Document:

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                                                                    EXHIBIT 4.22

            AMENDMENT TO THE NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
                   OF AMERICAN FREIGHTWAYS CORPORATION (1993)
                   ------------------------------------------

     THIS AMENDMENT, made by the Board of Directors of American Freightways
corporation (the "Company") is effective as of the date indicated below.

                               W-I-T-N-E-S-S-E-T-H

     WHEREAS, the Company sponsors the 1993 Non-Employee Director Stock Option
Plan of American Freightways Corporation (the "Plan"); and

     WHEREAS, paragraph 5 of Section 1 of the Plan authorizes the Board of
Directors of the Company to amend the Plan from time to time; and

     WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Plan's participants and beneficiaries and the
Company's shareholders to amend Section 3 of the Plan to provide for the
treatment of options upon the occurrence of certain events.

     NOW, THEREFORE, the Plan is hereby amended as follows:

1. Effective as of the date set forth below, the second paragraph of Section 3
(Recapitalizations and Reorganizations) shall be amended by adding at the end
thereof the following sentence:

          In the event of a merger or consolidation of the Company in which the
     Company does not survive and the agreement of merger or consolidation
     provides that outstanding options shall not terminate (or shall be
     substituted), unless otherwise provided in the agreement of merger or
     consolidation, (i) this Plan shall continue and be effective for purposes
     of administering options previously granted and remaining outstanding (or
     any substituted options), (ii) the successor company (or its parent) to
     such merger or consolidation shall assume the liabilities hereunder and
     thereunder, and (iii) notwithstanding paragraph 3E of Section 2, if an
     optionee resigns or is terminated as director of the Company as a result of
     or arising from such merger or consolidation of the Company, options
     granted prior to such resignation or termination (or any substituted
     options) shall continue to vest and shall remain exercisable for such time
     and in such manner as if the director had not resigned or been terminated,
     so long as the director agrees to be available to consult on matters
     affecting the Company or its successor for the remainder of the vesting
     period with respect to the options.

This amendment is executed and effective as of this 12th day of November, 2000.<PAGE>

                                                                    EXHIBIT 4.24

                  AMENDMENT TO THE 1999 EMPLOYEE STOCK PURCHASE
                    PLAN OF AMERICAN FREIGHTWAYS CORPORATION
                    ----------------------------------------

     THIS AMENDMENT, made by the Board of Directors of American Freightways
Corporation (the "Company"), is effective as of the date indicated below.

                               W-I-T-N-E-S-S-E-T-H

     WHEREAS, the Company sponsors the 1999 Employee Stock Purchase Plan of
American Freightways Corporation (the "Plan"); and

     WHEREAS, the Plan authorizes the Board of Directors of the Company to amend
the Plan from time to time; and

     WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Plan 's participants and beneficiaries and the
Company's shareholders to amend Section 19(c) of the Plan to provide for the
treatment of options upon the occurrence of certain events.

     NOW, THEREFORE, the Plan is hereby amended as follows:

1. Effective as of the date set forth below, paragraph (c) of Section 19 (Merger
or Asset Sale) shall be deleted in its entirety and in its place the following
shall be added:

In the event of a merger or consolidation of the Company in which the Company
does not survive, each participant shall have the option to elect, under such
terms and conditions as determined by the Committee (including, notwithstanding
anything in this Plan to the contrary, terms and conditions for including lump
sum contributions received less than 15 days prior to the Exercise Date for
option grant and exercise purposes), that with respect to such participant, the
Offering Period then in progress shall terminate not more than 15 days prior to
the effective date of such merger or consolidation (each participant making such
election, an "Electing Participant"). The Company shall notify each Electing
Participant in writing of the new Exercise Date (as determined by the Committee)
for such Offering Period applicable to all Electing Participants. With respect
to each Electing Participant, the Offering Period ending as of the new Exercise
Date shall be the final Offering Period under the Plan and as of the effective
time of the merger or consolidation each Electing Participant shall cease to
have any rights under the Plan. With respect to each participant other than an
Electing Participant (each, a "Non-Electing Participant"), the Offering Period
then in progress under the Plan shall terminate on the regularly scheduled
Exercise Date for such Offering Period. At or immediately prior to the effective
time of the merger or consolidation, subject to the immediately preceding
sentence, (1) the successor corporation (and/or its parent) shall assume the
obligations of the Company under the Plan with respect to all Non-Electing
Participants and (2) the right of each Non-Electing Participant to purchase
Common Stock thereunder at the end of the Offering Period then in progress shall
be deemed to constitute the right to purchase a number of shares of the
successor corporation, or its parent, as applicable under the agreement of
merger or consolidation, equal to the dollar amount of contributions made by
such Non-Electing Participant pursuant to the Plan divided by the lesser of (x)
85% of the Fair Market Value of Common Stock on the beginning date of the
Offering Period, divided by the exchange ratio as provided in the agreement of
merger or consolidation, and (y) 85% of the Fair Market Value of the stock of
the successor, or its parent, as applicable, on the regularly scheduled Exercise
Date for such Offering Period. The Plan will terminate as of the scheduled
Exercise Date for such Offering Period.

This amendment is executed and effective as of this 19th day of January, 2001.<PAGE>

                                                                 EXHIBIT 10.3(a)

                             PEREGRINE SYSTEMS, INC.

                             1994 STOCK OPTION PLAN

                       (AS AMENDED THROUGH JULY 14, 1999)

         1. PURPOSES OF THE PLAN. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or non-statutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder.

         2. DEFINITIONS. As used herein, the following definitions shall apply:

                  (a) "ADMINISTRATOR" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

                  (b) "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

                  (c) "BOARD" means the Board of Directors of the Company.

                  (d) "CODE" means the Internal Revenue Code of 1986,
as amended.

                  (e) "COMMITTEE" means a Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.

                  (f) "COMMON STOCK" means the Common Stock of the Company.

                  (g) "COMPANY" means Peregrine Systems, Inc., a Delaware
corporation.

                  (h) "CONSULTANT" means any person, including an advisor, who
is engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services.

                  (i) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" means
that the employment or consulting relationship or directorship is not
interrupted or terminated by the Employee, Consultant or Director or the
Company, or any Parent or Subsidiary. Continuous Status as an Employee,
Director, or Consultant shall not be considered interrupted in the case of: (i)
any leave of absence approved by the Company, including sick leave, military
leave, or any other personal leave; provided, however, that for purposes of
Incentive Stock Options, no such leave may exceed ninety (90) days, unless
reemployment upon

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the expiration of such leave is guaranteed by contract (including certain
Company policies) or statute; provided, further, that on the ninety-first
(91st) day of any such leave (where reemployment is not guaranteed by
contract or statute) the Optionee's Incentive Stock Option shall cease to be
treated as an Incentive Stock Option and will be treated for tax purposes as
a Nonstatutory Stock Option; or (ii) transfers between locations of the
Company or between the Company, its Parent, its Subsidiaries or its successor.

                  (j) "DIRECTOR" shall mean a member of the Board.

                  (k) "DISABILITY" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

                  (l) "EMPLOYEE" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.

                  (m) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

                  (n) "FAIR MARKET VALUE" means, as of any date, the value of
Common Stock determined as follows:

                               (i)    If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the National Market System or the Nasdaq SmallCap Market of the
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported, as quoted on such
exchange or system for the last market trading day prior to the time of
determination) as reported in THE WALL STREET JOURNAL or such other source as
the Administrator deems reliable;

                               (ii)   If the Common Stock is regularly quoted
by a recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of determination,
as reported in THE WALL STREET JOURNAL or such other source as the Administrator
deems reliable or;

                               (iii)  In the absence of an established market
for the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator.

                  (o) "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

                  (p) "NONSTATUTORY STOCK OPTION" means an Option not intended
to qualify as an Incentive Stock Option.

                  (q) "NOTICE OF GRANT" means a written notice evidencing
certain terms and conditions of an individual Option grant. The Notice of Grant
is part of the Option Agreement.

                  (r) "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

                  (s) "OPTION" means a stock option granted pursuant
to the Plan.

                                       -2-

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                  (t) "OPTION AGREEMENT" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.

                  (u) "OPTIONED STOCK" means the Common Stock subject
to an Option.

                  (v) "OPTIONEE" means an Employee, Director, or Consultant
who receives an Option.

                  (w) "PARENT" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (x) "PLAN" means this 1994 Stock Option Plan, as amended.

                  (y) "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

                  (z) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 11 below.

                  (aa)"SUBSIDIARY" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.

         3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 11
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 24,592,000, plus an annual increase, effective January 1
of each calendar year beginning January 1, 1999 and ending January 1, 2003,
equal to such number of additional Shares of Common Stock as may then be
required to fix the number of Shares of Common Stock then available for new
Option grants at an amount not less than the lesser of (i) four percent (4%) of
the Company's then issued and outstanding Common Stock or (ii) 16,000,000
Shares. The Shares may be authorized, but unissued, or reacquired Common Stock.

         If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.

         4. ADMINISTRATION OF THE PLAN.

                  (a) PROCEDURE.

                               (i)    MULTIPLE ADMINISTRATIVE BODIES. The Plan
may be administered by different Committees with respect to different Optionees.

                               (ii)   SECTION 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                               (iii)  RULE 16b-3. To the extent desirable to
qualify transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

                                       -3-

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                               (iv)   OTHER ADMINISTRATION. Other than as
provided above, the Plan shall be administered by (A) the Board or (B) a
Committee, which committee shall be constituted to satisfy Applicable Laws.

                  (b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of
the Plan and, in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, including the approval, if required, of any stock exchange upon
which the Common Stock is listed, the Administrator shall have the authority, in
its discretion:

                               (i)    to determine the Fair Market Value of the
Common Stock, in accordance with Section 2(m) of the Plan;

                               (ii)   to select the Consultants, Directors, and
Employees to whom Options may from time to time be granted hereunder;

                               (iii)  to determine whether and to what extent
Options are granted hereunder;

                               (iv) to modify or amend each Option, including
the discretionary authority to extend the post-termination exercisability period
of Options longer than is otherwise provided for in the Plan;

                               (v)    to approve forms of agreement for use
under the Plan;

                               (vi)   to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option of the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                               (vii)  to determine whether and under what
circumstances an Option may be settled in cash under Section 9 instead of Common
Stock;

                               (viii) to reduce the exercise price of any Option
to the then current Fair Market Value if the Fair Market Value of the Common
Stock covered by such Option has declined since the date the Option was granted;

                               (ix)   to allow Optionees to satisfy withholding
tax obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable;

                               (x)    to construe and interpret the terms of the
Plan and awards granted pursuant to the Plan; and

                               (xi)   to prescribe, amend, and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
subplans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws.

                                       -4-

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                  (c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations, and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.

         5. ELIGIBILITY.

                  (a) Nonstatutory Stock Options may be granted to Employees,
Directors, and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee, Director, or Consultant who has been granted an Option
may, if otherwise eligible, be granted additional Options.

                  (b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of the Shares underlying Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year (under
all plans of the Company or any Parent or Subsidiary) in excess of $100,000,
such excess shall be treated as Nonstatutory Stock Options.

                  (c) For purposes of Section 5(b), Incentive Stock Options
shall be taken into account in the order in which they were granted, and the
Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.

                  (d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company or service as a Director, nor shall it interfere in any way with his or
her right or the Company's right to terminate his or her employment, service as
a Director or consulting relationship at any time, with or without cause.

                  (e) LIMITATIONS.

                               (i)    No Employee shall be granted, in any
fiscal year of the Company, Options to purchase more than 450,000 Shares.

                               (ii)   The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 11(a).

                               (iii)  If an Option is canceled (other than in
connection with a transaction described in Section 11), the canceled Option will
be counted against the limit set forth in Section 5(e)(i). For this purpose, if
the exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

         6. TERM OF PLAN. The Plan became effective upon its adoption by the
Board of Directors. It shall continue in effect for a term of ten (10) years
from such date, unless sooner terminated under Section 13 of the Plan.

         7. TERM OF OPTION. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that in the case of an Incentive Stock
Option the term shall be no more than ten (10) years from the date of grant
thereof. However, in the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement.

                                       -5-

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         8. OPTION EXERCISE PRICE AND CONSIDERATION.

                  (a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:

                               (i)    In the case of an Incentive Stock Option

                                      (1) granted to an Employee who, at the
time of the grant of such Incentive Stock Option, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of grant.

                                      (2) granted to any Employee other than an
Employee described in the preceding paragraph, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.

                               (ii)   In the case of a Nonstatutory Stock
Option, the per Share exercise price shall be determined by the Administrator.
However, in the case of a Nonstatutory Stock Option intended to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant.

                               (iii)  Notwithstanding the foregoing, Options
may be granted with a per Share exercise price of less than 100% of the Fair
Market Value per Share on the date of grant pursuant to a merger or other
corporate transaction.

                  (b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six months on the date of surrender and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan; (6) such other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Laws, or (7) any combination of the
foregoing methods of payment. In making its determination as to the type of
consideration to accept, the Board shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.

         9. EXERCISE OF OPTION.

                  (a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any
Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria with
respect to the Company and/or the Optionee, and as shall be permissible under
the terms of the Plan. All Options granted hereunder shall be exercisable at the
rate of at least 20% per year over five years from the date the Option is
granted. An Option may not be exercised for a fraction of a Share.

                           An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board, consist
of any consideration and method of payment allowable under the Plan. Until the
issuance (as evidenced by the appropriate entry on the books of

                                       -6-

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the Company or of a duly authorized transfer agent of the Company) of such
Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued)
such Shares promptly upon exercise of the Option. No adjustment will be made
for a dividend or other right for which the record date is prior to the date
the Shares are issued, except as provided in Section 11 of the Plan.

                           Exercise of an Option in any manner shall result in
a decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.

                  (b) TERMINATION OF CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR,
OR CONSULTANT. In the event that an Optionee's Continuous Status as an Employee,
Director, or Consultant terminates (but not in the event of a change of status
from Employee to Consultant (in which case an Employee's Incentive Stock Option
shall automatically convert to a Nonstatutory Stock Option on the ninety-first
(91st) day following such change of status) or from Consultant to Employee)
other than upon the Optionee's death or disability, the Optionee may exercise
his or her Option, within 90 days of the date of termination, and only to the
extent that the Optionee was entitled to exercise it at the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant); provided, however, that (i) the Administrator may
in its discretion extend the period of exercisability of the Option beyond a
termination of an Optionee's Continuous Status as an Employee, Director, or
Consultant until a date not later than the expiration of the term of such Option
as set forth in the Notice of Grant and (ii) the Administrator may in its
discretion extend the termination date for the purpose of vesting accrual to a
date beyond the actual termination date of employment (the "deemed termination
date") (but in no event may the deemed termination date be later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the event the Administrator shall exercise such discretion to extend the term of
an Option, such Option shall be exercisable during such extended term to the
extent it was exercisable at the date of such termination or the deemed
termination date, as applicable. Similarly, in the event the Administrator shall
exercise such discretion to extend the termination date of an Optionee, such
Option shall be exercisable during such term (or such extended term if
applicable) to the extent it would be exercisable at the deemed termination
date. If at the date of termination the Optionee is not entitled to exercise his
or her entire Option, the Shares covered by the unexercisable portion of the
Option shall revert to the Plan. If after termination the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

                  (c) DISABILITY OF OPTIONEE. In the event of termination of an
Optionee's Continuous Status as an Employee, Director, or Consultant as a result
of his or her Disability, Optionee may, but only within six (6) months from the
date of such termination (and in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise the Option
to the extent otherwise entitled to exercise it at the date of such termination.
To the extent that Optionee is not entitled to exercise the Option at the date
of termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

                  (d) DEATH OF OPTIONEE. In the event of the death of an
Optionee, the Option shall vest and become exercisable as to all of the Shares
subject thereto and may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance. In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. The Option may be exercised by the executor or administrator of the
Optionee's estate or, if none, by the person(s) entitled to exercise the Option
under the Optionee's will or the laws of descent or distribution. If the Option
is not so

                                       -7-

<PAGE>

exercised with the specified time, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

                  (e) BUYOUT PROVISIONS. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously granted, based
on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.

         10. NON-TRANSFERABILITY OF OPTIONS. Unless determined otherwise, by the
Administrator, Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

         11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

                  (a) CHANGES IN CAPITALIZATION. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding, and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

                  (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.

                  (c) MERGER, SALE OF ASSETS, OR STOCK TRANSFER. In the event of
(i) a merger or consolidation of the Company with or into another corporation
resulting in the outstanding voting securities of the Company immediately prior
thereto representing (either by remaining or by being converted into voting
securities of the surviving entity) less than fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation;
(ii) the sale of all or substantially all of the assets of the Company; or (iii)
the sale or other transfer by John Moores and any stockholder affiliated (within
the meaning of the Securities Act) with Mr. Moores, in a single transaction or a
series of related transactions, of shares of Common Stock constituting more than
fifty percent (50%) of the then outstanding Common Stock of the Company to any
person or entity not affiliated with Mr. Moores or the Company, the Optionee
shall fully vest in and have the right to exercise the Option as to all of the
Optioned Stock, including Shares as to which it would not otherwise be vested or
exercisable. Notwithstanding the provisions of clause (iii) above, any such sale
or other transfer by Mr. Moores or any stockholder affiliated with Mr. Moores of
shares of Common Stock through a registered public offering of securities under
the Securities Act, or in compliance with the requirements of paragraphs (c),
(d), (e), and (f) of Rule 144 under the Securities Act, shall not cause the
Option to become fully vested and exercisable. If an

                                       -8-

<PAGE>

Option becomes fully vested and exercisable in the event of a merger or
consolidation, sale of assets, or sale or transfer of Common Stock by Mr.
Moores as provided above, the Administrator shall notify the Optionee in
writing or electronically that the Option shall be fully vested and
exercisable.

         12. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.

         13. AMENDMENT AND TERMINATION OF THE PLAN.

                  (a) AMENDMENT AND TERMINATION. The Board may at any time
amend, alter, suspend, or discontinue the Plan, but no amendment, alteration,
suspension, or discontinuation shall be made which would impair the rights of
any Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Applicable Laws,
the Company shall obtain shareholder approval of any Plan amendment in such a
manner and to such a degree as required.

                  (b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company. Termination of the Plan shall not affect the Administrator's ability to
exercise the powers granted to it hereunder with respect to Options granted
under the Plan prior to the date of such termination.

         14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

                  As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

         15. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

                  The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

         16. AGREEMENTS. Options shall be evidenced by written agreements in
such form as the Board shall approve from time to time.

         17. STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under Applicable Laws.

                                       -9-

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