Page
Exhibit 4.2
TABLE OF CONTENTS
Page | |||
| Section 1. | ESTABLISHMENT AND PURPOSE. | 1 | |
| Section 2. | DEFINITIONS. | 1 | |
| (a) | “Affiliate” | 1 | |
| (b) | “Award” | 1 | |
| (c) | “Award Agreement” | 1 | |
| (d) | “Board of Directors” or “Board” | 1 | |
| (e) | “Cash-Based Award” | 1 | |
| (f) | “Change in Control” | 1 | |
| (g) | “Code” | 3 | |
| (h) | “Committee” | 3 | |
| (i) | “Company” | 3 | |
| (j) | “Consultant” | 3 | |
| (k) | “Disability” | 3 | |
| (l) | “Employee” | 3 | |
| (m) | “Exchange Act” | 3 | |
| (n) | “Exercise Price” | 3 | |
| (o) | “Fair Market Value” | 3 | |
| (p) | “ISO” | 4 | |
| (q) | “Nonstatutory Option” or “NSO” | 4 | |
| (r) | “Option” | 4 | |
| (s) | “Outside Director” | 4 | |
| (t) | “Parent” | 4 | |
| (u) | “Participant” | 4 | |
| (v) | “Plan” | 4 | |
| (w) | “Purchase Price” | 5 | |
| (x) | “Restricted Share” | 5 | |
| (y) | “SAR” | 5 | |
| (z) | “Section 409A” | 5 | |
| (aa) | “Securities Act” | 5 | |
| (bb) | “Service” | 5 | |
| (cc) | “Ordinary Share” | 5 | |
| (dd) | “Share-Based Award” | 5 | |
| (ee) | “Share Unit” | 5 | |
| (ff) | “Subsidiary” | 5 | |
| Section 3. | ADMINISTRATION. | 6 | |
| (a) | Committee Composition | 6 | |
| (b) | Committee Appointment | 6 | |
| (c) | Committee Responsibilities | 6 | |
| Section 4. | ELIGIBILITY. | 7 | |
| (a) | General Rule | 7 | |
| (b) | Ten-Percent Shareholders | 8 | |
| (c) | Attribution Rules | 8 | |
| (d) | Outstanding Ordinary Shares | 8 | |
| Section 5. | Ordinary Shares SUBJECT TO PLAN; Outside director COMPENSATION limit. | 8 | |
| (a) | Basic Limitation | 8 | |
| (b) | Additional Shares | 9 | |
| (c) | Substitution and Assumption of Awards | 9 | |
| (d) | Outside Director Compensation Limit | 9 | |
| Section 6. | RESTRICTED SHARES. | 9 | |
| (a) | Restricted Share Award Agreement | 9 | |
| (b) | Payment for Awards | 10 | |
| (c) | Vesting | 10 | |
| (d) | Xxxxxx and Dividend Rights | 10 | |
| (e) | Restrictions on Transfer of Shares | 10 | |
| Section 7. | TERMS AND CONDITIONS OF OPTIONS. | 10 | |
| (a) | Option Award Agreement | 10 | |
| (b) | Number of Ordinary Shares | 11 | |
| (c) | Exercise Price | 11 | |
| (d) | Withholding Taxes | 11 | |
| (e) | Exercisability and Term | 11 | |
| (f) | Exercise of Options | 11 | |
| (g) | Effect of Change in Control | 11 | |
| (h) | No Rights as a Shareholder | 12 | |
| (i) | Modification, Extension and Renewal of Options | 12 | |
| (j) | Restrictions on Transfer of Shares | 12 | |
| (k) | Buyout Provisions | 12 | |
| Section 8. | PAYMENT FOR SHARES. | 12 | |
| (a) | General Rule | 12 | |
| (b) | Surrender of Ordinary Shares | 12 | |
| (c) | Services Rendered | 13 | |
| (d) | Cashless Exercise | 13 | |
| (e) | Exercise/Pledge | 13 | |
| (f) | Net Exercise | 13 | |
| (g) | Promissory Note | 13 | |
| (h) | Other Forms of Payment | 13 | |
| (i) | Limitations under Applicable Law | 13 | |
| Section 9. | SHARE APPRECIATION RIGHTS. | 13 | |
| (a) | SAR Award Agreement | 13 | |
| (b) | Number of Shares | 14 | |
| (c) | Exercise Price | 14 | |
| (d) | Exercisability and Term | 14 | |
| (e) | Effect of Change in Control | 14 | |
| (f) | Exercise of SARs | 14 | |
| (g) | Modification, Extension or Assumption of SARs | 14 | |
| (h) | Buyout Provisions | 15 | |
| Section 10. | share UNITS. | 15 | |
| (a) | Share Unit Award Agreement | 15 | |
| (b) | Payment for Awards | 15 | |
| (c) | Vesting Conditions | 15 | |
| (d) | Xxxxxx and Dividend Rights | 15 | |
| (e) | Form and Time of Settlement of Share Units | 15 | |
| (f) | Death of Participant | 16 | |
| (g) | Creditors’ Rights | 16 | |
| Section 11. | CASH-BASED AWARDS AND SHARE BASED AWARDS. | 16 | |
| Section 12. | ADJUSTMENT OF SHARES. | 16 | |
| (a) | Adjustments | 16 | |
| (b) | Dissolution or Liquidation | 17 | |
| (c) | Merger or Reorganization | 17 | |
| (d) | Reservation of Rights | 18 | |
| Section 13. | DEFERRAL OF AWARDS. | 18 | |
| (a) | Committee Powers | 18 | |
| (b) | General Rules | 18 | |
| Section 14. | AWARDS UNDER OTHER PLANS. | 18 | |
| Section 15. | PAYMENT OF DIRECTOR’S FEES IN SECURITIES. | 18 | |
| (a) | Effective Date | 18 | |
| (b) | Elections to Receive NSOs, SARs, Restricted Shares, or Share Units | 18 | |
| (c) | Number and Terms of NSOs, SARs, Restricted Shares or Share Units | 18 | |
| Section 16. | LEGAL AND REGULATORY REQUIREMENTS. | 19 | |
| Section 17. | TAXES. | 19 | |
| (a) | Withholding Taxes | 19 | |
| (b) | Ordinary Share Withholding | 19 | |
| (c) | Section 409A | 19 | |
| Section 18. | TRANSFERABILITY. | 20 | |
| Section 19. | PERFORMANCE BASED AWARDS. | 20 | |
| Section 20. | RECOUPMENT. | 20 | |
| Section 21. | NO EMPLOYMENT RIGHTS. | 20 | |
| Section 22. | DURATION AND AMENDMENTS. | 21 | |
| (a) | Term of the Plan | 21 | |
| (b) | Right to Amend the Plan | 21 | |
| (c) | Effect of Termination | 21 | |
| Section 23. | AWARDS TO PARTICIPANTS outside the United States. | 21 | |
| Section 24. | GOVERNING LAW. | 21 | |
| Section 25. | SUCCESSORS AND ASSIGNS. | 21 | |
| Section 26. | EXECUTION. | 21 | |
2023 Omnibus Incentive Plan
Section 1. ESTABLISHMENT AND PURPOSE.
The Plan was adopted by the Board of Directors on [_____] and shall be effective on [_____] (the “Effective Date”). The Plan’s purpose is to enhance the Company’s ability to attract, retain, incent, reward, and motivate persons who make (or are expected to make) important contributions to the Company and/or its Subsidiaries and Affiliates by providing Participants with equity ownership and other incentive opportunities.
Section 2. DEFINITIONS.
(a) “Affiliate” means any entity other than a Subsidiary if the Company and/or one or more Subsidiaries own not less than fifty percent (50%) of such entity.
(b) “Award” means any award of an Option, a SAR, a Restricted Share, a Share Unit, a Share-Based Award, or a Cash-Based Award under the Plan.
(c) “Award Agreement” means the agreement between the Company and the recipient of an Award which contains the terms, conditions and restrictions pertaining to such Award.
(d) “Board of Directors” or “Board” means the Board of Directors of the Company, as constituted from time to time.
(e) “Cash-Based Award” means an Award that entitles the Participant to receive a cash-denominated payment.
(f) “Change in Control” means the occurrence of any of the following events:
| (i) | A change in the composition of the Board occurs as a result of which fewer than one-half of the incumbent directors are directors who either: |
| (A) | Had been directors of the Company on the “look-back date” (as defined below) (the “original directors”); or |
| (B) | Were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved (the “continuing directors”); |
provided, however, that for this purpose, the “original directors” and “continuing directors” shall not include any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board;
| (ii) | Any “person” (as defined below) who by the acquisition or aggregation of securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company; |
| (iii) | The consummation of a merger or consolidation of the Company or a Subsidiary of the Company with or into another entity or any other corporate reorganization, if persons who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization fifty percent (50%) or more of the voting power of the outstanding securities of each of (A) the Company (or its successor) and (B) any direct or indirect parent corporation of the Company (or its successor); or |
| (iv) | The sale, transfer, or other disposition of all or substantially all of the Company’s assets. |
For purposes of subsection (f)(i) above, the term “look-back” date means the later of (1) the Effective Date and (2) the date that is twenty-four (24) months prior to the date of the event that may constitute a Change in Control.
For purposes of subsection (f)(ii) above, the term “person” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act, but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary, (2) a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the shares, and (3) the Company or any Subsidiary of the Company.
Any other provision of this Section 2(f) notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction, and a Change in Control shall not be deemed to occur if the Company files a registration statement with the United States Securities and Exchange Commission in connection with an initial or secondary public offering of securities or debt of the Company to the public or on account of any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof.
(g) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
(h) “Committee” means the Compensation Committee as designated by the Board which is authorized to administer the Plan as described in Section 3 hereof.
(i) “Company” means Gorilla Technology Group Inc., a Cayman Islands limited exempted company, including any successor thereto.
(j) “Consultant” means an individual who is a consultant or advisor and who provides bona fide services to the Company, a Parent, a Subsidiary, or an Affiliate as an independent contractor (not including service as a member of the Board) or a member of the board of directors of a Parent or a Subsidiary, in each case who is not an Employee.
(k) “Disability” means any permanent and total disability as defined by Section 22(e)(3) of the Code, or, in the case of a Participant outside the United States, such other definition as determined by the Committee for purposes of the Plan taking into consideration the provisions of applicable law.
(l) “Employee” means any individual who is a common-law employee of the Company, a Parent, a Subsidiary, or an Affiliate.
(m) “Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(n) “Exercise Price” means, in the case of an Option, the amount for which one Ordinary Share may be purchased upon exercise of such Option, as specified in the applicable Option Award Agreement. “Exercise Price” means, in the case of a SAR, an amount, as specified in the applicable SAR Award Agreement, which is subtracted from the Fair Market Value of one Ordinary Share in determining the amount payable upon exercise of such SAR.
(o) “Fair Market Value” with respect to an Ordinary Share means the market price of one Ordinary Share determined by the Committee as follows:
| (i) | If the Ordinary Shares were traded over-the-counter on the date in question, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which the Ordinary Shares are quoted or, if the Ordinary Shares are not quoted on any such system, by the Pink Quote system; |
| (ii) | If the Ordinary Shares were traded on any established stock exchange (such as the New York Stock Exchange, The Nasdaq Capital Market, The Nasdaq Global Market or The Nasdaq Global Select Market) or national market system on the date in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable exchange or system; or |
| (iii) | If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate. |
The determination of fair market value for purposes of tax withholding may be made in the Committee’s discretion subject to applicable law and is not required to be consistent with the determination of Fair Market Value for other purposes.
For any date that is not a trading day, the Fair Market Value of an Ordinary Share for such date shall be determined under clauses (i) and (ii) above with reference to the immediately preceding trading day. In all cases, the determination of Fair Market Value by the Committee shall be conclusive and binding on all persons and shall be consistent with the rules of Section 409A and Section 422 of the Code to the extent applicable.
(p) “ISO” means an Option intended to be an “incentive stock option” described in Section 422 of the Code. Each Option granted pursuant to the Plan will be treated as providing by its terms that it is to be an NSO unless, as of the date of grant, it is expressly designated as an ISO in the applicable Option Award Agreement.
(q) “Nonstatutory Option” or “NSO” means an Option that is not an ISO.
(r) “Option” means an option entitling the holder to acquire Ordinary Shares upon payment of the exercise price.
(s) “Outside Director” means a member of the Board who is not a common-law employee of, or paid consultant to, the Company, a Parent or a Subsidiary.
(t) “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns shares possessing fifty percent (50%) or more of the total combined voting power of all classes of shares in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be a Parent commencing as of such date.
(u) “Participant” means a person who holds an Award.
(v) “Plan” means this 2023 Omnibus Incentive Plan of Gorilla Technology Group Inc., as amended from time to time.
(w) “Purchase Price” means the consideration for which one Ordinary Share may be acquired under the Plan (other than upon exercise of an Option or SAR), as specified by the Committee.
(x) “Restricted Share” means an Ordinary Share subject to restrictions requiring that it be forfeited, redelivered or offered for sale to the Company if specified performance or other vesting conditions are not satisfied awarded under the Plan.
(y) “SAR” means a right entitling the holder upon exercise to receive an amount (payable in cash or in Ordinary Shares of equivalent value) equal to the excess of the Fair Market Value of the Ordinary Shares subject to the right over the Exercise Price from which appreciation under the SAR is to be measured.
(z) “Section 409A” means Section 409A of the Code.
(aa) “Securities Act” means the United States Securities Act of 1933, as amended, the rules and regulations promulgated thereunder.
(bb) “Service” means service as an Employee, Consultant or Outside Director, subject to such further limitations as may be set forth in the Plan or the applicable Award Agreement. Service does not terminate when an Employee goes on a bona fide leave of absence, that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, for purposes of determining whether an Option is entitled to ISO status, an Employee’s employment will be treated as terminating three (3) months after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. The Administrator determines which leaves of absence count toward Service, and when Service terminates for all purposes under the Plan.
(cc) “Ordinary Share” means one ordinary share, par value $.0001 per share, of the Company as adjusted in accordance with Section 12 (if applicable).
(dd) “Share-Based Award” means an Award other than an Option, a SAR, a Restricted Share, a Share Unit that is convertible into or otherwise based on Ordinary Shares.
(ee) “Share Unit” means a bookkeeping entry representing the Company’s obligation to deliver one Ordinary Share (or distribute cash measured by the value of an Ordinary Share on a future date) and may be subject to the satisfaction of performance or other vesting conditions.
(ff) “Subsidiary” means any corporation, if the Company owns and/or one or more other Subsidiaries own not less than fifty percent (50%) of the total combined voting power of all classes of outstanding equity of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. The determination of whether an entity is a “Subsidiary” shall be made in accordance with Section 424(f) of the code.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
5
Section 3. ADMINISTRATION.
(a) Committee Composition. The Plan shall be administered by a Committee appointed by the Board, or by the Board acting as the Committee. The Committee shall consist of two or more directors of the Company. In addition, to the extent required by the Board, the composition of the Committee shall satisfy such requirements of the New York Stock Exchange or the Nasdaq Stock Market, as applicable, and as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act.
(b) Committee Appointment. The Board may also appoint one or more separate committees of the Board, each composed of one or more directors of the Company who need not satisfy the requirements of Section 3(a), who may administer the Plan, grant Awards under the Plan and determine all terms of such grants, in each case with respect to all Employees, Consultants and Outside Directors (except such as may be on such committee), provided that such committee or committees may perform these functions only with respect to Employees who are not considered officers or directors of the Company under Section 16 of the Exchange Act. Within the limitations of the preceding sentence, any reference in the Plan to the Committee shall include such committee or committees appointed pursuant to the preceding sentence. To the extent permitted by applicable laws, the Board or the Committee may also authorize one or more officers of the Company to designate Employees, other than officers under Section 16 of the Exchange Act, to receive Awards and/or to determine the number of such Awards to be received by such persons; provided, however, that the Board or the Committee shall specify the total number of Awards that such officers may so award.
(c) Committee Responsibilities. Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take the following actions:
| (i) | To interpret the Plan and to apply its provisions; |
| (ii) | To adopt, amend, or rescind rules, procedures, and forms relating to the Plan; |
| (iii) | To adopt, amend, or terminate sub-plans established for the purpose of satisfying applicable foreign laws including qualifying for preferred tax treatment under applicable foreign tax laws; |
| (iv) | To authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan; |
| (v) | To determine when Awards are to be granted under the Plan; |
| (vi) | To select the Participants to whom Awards are to be granted; |
| (vii) | To determine the type of Award and number of Ordinary Shares or amount of cash to be made subject to each Award; |
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
6
| (viii) | To prescribe the terms and conditions of each Award, including (without limitation) the Exercise Price and Purchase Price, and the vesting or duration of the Award (including accelerating the vesting of Awards, either at the time of the Award or thereafter, without the consent of the Participant), to determine whether an Option is to be classified as an ISO or as an NSO, and to specify the provisions of the agreement relating to such Award; |
| (ix) | To amend any outstanding Award Agreement, subject to applicable legal restrictions and to the consent of the Participant if the Participant’s rights or obligations would be materially impaired; |
| (x) | To prescribe the consideration for the grant of each Award or other right under the Plan and to determine the sufficiency of such consideration; |
| (xi) | To determine the disposition of each Award or other right under the Plan in the event of a Participant’s divorce or dissolution of marriage; |
| (xii) | To determine whether Awards under the Plan will be granted in replacement of other grants under an incentive or other compensation plan of an acquired business; |
| (xiii) | To correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award Agreement; |
| (xiv) | To establish or verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting, and/or ability to retain any Award; and |
| (xv) | To take any other actions deemed necessary or advisable for the administration of the Plan. |
Subject to the requirements of applicable law, the Committee may designate persons other than members of the Committee to carry out its responsibilities and may prescribe such conditions and limitations as it may deem appropriate, except that the Committee may not delegate its authority with regard to the selection for participation of or the granting of Awards under the Plan to persons subject to Section 16 of the Exchange Act, to the extent applicable. All decisions, interpretations and other actions of the Committee shall be final and binding on all Participants and all persons deriving their rights from a Participant. No member of the Committee shall be liable for any action that such member of the Committee has taken or has failed to take in good faith with respect to the Plan or any Award under the Plan.
Section 4. ELIGIBILITY.
(a) General Rule. The Committee will select Participants from among Employees, Consultants and Outside Directors. Eligibility for ISOs is limited to individuals described in the first sentence of this Section 4(a) who are employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code. Eligibility for Options, other than ISOs, and SARs is limited to individuals described in the first sentence of this Section 4(a) who are providing direct services on the date of grant of the Award to the Company or to a subsidiary of the Company that would be described in the first sentence of Section 1.409A-1(b)(5)(iii)(E) of the United States Treasury Regulations.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
7
(b) Ten-Percent Shareholders. An Employee who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding shares of the Company, a Parent or Subsidiary shall not be eligible for the grant of an ISO unless such grant satisfies the requirements of Section 422(c)(5) of the Code.
(c) Attribution Rules. For purposes of Section 4(b) above, in determining share ownership, an Employee shall be deemed to own the shares owned, directly or indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors, and lineal descendants. Shares owned, directly or indirectly, by or for a corporation, partnership, estate, or trust shall be deemed to be owned proportionately by or for its shareholder, partners, or beneficiaries.
(d) Outstanding Ordinary Shares. For purposes of Section 4(b) above, “outstanding shares” shall include all shares actually issued and outstanding immediately after the grant. “Outstanding shares” shall not include Ordinary Shares authorized for issuance under outstanding Options held by the Employee or by any other person.
Section 5. Ordinary Shares SUBJECT TO PLAN; Outside director COMPENSATION limit.
(a) Basic Limitation. Ordinary Shares offered under the Plan shall be authorized but unissued shares or treasury shares. The maximum aggregate number of Ordinary Shares authorized for issuance as Awards under the Plan shall not exceed (i) 10,000,000 Ordinary Shares (the “Share Reserve”), plus (ii) an annual increase on the first day of each fiscal year for a period of not more than ten (10) years beginning on January 1, 2024 and ending on (and including) January 1, 2033, in an amount equal to (x) five percent (5%) of the total number of Ordinary Shares outstanding on the last day of the immediately preceding fiscal year and (y) such lesser amount (including zero) that the Board or the Committee determines for purposes of the annual increase for that fiscal year. Notwithstanding the foregoing, the number of Ordinary Shares that may be delivered in the aggregate pursuant to the exercise of ISOs granted under the Plan shall not exceed five (5) times the number of Ordinary Shares provided under clause (i) above plus, to the extent allowable under Section 422 of the Code, any Ordinary Shares that become available for issuance under the Plan pursuant to Section 5(b), but nothing in this Section 5 will be construed as requiring that any, or any fixed number of, ISOs be awarded under the Plan. The limitations of this Section 5(a) shall be subject to adjustment pursuant to Section 12. The number of Ordinary Shares that are subject to Awards outstanding at any time under the Plan shall not exceed the number of Ordinary Shares which then remain available for issuance under the Plan. The Company shall at all times reserve and keep available sufficient Ordinary Shares to satisfy the requirements of the Plan.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
8
(b) Additional Shares. If Restricted Shares or Ordinary Shares issued upon the exercise of Options are forfeited, then such Ordinary Shares shall again become available for Awards under the Plan. If Share Units, Options, or SARs are forfeited or terminate for any reason before being exercised or settled, or an Award is settled in cash without the delivery of Ordinary Shares to the holder, then the corresponding Ordinary Shares shall again become available for Awards under the Plan. If Share Units or SARs are settled, then only the number of Ordinary Shares (if any) actually issued in settlement of such Share Units or SARs shall reduce the number available in Section 5(a) and the balance (including any Ordinary Shares withheld to satisfy tax withholding obligations) shall again become available for Awards under the Plan. Any Ordinary Shares withheld to satisfy the Exercise Price or tax withholding obligation pursuant to any Award of Options or SARs shall be added back to the Ordinary Shares available for Awards under the Plan. Notwithstanding the foregoing provisions of this Section 5(b), Ordinary Shares that have actually been issued shall not again become available for Awards under the Plan except for Ordinary Shares that are forfeited and do not become vested.
(c) Substitution and Assumption of Awards. The Committee may make Awards under the Plan by assumption, substitution, or replacement of options, share appreciation rights, share units, or similar awards granted by another entity (including a Parent or Subsidiary), if such assumption, substitution, or replacement is in connection with an asset acquisition, share acquisition, merger, consolidation, or similar transaction involving the Company (and/or its Parent or Subsidiary) and such other entity (and/or its Affiliate). The terms of such assumed, substituted, or replaced Awards shall be as the Committee, in its discretion, determines is appropriate, notwithstanding limitations on Awards in the Plan. Any such substitute or assumed Awards shall not count against the Ordinary Share limitation set forth in Section 5(a) (nor shall Ordinary Shares subject to such Awards be added to the Ordinary Shares available for Awards under the Plan as provided in Section 5(b) above), except that Ordinary Shares acquired by exercise of substitute ISOs will count against the maximum number of Ordinary Shares that may be issued pursuant to the exercise of ISOs under the Plan.
(d) Outside Director Compensation Limit. The maximum number of Ordinary Shares subject to Awards granted under the Plan during any one calendar year to any Outside Director taken together with any cash fees paid by the Company to such Outside Director during such calendar year for service on the Board (other than the calendar year in which an Outside Director commences service on the Board), will not exceed seven hundred and fifty thousand dollars ($750,000) in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes), or, with respect to the calendar year in which an Outside Director is first appointed or elected to the Board, one million dollars ($1,000,000).
Section 6. RESTRICTED SHARES.
(a) Restricted Share Award Agreement. Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Share Award Agreement between the Participant and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Share Award Agreements entered into under the Plan need not be identical.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
9
(b) Payment for Awards. Restricted Shares may be sold or awarded under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past services, and future services.
(c) Vesting. Each Award of Restricted Shares may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Share Award Agreement. A Restricted Share Award Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability or retirement or other events. The Committee may determine, at the time of granting Restricted Shares or thereafter, that all or part of such Restricted Shares shall become vested in the event that a Change in Control occurs with respect to the Company.
(d) Xxxxxx and Dividend Rights. A holder of Restricted Shares awarded under the Plan shall have the same voting, dividend, and other rights as the Company’s other shareholder, except that in the case of any unvested Restricted Shares, the holder shall not be entitled to any dividends or other distributions paid or distributed by the Company in respect of outstanding Ordinary Shares. Notwithstanding the foregoing, at the Committee’s discretion, the holder of unvested Restricted Shares may be credited with such dividends and other distributions, provided that such dividends and other distributions shall be paid or distributed to the holder only if, when and to the extent such unvested Restricted Shares vest. The value of dividends and other distributions payable or distributable with respect to any unvested Restricted Shares that do not vest shall be forfeited. At the Committee’s discretion, the Restricted Share Award Agreement may require that the holder of Restricted Shares invest any cash dividends received in additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions as the Award with respect to which the dividend was paid. For the avoidance of doubt, other than with respect to the right to receive dividends and other distributions, the holders of unvested Restricted Shares shall have the same voting rights and other rights as the Company’s other shareholder in respect of such unvested Restricted Shares.
(e) Restrictions on Transfer of Shares. Restricted Shares shall be subject to such rights of repurchase, rights of first refusal, or other restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Restricted Share Award Agreement and shall apply in addition to any general restrictions that may apply to all holders of Ordinary Shares.
Section 7. TERMS AND CONDITIONS OF OPTIONS.
(a) Option Award Agreement. Each grant of an Option under the Plan shall be evidenced by an Option Award Agreement between the Participant and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in an Option Award Agreement. The Option Award Agreement shall specify whether the Option is an ISO or an NSO. The provisions of the various Option Award Agreements entered into under the Plan need not be identical.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
10
(b) Number of Ordinary Shares. Each Option Award Agreement shall specify the number of Ordinary Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 12.
(c) Exercise Price. Each Option Award Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than one hundred percent (100%) of the Fair Market Value of an Ordinary Share on the date of grant (110% for ISOs granted to Employees described in Section 4(b)), and the Exercise Price of an NSO shall not be less than one hundred percent (100%) of the Fair Market Value of an Ordinary Share on the date of grant. Notwithstanding the foregoing, Options may be granted with an Exercise Price of less than one hundred percent (100%) of the Fair Market Value per Ordinary Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. Subject to the foregoing in this Section 7(c), the Exercise Price under any Option shall be determined by the Committee in its sole discretion. The Exercise Price shall be payable in one of the forms described in Section 8.
(d) Withholding Taxes. As a condition to the exercise of an Option, the Participant shall make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Participant shall also make such arrangements as the Committee may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Ordinary Shares acquired by exercising an Option.
(e) Exercisability and Term. Each Option Award Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Option Award Agreement shall also specify the term of the Option; provided that the term of an ISO shall in no event exceed ten (10) years from the date of grant (five (5) years for ISOs granted to Employees described in Section 4(b)). An Option Award Agreement may provide for accelerated exercisability in the event of the Participant’s death, Disability, or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Participant’s Service. Options may be awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited. Subject to the foregoing in this Section 7(e), the Committee in its sole discretion shall determine when all or any installment of an Option is to become exercisable and when an Option is to expire.
(f) Exercise of Options. Each Option Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s Service with the Company and its Subsidiaries, and the right to exercise the Option of any executors or administrators of the Participant’s estate or any person who has acquired such Option(s) directly from the Participant by bequest or inheritance. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.
(g) Effect of Change in Control. The Committee may determine, at the time of granting an Option or thereafter, that such Option shall become exercisable as to all or part of the Ordinary Shares subject to such Option in the event that a Change in Control occurs with respect to the Company.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
11
(h) No Rights as a Shareholder. A Participant shall have no rights as a shareholder with respect to any Ordinary Shares covered by an Option or other Award until the date of issuance of a share certificate or other evidence of ownership for such Ordinary Shares or until the Participant’s ownership of such Ordinary Shares shall have been entered into the books of the registrar in the case of uncertificated shares. No adjustments shall be made, except as provided in Section 12.
(i) Modification, Extension and Renewal of Options. Within the limitations of the Plan, the Committee may modify, extend, or renew outstanding options or may accept the cancellation of outstanding options (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number of Ordinary Shares and at the same or a different Exercise Price, or in return for the grant of a different Award for the same or a different number of Ordinary Shares or for cash. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Participant, materially impair the Participant’s rights or obligations under such Option; provided, however, that an amendment or modification that may cause an ISO to become an NSO, and any amendment or modification that is required to comply with the rules applicable to ISOs, shall not be treated as materially impairing the rights or obligations of the Participant.
(j) Restrictions on Transfer of Shares. Any Ordinary Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal, and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Option Award Agreement and shall apply in addition to any general restrictions that may apply to all holders of Ordinary Shares.
(k) Buyout Provisions. The Committee may at any time (i) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (ii) authorize a Participant to elect to cash out an Option previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish.
Section 8. PAYMENT FOR SHARES.
(a) General Rule. The entire Exercise Price or Purchase Price of Ordinary Shares issued under the Plan shall be payable in lawful money of the United States at the time when such Ordinary Shares are purchased, except as provided in Section 8(b) through Section 8(h) below.
(b) Surrender of Ordinary Shares. To the extent that an Option Award Agreement so provides, payment may be made all or in part by surrendering, or attesting to the ownership of, Ordinary Shares which have already been owned by the Participant or the Participant’s representative. Such Ordinary Shares shall be valued at their Fair Market Value on the date when the new Ordinary Shares are purchased under the Plan. The Participant shall not surrender, or attest to the ownership of, Ordinary Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
12
(c) Services Rendered. At the discretion of the Committee, Ordinary Shares may be awarded under the Plan in consideration of services rendered to the Company or a Subsidiary. If Ordinary Shares are awarded without the payment of a Purchase Price in cash, the Committee shall make a determination (at the time of the Award) of the value of the services rendered by the Participant and the sufficiency of the consideration to meet the requirements of Section 6(b).
(d) Cashless Exercise. To the extent that an Option Award Agreement so provides, if the Ordinary Shares are traded on an established securities market, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Ordinary Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.
(e) Exercise/Pledge. To the extent that an Option Award Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker or lender to pledge Ordinary Shares, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of the aggregate Exercise Price.
(f) Net Exercise. To the extent that an Option Award Agreement so provides, by a “net exercise” arrangement pursuant to which the number of Ordinary Shares issuable upon exercise of the Option shall be reduced by the largest whole number of Ordinary Shares having an aggregate Fair Market Value that does not exceed the aggregate Exercise Price (plus tax withholdings, if applicable) and any remaining balance of the aggregate Exercise Price (and/or applicable tax withholdings) not satisfied by such reduction in the number of whole Ordinary Shares to be issued shall be paid by the Participant in cash or any other form of payment permitted under the Option Award Agreement.
(g) Promissory Note. To the extent that an Option Award Agreement or Restricted Share Award Agreement so provides, payment may be made all or in part by delivering (on a form prescribed by the Company) a full-recourse promissory note.
(h) Other Forms of Payment. To the extent that an Option Award Agreement or Restricted Share Award Agreement so provides, payment may be made in any other form that is consistent with applicable laws, regulations, and rules.
(i) Limitations under Applicable Law. Notwithstanding anything herein or in an Option Award Agreement or Restricted Share Award Agreement to the contrary, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion.
Section 9. SHARE APPRECIATION RIGHTS.
(a) SAR Award Agreement. Each grant of a SAR under the Plan shall be evidenced by a SAR Award Agreement between the Participant and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Award Agreements entered into under the Plan need not be identical.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
13
(b) Number of Shares. Each SAR Award Agreement shall specify the number of Ordinary Shares to which the SAR pertains and shall provide for the adjustment of such number in accordance with Section 12.
(c) Exercise Price. Each SAR Award Agreement shall specify the Exercise Price. The Exercise Price of a SAR shall not be less than one hundred percent (100%) of the Fair Market Value of an Ordinary Share on the date of grant. Notwithstanding the foregoing, SARs may be granted with an Exercise Price of less than one hundred percent (100%) of the Fair Market Value per Ordinary Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. Subject to the foregoing in this Section 9(c), the Exercise Price under any SAR shall be determined by the Committee in its sole discretion.
(d) Exercisability and Term. Each SAR Award Agreement shall specify the date when all or any installment of the SAR is to become exercisable. The SAR Award Agreement shall also specify the term of the SAR provided that the term of the SAR shall in no event exceed ten (10) years from the date of grant. A SAR Award Agreement may provide for accelerated exercisability in the event of the Participant’s death, Disability, retirement, or other events and may provide for expiration prior to the end of its term in the event of the termination of the Participant’s Service. SARs may be awarded in combination with Options, and such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. A SAR may be included in an ISO only at the time of grant but may be included in an NSO at the time of grant or thereafter. A SAR granted under the Plan may provide that it will be exercisable only in the event of a Change in Control.
(e) Effect of Change in Control. The Committee may determine, at the time of granting a SAR or thereafter, that such SAR shall become fully exercisable as to all Ordinary Shares subject to such SAR in the event that a Change in Control occurs with respect to the Company.
(f) Exercise of SARs. Upon exercise of a SAR, the Participant (or any person having the right to exercise the SAR after the Participant’s death) shall receive from the Company (i) Ordinary Shares, (ii) cash or (iii) a combination of Ordinary Shares and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Value of Ordinary Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Ordinary Shares subject to the SARs exceeds the Exercise Price.
(g) Modification, Extension or Assumption of SARs. Within the limitations of the Plan, the Committee may modify, extend, or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a different number of Ordinary Shares and at the same or a different Exercise Price, or in return for the grant of a different Award for the same or a different number of Ordinary Shares or cash. The foregoing notwithstanding, no modification of a SAR shall, without the consent of the holder, materially impair the Participant’s rights or obligations under such SAR.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
14
(h) Buyout Provisions. The Committee may at any time (i) offer to buy out for a payment in cash or cash equivalents a SAR previously granted, or (ii) authorize a Participant to elect to cash out a SAR previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish.
Section 10. share UNITS.
(a) Share Unit Award Agreement. Each grant of Share Units under the Plan shall be evidenced by a Share Unit Award Agreement between the Participant and the Company. Such Share Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Share Unit Award Agreements entered into under the Plan need not be identical.
(b) Payment for Awards. To the extent that an Award is granted in the form of Share Units, no cash consideration shall be required of the Award recipients.
(c) Vesting Conditions. Each Award of Share Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Share Unit Award Agreement. A Share Unit Award Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability, retirement, or other events. The Committee may determine, at the time of granting Share Units or thereafter, that all or part of such Share Units shall become vested in the event that a Change in Control occurs with respect to the Company.
(d) Xxxxxx and Dividend Rights. The holders of Share Units shall have no voting rights. Prior to settlement or forfeiture, any Share Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right, if awarded, entitles the holder to be credited with an amount equal to all cash dividends paid on one Ordinary Share while the Share Unit is outstanding. Settlement of dividend equivalents may be made in the form of cash, in the form of Ordinary Shares, or in a combination of both. Dividend equivalents may also be converted into additional Share Units at the Committee’s discretion. Dividend equivalents shall not be distributed prior to settlement of the Share Unit to which the dividend equivalents pertain. Prior to distribution, any dividend equivalents shall be subject to the same conditions and restrictions (including without limitation, any forfeiture conditions) as the Share Units to which they attach. The value of dividend equivalents payable or distributable with respect to any unvested Share Units that do not vest shall be forfeited. Any entitlement to dividend equivalents or similar entitlements will be established and administered either consistent with an exemption from, or in compliance with, Section 409A, to the extent applicable.
(e) Form and Time of Settlement of Share Units. Settlement of vested Share Units may be made in the form of (i) cash, (ii) Ordinary Shares or (iii) any combination of both, as determined by the Committee. The actual number of Share Units eligible for settlement may be larger or smaller than the number included in the original Award, based on predetermined performance factors. Methods of converting Share Units into cash may include (without limitation) a method based on the average Fair Market Value of Ordinary Shares over a series of trading days. A Share Unit Award Agreement may provide that vested Share Units may be settled in a lump sum or in installments. A Share Unit Award Agreement may provide that the distribution may occur or commence when all vesting conditions applicable to the Share Units have been satisfied or have lapsed, or it may be deferred to any later date, subject to compliance with Section 409A, to the extent applicable. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Share Units is settled, the number of such Share Units shall be subject to adjustment pursuant to Section 12.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
15
(f) Death of Participant. Any Share Unit Award that becomes payable after the Participant’s death shall be distributed to the Participant’s beneficiary or beneficiaries, provided the Committee has permitted the designation of a beneficiary and such beneficiary has been designated prior to the Participant’s death in a form acceptable to the Committee. Each recipient of a Share Unit Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with the Company, provided the Committee has permitted the designation of beneficiaries. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Participant’s death. If the Committee has not permitted the designation of a beneficiary, if no beneficiary was designated or if no designated beneficiary survives the Participant, then any Share Units Award that becomes payable after the Participant’s death shall be distributed to the Participant’s estate.
(g) Creditors’ Rights. A holder of Share Units shall have no rights other than those of a general creditor of the Company. Share Units represent an unfunded and unsecured obligation of the Company subject to the terms and conditions of the applicable Share Unit Award Agreement.
Section 11. CASH-BASED AWARDS AND SHARE BASED AWARDS.
The Committee may, in its sole discretion, grant Cash-Based Awards and Share-Based Awards to any Participant in such number or amount and upon such terms, and subject to such conditions, as the Committee shall determine at the time of grant and specify in an applicable Award Agreement. The Committee shall determine the maximum duration of the Cash-Based Award or Share-Based Awards, the amount of cash which may be payable pursuant to the Cash-Based Award, the conditions upon which the Cash-Based Award or Share-Based Awards shall become vested or payable, and such other provisions as the Committee shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula, or payment ranges as determined by the Committee. Payment, if any, with respect to a Cash-Based Award or Share-Based Award shall be made in accordance with the terms of the Award and may be made in cash or in Ordinary Shares, as the Committee determines.
Section 12. ADJUSTMENT OF SHARES.
(a) Adjustments.
| (i) | Recapitalization Transactions. In the event of a subdivision of the outstanding Ordinary Shares, a declaration of a dividend payable in Ordinary Shares, a declaration of a dividend payable in a form other than Ordinary Shares in an amount that has a material effect on the price of Ordinary Shares, a combination or consolidation of the outstanding Ordinary Shares (by reclassification or otherwise) into a lesser number of Ordinary Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make appropriate and equitable adjustments in: |
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
16
| (A) | The class(es) and number of securities available for future Awards and the limitations set forth under Section 5; |
| (B) | The class(es) and number of securities covered by each outstanding Award; and |
| (C) | The Exercise Price under each outstanding Option and SAR. |
| (ii) | Other adjustments. In the event of other transactions, the Committee may make such changes as provided in subsection (a) herein, as it determines are necessary or appropriate to avoid distortion in the operation of the Plan. |
| (iii) | Committee’s Authority. The Committee’s determinations will be final, binding and conclusive. |
(b) Dissolution or Liquidation. To the extent not previously exercised or settled, Options, SARs, and Share Units shall terminate immediately prior to the dissolution or liquidation of the Company.
(c) Merger or Reorganization. In the event that the Company is a party to a merger or other reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization. Subject to compliance with Section 409A, to the extent applicable, such agreement may provide for, without limitation, one or more of the following:
| (i) | The continuation of the outstanding Awards by the Company, if the Company is a surviving corporation; |
| (ii) | The assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary; |
| (iii) | The substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding Awards; |
| (iv) | Immediate vesting, exercisability, or settlement of outstanding Awards followed by the cancellation of such Awards upon or immediately prior to the effectiveness of such transaction; |
| (v) | Cancellation of the Award, to the extent not vested or not exercised prior to the effective time of the merger or reorganization, in exchange for such cash or equity consideration (including no consideration) as the Committee, in its sole discretion, may consider appropriate; or |
| (vi) | Settlement of the intrinsic value of the outstanding Awards (whether or not then vested or exercisable) in cash or cash equivalents or equity (including cash or equity subject to deferred vesting and delivery consistent with the vesting restrictions applicable to such Awards or the underlying Ordinary Shares) followed by the cancellation of such Awards (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment), provided that any such amount may be delayed to the same extent that payment of consideration to the holders of Shares in connection with the merger or reorganization is delayed as a result of escrows, earnouts, holdbacks or other contingencies; |
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
17
in each case without the Participant’s consent. Any acceleration of payment of an amount that is subject to Section 409A will be delayed, if necessary, until the earliest time that such payment would be permissible under Section 409A without triggering any additional taxes applicable under Section 409A. Any actions hereunder will comply with, or be exempt from, Section 409A to the extent determined by the Committee to be reasonably practicable.
The Company will have no obligation to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly.
(d) Reservation of Rights. Except as provided in this Section 12, a Participant shall have no rights by reason of any subdivision or consolidation of shares of any class, the payment of any dividend or any other increase or decrease in the number of shares of any class. Any issue by the Company of shares of any class, or securities convertible into shares of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Ordinary Shares subject to an Award. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell, or transfer all or any part of its business or assets. In the event of any potential change affecting the Ordinary Shares or the Exercise Price of Ordinary Shares subject to an Award, including a merger or other reorganization, for reasons of administrative convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the occurrence of such event.
Section 13. DEFERRAL OF AWARDS.
(a) Committee Powers. Subject to compliance with Section 409A, to the extent applicable, the Committee (in its sole discretion) may permit or require a Participant to:
| (i) | Have cash that otherwise would be paid to such Participant as a result of the exercise of a SAR or the settlement of Share Units credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books; |
| (ii) | Have Ordinary Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR converted into an equal number of Share Units; or |
| (iii) | Have Ordinary Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR or the settlement of Share Units converted into amounts credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books. |
Such amounts shall be determined by reference to the Fair Market Value of such Ordinary Shares as of the date when they otherwise would have been delivered to such Participant.
(b) General Rules. A deferred compensation account established under this Section 13 may be credited with interest or other forms of investment return, as determined by the Committee. A Participant for whom such an account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to the terms and conditions of the applicable agreement between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures, and forms pertaining to such Awards, including (without limitation) the settlement of deferred compensation accounts established under this Section 13.
Section 14. AWARDS UNDER OTHER PLANS.
The Company may grant awards under other plans or programs. Such awards may be settled in the form of Ordinary Shares issued under the Plan. Such Ordinary Shares shall be treated for all purposes under the Plan like Ordinary Shares issued in settlement of Share Units and shall, when issued, reduce the number of Ordinary Shares available under Section 5.
Section 15. PAYMENT OF DIRECTOR’S FEES IN SECURITIES.
(a) Effective Date. No provision of this Section 15 shall be effective unless and until the Board has determined to implement such provision.
(b) Elections to Receive NSOs, SARs, Restricted Shares, or Share Units. An Outside Director may elect to receive the Outside Director’s annual retainer payments and/or meeting fees from the Company in the form of cash, NSOs, SARs, Restricted Shares, Share Units, or a combination thereof, as determined by the Board. Alternatively, the Board may mandate payment in any of such alternative forms. Such NSOs, SARs, Restricted Shares, and Share Units shall be issued under the Plan. An election under this Section 15 shall be filed with the Company on the prescribed form.
(c) Number and Terms of NSOs, SARs, Restricted Shares or Share Units. The number of NSOs, SARs, Restricted Shares, or Share Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board. The terms of such NSOs, SARs, Restricted Shares, or Share Units shall also be determined by the Board.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
18
Section 16. LEGAL AND REGULATORY REQUIREMENTS.
Ordinary Shares shall not be issued under the Plan unless the issuance and delivery of such Ordinary Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the Securities Act, United States state securities laws and regulations, the regulations of any stock exchange on which the Company’s securities may then be listed and any foreign securities, exchange control or other applicable laws, and the Company has obtained the approval or favorable ruling from any governmental agency which the Administrator determines is necessary or advisable. The Company shall not be liable to a Participant or other persons as to: (a) the non-issuance or sale of Ordinary Shares as to which the Company has not obtained from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Ordinary Shares under the Plan; and (b) any tax consequences expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Award granted under the Plan.
Section 17. TAXES.
(a) Withholding Taxes. To the extent required by applicable federal, state, local, or foreign law, a Participant or the Participant’s successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any Ordinary Shares or make any cash payment under the Plan until such obligations are satisfied.
(b) Ordinary Share Withholding. The Committee may permit a Participant to satisfy all or part of the Participant’s withholding or income tax obligations by having the Company withhold all or a portion of any Ordinary Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Ordinary Shares that the Participant previously acquired. Such Ordinary Shares shall be valued at their fair market value on the date when taxes otherwise would be withheld in cash. In no event may a Participant have Ordinary Shares withheld that would otherwise be issued to him or her in excess of the number necessary to satisfy the maximum applicable tax withholding rate.
(c) Section 409A. Each Award that provides for “nonqualified deferred compensation” within the meaning of Section 409A shall be subject to such additional rules and requirements as specified by the Committee from time to time in order to comply with Section 409A. If any amount under such an Award is payable upon a “separation from service” (within the meaning of Section 409A) to a Participant who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six (6) months and one day after the Participant’s separation from service, or (ii) the Participant’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties, and/or additional tax imposed pursuant to Section 409A. In addition, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
19
Section 18. TRANSFERABILITY.
Unless the agreement evidencing an Award (or an amendment thereto authorized by the Committee) expressly provides otherwise, no Award granted under the Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated, or otherwise transferred in any manner (prior to the vesting and lapse of any and all restrictions applicable to Ordinary Shares issued under such Award), other than by will or the laws of descent and distribution; provided, however, that an ISO may be transferred or assigned only to the extent consistent with Section 422 of the Code. Any purported assignment, transfer, or encumbrance in violation of this Section 18 shall be void and unenforceable against the Company.
Section 19. PERFORMANCE BASED AWARDS.
The number of Ordinary Shares or other benefits granted, issued, retained, and/or vested under an Award may be made subject to the attainment of performance goals. The Committee may utilize any performance criteria selected by it in its sole discretion to establish performance goals.
Section 20. RECOUPMENT.
In the event that the Company is required to prepare restated financial results owing to an executive officer’s intentional misconduct or grossly negligent conduct, the Committee shall have the authority, to the extent permitted by applicable law, to require reimbursement or forfeiture to the Company of the amount of bonus or incentive compensation (whether cash-based or equity-based) such executive officer received during a fixed period, determined by the Committee, preceding the year the restatement is determined to be required, to the extent that such bonus or incentive compensation exceeds what the officer would have received based on an applicable restated performance measure or target. The Company will recoup incentive-based compensation from executive officers to the extent required under the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and any rules, regulations and listing standards that may be issued under that act. Any right of recoupment under this provision will be in addition to, and not in lieu of, any other rights of recoupment that may be available to the Company. No recovery of compensation under any clawback policy or this Section 20 will constitute an event giving rise to a Participant’s right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or any of its Subsidiaries or Affiliates.
Section 21. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any Award granted under the Plan, shall be construed to give any person any right to become, to be treated as, or to remain an Employee or Consultant. The Company and/or its Subsidiaries, as applicable, reserve the right to terminate any person’s Service at any time and for any reason, with or without notice.
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
20
Section 22. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth herein, shall come into existence on the date of its adoption by the Board; provided, however, that no Award may be granted hereunder prior to the Effective Date. The Board may suspend or terminate the Plan at any time. No ISOs may be granted after the tenth anniversary of the earlier of (i) the date the Plan is adopted by the Board or (ii) the date the Plan is approved the shareholders of the Company.
(b) Right to Amend the Plan. The Board may amend the Plan at any time and from time to time. Rights and obligations under any Award granted before amendment of the Plan shall not be materially impaired by such amendment except with consent of the Participant. An amendment of the Plan shall be subject to the approval of the Company’s shareholders only to the extent required by applicable laws, regulations or rules.
(c) Effect of Termination. No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan shall not affect Awards previously granted under the Plan.
Section 23. AWARDS TO PARTICIPANTS outside the United States.
Notwithstanding any provision of the Plan to the contrary, to comply with the laws in countries outside the United States in which the Company and its Subsidiaries and Affiliates operate or in which Participants work or reside, the Committee, in its sole discretion, will have the power and authority to: (a) determine which Participants outside the United States will be eligible to participate in the Plan; (b) modify the terms and conditions of any Award granted to Participants outside the United States; (c) establish sub-plans and modify exercise procedures and other terms and procedures and rules, to the extent such actions may be necessary or advisable, including adoption of rules, procedures or sub-plans applicable to particular Subsidiaries and Affiliates or Participants in particular locations; provided that no such sub-plans and/or modifications shall take precedence over Section 3 of the Plan or otherwise require shareholder approval; (d) take any action, before or after an Award is granted, that it deems advisable to obtain approval or to facilitate compliance with any necessary local governmental regulatory exemptions or approvals and (e) impose conditions on the exercise, vesting, or settlement of Awards in order to minimize the Company’s obligation with respect to tax equalization for Participants on assignments outside their home country. Without limiting the generality of the foregoing, the Board and the Committee is specifically authorized to adopt rules, procedures and sub-plans with provisions that limit or modify rights on eligibility to receive an Award under the Plan or on death, Disability, retirement or other termination of employment, available methods of exercise or settlement of an Award, payment of income tax, social insurance contributions and payroll taxes, the shifting of employer tax or social insurance contribution liability to a Participant, the withholding procedures and handling of any Ordinary Share certificates or other indicia of ownership. Notwithstanding the foregoing, the Board and the Committee will only take action and grant Awards that comply with applicable laws.
Section 24. GOVERNING LAW.
The Plan and each Award Agreement shall be governed by the laws of the Cayman Islands, without application of the conflicts of law principles thereof.
Section 25. SUCCESSORS AND ASSIGNS.
The terms of the Plan shall be binding upon and inure to the benefit of the Company and any successor entity, including any successor entity contemplated by Section 12(c).
Section 26. EXECUTION.
To record the adoption of the Plan by the Board, the Company has caused its authorized officer to execute the same.
| GORILLA TECHNOLOGY GROUP INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Date: | ||
Gorilla Technology Group Inc.
2023 OMNIBUS INCENTIVE PLAN
21
