Tennessee Nonemployee Director Stock Option Plan of Inner Laboratories, Inc. is a comprehensive compensation program designed specifically for nonemployee directors of the company. This plan offers unique stock options to these nonemployee directors as part of their remuneration package. The Tennessee Nonemployee Director Stock Option Plan reflects the company's commitment to attracting and retaining high-caliber individuals to serve on its board of directors. Under the Tennessee Nonemployee Director Stock Option Plan, nonemployee directors are granted stock options that allow them to purchase shares of Inner Laboratories, Inc. at a predetermined price, known as the exercise price. These stock options serve as a valuable incentive for nonemployee directors to contribute their skills, expertise, and knowledge to the overall growth and success of the company. By offering stock options, Inner Laboratories, Inc. aligns the interests of nonemployee directors with those of the company's shareholders. This creates a sense of shared ownership and motivates nonemployee directors to make decisions that positively impact the company's long-term performance. The Tennessee Nonemployee Director Stock Option Plan of Inner Laboratories, Inc. may include different types of stock options, such as: 1. Nonqualified Stock Options: Nonqualified stock options are the most common type of stock options granted under the plan. These options provide nonemployee directors with the flexibility to purchase company shares at a predetermined price, regardless of the market price at the time of exercise. Nonqualified stock options are subject to certain tax implications upon exercise. 2. Incentive Stock Options: Inner Laboratories, Inc. may also grant incentive stock options to nonemployee directors as part of the Tennessee Nonemployee Director Stock Option Plan. These options incentivize nonemployee directors by offering favorable tax treatment upon exercise. To qualify for this treatment, specific IRS requirements must be met. 3. Restricted Stock Units (RSS): In addition to stock options, the Tennessee Nonemployee Director Stock Option Plan may include RSS. RSS grant nonemployee directors the right to receive company shares at a specified future date or upon the achievement of predetermined performance goals. These units may vest over time or based on specific milestones, further encouraging nonemployee directors' commitment to the company's long-term objectives. The aim of Tennessee Nonemployee Director Stock Option Plan is to attract experienced and knowledgeable individuals to serve on the board of Inner Laboratories, Inc. It emphasizes the importance of aligning the interests of nonemployee directors with those of company shareholders through stock-based compensation. These stock options serve as a valuable tool for incentivizing nonemployee directors to actively contribute to the company's success and create shareholder value.