plan was initially adopted and ending on December 31, 2018.
		

		
			Agent for Service of Legal Process:  Legal process regarding the Plan may be served on the Company at the address listed above.
		

		
			Assignment of Benefits:  You cannot assign your benefits under this Plan to anyone else, and your benefits are not subject to attachment by your creditors. The Company will not pay Plan benefits to anyone other than you (or your estate, if you die after having a qualifying severance event but before receiving the complete severance amount payable to you up to the date of your death).
		

		
			Governing Law:  This Plan, to the extent not preempted by ERISA or any other federal law shall be governed by and construed in accordance with, the laws of the State of Minnesota.
		

		
			Employment Rights:  Establishment of the Plan shall not be construed to in any way modify the parties’ at-will employment relationship, or to give any employee the right to be retained in the Company’s service or to any benefits not specifically provided by the Plan.  The right of an employer to terminate the 

		 

		

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employment relationship of an employee (or to accelerate the termination date) will not in any way be affected by the terms of this Plan or any release.
		

		
			Successor/Purchasing Entity:  For the avoidance of doubt, references in this Plan to the “Company” include, after a Change in Control or other corporate transaction, the successor to the Company or purchasing entity.  
		

		
			 
		

		 

		

			-9-TCMD EX 10-3

		
			Exhibit 10.3
		

		
			 
		

		
			TACTILE SYSTEMS TECHNOLOGY, INC.
		

		
			Confidentiality, Assignment of Intellectual Property and 
		

		
			Restrictive Covenants Agreement
		

		
			 
		

		
			This Confidentiality, Assignment of Intellectual Property and Restrictive Covenants Agreement (this “Agreement”) is entered into effective [_________________], 20[__] (the “Effective Date”) by and between Tactile Systems Technology, Inc., a Delaware corporation (the “Company”), and [______________], a resident of [_________] (“Executive”).
		

		
			RECITALS
		

		
			 
		

		
			A.The Company and Executive previously entered into an Employment Agreement (the “Employment Agreement”).
		

		
			 
		

		
			B.The Company has adopted the Tactile Systems Technology, Inc. Executive Employee Severance Plan (the “Plan”), and has informed Executive that Executive will be designated as a Participant (as defined in the Plan) subject to Executive executing this Agreement, executing a Termination of Employment Agreement (the “Termination Agreement”) (terminating the Employment Agreement), and otherwise satisfying the conditions to become and remain a Participant under the Plan.
		

		
			 
		

		
			AGREEMENT
		

		
			 
		

		
			NOW, THEREFORE, for good and valuable consideration, including without limitation Executive becoming a Participant (as defined in the Plan) in exchange for Executive entering into this Agreement and the Termination Agreement, the Company and Executive agree as follows:
		

			
	
			
				 1.
			

			
	
			
			Affiliated Entities.  As used in this Agreement, “Affiliates” includes the Company and each corporation, partnership, or other entity which controls the Company, is controlled by the Company, or is under common control with the Company (in each case “control” meaning the direct or indirect ownership of 50% or more of all outstanding equity interests).

			
	
			
				 2.
			

			
	
			
			Confidential Information.  Except as permitted by the Company, Executive will not at any time divulge, furnish or make accessible to anyone or use in any way other than in the ordinary course of the business of the Company or its Affiliates, any confidential, proprietary or secret knowledge or information of the Company or its Affiliates that Executive has acquired or will acquire about the Company or its Affiliates, whether developed by Executive or by others, concerning (i) any trade secrets, (ii) any confidential, proprietary or secret designs, programs, processes, formulae, plans, devices or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Company or of its Affiliates, (iii) any customer or supplier lists, (iv) any confidential, proprietary or secret development or research work, (v) any strategic or other business, marketing or sales plans, (vi) any financial data or plans, or (viii) any other confidential or proprietary information or secret aspects of the business of the Company or of its Affiliates.  Executive acknowledges that the above-described knowledge and information constitutes a unique and valuable asset of the Company and represents a substantial investment of 

		 

		

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	time and expense by the Company, and that any disclosure or other use of such knowledge or information other than for the sole benefit of the Company or its Affiliates would be wrongful and would cause irreparable harm to the Company.  Executive will refrain from intentionally committing any acts that would materially reduce the value of such knowledge or information to the Company or its Affiliates.  The foregoing obligations of confidentiality shall not apply to any knowledge or information that (i) is now or subsequently becomes generally publicly known, other than as a direct or indirect result of the breach of this Agreement, (ii) is independently made available to Executive in good faith by a third party who has not violated a confidential relationship with the Company or its Affiliates, or (iii) is required to be disclosed by law or legal process.  Executive understands and agrees that Executive’s obligations under this Agreement to maintain the confidentiality of the Company’s confidential information are in addition to any obligations of Executive under applicable statutory or common law.

			
	
			
				 3.
			

			
	
			
			Ventures.  If, during Executive’s employment with the Company, Executive is engaged in or provides input into the planning or implementing of any project, program or venture involving the Company, all rights in such project, program or venture belong to the Company.  Except as approved in writing by the Company’s Board of Directors, Executive will not be entitled to any interest in any such project, program or venture or to any commission, finder’s fee or other compensation in connection therewith.  Executive will have no interest, direct or indirect, in any customer or supplier that conducts business with the Company.  

			
	
			
				 4.
			

			
	
			
			Noncompetition and Nonsolicitation Covenants.

		
			(a)Agreement Not to Compete.  During the Restricted Period (defined below), Executive will not, directly or indirectly, engage in any business, in the United States or in any other location in which the Company is then doing business, for the development, sale, service, or distribution of medical devices to treat lymphedema patients or any other business that is competitive with the then-current businesses of the Company or its Affiliates, including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, consultant or otherwise.  Ownership by Executive, as a passive investment, of less than 2.5% of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a breach of this Section 4(a).  Notwithstanding the foregoing, Executive’s direct or indirect engagement in a business whose sole purpose is the development, sale, service, or distribution of compression garments (but not pumps or other devices) to treat lymphedema patients or other patients shall not constitute a breach of this Section 4(a).
		

		
			(b)Agreement Not to Solicit or Hire Employees or Contractors.  During the Restricted Period (defined below), Executive will not, directly or indirectly, solicit, hire or engage any person who is then an employee or contractor of the Company or who was an employee of the Company at any time during the immediately preceding six (6) month period (or, following Executive’s termination of employment, at any time during the six (6) month period immediately preceding Executive’s termination of employment), in any manner or capacity, including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, consultant or otherwise, or otherwise directly or indirectly request, advise or induce any then current employee or contractor of the Company to terminate or otherwise adversely change its relationship with the Company.
		

		
			

		 

		

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			(c)Agreement Not to Solicit Others.  During the Restricted Period (defined below), Executive will not, directly or indirectly, solicit, request, advise or induce any then current customer, supplier or other business contact of the Company to cancel, curtail or otherwise adversely change its relationship with the Company, in any manner or capacity, including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, consultant or otherwise.
		

		
			(d)Restricted Period.  For purposes of this Agreement “Restricted Period” is the period during Executive’s employment with the Company or any Affiliates and for a period of twelve (12) consecutive months from and after the termination of Executive’s employment, whether such termination is with or without cause, or whether such termination is at the instance of Executive or the Company.
		

		
			(e)Acknowledgment.  Executive hereby acknowledges that the provisions of this Section 4 are reasonable and necessary to protect the legitimate interests of the Company and that any violation of this Section 4 by Executive will cause substantial and irreparable harm to the Company to such an extent that monetary damages alone would be an inadequate remedy therefor.  Executive represents and warrants that Executive is not subject to any other agreements prohibiting the performance of Executive’s obligations under this Agreement, including any non-competition agreement.
		

		
			(f)Blue Pencil Doctrine.  If the duration of, the scope of or any business activity covered by any provision of this Section 4 is in excess of what is determined to be valid and enforceable under applicable law, such provision will be construed to cover only that duration, scope or activity that is determined to be valid and enforceable.  Executive hereby acknowledges that this Section 4 will be given the construction which renders its provisions valid and enforceable to the maximum extent, not exceeding its express terms, possible under applicable law.
		

			
	
			
				 5.
			

			
	
			
			Patents, Copyrights and Related Matters.

		
			(a)Disclosure and Assignment.  Executive must immediately disclose to the Company any and all improvements and inventions that Executive has conceived or reduced to practice, or may conceive or reduce to practice, individually or jointly or commonly with others while Executive has been or is employed with the Company or any of its Affiliates with respect to (i) any methods, processes or apparatus concerned with the development, use or production of any type of products, goods or services sold or used by the Company or its Affiliates, and (ii) any type of products, goods or services sold or used by the Company or its Affiliates.  Any such improvements and inventions will be the sole and exclusive property of the Company and Executive hereby immediately assigns, transfers and sets over to the Company Executive’s entire right, title and interest in and to any and all of such improvement and inventions as are specified in this Section 5(a), and in and to any and all applications for letters patent that may be filed on such inventions, and in and to any and all letters patent that may issue, or be issued, upon such applications.  In connection therewith and for no additional compensation therefor, but at no expense to Executive, Executive will sign any and all instruments deemed necessary by the Company for:
		

		
			

		 

		

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			(i)the filing and prosecution of any applications for letters patent of the United States or of any foreign country that the Company may desire to file upon such inventions as are specified in this Section 5(a);
		

		
			(ii)the filing and prosecution of any divisional, continuation, continuation-in-part or reissue applications that the Company may desire to file upon such applications for letters patent; and
		

		
			(iii)the reviving, re-examining or renewing of any of such applications for letters patent.
		

		
			This Section 5(a) will not apply to any invention for which no equipment, supplies, facilities, confidential, proprietary or secret knowledge or information, or other trade secret information of the Company was used and that was developed entirely on Executive’s own time, and (i) that does not relate (A) directly to the business of the Company, or (B) to the Company’s actual or demonstrably anticipated research or development, or (ii) that does not result from any work performed by Executive for the Company.
		

		
			(b)Copyrightable Material.  All right, title and interest in all copyrightable material that Executive shall conceive or originate individually or jointly or commonly with others, and that arise in connection with Executive’s services hereunder or knowledge of confidential and proprietary information of the Company, will be the property of the Company and are hereby assigned by Executive to the Company of its Affiliates, along with ownership of any and all copyrights in the copyrightable material. Where applicable, works of authorship created by Executive relating to the Company or its Affiliates and arising out of Executive’s knowledge of confidential and proprietary information of the Company shall be considered “works made for hire,” as defined in the U.S. Copyright Act, as amended.
		

		
			(c)Remedies.Executive acknowledges that it would be difficult to fully compensate the Company for monetary damages resulting from any breach by Executive of this Section 5.  Accordingly, in the event of any actual or threatened breach of any such provisions, the Company will, in addition to any other remedies it may have, be entitled to injunctive and other equitable relief to enforce such provisions, and such relief may be granted without the necessity of proving actual monetary damages.
		

			
	
			
				 6.
			

			
	
			
			Return of Records and Property.  Upon termination of Executive’s employment or at any time upon the Company’s request, Executive will promptly deliver to the Company any and all Company and Affiliate records and any and all Company and Affiliate property in Executive’s possession or under Executive’s control, including without limitation manuals, books, blank forms, documents, letters, memoranda, notes, notebooks, reports, printouts, computer disks, computer tapes, source codes, data, tables or calculations and all copies thereof, documents that in whole or in part contain any trade secrets or confidential, proprietary or other secret information of the Company or its Affiliates and all copies thereof, and keys, access cards, access codes, passwords, credit cards, personal computers, telephones and other electronic equipment belonging to the Company or its Affiliates. 

		
			

		 

		

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				 7.
			

			
	
			
			Miscellaneous.

		
			(a)Governing Law.  All matters relating to the interpretation, construction, application, validity and enforcement of this Agreement will be governed by the laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule, whether of the State of Minnesota or any other jurisdiction, that would cause the application of laws of any jurisdiction other than the State of Minnesota.
		

		
			(b)Jurisdiction and Venue.  Executive and the Company consent to jurisdiction of the courts of the State of Minnesota and/or the federal courts, District of Minnesota, for the purpose of resolving all issues of law, equity, or fact, arising out of or in connection with this Agreement.  Any action involving claims of a breach of this Agreement must be brought in such courts.  Each party consents to personal jurisdiction over such party in the state and/or federal courts of Minnesota and hereby waives any defense of lack of personal jurisdiction.  Venue, for the purpose of all such suits, will be in Hennepin County, State of Minnesota.
		

		
			(c)Entire Agreement.  This Agreement and the Termination Agreement contain the entire agreement of the parties relating to Executive’s employment with the Company and supersede all prior agreements and understandings with respect to such subject matter, including without limitation the Employment Agreement, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement that are not set forth herein; provided, however, that nothing in this Agreement is intended to supersede, replace or modify the terms of the Plan or the Company’s 2016 Equity Incentive Plan or any equity award agreements issued to Executive under the Company’s 2016 Equity Incentive Plan, each of which shall remain in full force and effect in accordance with their terms.
		

		
			(d)Amendments.  No amendment or modification of this Agreement will be deemed effective unless made in writing and signed by the parties hereto.
		

		
			(e)No Waiver.  No term or condition of this Agreement will be deemed to have been waived, except by a statement in writing signed by the party against whom enforcement of the waiver is sought.  Any written waiver will not be deemed a continuing waiver unless specifically stated, will operate only as to the specific term or condition waived and will not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.
		

		
			(f)Assignment.  This Agreement will not be assignable, in whole or in part, by either party without the prior written consent of the other party, except that the Company may, without the consent of Executive, assign its rights and obligations under this Agreement (1) to an Affiliate or (2) to any corporation or other person or business entity to which the Company may sell or transfer all or substantially all of its assets; provided, however, that the Company’s  assignment of rights may only take place if the assignee accepts and agrees to all of the obligations to Executive  under this Agreement.   After any such assignment by the Company, the Company will be discharged from all further liability hereunder and such assignee will thereafter be deemed to be “the Company” for purposes of all terms and conditions of this Agreement, including this Section 7. For the avoidance of doubt, in the event of Executive’s death, all payments and obligations to Executive shall be paid to Executive’s estate.
		

		
			

		 

		

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			(g)Counterparts.  This Agreement may be executed by facsimile signature and in any number of counterparts, and such counterparts executed and delivered, each as an original, will constitute but one and the same instrument.
		

		
			(h)Severability.  Subject to Section 5(f) hereof, to the extent that any portion of any provision of this Agreement is held invalid or unenforceable, it will be considered deleted herefrom and the remainder of such provision and of this Agreement will be unaffected and will continue in full force and effect.
		

		
			(i)Captions and Headings.  The captions and paragraph headings used in this Agreement are for convenience of reference only and will not affect the construction or interpretation of this Agreement or any of the provisions hereof.
		

		
			
		

		
			

		 

		

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			IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the Effective Date first above written.
		

		
			 
		

		
			COMPANY
		

		
			By:___________________________________________________________
Name:  
Title:
		

		
			 
		

		
			 
		

		
			EXECUTIVE 
		

		
			_________________________________________________________

		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			
		

		
			
		

		
			 
		

		
			 
		

		 

		

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