The Pennsylvania Stock Option Plan is a program designed to incentivize employees and key individuals at Pacific Animated Imaging Corp. It allows them to purchase company stock at a predetermined price within a specified time frame. By offering stock options, the program aims to align the interests of employees with the overall success and growth of the company. The Incentive Stock Option Plan offered by Pacific Animated Imaging Corp. is a specific type of stock option plan under the Pennsylvania law. This plan is designed to provide tax advantages to employees who meet certain criteria outlined by the Internal Revenue Service (IRS). Through this plan, employees are granted stock options at a specified exercise price, and once exercised, the capital gains tax on the difference between the exercise price and the fair market value is deferred until the stock is eventually sold. Pennsylvania offers several types of stock option plans that can be used to approve the Incentive Stock Option Plan of Pacific Animated Imaging Corp. These include: 1. Broad-Based Stock Option Plans: These plans are available to a wide range of employees within the company, usually excluding only the highest executives. They provide an opportunity for many employees to benefit from the company's success. 2. Non-Qualified Stock Option Plans: These plans do not meet the specific requirements set by the IRS for Incentive Stock Option Plans. They may be available to a broader range of employees but do not offer the same tax advantages as the Incentive Stock Option Plan. 3. Restricted Stock Unit (RSU) Plans: RSU plans offer employees the right to receive shares of company stock at a predetermined vesting schedule determined by the company. Unlike stock options, RSS are not purchased by employees but are granted as part of their compensation package. 4. Employee Stock Purchase Plans (ESPN): These plans allow employees to purchase company stock at a discounted price, often through payroll deductions. ESPN typically offer a favorable tax treatment for employees, making them an attractive option for enhancing employee benefits. The Pennsylvania Stock Option Plan is a valuable tool for companies like Pacific Animated Imaging Corp. to attract and retain top talent while aligning their interests with company success. By offering various types of stock option plans, the company can tailor its incentives to meet the needs and goals of its employees.