The Delaware Nonqualified and Incentive Stock Option Plan of Intercargo Corp. is a compensation program designed to attract and retain talented employees by providing them with the opportunity to purchase company shares at a predetermined price. This plan is important for Intercargo Corp. as it aligns the interests of employees with those of shareholders, encouraging a commitment to the company's success. The Delaware Nonqualified and Incentive Stock Option Plan offers two different types of stock options: nonqualified stock options (Nests) and incentive stock options (SOS). Nonqualified Stock Options (Nests): Nests are stock options that do not meet the specific requirements outlined by the Internal Revenue Code (IRC) for SOS. These options are more flexible in terms of eligibility criteria and can be granted to both employees and non-employees such as contractors and directors. Nests provide employees with the right to purchase shares at a predetermined price, known as the exercise price or strike price. If the stock price rises above the exercise price, employees can exercise their options and sell the shares at a profit. Incentive Stock Options (SOS): SOS, on the other hand, are stock options that qualify for certain tax advantages outlined in the IRC. These options are typically granted exclusively to employees and are subject to several restrictions and limitations. SOS are granted with a specific exercise price, and employees must wait for a predetermined period known as the vesting period before exercising their options. If employees hold the shares for at least one year after the exercise date and two years from the grant date, any gains made from selling the shares may be eligible for favorable tax treatment, potentially resulting in lower taxes compared to Nests. The purpose of the Delaware Nonqualified and Incentive Stock Option Plan is to provide Intercargo Corp. with a competitive compensation tool to attract and motivate talented individuals. By offering stock options, the company can provide employees with a direct stake in the company's performance, fostering a sense of ownership and incentivizing them to contribute to its long-term success. Disclaimer: The above description is provided for informational purposes only and does not constitute legal or financial advice. It is important to consult with professionals and review official plan documents for accurate and up-to-date information about the Delaware Nonqualified and Incentive Stock Option Plan of Intercargo Corp.