Form of Performance Stock Unit Agreement under the 2025 Equity Incentive Plan

Exhibit 10.4

TACTILE SYSTEMS TECHNOLOGY, INC. 

2025 EQUITY INCENTIVE PLAN

Performance Stock Unit Agreement

Tactile Systems Technology, Inc. (the “Company”), pursuant to its 2025 Equity Incentive Plan (the “Plan”), hereby grants an award of Performance Stock Units to you, the Participant named below. The terms and conditions of this Award are set forth in this Performance Stock Unit Agreement (the “Agreement”), consisting of this cover page, the Terms and Conditions on the following pages and the attached Exhibit A, and in the Plan document, a copy of which has been provided to you. Any capitalized term that is used but not defined in this Agreement shall have the meaning assigned to it in the Plan as it currently exists or as it is amended in the future.

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

Tactile Systems Technology, Inc. 

2025 Equity Incentive Plan 

Performance Stock Unit Agreement

Terms and Conditions

1.            Award of Performance Stock Units. The Company hereby confirms the grant to you, as of the Grant Date and subject to the terms and conditions of this Agreement and the Plan, of an award of Performance Stock Units (the “Units”) with the Target Number of Performance Stock Units (the “Target Number of Units”) specified on the cover page of this Agreement. For each Performance Year, one-third of the Target Number of Units will be subject to the applicable Performance Year’s payout factors specified in Exhibit A (the “Performance Year Target Number of Units”). The number of Units that may actually be earned and become eligible to vest pursuant to this Award can be between [ ]% and [ ]% of the Target Number of Units. Each Unit that is earned as a result of the performance goals specified in Exhibit A to this Agreement having been satisfied and which thereafter vests represents the right to receive one Share of the Company’s common stock. Prior to their settlement or forfeiture in accordance with the terms of this Agreement, the Units granted to you will be credited to a performance stock unit account in your name maintained by the Company. This account will be unfunded and maintained for book-keeping purposes only, with the Units simply representing an unfunded and unsecured contingent obligation of the Company.

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

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

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

(a)            Determination of Units Earned; Scheduled Vesting. Subject to Sections 4(b)-(d), and subject to any separate employment (or similar) agreement or severance plan to which you are a party or a participant, the number of Units that have been earned during each Performance Year, as determined by the Committee in accordance with Exhibit A (the “Earned Units”), will vest as follows, so long as your Service has been continuous from the Grant Date to each applicable vesting date (each, a “Vesting Date”):

(i)  Earned Units with respect to the [___] Performance Year and Earned Units with respect to the [___] Performance Year shall vest on the date the Committee certifies (A) the degree to which the performance goals for the [___] Performance Year have been satisfied, and (B) the number of Units that have been earned during the [___] Performance Year as determined in accordance with Exhibit A, which certification shall occur no later than March 15 of the calendar year immediately following the [___] Performance Year; and

(ii)  Earned Units with respect to the [___] Performance Year shall vest on the date the Committee certifies (A) the degree to which the performance goals for the [___] Performance Year have been satisfied, and (B) the number of Units that have been earned during the [___] Performance Year as determined in accordance with Exhibit A, which certification shall occur no later than March 15 of the calendar year immediately following the [___] Performance Year.

For the avoidance of doubt, the Committee shall certify (1) the degree to which the performance goals for the [___] Performance Year have been satisfied, and (2) the number of Units that have been earned during the [___] Performance Year as determined in accordance with Exhibit A, which certification shall occur no later than March 15 of the calendar year immediately following the [___] Performance Year, but any Earned Units with respect to the [___] Performance Year shall vest in accordance with Section 4(a)(i) above.

(b)            Disability. If your Service terminates by reason of your Disability prior to an applicable Vesting Date, then you will be entitled to have vest on the date your Service terminates all unvested Earned Units for completed Performance Years.

(c)            Death. If your Service terminates by reason of your death prior to an applicable Vesting Date, then you will be entitled to have vest on the date your Service terminates (i) for completed Performance Years, all unvested Earned Units; and (ii) for uncompleted Performance Years, a pro rata portion of the applicable Performance Year Target Number of Units. The pro rata portion shall be determined by multiplying the Performance Year Target Number of Units by a fraction whose numerator is the number of days during the Performance Year prior to your Service termination date and whose denominator is the number of days in the Performance Year.

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

If this Award is not continued, assumed or replaced in connection with a Change in Control and vesting of the Units is being accelerated in accordance with Sections 12(b) and 12(c) of the Plan, then in such case the number of Units that may be vested shall be (i) for any Performance Year that has ended, the Earned Units, plus (ii) for any other Performance Year, the Performance Year Target Number of Units.

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

(e)            Forfeiture of Unvested Units. If your Service terminates prior to the applicable Vesting Date under circumstances other than as set forth in Sections 4(b) through (d), or as set forth in any separate employment (or similar) agreement or severance plan to which you are a party or a participant, all unvested Units shall be forfeited immediately after the termination of your Service. To the extent you are a participant in the Company’s Executive Employee Severance Plan and these Units are subject to pro rata vesting pursuant to the terms of that plan, any references to “the vesting or performance period” therein as applied to these Units shall be the period of time between the Grant Date of these Units and the third anniversary of the Grant Date.

5.            Settlement of Units. Subject to Section 7 below, as soon as practicable after any date on which Units vest (but no later than the 15^th day of the third calendar month following the applicable vesting date), the Company shall cause to be issued and delivered to you (or to your personal representative or your designated beneficiary or estate in the event of your death, as applicable) one Share in payment and settlement of each vested Unit. Delivery of the Shares shall be effected by the issuance of a stock certificate to you, by an appropriate entry in the stock register maintained by the Company’s transfer agent with a notice of issuance provided to you, or by the electronic delivery of the Shares to a brokerage account you designate, and shall be subject to the tax withholding provisions of Section 6 and compliance with all applicable legal requirements as provided in Section 17(c) of the Plan, and shall be in complete satisfaction and settlement of such vested Units. If the number of Units that vest on a Vesting Date include a fractional Unit, the Company shall round the number of vested Units to the nearest whole Unit prior to issuance of Shares as provided herein.

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

7.            Compensation Recovery Policy. All compensation paid or payable pursuant to this Agreement shall be subject to potential forfeiture or recovery by the Company in accordance with any compensation recovery policy adopted by the Board or any committee thereof, including but not limited to in response to the requirements of Section 10D of the Exchange Act and any implementing rules and regulations thereunder adopted by the Securities and Exchange Commission or any national securities exchange on which the Company’s common stock is then listed. This Agreement will be automatically amended to comply with any such compensation recovery policy.

8.            Additional Provisions.

(a)            Governing Plan Document. This Agreement and the Award are subject to all the provisions of the Plan, and to all interpretations, rules and regulations which may, from time to time, be adopted and promulgated by the Committee pursuant to the Plan. If there is any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will govern. If there is any conflict between this Agreement or the Plan and any separate employment (or similar) agreement or severance plan to which you are a party or a participant, the provisions of the other agreement or plan will govern.

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

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

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

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

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

Exhibit A

Tactile Systems Technology, Inc. 

Performance Stock Unit Agreement 

Performance Goals and Determination of Earned Units