The New Jersey Stock Option and Stock Award Plan of American Stores Company is a comprehensive financial program designed to incentivize and reward employees of the company based in the state of New Jersey. This plan allows eligible employees to receive stock options and stock awards as a way to drive employee engagement, enhance productivity, and align their interests with the long-term success of the company. The stock option component of the plan grants employees the right to purchase a specified number of company stocks at a predetermined price, known as the exercise price, within a designated timeframe. This option provides employees with the opportunity to participate in the potential growth of American Stores Company's stock value. The stock option plans are typically structured as incentive stock options (SOS) or non-qualified stock options (SOS). SOS, also known as statutory stock options, offer certain tax benefits to employees as they are not subject to regular income tax upon exercise. On the other hand, SOS are subject to regular income tax upon exercise. Both types of options require the employee to meet certain criteria, such as a specific employment period, before exercising their options. In addition to stock options, the New Jersey Stock Option and Stock Award Plan also includes stock awards. Stock awards involve the direct issuance of shares to eligible employees, typically subject to certain vesting conditions. Vesting means that the employee gains ownership of awarded shares gradually over a predetermined period. These stock awards encourage recipients to remain with the company, fostering loyalty and long-term commitment. Multiple types of stock awards may be included in this plan, such as restricted stock units (RSS), performance share units (Plus), and performance stock options (SOS). RSS are grants of company stock that will be delivered to employees at a future date based on predetermined vesting conditions. Plus and SOS are performance-based awards that link vesting and payout to specific performance targets set by the company. These awards ensure that employees' success is directly tied to their individual and company-wide achievements. It is worth mentioning that the exact specifics and terms of the New Jersey Stock Option and Stock Award Plan may vary based on the discretion of American Stores Company's management and compliance with applicable laws and regulations. The plan aims to attract, retain, and motivate talented employees by offering them an opportunity to share in the success and growth of the company through stock ownership.