The Arkansas Stock Option Plan of Sunrise Assisted Living, Inc. is a comprehensive program designed to provide employees, consultants, and advisers with the opportunity to receive Incentive Stock Options (SOS) and Nonqualified Stock Options (Nests) as a part of their compensation package. These stock options are granted to individuals who play a crucial role in the success and growth of the company. Under the Arkansas Stock Option Plan, Sunrise Assisted Living, Inc. offers two main types of stock options: Incentive Stock Options (SOS) and Nonqualified Stock Options (Nests). These options have distinct characteristics and benefits. 1. Incentive Stock Options (SOS): SOS are a form of stock option granted to employees that provide them with potential tax advantages. Employees who are granted SOS have the opportunity to purchase company stock at a predetermined price (the exercise price) within a specified period. To qualify for the favorable tax treatment associated with SOS, employees must hold the acquired stock for a specified holding period. 2. Nonqualified Stock Options (Nests): Nests are another type of stock option that does not provide the same tax advantages as SOS. Nests are typically granted to employees, consultants, and advisers who do not meet the qualification criteria for SOS or who work in non-employee roles. Nests allow individuals to purchase shares of the company's stock at a predetermined price, and they are subject to regular income tax upon exercise. The Arkansas Stock Option Plan aims to incentivize employees, consultants, and advisers to contribute to the company's growth and success by aligning their interests with those of the shareholders. By granting stock options, Sunrise Assisted Living, Inc. provides participants with the opportunity to share in the company's financial performance and potentially realize gains as the stock value increases. It is important to note that the specific terms, conditions, and eligibility criteria of the Arkansas Stock Option Plan may vary and are detailed in the plan documents. Participants should refer to the plan documents and consult with the company's human resources or legal departments for specific information related to their stock option grants under the plan.