| 20222024 Proxy Statement
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support for our executive compensation program, with approximately 97% of votes cast approving our advisory say-on-pay resolution. The Compensation and Organization Committee considered the strong level of stockholder support and made no material changes in our executive compensation program for 20222023 as a result of the 20212022 say-on-pay vote. 01 NO TAX GROSS-UPS OUR NAMED EXECUTIVE OFFICERS ARE NOT ENTITLED TO ANY TAX GROSS-UP TREATMENT ON ANY SEVERANCE OR CHANGE IN CONTROL BENEFITS. | 02 NO EXCESSIVE RISK OUR COMPENSATION AND ORGANIZATION COMMITTEE REVIEWED OUR COMPENSATION PROGRAM AND DETERMINED THAT IT DOES NOT CREATE INAPPROPRIATE OR EXCESSIVE RISK THAT IS LIKELY TO HAVE A MATERIAL ADVERSE EFFECT ON OUR COMPANY. | 03 STANDARDIZED EQUITY GRANT TIMING WE GENERALLY GRANT EQUITY AWARDS ON THE SECOND TRADING DAY FOLLOWING THE ISSUANCE OF OUR EARNINGS RELEASE FOR A COMPLETED FISCAL QUARTER. | 04 INDEPENDENT COMPENSATION CONSULTANT OUR COMPENSATION AND ORGANIZATION COMMITTEE ENGAGES AN INDEPENDENT COMPENSATION CONSULTANT TO ASSIST THE COMMITTEE WITH DETERMINING COMPENSATION FOR OUR NAMED EXECUTIVE OFFICERS AND TO PROVIDE THE COMMITTEE WITH MARKET DATA AND GUIDANCE ON BEST PRACTICES. | | COMPENSATION POLICIES AND PRACTICES | | 08 STOCK OWNERSHIP GUIDELINES WE MAINTAIN STOCK OWNERSHIP GUIDELINES WHICH REQUIRE OUR NAMED EXECUTIVE OFFICERS TO BENEFICIALLY OWN SHARES OF OUR COMMON STOCK. | | 05 NO HEDGING OR PLEDGING TRANSACTIONS OUR INSIDER TRADING POLICY PROHIBITS OUR DIRECTORS AND EXECUTIVE OFFICERS FROM PURCHASING OUR SECURITIES ON MARGIN, OR OTHERWISE PLEDGING OR HEDGING OUR SECURITIES. | | 07 MULTI-YEAR PERFORMANCE PERIODS THE ANNUAL EQUITY AWARDS GRANTED TO OUR NAMED EXECUTIVE OFFICERS VEST OR ARE EARNED OVER A MULTI-YEAR PERIOD. | 06 PERFORMANCE-BASED COMPENSATION OUR COMPENSATION PROGRAM IS DESIGNED SO THAT A SIGNIFICANT PORTION OF COMPENSATION IS “AT RISK” BASED ON CORPORATE PERFORMANCE, AS WELL AS EQUITY- BASED, ALIGNING THE INTERESTS OF OUR NAMED EXECUTIVE OFFICERS AND OUR STOCKHOLDERS. | |
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Use of Compensation Consultant and Market Comparisons In connection with the Compensation and Organization Committee’s review of our 20222023 executive compensation program, the Compensation and Organization Committee directly engaged Coda Advisors LLC (“Coda”) to act as its outside compensation consultant to perform a review of executive compensation, including a market benchmarking assessment. Coda assisted the Compensation and Organization Committee with evaluating our compensation philosophy and providing guidance in administering our compensation program. Coda does not provide any other services to the Company. The Compensation and Organization Committee has determined that the work of Coda has not raised any conflict of interest. The Compensation and Organization Committee reviewed a report prepared by Coda reflecting a benchmarking review of our executive compensation program, including base salary, cash incentive and equity award levels for our executives, compared to competitive practice for companies in related businesses of similar size and market value. TheIn connection with making 2023 executive compensation determinations, the competitive compensation data was analyzed for a 17-companyan 18-company peer group of publicly traded medical device and technology companies using the most recent annual meeting proxy statements, annual reports and 8-K filings. The 1718 companies included in the peer group were: | | | | | | | | ● Antares Pharma,AngioDynamics, Inc.
| | ● MiMedx Group, Inc.Nevro Corp.
| | | ● Nevro Corp.Outset Medical, Inc.
| | | ● SeaSpine Holdings Corp.SI-BONE, Inc.
| | ● Intersect ENT,iRhythm Technologies, Inc.
| | | ● iRhythm Technologies,LeMaitre Vascular, Inc.
| | ● Cardiovascular Systems, Inc. | ● LeMaitre Vascular,MiMedx Group, Inc.
| ●Zynex, Inc.
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Although the Compensation and Organization Committee does not rely solely on benchmarking to determine any element of compensation or overall compensation, the Compensation and Organization Committee does believe that compensation data is important to the competitive positioning of the Company’s compensation levels. The Committee utilized this data to assess whether our executive compensation falls within a competitive range against industry norms. For 2022,2023, the Committee generally targeted the 50th percentile of our peer group for benchmarking purposes. Executive Compensation Components and 20222023 Determinations Our executive compensation program in 20222023 consisted of base salary, cash incentive bonuses, long-term incentive compensation in the form of performance stock units (“PSUs”) and RSUs, and a broad-based benefits program. We have not adopted any formal guidelines for allocating total compensation between long-term and short-term compensation, cash compensation and non-cash compensation, or among different forms of non-cash compensation. The Compensation and Organization Committee considers a number of factors in setting compensation for our executive officers, including Company performance, as well as the executive’s performance, experience and responsibilities, and the compensation of executive officers in similar positions at comparable companies.
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Base Salary Our named executive officers receive a base salary to compensate them for the satisfactory performance of duties to our Company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. Base salaries for our named executive officers have generally been set at levels deemed necessary to attract and retain individuals with superior talent. Base salaries for 20222023 for the named executive officers were set based on market competitiveness utilizing the compensation data of the peer group provided by the Compensation and Organization Committee’s compensation consultant. In December 2021,2022, the Compensation and Organization Committee approved increases for each named executive officer at the time, as shown below, effective January 1, 2022,2023, based on its review of the base salaries of executives in similar positions at the companies in our peer group. In connection with the hiring and appointment of Ms. Birkemeyer as Chief Financial Officer effective March 20, 2023, and Ms. Ferstler as Senior Vice President, Sales effective July 31, 2023, the Compensation and Organization Committee established their annual base salaries, as shown below, based on its review of the base salaries of executives in similar positions at the companies in our peer group. The following table sets forth the annual base salary of each of the named executive officers for 2022,2023, as well as the percentage increase over 20212022 base salary amounts: | | | | | | | | | | Name | | 2022 Base Salary | | 2021 Base Salary | | Percentage Increase | Daniel Reuvers | | $ | 625,000 | | $ | 572,000 | | 9.3 | % | Brent Moen | | $ | 411,000 | | $ | 397,000 | | 3.5 | % | Kristie Burns | | $ | 362,000 | | $ | 350,000 | | 3.4 | % | Eric Pauls | | $ | 340,000 | | $ | 325,000 | | 4.6 | % |
| | | | | | | | | | Name | | 2023 Base Salary | | 2022 Base Salary | | Percentage Increase | Daniel L. Reuvers | | $ | 650,000 | | $ | 625,000 | | 4.0 | % | Elaine M. Birkemeyer | | $ | 400,000 | | | N/A | | N/A | | Kristie T. Burns | | $ | 376,000 | | $ | 362,000 | | 3.9 | % | Sherri L. Ferstler | | $ | 340,000 | | | N/A | | N/A | |
Cash Incentive Compensation Our Compensation and Organization Committee has adopted a Management Incentive Plan (the “MIP”) pursuant to which annual cash incentive opportunities may be provided to our executive officers and other employees. The MIP provides that any of our employees is eligible to participate, and that the Compensation and Organization Committee will designate which employees will participate in the MIP and be granted an award for each calendar year performance period. When an award is made, the Compensation and Organization Committee will specify the terms and conditions of the award, which will include the performance goals and period under which the award may be earned. The performance measures specified in the MIP involve a variety of financial and operational measures, and performance goals based on these measures may relate to Company, subsidiary, business unit or individual performance. In connection with establishing or applying the performance goals applicable to any performance period, the Compensation and Organization Committee may adjust the performance goals or the performance measures on which they are based to equitably reflect, in the Compensation and Organization Committee’s judgment, the impact of events during the performance period that are unusual in nature or infrequently occurring (such as acquisitions, divestitures, restructuring activities or asset write-downs), changes in applicable tax laws or accounting principles, equity restructurings, reorganizations or other changes in corporate capitalization. Following the completion of each performance period, the Compensation and Organization 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 Compensation and Organization Committee retains the discretion, based on factors it deems relevant, to increase or decrease (including to zero) the amount of an award that | | | | 34 | Tactile Systems Technology, Inc. |
would otherwise be payable to any participant based on attainment of applicable performance goals. The amount of any award determined by the Compensation and Organization Committee to be payable will be paid to the participant in a lump sum cash payment no later than March 15 of the calendar year immediately following the applicable
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performance period. A participant must continue to be employed by us on the date of payment to receive payment of an award under the MIP. In January 2022,March 2023, the Compensation and Organization Committee, pursuant to the MIP and with respect to the 20222023 performance period, selected the applicable performance measures, specified the performance goals based on those performance measures, and specified the method for calculating the amount payable to our named executive officers if and to the extent the performance goals are satisfied. As in the prior year, the Committee selected revenue and net income before interest, taxes, depreciation and amortization, stock-based compensation expense and other adjustments (“Adjusted EBITDA”) as the performance measures, which are among the performance measures set forth in the MIP. Target bonus amounts for these named executive officers were split 80%65% based on our achievement of 20222023 revenue goals and 20%35% based on our achievement of 20222023 Adjusted EBITDA goals. The following payout levels associated with the degree to which the revenue and Adjusted EBITDA goals were attained for 20222023 were as follows: | | | | | | | | | | | | | | | Revenue (In millions) | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | Results | | $219.9 | | $248.7 | | $272.7 | | | $249.7 | | $273.7 | | $297.7 | | Percentage Payout Level | | 50% | | 100% | | 150% | | | 50% | | 100% | | 150% | | | | | | | | | | | | | | | | | Adjusted EBITDA (In millions) | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | Results | | $15.3 | | $17.1 | | $18.6 | | | $22.4 | | $27.4 | | $32.4 | | Percentage Payout Level | | 50% | | 100% | | 150% | | | 50% | | 100% | | 150% | |
The Compensation and Organization Committee provided that payout levels would be interpolated for results between the threshold and maximum levels. In January 2022,March 2023, the Compensation and Organization Committee also established the target amounts to which the resulting percentage payout level would be applied. The target dollar amount as a percentage of base salary for each participating named executive officer at the time was: | | | | Name | | Target Dollar Amount as a Percentage of Base Salary | | Daniel L. Reuvers | | 90%
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| Brent Moen
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| Eric Pauls
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With respect to Ms. Birkemeyer, the Compensation and Organization Committee established the target amount of her 2023 bonus at 55% of her base salary prorated for the time she served in her role in 2023, which was from March 20, 2023 through December 31, 2023. With respect to Ms. Ferstler, the Compensation and Organization Committee established the target amount of her 2023 bonus at 50% of her base salary prorated for the time she served in her role in 2023, which was from July 31, 2023 through December 31, 2023, but with a minimum guarantee of $85,000. The MIP for 20222023 also provided that if the aggregate amount to be paid to all employees of the Company under the MIP for 20222023 would cause the Company’s Adjusted EBITDA for 20222023 to fall below $15.3$22.4 million, the Company would reduce the amounts paid to all employees on a pro rata basis based on each employee’s potential bonus award payout amount such that the aggregate amount to be paid to all employees of the Company under the MIP for 20222023 would not cause the Company’s Adjusted EBITDA to fall below $15.3$22.4 million. OnIn February 25, 2023,2024, our Compensation and Organization Committee determined the degree to which the 20222023 revenue and Adjusted EBITDA goals were attained, and the resulting payout level relative to the target amount for each metric. For 2022,2023, revenue was $246.8$274.4 million, and therefore the Committee determined that the resulting percentage payout level relative to the target amount for that metric was 96%101.8%. For 2022,2023, Adjusted EBITDA was $18.3$29.7 million, and therefore
the Committee determined that the resulting percentage payout level relative to the target amount for that metric was 140%122.0%. Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendix A to this Proxy Statement for a reconciliation of this non-GAAP financial measure to the corresponding GAAP measure. The weightings applicable to each of the revenue metric (80%(65%) and the Adjusted EBITDA metric (20%(35%) were then applied to the percentage payout level for each metric, resulting in a weighted payout percentage of 104.8%109.0% of the target dollar amount. The Committee did not exercise any discretion to increase or decrease the amounts payable pursuant to the MIP for 20222023 as calculated pursuant to the terms as described above. As a result, based on the results as applied to the MIP for 20222023 as described above, the Compensation and Organization Committee’s approval resulted in the payment of the following amounts to our named executive officers under the MIP for 2022:2023: | | | | | Name | | | 2022 MIP Payment | | Daniel Reuvers | | $ | 589,500 | | Brent Moen | | $ | 236,900 | | Kristie Burns | | $ | 170,719 | | Eric Pauls | | $ | 160,344 | |
| | | | | Name | | | 2023 MIP Payment | | Daniel L. Reuvers | | $ | 708,500 | | Elaine M. Birkemeyer | | $ | 187,898 | | Kristie T. Burns | | $ | 204,920 | | Sherri L. Ferstler(1) | | $ | 77,674 | |
(1) | As noted above, Ms. Ferstler had a minimum guaranteed 2023 bonus amount of $85,000, and therefore received an additional bonus payment of $7,326. |
Equity-Based Compensation Equity Awards Granted in 20222023 With respect to the 20222023 annual equity awards to the named executive officers, the Compensation and Organization Committee reviewed various factors, including the total compensation package of our executives, its focus on pay for performance and its compensation consultant’s recommendation to provide a mix of equity-based compensation for 2022.2023. The Compensation and Organization Committee determined to continue to grant RSUs and PSUs to our executive officers but no longer to grant stock options.as the forms of equity compensation awards. The Compensation and Organization Committee believes that this mix emphasizes performance, further aligning with our stockholders’ interests, and promotes retention. The Compensation and Organization Committee determined that the mix of RSUs and PSUs would be 50% RSUs and 50% PSUs for Mr. Reuvers and 60% RSUs and 40% PSUs for the other named executive officers. In February 2022,2023, under our 2016 Equity Incentive Plan (the “2016 Plan”), the Compensation and Organization Committee approved the grant of RSUs and PSUs (the “2022“2023 PSUs”) to our then named executive officers, as the long-term incentive component of our compensation program. TheFor Mr. Reuvers and Ms. Burns, the RSUs and 20222023 PSUs had an effective grant date of February 24, 2022,22, 2023, which was the second trading day following the issuance of our earnings release for the fourth quarter and full year 2021. The number2022. In connection with the appointment of RSUs and the target number of 2022 PSUs granted to our named executive officers in February 2022 wereMs. Birkemeyer as follows:
| | | | | | Name | | Restricted Stock Units (#) | | Target Performance Stock Units (#) | Daniel Reuvers | | 53,937 | | 53,937 | | Brent Moen | | 29,126 | | 19,417 | | Kristie Burns | | 16,181 | | 10,787 | | Eric Pauls | | 12,944 | | 8,629 | |
The RSUs granted to our named executive officers in 2022 will vest one-third on each of the first three anniversaries of the grant date, subject to continued service on each vesting date. The 2022 PSUs will be earned if and to the extentChief
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Financial Officer, the Compensation and Organization Committee approved the grant of the RSUs and the 2023 PSUs to her as her annual grant of equity awards. The number of RSUs and the target number of 2023 PSUs granted to our named executive officers in 2023 as part of their annual grants were as follows: | | | | | | Name | | Restricted Stock Units (#) | | Target Performance Stock Units (#) | Daniel L. Reuvers | | 52,613 | | 52,613 | | Elaine M. Birkemeyer | | 17,155 | | 11,436 | | Kristie T. Burns | | 16,724 | | 11,149 | |
In addition, in connection with Ms. Birkemeyer’s appointment, the Compensation and Organization Committee approved a sign-on grant of 11,913 RSUs to her. The RSUs granted to Ms. Birkemeyer in 2023 had an effective grant date of May 10, 2023, which was the second trading day following the issuance of our earnings release for the first quarter of 2023. In connection with the appointment of Ms. Ferstler as Senior Vice President, Sales, the Compensation and Organization Committee approved a sign-on grant of 18,701 RSUs to her. The RSUs granted to Ms. Ferstler in 2023 had an effective grant date of August 9, 2023, which was the second trading day following the issuance of our earnings release for the second quarter of 2023. The RSUs granted to our named executive officers in 2023 will vest one-third on each of the first three anniversaries of the grant date, subject to continued service on each vesting date. The 2023 PSUs have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue growth and Adjusted EBITDA marginas a percentage of revenue (“Adjusted EBITDA Margin”) are achieved in each of 2023 and 2024 (ranging from 25% to 175% of target), and one-third will be earned if and to the extent performance goals based on revenue growth and Adjusted EBITDA growth are achieved.achieved in 2025. The revenue growth performance factor will be weighted at 80%65% and the Adjusted EBITDA marginMargin performance factor will be weighted at 20%35%. Participants will have the ability to earn between 50% of the target number of 2022 PSUs for achieving threshold performance and 150% of the target number of 2022 PSUs for achieving maximum performance. If and to the extent any 20222023 PSUs are determined by the Compensation and Organization Committee to be earned based on the level of achievement of the performance goals, one-third of the earned 20222023 PSUs with respect to the 2023 performance year and the earned 2023 PSUs with respect to the 2024 performance year will vest on the date on which the Committee certifies the number of 2022 PSUs earned with respect to the 2024 performance year, and the remaining two-thirds ofearned 2023 PSUs with respect to the earned 2022 PSUs2025 performance year will vest on the first anniversaryon the date on which the Committee certifies the number of that certification date.2023 PSUs earned with respect to the 2025 performance year. Earned PSU Awards for 20222023 Performance Period 2022 PSUs On February 25, 2023,24, 2024, the Compensation and Organization Committee determined the degree to which the performance goals under the PSUs granted to the named executive officers in 20212022 (the “2021“2022 PSUs”) were satisfied, and the resulting number of PSUs that had been earned during the performance period of 20222023 under the terms of the 20212022 PSUs. The 20212022 PSUs provided that they would have been earned if and to the extent the performance goals based on revenue change and Adjusted EBITDA Margin in 20222023 were achieved, where the revenue performance factor was weighted at 65%80% and the Adjusted EBITDA Margin performance factor was weighted at 35%20%. The 20212022 PSU performance goals based on revenue change and Adjusted EBITDA Margin achieved in 20222023 were as follows: | | | | | Performance Level | Revenue (65% Weighting) | Revenue Payout Factor | Adjusted EBITDA (35% Weighting) | Adjusted EBITDA Payout Factor | Revenue Change (2023 Revenue Compared to 2022 Revenue) (80% Weighting) | Revenue Change Payout Factor | 2023 Adjusted EBITDA Margin (20% Weighting) | Adjusted EBITDA Margin Payout Factor | Threshold | $231.6 million | 50% | $30.5 million | 50% | 102% | 50% | 9.5% | 50% | Target | $272.5 million | 100% | $40.5 million | 100% | 120% | 100% | 10.5% | 100% | Maximum | $313.4 million | 150% | $50.5 million | 150% | 137% | 150% | 11.5% | 150% |
The 20212022 PSUs provided that if the revenue or Adjusted EBITDA Margin amount achieved by the Company during 20222023 was between performance levels specified in the table, the corresponding payout factor would be determined by linear interpolation. Further, if actual results are below the threshold performance level specified in the table, the corresponding payout factor will be zero. On February 25, 2023,24, 2024, our Compensation and Organization Committee determined the degree to which the 20222023 revenue and Adjusted EBITDA Margin goals under the 20212022 PSUs were attained, and the resulting payout level relative to the target amount for each metric. For 2022,2023, revenue was $246.8$274.4 million, and therefore the Committee determined that the resulting payout factor relative to the target amount for the revenue change metric was 75.5%. For 2023, Adjusted EBITDA Margin was 10.8%, and therefore the Committee determined that the resulting payout factor relative to the target amount for that metric was 68.6%114.4%. For 2022, Adjusted EBITDA was $18.3 million, and therefore the Committee determined that the resulting payout factor relative to the target amount for that metric was 0%. Adjusted EBITDAMargin is a non-GAAP financial measure. Refer to Appendix A to this Proxy Statement for a reconciliation of this non-GAAP financial measure to the corresponding GAAP measure. The weightings applicable to each of the revenue change metric (65%(80%) and the Adjusted EBITDA Margin metric (35%(20%) were then applied to the percentage payout level for each metric, resulting in a weighted payout percentage of 44.6%83.3% of the target number of PSUs.
Based on these determinations, the Compensation and Organization Committee approved the following number of PSUs earned for each named executive officer pursuant to the 2021that held 2022 PSUs: | | | | | Name | | Target Number of 2021 PSUs | | Actual Number of 2021 PSUs Earned | Daniel Reuvers | | 14,534 | | 6,482 | Brent A. Moen | | 5,167 | | 2,304 | Kristie Burns | | 2,156 | | 962 | Eric Pauls | | 1,334 | | 595 |
| | | | | Name | | Target Number of 2022 PSUs | | Actual Number of 2022 PSUs Earned | Daniel L. Reuvers | | 53,937 | | 44,930 | Kristie T. Burns | | 10,787 | | 8,986 |
One-third of the earned PSUs shown in the table above vested on February 25, 2023,24, 2024, the date on which the Committee certified the number of PSUs earned, and the remaining two-thirds of the earned PSUs will vest on the first anniversary of that certification date. | | | | 38 | Tactile Systems Technology, Inc. |
2023 PSUs – 2023 Performance Year On February 24, 2024, the Compensation and Organization Committee determined the degree to which the performance goals for the 2023 performance year under the 2023 PSUs were satisfied, and the resulting number of PSUs that had been earned with respect to the 2023 performance year under the terms of the 2023 PSUs. The 2023 PSUs provide that one-third of the target number of 2023 PSUs would have been earned if and to the extent the performance goals based on revenue change and Adjusted EBITDA Margin in 2023 were achieved, where the revenue change performance factor was weighted at 65% and the Adjusted EBITDA Margin performance factor was weighted at 35%. The 2023 PSU performance goals based on revenue and Adjusted EBITDA Margin achieved in 2023 were as follows: | | | | | Performance Level | Revenue Change (2023 Revenue Compared to 2022 Revenue) (65% Weighting) | Revenue Change Payout Factor | 2023 Adjusted EBITDA Margin (35% Weighting) | Adjusted EBITDA Margin Payout Factor | Threshold | 105% | 25% | 8.25% | 25% | Target | 120% | 100% | 10.5% | 100% | Maximum | 135% | 175% | 12.75% | 175% |
The 2023 PSUs provided that if the revenue change or Adjusted EBITDA Margin amount achieved by the Company during 2023 was between performance levels specified in the table, the corresponding payout factor would be determined by linear interpolation. Further, if actual results are below the threshold performance level specified in the table, the corresponding payout factor will be zero. On February 24, 2024, our Compensation and Organization Committee determined the degree to which the 2023 revenue change and 2023 Adjusted EBITDA Margin goals under the 2023 PSUs were attained, and the resulting payout level relative to the target amount for each metric. For 2023, revenue was $274.4 million, and therefore the Committee determined that the resulting payout factor relative to the target amount for the revenue change metric was 56.0%. For 2023, Adjusted EBITDA Margin was 10.8%, and therefore the Committee determined that the resulting payout factor relative to the target amount for that metric was 109.6%. Adjusted EBITDA Margin is a non-GAAP financial measure. Refer to Appendix A to this Proxy Statement for a reconciliation of this non-GAAP financial measure to the corresponding GAAP measure. The weightings applicable to each of the revenue change metric (65%) and the Adjusted EBITDA Margin metric (35%) were then applied to the percentage payout level for each metric, resulting in a weighted payout percentage of 74.7% of the target number of PSUs for the 2023 performance year. The Compensation and Organization Committee approved the following number of PSUs earned for each named executive officer who holds 2023 PSUs pursuant to the 2023 performance year under 2023 PSUs: | | | | | Name | | Target Number of 2023 PSUs for the 2023 Performance Year | | Actual Number of 2023 PSUs Earned for the 2023 Performance Year | Daniel L. Reuvers | | 17,537 | | 13,100 | Elaine M. Birkemeyer | | 3,812 | | 2,848 | Kristie T. Burns | | 3,716 | | 2,776 |
The earned PSUs with respect to the 2023 performance year shown in the table above will vest on the date on which the Committee certifies the number of 2023 PSUs earned with respect to the 2024 performance year. Executive Severance Arrangements On November 1, 2018, the Compensation and Organization Committee of our Board of Directors approved and adopted the Tactile Systems Technology, Inc. Executive Employee Severance Plan (the “Severance Plan”). Employees who are designated by our Board of Directors or a committee thereof are eligible to be participants in the Severance Plan. Each of Messrs.Mr. Reuvers and PaulsMses. Birkemeyer, Burns and Ms. Burns is, and Mr. Moen was, a participantFerstler are current participants in the Severance Plan. In connection with their designation as a participant in the Severance Plan, each of the participants entered into a Confidentiality, Assignment of Intellectual Property and Restrictive Covenants Agreement (each, a “Restrictive Covenants Agreement”) with us. See “Potential Payments Upon Termination or Change in Control – Severance Plan” for a description of the terms of the Severance Plan. The Compensation and Organization Committee adopted the Severance Plan in lieu of the employment agreements to provide for standardization of the severance terms for all of our executive officers. Retirement, Health, Welfare and Additional Benefits Our named executive officers are eligible to participate in our employee benefit plans and programs, including medical and dental benefits, flexible spending accounts and short- and long-term disability and life insurance, to the same extent as our other full-time employees, subject to the terms and eligibility requirements of those plans. Our named executive officers are also eligible to participate in a tax-qualified 401(k) defined contribution plan to the same extent as all of our other full-time employees. Our 401(k) plan permits, but does not require, the Company to make discretionary contributions. The Company made contributions to named executive officers under the 401(k) plan in 2022,2023, as shown in the ”2022”2023 Summary Compensation Table.” We have an Employee Stock Purchase Plan (“ESPP”) in which all of our employees who have been employed for at least 60 days are eligible to participate. The ESPP permits employees to acquire shares of our common stock through periodic payroll deductions of up to 15% of their eligible compensation, subject to certain limitations. The purchase price of our common stock acquired on each purchase date under the ESPP will be no less than 85% of the lower of the closing market price per share of our common stock on (i) the first trading day of the applicable purchase period or (ii) the last trading day of the applicable purchase period. Clawback Policy Our BoardWe previously maintained a clawback policy covering recovery of Directors has established ancertain incentive compensation received by executive officers under certain circumstances. In light of the incentive compensation recovery policy, orrules and listing standards that were finalized in 2023, effective October 2, 2023, we adopted a revised clawback policy pursuant to, and in compliance with, Rule 10D-1 of the Exchange Act, as amended, SEC regulations promulgated thereunder, and applicable Nasdaq listing standards (the "Required Clawback Policy"), as well as a supplemental clawback policy consistent with our prior clawback policy (the "Supplemental Clawback Policy").
The Required Clawback Policy applies to all incentive-based compensation, which requires reimbursementis any compensation that is granted, earned, or forfeiturevested based wholly or in part upon the attainment of alla financial reporting measure, received by officers of the Company, as defined under Rule 16a-1(f) of the Exchange Act (“executive officers”). The Required Clawback Policy applies in the case of an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or a portion of any incentive compensation awarded to an executive when (i) thethat would result
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Company is required to preparein a material misstatement if the error were corrected in the current period or left uncorrected in the current period. The Required Clawback Policy provides that promptly following such an accounting restatement, due to material noncompliance with financial reporting requirementsthe Compensation and Organization Committee will determine the executive’s award, vesting, or paymentamount of an awardthe erroneously awarded compensation, which is the excess of the amount of incentive-based compensation received by current and former executive officers during the three completed fiscal years immediately preceding the required restatement date over the amount of incentive-based compensation that otherwise would have been smaller givenreceived had it been determined based on the restated financial informationamounts. The Company will provide each such executive officer with a written notice of such amount and a demand for repayment or return. If such repayment or return is not made within a reasonable time, the award vestingRequired Clawback Policy provides that the Company will recover the erroneously awarded compensation in a reasonable and prompt manner using any lawful method, subject to limited exceptions as permitted by Nasdaq listing standards.
The Supplemental Clawback Policy provides that if any employee with the title of senior vice president or payment occurred or was received during the three-year period preceding the date on whichabove (including executive officers) of the Company is requireddetermined by the Compensation and Organization Committee to prepare the restatement, or (ii) there ishave engaged in misconduct resulting in either a violation of the law or of Company policy that has caused significant financial or reputational harm to the Company, and either the executiveindividual committed the misconduct directly or failed in his or her responsibility to manage or monitor the applicable conduct or risks. In October 2022,risks, then the SEC adopted final rules under the Dodd-Frank Act directing national securities exchanges to establish listing standards related to clawback policies. Nasdaq recently posted proposed listing standards requiring listed companies to adopt compensation recoupment policies containing certain provisions. The Compensation and Organization Committee will make appropriate modificationsmay determine to require recovery from such individual of any or all incentive compensation (which includes any annual or long-term incentive compensation, including equity-based compensation) that was awarded, vested or paid or is scheduled to be vested or paid during any fiscal year in which the Company’s clawback policy to comply with the new listing standards once they are finalized.misconduct occurred.
Compensation Risk Assessment The Compensation and Organization Committee has reviewed the concept of risk as it relates to our compensation programs and believes that risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. The Compensation and Organization Committee believes that our compensation programs do not foster undue risk-taking, because they focus on performance of Company-wide annual goals that are aligned with the long-term interests of our stockholders and they include risk control and mitigation factors. Stock Ownership Guidelines Our Board of Directors has established Stock Ownership Guidelines applicable to our directors and executive officers. For a description of the provisions of the Guidelines applicable to our directors, see “Director Compensation.” Under the Guidelines, our Chief Executive Officer is expected to own shares of our common stock with a value at least equal to three times his annual base salary, and our other executive officers are expected to own shares of our common stock with a value at least equal to one times their annual base salaries. Shares owned directly and indirectly, as well as the full-value equity awards (such as RSUs) with only a time-based vesting condition, count toward the ownership level under the Guidelines, but shares subject to vested or unvested stock options and equity awards with a performance-based vesting condition do not count toward the ownership level under the Guidelines. The applicable ownership level is to be achieved by our executive officers within the later of December 9, 2026 or five years of when he or she becomes subject to the Guidelines. Until an executive officer has achieved the applicable ownership level, he or she must retain at least 50% of the “net profit shares” resulting from any stock option exercise or from the exercise, vesting or settlement of any other form of equity-based compensation award. “Net profit shares” refers to that portion of the number of shares subject to the exercise, vesting or settlement of an award that the officer would receive had he or she authorized us to withhold shares otherwise deliverable in order to satisfy any applicable exercise price or withholding taxes. The Compensation and Organization Committee is responsible for monitoring the application of the Guidelines. Each of our executive officers either complies with, or is making progress within the permitted time period to comply with, the stock ownership level applicable to him or her under the Guidelines. Prohibition on Pledging and Hedging Under the terms of our Insider Trading Policy, our executive officers and directors are prohibited from: pledging our stock; engaging in short sales of our stock; buying or selling put or call options or other derivative securities based on our stock; purchasing any financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in transactions that are designed to or have the effect of hedging or offsetting any decrease in the market value of our stock; and engaging in limit orders or other pre-arranged transactions that execute automatically, except for same-day limit orders and approved 10b5-1 plans. Tax and Accounting Considerations Section 162(m) of the Internal Revenue Code (the “Code”) generally disallows a tax deduction to public companies for compensation of more than $1 million paid in any taxable year to each “covered employee.” Although a previous exception to this limit for “performance-based” compensation has since been eliminated, the Compensation and Organization Committee continues to believe that a significant portion of our executives’ compensation should be tied to the Company’s performance and that stockholder interests are best served if its discretion and flexibility in structuring and awarding compensation is not restricted, even though some compensation awards may have resulted in the past, and are expected to result in the future, in non-deductible compensation expenses to the Company. Also theThe Compensation and Organization Committee also takes into account whether components of our compensation program may be subject to the penalty tax associated with Section 409A of the Code, and aims to structure the elements of compensation to be compliant with or exempt from Section 409A to avoid such potential adverse tax consequences.
Compensation and Organization Committee Report The Compensation and Organization Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation and Organization Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.2023. | | | | | THE COMPENSATION AND ORGANIZATION COMMITTEE | | | Raymond O. Huggenberger, Chair Sheri Dodd D. Brent Shafer Carmen B. Volkart |
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20222023 Summary Compensation Table The following table provides information regarding the compensation of our named executive officers for 2023, 2022 2021 and 2020:2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary(1) | | Bonus(2) | | Stock Awards(3) | | Option Awards(4) | | Non-Equity Incentive Plan Compensation(5) | | All Other Compensation(6) | | Total | | | | Salary(1) | | Bonus(2) | | Stock Awards(3) | | Option Awards(4) | | Non-Equity Incentive Plan Compensation(5) | | All Other Compensation(6) | | Total | Name and Principal Position | | Year | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | Year | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | Daniel Reuvers (7) | | 2022 | | 625,000 | | — | | 1,999,984 | | — | | 589,500 | | 6,100 | | 3,220,584 | | Daniel L. Reuvers | | | 2023 | | 650,000 | | — | | 1,509,993 | | — | | 708,500 | | 6,100 | | 2,874,593 | Chief Executive Officer | | 2021 | | 571,154 | | — | | 1,124,931 | | 374,999 | | — | | 5,800 | | 2,076,884 | | 2022 | | 625,000 | | — | | 1,999,984 | | — | | 589,500 | | 6,100 | | 3,220,584 | | | 2020 | | 296,154 | | 251,731 | | 708,976 | | 709,009 | | — | | 59,108 | | 2,024,978 | | 2021 | | 571,154 | | — | | 1,124,931 | | 374,999 | | — | | 5,800 | | 2,076,884 | Brent Moen | | 2022 | | 411,000 | | — | | 899,987 | | — | | 236,900 | | 6,100 | | 1,553,987 | | Elaine M. Birkemeyer (7) | | | 2023 | | 315,385 | | — | | 849,976 | | — | | 187,898 | | — | | 1,353,259 | Chief Financial Officer | | 2021 | | 396,539 | | — | | 533,234 | | 266,659 | | — | | 5,800 | | 1,202,232 | | | | | | | | | | | | | | | | | | | 2020 | | 383,977 | | 144,375 | | 933,240 | | 266,655 | | — | | — | | 1,728,247 | | | | | | | | | | | | | | | | | Kristie Burns (7) | | 2022 | | 362,000 | | — | | 499,987 | | — | | 170,719 | | 6,100 | | 1,038,806 | | Kristie T. Burns (7) | | | 2023 | | 376,000 | | — | | 399,978 | | — | | 204,920 | | 6,100 | | 986,998 | SVP, Marketing and Clinical Affairs | | 2021 | | 262,500 | | — | | 483,276 | | 116,653 | | — | | 7,269 | | 869,698 | | 2022 | | 362,000 | | — | | 499,987 | | — | | 170,719 | | 6,100 | | 1,038,806 | Eric Pauls (7) | | 2022 | | 340,000 | | — | | 399,964 | | — | | 160,344 | | 6,100 | | 906,408 | | | | | 2021 | | 262,500 | | — | | 483,276 | | 116,653 | | — | | 7,269 | | 869,698 | Sherri L. Ferstler (7) | | | 2023 | | 143,846 | | 7,326 | | 339,984 | | — | | 77,674 | | 3,923 | | 572,753 | SVP, Sales | | 2021 | | 206,250 | | 75,000 | | 394,335 | | 72,204 | | — | | 5,625 | | 753,414 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Brent A. Moen (8) | | | 2023 | | 110,654 | | — | | — | | — | | — | | — | | 110,654 | Former Chief Financial Officer | | | 2022 | | 411,000 | | — | | 899,987 | | — | | 236,900 | | 6,100 | | 1,553,987 | | | | 2021 | | 396,539 | | — | | 533,234 | | 266,659 | | — | | 5,800 | | 1,202,232 |
(1) | Represents base salary earned during the year indicated. |
(2) | Represents: (a)Represents, for Mr. Moen, for 2020, a payoutMs. Ferster in 2023, the excess of 75% of target payout; (b) for Mr. Reuvers, for 2020, athe cash bonus amount equal to 85% of his base salary earned during 2020,$85,000 as provided for in hisher offer letter;letter as a guaranteed bonus payment over the amount she earned and (c) for Mr. Pauls, for 2021, a cash bonus amount of $75,000was paid as provided for in his offer letter.shown under the “Non-Equity Incentive Plan Compensation” column. |
(3) | Represents the aggregate grant date fair value of RSU and PSU awards granted during the given year, computed in accordance with FASB ASC Topic 718, which for RSUs was equal to the closing price of a share of our common stock on the date of grant, multiplied by the number of RSUs in the grant, and for PSUs was equal to the closing price of a share of our common stock on the date of grant, multiplied by the number of shares that would be earned based on the probable outcome of the applicable performance conditions. |
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The following table presents the grant date fair value of the PSUs included in this column, and the grant date fair value of the PSUs assuming that the highest level of performance conditions would be achieved, and the grant date fair value of the RSUs included in this column: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 PSUs | | 2022 RSUs | | 2021 PSUs | | 2021 RSUs | | 2020 PSUs | | 2020 RSUs | | | 2023 PSUs | | 2023 RSUs | | 2022 PSUs | | 2022 RSUs | | 2021 PSUs | | 2021 RSUs | | | | Grant Date Fair Value (Based on Probable Outcome) | | Grant Date Fair Value (Based on Maximum Performance) | | Grant Date Fair Value | | Grant Date Fair Value (Based on Probable Outcome) | | Grant Date Fair Value (Based on Maximum Performance) | | Grant Date Fair Value | | Grant Date Fair Value (Based on Probable Outcome) | | Grant Date Fair Value (Based on Maximum Performance) | | Grant Date Fair Value | | | Grant Date Fair Value (Based on Probable Outcome) | | Grant Date Fair Value (Based on Maximum Performance) | | Grant Date Fair Value | | Grant Date Fair Value (Based on Probable Outcome) | | Grant Date Fair Value (Based on Maximum Performance) | | Grant Date Fair Value | | Grant Date Fair Value (Based on Probable Outcome) | | Grant Date Fair Value (Based on Maximum Performance) | | Grant Date Fair Value | | Name | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | Daniel Reuvers | | 999,992 | | 1,499,979 | | 999,992 | | 749,954 | | 1,124,932 | | 374,977 | | — | | — | | 708,976 | | | Brent Moen | | 359,991 | | 539,978 | | 539,996 | | 266,617 | | 399,900 | | 266,617 | | 266,618 | | 399,903 | | 666,622 | | | Kristie Burns | | 199,991 | | 299,977 | | 299,996 | | 116,640 | | 174,959 | | 366,636 | | — | | — | | — | | | Eric Pauls | | 159,982 | | 239,963 | | 239,982 | | 72,169 | | 108,254 | | 322,166 | | — | | — | | — | | | Daniel L. Reuvers | | | 754,997 | | 1,321,233 | | 754,997 | | 999,992 | | 1,499,979 | | 999,992 | | 749,954 | | 1,124,932 | | 374,977 | | Elaine M. Birkemeyer | | | 239,984 | | 419,973 | | 609,992 | | — | | — | | — | | — | | — | | — | | Kristie T. Burns | | | 159,988 | | 279,969 | | 239,989 | | 199,991 | | 299,977 | | 299,996 | | 116,640 | | 174,959 | | 366,636 | | Sherri L. Ferstler | | | — | | — | | 339,984 | | — | | — | | — | | — | | — | | — | |
(4) | Represents the aggregate grant date fair value of the option awards granted during the given year, computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a description of the assumptions used in valuing these awards, see Note 13 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.2023. |
(5) | Represents awards earned under the applicable bonus plan during the given year, related to performance objectives as to which the outcomes were substantially uncertain at the time the performance objectives were established. These amounts were earned related to performance in the year shown but paid in the following year. For additional information regarding our bonus programs, see the section titled “Executive Compensation Components and 20222023 Determinations—Cash Incentive Compensation” above. |
(6) | Represents: (a)Represents for each named executive officer for 2023, 2022 and 2021, the amount to be paid by the Company to match, in part, the contributions of each of them to their respective 401(K) plan account, and (b) for Mr. Reuvers in 2020, $50,000 in moving expenses and $9,108 in legal fees paid under the terms of his offer letter.account. |
(7) | Mr. ReuversMs. Birkemeyer joined the Company in June 2020,March 2023, Ms. Burns joined the Company in March 2021 and Mr. PaulsMs. Ferstler joined the Company in May 2021.July 2023. |
(8) | Mr. Moen retired from the Company in March 2023. |
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Grants of Plan-Based Awards in 20222023 The following table sets forth information regarding grants of plan-based awards to our named executive officers during 2022.2023. Mr. Moen did not receive any grants of plan-based awards in 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | Estimated Possible Payouts Under Equity Incentive Plan Awards | | | | | Name and Award Type | | Grant Date | | Date of Compensation Committee Approval | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | Grant Date Fair Value of Stock and Option Awards ($)(2) | | Grant Date | | Date of Compensation Committee Approval | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | Grant Date Fair Value of Stock and Option Awards ($)(2) | Daniel Reuvers | | | | | | | | | | | | | | | | | | | | | | Daniel L. Reuvers | | | | | | | | | | | | | | | | | | | | | | RSUs | | 2/24/2022 | | 1/20/2022 | | | | | | | | | | | | | | 53,937 | | 999,992 | | 2/22/2023 | | 2/19/2023 | | | | | | | | | | | | | | 52,613 | | 754,997 | PSUs | | 2/24/2022 | | 1/20/2022 | | | | | | | | 26,968 | | 53,937 | | 80,905 | | | | 999,992 | | 2/22/2023 | | 2/19/2023 | | | | | | | | 13,153 | | 52,613 | | 92,072 | | | | 754,997 | MIP | | | | 1/20/2022 | | 281,250 | | 562,500 | | 843,750 | | | | | | | | | | | | | | 3/7/2023 | | 325,000 | | 650,000 | | 975,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Brent Moen | | | | | | | | | | | | | | | | | | | | | | Elaine M. Birkemeyer | | | | | | | | | | | | | | | | | | | | | | RSUs | | 2/24/2022 | | 1/20/2022 | | | | | | | | | | | | | | 29,126 | | 539,996 | | 5/10/2023 | | 3/7/2023 | | | | | | | | | | | | | | 29,068 | | 609,992 | PSUs | | 2/24/2022 | | 1/20/2022 | | | | | | | | 9,708 | | 19,417 | | 29,125 | | | | 359,991 | | 5/10/2023 | | 3/7/2023 | | | | | | | | 2,859 | | 11,436 | | 20,013 | | | | 239,984 | MIP | | | | 1/20/2022 | | 113,025 | | 226,050 | | 339,075 | | | | | | | | | | | | | | 3/7/2023 | | 86,192 | | 172,384 | | 258,575 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Kristie Burns | | | | | | | | | | | | | | | | | | | | | | Kristie T. Burns | | | | | | | | | | | | | | | | | | | | | | RSUs | | 2/24/2022 | | 1/20/2022 | | | | | | | | | | | | | | 16,181 | | 299,996 | | 2/22/2023 | | 2/19/2023 | | | | | | | | | | | | | | 16,724 | | 239,989 | PSUs | | 2/24/2022 | | 1/20/2022 | | | | | | | | 5,393 | | 10,787 | | 16,180 | | | | 199,991 | | 2/22/2023 | | 2/19/2023 | | | | | | | | 2,787 | | 11,149 | | 19,510 | | | | 159,988 | MIP | | | | 1/20/2022 | | 81,450 | | 162,900 | | 244,350 | | | | | | | | | | | | | | 3/7/2023 | | 94,000 | | 188,000 | | 282,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Eric Pauls | | | | | | | | | | | | | | | | | | | | | | Sherri L. Ferstler | | | | | | | | | | | | | | | | | | | | | | RSUs | | 2/24/2022 | | 1/20/2022 | | | | | | | | | | | | | | 12,944 | | 239,982 | | 8/9/2023 | | 7/17/2023 | | | | | | | | | | | | | | 18,701 | | 339,984 | PSUs | | 2/24/2022 | | 1/20/2022 | | | | | | | | 4,314 | | 8,629 | | 12,943 | | | | 159,982 | | MIP | | | | 1/20/2022 | | 76,500 | | 153,000 | | 229,500 | | | | | | | | | | | | | | 7/17/2023 | | 35,630 | | 71,260 | | 106,890 | | | | | | | | | | |
(1) | Amounts shown in this column represent the potential cash payout amounts under the 20222023 MIP. The Actualactual cash bonus payout amounts approved by the Compensation and Organization Committee are disclosed in the Summary Compensation Table in the “Bonus”“Non-Equity Incentive Plan Compensation” column. |
(2) | Amounts represent the grant date fair value of the awards determined in accordance with FASB ASC Topic 718. Amounts related to PSUs represent the value at the grant date based upon the probable outcome of the performance conditions. |
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Outstanding Equity Awards at 20222023 Fiscal Year-End The following table sets forth certain information regarding equity awards that have been granted to our named executive officers and that were outstanding as of December 31, 2022:2023. Mr. Moen did not hold any outstanding equity awards as of December 31, 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Option Awards | | Stock Awards | | | Number of Securities Underlying Unexercised Options Exercisable | | Number of Securities Underlying Unexercised Options Unexercisable | | Option Exercise Price | | Option Expiration | | Number of Shares or Units of Stock That Have Not Vested | | Market Value of Shares or Units of Stock that Have Not Vested | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | Number of Securities Underlying Unexercised Options Exercisable | | Number of Securities Underlying Unexercised Options Unexercisable | | Option Exercise Price | | Option Expiration | | Number of Shares or Units of Stock That Have Not Vested | | Market Value of Shares or Units of Stock that Have Not Vested | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | Name | | (#) | | (#) | | ($) | | Date | | (#) | | ($)(1) | | (#) | | ($)(1) | | (#) | | (#) | | ($) | | Date | | (#) | | ($)(1) | | (#) | | ($)(1) | Daniel Reuvers | | 42,288 | | 8,737 | (2) | 36.50 | | 8/5/2027 | | | | | | | | | | | | 6,485 | | 12,971 | (3) | 51.60 | | 2/25/2028 | | | | | | | | | | | | | | | | | | | | 3,394 | (6) | 38,963 | | | | | | | | | | | | | | | | 4,845 | (7) | 55,621 | | | | | | | | | | | | | | | | 53,937 | (10) | 619,197 | | | | | | | | | | | | | | | | 4,321 | (11) | 49,605 | | | | | | | | | | | | | | | | | | | | 26,968 | (12) | 309,593 | | Brent Moen | | 12,006 | | — | | 62.99 | | 11/7/2025 | | | | | | | | | | Daniel L. Reuvers | | | 51,025 | | — | | 36.50 | | 8/5/2027 | | | | | | | | | | | 4,175 | | — | | 72.64 | | 3/4/2026 | | | | | | | | | | 12,970 | | 6,486 | (2) | 51.60 | | 2/25/2028 | | | | | | | | | | | 9,534 | | 4,769 | (4) | 50.41 | | 2/28/2027 | | | | | | | | | | | | | | | | | | 2,423 | (4) | 34,649 | | | | | | | 4,611 | | 9,224 | (3) | 51.60 | | 2/25/2028 | | | | | | | | | | | | | | | | | | 35,958 | (6) | 514,199 | | | | | | | | | | | | | | | 4,409 | (8) | 50,615 | | | | | | | | | | | | | | 52,613 | (7) | 752,366 | | | | | | | | | | | | | | | 3,445 | (7) | 39,549 | | | | | | | | | | | | | | 4,321 | (8) | 61,790 | | | | | | | | | | | | | | | 29,126 | (10) | 334,366 | | | | | | | | | | | | | | 29,953 | (9) | 428,333 | | | | | | | | | | | | | | | 1,536 | (11) | 17,633 | | | | | | | | | | | | | | 13,100 | (10) | 187,330 | | 8,769 | (11) | 125,392 | Elaine M. Birkemeyer | | | | | | | | | | | 29,068 | (12) | 415,672 | | | | | | | | | | | | | | | | | | | 9,708 | (12) | 111,448 | | | | | | | | | | 2,848 | (10) | 40,726 | | 1,906 | (11) | 27,256 | Kristie Burns | | 1,698 | | 3,396 | (5) | 54.10 | | 5/5/2028 | | | | | | | | | | Kristie T. Burns | | | 3,395 | | 1,699 | (3) | 54.10 | | 5/5/2028 | | | | | | | | | | | | | | | | | | | 4,519 | (9) | 51,878 | | | | | | | | | | | | | | 2,261 | (5) | 32,332 | | | | | | | | | | | | | | | 16,181 | (10) | 185,758 | | | | | | | | | | | | | | 10,788 | (6) | 154,268 | | | | | | | | | | | | | | | 642 | (11) | 7,370 | | | | | | | | | | | | | | 16,724 | (7) | 239,153 | | | | | | | | | | | | | | | | | | | 5,393 | (12) | 61,912 | | | | | | | | | | 642 | (8) | 9,181 | | | | | Eric Pauls | | 1,051 | | 2,102 | (5) | 54.10 | | 5/5/2028 | | | | | | | | | | | | | | | | | | | | 3,971 | (9) | 45,587 | | | | | | | | | | | | | | 5,991 | (9) | 85,667 | | | | | | | | | | | | | | | 12,944 | (10) | 148,597 | | | | | | | | | | | | | | 2,776 | (10) | 39,697 | | 1,858 | (11) | 26,569 | | | | | | | | | | | 397 | (11) | 4,558 | | | | | | | | | | | | | | | | | | | | 4,314 | (12) | 49,525 | | Sherri L. Ferstler | | | | | | | | | | | 18,701 | (13) | 267,424 | | | | |
(1) | Market value is calculated by multiplying the number of shares by $11.48,$14.30, the closing sale price per share of our common stock on the Nasdaq Global Market on December 30, 2022,29, 2023, the last trading day of 2022.2023. |
(2) | Represents options that vested on February 25, 2024. |
(3) | Represents options that vest on AugustMay 5, 2023,2024, subject to continued service. |
(4) | Represents RSUs that vested on February 25, 2024. |
(5) | Represents RSUs that vest on May 5, 2024, subject to continued service. |
(6) | Represents RSUs that vest one-half on February 24, 2024 and one-half on February 24, 2025, subject to continued service on theeach vesting date. |
(3)(7) | This option vests as follows:Represents RSUs that vest one-third of the shares vest on each of the first three anniversaries of the grant date of February 25, 2021,22, 2023, subject to continued service on each vesting date. |
(4)(8) | Represents options67% of the 2021 PSUs that were earned based on 2022 performance and which vested on February 28, 2023.25, 2024. |
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(5)(9) | This option vests as follows: one-thirdRepresents 67% of the shares2022 PSUs that were earned based on 2023 performance and which will vest on eachFebruary 24, 2025, the first anniversary of the first three anniversariesdate the Compensation and Organization Committee certified the number of 2022 PSUs earned. The other 33% of the grantearned 2022 PSUs vested on the date the Committee certified the number of May 5, 2021, subject to continued service on each vesting date.2022 PSUs earned, and those PSUs are reported in the “Option Exercises and Stock Vested for Fiscal 2023” table. |
(6)(10) | Represents RSUsthe number of 2023 PSUs that were earned with respect to the 2023 performance year, based on 2023 performance, which will vest on August 5,the date the Compensation and Organization Committee certifies the number of 2023 subjectPSUs earned with respect to continued servicethe 2024 performance year, based on the vesting date.2024 performance. |
(7)(11) | Represents RSUs that vest one-third on eachthe threshold number of the first three anniversaries2023 PSUs that can be earned based on the results of the grantperformance measures in 2024 and 2025. Any of such PSUs that are earned based on 2024 performance will vest on the date the Compensation and Organization Committee certifies the number of February 25, 2021, subject2023 PSUs earned with respect to continued servicethe 2024 performance year, based on each vesting date.2024 performance. Any of such PSUs that are earned based on 2025 performance will vest on the date the Compensation and Organization Committee certifies the number of 2023 PSUs earned with respect to the 2025 performance year, based on 2025 performance. |
(8) | Represents RSUs that vested on February 28, 2023. |
(9)(12) | Represents RSUs that vest one-third on each of the first three anniversaries of the grant date of May 5, 2021,10, 2023, subject to continued service on each vesting date. |
(10)(13) | Represents RSUs that vest one-third on each of the first three anniversaries of the grant date of February 24, 2022,August 9, 2023, subject to continued service on each vesting date. |
(11) | Represents 67% of the 2021 PSUs that were earned based on 2022 performance and which will vest on February 25, 2024, the first anniversary of the date the Compensation and Organization Committee certified the number of 2021 PSUs earned. The other 33% of the earned 2021 PSUs vested on the date the Committee certified the number of 2021 PSUs earned, and those PSUs are reported in the “Option Exercises and Stock Vested for Fiscal 2022” table. |
(12) | Represents the threshold number of 2022 PSUs that can be earned based on the results of performance measures in 2023. Any PSUs that are earned will vest as follows: 33% of earned units will vest upon the Compensation Committee certifying the number of 2022 PSUs earned and the remaining 67% will vest on the first anniversary of the initial vest date. |
Option Exercises and Stock Vested for Fiscal 20222023 The following table sets forth certain information regarding option exercises by our named executive officers in the year ended December 31, 2022,2023, and RSUs and PSUs held by our named executive officers that vested in the year ended December 31, 2022:2023: | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | Option Awards | | Stock Awards | | | Number of | | Value | | Number of | | Value | | Number of | | Value | | Number of | | Value | | | Shares Acquired | | Realized | | Shares Acquired | | Realized | | Shares Acquired | | Realized | | Shares Acquired | | Realized | | | on Exercise | | on Exercise | | on Vesting | | on Vesting | | on Exercise | | on Exercise | | on Vesting | | on Vesting | Name | | (#) | | ($)(1) | | (#) | | ($)(2) | | (#) | | ($)(1) | | (#) | | ($)(2) | Daniel Reuvers | | — | | — | | 7,975 | (3) | 108,893 | | Brent Moen | | — | | — | | 7,449 | (4) | 145,754 | | Kristie Burns | | — | | — | | 2,578 | (5) | 36,126 | | Eric Pauls | | — | | — | | 2,182 | (6) | 30,516 | | Daniel L. Reuvers | | | — | | — | | 38,772 | (3) | 615,987 | Elaine M. Birkemeyer | | | — | | — | | — | | — | Kristie T. Burns | | | — | | — | | 10,646 | (4) | 170,888 | Sherri L. Ferstler | | | — | | — | | — | | — | Brent A. Moen | | | — | | — | | 15,839 | (5) | 236,189 |
(1) | Represents the difference between the option exercise price and the closing price of our common stock, as reported on the Nasdaq Global Market, on the date of exercise, multiplied by the number of shares of our common stock underlying the stock options that were exercised. |
(2) | Represents the closing price of our common stock, as reported on the Nasdaq Global Market, on the date of vesting, multiplied by the number of shares of common stock underlying RSUs or PSUs that vested. |
(3) | Represents 5,81423,795 RSUs that vested during 20222023 and 2,161 202114,977 2022 PSUs that were earned for the 20222023 performance period and vested on February 25, 2023,24, 2024, the date the Compensation and Organization Committee certified the number of 20212022 PSUs earned. |
(4) | Represents 6,6817,651 RSUs that vested during 20222023 and 768 20212,995 2022 PSUs that were earned for the 20222023 performance period and vested on February 25, 2023,24, 2024, the date the Compensation and Organization Committee certified the number of 20212022 PSUs earned. |
(5) | Represents 2,25815,839 RSUs that vested during 2022 and 320 2021 PSUs that were earned for the 2022 performance period and vested on February 25, 2023, the date the Compensation and Organization Committee certified the number of 2021 PSUs earned. |
(6) | Represents 1,984 RSUs that vested during 2022 and 198 2021 PSUs that were earned for the 2022 performance period and vested on February 25, 2023, the date the Compensation and Organization Committee certified the number of 2021 PSUs earned.2023. |
| | 2022
| | 2024 Proxy Statement | 4347
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Potential Payments Upon Termination or Change inin Control Severance and Restrictive Covenant Arrangements Each of Messrs.Mr. Reuvers and PaulsMses. Birkemeyer, Burns and Ms. Burns is, and Mr. Moen was, a participant inFerstler are current participants the Severance Plan and each is a party to a Restrictive Covenants Agreement with us. The terms of the Severance Plan are summarized below under “—Severance Plan.” The Restrictive Covenants Agreements with each of our named executive officers provide that, among other matters, while the executive officer is employed by us and for a period of 12 months thereafter, he or she will not (i) engage in any competitive business, subject to certain exceptions; (ii) solicit, hire or engage our employees or contractors, or certain former employees; and (iii) solicit, request, advise or induce customers, suppliers or other business contacts of ours to cancel, curtail or otherwise adversely change its relationship with us. Under the Restrictive Covenants Agreements, each executive officer also agrees to disclose and assign to us any and all improvements and inventions that he or she conceives or reduces to practice during his or her employment. In addition, the Restrictive Covenants Agreements contain customary confidentiality provisions. Severance Plan Under the Severance Plan, a participant will be entitled to receive the specified severance benefits if his or her employment is terminated (i) at our initiative other than for Cause (as defined below) or (ii) by the participant for Good Reason (as defined below) (each such type of termination, a “Qualifying Severance Event”). A participant who experiences a Qualifying Severance Event will be eligible to receive certain severance benefits under the Severance Plan, including: | ● | if the Qualifying Severance Event occurs prior to a Change in Control (as defined below), payment of: |
| o | an amount equal to two times (for our Chief Executive Officer) or one times (for all other participants) his or her annualized base salary as of the termination date, payable in accordance with our regular payroll schedule for 24 months (for our Chief Executive Officer) or 12 months (for all other participants) thereafter; and |
| o | the portion of the premium costs that we would have paid, if the participant had remained employed by us, for any continued group health insurance coverage following the termination date, at the same level of coverage, for a period of 18 consecutive months (for our Chief Executive Officer) or 12 consecutive months (for all other participants) after the termination date (or until group health or dental coverage from another employer is received, if earlier); and |
| ● | if the Qualifying Severance Event occurs within 12 months after a Change in Control, payment of: |
| o | an amount equal to two times (for our Chief Executive Officer) or one times (for all other participants) the sum of (i) his or her annualized base salary as of the termination date, plus (ii) his or her target incentive bonus as of the termination date, payable in a lump sum on the first payroll date occurring more than 60 days after the termination date; and |
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| o | the portion of the premium costs that we would have paid, if the participant had remained employed by us, for any continued group health insurance coverage following the termination date, at the same level of coverage, for a period of 18 consecutive months (for our Chief Executive Officer) or 12 consecutive months (for all other participants) after the termination date (or until group health or dental coverage from another employer is received, if earlier). |
In addition, if a participant experiences a Qualifying Severance Event and the termination date occurs: | ● | before a Change in Control, then with respect to any equity-based award that has been granted to him or her under one of our equity plans 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 the participant’s release of claims becomes irrevocable; and |
| ● | 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 the participant’s release becomes irrevocable. |
In either case, if the Equity Award is subject to the satisfaction of performance goals over a performance period, the number of shares or units for purposes of the above determinations will be the number of target shares or units in the award. For pro rata determinations, the PSU award agreements provide that the vesting or performance period to be used is the period of time between the grant date of the units and the third anniversary of the grant date. Further, if an Equity Award is a stock option or stock appreciation rights award that vests as provided above, it will remain exercisable to the extent so vested for one year after the termination date. Under the Severance Plan, “Cause” is generally defined as: an act or acts of dishonesty intended to result in personal gain or enrichment at the expense of the Company; unlawful conduct or gross misconduct that is materially injurious to the Company; being convicted of a felony; or any material breach of a written agreement between the participant and the Company that has not been cured within 15 days following notice. Under the Severance Plan, “Good Reason” generally means the occurrence of any of the following events without the participant’s consent: the assignment of the participant to a position with responsibilities or duties of a materially lesser status or degree than his or her position as of the date the Severance Plan was adopted; any material breach of any terms or conditions of any written agreement between the Company and the participant by the Company not caused by the participant; or the requirement by the Company that the participant relocate out of the Minneapolis/St. Paul Metropolitan area or metropolitan area designated by the Company at the later of the participant’s initial employment date or the date the Severance Plan was adopted. Certain notice and timing requirements apply for a termination to qualify as being for “Good Reason.” The Severance Plan defines “Change in Control” by reference to the definition of that term in the 2016 Plan, which is discussed below under “—Equity Awards—2016 Plan.” To receive benefits under the Severance Plan, a participant must sign and not rescind a release form approved by us. Payment of severance benefits under the Severance Plan is also subject to other conditions, and will be terminated if the participant violates his or her ongoing obligations with respect to non-disclosure of confidential information, assignment of intellectual property, non-competition and non-solicitation. Equity Awards 2016 Plan Generally, the award agreements with respect to RSUs, stock options and PSUs granted under the 2016 Plan to the named executive officers provide that, except with respect to terminations following certain corporate transactions described below or due to death or disability, upon termination of the officer’s service with our Company, all unvested and unexercisable portions of his or her outstanding awards will immediately be forfeited. If a named executive officer’s service with our Company terminates other than for cause (as defined in the 2016 Plan), death or disability, the vested and exercisable portions of the officer’s outstanding option awards generally will remain exercisable for three months after termination. Upon termination for cause, all unexercised stock option awards will be forfeited. Upon termination of a named executive officer’s service with our Company due to death or disability, all unvested RSUs will vest as of such termination date, and all stock options will vest as of such termination date and will generally remain exercisable for one year thereafter. With respect to outstandingthe 2022 PSUs, in the event of the termination of a named executive officer’s service with our Company by reason of disability, (i) if such termination occurs prior to the date the Compensation and Organization Committee certifies the number of earned PSUs, he or she will be entitled to have vest, on that certification date, a pro rata portion of the earned PSUs, which pro rata portion will be based on the number of days he or she was employed in the applicable performance period; or (ii) if such termination occurs after the date the Committee certifies the number of earned PSUs, he or she will be entitled to have vest, on the termination date, all unvested earned PSUs. With respect to the 2023 PSUs, in the event of the termination of a named executive officer’s service with our Company by reason of disability, he or she will be entitled to have vest, on the termination date, all unvested earned PSUs for completed performance years. Further with respect to outstandingthe 2022 PSUs, in the event of the termination of a named executive officer’s service with our Company due to death, (i) if such termination occurs prior to the date the Compensation and Organization Committee certifies the number of earned PSUs, he or she will be entitled to have vest, on the termination date, a pro rata portion of the target number of PSUs applicable to that officer, which pro rata portion will be based on the number of days he or she was employed in the applicable performance period; or (ii) if such termination occurs after the date the Compensation and Organization Committee certifies the number of earned PSUs, he or she will be entitled to have vest, on the termination date, all unvested earned PSUs. With respect to the 2023 PSUs, in the event of the termination of a named executive officer’s service with our Company due to death, he or she will be entitled to have vest, on the termination date (i) for completed performance years, all unvested earned PSUs; and (ii) for uncompleted performance years, a pro rata portion of the applicable performance year target number of PSUs applicable to that officer, which pro rata portion will be based on the number of days he or she was employed during the applicable performance year. Unless otherwise provided in an award agreement, in the event of a Change in Control that is a corporate transaction, the surviving or successor entity may continue, assume or replace some or all of the outstanding awards under the 2016 Plan. Our award agreements with our named executive officers generally provide that if awards granted to the executive officer under the 2016 Plan are continued, assumed or replaced in connection with a Change in Control and if within one year after the transaction the named executive officer experiences an involuntary termination of service other than for cause, or terminates his or her employment for good reason, the named executive officer’s outstanding: (i) RSUs will vest in full; (ii) stock options will vest in full and will remain exercisable for one year following termination; and (iii) PSUs will vest in an amount equal to (a) the target number of PSUs applicable to that officer or, if the performance period has ended, the number of earned PSUs applicable to that officer, minus (b) the number of PSUs that vested prior to such termination date. | | | | 50 | Tactile Systems Technology, Inc. |
If awards granted to any named executive officer are not continued, assumed or replaced in connection with a Change in Control, then (i) any outstanding RSUs will vest immediately prior to the transaction, (ii) any outstanding stock options will become fully exercisable for a period of time prior to the transaction and terminate at the time of the transaction; and (iii) any outstanding PSUs will vest in an amount equal to: (a) if the performance period has not ended, the target number of PSUs applicable to that named executive officer, or (b) if the performance period has ended, the number of earned PSUs applicable to that named executive officer minus the number of PSUs that vested prior to the date of the Change in Control. Alternatively, the Compensation and Organization Committee may provide for the cancellation of any outstanding award in exchange for payment to the holder of the amount of the consideration that would have been received in the transaction for the number of shares subject to the award less the aggregate exercise price (if any) of the award. In the event of a Change in Control that does not involve a corporate transaction, the Compensation and Organization Committee, in its discretion, may take such action as it deems appropriate with respect to outstanding awards, which may include providing for the cancellation of any award in exchange for payment to the holder of the amount of the consideration that would have been received in the Change in Control for the number of shares subject to the award
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| Tactile Systems Technology, Inc.
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less the aggregate exercise price (if any) of the award, or making adjustments to any award to reflect the Change in Control, including the acceleration of vesting in full or in part. For purposes of the 2016 Plan, a “Change in Control” generally refers to a corporate transaction (as defined in the next sentence), the acquisition by a person or group of more than 50% of the combined voting power of our stock, or our “continuing directors” ceasing to constitute a majority of the members of the Board of Directors. A “corporate transaction” generally refers to (i) a sale or other disposition of all or substantially all of the assets of our Company, or (ii) a merger, consolidation, share exchange or similar transaction involving our Company, regardless of whether our Company is the surviving corporation. Potential Payments Table The table below reflects the estimated value of compensation and benefits payable to each of our named executive officers upon the occurrence of certain events. The amounts in the table are based on a hypothetical termination of employment or change in control date on December 31, 2022.2023.
AlthoughIn connection with Mr. Moen’s employment with us terminated following the end of 2022 and before this proxy statement is filed, because he was our Chief Financial Officer, based on SEC guidance, we are providing a table below quantifying the estimated payments and benefits that would have been provided to Mr. Moen if his employment had terminated under the various scenarios indicated on December 31, 2022. However, because Mr. Moen resignedresignation from the Company effective March 19, 2023, he did not receive any payments or benefits in connection with his termination of employment, and his participation in the Severance Plan and all outstanding equity awards held by him were terminated effective upon his termination of employment.
| | 2022
| | 2024 Proxy Statement | 4751
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| | | | | | | | | | | | | | | | | | | Involuntary Termination: Without Cause or for Good Reason Prior to a Change in Control | | Involuntary Termination: Without Cause or for Good Reason Within 12 Months Following a Change in Control | | Termination Due to Death or Disability | | Change in Control and Equity Awards Not Assumed | | Involuntary Termination: Without Cause or for Good Reason Prior to a Change in Control | | Involuntary Termination: Without Cause or for Good Reason Within 12 Months Following a Change in Control | | Termination Due to Death or Disability | | Change in Control and Equity Awards Not Assumed | Name/Benefits | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | Daniel Reuvers | | | | | | | | | | Daniel L. Reuvers | | | | | | | | | | Base salary | | 1,250,000 | | 1,250,000 | | — | | — | | 1,300,000 | | 1,300,000 | | — | | — | Annual bonus | | — | | 562,500 | | — | | — | | — | | 650,000 | | — | | — | Health benefits | | 14,505 | | 14,505 | | — | | — | | 16,442 | | 16,442 | | — | | — | Value of accelerated stock options(1) | | — | | — | | — | | — | | — | | — | | — | | — | Value of accelerated RSUs(2) | | 214,469 | | 713,780 | | 713,780 | | 713,780 | | 461,418 | | 1,301,214 | | 1,301,214 | | 1,301,214 | Value of accelerated PSUs(2)(3) | | 383,581 | | 693,610 | | 383,581 | | 693,610 | | 1,100,028 | | 1,393,211 | | 891,634 | | 1,393,211 | Total | | 1,862,555 | | 3,234,395 | | 1,097,361 | | 1,407,390 | | 2,877,888 | | 4,660,867 | | 2,192,848 | | 2,694,425 | | | | | | | | | | | | | | | | | | Brent Moen | | | | | | | | | | Elaine M. Birkemeyer | | | | | | | | | | Base salary | | 411,000 | | 411,000 | | — | | — | | 400,000 | | 400,000 | | — | | — | Annual bonus | | — | | 226,050 | | — | | — | | — | | 220,000 | | — | | — | Health benefits | | 12,844 | | 12,844 | | — | | — | | — | | — | | — | | — | Value of accelerated stock options(1) | | — | | — | | — | | — | | — | | — | | — | | — | Value of accelerated RSUs(2) | | 153,752 | | 424,530 | | 424,530 | | 424,530 | | 89,118 | | 415,672 | | 415,672 | | 415,672 | Value of accelerated PSUs(2)(3) | | 137,749 | | 249,357 | | 137,749 | | 249,357 | | 75,290 | | 149,750 | | 40,726 | | 149,750 | Total | | 715,345 | | 1,323,781 | | 562,279 | | 673,887 | | 564,408 | | 1,185,422 | | 456,398 | | 565,422 | | | | | | | | | | | | | | | | | |
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| | 52 | Tactile Systems Technology, Inc. |
Potential Payments Table (cont.) | | | | | | | | | | | | | | | | | | | Involuntary Termination: Without Cause or for Good Reason Prior to a Change in Control | | Involuntary Termination: Without Cause or for Good Reason Within 12 Months Following a Change in Control | | Termination Due to Death or Disability | | Change in Control and Equity Awards Not Assumed | | Involuntary Termination: Without Cause or for Good Reason Prior to a Change in Control | | Involuntary Termination: Without Cause or for Good Reason Within 12 Months Following a Change in Control | | Termination Due to Death or Disability | | Change in Control and Equity Awards Not Assumed | Name/Benefits | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | Kristie Burns | | | | | | | | | | Kristie T. Burns | | | | | | | | | | Base salary | | 362,000 | | 362,000 | | — | | — | | 376,000 | | 376,000 | | — | | — | Annual bonus | | — | | 162,900 | | — | | — | | — | | 188,000 | | — | | — | Health benefits | | 12,114 | | 12,114 | | — | | — | | 14,564 | | 14,564 | | — | | — | Value of accelerated stock options(1) | | — | | — | | — | | — | | — | | — | | — | | — | Value of accelerated RSUs(2) | | 72,485 | | 237,636 | | 237,636 | | 237,636 | | 160,489 | | 425,754 | | 425,754 | | 425,754 | Value of accelerated PSUs(2)(3) | | 72,875 | | 134,879 | | 72,875 | | 134,879 | | 219,376 | | 283,641 | | 177,363 | | 283,641 | Total | | 519,474 | | 909,529 | | 310,511 | | 372,515 | | 770,429 | | 1,287,959 | | 603,117 | | 709,395 | | | | | | | | | | | | | | | | | | Eric Pauls | | | | | | | | | | Sherri L. Ferstler | | | | | | | | | | Base salary | | 340,000 | | 340,000 | | — | | — | | 340,000 | | 340,000 | | — | | — | Annual bonus | | — | | 153,000 | | — | | — | | — | | 170,000 | | — | | — | Health benefits | | 4,172 | | 4,172 | | — | | — | | 9,614 | | 9,614 | | — | | — | Value of accelerated stock options(1) | | — | | — | | — | | — | | — | | — | | — | | — | Value of accelerated RSUs(2) | | 59,558 | | 194,184 | | 194,184 | | 194,184 | | 35,135 | | 267,424 | | 267,424 | | 267,424 | Value of accelerated PSUs(2)(3) | | 56,286 | | 105,892 | | 56,286 | | 105,892 | | — | | — | | — | | — | Total | | 460,016 | | 797,248 | | 250,470 | | 300,076 | | 384,749 | | 787,038 | | 267,424 | | 267,424 |
(1) | The value of the accelerated stock options is calculated based on the number of shares of our common stock subject to accelerated unvested stock options multiplied by the difference between $11.48,$14.30, the closing price for a share of our common stock on the Nasdaq Global Market on December 30, 202229, 2023 (the last trading day of 2022)2023), and the per share exercise price. None of the unvested stock options outstanding as of December 31, 20222023 had an exercise price below the closing price of our stock; as a result, the amounts related to stock options in the table are zero. |
(2) | The value of accelerated RSUs and PSUs is determined by multiplying the number of accelerated unvested units by $11.48,$14.30, the closing price for our common stock on December 30, 2022,29, 2023, the last trading day of 2022.2023. |
(3) | To determine the number of PSUs for which vesting would be accelerated, the “Involuntary Termination: Without Cause or for Good Reason Prior to a Change in Control” column utilize: (a) for the 2021 PSUs, the number of earned PSUs that had not vested as of December 31, 2023; (b) for the 2022 PSUs, the total number of 2022 PSUs earned; and (c) for the 2023 PSUs, the number of PSUs earned for the 2023 performance year and the target number of PSUs that can be earned for the 2024 and 2025 performance years pro-rated as provided in the award agreements. To determine the number of PSUs for which vesting would be accelerated for the “Termination Due to Death or Disability” column utilize: (a) for the 2020 PSUs, zero, since none of the 2020 PSUs were earned; (b) for the 2021 PSUs, the total number of sharesearned PSUs that had not vested as of December 31, 2023; (b) for the 2022 PSUs, the total number of PSUs earned; and (c) for the 20222023 PSUs, the targettotal number of 2022 PSUs and ashares earned with respect to the 2023 performance period of January 1, 2022 – December 31, 2023 for purposes of the pro rata calculation.year. To determine the number of PSUs for which vesting would be accelerated, the “Involuntary Termination: Without Cause or for Good Reason Within 12 Months Following a Change in Control” column and the “Change in Control and Equity Awards Not Assumed” column utilize: (a) for the 2020 PSUs, zero; (b) for the 2021 PSUs, the total number of sharesearned PSUs that had not vested as of December 31, 2023; (b) for the 2022 PSUs, the total number of PSUs earned; and (c) for the 20222023 PSUs, the number of PSUs earned for the 2023 performance year and the target number of 2022 PSUs.PSUs that can be earned for the 2024 and 2025 performance years. |
| | 2022
| | 2024 Proxy Statement | 4953
|
CEO PAY RATIO The following is the annual disclosure of the ratio of our median employee’s annual total compensation to the annual total compensation of Daniel L. Reuvers, our Chief Executive Officer (our “CEO”). For 2022:2023: | ● | the annual total compensation of our median employee was $79,759;$85,664; and |
| ● | the total compensation of our CEO, as reported in the 20222023 Summary Compensation Table included in this Proxy Statement, was $3,220,584.$2,874,593. |
Based on this information for 2022,2023, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 40:34:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K. We identified our median employee as of December 31, 2022,2023, at which time we had approximately 982992 employees, all of whom are U.S. employees. Our median employee was identified based on the cash compensation paid related to 20222023 to all members of our workforce including full-time and part-time employees, other than our CEO, who were employed on December 31, 2022.2023. We annualized the cash compensation of employees who were employed on December 31, 20222023 but had not worked for us for all of 2022.2023. For purposes of determining the cash compensation paid related to 2022,2023, we included the amount of base salary the employee received during 20222023 and the amount of any cash incentives earned in 2022.2023. Once we identified our median employee, we then determined that employee’s total compensation, including any perquisites and other benefits, in the same manner that we determine the total compensation of our named executive officers for purposes of the 20222023 Summary Compensation Table disclosed above. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
The following table sets forth compensation of our CEO (the Principal Executive Officer, referred to in this section as “PEO”) and our other named executive officers (the “Non-PEO NEOs”), on an average basis, along with total shareholder return, net income (loss), and total revenue for our fiscal years 2023, 2022, 2021, and 2020. | | | | | | | | | | | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | Year (1) | Summary Compensation Table Total for Current PEO ($) | Compensation Actually Paid to Current PEO (2) ($) | Summary Compensation Table Total for Former PEO ($) | Compensation Actually Paid to Former PEO (2) ($) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs (2) ($) | Company Total Shareholder Return (3) ($) | Peer Group Total Shareholder Return (3) ($) | Net Income (Loss) ($) (in thousands) | Total Revenue (4) ($) (in thousands) | 2022 | 3,220,584 | 1,851,324 | — | — | 1,166,401 | 768,103 | 17.00 | 104.93 | (17,866) | 246,785 | 2021 | 2,076,884 | 459,477 | — | — | 941,781 | 359,062 | 28.18 | 137.24 | (11,811) | 208,057 | 2020 | 2,024,978 | 2,465,081 | 687,888 | (1,156,368) | 1,391,233 | 515,160 | 66.57 | 132.83 | (620) | 187,130 |
| | | | | | | | | | | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | Year (1) | Summary Compensation Table Total for Current PEO ($) | Compensation Actually Paid to Current PEO (2) ($) | Summary Compensation Table Total for Former PEO ($) | Compensation Actually Paid to Former PEO (2) ($) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs (2) ($) | Company Total Shareholder Return (3) ($) | Peer Group Total Shareholder Return (3) ($) | Net Income (Loss) ($) (in thousands) | Total Revenue (4) ($) (in thousands) | 2023 | 2,874,593 | 3,205,532 | — | — | 755,916 | 593,656 | 21.18 | 98.68 | 28,515 | 274,423 | 2022 | 3,220,584 | 1,851,324 | — | — | 1,166,401 | 768,103 | 17.00 | 104.93 | (17,866) | 246,785 | 2021 | 2,076,884 | 459,477 | — | — | 941,781 | 359,062 | 28.18 | 137.24 | (11,811) | 208,057 | 2020 | 2,024,978 | 2,465,081 | 687,888 | (1,156,368) | 1,391,233 | 515,160 | 66.57 | 132.83 | (620) | 187,130 |
(1) Daniel L. Reuvers was our PEO in each of 2023, 2022 and 2021, as well as in 2020 starting on June 8, 2020. Gerald R. Mattys served as our PEO in 2020 through June, 8 2020. In 2023, Elaine M. Birkemeyer, Kristie T. Burns, Sherri L. Ferstler and Brent A. Moen were our Non-PEO NEOs. In 2022 and 2021, Brent A. Moen, Kristie T. Burns and Eric Pauls were our Non-PEO NEOs. In 2020, Brent A. Moen, Robert J. Folkes and Bryan Rishe were our Non-PEO NEOs. (2) The dollar amounts reported represent the Compensation Actually Paid (“CAP”) to the NEOs in accordance with, and using the adjustments set forth in, Item 402(v) of Regulation S-K. The following adjustments related to equity awards were made to their total compensation each year as reported in the Summary Compensation Table (“SCT”) to determine the CAP: Reconciliation of PEO Summary Compensation Table Total to Compensation Actually Paid | | | Year | Reported SCT Total ($) | Equity Award Adjustments ($) | Compensation Actually Paid ($) | Reported SCT Total ($) | Equity Award Adjustments ($) | Compensation Actually Paid ($) | 2023 | | 2,874,593 | 330,939 | 3,205,532 | 2022 | 3,220,584 | (1,369,260) | 1,851,324 | 3,220,584 | (1,369,260) | 1,851,324 | 2021 | 2,076,884 | (1,617,407) | 459,477 | 2,076,884 | (1,617,407) | 459,477 | 2020 (Current) | 2,024,978 | 440,103 | 2,465,081 | 2,024,978 | 440,103 | 2,465,081 | 2020 (Former) | 687,888 | (1,844,256) | (1,156,368) | 687,888 | (1,844,256) | (1,156,368) |
Reconciliation of Average Non-PEO NEO Summary Compensation Table Total to Compensation Actually Paid | | | Year | Reported SCT Total ($) | Equity Award Adjustments ($) | Compensation Actually Paid ($) | Reported SCT Total ($) | Equity Award Adjustments ($) | Compensation Actually Paid ($) | 2023 | | 755,916 | (162,260) | 593,656 | 2022 | 1,166,401 | (398,298) | 768,103 | 1,166,401 | (398,298) | 768,103 | 2021 | 941,781 | (582,719) | 359,062 | 941,781 | (582,719) | 359,062 | 2020 | 1,391,233 | (876,073) | 515,160 | 1,391,233 | (876,073) | 515,160 |
(3) Our peer group for the calculation of total shareholder return (“TSR”) is the S&P Healthcare Equipment Select Industry Index, which is the industry index used in our stock price performance graph in our Form 10-K for the fiscal year ended December 31, 2022.2023. TSR, in the case of both the Company and our peer group, reflects the cumulative return on $100 as if invested on December 31, 2019, including reinvestment of any dividends. (4) Our company-selected measure, which we believe represents the most important financial performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link CAP to the NEOs for 20222023 to company performance, is revenue. Revenue is one of the metrics under both the 20222023 annual cash incentive program and the 20222023 PSUs.
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In order to calculate CAP, the following amounts were excluded from or added to the SCT total compensation: Current PEO | | | | | | | | | Year | Deduct: Grant Date Fair Value of Covered Year Equity Awards ($) | Year End Fair Value of Covered Year Equity Awards ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that were Unvested at End of Covered Year ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that Vested in the Covered Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | Deduct: Grant Date Fair Value of Covered Year Equity Awards ($) | Year End Fair Value of Covered Year Equity Awards ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that were Unvested at End of Covered Year ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that Vested in the Covered Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | 2023 | | (1,506,836) | 1,406,539 | 249,724 | — | 181,513 | — | 330,939 | 2022 | (1,999,984) | 1,081,241 | (323,775) | — | (126,742) | — | (1,369,260) | (1,999,984) | 1,081,241 | (323,775) | — | (126,742) | — | (1,369,260) | 2021 | (1,499,930) | 598,713 | (382,129) | — | (334,060) | — | (1,617,407) | (1,499,930) | 598,713 | (382,129) | — | (334,060) | — | (1,617,407) | 2020 | (1,417,951) | 1,858,054 | — | — | — | 440,103 | (1,417,951) | 1,858,054 | — | — | — | 440,103 |
In connection with his appointment as CEO in 2020, Mr. Reuvers received a grant of stock options that included a market condition related to stock price in order to vest. Due to that market condition, the grant date fair value of those stock options was determined using the Monte Carlo Simulation model. The market condition was satisfied in the first quarter of 2021, and as a result, we have used the Black-Scholes valuation model (which is the valuation model used for all other stock option awards we have granted) to value these stock options for all dates subsequent to the grant date as part of the CAP calculations.
Former PEO | | | | | | | | | Year | Deduct: Grant Date Fair Value of Covered Year Equity Awards ($) | Year End Fair Value of Covered Year Equity Awards ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that were Unvested at End of Covered Year ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that Vested in the Covered Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | 2022 | — | — | — | — | — | — | — | — | 2021 | — | — | — | — | — | — | — | — | 2020 | — | — | (546,525) | — | (484,627) | (813,103) | — | (1,844,256) |
| | | | | | | | | Year | Deduct: Grant Date Fair Value of Covered Year Equity Awards ($) | Year End Fair Value of Covered Year Equity Awards ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that were Unvested at End of Covered Year ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that Vested in the Covered Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | 2023 | — | — | — | — | — | — | — | — | 2022 | — | — | — | — | — | — | — | — | 2021 | — | — | — | — | — | — | — | — | 2020 | — | — | (546,525) | — | (484,627) | (813,103) | — | (1,844,256) |
Average Non-PEO NEOs | | | | | | | | | Year | Deduct: Grant Date Fair Value of Covered Year Equity Awards ($) | Year End Fair Value of Covered Year Equity Awards ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that were Unvested at End of Covered Year ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that Vested in the Covered Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | Deduct: Grant Date Fair Value of Covered Year Equity Awards ($) | Year End Fair Value of Covered Year Equity Awards ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that were Unvested at End of Covered Year ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year ($) | Year-over-Year Change in Fair Value of Equity Awards Granted in a Prior Year that Vested in the Covered Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | 2023 | | (397,276) | 300,766 | 16,319 | — | 24,594 | (106,664) | — | (162,260) | 2022 | (599,979) | 333,793 | (104,006) | — | (28,107) | — | (398,298) | (599,979) | 333,793 | (104,006) | — | (28,107) | — | (398,298) | 2021 | (622,120) | 239,005 | (114,494) | — | (5,881) | (79,229) | — | (582,719) | (622,120) | 239,005 | (114,494) | — | (5,881) | (79,229) | — | (582,719) | 2020 | (933,225) | 614,574 | (159,351) | 33,592 | (258,905) | (172,758) | — | (876,073) | (933,225) | 614,574 | (159,351) | 33,592 | (258,905) | (172,758) | — | (876,073) |
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Compensation Actually Paid versus Total Revenue:
Compensation Actually Paid versus Net Loss:Income (Loss):
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Compensation Actually Paid versus Company and Peer Group TSR:
The items listed below represent the most important financial performance measures we used to link compensation actually paid to the NEOs for 2022,2023, to company performance, as further described in our Compensation Discussion and Analysis. | Most Important Company Performance Measures | Total Revenue | Adjusted EBITDA | Adjusted EBITDA Margin |
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EQUITY COMPENSATION PLAN INFORMATION The following table sets forth information concerning our equity compensation plans as of December 31, 2022:2023: | | | | | | | | | | | | | | | | | | | Plan Category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | Equity compensation plans approved by security holders(1) | | 1,404,764 | (2) | | 43.25 | (3) | | 7,516,834 | (4) | | 1,213,688 | (2) | | 40.74 | (3) | | 7,179,612 | (4) | Equity compensation plans not approved by security holders | | — | | | — | | | — | | | — | | | — | | | — | | Total | | 1,404,764 | (2) | | 43.25 | (3) | | 7,516,834 | (4) | | 1,213,688 | (2) | | 40.74 | (3) | | 7,179,612 | (4) |
(1) | Includes the 2016 Plan and the ESPP. |
(2) | Consists of stock options, RSUs, and PSUs. Other than PSUs held by a former executive that were deemed to be earned at the target level of performance at the time of their termination, (a) theThe number of 20212022 PSUs included in these amounts consists of the number of PSUs equal to 67% of the earned 20212022 PSUs based on 20222023 performance, which vest in 2024, and (b) the2025. The number of 20222023 PSUs included in these amounts consists of (a) the number of earned 2023 PSUs with respect to the 2023 performance year, and (b) the maximum number of shares2023 PSUs that participants are eligible to receive if applicableearn with respect to the 2024 and 2025 performance metrics are fully achieved under the terms of the outstanding 2022 PSUs.years. |
(3) | Represents the weighted average exercise price of outstanding stock options. Does not take into account the outstanding RSUs and PSUs which, when settled, will be settled in shares of our common stock on a one-for-one basis at no additional cost. |
(4) | Consists of shares available for awards under the 2016 Plan and the ESPP as of December 31, 2022.2023. The 2016 Plan contains an “evergreen” provision, pursuant to which the number of shares of common stock reserved for issuance under the 2016 Plan automatically increases on January 1 of each year beginning on January 1, 2017 and ending on January 1, 2026 in an amount equal to the lesser of: (i) 5% of the total number of shares outstanding as of December 31 of the immediately preceding calendar year; (ii) 2,500,000 shares; or (iii) a number of shares determined by our Board of Directors. As of December 31, 2022,2023, there were 5,957,6835,809,744 shares available for future awards under the 2016 Plan. The ESPP also contains an “evergreen” provision, pursuant to which the number of shares of common stock reserved for issuance under the ESPP shall automatically increase on January 1 of each year beginning on January 1, 2017 and ending on January 1, 2026 in an amount equal to the lesser of: (i) 1% of the total number of shares outstanding as of December 31 of the immediately preceding calendar year; (ii) 500,000 shares; or (iii) a number of shares determined by our Board of Directors. As of December 31, 2022,2023, there were 1,559,1511,369,868 shares available for issuance under the ESPP, of which 36,83528,637 shares were subject to purchase based upon the payroll withholdings to that date under the ESPP for the current purchase period. |
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proposal 4: aPPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ALLOW FOR EXCULPATION OF OFFICERS AS PERMITTED BY DELAWARE LAW In August 2022, the State of Delaware, which is the Company’s state of incorporation, enacted legislation that enables Delaware corporations to limit the personal liability of certain of their officers for monetary damages for breach of the duty of care in certain circumstances, as permitted under Section 102(b)(7) of the Delaware General Corporation Law (the “DGCL”). In light of this legislation, the Board of Directors has adopted, and recommends that stockholders approve, an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Restated Certificate”) to allow for exculpation of certain of the Company’s officers to the extent permitted by Delaware law (the “Exculpation Amendment”). The full text of the Exculpation Amendment is provided in the form of Certificate of Amendment to the Restated Certificate (the “Certificate of Amendment”) attached as Appendix B to this Proxy Statement. In accordance with the DGCL, the officers who would be covered by the Exculpation Amendment include any officer who, during the course of conduct alleged to be wrongful, (i) is or was the Company’s president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer, or chief accounting officer; (ii) is or was identified in the Company’s public filings with the SEC as one of the most highly compensated officers of the Company; or (iii) has, by written agreement with the Company, consented to being identified as an officer for purposes of accepting service of process. The Exculpation Amendment is aligned with the narrow class and type of claims for which certain officers’ liability can be exculpated under Section 102(b)(7) of the DGCL. Accordingly, the Exculpation Amendment would only permit exculpation for direct claims (as opposed to derivative claims made by stockholders on behalf of the Company) and would not apply to: (i) breaches of the duty of loyalty to the Company or its stockholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or (iii) any transaction in which the officer derived an improper personal benefit. In considering whether to propose the Exculpation Amendment, the Board of Directors considered that the role of an officer (like the role of a director) often requires them to make time-sensitive decisions on critical matters that can create substantial risk of investigations, claims, actions, lawsuits, or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit. The Board of Directors believes the proposed Exculpation Amendment better aligns the protections available to the Company’s officers with those currently available to the Company’s directors and would lower the risk of plaintiffs’ lawyers adding officers to direct claims relating to breaches of the duty of care, which can lead to increased litigation and insurance costs. | | | | 60 | Tactile Systems Technology, Inc. |
Table of Contents Proposal 4: Approval of an Amendment to Our Amended and Restated Certificate of Incorporation In addition, the Board believes that the Exculpation Amendment would better position the Company to continue to attract and retain top executive talent by providing protection against the potential exposure to liabilities and costs of defense tied to such claims. For these reasons, and taking into account the narrow class of officers and the limits on the types of claims for which those officers’ liability would be exculpated, the Board of Directors determined that approval of the Exculpation Amendment to allow for exculpation of certain of the Company’s officers is advisable and in the best interests of the Company and its stockholders. The Exculpation Amendment also provides that if the DGCL is amended after approval by the stockholders to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or an officer of the Company shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. If the stockholders approve the Exculpation Amendment, it will become effective upon the filing of the Certificate of Amendment with the Delaware Secretary of State, which the Company anticipates doing shortly following stockholder approval. Other than the replacement of the existing Section 8.1 and the heading of Article 8, the remainder of the Company’s Restated Certificate will remain unchanged after effectiveness of the Certificate of Amendment. The complete text of the proposed Exculpation Amendment is included in the Certificate of Amendment attached as Appendix B to this Proxy Statement. Board of Directors’ Recommendation The Board of Directors recommends that stockholders vote FOR the amendment to the Company’s Amended and Restated Certificate of Incorporation to allow for exculpation of officers as permitted by Delaware law. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information regarding beneficial ownership of our common stock as of March 13, 2023,2024, for: each person known to the Company to be the beneficial owner of more than 5% of our outstanding common stock; each of our named executive officers; each of our directors and nominees; and all of our current directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as noted by footnote, and subject to community property laws where applicable, we believe based on the information provided to the Company that the persons and entities named in the table below have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. The table lists applicable percentage ownership based on 23,232,58523,759,462 shares of our common stock outstanding as of March 13, 2023.2024. The number of shares beneficially owned includes shares of our common stock that each person has the right to acquire within 60 days of March 13, 2023,2024, including upon the exercise of stock options and the vesting of RSUs. These shares are deemed to be outstanding for the purpose of computing the percentage of outstanding shares of our common stock owned by such person but are not deemed to be outstanding for the purpose of computing the percentage of outstanding shares of our common stock owned by any other person.
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| | | | | | Name of Beneficial Owner | | | Amount and Nature of Ownership | | Percentage of Class | 5% or Greater Stockholders | | | | | | BlackRock, Inc. (1) | | | | | | 55 East 52nd Street, New York, NY 10055 | | | 2,243,442 | | 9.7% | The Vanguard Group (2) | | | | | | 100 Vanguard Blvd., Malvern, PA 19355 | | | 1,218,371 | | 5.2% | Waddell & Reed Financial, Inc. (3) | | | | | | 6300 Lamar Avenue, Overland Park, KS 66202 | | | 1,202,852 | | 5.2% | Named Executive Officers and Directors | | | | | | Daniel Reuvers (4) | | | 83,264 | | * | Brent Moen (5) | | | 65,789 | | * | Raymond Huggenberger (6) | | | 29,211 | | * | Bill Burke (7) | | | 28,149 | | * | Sheri Dodd (8) | | | 15,448 | | * | Deepti Jain (8) | | | 15,448 | | * | Valerie Asbury (8) | | | 14,538 | | * | Brent Shafer (8) | | | 14,538 | | * | Kristie Burns (9) | | | 10,328 | | * | Eric Pauls (10) | | | 8,508 | | * | Carmen Volkart (11) | | | 3,414 | | * | All current executive officers and directors as a group (11 persons) (12) | | | 222,846 | | * |
| | | | | | Name of Beneficial Owner | | | Amount and Nature of Ownership | | Percentage of Class | 5% or Greater Stockholders | | | | | | First Light Asset Management, LLC (1) | | | | | | 3300 Edinborough Way, Suite 201, Edina, MN 55435 | | | 2,865,547 | | 12.1% | BlackRock, Inc. (2) | | | | | | 50 Hudson Yards, New York, NY 10001 | | | 2,425,168 | | 10.2% | Cadian Capital Management, LP (3) | | | | | | 535 Madison Avenue, 36th Floor, New York, NY 10022 | | | 1,745,000 | | 7.3% | The Vanguard Group (4) | | | | | | 100 Vanguard Blvd., Malvern, PA 19355 | | | 1,370,016 | | 5.8% | Waddell & Reed Financial, Inc. (5) | | | | | | 6300 Lamar Avenue, Overland Park, KS 66202 | | | 1,202,852 | | 5.1% | Named Executive Officers and Directors | | | | | | Daniel L. Reuvers (6) | | | 140,353 | | * | Brent A. Moen | | | 48,760 | | * | Raymond O. Huggenberger (7) | | | 36,948 | | * | William W. Burke (8) | | | 31,486 | | * | Kristie T. Burns (9) | | | 23,719 | | * | Sheri L. Dodd (10) | | | 23,185 | | * | Valerie L. Asbury (10) | | | 22,275 | | * | D. Brent Shafer (10) | | | 22,275 | | * | Carmen B. Volkart (10) | | | 11,151 | | * | Elaine M. Birkemeyer (11) | | | 9,689 | | * | B. Vindell Washington (12) | | | 8,700 | | * | Sherri L. Ferstler | | | — | | * | All current executive officers and directors as a group (11 persons) (13) | | | 329,781 | | 1.4% |
*Less than 1%. (1) | Based on a Schedule 13G/A13G filed with the SEC on January 23, 2023February 14, 2024 by BlackRock, Inc.,First Light Asset Management, LLC and Matthew P. Arens, that it has solethey have shared voting power with respect to 2,125,078 shares and sole dispositive power with respect to 2,243,4422,865,547 shares of our common stock. |
(2) | Based on a Schedule 13G/A filed with the SEC on January 24, 2024 by BlackRock, Inc., that it has sole voting power with respect to 2,317,142 shares and sole dispositive power with respect to 2,425,168 shares of our common stock. |
(3) | Based on a Schedule 13G filed with the SEC on February 9, 202314, 2024 by Cadian Capital Management, LP, Cadian Capital Management GP, LLC and Eric Bannasch that they have shared voting and dispositive power with respect to 1,745,000 shares of our common stock. |
(4) | Based on a Schedule 13G/A filed with the SEC on February 13, 2024 by The Vanguard Group, that it has shared voting power with respect to 16,76238,012 shares, sole dispositive power with respect to 1,194,6601,322,686 shares and shared dispositive power with respect to 23,71147,330 shares of our common stock. |
(3)(5) | Based on a Schedule 13G/A filed with the SEC on February 12, 2021 by Waddell & Reed Financial, Inc. and its investment advisory subsidiary Ivy Investment Management Company, that they have sole voting power and sole dispositive power with respect to 1,202,852 shares of our common stock. |
(4)(6) | Includes 55,25870,481 shares subject to options that are exercisable as of, or will be exercisable within 60 days following, March 13, 2023.2024. |
(5) | Includes 39,706 shares subject to options that are exercisable as of, or will be exercisable within 60 days following, March 13, 2023. |
(6)(7) | Includes 7,175 shares subject to options that are exercisable as of, or will be exercisable within 60 days following, March 13, 2023,2024, and 12,1037,737 RSUs that are scheduled to vest within 60 days following March 13, 2023.2024. |
(7)(8) | Includes 3,713 shares subject to options that are exercisable as of, or will be exercisable within 60 days following, March 13, 2023,2024, and 12,1037,737 RSUs that are scheduled to vest within 60 days following March 13, 2023.2024. |
(8) | | Includes 12,103 RSUs that are scheduled to vest within 60 days following March 13, 2023.
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(9) | Includes 3,3955,094 shares subject to options that are exercisable as of, or will be exercisable within 60 days following, March 13, 2023,2024, and 2,2582,261 RSUs that are scheduled to vest within 60 days following March 13, 2023.2024. |
(10) | Includes 2,101 shares subject to options that are exercisable as of, or will be exercisable within 60 days following, March 13, 2023, and 1,9847,737 RSUs that are scheduled to vest within 60 days following March 13, 2023.2024. |
(11) | Includes 3,4149,689 RSUs that are scheduled to vest within 60 days following March 13, 2023.2024. |
(12) | Includes Ms. Birkemeyer and excludes8,700 RSUs that are scheduled to vest within 60 days following March 13, 2024. |
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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS Compensation and Organization Committee Interlocks and Insider Participation None of the members of our Compensation and Organization Committee during 20222023 is or has been our current or former officer or employee or was involved in a relationship requiring disclosure as an interlocking director or under Item 404 of Regulation S-K. Policy for Approval of Related Person Transactions Our Board of Directors has adopted a written statement of policy regarding transactions with related persons, which we refer to as our related person policy. Our related person policy covers any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness or employment by us of a related person. An executive officer is to present a transaction with a related party to the Audit Committee, which is then responsible for approving or denying the transaction. The Audit Committee bases its decision on factors including but not limited to the following: | ● | whether the terms are fair to our Company; |
| ● | the role the related person has played in arranging the transaction; |
| ● | the structure of the transaction; and |
| ● | the interests of all related persons in the transaction. |
Transactions with Related Persons Since January 1, 2022,2023, we have not been a party to any, and there are no currently proposed, transactions in which the amount exceeded or will exceed $120,000, and in which any director, executive officer or holder of more than 5% of any class of our voting stock, or any member of the immediate family of or entities affiliated with any of them, had or will have a material interest. Indemnification Agreements. Our Certificate of Incorporation contains provisions limiting the liability of directors, and our Certificate of Incorporation and our Bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted under Delaware law. Our Certificate of Incorporation and Bylaws also provide our Board of Directors with discretion to indemnify our employees and agents when determined appropriate by the Board. In addition, we have entered into agreements to indemnify our directors and executive officers.
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questions and answers about the annual meetinG The following questions and answers are intended to address briefly some commonly asked questions regarding the Annual Meeting and the matters to be voted on at the Annual Meeting or at any adjournments or postponements thereof. We urge you to read the remainder of this Proxy Statement carefully because the information in this section does not provide all information that might be important to you. Please refer to the more detailed information contained elsewhere in this Proxy Statement and the documents referred to in this Proxy Statement, which you should read carefully. What is the purpose of the Annual Meeting? The Annual Meeting is being held for the purpose of considering and taking action with respect to the following: | 1. | to elect seveneight directors, BillWilliam W. Burke, Valerie L. Asbury, Sheri L. Dodd, Raymond O. Huggenberger, Daniel L. Reuvers, D. Brent Shafer, Carmen B. Volkart, and Carmen Volkart,B. Vindell Washington, to serve until the 20242025 Annual Meeting of Stockholders and until their successors are duly elected and qualified, subject to their earlier death, resignation or removal; |
| 2. | to ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2023;2024; |
| 3. | to approve, on an advisory basis, the 20222023 compensation of our named executive officers as disclosed in this Proxy Statement; |
| 4. | to approve an amendment to our Amended and Restated Certificate of Incorporation to allow for exculpation of officers as permitted by Delaware law; and |
| 4.5. | to transact such other business as may properly come before the meeting or at any and all adjournments or postponements thereof. |
Who is entitled to vote at the Annual Meeting? As of the close of business on March 13, 2023,2024, the record date for determination of stockholders entitled to vote at the Annual Meeting, there were outstanding 23,232,58523,759,462 shares of our common stock, par value $0.001 per share, all of which are entitled to vote with respect to all matters to be acted upon at the Annual Meeting. Each stockholder of record is entitled to one vote for each share of our common stock held by such stockholder. What constitutes a quorum for the Annual Meeting? Our Amended and Restated Bylaws (the “Bylaws”) provide that a majority of the voting power of the shares of stock issued and outstanding and entitled to vote, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. Under the General Corporation Law of the State of Delaware (the “DGCL”),DGCL, shares that are voted “abstain” or “withheld” and broker “non-votes” are counted as present for purposes of determining whether a quorum is present at the Annual Meeting.
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What is the difference between a “stockholder of record” and a “street name” holder? If your shares are registered directly in your name, you are considered the stockholder of record with respect to those shares. If your shares are held in a stock brokerage account or by a bank or other nominee, then the broker, bank or other nominee is considered to be the stockholder of record with respect to those shares, while you are considered the beneficial owner of those shares. In that case, your shares are said to be held in “street name.” What are broker non-votes? If your shares are held in “street name,” your broker, bank or other nominee is required to vote your shares according to your instructions. If you do not give instructions to your broker, bank or other nominee, it will still be able to vote your shares with respect to certain “discretionary” items, but will not be allowed to vote your shares with respect to “non-discretionary” items. Proposals 1, 3 and 34 are “non-discretionary” items. If you do not instruct your broker, bank or other nominee how to vote with respect to those proposals, it may not vote for those proposals, and those votes will be counted as broker “non-votes.” Proposal 2 is considered to be a discretionary item, and your broker, bank or other nominee will be able to vote on this proposal even if it does not receive instructions from you. What vote is required to approve each proposal? The following sets forth the votes that are required from the holders of common stock to approve each of the proposals, and the impact of abstentions and broker non-votes: | | | | | | | | | | | | | | Proposal Number | | Subject | | Vote Required | | Impact of Abstentions and Broker Non-Votes, if any | 1 | | Election of directors | | Directors will be elected by a plurality of the votes cast. The nominees receiving the most FOR votes will be elected. Withholding authority to vote with respect to nominees will not affect the outcome of the vote. | | Abstentions and broker non-votes will not count as votes cast on the proposal and will not affect the outcome of the vote. | | | | | | | | 2 | | Ratification of appointment of independent registered public accounting firm | | The holders of a majority of the shares present in person or by proxy at the meeting and entitled to vote must vote FOR to approve the proposal. | | Abstentions will have the same effect as votes cast AGAINST the proposal. Broker non-votes will not affect the outcome of the vote. | | | | | | | |
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3 | | Advisory vote to approve the compensation of our named executive officers | | The holders of a majority of the shares present in person or by proxy at the meeting and entitled to vote must vote FOR to approve the proposal. | | Abstentions will have the same effect as votes cast AGAINST the proposal. Broker non-votes will not affect the outcome of the vote. | | | | | | | | 4 | | Approval of amendment to Certificate of Incorporation to allow for exculpation of officers as permitted by Delaware law | | The holders of a majority of the outstanding shares entitled to vote. | | Abstentions and broker non-votes will have the same effect as votes cast AGAINST the proposal. |
What are the Board of Directors’ recommendations on how I should vote my shares? | ● | Proposal 1: FOR all nominees for election as directors. |
| ● | Proposal 2: FOR the ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2023.2024. |
| ● | Proposal 3: FOR the advisory vote to approve the compensation of our named executive officers. |
| ● | Proposal 4: FOR the approval of the amendment to our Amended and Restated Certificate of Incorporation to allow for exculpation of officers as permitted by Delaware law. |
How can I vote? During the Annual Meeting If you are a stockholder of record, you may vote online during the Annual Meeting through the link: www.virtualshareholdermeeting.com/TCMD2023TCMD2024. The 16-digit control number provided on your Notice of Internet Availability of Proxy Materials or proxy card is necessary to access this site. By Proxy If you do not wish to vote in person or will not be attending the meeting, you may vote by proxy through the following means. You can vote your shares by proxy: | ● | by mailing a proxy card; |
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Please refer to the specific instructions set forth on the Notice or printed proxy materials. For security reasons, our electronic voting system has been designed to authenticate your identity as a stockholder. If you hold your shares through a broker, bank or other nominee, the firm that holds your shares will provide you with materials and instructions for voting your shares. If you complete and submit your proxy before the meeting, the persons named as proxies will vote the shares represented by your proxy in accordance with your instructions. If you submit a proxy without giving voting instructions, your shares will be voted in the manner recommended by the Board of Directors on all matters presented in this Proxy Statement, and as the persons named as proxies may determine in their discretion with respect to any other matters properly presented at the meeting. Can I change my vote after I have submitted a proxy? If you are a stockholder of record, you may revoke your proxy by (1) following the instructions on the Notice or proxy card, as applicable, and entering a new vote by mail, over the internet or by phone by the time specified on the Notice or proxy card, as applicable, (2) sending a written notice of revocation to Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, New York 11717, or (3) virtually attending the Annual Meeting and voting (although attendance at the Annual Meeting will not in and of itself revoke a proxy). If a broker, bank or other nominee holds your shares, you must contact them in order to find out how to revoke or change your vote. What happens if additional matters are presented at the Annual Meeting? If any other matters are properly presented for consideration at the Annual Meeting, including, among other things, consideration of a motion to adjourn the Annual Meeting to another time or place (including, without limitation, for the purpose of soliciting additional proxies), the persons named as proxies will have discretion to vote on those matters in accordance with their best judgment. We do not currently anticipate that any other matters will be raised at the Annual Meeting. Who is paying for the cost of this proxy solicitation? The Company is making this solicitation and will pay the entire cost of preparing and distributing the Notice and these proxy materials and soliciting votes. If you choose to access the proxy materials or vote over the internet, you are responsible for any internet access charges that you may incur. Our directors, officers and employees may, without compensation other than their regular compensation, solicit proxies through further mailings, personal conversations, facsimile transmissions, e-mails, or otherwise. What is the deadline for submitting a stockholder proposal for the 20242025 annual meeting? Any stockholder proposal intended to be included in the Proxy Statement for the 20242025 Annual Meeting of Stockholders must satisfy the SEC regulations under Rule 14a-8 of the Securities Exchange Act, of 1934 (the “Exchange Act”), and be received no later than November 28, 2023.27, 2024. In addition, our Bylaws contain advance notice provisions requiring a stockholder who wishes to present a proposal or nominate directors at our next Annual Meeting of Stockholders (whether or not to be included in the Proxy Statement) to comply with certain requirements, including providing timely written notice thereof in accordance with our Bylaws. To be timely for our 20242025 Annual Meeting of Stockholders, any such proposal must be delivered in writing to our Corporate Secretary at our principal executive offices between the close of business on January 9, 20248, 2025 and the close of business on February 8, 2024.7, 2025. If the date of the next Annual Meeting of Stockholders is more than 30 days before or more than 60 days after the first anniversary of the 20232024 Annual Meeting of Stockholders, then notice by the stockholder must be delivered no earlier than the close of business on the 120th day prior to the date of such Annual Meeting and not later than the close of business on the later of (1) the 90th day prior to the date of such Annual Meeting or (2) the 10th day following the day on which public announcement of the date of such meeting is first made.
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In addition to satisfying the foregoing requirements, in order to comply with the universal proxy rules, a stockholder who intends to solicit proxies in support of director nominees for election at the 20242025 Annual Meeting, other than the Company’s nominees, must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 9, 2024.10, 2025. If the date of the next Annual Meeting of Stockholders is more than 30 days before or after the first anniversary of the 20232024 Annual Meeting of Stockholders, then such notice must be provided by the later of the 60th day prior to the date of such meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. All notices related to proposals and nominations must also comply with the requirements of applicable law and the provisions set forth in our Bylaws. | | 2022 Proxy Statement
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HOUSEHOLDING OF PROXY MATERIALS Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of the Notice of Internet Availability of Proxy Materials, Proxy Statement and 20222023 Annual Report to Stockholders, as applicable, is being delivered to multiple stockholders sharing an address unless we have received contrary instructions. We will promptly deliver a separate copy of any of these documents to you if you write to us at Tactile Systems Technology, Inc., 3701 Wayzata Boulevard, Suite 300, Minneapolis, Minnesota 55416, Attention: Corporate Secretary or call us at (612) 355-5100. If you want to receive separate copies of the Notice of Internet Availability of Proxy Materials, Proxy Statement, or 20222023 Annual Report to Stockholders in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your broker, bank or other nominee record holder, or you may contact us at the above address or telephone number. AVAILABILITY OF FORM 10-K Stockholders may receive, without charge, a copy of our Annual Report on Form 10-K for the year ended December 31, 2022,2023, as filed with the SEC, including financial statements (and excluding exhibits, which are available for a reasonable fee), by written request to our Corporate Secretary at Tactile Systems Technology, Inc., 3701 Wayzata Boulevard, Suite 300, Minneapolis, Minnesota 55416. Our Form 10-K is also available on our website in the “Investors—Annual Reports & SEC Filings” section of our website at www.tactilemedical.com.
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INCORPORATION BY REFERENCE Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act or the Exchange Act that may incorporate future filings (including this Proxy Statement, in whole or in part), the Audit Committee Report and the Compensation and Organization Committee Report included in this Proxy Statement shall not be incorporated by reference in any such filings. | | 65
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APPENDIXAPPENDIX A
RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMEASURES Adjusted EBITDA is referenced in this Proxy Statement and represents net lossincome plus interest expense, net, plusless income tax expense,benefit, plus depreciation and amortization, plus stock-based compensation expense, plus impairment charges and inventory write-offs, plusless the change in fair value of earn-out, plus litigation defense costs, and plus executive transition costs.earn-out. Adjusted EBITDA is amargin represents net income margin (net income divided by revenue) with the same items adjusted as in Adjusted EBITDA. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measuremeasures and should not be considered as an alternativealternatives to, or superior to, net income or loss as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and it should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. The Company’s definition of thisthese measure is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. The following table contains a reconciliation of Net LossIncome to Adjusted EBITDA: | | | | (In thousands) | | | Year Ended December 31, 2023 | Net Income | | $ | 28,515 | Interest expense, net | | | 2,273 | Income tax benefit | | | (12,745) | Depreciation and amortization | | | 6,539 | Stock-based compensation | | | 7,547 | Change in fair value of earn-out | | | (2,475) | Adjusted EBITDA | | $ | 29,654 |
| | | | (In thousands) | | | Year Ended December 31, 2022 | Net loss | | $ | (17,866) | Interest expense, net | | | 2,728 | Income tax expense | | | 2,393 | Depreciation and amortization | | | 6,267 | Stock-based compensation | | | 9,600 | Impairment charges and inventory write-offs | | | 215 | Change in fair value of earn-out | | | 11,850 | Litigation defense costs | | | 2,830 | Executive transition costs | | | 280 | Adjusted EBITDA | | $ | 18,297 |
The following table contains a reconciliation of Net Income Margin to Adjusted EBITDA Margin: | | | | |
| | Year Ended December 31, 2023 | Net Income Margin | | | 10.4% | Interest expense, net | | | 0.8% | Income tax benefit | | | (4.6)% | Depreciation and amortization | | | 2.4% | Stock-based compensation | | | 2.8% | Change in fair value of earn-out | | | (0.9)% | Adjusted EBITDA Margin | | | 10.8% |
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APPENDIX B CERTIFICATE OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF TACTILE SYSTEMS TECHNOLOGY, INC. Tactile Systems Technology, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), hereby certifies as follows: FIRST: At a meeting of the Board of Directors of the Corporation, the Board of Directors approved a proposed amendment to the Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) of the Corporation. SECOND: The proposed amendment provides that the heading of Article 8, and Section 8.1, of the Certificate of Incorporation is hereby amended to read in its entirety as follows: ARTICLE 8 DIRECTOR AND OFFICER LIABILITY; INDEMNIFICATION AND INSURANCE 8.1 Elimination of Certain Liability of Directors and Officers. The personal liability of the directors and the officers of the Corporation shall be eliminated to the fullest extent permitted by law. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or an officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. THIRD: Pursuant to Section 242 of the General Corporation Law of the State of Delaware, at the Corporation’s 2024 annual meeting of stockholders, duly called and held, the necessary number of shares as required by statute were voted in favor of the amendment. FOURTH: The foregoing amendment was duly adopted in accordance with Section 242 of the General Corporation Law of the State of Delaware. FIFTH: The foregoing amendment shall be effective on the date this Certificate of Amendment is filed with the Secretary of State of the State of Delaware. IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by the authorized officer named below, this __ day of ________, 2024. | | | | 2024 Proxy Statement | B-1 |
| Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. V06131-P91168V31969-P06304 ! ! ! For All Withhold All For All Except For Against Abstain ! ! ! ! ! ! To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. TACTILE SYSTEMS TECHNOLOGY, INC. 3701 WAYZATA BLVD. SUITE 300 MINNEAPOLIS, MN 55416 Nominees: 01) William W. Burke 02) Valerie L. Asbury 02) Bill Burke 03) Sheri L. Dodd 04) Raymond O. Huggenberger 05) Daniel L. Reuvers 06) D. Brent Shafer 07) Carmen B. Volkart 08) B. Vindell Washington 3. Approve, on an advisory basis, the 20222023 compensation of our named executive officers. 4. Approve an amendment to the Company's Amended and Restated Certificate of Incorporation to allow for exculpation of officers as permitted by Delaware law. The Board of Directors recommends you vote FOR proposals 2, 3 and 3.4. 2. Ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2023.2024. NOTE: In their discretion, the proxies are authorized to vote on such other business as may properly come before the meeting or any adjournment thereof. 1. Elect seveneight directors TACTILE SYSTEMS TECHNOLOGY, INC. The Board of Directors recommends you vote FOR the following: Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. SCAN TO VIEW MATERIALS & VOTEw! ! ! VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 7, 2023.2024. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - GoELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to www.virtualshareholdermeeting.com/TCMD2023 You may attendreduce the meetingcosts incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, vote during the meeting. Have the informationwhen prompted, indicate that is printedyou agree to receive or access proxy materials electronically in the box marked by the arrow available and follow the instructions.future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 7, 2023.2024. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. SCAN TO VIEW MATERIALS & VOTEw |
| V06132-P91168V31970-P06304 Continued and to be signed on reverse side Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and the Annual Report are available at www.proxyvote.com. TACTILE SYSTEMS TECHNOLOGY, INC. Annual Meeting of Stockholders May 8, 20232024 9:00 AM This proxy is solicited on behalf of the Board of Directors The stockholder(s) hereby appoint(s) Daniel L. Reuvers and Elaine Birkemeyer, or either of them, as proxies, each with the power to appoint their substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side hereof, all of the shares of Common Stock of TACTILE SYSTEMS TECHNOLOGY, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held virtually at 9:00 AM, CDT on May 8, 2023,2024 at Faegre Drinker Biddle & Reath LLP, Wells Fargo Center, Suite 2200 90 South Seventh Street, Minneapolis, Minnesota 55402, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations.
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