The Pennsylvania Stock Option and Stock Award Plan of American Stores Company is a comprehensive compensation program designed to reward employees with stock-based incentives. This plan offers employees the opportunity to purchase company stock at a predetermined price or receive stock awards as a performance-based incentive. The primary aim of the Pennsylvania Stock Option and Stock Award Plan is to align the interests of employees with the company's success, encouraging them to contribute towards the growth and profitability of American Stores Company. By granting stock options and stock awards, the company aims to motivate and retain talent while fostering a sense of ownership and commitment among its workforce. There are several types of stock options and stock awards available under this plan, each catering to different employee needs and objectives. The most common types include: 1. Non-Qualified Stock Options (Nests): Non-qualified stock options allow employees to purchase company stock at a predetermined price within a specified timeframe. These options can be exercised gradually over several years, promoting long-term engagement and dedication. Nests are typically offered to executives and key employees. 2. Incentive Stock Options (SOS): Incentive stock options are exclusively granted to employees and offer potential tax advantages. These options allow employees to purchase company stock at a predetermined price after meeting certain eligibility criteria. SOS often have specific holding requirements to qualify for favorable tax treatment. 3. Restricted Stock Units (RSS): RSS are a form of stock-based compensation where employees receive shares of company stock as awards. Unlike stock options, RSS do not require employees to make a purchase. Instead, they vest over a predetermined period, providing an incentive for employees to stay with the company and contribute to its success. 4. Performance Stock Units (Plus): Performance stock units are stock awards contingent on predetermined performance goals being met. These units are typically tied to specific objectives, such as revenue growth, profitability, or customer satisfaction. Plus offer employees the opportunity to directly contribute to the company's performance and share in its success. The Pennsylvania Stock Option and Stock Award Plan of American Stores Company aims to provide employees with various stock-based incentives to reward their contributions, drive engagement, and align their interests with the company's long-term objectives. It is an effective tool for attracting, motivating, and retaining top talent within the organization.