Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 17

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 8
Chunk 17
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 of compensation
table on page 40. For 2025, based on structured key performance indices (KPI)’) by the Compensation Committee, Mr. Ghauri earned
a bonus of $210,340. See bonus structure as discussed below on page 39. The Compensation Committee determined that Gross Revenue and
Income from Operations structure used in fiscal 2025 continues to be a proper measure for measuring Mr. Ghauri’s performance in
that it encourages his participation in revenue generating activities and continues to incentivize him to monitor and maximize cost efficiency.

Long-Term
Equity Incentive Compensation 

We
believe that long-term performance is achieved through an ownership culture that encourages long-term participation by our executives
in equity-based awards. Because base salary and equity awards are such basic elements of compensation within our industry, as well as
the high technology and software industries in general, and are generally expected by employees, we believe that these components must
be included in our compensation mix in order for us to compete effectively for talented executives. We award time based vested stock
from our Equity Incentive Plans for several reasons. First, such awards facilitate retention of our executives. Restricted stock generally
vests only if the executive remains employed by the Company. Second, time-based stock awards align executive compensation with the interests
of our shareholders and thereby focuses executives on increasing value for the shareholders. Time vested stock generally only provides
a superior return if the stock price appreciates, and results in materially less dilution to the shareholders than options while frequently
providing equivalent value to the employee at less cost to the Company than options. In determining the number of shares to be granted
to executives, we take into account the individual’s position, scope of responsibility, ability to affect profits and shareholder
value, past and recent performance, and the estimated value of shares at the time of grant. Assuming individual performance at a level
satisfactory to the Compensation Committee, the size of total equity compensation is generally targeted at the 50th percentile for the
peer group. As indicated above, market data, including compensation percentiles, were among several factors the committee reviewed in
determining compensation.

Equity
incentives provided to executives are determined by the Fair Market Value of our common stock on the grant date. Each executive’s
stock award was based on an analysis of the Compensation Committee of an appropriate overall cash compensation for each individual taking
into account their position and compensation at similarly situated companies. Each executive’s