The Colorado Stock Option Plan for Nonemployee Directors of Cameo International, Inc. is a compensation program designed to reward nonemployee directors of the company with stock options. This plan provides the directors with an opportunity to purchase a certain number of company's shares at a specified price within a predetermined timeframe. By offering stock options, Cameo International, Inc. aims to align the interests of its nonemployee directors with those of the company and its shareholders. This promotes a sense of ownership and incentivizes the directors to make decisions that positively impact the company's performance and value. The Colorado Stock Option Plan for Nonemployee Directors may include several types of stock options, depending on the specific terms and conditions. Some possible types of options that may be part of the plan are: 1. Nonqualified Stock Options (Nests): These are the most common type of stock options offered to nonemployee directors. Nests allow the directors to purchase company shares at a predetermined price, known as the exercise or strike price. The price is usually set at the fair market value of the stock on the date of grant. Directors can exercise these options at any time during a specified exercise period. 2. Incentive Stock Options (SOS): SOS may also be granted to nonemployee directors, although they are less common. These options have special tax advantages under the U.S. Internal Revenue Code, as they may qualify for preferential tax treatment if certain conditions are met. For example, SOS may have a longer exercise period and may offer potential capital gains tax benefits to the directors. 3. Restricted Stock Units (RSS): In addition to stock options, the Colorado Stock Option Plan for Nonemployee Directors may also include RSS. RSS are not options to purchase stock, but rather a promise to deliver shares of company stock at a future date. RSS generally vest over a defined period, after which the director will receive the shares or their cash equivalent. 4. Performance Stock Units (Plus): Plus may be another type of stock-based compensation that nonemployee directors could receive. Plus are similar to RSS, but their vesting is tied to specific performance targets or objectives set by the company. If the predetermined goals are achieved, the directors will be granted the shares or their cash equivalent. It's important to note that the specific details and provisions of the Colorado Stock Option Plan for Nonemployee Directors of Cameo International, Inc. may vary. Directors should refer to the plan documents and consult with legal and financial advisors for a comprehensive understanding of the plan's terms, eligibility criteria, exercise periods, vesting schedules, tax implications, and other relevant considerations.