The Arizona Nonemployee Directors Stock Plan of Jacob Communications, Inc. is a comprehensive compensation program designed specifically for nonemployee directors of the company. This stock plan aims to reward, motivate, and retain these directors by providing them with equity-based incentives. Created in accordance with Arizona state regulations, this plan offers various types of stock options and awards to participants. One of the focal points of the Arizona Nonemployee Directors Stock Plan is the granting of nonqualified stock options (Nests). These options provide directors with the right to purchase a specific number of company shares at a predetermined exercise price. Nests typically vest over a certain period and can be exercised within a specified timeframe, allowing directors to acquire company shares at a potentially lower price. Another type of stock award offered under this plan is restricted stock units (RSS). RSS are grants of company stock that vest over a specific period or upon the achievement of predetermined performance goals. They offer directors an opportunity to acquire company shares without upfront payment, providing a sense of ownership and alignment with shareholders' interests. Additionally, the Arizona Nonemployee Directors Stock Plan may include performance-based stock options or awards. These grants are tied to the achievement of specific performance criteria, such as financial targets or strategic milestones. By setting performance goals, this type of stock plan motivates directors to actively contribute to the company's success and aligns their interests with the long-term growth and profitability of Jacob Communications, Inc. The Arizona Nonemployee Directors Stock Plan of Jacob Communications, Inc. also entails a comprehensive set of rules and guidelines that govern the administration and operation of the plan. It outlines the eligibility criteria for participation, vesting schedules, exercise or settlement methods, and any restrictions or limitations on stock transactions. The plan ensures that all awards are granted and exercised in compliance with relevant laws, regulations, and corporate governance standards. Overall, the Arizona Nonemployee Directors Stock Plan of Jacob Communications, Inc. is a strategic compensation program that recognizes the important contributions of nonemployee directors and aligns their interests with the success of the company. By offering various types of stock options and awards, this plan provides directors with valuable incentives and rewards, fostering their commitment, and enhancing their overall engagement with Jacob Communications, Inc.