The Kansas Nonemployee Directors Nonqualified Stock Option Plan of Cocos, Inc. is a comprehensive compensation program designed specifically for nonemployee directors who serve on the board of directors for the company. It offers a range of stock options as incentives, allowing these directors to acquire shares of Cocos, Inc. common stock at predetermined prices. This nonqualified stock option plan is available exclusively to nonemployee directors, distinguishing it from other compensation plans within the company. It provides an opportunity for these directors to participate in the company's growth and success through stock ownership. The Kansas Nonemployee Directors Nonqualified Stock Option Plan is organized in a way that identifies different types or categories of stock options, each with its unique characteristics. These variations offer flexibility and cater to the diverse needs of nonemployee directors. Some possible types of stock option awards within this plan could include: 1. General Stock Options: These options allow nonemployee directors to purchase a specified number of shares of Cocos, Inc. common stock at a predetermined exercise price, commonly referred to as the "grant price" or "strike price." These options typically have a specific expiration date, encouraging directors to exercise them within a defined timeframe to realize potential gains. 2. Performance-Based Stock Options: This type of stock option is contingent upon specific performance metrics or targets being met by Cocos, Inc. If the company achieves predetermined goals, such as revenue growth or market share milestones, nonemployee directors are granted the opportunity to exercise these options and acquire shares at the predetermined price. Performance-based stock options align the interests of the directors with the company's performance. 3. Restricted Stock Units (RSS): Although not technically stock options, RSS are a common feature of many compensation plans for nonemployee directors. RSS represents a promise to deliver a specific number of shares of Cocos, Inc. common stock at a future date or upon meeting predetermined conditions. Nonemployee directors receive this RSS as an integral part of their compensation package and have the opportunity to convert them into actual shares of stock. 4. Stock Appreciation Rights (SARS): SARS offer nonemployee directors the right to receive value equal to the appreciation in the price of a specified number of shares of Cocos, Inc. common stock over a defined period. When exercised, SARS grant directors the cash value equivalent to the increase in stock price, providing them with a financial incentive tied to the company's stock performance. These different types of stock options within the Kansas Nonemployee Directors Nonqualified Stock Option Plan of Cocos, Inc. facilitate a tailored approach to director compensation, enabling the company to attract and retain high-quality directors while aligning their interests with the long-term success of the organization.