The Arizona Stock Option and Award Plan of Fresco, Inc. is a comprehensive program designed to incentivize and reward employees of the company. This plan allows eligible employees to purchase company stock at a predetermined price, known as the exercise price, within a specified period of time. The program aims to align the interests of employees with those of the shareholders, driving company performance and enhancing employee motivation and retention. One type of Arizona Stock Option offered under this plan is the Non-Qualified Stock Option (NO). Nests grant employees the right to purchase a specific number of shares at a predetermined price, which is usually lower than the current market value. These options typically have a vesting period, after which the employee can exercise the options and purchase the shares. Another type of Arizona Stock Option is the Incentive Stock Option (ISO) plan, which is designed to provide tax advantages to employees. SOS are subject to specific rules and regulations set forth by the Internal Revenue Service (IRS). This type of stock option allows employees to purchase company stock at the exercise price without incurring immediate taxable consequences. Additionally, the Arizona Stock Option and Award Plan of Fresco, Inc. may include other types of stock-based awards such as Restricted Stock Units (RSS). RSS are grants of company stock that vest over a certain period of time. Once the RSS are vested, employees are entitled to receive the underlying shares. The main purpose of this plan is to promote long-term commitment from employees by providing them with the opportunity to share in the growth and success of the company. By having a vested interest in the company, employees are motivated to perform at their best, driving innovation, and contributing to overall business success. In summary, the Arizona Stock Option and Award Plan of Fresco, Inc. is a comprehensive program that encompasses various stock options and awards. These options include Non-Qualified Stock Options (Nests) and Incentive Stock Options (SOS), while awards may also include Restricted Stock Units (RSS). This plan underscores the company's commitment to aligning the interests of employees and shareholders, fostering a culture of engagement, and recognizing and rewarding employee contributions.